Q3 2013
investor conference call
November 8, 2013
Darren Entwistle
President & Chief Executive Officer
Joe Natale
EVP & Chief Commercial Officer
John Gossling
EVP & Chief Financial Officer
TELUS forward looking statement
Today's presentation and answers to questions contain statements about financial and
operating performance of TELUS and future events, including with respect to future dividend
increases and normal course issuer bids to 2016 and the annual 2013 guidance, that are
forward-looking. By their nature, forward-looking statements require the Company to make
assumptions and predictions and are subject to inherent risks and uncertainties. There is
significant risk that the forward-looking statements will not prove to be accurate. Readers are
cautioned not to place undue reliance on forward-looking statements as a number of factors
could cause actual future performance and events to differ materially from that expressed in
the forward-looking statements. Accordingly, our comments are subject to the disclaimer and
qualified by the assumptions (including assumptions for 2013 annual guidance, CEO three-year
goals to 2013 for EPS and free cash flow growth excluding spectrum costs, semi-annual
dividend increases to 2016, ability to sustain and complete multi-year share purchase programs
to 2016), qualifications and risk factors referred to in the first, second and third quarter
Management’s discussion and analysis and in the 2012 annual report, and in other TELUS
public disclosure documents and filings with securities commissions in Canada (on SEDAR at
sedar.com) and in the United States (on EDGAR at sec.gov). Except as required by law,
TELUS disclaims any intention or obligation to update or revise forward-looking statements,
and reserves the right to change, at any time at its sole discretion, its current practice of
updating annual targets and guidance.
2
Agenda
 CEO Introduction
 Q3 operational highlights
 Q3 financial results
 Questions and Answers
3
CEO introduction
 Reporting solid Q3 results driven by wireless and wireline
 Returning significant capital to shareholders
 Furthering our strategy with Public Mobile transaction
 Delivering a differentiated customer service experience
TELUS demonstrating strong results
and executing on shareholder friendly initiatives
4
Robust postpaid net additions
Wireless
subscribers
Postpaid net adds (000s)
116
106
1.1M
prepaid
14%
7.8M
total
Q3-12
Q3-13
6.7M
postpaid
86%
Solid postpaid net adds with postpaid base up 5% y/y
5
Strong smartphone adoption and ARPU growth
6.0
6.4
6.7
75%
$60.52
20.90
$61.42
$62.49
24.51
27.72
36.91
34.77
Q3-12
Q3-13
63%
48%
Q3-11
39.62
Q3-12
Q3-13
Q3-11
Postpaid subscribers (millions)
Voice ARPU
Smartphone % of postpaid
Data ARPU
Q3 smartphone penetration up 12 points to 75% of postpaid base
supporting ARPU growth of 1.7%
6
Industry leading wireless churn
Blended
Postpaid
1.67%
1.44%
1.36%
1.33%
1.10%
Q3-11 Q3-12 Q3-13
0.99%
Q3-11 Q3-12 Q3-13
Industry-leading churn results
Postpaid down 11 basis points to reach lowest level in over six years
7
Industry leading lifetime revenue per susbcriber1
$4,265
$4,595
$3,624
Q3-11
Q3-12
Q3-13
Customers First focus generating
industry-leading lifetime revenue per subscriber
1
Lifetime revenue derived by dividing ARPU by blended churn rate
8
Healthy TV and Internet growth
TELUS TV (000s)
776
637
High-speed Internet (000s)
22%
1,303
1,374
5.4%
1,218
453
Q3-11
Q3-12
Q3-13
Q3-11
Q3-12
Q3-13
Continued healthy Internet and TV subscriber growth
balanced with focus on enhanced profitability
9
Q3 2013 wireless financial results
Q3 2013
Change
Revenue (external)
1,563
4.1%
Network revenue
1,443
5.2%
680
6.6%
684
7.0%
46.8%
0.6 pts
47.0%
0.8 pts
194
11%
($M, except margins)
EBITDA1
EBITDA excluding restructuring & other like costs
EBITDA margin2
EBITDA margin excluding restructuring & other like
costs
Capital expenditures
TELUS delivers another solid quarter of wireless results
1
EBITDA does not have any standardized meaning prescribed by IFRS-IASB. For definition and explanation, see Section 11.1
in the 2013 third quarter Management’s discussion and analysis (MD&A).
