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TELUS Corporation
Annual Information Form
for the year ended December 31, 2014
March 19, 2015

Table of contents

  • Page 1
    TELUS Corporation Annual Information Form for the year ended December 31, 2014 March 19, 2015

  • Page 2
    ...19 CORPORATE SOCIAL RESPONSIBILITY & ENVIRONMENT ...20 EMPLOYEE RELATIONS...21 RISK FACTORS ...21 CANADIAN OWNERSHIP REQUIREMENTS ...22 REGULATION ...24 DIVIDENDS DECLARED ...27 CAPITAL STRUCTURE OF TELUS ...27 RATINGS ...30 MARKET FOR SECURITIES ...33 DIRECTORS AND OFFICERS ...35 LEGAL PROCEEDINGS...

  • Page 3
    ... for wireless spectrum; our ability to continue to retain customers through an enhanced customer service experience; network access line (NAL) losses; subscriber additions and retention volumes and associated costs for wireless, TV and high-speed Internet services; pressures on wireless average...

  • Page 4
    ... iDEN wireless networks to redeploy spectrum and reduce operating costs, and the associated subscriber migration costs and customer retention risks; availability of resources and ability to build out adequate broadband capacity; and success of upgrades and evolution of TELUS TV® technology, which...

  • Page 5
    ..., retention and appropriate training in a highly competitive industry; and the future outcome of collective bargaining for the contract with the Telecommunications Workers Union (TWU), which expires at the end of 2015. Ability to successfully implement cost reduction initiatives and realize planned...

  • Page 6
    and in our filings with the Securities and Exchange Commission (SEC) in the United States, including Form 40-F (on EDGAR at sec.gov). Section 10: Risks and risk management in our MD&A is incorporated by reference in this cautionary statement. 6

  • Page 7
    ...the name BCT.TELUS Communications Inc. (BCT). On January 31, 1999, pursuant to a court-approved plan of arrangement under the Canada Business Corporations Act among BCT, BC TELECOM Inc. (BC TELECOM) and the former Alberta-based TELUS Corporation (TC), BCT acquired all of the shares of BC TELECOM and...

  • Page 8
    ... telecommunications companies, providing a wide range of telecommunications services and products, including wireless and wireline voice and data. Data services include: internet protocol (IP); television; hosting, managed information technology and cloud-based services; healthcare solutions; and...

  • Page 9
    ... similar products and services. Our strategy Our strategic intent is to unleash the power of the Internet to deliver the best solutions to Canadians at home, in the workplace and on the move. Our focus is on our core telecommunications business in Canada supported by our international contact centre...

  • Page 10
    ... 2.2 Strategic imperatives. To advance our long-term strategic initiatives and address near-term opportunities and challenges, we set new corporate priorities each year. See MD&A Section 3: Corporate priorities for 2015 and progress on 2014 corporate priorities for our 2014 corporate priorities...

  • Page 11
    ... larger high-speed Internet subscriber base, bundling of offers with Optik TV and certain rate increases. Under an agreement with the Government of B.C., since 2011, we have been providing telecommunications and strategic services to the government and its public sector partners. By January 2015, we...

  • Page 12
    ... and place care in the hands of patients. Payor Solutions: Our payor solutions include health claims management solutions that are managed directly at the point-of-service for public and private insurers. Payor solutions transport, process and adjudicate claims, providing processing support to more...

  • Page 13
    ...4G HSPA+ network. In 2012, we also introduced a number of applications (apps), including: the free Optik Smart Remote app that Optik TV customers can download to their mobile phones or tablets, allowing customers to navigate the interactive program guide on the mobile device without interrupting the...

  • Page 14
    ... devices, which complements the app already available on Apple devices. Optik Smart Remote enables customers to surf TV, set and manage recordings while on the go, and browse content on their device instead of using the traditional guide on the TV screen; and The wireless digital box for Optik TV...

  • Page 15
    ... and 4G LTE expansion and upgrades, as well as in network and systems resiliency and reliability, to increase available Internet speed and capacity, connect more homes and businesses to high-speed Internet services, extend the reach of Optik TV and enhance our healthcare solutions. In addition...

  • Page 16
    ...services to these new facilities. In 2014, we continued to enhance the infrastructure in our Internet data centres (IDCs) in Kamloops, B.C. and Rimouski, Quebec, enabling us to provide our customers with hosting solutions. Partnering, acquiring and divesting to accelerate the implementation of TELUS...

  • Page 17
    ... position in healthcare information management with the following acquisitions: ï,· ï,· In March 2014, we acquired Med Access Inc., a leading company based in Kelowna, B.C. providing EMR services to 2,000 specialty and general practice physicians in B.C., Alberta, Saskatchewan, Manitoba and Ontario...

