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Telus Updates on 1Q 2013 Results [Manufacturing Close - Up](Manufacturing Close - Up Via Acquire Media NewsEdge) Telus Corp.'s first quarter 2013 revenue increased by nearly 5 percent to $2.76 billion from a year earlier while earnings before interest, taxes, depreciation and amortization increased by more than 5 percent to $1.03 billion. In a release dated May 9, the Company said that earnings per share rose 14 percent to $0.56, which reflects the mid-April two- for-one stock split. The increase in consolidated revenue was generated by greater than 6 percent growth in wireless revenue and almost 3 percent growth in wireline revenue. Telus continued to attract new wireless customers and increase average revenue per unit from use of more wireless data services and continued focus on higher value postpaid subscribers. Wireline benefited from a 9 percent increase in data revenue generated from the company's Optik TV and high-speed Internet services. Consolidated EBITDA growth reflects 7 percent higher wireless EBITDA and 2 percent higher wireline EBITDA. Telus started the year with strong subscriber growth, adding 59,000 postpaid wireless customers, 34,000 TV subscribers and 16,000 high-speed Internet customers, partially offset by losses of prepaid wireless customers, and wired phone lines. Telus' total wireless base of 7.7 million is up nearly 5 percent year-over-year, the Telus TV subscriber base of 712,000 is up 29 percent, and the high-speed Internet connections are up nearly seven percent to more than 1.3 million. Free cash flow of $358 million in the first quarter was unchanged from a year ago. Underlying free cash flow, before income taxes, was up strongly by 25 percent to $506 million, giving the company the ability to invest in the growth of its core operations while returning capital to investors and funding higher income tax payments. Darren Entwistle, Telus President and CEO said, "Telus realised strong first quarter results driven by our company's revenue and EBITDA growth in both the wireline and wireless segments of our business. Our unwavering focus on investing in broadband data technology and services combined with our unremitting commitment to put our customers first enhances the loyalty of our existing client base, attracts new customers and generates strong bottom line growth. This is evidenced by our 59,000 new postpaid wireless customers, 34,000 new TV clients, 16,000 additional high-speed Internet connections and industry leading postpaid subscriber churn rate of only 1.11 percent per month. Furthermore, the strength of our earnings per share, up 14 percent, and free cash flow position are enabling us to proceed with numerous initiatives aimed at continuing to create value for our investors. "Building on the momentum generated by our successful two-for- one stock split completed in April, I am pleased to announce four additional shareholder-friendly initiatives. Firstly, we are increasing our quarterly dividend to 34 cents per share, 11.5 percent higher than the dividend level one year ago. Secondly, we are extending our dividend growth program for an additional three years to 2016, targeting semi-annual increases of circa 10 percent annually. Thirdly, we are requesting regulatory approval to make a normal course issuer bid to purchase and cancel up to 15 million Telus shares valued at up to $500 million in 2013. Finally, it is our intention to extend this share purchase program for up to $500 million in each of the next three calendar years for a total of up $2 billion. We see all these initiatives as consistent to our goal of providing superior investment returns to Telus shareholders." John Gossling, Telus Executive Vice-President and CFO, said, "The successful completion of our $1.7 billion debt financing on April 1 of 11 year and 30 year notes, at an attractive average blended coupon rate of 3.7 percent, demonstrates our excellent access to Canadian and U.S. capital markets. This outcome is something Telus has earned by maintaining a strong balance sheet and adhering to our financial policies year-after-year. In addition, this financing significantly reduces our refinancing risk with our average term to maturity almost doubling to nine years. With this issue and almost $2 billion of available liquidity, we are well positioned to early redeem this month $700 million of higher cost 2014 debt, participate in the upcoming spectrum auction and to action our $500 million share purchase program in 2013." Telus has reaffirmed its full year 2013 targets on all eight financial metrics announced in mid-February. Operating Highlights Telus wireless -External wireless revenues increased by $89 million or 6.4 percent to $1.5 billion in the first quarter of 2013, compared to the same period a year ago. This growth was driven by continued growth in data services and subscribers. -Data revenue increased by $85 million or 17 percent to $583 million, representing 43 percent of wireless network revenue in the quarter. Data ARPU increased by $2.79 or 12 percent to $25.62. These increases were due to continued strong adoption and usage of smartphones and data applications and higher roaming volumes. -Blended ARPU increased by $1.17 or 2.0 percent to $60.04 as data ARPU growth more than offset a moderating 4.5 percent voice ARPU decline. This is the tenth consecutive quarter of year-over-year growth in blended ARPU. -Monthly postpaid subscriber churn was 1.11 percent, down three basis points from a year ago, while blended churn decreased seven bps to 