TELUS financial results for the first quarter of 2007

[Barry]

TELUS reported its financial results for the first quarter of 2007, including a six per cent increase in revenues to $2.21 billion from a year ago due to continued strong wireless and data growth. Reported EBI , taxes, depreciation and amortization (EBITDA) and EPS were negatively impacted in the quarter by a previously announced non-recurring and non cash charge of $173.5 million associated with the introduction of a new cash settlement feature for employee share options granted prior to 2005. The benefits of the new feature include reducing share dilution and generating cash tax savings of up to $70 million over three years.

Adjusted for this charge, underlying EBITDA and EPS increased 8.7% and 50%, to $938 million and 90 cents, respectively, when compared to the same period a year ago. EBITDA as adjusted increased due to wireless growth and lower restructuring costs. EPS as adjusted increased due to higher EBITDA, lower depreciation and amortization, less financing costs and reduced income taxes. Free Cash Flow this quarter was lower due to higher capital expenditures and the receipt, in the first quarter of 2006, of a large income tax recovery.

Wireless FINANCIAL HIGHLIGHTS

- Revenues increased by $118 million or 13% to $1.0 billion in the
first quarter of 2007, when compared with the same period in 2006
- ARPU (average revenue per subscriber unit per month) improved by 2.9%
to $62.03. The data component increased by 69% to $6.27, which more
than offset the decline in voice ARPU
- EBITDA (as adjusted) increased by $68 million over the first quarter
of 2006 representing 17% growth
- Cost of acquisition per gross addition of $438 increased slightly at
2% year over year.
- Net subscriber additions were 90,500, down slightly by 2%. Postpaid
additions totaled 60,800 while prepaid loading was 29,700
- Blended monthly churn was stable at 1.35% compared to 1.33% a year
ago, while postpaid churn remained low at 0.97%
- Cash flow (EBITDA less capital expenditures) based on EBITDA as
adjusted increased $18 million or 5.4% to $353 million in the quarter
due to higher EBITDA partially offset by increased capital
expenditures, which included implementation of wireless number
portability.

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