Q2 2010 TELUS
investor conference call
Robert McFarlane
EVP & Chief Financial Officer
Darren Entwistle
President & Chief Executive Officer
Joe Natale
EVP & Chief Commercial Officer
August 6, 2010
TELUS forward looking statements
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 forwardlooking 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 2010 guidance), qualifications
and risk factors referred to in the Management’s discussion and analysis in
the 2009 annual report and in the 2010 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
 TELUS TV
 Refinancing June 2011 notes
 2010 guidance
 IFRS
 Question and answers
3
Q2 2010 wireless financial results
4
($M)
Q2-09
Q2-10
Revenue (external)
1,146
1,217

6.2%
656
703

7.2%
4
-

(100)%
493
523

6.1%
42.8%
42.7%

(0.1) pts
Capex
189
99

(48)%
EBITDA less capex
304
424

39%
Operational expenses
Restructuring costs
EBITDA
EBITDA margins
(total revenue)
change
Wireless cash flow up significantly due to lower capex
and EBITDA increase
subscriber results
Total
net adds
111K
5
Postpaid
net adds
Wireless
subscribers
1.2M
124K
109K
prepaid
18%
95K
postpaid
82%
5.5M
Q2-09 Q2-10
Q2-09 Q2-10
6.7 million total
Strong total net adds growth of 12% y/y with higher
value postpaid representing 88% of net adds
smartphone subscriber mix
 Smartphone subs represent 25% of postpaid base
compared to 16% a year ago
 In Q2, 34% of all smartphone loading new to TELUS
 BlackBerries and iPhones continue to dominate
smartphone retention loading
Smartphone base increased 65% y/y to 1.4M
6
data revenue
7
$273M
$216M
$159M
BlackBerry
Bold
Q2-08
Q2-09
Q2-10
Data growth of 26% driven by continued smartphone adoption
and expected to be enhanced further with HSPA + devices
marketing and retention
8
Q2-09
Gross adds (000s)
402
Q2-10
change
413 
2.7%

10 pts
$311
$342 
10%
COA expense
$125M
$142M 
14%
Retention expense
$116M
$114M

(1.7)%
Lifetime revenue
$3,781
$3,963 
4.8%
Churn
COA per gross add
1.55%
1.45%
Improved churn reflects improving economic conditions and
availability of new 3G+ handsets including the Apple iPhone
blended ARPU breakdown
9
Data
Voice
$58.61
$57.47
11.56
13.80
47.05
Q2-09
% of ARPU
20%
24%
43.67
80%
76%
Q2-10
Q2-09
Q2-10
Strong data growth with improving trend in overall ARPU down
1.9% y/y compared to 4.4% decline in Q1/10 and 7.7% in Q4/09
TELUS to increase wireless data network speeds*
 This week, TELUS announced it will be launching HSPA+
Dual Cell technology in select cities
 Increasing manufacturer-rated maximum download
speeds to up to 42 Mbps when deployed
 TELUS only N.A. carrier to successfully test HSPA+
Dual Cell technology and announce deployment
 New devices starting with mobile Internet keys expected to
be commercially available starting in 2011
 Deployment of Dual Cell technology represents small
investment and within TELUS’ 2010 capex guidance
* See forward looking statement caution
Dual Cell technology consistent with TELUS’ evolution
towards long-term evolution
10
Q2 2010 wireline financial results
11
($M)
Q2-09
Q2-10
Revenue (external)
1,231
1,181

(4.1)%
833
806

(3.2)%
49
19

(61)%
396 
4.2%
Restructuring costs
EBITDA
EBITDA margins
(total revenue)
Capex
EBITDA less capex
380
30.1%
368
12
32.4%  2.3 pts

Operational expenses
Change
(19)%
98 
717%
298
EBITDA growth driven by a decline in expenses and
restructuring costs offsetting continued revenue decline
wireline operating stats
Business*
NAL losses
Q2-09
-5K
Q2-10
Residential*
NAL losses
Q2-09
Q2-10
High-speed
Internet
net additions
3K
3K
Q2-09
Q2-10
-12K
-43K
*
12
-51K
Historic NALs restated for prior periods starting in 2007 as a result of a periodic
subscriber measurement review and correction.
Wireline operating stats impacted by competition
TELUS TV subscribers
TELUS TV
net additions*
13
TELUS TV
subscribers*
228K
29K
115K
17K
Q2-09 Q2-10
*
Q2-09 Q2-10
Includes both TELUS IP TV and TELUS Satellite TV subscribers
TELUS TV net adds up 71% y/y with subscriber base doubling
TELUS TV developments
14
14
 In June, TELUS launched Optik TV powered by Microsoft
Mediaroom and Optik High-Speed
 Optik TV footprint now covers 1.9M households and
expanding
 This week, TELUS launched Microsoft Xbox 360 to be used
to directly access Optik TV including new promotional offer
 TELUS customers among first to use Xbox 360 as set top
box with Optik TV
 Also this week, TELUS launched Remote Recording for Optik
TV customers
 New feature allows customers to manage PVR Anywhere
content using web enabled computer or iPhone
Investments in broadband have enabled TELUS to offer
differentiated and integrated TV service and applications
Q2 2010 consolidated financial results
15
($M excl. EPS)
Q2-09
Q2-10
change
Revenue (external)
2,377
2,398 
0.9%
Operating expenses
1,451
1,460 
0.6%

