Transcript CFO Presentation

TELUS and Emergis
investor conference call
Darren Entwistle
President & Chief Executive Officer, TELUS
Robert McFarlane
EVP & Chief Financial Officer, TELUS
Joe Natale
EVP & President, TELUS Business Solutions
François Côté
President & Chief Executive Officer, Emergis
November 29, 2007
1
Forward looking statements
This conference call and the answers to questions contain forward-looking statements about TELUS and Emergis that are
intended to be covered by the safe harbour for “forward-looking statements” provided by the Private Securities Litigation
Reform Act of 1995. Forward-looking statements require assumptions about expected future events and are subject to
inherent risks and uncertainties. There is significant risk that they will not prove to be accurate so do not place undue
reliance on them. The forward-looking statements made today represent TELUS’ and Emergis’ views as of the date
hereof and should not be relied upon as representing their views as of any other date. They specifically disclaim any
obligation to update any forward-looking statements made today.
All statements other than statements of historical fact included in this conference call are forward looking statements, and
include but are not limited to statements regarding: completion of the proposed transaction; strategic plans and
expectations; business and financial prospects; expected efficiencies and economies of scale from the transaction; future
financial or operating performance and cash flows; strategies, objectives, goals and targets. There can be no assurance
that the proposed transaction will occur at all or on the timetable contemplated.
There are many factors that could cause actual results to differ materially. They include but are not limited to: valid
acceptance of the Offer by holders of 66 2/3% of Emergis’ outstanding common shares not being obtained, required
approvals or clearances from regulatory and other bodies not being obtained in a timely manner or at all; anticipated
benefits, efficiencies and savings not being fully realized; integration costs and difficulties being greater than expected;
business and economic conditions in the principal markets for the companies’ products; other anticipated and
unanticipated costs and expenses; competition; capital expenditure levels (including possible spectrum purchases);
financing and debt requirements (including share repurchases); tax matters (including acceleration or deferral of payment
of significant cash taxes); regulatory developments; and process risks. For a description of other potential risk factors and
assumptions, please refer to the public filings by TELUS and Emergis with securities commissions in Canada (sedar.com)
and the United States (sec.gov).
All dollars referenced are in C$ unless otherwise specified.
2
Agenda
 About TELUS & transaction overview
 Transaction strategic rationale
 About Emergis & its health care strategy
 TELUS' health care strategy & transaction benefits
 Q&A
3
About TELUS
 Executing national growth strategy focused on data, IP & wireless
 2007E consolidated guidance1:
 Revenues
$9.125 to $9.175B
 EBITDA2
 EPS2
$3.725 to $3.775B
$3.55 to $3.65
 5 to 6%
 4 to 5%
 9 to 12%
 Enterprise value: $22B (equity $16B)
 Listings: Common: TSX T; non-voting: TSX T.A; NYSE TU
 Reporting segments: wireless and wireline
1
As of November 2, 2007.
2 2007
EBITDA and EPS guidance exclude approx. $170M and $0.32 for net-cash settlement option
expense
4
Transaction overview
 TELUS offering $8.25 cash per Emergis share, or $763 million
 Based on a fully-diluted share count of 92.5 million shares, which
takes into account expected option exercises
 17% premium to 30-day trailing average
 Both boards have approved, and Emergis Board has unanimously
recommended shareholders approve offer
 Management and major shareholders have signed lockup agreements
representing 22% of fully diluted shares
 Key members of Emergis’ management team have signed employment
contracts to join TELUS team
Implied enterprise value of ~$680 million accounting for Emergis'
net cash position & expected proceeds from options exercise
5
Transaction overview
 TELUS has right to match any superior offer
 Break fee of $15 million
 TELUS' offer is not subject to due diligence
 66 2/3rds % Emergis shareholder approval
 Take-over bid to be mailed in early December
 Transaction subject to customary closing conditions with
anticipated closing first quarter 2008
All cash offer expected to close in Q1 2008
6
Leading the way with a proven strategy
Strategic imperatives
 Focusing on growth markets of data and wireless
 Building national capabilities
 Providing integrated solutions
 Investing in internal capabilities
 Partnering, acquiring and divesting as necessary
 Going to market as one team
strategic intent… to unleash the power of the Internet
to deliver the best solutions to Canadians at home,
in the workplace and on the move.
