Form 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Issuer
Pursuant to Rule 13a - 16 or 15d - 16 of
the Securities Exchange Act of 1934
For the month of ___December___ 2005
(Commission File No. 000-24876)
TELUS Corporation
(Translation of registrant's name into English)
21st Floor, 3777 Kingsway
Burnaby, British Columbia V5H 3Z7
Canada
(Address of principal registered offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F:
X
Form 20-F _____ Form 40-F _____
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.
X
Yes _____ No _____
This Form 6-K consists of the following:
TELUS News Release
December 16, 2005
TELUS sets 2006 financial and operating targets
Expect to exceed initial 2005 consolidated financial targets despite labour
disruption
Strong record of growth in revenue, earnings and cash flow expected to continue
in 2006
Vancouver, B.C. - TELUS Corporation (TSX: T and T.NV / NYSE: TU) announced 2006
financial and operating targets that reflect continued successful execution of
the Company's strategy focused on growth in wireless, data and Internet. In
addition, TELUS revised guidance for five of its 2005 indicators including
tightening the operating earnings guidance range for our wireline business and
TELUS consolidated, and increasing guidance for high speed Internet and
wireless subscriber net additions.
"We are on track to exceed all of the 2005 consolidated targets we set a year
ago for revenue, earnings and cash flow" said Robert McFarlane, executive vice
president and CFO. "Notably, we accomplished this despite a four month labour
disruption experienced in Western Canada. The acceptance of a new collective
agreement in November and the ongoing strong growth in the Canadian wireless
industry positions TELUS for continued financial success, as reflected in the
2006 targets announced today. These targets reflect our expectation for strong
growth in both revenue and profitability with the target range for consolidated
EPS representing a 23 to 33 per cent increase over that expected for 2005. Even
with capital expenditures increasing, due to deferred capital investments in
2005 as a result of the labour disruption, we expect increased free cash flow
to up to $1.6 billion in 2006. These targets reflect the confidence of the
TELUS organization to successfully execute our business plan in the face of
ongoing competitive pressures and to continue to enhance shareholder value
through both profitability growth and by returning significant capital to our
shareholders. In addition to the previously announced 38% increase in the
quarterly dividend to be paid on January 1, 2006, TELUS also announced today a
new normal course issuer bid to repurchase up to 24 million shares over the
next 12 months."
The 2006 financial targets and updated 2005 guidance are as follows:
_______________________________________________________________________________________________________________
2006 Targets Latest 2005 Guidance Change(1)
_______________________________________________________________________________________________________________
Consolidated
Revenues $8.6 to 8.7 billion $8.1 to 8.15 billion 6 to 7%
EBITDA (2) $3.5 to 3.6 billion $3.275 to 3.325 billion(4) 6 to 9%
Earnings per share $2.40 to 2.60 $1.90 to 2.00 23 to 33%
Capital expenditures $1.5 to 1.55 billion approx. $1.3 billion 15 to 19%
Free cash flow (3) $1.55 to 1.65 billion $1.4 to 1.5 billion 7 to 14%
Wireline
Revenue (external) $4.825 to 4.875 billion $4.825 to 4.85 billion 0 to 1%
Non-ILEC revenue $650 to 700 million $625 to 635 million(4) 3 to 11%
EBITDA (2) $1.8 to 1.85 billion $1.84 to 1.865 billion(4) (3) to 0%
Non-ILEC EBITDA $25 to 40 million $15 to 20 million 43 to 129%
Capital expenditures $1.05 to 1.1 billion approx. $900 million 17 to 22%
High-speed Internet
subscriber net adds over 100,000 over 65,000(4) 54%
Wireless
Revenue (external) $3.775 to 3.825 billion $3.275 to 3.3 billion 15 to 16%
EBITDA (2) $1.7 to 1.75 billion $1.425 to 1.45 billion 18 to 22%
Capital expenditures approx. $450 million approx. $400 million 13%
Wireless subscriber net additions over 550,000 over 550,000(4) no change
_______________________________________________________________________________________________________________
(1) Annual change based on low and high-end 2006 targets compared to midpoint
of latest 2005 guidance.
(2) Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)is
defined as Operating revenues less Operations expense less Restructuring
and workforce reduction costs. Restructuring and workforce reduction costs
are estimated to be approximately $50 million in 2005 and $100 million in
2006.
(3) Defined as EBITDA, adding (deducting) net non-cash share-based
compensation expense (payments), adding restructuring costs net of cash
payments, and deducting capital expenditures, net cash interest paid,
and net cash taxes.
(4) Items that have been updated since last guidance provided on November 10,
2005.
