Offer to purchase CLEARNET.pdf - About TELUS

More documents

Recommendations

Info

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) are recognized as liabilities assumed in a purchase business combination. Therefore, qualifying merger related restructuring costs (after tax) of $144.6 million associated with TELUS have been recorded as liabilities assumed at the time of purchase. (c) Depreciation As TELUS capital assets on acquisition have been recorded at their fair value, depreciation of such assets will be different under U.S. GAAP. (d) Interest As TELUS long-term debt on acquisition has been recorded at its fair value, the interest expense of the Company will be different under U.S. GAAP. (e) Intangible Assets As TELUS intangible assets on acquisition have been recorded at their fair value, amortization of such assets needs to be included under U.S. GAAP. Amortization is calculated using the straight-line method at the following rates: Assigned Fair Value on Acquisition Useful Life Subscribers — wireline ...................... $1,950.0 million 40 years Spectrum licenses .......................... $1,833.3 million 40 years Subscribers — wireless ...................... $ 250.0 million 10 years (f) Goodwill Under the purchase method of accounting, TELUS assets and liabilities at acquisition have been recorded at their fair values with the excess purchase price being allocated to goodwill. The goodwill on the acquisition of TELUS is being amortized on a straight line basis over its estimated life of 20 years. (g) Change in Accounting Policy Under Canadian GAAP, changes in accounting policies are applied retroactively. Under U.S. GAAP the cumulative effect of changing to a new accounting principle on the amount of retained earnings at the beginning of the period in which the change is made is included in net income of the period of the change. (h) Asset Impairment In assessing capital asset impairment under Canadian GAAP, estimated future net cash flows are not discounted in computing the net recoverable amount. Under U.S. GAAP, the determination on whether or not the assets are impaired is made on a discounted basis. Upon determining that asset impairment existed, the Company estimated fair value using discounted cash flows. Under U.S GAAP the charge taken would be $232.2 million higher and would not be considered an extra-ordinary item. I-29
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) As a result, under U.S. GAAP the capital assets have a book value which is $232.2 million lower than the value under Canadian GAAP. Therefore, under U.S. GAAP the annual depreciation expense, after-tax, would be $40 million lower. Additional Disclosures Required under U.S. GAAP Stock Option Compensation SFAS 123, ‘‘Accounting for Stock-based Compensation’’, establishes financial accounting and reporting standards for stock-based employee compensation plans. As permitted by this statement, the Company has elected to continue to follow the intrinsic value method of accounting for stock-based compensation arrangements, as provided for in APB Opinion 25. Since all options were granted with exercise prices equal to the market price at the date of grant, no compensation cost has been charged to operations. Under U.S. GAAP, a company which does not adopt the fair value method described in SFAS 123 must disclose the cost of stock compensation awards, at their fair value, at the date the award is granted. The fair value of the Company’s options was estimated using the Black-Scholes model with assumptions of a 10 year expected term, 20% volatility, interest rates ranging from 5.3% to 5.6% and an expected dividend yield ranging from 3.3% to 4.1%. Had compensation cost for the employee stock option plan been determined based upon fair value at the date of award, the Company’s net income and earnings per share would have been reduced by approximately $1.3 million and $0.7 million or $0.01 and $0.01 per share in the years 1999 and 1998, respectively. Comprehensive Income SFAS 130, ‘‘Reporting Comprehensive Income’’, requires that a statement of comprehensive income be displayed with the same prominence as other financial statements. Comprehensive