2 EBITDA as percentage of total network revenue
10
Wireless data revenue ($M)
637
546
444
Q3-11
Q3-12
Q3-13
Strong Q3 data revenue growth of 17% year-over-year
Data now 44% of wireless network revenue, up 4 points
11
Q3 2013 wireline financial results
($M, except margins)
Revenue (external)
EBITDA
EBITDA excluding restructuring & other like costs
EBITDA margin1
EBITDA margin excluding restructuring & other like
costs
Capital expenditures
Q3 2013
Change
1,311
3.0%
355
0.8%
366
3.4%
26.2%
(0.5) pts
27.0%
0.1 pt
361
22%
Strong revenue growth driven by Data
EBITDA excluding restructuring up 3.4%
1.
EBITDA as percentage of total revenue.
12
Wireline data revenue ($M)
737
801
644
Q3-11
Q3-12
Q3-13
Data revenue growth of 8.7% driven by TV and Internet
Data revenue 61% of external revenue, up 3 points
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Q3 2013 consolidated financial results
Q3 2013
Change
Revenue (external)
2,874
3.6%
EBITDA
1,035
4.6%
1,050
5.7%
0.56
14%
0.58
18%
Capital expenditures (capex)
555
18%
Simple cash flow (EBITDA less capex)
480
(7.5%)
($M, except EPS)
EBITDA excluding restructuring & other like costs
EPS (basic)
Adjusted EPS1
Strong growth in revenue and profitability
Continued capex investments to support sustainable growth
1.
Adjusted EPS does not have any standardized meaning prescribed by IFRS-IASB. See appendix for definition.
14
EPS continuity analysis
$0.49
Q3-12
$0.05
EBITDA
$0.02
Depr &
Amort
$0.02
Lower O/S
shares
($0.01)
Higher
financing
costs
($0.01)
Higher
income tax
$0.56
Q3-13
Strong double digit EPS growth
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2013 guidance changes1
2013 guidance
changes
($B)
Wireless revenue (external)
Consolidated capex
Y/Y change
$6.1 to 6.2
4 to 6%
Approx $2.0
 All other segmented and consolidated targets remain unchanged
and reaffirmed today.
2013 targets for profitability remain unchanged
1.
See forward looking statement caution and assumptions in Section 9 of the Q3-13 Managements Discussion and Analysis. Revised
guidance excludes any impacts of the proposed Public Mobile acquisition.
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Appendix – Q3 2013 free cash flow comparison
2012
Q3
2013
Q3
990
1,035
(471)
(555)
24
27
Employer contributions to employee defined benefit plans
(14)
(7)
Interest expense paid, net
(55)
(62)
Income taxes paid, net
(58)
(88)
Share-based compensation
13
21
Restructuring costs net of cash payments
(2)
(6)
Other
(1)
-
Free Cash Flow
426
365
Cash payments for spectrum licences
-
(67)
Purchase of shares for cancellation
-
(762)
(198)
(222)
(7)
(3)
Real Estate joint ventures
-
(5)
Working capital and other
56
242
Funds available for debt redemption
277
(452)
Net issuance (repayment) of debt
(304)
212
Increase (decrease) in cash
(27)
(240)
EBITDA
Capital expenditures
Net employee defined benefit plans expense
Dividends
Cash payments for acquisitions and related investments
Glossary
 Adjusted EPS does not have any standardized meaning
prescribed by IFRS-IASB. This term is defined in this
presentation as excluding (after income taxes): 1) Restructuring
and other like costs; 2) unfavourable income tax-related
adjustments. For further analysis of the aforementioned items
see Section 1.3 in the 2013 third quarter MD&A.
19