Annual report - About TELUS

management discussion and analysis
QuébecTel Mobilité, TELUS Mobility’s capital expenditures
were $533.7 million in 2000 as compared to
$545.9 million in 1999.
Capital spending in Advanced Communications increased
to support more rapid rollout of ADSL high-speed Internet
services and TELUS.net, interactive commerce initiatives,
internetworking services and the acquisition of the assets
of a data services company.
Other capital expenditure increases included $111.0
million that was directed to expansion of TELUS’ national
network (inter-city transport, access, real estate), and
seven months of QuébecTel Communications capital
expenditures ($32.9 million).
FINANCING ACTIVITIES
($ millions) 2000 1999 Change %
Cash provided (used) by
financing activities 2,328.5 (560.5) 2,889.0 –
In May 2000, TELUS Communications Inc. redeemed
$150 million of notes and financed the redemption with a
$110 million withdrawal of sinking fund assets and the
balance with cash from operations.
In June 2000, TELUS Communications (B.C.) Inc.
issued $200 million of extendible medium-term notes
with an initial maturity of 2003. Other than this single
transaction, no additional medium-term notes were
issued from the Company’s $2.4 billion authorized program
($1.0 billion at TELUS Corporation and $700 million
at each of TELUS Communications Inc. and TELUS
Communications [B.C.] Inc.). Additional cash needs
throughout the year for operating and general corporate
purposes including the acquisition of QuébecTel in June
were provided by issues from the aggregate $1.5 billion
authorized commercial paper programs which were fully
backed by committed bank lines of credit.
> 48
NET DEBT TO EBITDA
1.5
96
1.2
0.9
0.9
3.2
97 98 99 00
In October 2000, a $7.7 billion senior secured bank
credit facility was placed between TELUS Corporation
and a number of Canadian, U.S. and offshore banks to
finance the Clearnet acquisition and provide ongoing liquidity
lines. This facility consisted of three components:
(1) a $5.0 billion tranche established as a 364-day bridge
facility had approximately $4.0 billion drawn down as at
December 31, 2000; (2) a $1.25 billion 364-day revolving
line of credit provided a liquid reserve for general corporate
purposes; and (3) a $1.45 billion single purpose
tranche established to provide funds to the Company in
the event that an offer to purchase certain Clearnet notes
was triggered upon the change of control of Clearnet.
This latter tranche did not have to be used and was cancelled
by the Company in December 2000, leaving $6.25
billion of the facility remaining.
As part of the Clearnet acquisition, TELUS assumed
$2.6 billion book value of Clearnet debt. In December,
Clearnet long-term debt with a face value of $1.3 billion
was redeemed for $1.4 billion cash including prepayment
premiums of $99.8 million. These repayments were
comprised of $484 million for Senior Discount notes
scheduled to mature in 2005, $658 million for a secured
vendor financing facility and $295 million for a secured
bank financing facility.
Subsequent to year-end, TELUS completed the compulsory
acquisition of remaining Clearnet Class A non-voting
shares outstanding. In addition, TELUS successfully completed
exchange offers for 98.7% of the outstanding
Clearnet 6.75% Convertible Debentures, and 99.6% of the
outstanding Clearnet Warrants. These were exchanged for
TELUS Corporation 6.75% Convertible Debentures and
TELUS Warrants. TELUS completed compulsory acquisition
procedures to acquire the balance of Clearnet 6.75%
Convertible Debentures and Warrants in February, 2001.
Credit Facilities
TELUS credit facilities at December 31, 2000, consist of
a $6.25 billion Senior Bank Credit Facility, comprised of a
$5.0 billion bridge facility with a 364-day term ($4.0 billion
drawn and $1.0 billion available) and a $1.25 billion 364day
revolving facility (undrawn) that matures on October
19, 2001; and other bank facilities with an aggregate
commitment of approximately $200 million.