Telus 2006 Annual Report Download - page 16

As at December 31, 2006, goodwill had a net book value of $3.2 billion. Goodwill represents
the excess of cost of acquired businesses over the fair value attributed to the net identifiable
assets.
TELUS monitors its operations for compliance with applicable environmental requirements and
standards, and implements preventative and remedial actions as required. TELUS’ business of
telecommunications services does not generate significant waste products that would be
considered hazardous. For these reasons, remedial action has not been significant to the
ongoing operations and expenditures of TELUS.
Value of intangible assets and goodwill
The carrying value of intangible assets with indefinite lives, and goodwill, are periodically tested
for impairment using a two-step impairment test. The frequency of the impairment test generally
is the reciprocal of the stability of the relevant events and circumstances, but intangible assets
with indefinite lives and goodwill must, at a minimum, be tested annually. The Company has
selected December as its annual test time. No impairment amounts arose from the December
2006, 2005 and 2004 annual tests. The test is applied to each of the Company’s two reporting
units (the reporting units being identified in accordance with the criteria in the Canadian Institute
of Chartered Accountants (“CICA”) Handbook section for intangible assets and goodwill):
wireline and wireless.
Intangible assets with finite lives (“intangible assets subject to amortization”) are amortized on a
straight-line basis over their estimated lives; estimated lives are reviewed at least annually and
are adjusted as appropriate.
RISK FACTORS
Management’s discussion and analysis -- Section 10 Risks and risk management in TELUS’
2006 Annual Report – Financial Review is hereby incorporated by reference. Management’s
discussion and analysis is available at www.sedar.com.
ALLIANCES
Verizon’s Sale of TELUS Equity
Pursuant to the Long-Term Relationship Agreement between TELUS and certain Verizon
corporations dated January 31, 1999 (the “Long Term Relationship Agreement”), Verizon was
prohibited from selling its equity interest in TELUS to below 19.9 per cent without the approval
of the independent directors of TELUS. On November 30, 2004, TELUS and Verizon
announced that they had entered into an agreement pursuant to which TELUS’ independent
directors agreed to accommodate Verizon’s sale of all of its equity interest in TELUS, being
48,551,972 Common Shares and 24,942,368 Non-Voting Shares held indirectly through a
subsidiary, on certain conditions set out in that agreement. Under that agreement, Verizon paid
to TELUS U.S. $125 million. The Long Term Relationship Agreement was terminated on
December 14, 2004 on the completion of the Verizon Sale. Concurrently, the two Verizon
executives who sat on the Board of Directors of TELUS resigned.
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