Q1-07 CFO Presentation

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Q1 2007 TELUS investor conference call May 2,
2007
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TELUS forward looking statements
This session and answers to questions contain
forward-looking statements that require
assumptions about expected future events
including 2007 guidance, competition, financing,
financial and operating results, and regulation
that are subject to inherent risks and
uncertainties. There is significant risk that
predictions and other forward looking statements
will not prove to be accurate so do not place
undue reliance on them. Factors that could cause
actual results to differ materially include but
are not limited to competition capital
expenditure levels (including possible spectrum
purchases) financing and debt requirements
(including share repurchases, debt redemptions
and refinancing plans) tax matters (including
deferral of payment of significant cash taxes)
regulatory developments (including possible local
price cap reductions, local forbearance, local
number portability, the timing, rules, process
and cost of future spectrum auctions, and
possible changes to foreign ownership
restrictions) process risks (including
conversion of legacy systems and billing system
integrations) and other risk factors discussed
herein and listed from time to time in TELUS
reports. There are many factors that could
cause actual results to differ materially. For a
full listing and description of the potential
risk factors and assumptions, please refer to the
TELUS 2006 annual report and updates in the 2007
quarterly reports (see Section 10 Risks and Risk
Management in Managements discussion and
analysis), 2007 targets news release issued on
Dec. 14, 2006 and other filings with securities
commissions in Canada (sedar.com) and the United
States (sec.gov). All dollars referenced are in
C unless otherwise specified.
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Q1 2007 TELUS investor conference call
Robert McFarlane EVP Chief Financial
Officer May 2, 2007
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Summary

• Continued profitable wireless growth
• Resilient wireline results
• Strong consolidated results, no changes to 2007
  guidance
• Positive developments for TELUS
• TELUS financing
• New wireline industry rules for deregulation

Innovative shareholder friendly initiative
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5
Net-cash settlement for options program update

• Introduction of net-cash settlement feature for
  share options impacted reported Q1 results

Impact on Q1-07 2007E
Consolidated EBITDA 173.5M approx. 180M
Wireline EBITDA 153.1M approx. 155M
Wireless EBITDA 20.4M approx. 25M
EPS impact 0.32 approx. 0.33

• Reduces share dilution and leads to tax savings
  (1.5M net-cash settled options exercised in
  Q1-07)

Upfront expense for net-cash settled options
largely recorded in Q1
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Wireless segment Q1 2007 financial results
Q1-06 Q1-07 Change
Revenue 882M 1.00B 13
EBITDA (reported) 396M 443M 12
EBITDA (as adjusted)1 396M 464M 17
Capital expenditures 62M 111M 81
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1 Excludes upfront non-cash charge of 20.4M in
Q1-07 for net cash settlement feature of options
granted prior to 2005
Continued double digit revenue and EBITDA growth
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7
Wireless subscriber results
total wireless subscribers
net additions
prepaid
93K
1.0M
91K
postpaid
Prepaid 20
Postpaid 80
76
67
4.1M
Q1-06
Q1-07
5.1 million
Total wireless subscribers up 12 to 5.1M
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Wireless ARPU growth
62.03
Data ARPU
60.31
3.71
Voice
6.27
56.60
55.76
Q1-06
Q1-07
69 increase in data more than offsetting voice
declines
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Leading in wireless data growth

Data ARPU ()

