Q2 2011 TELUS
investor conference call
Robert McFarlane
EVP & Chief Financial Officer
Joe Natale
EVP & Chief Commercial Officer
Darren Entwistle
President & Chief Executive Officer
August 5, 2011
TELUS Forward Looking Statement
Today's presentation and answers to questions contain statements about
expected future events and financial and operating performance of TELUS 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 2011 annual guidance), qualifications and risk factors
(including the ability to sustain dividend growth model of circa 10% per annum
with semi-annual dividend increases to 2013) referred to in the Management’s
discussion and analysis in the 2010 annual report, and in the 2011 first and
second quarter reports. 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
 Wireless and wireline segment review
 Consolidated financial review
 Updates
 Guidance
 Financing
 Regulatory
 Operations
 Questions and Answers
3
Q2 2011 wireless financial results
($M)
Q2-10
Q2-11
Revenue (external)
1,216
1,333 
9.6%
520
565 
8.7%
EBITDA margins1
(total revenue)
Capex
EBITDA less capex

EBITDA
42.4%
42.1%
change
(0.3) pts
99
107 
8.1%
421
458 
8.8%
Strong revenue and EBITDA growth
driving cash flow growth of 9%
4
1
Margins on network revenue in Q2/11 and Q2/10 were 45.7% and 45.8%, respectively
Wireless subscriber results
Total
net adds
Postpaid
net adds
Wireless
subscribers
1.2M
124K
94K
prepaid
18%
109K
92K
postpaid
82%
5.9M
Q2-10 Q2-11
Q2-10 Q2-11
7.1M total
Healthy postpaid net additions despite
loss of 32K Federal Government subscribers
5
Wireless data revenue
$402M
$270M
$212M
Q2-09
Q2-10
Q2-11
Data revenue growth of 49%
Six consecutive quarters of accelerating y/y data growth
6
Marketing and retention
Q2-10
Q2-11
413
447

8.2%
1.45%
1.67%

0.22 pts
$342
$370

8.2%
COA expense
$142M
$165M

16%
Retention expense
$114M
$149M

31%
Gross adds (000s)
Churn
COA per gross add
change
Churn of 1.51% excluding loss of federal contract.
Investments in COA/COR expense reflects record Q2
smartphone loading and competitive market dynamics
7
Blended ARPU analysis
Data
Voice
% of ARPU
$57.47
$58.88
13.80
19.25
24%
33%
43.67
39.63
76%
67%
Q2-10
Q2-11
Q2-10
Q2-11
ARPU up 2.5% driven by strong data ARPU growth of 39%
partially offset by 9% voice decline
8
2011 wireless annual guidance* update
Consolidated
Revenue
(external)
2011 revised guidance

y/y growth
$5.4 to 5.5B
(up $200 to $150 million)
$2.15 to 2.25B
EBITDA
(unchanged)
8 to 10%
6 to 11%
Strong start to 2011 leads to
increased wireless revenue guidance
* See forward looking statement caution
9
Q2 2011 wireline financial results
($M)
Q2-10
Q2-11
Revenue (external)
1,184
1,221 
3.1%
385
(4.9)%
33.1%
30.5%
298
EBITDA less capex
107
(2.6) pts
349 
17%

Capex

EBITDA margins
(total revenue)
405

EBITDA
change
(66)%
36
Results reflect strong subscriber growth and investments in Optik
services and continued erosion of high margin legacy services
10
TELUS TV subscribers
TELUS TV
net additions*
TELUS TV
subscribers*
403K
46K
228K
29K
Q2-10
Q2-11
Q2-10
Q2-11
Strong momentum continues with TV net adds up 59% y/y
and total subscribers up 77% surpassing 400K milestone
11
*
Includes both IP TV and TELUS Satellite TV subscribers
TELUS high-speed Internet net additions
18K
15K
3K
3K
Q1-10
Q2-10
Q3-10
16K
13K
Q4-10
Q1-11
Q2-11
Strong growth in HSIA net adds reflects success of enhanced
Optik services and bundling since launch in June 2010
12
TELUS network access lines
Residential
Q2-10 Q2-11
Business
Q2-10
7K
Q2-11
-12K
-31K
-51K
Residential line losses improved 39% y/y – best result in 5 years
Business line increase reflects gain in wholesale customers
13
2011 wireline annual guidance* update
Consolidated
2011 revised guidance
Revenue
(external)
 $4.825 to 4.925B
EBITDA
y/y growth
(up $100 to $50 million)
$1.525 to 1.625B
(unchanged)
1 to 3%
(6)% to flat
Wireline revenue increase reflects
subscriber growth in Optik services
* See forward looking statement caution
14
Q2 2011 consolidated financial results
($M, except EPS)
Q2-10
Q2-11
change
Revenue (external)
2,400
2,554 
6.4%
EBITDA
925
950 
2.7%
EPS (basic)
0.94
0.99 
5.3%
Capex
397
456

