Offer to purchase CLEARNET.pdf - About TELUS

TELUS CORPORATION
(FORMERLY BCT.TELUS COMMUNICATIONS INC.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 1999
21. DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES (Continued)
(a) Merger of BC TELECOM and TELUS
The business combination between BC TELECOM and TELUS described in note 1(a) was accounted for
using the pooling of interests method under Canadian GAAP. Under Canadian GAAP, the application of
the pooling of interests method of accounting for the merger of BC TELECOM and TELUS resulted in the
restatement of prior periods as if the two companies have always been combined. Under U.S. GAAP, the
merger is accounted for using the purchase method. Use of the purchase method results in TELUS being
acquired by BC TELECOM for $4,662.4 million (including merger related costs of $51.9 million) effective
January 31, 1999. The acquisition was effected by issuing 112.3 million shares in TELUS Corporation
(formerly BCT.TELUS Communications Inc.) and 1.5 million options to replace TELUS options
outstanding.
The acquisition is summarized as follows:
Net assets acquired:
Net working capital (including bank indebtedness acquired of $57.5 million) ........... $ (644.6)
Property and equipment ................................................. 2,531.4
Intangible assets ...................................................... 4,033.3
Goodwill ............................................................ 403.1
Deferred income tax asset ............................................... 587.8
Other assets ......................................................... 284.8
Long-term debt ....................................................... (667.7)
Deferred income tax liability ............................................. (1,855.3)
Other liabilities ....................................................... (10.4)
$ 4,662.4
Financed by:
Issuance of shares and replacement options ................................... $4,609.2
Repurchase of partial shares .............................................. 1.3
Transaction costs ...................................................... 51.9
$ 4,662.4
The results of TELUS prior to the merger date of January 31, 1999 would not be included in the results of
the Company under U.S. GAAP. Therefore, $15.3 million for the month ended January 31, 1999, and
$249.3 million for the year ending December 31, 1998 has been deducted from the net income under
Canadian GAAP.
(b) Restructuring Charge
A charge of $466.3 million was recorded for the expected costs to complete merger-related restructuring
activities. Under U.S. GAAP, costs incurred to:
• exit an activity of an acquired company,
• involuntarily terminate employees of an acquired company, or
• relocate employees of an acquired company
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