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TELUS Reports Strong Results for Fourth Quarter 2014 and Announces 2015 Financial Targets

VANCOUVER, BRITISH COLUMBIA — (Marketwired) — 02/12/15 — For the fourth quarter of 2014, TELUS Corporation (TSX: T)(NYSE: TU) reported consolidated operating revenue growth of 6.1 per cent from a year earlier. Earnings before interest, income taxes, depreciation and amdortization (EBITDA) increased by 5.3 per cent to $1.0 billion. Net income of $312 million was higher by 7.6 per cent, while basic earnings per share (EPS) rose by 8.5 per cent to $0.51.

“In 2014, TELUS once again demonstrated how our world leading employee engagement, focused on our winning strategy and passion for putting customers first, can drive industry-leading financial and operational performance while delivering significant returns for shareholders,” said Darren Entwistle, TELUS Executive Chair. “During the year, we earned the privilege of providing service to an industry-leading 538,000 new customers across postpaid wireless, TV and high-speed Internet while maintaining our leadership in having the most loyal customers in the industry. Notably, we realized an annualized postpaid wireless churn rate of 0.93 per cent – the best full-year churn result we have ever achieved, while churn for high-speed Internet and TV also declined. These results drove robust financial performance, including industry-leading consolidated revenue and EBITDA growth of 5 per cent and double digit net income and EPS growth.”

Mr. Entwistle added, “Our strong and consistent financial and operational performance in 2014 also continued to support our significant and ongoing multi-year share purchase and dividend growth programs, which returned $1.5 billion to our shareholders in 2014. Notably, since 2004 we have returned $11 billion to TELUS shareholders or $18 per share.”

Mr. Entwistle further commented, “As a result of our team–s excellent track record in executing our strategy, in combination with our high quality asset mix, we are establishing strong 2015 financial targets, including revenue, EBITDA and EPS growth of up to 5, 7 and 13 per cent respectively, and healthy cash flow generation of up to 27 per cent. These targets not only support our multi-year dividend growth and share buyback programs, but also reflect the confidence we have in successfully managing our wireless and wireline business within the context of a competitive industry and a dynamic Canadian economy.”

TELUS President and CEO Joe Natale said, “Customers vote with their feet every day, and it is gratifying to see them consistently voting to stay with TELUS, or to join us from another provider. Putting customers first is the foundation of our business strategy, a source of great inspiration and motivation for our team, and ultimately the reason we continue to deliver strong financial results.”

John Gossling, TELUS Executive Vice-President and CFO said “In 2014, we further enhanced our financial strength by increasing our liquidity and issued over $2 billion in new lower-cost long-term debt. With these new debt issues, the average term to maturity of our long-term debt is now 10.9 years, compared to 5.5 years at the end of 2012, and the average interest rate has decreased to 4.72 per cent, compared to 5.44 per cent at the end of 2012. With our solid financial and operating performance in 2014, supported by the strongest balance sheet among our Canadian peers, TELUS remains in a position of strength to make the right strategic investments in our business, including participating in the upcoming AWS-3 and 2,500 MHz spectrum auctions, while at the same time returning significant capital to our shareholders.”

CONSOLIDATED FINANCIAL HIGHLIGHTS

Consolidated revenue growth was generated in both wireless and wireline operations. Wireless network revenue was up 8.0 per cent and wireline data revenue was up 7.1 per cent from a year ago. In wireless, revenue was primarily driven by continued subscriber growth and higher data usage as a result of continued smartphone adoption and the expansion of TELUS– LTE network coverage. Wireline data revenue growth was generated primarily by an increase in Internet and enhanced data service revenue from continued high-speed Internet subscriber growth and higher revenue per customer, and TELUS TV subscriber growth. Combined data revenue from wireless and wireline operations increased by 15 per cent over the same period a year ago to $1.7 billion, representing 55 per cent of fourth quarter consolidated revenue.