15%
EBITDA less capex
528
494

(6.4)%
Free cash flow
239
286

20%
Strong revenue growth driven by wireless and wireline data
Free cash flow up 20%
15
EPS continuity analysis ($)
Positive income tax-related adjustments
0.94
0.05
0.03
0.03
0.03
0.99
-0.07
0.91
Excl.
Tax Adj.
Q2-10
reported
Lower
Higher
Financing Normalized
costs
EBITDA1
Lower
Pension
& Restr.
costs
Lower
Tax rates
& Other
Higher
Dep &
Amort
- 0.02
0.96
Excl.
Tax Adj.
Higher
Q2-11
O/S shares reported
EPS growth driven by lower financing costs and EBITDA growth
1
Normalized EBITDA excludes pension and restructuring costs
16
TELUS successfully refinances U.S. dollar notes
 In May successfully issued $600M senior unsecured notes
 3.65% 5-year notes, maturing May 2016
 Proceeds used, in combination with commercial paper, to
redeem maturing 8% U.S. dollar notes and associated cross
currency interest rates swaps (effective cost 8.5%)
 Final of three tranches undertaken since December 2009
Well staggered debt maturity profile out 9 years
with lower financing costs in future
17
2011 consolidated annual guidance* update
Consolidated
Revenue
(external)
2011 revised guidance

$10.225 to 10.425B
(up $300 to $200 million)
4 to 6%
$3.675 to 3.875B
EBITDA
1 to 6%
(unchanged)
$3.50 to 3.90
EPS – basic
Capex
y/y growth
(unchanged)

7 to 19%
Approx. $1.8B
(up $100 million)
5%
Increasing 2011 revenue and capex guidance
* See forward looking statement caution
18
Industry vertical integration update
 In June TELUS presented its views on Vertical Integration to CRTC
 Hearing proceeded as TELUS expected
 Independent distributors, including TELUS, presented at request of CRTC,
a Code of Conduct, which includes:
1. A prohibition on exclusive distribution of TV content on any platform
2. Access to content on commercially reasonable terms
3. Where a dispute arises, complainant must be “held harmless” pending
resolution
4. Restrictions on sharing confidential info between broadcasting and
carrier side of Vertically Integrated company
 TELUS expects CRTC decision this Fall
CRTC has issued temporary policy decision prohibiting
withholding of signals that are subject of negotiations
19
Q2 2011 summary
 Strong consolidated revenue growth driven by both wireless and
wireline
 Good wireless and Optik subscriber results with improved
residential NAL losses
 Free cash flow growth of 20%
 Dividend declared of $0.55 up 10% consistent with dividend
growth model
 Increased 2011 revenue and capex guidance
TELUS successfully advancing its 2011 priorities
20
Strong smartphone adoption driving ARPU growth
Postpaid subscribers (millions)
Wireless Data ARPU
Smartphone % of postpaid
5.1
5.5
$19.25
5.9
$13.80
$11.56
42%
25%
16%
Q2-09
Q2-10
Q2-11
Q2-09
Q2-10
Q2-11
Smartphone base increased 80% to 2.5 million
Data ARPU increased by 39% year over year
21
Future Friendly Home - continued Optik momentum
High-speed Internet
TELUS TV
Residential NALs
59K
32K
20K
46K
29K
17K
-31K
-43K
Q2-09
-51K
Q2-10
Q2-11
TV and High-Speed Internet loading more than offsetting
residential NAL losses for fourth consecutive quarter
22
Evolution of Clear and Simple
 Transformed contracts via device ownership agreements
 Simplified and lowered international roaming rates
 Offer best customer experience for key over-the-top partners
 Clear and Simple philosophy extends across TELUS
Clear and Simple approach driving customer loyalty and
differentiation while enhancing operating efficiency
Appendix – free cash flow
C$ millions
2010
Q2
EBITDA
925
(397)
950
(456)
(3)
(7)
(44)
(15)
(187)
(145)
(58)
(50)
6
5
(3)
239
2
4
286
Capex
Net Employee Defined Benefit Plans Expense (Recovery)
Employer Contributions to Employee Defined Benefit Plans
Interest expense paid
Cash Income Taxes and Other
Share-based compensation
Restructuring payments (net of expense)
Free Cash Flow
Common and Non-voting shares issued
Dividends
Dividends reinvested (DRIP)
Acquisitions
Working Capital and Other
Funds Available for debt redemption
Net Issuance (Repayment) of debt
Decrease in cash
(152)
32
-
2011
Q2
2
(170)
-
(105)
(51)
(241)
16
(174)
(21)
172
(5)
(2)
Appendix – definitions
 EBITDA: Earnings before interest, taxes, depreciation and amortization
 Capital intensity: capital expenditures divided by total revenue
 Cash flow: EBITDA less capex
 Free cash flow: EBITDA, adding Restructuring costs, net employee defined
benefit plans expense, cash interest received and excess of share-based
compensation expense over share-based compensation payments,
subtracting the non-cash gain on Transactel, cash interest paid, cash taxes,
capital expenditures, restructuring payments and employer contributions to
employee defined benefit plans.
 Cost of retention (COR): total costs to retain existing subscribers, often
presented as a percentage of network revenue