income, which incorporates net income, includes all changes in equity during a period except those resulting from investments by and distributions to owners. There is no requirement to disclose comprehensive income under Canadian GAAP. There are no material differences between Canadian and U.S. GAAP which would have an impact on the consolidated statements of comprehensive income except as outlined in the tables above. Recently Issued Accounting Standards Not Yet Implemented Under Staff Accounting Bulletin 74, the Company is required to disclose certain information related to new accounting standards which have not yet been adopted due to delayed effective dates. SFAS 133, ‘‘Accounting for Derivative Instruments and Hedging Activities’’ originally effective for fiscal 2000, has been deferred and will now be effective for fiscal 2001. It requires that all derivatives be recognized as either assets or liabilities and measured at fair value. The criteria for determining whether all or a portion of a derivative may be designated as a hedge have changed. Derivatives which are fair value hedges, together with the financial instrument being hedged, will be marked to market with adjustments reflected in income. Derivatives which are cash flow hedges will be marked to market with adjustments reflected in comprehensive income. The impact of implementing this standard on the Company’s financial statements is not yet determinable. I-30
Page 1 and 2:
No securities commission or similar
Page 3 and 4:
QUESTIONS AND ANSWERS ABOUT THE OFF
Page 5 and 6:
outstanding voting shares of Clearn
Page 7 and 8:
WHERE YOU CAN OBTAIN MORE INFORMATI
Page 9 and 10:
SUMMARY The following is a summary
Page 11 and 12:
Commitment to Accept the Offers by
Page 13 and 14:
Selected Historical and Pro Forma C
Page 15 and 16:
DEFINITIONS In the accompanying Sum
Page 17 and 18:
‘‘Governmental Entity’’ mea
Page 19 and 20:
‘‘Shareholders Agreements’’
Page 21 and 22:
Shares and the amount of cash recei
Page 23 and 24:
shares into the Depositary’s acco
Page 25 and 26:
the person or persons specified by
Page 27 and 28:
(l) neither TELUS nor the Banks bec
Page 29 and 30:
condition of the Offers specified u
Page 31 and 32:
(f) the Holdco Shareholder properly
Page 33 and 34:
Notice of any determination regardi
Page 35 and 36:
The Offers are not being made to, n
Page 37 and 38:
On July 14, 2000, Darren Entwistle,
Page 39 and 40:
espect of such Acquisition Proposal
Page 41 and 42:
etter positioned to take advantage
Page 43 and 44:
The funds obtained pursuant to the
Page 45 and 46:
part of its national strategy, TELU
Page 47 and 48:
to require holders of TELUS Non-Vot
Page 49 and 50:
‘‘Dividends’’ in TELUS’ A
Page 51 and 52: systems. Change in the regulation o
Page 53 and 54: (b) the management proxy circular o
Page 55 and 56: COMMITMENTS TO ACQUIRE SECURITIES O
Page 57 and 58: the proposed transaction is likely
Page 59 and 60: ACQUISITION OF CLEARNET SHARES NOT
Page 61 and 62: least equal in value to the conside
Page 63 and 64: Beneficial owners of Clearnet Conve
Page 65 and 66: separately dispose of the balance o
Page 67 and 68: also be taxable Canadian property w
Page 69 and 70: No brokerage fees or commissions wi
Page 71 and 72: CONSENT OF AUDITORS To: British Col
Page 73 and 74: CERTIFICATE OF 612459 B.C. LTD. The
Page 75 and 76: MANAGEMENT’S REPORT Management is
Page 77 and 78: TELUS CORPORATION (FORMERLY BCT.TEL
Page 87 and 88: 4. FINANCING COSTS TELUS CORPORATIO
Page 101: TELUS CORPORATION (FORMERLY BCT.TEL
Page 105 and 106: SCHEDULE II TELUS CORPORATION UNAUD
Page 107 and 108: COMPILATION REPORT To the Directors
Page 109 and 110: TELUS CORPORATION PRO FORMA CONSOLI
Page 111 and 112: TELUS CORPORATION NOTES TO THE PRO
Page 119 and 120: TELUS CORPORATION PRO FORMA CONSOLI
Page 127 and 128: SCHEDULE III TELUS CORPORATION U.S.
Page 129 and 130: The following table restates the ma
Page 131 and 132: ANNEX A ADDITIONAL INFORMATION ADDI
Page 133 and 134: Fares F. Salloum President — Inte
Page 135 and 136: Officers Name and Position held wit
show all

Offer to purchase CLEARNET.pdf - About TELUS

Create successful ePaper yourself

Delete template?

Save as template?