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4th quarter 2003 review. Darren Entwistle Member of the TELUS Team. 2003: A strong financial performance. 13% EBITDA increase to $2.84 billion 400 bps margin increase to 40% Net income $332 million 92 cents in EPS Free Cash Flow $961 million. $1,136M. 52%. $746M. $456M. 508%. $75M.
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4th quarter 2003 review Darren Entwistle Member of the TELUS Team
2003: A strong financial performance • 13% EBITDA increase to $2.84 billion • 400 bps margin increase to 40% • Net income $332 million • 92 cents in EPS • Free Cash Flow $961 million
$1,136M 52% $746M $456M 508% $75M 2002 2003 2002 2003 Communications TELUS business segments deliver cash flow1 Mobility 1EBITDA less capex significant increase in YoY cash flow
% 19 15 14 13 9 8 2 2 1 SBC Sprint BLS VZ BT PCCW Aliant Telia FT DT TELUS KPN MTS Telstra Nippon BCE (0.3) (3) (3) (4) (5) (6) As at February 10, 2004 Notes: 1 Excluding restructuring TELUS data based on 2002 & 2003 results Other results provided by Bloomberg, company, and analyst reports (14) 2003 leading global telecom performance EBITDA1 % growth rates AT&T (18) (18)
94 57 43 29 20 17 14 4 3 4 AT&T PCCW VZ 2 BT 0.2 (0.1) (1) TELUS FT Telia DT MTS BCE Sprint Aliant Nippon BLS KPN Telstra (4) (16) 2003 leading global telecom performance Cash Flow (EBITDA1 - Capex) % growth rates % SBC As at February 10, 2004 Notes: 1 Excluding restructuring TELUS data based on 2002 & 2003 results Other results provided by Bloomberg, company, and analyst reports (24)
delivering on 2003 priorities TELUS Communications • Operational efficiency program on target • net 1,500 staff reductions = two-year 6,700 total • cumulative savings $454 million TELUS Mobility leading wireless performance • Revenue growth 17% • Lifetime revenue/sub $3,900 up 28% • EBITDA increase 53% / 800 bps margin increase
reaching a collective agreement • Union accepted binding arbitration Jan. 30 • Next steps • select arbitrator(s), set terms of reference & timeline • Generic terms of reference include • growth and competitiveness of a company and competitive dynamics of its industry • a company's ability to operate efficiently, improve productivity and meet standards of service • comparability with other industry collective agreements • good labour-management relations
TELUS IP telephony - business • TELUS industry leader in IP telephony • TELUS IP-One Hosted & Managed solution • carrier grade telephony over TELUS Next Generation Network (NGN) today • 411, 911, operator service • cost savings & productivity for customers • provides end to end Quality of Service (QoS) at or better than PSTN and superior to VoIP • compelling applications for enhanced productivity • Portal management, messaging, conferencing, find me etc.
IP telephony - consumer • competitive threat & opportunity • TELUS differentiating factors • core to business & consumer • known complex business • primary & second lines • QoS • regulatory symmetry for all players
% 9 7 7 7 7 5 4 3 3 2 1 0.2 SBC BLS Sprint VZ KPN Telstra DT FT TELUS BCE MTS Aliant Telia BT PCCW Nippon (0.4) (1) (2) (3) (7) As at February 10, 2004 Notes: TELUS data based on 2003 results & mid-point of 2004 targets Other estimates provided by Bloomberg, company and analyst reports 2004E leading global telecom performance projected EBITDA % growth rates AT&T (16)
% 14 11 11 10 7 5 5 3 3 2 2 2 BT VZ SBC KPN TELUS Telstra Aliant Telia MTS BCE Nippon FT DT PCCW BLS Sprint (3) (4) (11) (11) As at February 10, 2004 Notes: TELUS data based on 2003 results & mid-point of 2004 targets Other estimates provided by Bloomberg, company and analyst reports 2004E leading global telecom performance projected Cash Flow (EBITDA - Capex) % growth rates AT&T (23) (23)