TELUS attracted a total of 135,000 net new customer connections (excluding Public Mobile) in the quarter, driven by the gain of 118,000 wireless postpaid customers, 28,000 TELUS TV subscribers and 22,000 high-speed Internet customers, partially mitigated by the loss of wireless prepaid customers and network access lines. TELUS– total wireless subscriber base is up 3.8 per cent from a year ago to 8.1 million, high-speed Internet connections are up 5.7 per cent to 1.48 million, and TELUS TV subscribers are up 12 per cent to 916,000.

TELUS– ongoing customers first focus delivered a year-over-year improvement of three basis points in monthly postpaid wireless subscriber churn to 0.94 per cent, the sixth consecutive quarter this important metric was below 1 per cent.

Free cash flow of $337 million was higher by 148 per cent from a year ago driven by higher EBITDA, lower income tax payments, and lower employer contributions to employee defined benefit pension plans.

During the fourth quarter, TELUS returned $345 million to shareholders, consisting of $233 million in dividends paid and $112 million in share purchases under its advanced 2015 normal course issuer bid (NCIB) program. For the year, TELUS returned $1.5 billion to shareholders consisting of $913 million in dividends and the purchase of approximately 15.8 million common shares for $612 million under its 2014 and advanced 2015 NCIB programs.

This news release contains 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 through 2016 and the 2015 annual targets and guidance 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 those expressed in the forward-looking statements. Accordingly, this news release is subject to the disclaimer and qualified by the assumptions (including assumptions for the 2015 annual targets and guidance, semi-annual dividend increases through 2016 and our ability to sustain and complete our multi-year share purchase program through 2016), qualifications and risk factors referred to in the accompanying fourth quarter Managements review of operations and in the 2014 annual Management–s discussion and analysis, 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.

Corporate Highlights

In 2014, TELUS made significant contributions and investments in communities and the Canadian economy on behalf of customers, shareholders and team members:

Operating Highlights

TELUS wireless

TELUS wireline

TELUS sets 2015 financial targets

TELUS today announced 2015 financial targets that reflect continued execution of the Company–s long-standing and proven national growth strategy focused on wireless and data.

TELUS– 2015 targets build on the positive results achieved in both wireless and wireline in 2014, including revenue and EBITDA growth in both operating segments of the business. TELUS plans to generate future growth through continued subscriber growth and increased demand for wireless data. TELUS also expects to benefit from higher Internet and enhanced data revenues from continued high-speed Internet subscriber growth and higher revenue per customer, a higher TELUS TV subscriber base, growth in business process outsourcing services, and increased TELUS Health revenues.

These targets demonstrate the benefits of the Company–s ongoing major strategic network and service-related investments combined with customer-focused operational execution, which has resulted in revenue and profitability growth as well as strong free cash flow generation enabling TELUS to return significant amounts of capital to shareholders through its dividend growth and share purchase programs.

For 2015, TELUS is targeting consolidated year-over-year revenue growth of between 3 and 5 per cent, while EBITDA including restructuring and other like costs is targeted to be higher by 3 to 7 per cent. Revenue and EBITDA should benefit from continued strong execution in both wireless and wireline operating segments and ongoing growth in data services. Basic earnings per share (EPS) is targeted to be higher by 4 to 13 per cent, due to EBITDA growth combined with lower shares outstanding reflecting our share purchase programs.

For wireless, network revenue is targeted to increase between 3 and 5 per cent in 2015 on the basis of modest growth in both subscribers and ARPU. Subscriber loading should benefit from a Canadian wireless industry penetration gain of approximately one percentage point driven by continued postpaid subscriber growth, while ARPU is expected to benefit from continued increased data usage and ongoing adoption of two year plans, partially offset by lower voice revenue. TELUS should also continue to benefit from its 4G long-term evolution (LTE) network investments resulting in continued growth in data and roaming revenues, helping to offset lower voice revenue. Wireless EBITDA excluding restructuring and other like costs is targeted to be higher by between 3 and 7 per cent.

In wireline, revenue is targeted to increase between 2 and 4 per cent in 2015, as we anticipate continued data revenue growth from high-speed Internet, business process outsourcing, healthcare and TELUS TV, partially offset by continued decreases in legacy voice revenues. Wireline EBITDA excluding restructuring and other like costs is targeted to increase by between 1 and 6 per cent, supported by revenue growth and ongoing efficiency initiatives, partially offset by the ongoing industry trend of revenue losses from higher-margin legacy voice services.

