Telus 2008 Annual Report Download - page 20

Directory business
TELUS directories are published by the Yellow Pages Group, pursuant to a series of
commercial arrangements that were first entered into in 2001, when TELUS sold its
directory advertising services business to Verizon Information Services – Canada Inc.
(VIS), a subsidiary of Verizon. At that time, various TELUS subsidiaries and VIS entered
into a series of commercial arrangements whereby VIS acquired the exclusive right to
publish TELUS directories and provide on-line directories on TELUS portals, in Canada
and within 40 miles of the Canada-U.S. border, for an initial term of 30 years with certain
renewal rights thereafter, and TELUS agreed not to compete with this business for the
term of the agreement.
In 2004, Verizon announced that it had sold VIS to Advertising Directory Solutions
Holdings Inc. (ADSHI), an affiliate of Bain Capital. In 2005, the Yellow Pages Group
announced that it, through Yellow Pages Income Fund, had purchased ADSHI from an
affiliate of Bain Capital.
LEGAL PROCEEDINGS AND REGULATORY ACTIONS
Investigations, claims and lawsuits
Given the size of TELUS, investigations, claims and lawsuits seeking damages and
other relief are regularly threatened or pending against the Company and its
subsidiaries. TELUS cannot predict with any certainty the outcome of such actions and
as such, there can be no assurance that results will not be negatively impacted. The
Company believes that it has put in place reasonable policies, processes and awareness
designed to enable compliance with legal obligations and reduce exposure to legal
claims.
TELUS Corporation Pension Plan and TELUS Edmonton Pension Plan
Two lawsuits were commenced in Alberta in 2001 and 2002, respectively, by plaintiffs
alleging to be either members or business agents of the TWU, and suing allegedly on
behalf of all current or future beneficiaries of the TELUS Corporation Pension Plan and
the TELUS Edmonton Pension Plan, respectively. The TELUS Corporation Pension Plan
related action named the Company, certain of its affiliates and certain present and
former trustees of the TELUS Corporation Pension Plan as defendants, and claims
damages in the sum of $445 million. The TELUS Edmonton Pension Plan related action
named the Company, certain of its affiliates and certain individuals who are alleged to be
trustees of the TELUS Edmonton Pension Plan as defendants, and claims damages in
the sum of $15.5 million. The statements of claim were subsequently amended in 2002
by the plaintiffs to include allegations, inter alia, that benefits provided under the two
pension plans are less advantageous than those provided under their respective former
pension plans, contrary to applicable legislation, that insufficient contributions were
made to the plans and contribution holidays were taken and that the defendants
wrongfully used the diverted funds, and that administration fees and expenses were
improperly deducted. The Company believes that it has good defences to the actions.
As a term of the 2005 settlement reached between TCI and the TWU that resulted in a
collective agreement, the TWU has agreed to not provide any direct or indirect financial
or other assistance to the plaintiffs in these actions, and to communicate to the plaintiffs
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