70
Voice ARPU ()
70
Data growth , YoY
60
60
50
50
40
40
30
30
20
20
10
10
0
0
Q4-05
Q4-06
Q1-06
Q1-07
Q1-06
Q1-07
Q4-05
Q4-06
Q1-06
Q1-07
Q1-06
Q1-07
Sprint Nextel
Rogers
TELUS
T-Mobile
Verizon
ATT
Strength in voice ARPU with leading wireless data
growth rate
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Profitable wireless growth strategy
Q1-06 Q1-07 Change
Total subscribers 4.6M 5.1M 12
ARPU 60.31 62.03 2.9
Blended churn 1.33 1.35 2 bps
Lifetime revenue 4535 4595 1.3
COA 429 438 2.1
COA/lifetime revenue 9.5 9.5 -
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Strong wireless subscriber operating metrics
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Wireline segment Q1 2007 financial results
Q1-06 Q1-07 Change
Revenue 1.20B 1.21B 0.6
EBITDA (reported) 467M 321M (31)
EBITDA (as adjusted)1 467M 474M 1.5
Capital expenditures 259M 271M 4.5
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1 Excludes upfront non-cash charge of 153.1M in
Q1-07 for net cash settlement feature of options
granted prior to 2005
Solid first quarter results reflect resiliency
despite increased competition
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Wireline revenue profile
Q1-06 Q1-07 Change
Voice Local 536M 532M (0.7)
Voice Long Distance 208M 188M (9.7)
Data 394M 425M 7.9
Other 62M 61M (0.8)
External Revenue 1.20B 1.21B 0.6
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Continued solid data growth offsets local and LD
erosion
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Local and data revenue normalized
Q1-06 Q1-07 Change
Local revenue (reported) 536M 532M (0.7)
Deferral account - (15M)
Local revenue (normalized) 536M 517M (3.5)
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Data revenue (reported) 394M 425M 7.9
Retro CDNS discounts - 11M
Data revenue (normalized) 394M 436M 10.8
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Normalized data revenue up 10.8
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High-speed Internet subscribers
Internet subscribers
High-speed Internet net additions
182K
Dial-up 16
39K
32K
High-speed 84
949K
1.13 million total
Q1-06
Q1-07
Good net adds of 32K but down 7K year over year
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Network access line results
of network access lines lost (yr. over yr.)
Q4-05
Q1-06
Q2-06
Q3-06
Q4-06
Q1-07
-2.4
-2.6
-2.7
-2.8
-2.9
-3.0
Relatively stable overall line losses due to
business line growth
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TELUS total subscriber connections
10.8
(millions)
10.3
9.8
Res NALs
Bus NALs
Dial-up Internet
High-speed Internet
Wireless
Q1-07
Q1-06
Q1-05
Connections increasing with strong wireless and
Internet growth
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Consolidated Q1 2007 financial results
Q1-06 Q1-07 Change
Revenue 2.08B 2.21B 6.0
EBITDA 863M 764M (11)
EBITDA (as adjusted)1 863M 938M 8.7
EPS 0.60 0.58 (3.3)
EPS (as adjusted)1 0.60 0.90 50
Capital Expenditures 321M 382M 19
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1 EBITDA EPS (as adjusted) exclude upfront
non-cash charge of 173.5M (or 0.32 per share)
in 2007 for net cash settlement feature of
options granted prior to 2005
Strong growth in revenue, EBITDA and EPS
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EPS continuity
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0.90
0.02
0.06
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0.07
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0.15
0.60
Lower deprn amortizn
Other (incl. lower avg o/s shares)
EBITDA (as adjusted) growth
Lower financing costs
Q1-06
Q1-07 (as adjusted)1
1 EPS (as adjusted) excludes upfront non-cash
charge of 0.32 in 2007 for net cash settlement
feature of options granted prior to 2005
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Share buy backs 3rd Normal Course Issuer Bid
2004 2005 2006 Q1-07 Total
Total investment (M) 78 892 800 201 1,970
Gross shares repurchased (M) 2.2 20.8 16.4 3.5 42.9
Net reduction in shares (M) - 8.4 12.2 3.5 24.1
Total shares outstanding (M) (end of period) 358.5 350.1 337.9 334.4
change in o/s shares (2.4) (3.5) (1.0) 7
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Share repurchases lead to 7 reduction in shares
outstanding 100 flow through in Q1-07 due to
cash settled options feature
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Strong record of returning capital
per share
3.88
4
3.43
Share repurchases
3.30
Dividends
3
2.38
2
2.33
2.50
0.60
1.50
0.82
1
1.10
0.60
0.80
0.22
0.60
2003
2004
2005
2006
2007E1,2
1 Annualized dividend, plus YTD NCIB as at Mar
31/07, annualized
2 See forward looking statement caution. Assumes
continuation of share repurchase program and
dividend at same rate
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Financing update

• Completed 1 billion financing in March
• 300 million at 4.5 maturing 2012
• 700 million at 4.95 maturing 2017
• Part of refinancing 7.5 1.5 billion due June
  2007
• Closed new 2 billion credit facility to 2012
• Can back stop commercial paper issuance

Very successful debt issuance resulting in lower
interest expense, and stronger balance sheet with
extended maturities
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Regulatory developments

• Wireless Number Portability (phase 1)
  successfully implemented mid-March 2007
• Government decision on local forbearance April 4,
  2007
• 9 vs. 14 quality of service indicators
• Elimination of winback delay rules
• Definitional change of criteria and local market
  area
• April 30 price cap decision confirms TELUS
  assumption of no further mandated consumer local
  price reductions

TELUS applies for deregulation in Victoria,
Vancouver, Calgary, Edmonton, Fort McMurray and
Rimouski
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2007 guidance - consolidated
2007 targets1 YoY growth
Revenue 9.175 to 9.275B 6 to 7
EBITDA (as adjusted)2 3.725 to 3.825B 4 to 7
EPS (as adjusted)3 3.25 to 3.45 17 to 24
Capital expenditures approx. 1.75B 8
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1 Confirmed May 2, 2007
2 Excludes expense of approx. 180 million in
2007 for net cash settlement feature for options.
3 Excludes an after-tax charge per share of
approx 0.33 for cash settlement feature for
options. Year over year growth rate normalized
for 0.48 of positive tax-related adjustments in
2006.
See forward looking statement caution
Consolidated and segment guidance remains
unchanged
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Questions?

• Bob McFarlane
• Darren Entwistle

investor relations 1-800-667-4871 telus.com ir_at_tel
us.com
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Appendix Free cash flow (2007 definition)
Q1-06
Q1-07
(M)
863
764
EBITDA
(321)
(382)
Capex
Cash Restructuring Payments (in excess of expense)
(16)
(17)
9
(22)
Net Cash Interest
8
139
Non-Cash Share Based Compensation
96
8
Net Cash Tax Recovery
Cash related to Other expenses
(5)
(9)
481
636
Free cash flow
33
0.4
Share Issuance (non-public)
(232)
(201)
Purchase of shares for cancellation (NCIB)
(96)
(126)
Dividends
(100)
(350)
Accounts Receivable Securitization
(177)
(63)
Working capital other
64
(256)
Funds avail. for debt redemption
804
(74)
Net debt issuance / (repayment)
Net change in cash
(10)
546
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Appendix - definitions

• EBITDA Earnings, after restructuring and
  workforce reduction costs, before interest,
  taxes, depreciation and amortization
• Capital intensity capex divided by total revenue
• 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

TELUS definitions for non-GAAP measures