Consolidated capital expenditures in 2015, excluding spectrum licences, are targeted to be similar to 2014. TELUS plans to continue making investments in its wireline and wireless broadband infrastructure, including connecting more homes and businesses directly to fibre-optic cable and the continued deployment of 700 MHz wireless spectrum, as well as in network and system resiliency and reliability to support our ongoing customers first initiatives. Capital intensity as a percentage of consolidated revenue is targeted to be approximately 19 per cent.

The preceding disclosure respecting TELUS– 2015 financial targets contains forward-looking information and is fully qualified by the –Caution regarding forward-looking statements– at the beginning of the accompanying Management–s review of operations for the fourth quarter of 2014 and full year 2014 Management–s discussion and analysis, and is based on management–s expectations and assumptions as set out in section 1.5 entitled –Financial and operating targets for 2015– in the accompanying Management–s review of operations for the fourth quarter of 2014.

Dividend Declaration

The TELUS Board of Directors has declared a quarterly dividend of 40 cents ($0.40) Canadian per share on the issued and outstanding Common Shares of the Company payable on April 1, 2015 to holders of record at the close of business on March 11, 2015. This first quarter dividend represents a four cent or 11.1 per cent increase from the $0.36 quarterly dividend paid on April 1, 2014.

About TELUS

TELUS (TSX: T)(NYSE: TU) is Canada–s fastest-growing national telecommunications company, with $12 billion of annual revenue and 13.7 million customer connections, including 8.1 million wireless subscribers, 3.2 million wireline network access lines, 1.5 million Internet subscribers and 916,000 TELUS TV customers. TELUS provides a wide range of communications products and services, including wireless, data, Internet protocol (IP), voice, television, entertainment and video, and is Canada–s largest healthcare IT provider.

In support of our philosophy to give where we live, TELUS, our team members and retirees have contributed more than $396 million to charitable and not-for-profit organizations and volunteered and more than 6 million hours of service to local communities since 2000. Created in 2005 by Executive Chairman Darren Entwistle, TELUS– 11 community boards across Canada have led the company–s support of grassroots charities and will have contributed $47 million in support of 3,700 local charities organizations by the end of 2014, enriching the lives of more than two million Canadian children and youth. TELUS was honoured to be named the most outstanding philanthropic corporation globally for 2010 by the Association of Fundraising Professionals, becoming the first Canadian company to receive this prestigious international recognition.

For more information about TELUS, please visit telus.com.

Access to Quarterly results information

Interested investors, the media and others may review this quarterly earnings news release, management–s discussion and analysis, quarterly results slides, audio and transcript of the investor webcast call, supplementary financial information, the 2014 annual Management–s discussion and analysis and financial statements, and our full 2013 annual report at telus.com/investors.

TELUS– fourth quarter 2014 and 2015 targets conference call is scheduled for February 12, 2015 at 11:00 a.m. ET (8:00 a.m. PT) and will feature a presentation followed by a question and answer period with investment analysts. Interested parties can access the webcast at telus.com/investors. A telephone playback will be available on February 12 until March 20 at 1-855-201-2300. Please use reference number 1172156# and access code 92105#. An archive of the webcast will also be available at telus.com/investors and a transcript will be posted on the website within a few business days.

TELUS CORPORATION

Management–s review of operations

2014 Q4

Caution regarding forward-looking statements

This document contains forward-looking statements about expected events and the financial and operating performance of TELUS Corporation. The terms TELUS, the Company, we, us or our refer to TELUS Corporation and where the context of the narrative permits or requires, its subsidiaries. Forward-looking statements include statements relating to annual targets, outlook, guidance and updates, our multi-year dividend growth program, our multi-year share purchase program, and trends. Forward-looking statements are typically identified by the words assumption, goal, guidance, objective, outlook, strategy, target and other similar expressions or future or conditional verbs such as aim, anticipate, believe, predict, could, expect, intend, may, plan, seek, should, strive and will. By their nature, forward-looking statements do not refer to historical facts, are subject to inherent risks and require us to make assumptions. There is significant risk that forward-looking statements will not prove to be accurate. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements. Except as required by law, we disclaim any intention or obligation to update or revise any forward-looking statements. Annual targets for 2015 and related assumptions are described in Sections 1.4 and 1.5.