For the wireline segment, EBITDA is expected to be flat to a decline of 3% in
2006 resulting from increased restructuring costs partially offset by continued
operating efficiencies. Excluding restructuring and workforce reduction costs,
wireline EBITDA is expected to be $1.9 to $1.95 billion, which is approximately
flat to $50M more than that expected for 2005. Wireline revenue growth in the
non-incumbent territory in Central Canada is expected to increase 3 to 11% in
2006, while targeting another strong increase in EBITDA.
For the wireless segment, EBITDA growth is expected to increase 18 to 22% as a
result of a 15 to 16% increase in revenues, continued economies of scale, cost
containment and continued strong growth in wireless subscribers.
The double-digit earnings per share increase is not only being generated by
higher operating profitability but also by lower financing costs as a
consequence of reduced debt levels. This significant growth in EPS is despite
increased pension expense and expectations for higher restructuring costs in
2006, as well as the 2005 estimate including 21 cents of positive impacts from
the settlement of tax matters in the first nine months, which are not projected
to reoccur in 2006. When adjusting for these factors as well as expenses
related to the labour disruption in 2005, the normalized EPS growth rate for
2006 would be 17 to 27%.
As previously announced, TELUS continues to have certain long-term policy
guidelines such as net debt to EBITDA of 1.5 to 2.0 times, net debt to total
capital of 45 to 50%, and a dividend payout ratio guideline of 45 to 55% of
sustainable net earnings. The latest 2005 guidance and 2006 targets announced
today are in compliance with these policy guidelines. In addition, a review of
our tax situation in regard to when TELUS is likely to pay cash taxes indicates
that cash tax payments are expected to be deferred by one year to 2008 from
2007.
Key Assumptions & Sensitivities
For 2006 target purposes, a number of assumptions were made including: economic
growth consistent with recent provincial and national estimates by the
Conference Board of Canada, including GDP growth of 3.1% in Canada; increased
wireline competition in both business and consumer markets; wireless industry
market penetration gain similar to 2005; approximately $100 million
restructuring and workforce reduction expenses (approximately $50 million in
2005); effective tax rate of approximately 35%. EPS, cash balances, net debt
and common equity may be affected by the potential purchases of up to 24
million TELUS shares under the normal course issuer bid accepted by the Toronto
Stock Exchange that can commence on December 20, 2005.
We also encourage investors to read the forward looking statements below, and
in related disclosures, for the various economic, competitive, regulatory and
company factors that could cause actual future financial and operating results
to differ from those currently expected.
About TELUS
TELUS (TSX: T, T.NV; NYSE: TU) is the largest telecommunications company in
Western Canada and the second largest in the country, with $8 billion of annual
revenue, 4.7 million network access lines and 4.3 million wireless customers.
The company provides customers with a full range of telecommunications products
and services including data, voice and wireless services across Canada,
utilizing next generation Internet-based technologies. For more information
about TELUS, please visit www.telus.com.
Contacts
Media Relations: Investor Relations:
Allison Vale John Wheeler
(416) 629-6425 (604) 697-8154
allison.vale@telus.com ir@telus.com
Forward-looking statements
______________________________________________________________________________
This document contains statements about expected future events and financial
and operating results of TELUS Corporation ("TELUS" or the "Company") that are
forward-looking. By their nature, forward-looking statements require the
Company to make assumptions and are subject to inherent risks and
uncertainties. There is significant risk that predictions and other
forward-looking statements will not prove to be accurate. Readers are cautioned
not to place undue reliance on forward-looking statements as a number of
factors could cause actual future results, conditions, actions or events to
differ materially from the targets, guidance, expectations, estimates or
intentions expressed in the forward-looking statements.
Factors that could cause actual results to differ materially include but are
not limited to: economic growth, competition; economic fluctuations; financing
and debt requirements (including share repurchases); tax matters; human
resources (including the ongoing impact of introducing the new collective
agreement and the return to work on operating expenses, customer service and
revenue); business integrations; pension performance, funding and expenses;
technology (including reliance on systems and information technology);
regulatory developments; process risks (including conversion of legacy
systems); health and safety; litigation; business continuity events (including
man-made and natural threats); and other risk factors discussed herein and
listed from time to time in TELUS' reports, comprehensive public disclosure
documents including the 2004 Annual Report, and in other filings with
securities commissions in Canada (filed on SEDAR at www.sedar.com) and the
United States (filed on EDGAR at www.sec.gov).
For further information, see Section 10: Risks and uncertainties in TELUS'
annual 2004 and interim quarterly reports in 2005 under Management's
discussions and analysis.
______________________________________________________________________________
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
December 16, 2005
TELUS Corporation
/s/ Audrey Ho
_____________________________
Name: Audrey Ho
Title: Vice President, Legal Services and
General Counsel and Corporate Secretary