Offer to purchase CLEARNET.pdf - About TELUS

TELUS CORPORATION
NOTES TO THE PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS (Continued)
June 30, 2000
(unaudited)
3. 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 was accounted for using the pooling
of interests method under Canadian GAAP. The merger transaction is more fully described in note 1(a)
of the Company’s audited consolidated financial statements contained in Schedule I of this Circular.
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 had 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 and $1.3 million paid to repurchase
partial shares) 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 assets ........................... 587.8
Other assets ...................................... 284.8
Long-term debt .................................... (667.7)
Deferred income tax liabilities ......................... (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
(b) 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.
(c) 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.
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