(64)%
EBITDA
873
919 
5.3%
EPS
0.77
0.92 
19%
Capex
557
397

(29)%
Free cash flow
144
241 
67%
Restructuring costs
53
19
Significant cash flow expansion driven by improved
profitability and capex decline
EPS continuity ($)
0.77
+ 0.08
+ 0.04
16
+ 0.03
+ 0.03 + 0.01
Tax Adj.
1
2
- 0.01
0.89
Excl. Tax
Adj.
0.71
Excl. Tax
Adj.
Q2-09
reported
0.92
Restr.
costs
Dep &
Amort
Normalized Lower Normalized
EBITDA1 tax rates Financing
& other
costs2
Pension Q2-10
costs reported
Normalized EBITDA excludes restructuring and pension costs.
Normalized financing costs excludes interest income for Q2/09.
EPS excluding income-tax related adjustments up 25%
breakdown of full time equivalent employees
Domestic - telecom
Domestic - Black’s
International
Total
17
YE 2009
Q2-10
Change
25,750
25,000
(750)
850
750
(100)
8,700
8,450
(250)
35,300
34,200
(1,100)
 International and Black’s FTE decline largely represents Q4
and Q1 seasonality
Significant domestic FTE reduction in first half of 2010
TELUS refinancing update
 In July, successfully issued $1B senior unsecured notes
 5.05% 10-year notes, maturing July 2020
 Proceeds to be used in September to fund partial early
redemption of US notes due in June 2011
 Redemption price is approx US$640M and estimated
payment to terminate associated swaps is approx $313M
 Expect Q3 pre-tax charge of $58M for early partial redemption
 After-tax impact of 13 cents per share
 Benefits include reduced refinancing risk, staggered debt
maturity profile and interest expense savings (5% vs 8.5%)
Completed landmark $1B debt issue in July - $240 million
larger than the next non-bank or non-government issue
18
update on Cdn GAAP to IFRS transition
19
 Transparent status report on key topics and progress
against key milestones of changeover plan in MD&A
 Expect to quantify impacts on key financial statement
line items and other measures in Q3 disclosure on Nov 5
 Currently estimate pro forma net income YTD under
IFRS approximately the same as under Cdn and US
GAAP
Comprehensive disclosure in section 8.2 in MD&A
2010 annual guidance* update
Consolidated
Revenue
(external)
EBITDA
EPS – basic 1
Capex
2010 guidance
$9.7 to 9.95B
$3.5 to 3.7B
20
change
y/y growth
$(100) to
$(150)M
1 to 4%
no change Flat to 6%
$2.90 to 3.30
no change
(8) to 5%
Approx. $1.7B
no change
(19)%
 Revenue guidance updated to reflect change in
wireline revenue guidance
1
Normalized EPS y/y growth of 2 to 16%. See appendix.
* See forward looking statement caution
Earnings guidance for 2010 reconfirmed despite reduced
wireline revenue guidance
Q2 2010 summary
21
 Wireless
 ARPU decline trend continuing to improve
 Strong wireless subscriber growth and improved churn
 Improving trend in revenue and EBITDA growth
 Wireline
 Continued strong TELUS TV subscriber growth
 Improved cost structure generating EBITDA
expansion despite legacy revenue declines
 Robust free cash flow growth
 Earnings guidance for 2010 reconfirmed
Strategic investments resulting in improved TELUS 2010
performance as planned
appendix – free cash flow
EBITDA
2009
Q2
873
2010
Q2
919
Capex
(557)
(397)
5
7
Employer Contributions to Employee Defined Benefit Plans
(51)
Interest expense paid (includes income tax interest income)
(149)
(44)
(185)
Cash Income Taxes and Other
(8)
(58)
Non-cash portion of share-based compensation
15
10
Restructuring payments (net of expense)
31
C$ millions
Net Employee Defined Benefit Plans Expense (Recovery)
Donations and securitization fees included in other expense
(11)
(3)
(4)
Free Cash Flow (before share-based compensation payment)
148
245
(4)
(4)
144
241
Issuance of non-voting shares*
-
32
Issuance of common shares
-
2
(151)
52
(152)
(107)
45
16
100
-
(184)
(21)
(39)
(5)
Share Based Compensation Paid
Free Cash Flow (per current public guidance methodology)
Dividends
Working Capital and Other
Funds Available for debt redemption
A/R Securitization
Net Issuance (Repayment) of debt
Increase (Decrease) in cash
* Non-voting share issuance from treasury for shareholders in the DRIP
appendix – definitions
 EBITDA: earnings, after restructuring and workforce reduction costs, 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 and workforce reduction costs,
net employee defined benefit plans expense, cash interest received and excess
of share compensation expense over share compensation payments,
subtracting cash interest paid, cash taxes, capital expenditures, cash
restructuring payments, employer contributions to employee defined benefit
plans, and cash related to Other expenses such as charitable donations and
securitization fees
 Cost of retention (COR): total costs to retain existing subscribers, often
presented as a percentage of network revenue
 EPS normalized: growth rates are based on 2010 expected EPS ($2.90 to
$3.30) compared with 2009 actual results when excluding 52 cents of positive
income tax-related adjustments and a 22 cent loss on early partial redemption
of long-term debt
TELUS definitions for non-GAAP measures