Q2 2014

investor conference call

August 7, 2014

Darren Entwistle, Executive Chair

Joe Natale, President and Chief Executive Officer

John Gossling, EVP & Chief Financial Officer

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Today's presentation and answers to questions contain statements about financial and operating performance of TELUS (the Company) and future events, including with respect to future dividend increases and normal course issuer bids to 2016 and 2014 annual targets 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 2014 annual targets, semi-annual dividend increases through 2016 and our ability to sustain and complete multi-year share purchase programs through 2016), qualifications and risk factors referred to in the first and second quarter Management’s discussion and analysis, in the 2013 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.

TELUS forward looking statement

Executing on our strategy

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TELUS consistently delivering strong results and returning significant cash to shareholders

• Delivering strong second quarter results

• Returning significant capital to shareholders

• Continuing track record of executing in dynamic marketplace

Healthy postpaid net additions

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Postpaid net adds (000s)

Q2-13

100

Q2-14

Wireless subscribers1

7.9M total

1.0Mprepaid

87%

13%

6.9Mpostpaid

78

1 Wireless operating indicators exclude Public Mobile subscribers, which are all prepaid.

Continued expansion of postpaid subscriber baseand mix shift toward higher value postpaid

Industry-leading wireless churn

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1.40%

Q2-13

1.26%

Q2-14

Blended1 Postpaid

1.03%

Q2-13

0.90%

Q2-14Q2-12Q2-12

1.39%

1.00%

Industry-leading postpaid churn matching record low set eight years ago Fourth consecutive quarter with postpaid churn <1%

1 Wireless operating indicators exclude Public Mobile subscribers, which are all prepaid.

Smartphone & data adoption driving ARPU growth

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Q2-12 Q2-13 Q2-14

6.3 6.6 6.8

Postpaid subscribers (millions)

Smartphone % of postpaid

$61.12 $62.51$60.29

Blended ARPU1

Q2-12 Q2-13 Q2-14

59%

71%79%

Q2 smartphone penetration up eight points to 79% of postpaid base supporting continued strong ARPU growth of >2%

1 Wireless operating indicators exclude Public Mobile subscribers, which are all prepaid.

Industry-leading lifetime revenue per subscriber1,2

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Q2-13 Q2-14

$4,961$4,366

1 Lifetime revenue derived by dividing ARPU by blended churn rate.2 Wireless operating indicators exclude Public Mobile subscribers, which are all prepaid.

Q2-12

$4,337

Customers First focus supporting industry-leading lifetime revenue per subscriber - up a strong 14% YoY

Future Friendly Home subscriber growth

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Combined TV and High-Speed net additions exceeded residential NAL losses by 2x for the third straight quarter

TELUS TVResidential NALs

High-speed Internet

Q1-14

48K

-33K

34K 27K

21K44K

Q2-13

-24K-19K

23K

Q2-14

38K

24K12K 19KTotal wireline customer net adds

31K

-32K

13K15K

Key second quarter operational highlights

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Strong operating momentum in wireless and wireline supporting value creation and return of significant cash to

shareholders

• Lowest postpaid churn in Canada

• Industry-leading ARPU

• Industry-leading lifetime revenue per customer

• Most rapidly growing wireline business in Canada

• Strong EBITDA performance and revenue growth in both wireless and wireline

Q2 2014 wireless financial results

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($ millions, except margin) Q2 2014 y/y change

Revenue (external)1 1,604 +6.2%

Network revenue 1,478 +6.1%

EBITDA2 708 +6.3%

EBITDA (excl. Public Mobile and restructuring) 714 +5.7%

EBITDA margin3 43.8% +0.1 pts

EBITDA margin (excl. Public Mobile and restructuring) 44.8% +0.4 pts

Capital expenditures 228 +33%

TELUS delivers another strong quarter of wireless results

1 Includes Public Mobile revenue of $25M, composed of network revenues of $22M and equipment and other revenues of $3M 2 For definition, see section 11.1 in Q2 2014 Management’s discussion and analysis.3 EBITDA as a percentage of total revenue.

Q2 2014 wireline financial results

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($ millions, except margin) Q2 2014 y/y change

Revenue (external) 1,347 +2.4%

EBITDA 365 +9.8%

EBITDA (excl. restructuring) 373 +3.1%

EBITDA margin1 26.2% +1.7 pts

EBITDA margin (excl. restructuring) 26.8% +0.2 pts

Capital expenditures 408 +20%

Strong EBITDA growth and margin expansion reflecting continued revenue growth momentum and efficiency flow-

through

1 EBITDA as a percentage of total revenue.

Q2 2014 consolidated financial results

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($ millions, except EPS) Q2 2014 y/y change

Revenue 2,951 +4.4%

EBITDA 1,073 +7.5%

EBITDA (excl. Public Mobile and restructuring) 1,087 +4.8%

EPS (basic) 0.62 +41%

Adjusted EPS1 0.63 +17%

Capital expenditures 636 +25%

Simple cash flow (EBITDA less capex) 437 (10)%

Strength in both wireless and wireline delivering strong consolidated growth in revenue and profitability

1 Adjusted EPS does not have any standardized meaning prescribed by IFRS-IASB. See appendix for definition.

EPS continuity analysis

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EPS growth reflects strong EBITDA growthand lower shares outstanding from active NCIB program

Q2-13(as reported)

Q2 2013 items1

Lower shares

outstanding

Q2-14(adjusted)

$0.44

$0.10

$0.03 $0.63$0.54

Q2-13(adjusted)

$0.06

EBITDA (excluding

restructuring)

($0.01)

Restructuring costs

Q2-14(as reported)

$0.62

1 Q2 2013 items include (after income taxes): 1) restructuring and other like costs of $0.04; 2) long-term debt pre-payment premium of $0.03; and 3) unfavourable income tax-related adjustments of $0.03. See appendix for definition.

Returning significant cash to shareholders

• Executing on multi-year dividend growth and share purchase programs

• 14 dividend increases since 2004 to current $0.38/share or $1.52 annually

• 10.7M shares purchased in 2014 for $410M

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2004 to mid-2014cumulative

$10.3B

$4.2B

$6.1B

Buybacks

Dividends

Strong track record of returning capital to shareholders

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Appendix – Q2 2014 free cash flow comparison

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2014 2013  Q2 Q2EBITDA 1,073 998Capital expenditures (excluding spectrum licenses) (636) (511)Net employee defined benefit plans expense 22 28Employer contributions to employee defined benefit plans (22) (130)Interest expense paid, net (124) (128)Income taxes paid, net (122) (82)Share-based compensation 23 13Restructuring (disbursements) net of restructuring costs (4) 4Free Cash Flow 210 192Spectrum (914) -Dividends (224) (209)Purchase of Common Shares for cancellation (177) (238)Cash payments for acquisitions and related investments (3) (3)Real estate joint ventures (10) (6)Working Capital and other 49 -

Funds available for debt redemption (1,069) (264)Net issuance of debt 1,074 514Increase in cash 5 250

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Appendix - definitions

• EBITDA does not have any standardized meaning prescribed by IFRS-IASB. We have issued guidance on and report EBITDA because it is a key measure used to evaluate performance at a consolidated level and the contribution of our two segments. For definition and explanation, see Section 11.1 in the 2014 first quarter Management’s discussion and analysis.

• 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) long-term debt pre-payment premium; and 3) income tax-related adjustments. For further analysis of the aforementioned items see Section 1.3 in the 2014 second quarter MD&A.