Annual report - About TELUS

notes to consolidated financial statements
December 31, 2000
1. ACCOUNTING ENTITY
(a) Name Change
Effective January 1, 2000, BCT.TELUS Communications Inc. and TELUS Corporation changed their names to TELUS
Corporation (TELUS) and TELUS Holdings Inc., respectively.
(b) Business Combination
On January 31, 1999, the operations of BC TELECOM Inc. (BC TELECOM) and TELUS Corporation (TELUS Holdings
Inc.) were merged to form BCT.TELUS Communications Inc. (TELUS). The merged Company is engaged in providing
communications services and solutions for consumers and businesses.
The nature of the business combination was such that neither of the combining companies could be identified as the
acquirer for accounting purposes. Therefore, the business combination has been accounted for using the pooling of
interests method of accounting whereby the consolidated financial statements reflect the combined carrying values of
the assets, liabilities and shareholders’ equity, and the combined operating results of BC TELECOM and TELUS for all
periods presented.
Under the terms of the merger, shares of BC TELECOM were exchanged on a one-for-one basis and shares of TELUS
were exchanged on a one for .7773 basis for shares in BCT.TELUS Communications Inc. Subsequent to the exchange,
the former shareholders of BC TELECOM held 52.5% and the former shareholders of TELUS held 47.5% of the
177,427,492 outstanding voting common shares of the combined company. On February 1, 1999, the closing market
price of the BCT.TELUS Communications Inc. voting common shares was $42.50.
A summary of the book values of the assets and liabilities at the date of the merger is as follows:
(millions) BC TELECOM TELUS
Assets
Current assets $ 476.3 $ 497.5
Property, plant and equipment, net 3,156.9 2,713.8
Other assets 388.4 604.5
4,021.6 3,815.8
Less
Current liabilities 1,017.8 861.6
Long-term debt 883.7 558.5
Other liabilities 77.0 10.4
Non-controlling interest 9.7 –
Net assets $ 2,033.4 $ 2,385.3
A charge of $466.3 million was recorded in the first quarter of 1999 for the expected costs in 1999 and 2000 to
complete merger-related restructuring activities. More than half of this charge is for management termination costs
and the costs of voluntary early retirement programs. The business restructuring also included the rationalization of real
estate, the impairment of assets in two start-up businesses that were reassessed in relation to national growth plans
and consulting costs from merger integration activities.
Third-party costs to effect the merger arrangement were charged to retained earnings in the first quarter of 1999.
These costs totaled $51.9 million and included financial advisor fees, regulatory filing fees, legal and accounting fees,
and printing and mailing costs.
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