Telus 2010 Annual Report Download - page 33

on net debt to EBITDA of 1.5 to 2.0 times. At the same time,
we have continued to return cash to our shareholders once core
investments have been made.
TELUS’ dividend payout ratio guideline was increased
by the Board of Directors in May 2010 to 55 to 65 per cent of
sustainable net earnings on a prospective basis. This signalled
confidence in the outlook for the Company’s earnings and
cash flow, moderating capital expenditures, and aligned with
our dividend growth model. In 2010, the Company announced
two dividend increases of five per cent each, taking the current
dividend to a record high of $2.10 annually.
Indicative of our strong cash flow position, commencing in
March 2011, we are reducing share dilution by purchasing shares
in the open market under our dividend reinvestment and share
purchase
program, rather than issuing shares from treasury.
Other developments
On January 1, 2011, TELUS, along with most other public
companies in Canada, began reporting in accordance with
International Financial Reporting Standards (IFRS). Previously,
we reported in accordance with Canadian generally accepted
accounting principles (GAAP). Due to a comprehensive and,
as we have been advised, well-executed changeover plan, the
transition was smooth. Quantified impacts on financial state-
ment line items and other measures from the first-time adoption
o
f IFRS are outlined in Section 8.2 of the MD&A. Notably,
the pro forma 2010 EPS per IFRS was very similar to GAAP,
with a minimal increase of $0.04, a one per cent change.
With a number of key regulatory developments currently in
progress, TELUS is anticipating that additional information
and decisions will likely be issued in 2011 by Industry Canada
and the CRTC. We believe these decisions must be made
in a carefully considered and transparent manner, with suffi-
cient notice for stakeholders. To effectively make significant
strategic investment decisions, communications companies
need reasonable certainty and a timeframe that allows for
a return on the billions of dollars invested in bringing broadband
IP and wireless network infrastructure and the latest innovations
to consumers.
Pursuing excellence in disclosure,
social responsibility and governance
At TELUS, we firmly believe in the importance of full and fair
disclosure. As well, we strive to ensure our business decisions
are made using a triple bottom line approach, which balances
business, social and environmental impacts based on a
foundation of excellence in corporate governance.
Our efforts continue to gain external recognition. TELUS was
recognized for having the best financial reporting at the 2011
IR Magazine Canada awards. Also, in late 2010, the Canadian
Institute of Chartered Accountants (CICA) recognized TELUS
for our comprehensive 2009 shareholder information package
with the following awards:
.Overall Award of Excellence for Corporate Reporting,
CICA’s highest award in Canada
.Honourable Mention (second best) for Excellence
in Corporate Governance Disclosure
.Honourable Mention for Excellence in Sustainable
Development Reporting.
From a position of strength
Our commitment to clearly set and stick to our financial policies
has been a mainstay of our financial management approach
for more than a decade. While it has taken courage to stand firm
on these policies, especially during times of market exuberance
and economic downturns, our resolve has been rewarded.
The result is evident in our strong financial position, successful
access to the credit markets even during the recent recession,
and the excellent total shareholder return of 40 per cent in 2010.
We enter 2011 from a position of financial strength that
we believe will help us meet upcoming challenges and exciting
opportunities in the fast-moving communications industry.
Building on the momentum created in 2010, we are confident
in our prospects for the future as we strive to create value
for our investors.
Sincerely,
Robert McFarlane
Executive Vice-President and
Chief Financial Officer
February 24, 2011