Factors that could cause actual performance to differ materially from the forward-looking statements made herein and in other TELUS filings include, but are not limited to:

Management–s review of operations

February 12, 2015

Contents

1. Introduction

Our discussion in this section is qualified in its entirety by the Caution regarding forward-looking statements at the beginning of Management–s review of operations.

1.1 Preparation of Management–s review of operations

The following sections are a discussion of the consolidated financial position and financial performance of TELUS for the three-month period and year ended December 31, 2014, and should be read together with the accompanying summary financial information. The generally accepted accounting principles (GAAP) we use are the International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). Our use of the term IFRS in this Management–s review of operations is a reference to these standards. In our discussion, we also use certain non-GAAP financial measures, such as earnings before interest, income taxes, depreciation and amortization (EBITDA), to evaluate our performance, monitor compliance with debt covenants and manage our capital structure. These measures are defined, qualified and reconciled with their nearest GAAP measures in Section 5.1. All amounts are in Canadian dollars, unless otherwise specified.

Our disclosure controls and procedures are designed to provide reasonable assurance that all relevant information is gathered and reported to senior management on a timely basis, so that appropriate decisions can be made regarding public disclosure. This document was reviewed by TELUS– Audit Committee and approved by our Board of Directors for issuance on February 12, 2015.

1.2 Who we are

TELUS is one of Canada–s largest telecommunications companies, with $12.0 billion of annual revenues and 13.7 million customer connections, including 8.1 million wireless subscribers, 3.2 million wireline network access lines (NALs), 1.5 million Internet subscribers and 916,000 TELUS TV customers. We employ approximately 43,670 employees, including 28,065 in Canada. In support of our philosophy to give where we live, TELUS, our team members and retirees have contributed more than $396 million to charitable and not-for-profit organizations and volunteered more than six million hours of service to local communities since 2000. We were named to the Dow Jones Sustainability North America Index (the Index) for the 14th consecutive year. The Index ranks the performance of the world–s sustainability leaders based on a comprehensive assessment of long-term economic, environmental and social criteria. We are the only Canadian telecommunications company and one of two telecommunications companies in North America to be named to the Index.

Our strategic intent, culture and significant accomplishments

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 culture is anchored in our TELUS leadership values and our customers first commitments, both of which were developed collaboratively by team members to guide our actions and interactions with our customers and with each other. In 2014, we delivered an exceptional customer experience, represented by the lowest blended wireless churn since becoming a national carrier 14 years ago. In the second, third and fourth quarters, we recorded the lowest postpaid churn among major carriers in North America. Our 2014 smartphone penetration was up four points to 81% of our postpaid base, supporting strong average revenue per subscriber unit per month (ARPU) growth of 2.9%. In 2014, we also had the most rapidly growing wireline business in Canada, with strong EBITDA growth and margin expansion. For the third consecutive year, Koodo Mobile was ranked highest in customer satisfaction for a standalone carrier and TELUS was ranked the number one national full-service provider, according to the 2014 Canadian Wireless Total Ownership Experience Study released by J.D. Power in May. In November 2014, the Commissioner for Complaints for Telecommunications Services (CCTS) issued its annual report. For the third consecutive year, our approach to customer service resulted in a substantial decline in the number of complaints submitted to the CCTS – 26% fewer than in the previous year. Despite a substantial increase in the number of new customers to both our wireless and wireline services, TELUS once again was the subject of the fewest complaints of any of the major national carriers.