  • Page 18
    ... inexpensive device unlocking after 90 days (2011); clear, simple and plain language service terms (2011); the elimination of device activation fees for new and renewing customers (2012) and the introduction of Share Plus plans (2013) and Your ChoiceTM plans (2014). To fully align with the Code, we...

  • Page 19
    ... 3: Corporate priorities for 2015 and progress on 2014 corporate priorities. For a discussion of changes in our business expected in 2015, see MD&A Section 9: General trends, outlook and assumptions. For a review of the events and conditions that influenced our general development during 2012 and...

  • Page 20
    ... to business, focusing on the social, economic and environmental impact of the innovative communication and health solutions we provide to Canadians. TELUS values are reflected in our commitment to: ï,· Comply with applicable environmental legal requirements and meet voluntary requirements that are...

  • Page 21
    .... The SAMT also represents a small number of employees in the wireless segment under a separate collective agreement. Our subsidiary, TELUS Sourcing Solutions Inc., is a signatory to a collective agreement with the B.C. Government and Services Employees' Union (BCGEU) which covers approximately 65...

  • Page 22
    .... The Canadian Telecommunications Common Carrier Ownership and Control Regulations (Ownership and Control Regulations), made pursuant to the Telecommunications Act further provide that in order for a company that holds shares in a carrier (carrier holding corporation) to be considered Canadian, not...

  • Page 23
    ... For Common Shares trading on the New York Stock Exchange, non-Canadian ownership is monitored by utilizing the Depository Trust & Clearing Corporation's SEG-100 Account program. All TELUS Common Shares held by non-Canadians must be transferred to this account (no reservation application is required...

  • Page 24
    ..., to ensure network access and interconnection. See MD&A Section 10.4 Regulatory matters for further details related to regulation generally. Regulation of wireless services Wireless telecommunications services depend on the use of radio frequencies. The use of radio spectrum and radio apparatus is...

  • Page 25
    ... GHz/2.1 GHz spectrum in the AWS-3 auction. TELUS obtained spectrum in Ontario and Quebec, and all of British Columbia, Alberta, Saskatchewan and Manitoba for $1.51 billion. TELUS also intends to participate in the spectrum auction in the 2500-2690 MHz band which will begin on April 14, 2015. See MD...

  • Page 26
    ... Broadcasting Regulatory Policy CRTC 2015-86, which focused on measures to promote the creation of Canadian content and Broadcasting Regulatory Policy CRTC 2015-96 which set out a new regulatory framework to promote greater choice for consumers in the selection of programming services. At least...

  • Page 27
    ... February 4, 2013 pursuant to a plan of Arrangement under the provision of Division 5 of Part 9 of the Business Corporations Act (British Columbia). Consistent with TELUS' move to a single class share structure, at the 2013 annual and special meeting, shareholders approved alterations to the Notice...

  • Page 28
    ... general meeting of the shareholders of TELUS on the basis of one vote per Common Share held. Holders of Common Shares are entitled to vote by a separate resolution for each director rather than a slate. The Common Shares are subject to constraints on transfer to ensure our ongoing compliance with...

  • Page 29
    ...% discount) respectively. At the May 2013 annual and special meeting, shareholders approved amendments to the Rights Plan to reflect the elimination of the Non-Voting Share class from TELUS' authorized share structure. Additionally, minor amendments were approved to reflect TELUS' use of the Direct...

  • Page 30
    ... our control, including conditions affecting the telecommunications industry generally, and the wider state of the economy. The Company's credit ratings are outlined in the chart below. Credit ratings are not recommendations to purchase, hold or sell securities and do not address the market price...

  • Page 31
    ... (obtained from their public websites) are provided solely to satisfy requirements of Canadian law and do not constitute an endorsement by TELUS of the categories or of the application of the respective rating agencies. Institution DBRS Rating The DBRS® long-term rating scale provides an opinion...

  • Page 32
    ... charged TELUS for their rating services which include annual surveillance fees covering our outstanding long-term and short-term debt securities, in addition to onetime rating fees for certain agencies when debt is initially issued. We reasonably expect that such payments will continue to be...

  • Page 33
    MARKET FOR SECURITIES Trading Price and Volume TELUS' Common Shares are listed on the TSX under the symbol "T" and on the NYSE under the symbol "TU". Monthly share prices and volumes for 2014 are listed below: TSX - Common Shares Month January February March April May June July August September ...

