Table of Contents
Executive Summary .................................................................................................................................... 1 Company Description ................................................................................................................................. 2 Industrial Profile ......................................................................................................................................... 2 Performance Summary and Analysis .......................................................................................................... 4 Management Performance and Compensation Structure ............................................................................ 5 Accounting Policy Analysis ........................................................................................................................ 5 Credit Analysis ............................................................................................................................................ 6 Conclusion .................................................................................................................................................. 9 References ............................................................................................................................................. 10 Appendix A Industry Facts ................................................................................................................... 11 Appendix B Accounting Policy Details ................................................................................................ 18 Appendix C Ratio Calculation Details .................................................................................................. 20 Appendix D TELUS Financial Statements 2011References ................................................................. 23

Executive Summary TELUS is a leading competitor in the Canadian telecommunications industry. Major services provided by TELUS are wireless (voice and data) and wireline (phone, internet and TV) services. Demand and revenue of both sectors of the industry have grown steadily in the past years despite the economic recession. TELUS has been able to maintain its market share and competitiveness and improve its performance in the continuous nationwide business competition through effective management. TELUS transited to IFRS accounting standard in 2011 and its revenue recognition practices are consistent and comparable across the industry with its major competitors Bell and Rogers. In order to support its service to meet the growing demand for its services, TELUS plans to increase its capital expenditure to expand the wireless and wireless infrastructure. As a result, TELUS request a $2 billion medium term loan to fund the capital investment as well as to refinance debts maturing in near term. TELUS has maintained its key financial ratios at safe level compared to its peer competitors. Total debt to equity and net debt to EBITDA ratios are below average and interest coverage ratios are the highest among major competitors in 2011. Current ratio and quick ratios are lower than average. However, this shouldn’t trigger excess concerns over solvency issues due to revenue stability of the industry. We believe that granting $1 billion debt wouldn’t impact TELUS’ financial position significantly to the extent that it may experience difficulty maintaining its financial ratios and repaying interests. $2 billion debt will trigger some concerns over the net debt to EBITDA ratio. However, considering TELUS’ recent performance trend and the positive impact of its proposed new capital investments, we have confidence that TELUS would be able to increase revenues to further improve its financial position. In conclusion, we recommend approval of $1 billion 10-year loan with 3.5% annual interest rate, which is reflects for the company’s credit rating and market