The environment in which we operate

Economic growth

In January 2015, the Bank of Canada (the Bank) stated that the sharp decline in oil prices is expected to boost global economic growth and that the negative impact of lower oil prices on Canada–s economy will gradually be mitigated by a stronger U.S. economy, a weaker Canadian dollar, and the Bank–s monetary policy response. The Bank expects Canada–s economy to gradually strengthen in the second half of 2015, with real gross domestic product (GDP) growth averaging 2.1% in 2015 and 2.4% in 2016. The economy is expected to return to full capacity around the end of 2016.

Canadian telecommunications industry growth

We estimate that growth in industry revenues (including TV revenue and excluding media revenue) was approximately 2% in 2014 (3% in 2013). We estimate Canadian wireless industry revenue and EBITDA growth in 2014 was close to 5% and more than 5%, respectively (2013 – revenue and EBITDA growth of 3% and 6%, respectively), while the Canadian wireline industry continued to experience low revenue growth and flat or declining EBITDA.

Latest regulatory developments

Federal government review of paper bill charges

On October 21, 2014, the federal government introduced Bill C-43, Economic Action Plan 2014 Act, No.2, which included proposals to amend the Broadcasting Act and the Telecommunications Act to prohibit charging subscribers for paper bills. On December 16, 2014, Bill C-43 received royal assent and the provisions relating to paper bill charges are now in effect. The financial impact of the new paper bill legislation is reflected in our results for the fourth quarter of 2014 and 2015 financial targets. For additional information, see Section 10.4 Regulatory matters of our 2014 Annual MD&A.

1.3 Highlights of the fourth quarter of 2014

New appointment to the Board of Directors

In late 2014, we announced that Lisa de Wilde, the Chief Executive Officer of TVO and current Chair of the Toronto International Film Festival, will join the TELUS Board of Directors, effective February 1, 2015. A strong believer in the power of media to engage, inform and serve the public good, Lisa–s career has been dedicated to cultivating a strong Canadian media sector and championing the cause of educational broadcasters across the country. The appointment reflects our commitment to further strengthen our Board by recruiting outstanding candidates who bring strategic expertise and significant operational experience across key markets.

Renewal of shelf prospectus

On November 19, 2014, we filed a shelf prospectus, in effect until December 2016, pursuant to which we may offer up to $3.0 billion of long-term debt or equity securities.

Consolidated financial highlights

Notations used in Management–s review of operations: n/m – Not meaningful; pts. – Percentage points.

Operating highlights

Liquidity and capital resource highlights

1.4 Performance scorecard (key performance measures)

In 2014, we achieved three of four original consolidated targets and three of four original segment targets, which were announced on February 13, 2014. We achieved our consolidated revenue targets due to an increase in wireless network revenues that was reflected in higher ARPU and growth in wireline data revenues. Wireless network revenues were close to the high end of our target range, reflecting growth in our subscriber base, higher data usage and a larger proportion of higher-rate two-year plans in the revenue mix. Wireline revenues were slightly below the low end of our target range due to price competition and lower business spending.

We met the target for consolidated EBITDA. Our target for wireless EBITDA was met due to an increase in network revenues driven by growth in our subscriber base and higher ARPU. Our target for wireline EBITDA was met due to continued revenue growth driven by enhanced data and TELUS TV revenues and operational efficiency initiatives.

Our capital expenditures in 2014 were above both our original target and revised guidance as a result of our continued focus on investment in wireline and wireless broadband infrastructure, including connecting more homes and businesses directly to fibre-optic cable and the deployment of recently acquired 700 MHz spectrum, as well as in network and system resiliency and reliability to support our ongoing customers first initiatives, and readying the network and systems for future retirement of legacy assets.

We met all but one of our long-term financial objectives, policies and guidelines, including generally maintaining a minimum of $1.0 billion of unutilized liquidity and observing our dividend payout ratio guideline of 65 to 75% of sustainable earnings on a prospective basis. As at December 31, 2014, we did not meet our Net debt to EBITDA – excluding restructuring and other like costs long-term policy guideline of 1.50 to 2.00 as a result of funding the purchase of the 700 MHz spectrum licences; given the cash demands of upcoming spectrum auctions and other requirements, the assessment of the guideline and return to the range remains to be determined.

