Telus Reports Q2

VANCOUVER -- TELUS Corporation (TSX: T and T.A / NYSE: TU) today reported for the second quarter of 2006 a six per cent increase in revenues to $2.1 billion from a year ago due to continued strong wireless performance and good high-speed Internet and wireless subscriber growth. Earnings before interest, taxes, depreciation and amortization (EBITDA) increased 4% due to strong wireless growth partly offset by increased restructuring charges this quarter. Earnings per share (EPS) for the second quarter were $1.03, compared to 53 cents for the same period a year ago. EPS this quarter included favourable tax related adjustments totaling 34 cents per share. When normalizing for various items, EPS this quarter increased by approximately 23% due primarily to underlying EBITDA growth and lower financing costs from a lower debt level.

Darren Entwistle, president and CEO, stated "Our national wireless and data growth strategy continues to generate strong consolidated top and bottom line growth for TELUS despite the challenging wireline environment. Wireless revenue, which is now 44% of consolidated revenue, was up 18% in the second quarter. However, TELUS' wireless operations generated EBITDA growth of 20% and a one point increase in margin to 46%, supported by a $2 increase in ARPU to $63 and a churn rate of 1.3%. Notably, wireless data revenue more than doubled to $63 million this quarter. Wireline data revenue was up 6% due in part to a 71% increase in high-speed net additions this quarter. Significantly higher restructuring charges of $30.7 million this quarter indicate the ongoing focus of the TELUS organization to realize operating cost savings through successive efficiency programs consistent with prior guidance. Reflecting our strong mid-year performance, we today announced consolidated increases in 2006 guidance for revenue, EPS and capital expenditures."

Robert McFarlane, executive vice president and CFO, said "today's strong increase in earnings per share was due to a number of factors this quarter. These included EBITDA growth driven by our excellent wireless results, lower financing charges primarily due to the December 2005 early redemption of $1.6 billion of debt, positive tax adjustments this quarter due to the enactment of lower Federal and Alberta tax rates and recognition of investment tax credits, as well as lower shares outstanding. Again this quarter, TELUS returned significant capital to shareholders with our 27.5 cent quarterly dividend and the repurchase of 5.6 million shares for $249 million. Successive repurchase programs have resulted in shares outstanding of 341.3 million at June 30, 2006 being down 4.5% from a year ago. Finally, we have successfully taken initial steps regarding the refinancing of the 7.5% Notes coming due in June 2007. Reflecting our strong financial position and superior access to the capital markets, in May, TELUS publicly issued $300 million of 5.00% seven year Notes in a very well received transaction. We have also entered into forward starting interest rate swap agreements that fix the interest rate on an additional $300 million of future debt issuance as part of the 2007 Note refinancing."

Telus Corp. (NYSE: TU; Toronto: T)