putting YU first 2012 ANNUAL REPORT WorldReginfo - 1bdbc665-a9f5-44bb-89c0-603f532d7251 What’s inside Gatefold, 1-5 18-19 Corporate overview Community investment Who we are, what How we give where we offer, and a look at we live® our 2012 performance and 2013 targets 6-13 20-28 CEO letter to investors Leadership How TELUS is delivering Our Executive Leadership on its proven growth Team, Board of Directors, strategy and focusing on and questions and answers putting customers first 14-17 29-172 Review of operations Financial review A snapshot of our Detailed financial wireless and wireline disclosure, including a operations letter from our CFO, and other investor resources 1/2 INCH GETS TRIMMED OFF FOR GATEFOLD out more out more Open to findOpen to about TELUS Caution regarding forward-looking statements summary This document contains statements about expected future events and financial and operating performance of TELUS that are forward-looking. By their nature, forward-looking statements are subject to inherent risks and uncertainties and require the Company to make assumptions. There is significant risk that the assumptions, predictions and other 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 assumptions, actual future performance and events to differ materially from those expressed in the forward-looking statements. Accordingly this document is subject to the disclaimer and qualified in its entirety by the assumptions (including assumptions for 2013 targets, semi-annual dividend increases to 2013 and CEO three- year goals to 2013 for earnings per share and free cash flow growth to 2013 excluding any one-time items such as spectrum costs), qualifications and risk factors referred to in Management’s discussion and analysis starting on page 40 of this 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). In addition, there can be no assurance that the Company will initiate a normal course issuer bid in 2013 or maintain its dividend growth model beyond 2013. TELUS disclaims any intention or obligation to update or revise forward-looking statements, except as required by law, and reserves the right to change, at any time at its sole discretion, its current practice of updating annual targets and guidance. All financial information is reported in Canadian dollars unless otherwise specified. Copyright © 2013 TELUS Corporation. All rights reserved. Certain products and services named in this report are trademarks. The symbols ™ and ® indicate those owned by TELUS Corporation or its subsidiaries. All other trademarks are the property of their respective owners. WorldReginfo - 1bdbc665-a9f5-44bb-89c0-603f532d7251 2 . TELUS 2012 ANNUAL REPORT Who we are TELUS is a leading national telecommunications company in Canada, with $10.9 billion of annual revenue and 13.1 million customer connections including 7.7 million wireless subscribers, 3.4 million wireline network access lines, 1.4 million Internet subscribers and 678,000 TELUS TV® Our values customers. TELUS provides a wide range of communications products and services including We embrace change and initiate opportunity wireless, data, Internet protocol (IP), voice, We have a passion for growth television, entertainment and video. In support We believe in spirited teamwork of our philosophy to give where we live, TELUS, We have the courage to innovate our team members and retirees have contributed more than $300 million to charitable and not- for-profit organizations and volunteered 4.8 million hours of service to local communities since 2000. A quick view TELUS wireless TELUS wireline 2012 external revenue and annual growth $5.85 billion, an increase of 7.0% $5.08 billion, an increase of 2.9% Share of TELUS 1/2 INCH GETS TRIMMED OFF FOR GATEFOLD 54% 46% consolidated revenue 2012 EBITDA and $2.47 billion, an increase of 13% $1.51 billion, a decrease of 5.5% annual growth Share of TELUS 62% 38% consolidated EBITDA Industry drivers . Growing wireless industry penetration (currently . Capturing growing share of consumer entertainment estimated at 80% in Canada) and Internet market with IP-based services . Increasing smartphone adoption and usage . Delivering solutions for businesses with complex driving data revenue growth and changing technology needs . Accelerating growth of mobile commerce, machine- . Mitigating the impacts of competition and to-machine, mobile video and roaming services technological substitution with cost efficiency TELUS business drivers . Continuing 4G LTE network roll-out to reach . Bundling future friendly® home services to enhance more Canadians customer value . Offering Clear and Simple solutions . Optik TVTM and