We also completed eight targeted semi-annual dividend increases from 2011 to 2014. In May 2013, we announced our intention to target ongoing semi-annual dividend increases, with an annual increase of circa 10% through to the end of 2016, subject to the assessment and determination by our Board of Directors of our financial position and outlook on a quarterly basis and our long-term dividend payout ratio guideline of 65 to 75% of prospective sustainable net earnings. There can be no assurance that we will maintain this dividend growth program. See Caution regarding forward-looking statements – Ability to sustain dividend growth program of circa 10% per annum through 2016.

The following scorecard compares TELUS– performance to our original 2014 targets and also presents our 2015 targets. Our 2015 targets, plans and assumptions are fully qualified by the Caution regarding forward-looking statements at the beginning of Management–s review of operations.

Scorecard

Met target Yes; Missed target No.

We made the following key assumptions when we announced the 2014 targets in February 2014.

Assumptions for 2014 targets and result

1.5 Financial and operating targets for 2015

We expect future growth through postpaid wireless net additions, combined with ongoing smartphone adoption and upgrades, as well as continued high-speed Internet and Optik TV subscriber growth.

For 2015, our targets include the impacts of Public Mobile. We have targeted consolidated revenues in the range of $12.350 to $12.550 billion, or growth of approximately 3 to 5%. Consolidated EBITDA is targeted in the range of $4.325 to $4.500 billion, or growth of approximately 3 to 7%. Revenue and EBITDA growth is expected to result from increases in wireless and wireline data services. Basic EPS is expected to be in the range of $2.40 to $2.60, or an increase of approximately 4% to 13% due to EBITDA growth, combined with a reduction in shares outstanding as a result of our NCIB program.

Wireless network revenue is targeted to be in the range of $6.175 to $6.300 billion in 2015, or an increase of approximately 3 to 5% due to modest growth in subscribers and in blended ARPU from increasing data usage. We estimate that the Canadian wireless market will grow in 2015, with a penetration gain of approximately one percentage point, similar to 2014. We also expect growth in data and roaming revenues will offset lower voice revenue. Wireless EBITDA excluding restructuring and other like costs is targeted to be $2.850 to $2.950 billion, or an increase of approximately 3 to 7%.

Wireline revenue is targeted to be in the range of $5.525 to $5.625 billion in 2015, or an increase of approximately 2 to 4%, reflecting continued data revenue growth from high-speed Internet and Optik TV services, as well as from business services, including TELUS Health services, partially offset by continued decreases in legacy voice revenues. Wireline EBITDA excluding restructuring and other like costs is targeted to be in the range of $1.550 to $1.625 billion in 2015, or an increase of approximately 1 to 6%. We anticipate marginal improvements from Optik TV services, large enterprise business services and efficiency initiatives, partially offset by the ongoing industry trend of revenue losses from higher-margin legacy voice services.

Consolidated capital expenditures, excluding the purchase of spectrum licences, in 2015 are targeted to be similar to 2014. We plan to continue investing in our wireless network for 4G LTE expansion and upgrades. We intend to continue broadband infrastructure expansion and upgrades, including bringing fibre-optic cable deeper into the network and connecting more homes and businesses to fibre, to support high-speed Internet and Optik TV subscriber growth and faster Internet broadband speeds, as well as invest in network and system resiliency and reliability to support our ongoing customers first initiatives and ready the network and systems for future retirement of legacy assets.

Our long-term financial objectives, policies and guidelines are described in Section 1.4. Achievement of our 2015 targets is subject to risks and uncertainties, including, but not limited to competition, regulatory matters, financing and debt requirements, taxation matters, economic conditions, litigation and other factors noted in our Caution regarding forward-looking statements. The 2015 targets are based on many assumptions including:

Assumptions for 2015 targets

2. Discussion of operations

Our discussion in this section is qualified in its entirety by the Caution regarding forward-looking statements at the beginning of the Management–s review of operations.

2.1 General

Our operating and reportable segments are wireless and wireline. Segmented information is regularly reported to our Chief Executive Officer (the chief operating decision-maker).