7
Healthcare industry: opportunity for electronic
health records and information management
Our system in crisis:
Benefits of health IT systems:
 Age-related conditions
 Manage costs
 Expensive new drugs
 Shift away from acute care
 Consumer expectations
 Improve patient outcomes
 Inadequate metrics
 Taxpayer resistance
Patient information at the point of care – delivered over a
trusted network
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About TELUS
Emergis
 Canadian information technology leader focused on the health
and financial services sectors
 2007E guidance 1:
 Revenue
 EBITDA
 Net income 2
$191 to $195 million
$41 to $44 million
$24 to $28 million
12 to 15% 
17 to 26% 
9 to 27% 
 e-solutions for health claims processing, health record systems,
pharmacy management, mortgage document processing, cash
management, and debit & credit card authorizations
 Based in Longueuil, Quebec; 1,100 employees across Canada
 TSX listing: EME
1
updated November 1, 2007
2
from continuing operations
Successful and fast-growing, with strong management team
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Emergis revenue & EBITDA
Finance
Health
Revenue
($millions)
EBITDA
140
124
24%
35%
76%
31
65%
25
20%
margin
YTD Q3-06
YTD Q3-07
YTD Q3-06
22%
margin
YTD Q3-07
Strong YTD results with 13% revenue growth and 24% EBITDA
growth – expanding margins, focus on recurring revenue
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About TELUS
Emergis
– key attributes
Canada’s leading electronic health transaction processor
Important player in new eHR (electronic health records) industry with
world-class Oacis eHR system
Key tax and mortgage solution assets with high growth potential
Growing base of recurring revenue and significant operating
leverage
Major opportunities in both health and financial services areas
Transaction provides Emergis with:
Access to TELUS' client base, sales channels and financial strength
Profile and more complete offering when pursuing large government
contracts and entering new sectors
Strong presence across Canada
Emergis' expertise, applications and customer base
strengthen TELUS' existing industry solutions
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About TELUS
Emergis’
operating metrics
Q3/07
Q3/06 Growth
Financial services
Assure Pay Tax transactions1 (000)
Assyst Real Estate transactions (000)
Notaries and lawyers integrated (EOP)
Assure Pay Credit debit transactions (millions)
620
73
1,900
51.3
486
49
1,700
49.4
28%
36%
12%
4%
61.1
4,200
3,100
54.7
3,800
2,800
12%
11%
11%
Healthcare
Total health claims processed (millions)
Providers - Ontario WSIB (EOP)
Pharmacies (EOP)
1
Includes mandates and registrations
Significant transaction volume and presence
12
Emergis' diversified marquee health care &
financial customer base
Complementary customer relationships provide opportunity
13
Large & growing opportunity for business process
outsourcing
 Canadian business process outsourcing (BPO) sector is $7.4 billion
 Key industries include healthcare, financial services
 BPO sector has a critical reliance on network and IT infrastructure
 Our growth strategy: organic, partnering & acquisitions
 Health transformation: enabled by information communications technology
 Transformation requires significant investments in ICT
 Canada on the cusp, following lead of UK, Germany, Denmark, Australia
 Enable “continuum of care”: home/doctor/community/hospital
Around the globe, telecom providers have played mission
critical roles in enabling healthcare transformation
14
TELUS’ health care strategy
Health Information Management
Clinical Process Management
 Electronic health record
 Claims management
 Community care management
 Physicians office automation
 Lab information services
Mobile Health Solutions
 Wireless physician
 Wireless monitoring
 Self-care
Collaboration Services




Connectivity & infrastructure
Integrated bedside terminal
Tele-health and remote diagnostics
Care scheduling
HR & people management
 Data Networks
 Hosting and storage
 Security
Enable better health care in Canada by securely delivering the right
information to the right person at the right time - from hospital to home
15
TELUS' extensive health care relationships
 TELUS has nearly 2,000 healthcare customers Canada
Established relationships and national reach
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Realizing the benefits
 Accelerates our national data strategy and focus on key industries
 Positions TELUS as Canada’s leader in healthcare transformation & eHR
 “Network-centric applications”
 Drive synergies through disciplined execution
 Leverage TELUS' sales and marketing capabilities across Canada
 Significant synergies in pull-through revenue for network, hosting, security
 Further synergies in operating costs
 Capitalize on Emergis' successful track record
 Emergis executive team to lead this business area for TELUS
Positions TELUS to lead healthcare sector in Canada
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Questions?
investor relations
1-800-667-4871
telus.com
[email protected]
18
Appendix - François Côté - biography
 Mr. Côté assumed the role of President and Chief Executive Officer of Emergis in November 2004 after
BCE sold its majority position in the company and a new board of directors was appointed. During this
period, he developed and implemented a new business strategy, returned the company to profitability
and significantly increased customer satisfaction and employee morale. He is also involved in various
community and business organizations. He is on the Board of Directors for the Montréal-area YMCA
and is an active fundraiser for Mental Illness Foundation and the Salvation Army. He is also a member
of the Cercle des Présidents du Québec, a group of Quebec business leaders.
 Prior to the sale of Emergis' U.S. health operations earlier in 2004, François Côté was President of
Emergis eHealth Solutions Group (North America) and was based in Rockville, Maryland.
 Mr. Côté had been with Emergis since its inception in 1998, first in a senior corporate role and then as
President of the eHealth Solutions Group (Canada). He has first-hand business experience and deep
insight into the health sector and played a key role in shaping the company’s business activities in the
health sector.
 Prior to joining Emergis, Mr. Côté held a variety of management positions during a career that spanned
21 years at Bell Canada.
 Mr. Côté has a Bachelor’s degree in Industrial Relations from Laval University. He was named an Ernst
& Young Entrepreneur Of The Year® 2007 in Quebec.
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Appendix - definitions
 EBITDA: Earnings, after restructuring and workforce reduction costs, before
interest, taxes, depreciation and amortization
 Cash flow: EBITDA less capex
 Free cash flow: EBITDA, adding Restructuring and workforce reduction costs,
cash interest received and excess of share compensation expense over share
compensation payments, subtracting cash interest paid, cash taxes, capital
expenditures, cash restructuring payments, and cash related to Other expenses
such as charitable donations and securitization fees
 Emergis EBITDA (adjusted): net income from continuing operations before
depreciation, amortization of intangible assets, interest, losses on sale of
assets, gains and losses on foreign exchange and income taxes
Definitions for non-GAAP measures
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