  • Page 34
    ... drawn from the 2011 Credit Facility on April 2, 2014 to fund a portion of the purchase price of the 700 MHz Spectrum Licences, and (b) for general corporate purposes. The net proceeds used to repay indebtedness consisting of (a) advances on the 2014 Credit Facility and commercial paper issued to...

  • Page 35
    ...May 7, 2015 annual general meeting. Directors of TELUS (Name and municipality of residence) R.H. (Dick) Auchinleck Victoria, B.C. A. Charles Baillie (3), (5) Toronto, Ontario Director since 2003 Principal occupation Corporate Director 2003 Chair, Alberta Investment Management Corporation (pension...

  • Page 36
    ... Private Equity Fund (investment fund) Corporate Director William (Bill) MacKinnon (2 - Chair), (4) Toronto, Ontario John Manley (2), (4) Ottawa, Ontario 2009 2012 President & Chief Executive Officer, Canadian Council of Chief Executives President and Chief Executive Officer, TELUS Corporation...

  • Page 37
    ... Health and TELUS International Executive Vice President, Technology Strategy and Operations Executive Vice President, Corporate Affairs, Chief Legal Officer and Corporate Secretary Executive Vice President, Business Transformation Executive Vice President, TELUS Consumer & Small Business Solutions...

  • Page 38
    ... executive officers As at March 13, 2015, the directors and executive officers of TELUS, as a group, beneficially owned, directly or indirectly, or exercised control or direction over 1,152,253 Common Shares, which represented approximately 0.19% of the outstanding Common Shares. Cease trade orders...

  • Page 39
    ...required dates under Ontario securities laws. The OSC issued a further management cease trade order on April 10, 2006 prohibiting all directors, officers and certain current and former employees, including Mr. Manley, from trading in securities of the Nortel Companies until the filings were complete...

  • Page 40
    ... Wilde is Chief Executive Officer of the Ontario Educational Communications Authority (TVO), a position she has held since 2005. Previously, Lisa was President and CEO of Astral Television Networks Inc., a partner at Heenan Blaikie and CRTC Legal Counsel. Lisa has served on public company boards for...

  • Page 41
    ... that he has led. Mr. Lacey has completed the Program for Management Development at Harvard Business School. John Manley is President and Chief Executive Officer of the Canadian Council of Chief Executives, a position he has held since 2010. From 2004 to 2009, he served as Counsel to McCarthy...

  • Page 42
    ... and tax planning. Includes fees for services rendered by Deloitte that are not in relation to the audit or review of our financial statements, such as spectrum specific procedures. MATERIAL CONTRACTS As at December 31, 2014, TCI is a party to a three-year agreement (expiry December 31, 2016) with...

  • Page 43
    ... sec.gov. Additional information regarding directors' and officers' remuneration, and securities authorized for issuance under equity compensation plans, will be contained in TELUS' information circular for the annual meeting to be held on May 7, 2015. Additional financial information is provided in...

  • Page 44
    ... the Board in fulfilling its oversight responsibilities regarding the integrity of the Company's accounting and financial reporting, the Company's internal controls and disclosure controls, the Company's legal and regulatory compliance, the Company's ethics policy and timeliness of filings with...

  • Page 45
    ... laws; the interim and annual management's discussion and analysis of financial condition and results of operations (MD&A) of the Company and those of its subsidiaries that are reporting issuers, as defined in accordance with applicable securities laws; earnings press releases and earnings guidance...

  • Page 46
    ... conducted by the external auditors; pre-approve all audit, audit-related and non-audit services to be provided to the Company or any of its subsidiaries, by the external auditors (and its affiliates), in accordance with applicable securities laws; annually review the qualifications, expertise and...

  • Page 47
    ... of the external auditors and management's response; review reports of the external auditors; and pre-approve the hiring of employees and former employees of current and former auditors in accordance with applicable securities laws and TELUS policies. Notwithstanding section 4.2(d) above, the...

  • Page 48
    ... of whistleblower, ethics and internal controls complaints. 4.5 Accounting and Financial Management The Committee will review: a) with management and the external auditors, the Company's major accounting policies, including the impact of alternative accounting policies and key management estimates...

  • Page 49
    ... from the Chief Compliance Officer on legal and regulatory compliance activities. b) c) d) e) f) 4.8 Risk Management The Committee will: a) b) consider reports on the annual enterprise business risk assessment and updates thereto; except to the extent that responsibility is reserved to the...

  • Page 50
    ...the authority to: a) b) c) d) engage and set compensation for independent counsel and other advisors; communicate directly with the Chief Financial Officer, internal and external auditors, Chief Compliance Officer and Chief General Counsel; delegate tasks to Committee members or subcommittees of the...