1.48 percent. This is the best first quarter blended churn result in six years, reflecting our successful Customers First service approach, investments in retention and lower churn on smartphones. -Postpaid net additions of 59,000 were partially offset by a loss of 26,000 lower ARPU prepaid subscribers for net additions of 33,000 - an increase of 50 percent from 22,000 a year ago. Total wireless subscribers were up 4.6 percent from a year ago to 7.7 million, while the proportion of high-value postpaid subscribers grew to 86 percent of the base. Smartphone subscribers now represent 68 percent of our postpaid base, up from 56 percent a year ago. -Wireless EBITDA of $666 million increased by $46 million or 7.4 percent over last year due to strong network revenue growth and expense management. The EBITDA margin based on network service revenue increased by 0.5 points to 48.6 percent. Wireless simple cash flow (EBITDA less capital expenditures) increased by $63 million to $532 million in the quarter due to higher EBITDA and $17 million lower capital expenditures. Telus wireline -External wireline revenues increased by $36 million or 2.9 percent to $1.3 billion in the first quarter of 2013, when compared with the same period a year ago. This growth was generated by increased data service revenue, partially offset by declines in legacy voice revenues. -Data service and equipment revenues increased by $64 million or 9.1 percent, due primarily to strong growth in Telus TV subscribers, high-speed Internet and enhanced data services, combined with TV and high-speed Internet rate increases. -Total TV additions of 34,000 were lower by 10,000 over the same quarter last year, as lower gross additions were partly offset by a lower churn rate. The total TV subscriber base of 712,000 increased by 159,000 or 29 percent from a year ago. -High-speed Internet net additions of 16,000 were stable year- over-year, and reflect successful promotions and the pull-through effect of Optik TV sales. Telus' high-speed subscriber base of 1.3 million is up 85,000 or 6.8 percent from a year ago. -Total network access lines declined by 4.9 percent from a year ago to 3.4 million. Residential lines were down 7.2 percent over last year, reflecting ongoing wireless and Internet substitution and competition. Business lines were down 2.3 percent over last year, reflecting ongoing price-based competition in the small and medium business market and customer adoption of IP services. -Wireline EBITDA of $368 million increased by $7 million or 1.9 percent year over year due to improving Optik TV and Internet margins helped by a lower cost of subscriber acquisition and subscriber growth. This is the second consecutive quarter of positive year over year EBITDA growth. -Wireline simple cash flow (EBITDA less capital expenditures) declined by $36 million to $35 million in the quarter due to a $43 million increase in capital expenditures. Corporate and Business Developments Dividend Declaration - increased to 34 cents per quarter, up 11.5 percent from a year ago The Board of Directors has declared a quarterly dividend increase of two cents to 34 cents Canadian per share on the issued and outstanding common shares of the Company payable on July 2, to holders of record at the close of business on June 10. This new quarterly dividend represents the fifth of six under Telus' 2011 dividend growth program announced in May 2011 that targeted semi-annual increases of circa 10 percent annually. The new dividend represents a 3.5 cent or 11.5 percent increase from the $0.305 quarterly dividend paid on July 3, 2012. Telus extends semi-annual dividend growth program to 2016 Telus is providing shareholders with additional clarity on our intentions regarding our dividend growth program through to 2016. The Company plans to continue with two dividend increases per year to 2016, normally announced in May and November, and is targeting the increase to also be in the range of circa 10 percent annually. Notwithstanding this, dividend decisions will continue to be dependent on earnings and free cash flow and subject to the Board's assessment and determination of our financial situation and outlook on a quarterly basis. There can be no assurance that the Company will maintain its dividend growth program through to 2016. Telus to file for $500 million Telus common share purchase program in 2013 and intends to have multi-year share purchases The Board of Directors has authorized Telus to file shortly with the Toronto Stock Exchange a request for approval to make a Normal Course Issuer Bid. Subject to TSX approval, the NCIB program will enable Telus to purchase until Dec. 31, up to a maximum of 15.0 million Telus common shares or approximately 2.3 percent of the public float of our common shares, for an aggregate purchase price of up to $500 million. All shares purchased will be cancelled. The Company believes that the proposed purchase of its shares is an attractive investment opportunity and a desirable use of Telus' funds to enhance the value of the remaining shares. In addition, Telus currently intends to renew its NCIB program in each of the next three years in order to permit purchases for up to $500 million in each calendar year. Future NCIBs will be dependent on earnings and free cash flow, subject to Board assessment and determination, and obtaining regulatory approvals. There cannot be any assurance as to how many shares, if any, will be acquired by Telus under any NCIB. Telus is a telecommunications company in Canada. 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