high-speed Internet services growth . Increasing lifetime revenue through improved . Investing in broadband technology, innovative new customer loyalty (lower churn) and higher usage services and cost efficiency . Enhancing efficiency to control costs while . Satisfying business clients’ evolving needs for cloud enhancing customer experience computing, security and managed hosting solutions WorldReginfo - 1bdbc665-a9f5-44bb-89c0-603f532d7251 Our products and services Wireless Across Canada, TELUS provides Clear & Simple© voice and data solutions to 7.7 million customers on world-class nationwide wireless networks. Leading networks and devices: Total coverage of 99% of Canadians over a coast-to-coast 4G network, including 4G LTE and nationwide HSPA+, as well as CDMA and Mike® iDEN network technologies. We offer leading-edge smartphones, mobile Internet keys, mobile Wi-Fi devices and tablets Digital voice: Postpaid, prepaid and TELUS Push to Talk®, and international roaming to more than 200 countries Data: Web browsing, social networking, messaging (text, picture and video), TELUS mobile TV®, video on demand and the latest mobile applications. Wireline In British Columbia, Alberta and Eastern Quebec, TELUS is the established full-service local exchange carrier offering a wide range of telecommunications products to consumers, including residential phone, Internet access, and television and entertainment services. Nationally, we provide telecommunications and IT solutions for small to large businesses, including IP, voice, video, data and managed solutions, as well as contact centre outsourcing solutions for domestic and international businesses. Voice: Reliable home phone service with long distance and IP networks and applications: Leading-edge IP networks that advanced calling features offer converged voice, video, data or Internet access on a secure, Internet: High-speed Internet service with email and high-performing network a comprehensive suite of security solutions Conferencing and collaboration: Full range of equipment and TELUS TV: High-definition entertainment service with Optik TV application solutions to support meetings and webcasts by means and TELUS Satellite TV®. Optik TV offers extensive content of phone, video and Internet options and innovative features such as PVR Anywhere, Remote Contact centre and outsourcing solutions: Managed solutions Recording, OptikTM Smart Remote channel browsing with an providing secure, low-cost and scalable infrastructure. TELUS iPad or iPhone, use of Xbox 360 as a set-top box International is a leading service provider with sophisticated contact and Optik on the go centres in North America, Central America, Europe and Asia Hosting, managed IT, and cloud-based services: Ongoing assured availability of telecommunications, networks, servers, databases, files and applications, with critical applications stored in TELUS’ intelligent Internet data centres across Canada Healthcare: Claims management solutions, hospital and hospital- to-home technology, electronic health records and other healthcare solutions through TELUS Health. WorldReginfo - 1bdbc665-a9f5-44bb-89c0-603f532d7251 Our customer declaration YU told us what you want and we listened. We’re not perfect, but our employees are deeply motivated to consistently delight our customers. We know that getting better means making sure we’re listening to you. That’s why we’re embracing new ideas that will make your TELUS experience better, every day. We’re on a journey to build on your trust by being clear, helpful and dependable. In other words, at TELUS, we put you first. WorldReginfo - 1bdbc665-a9f5-44bb-89c0-603f532d7251 TELUS 2012 ANNUAL REPORT . 1 2012 performance highlights You want shareholder value. We delivered in 2012. Liquidity and Income capital resources Customer connections Operating revenues Cash from operations Wireless subscribers 2012: $10.9 billion 2012: $3.2 billion 2012: 7.7 million 2011: $10.4 billion +5.0% 2011: $2.6 billion +26% 2011: 7.3 million +4.5% EBITDA1 Capital expenditures Network access lines 2012: $4.0 billion 2012: $2.0 billion 2012: 3.4 million 2011: $3.8 billion +5.1% 2011: $1.8 billion +7.3% 2011: 3.6 million -5.2% Earnings per share (EPS) – basic Free cash flow1 Internet subscribers 2012: $4.05 2012: $1.3 billion 2012: 1.4 million 2011: $3.76 +7.7% 2011: $1.0 billion +34% 2011: 1.3 million +5.7% Dividends declared per share Net debt to EBITDA ratio TV subscribers 2012: $2.44 2012: 1.6 times 2012: 678,000 2011: $2.205 +10.7% 2011: 1.8 times -0.2 times 2011: 509,000 +33% Consolidated revenues ($ billions) Consolidated EBITDA1 ($ billions) 1012 10.9 1012 4.0 0911 10.4