2.2 Summary of consolidated quarterly results and trends

Summary of quarterly results

Trends

The consolidated revenue trend continues to reflect year-over-year increases in: (i) wireless network revenues generated from a growing subscriber base and higher ARPU driven by data usage; (ii) wireless equipment revenue that has generally increased from sales of higher value smartphones and retention volumes; and (iii) growth in wireline data revenues driven by Internet, enhanced data services, TELUS TV, business process outsourcing and TELUS Health services. This growth exceeded the declines in wireless voice revenues and wireline voice and other revenues.

Increasing wireless network revenues reflect growth in revenue from subscriber additions, growth in data usage and higher retail and wholesale data roaming revenues, partly offset by declines in voice revenue. Data revenue growth reflects increased data consumption driven by the higher adoption of smartphones, tablets and other wireless devices, expansion of networks, greater use of applications and other wireless data, as well as increased proportion of higher-rate two-year plans. Consequently, monthly blended ARPU has increased year over year for 17 consecutive quarters. The data revenue growth trend is impacted by competitive pressures driving larger allotments of data provided in rate plans, including data sharing, and an increasing number of unlimited-messaging rate plans, as well as off-loading of data traffic to increasingly available Wi-Fi hotspots. In July 2013, we introduced new two-year wireless rate plans, which have impacted acquisition and retention trends, as well as data usage, as subscribers optimize unlimited talk and text and shared data plans, and which we expect will increase the frequency of subscribers updating their devices and services. ARPU is expected to continue to increase over time as our customer base renews to the two-year plans and as data usage continues to grow. However, the outcome is highly dependent on competition and consumer behaviour, government decisions, device selection and other factors. Additionally, the implementation of the new CRTC national Wireless Code may cause operational challenges, due to two and three-year customer contracts ending coterminously in 2015.

Historically, there has been significant third and fourth quarter seasonality with respect to higher wireless subscriber additions, an increase in related acquisition costs and equipment sales, and higher retention costs due to contract renewals. Typically, these impacts can also be more pronounced around iconic device launches. Wireless EBITDA usually decreases sequentially from the third quarter to the fourth quarter due to continued competitive intensity and seasonal loading. Subscriber additions have typically been lowest in the first quarter. Historically, monthly wireless ARPU has experienced seasonal sequential increases in the second and third quarters, reflecting higher levels of usage and roaming in the vacation season, and seasonal sequential declines in the fourth and first quarters.

The trend of increasing wireline data revenue reflects growth in high-speed Internet and enhanced data services, including increases in usage and adoption of higher speed services, the continuing but moderating expansion of the TELUS TV subscriber base (up 12% in the 12-month period ended December 31, 2014), growth in business process outsourcing, growth in TELUS Health solutions, and rate increases. Higher Internet service revenues are due to a greater high-speed Internet subscriber base (up 5.7% in the 12-month period ended December 31, 2014), bundling of offers with Optik TV and certain rate increases. A general trend of declining wireline voice revenues and NALs is due to competition from voice over IP (VoIP) service providers (including cable-TV competitors), resellers and facilities-based competitors, as well as technological substitution to wireless and IP-based services and applications. Business NAL losses have been moderating, in part from large customer installations, and investments in service and customer offerings in the small and medium-sized business (SMB) markets.

The trend in the Goods and services purchased expense reflects increasing content costs due to a growing TELUS TV subscriber base and higher content rates, increasing wireless equipment expenses associated with a higher proportion of smartphones in the sales mix, higher retention volumes and higher network operating costs for the growing wireless subscriber base.

The trend in Employee benefits expense reflects increases in compensation and an increase in the number of wireline full-time equivalent (FTE) employees from acquisitions and contractor conversions, partly offset by higher capitalized labour costs associated with increased capital expenditures, as described in Section 4.3. Employee benefits expense includes employee-related restructuring and other like costs, which tend to fluctuate from quarter to quarter.

The general trend in depreciation and amortization has increased slightly, as underlying increases related to growth in capital assets from acquisitions, the expansion of our broadband footprint and enhanced LTE network coverage are partly offset by adjustments related to our continuing program of asset life studies.

Financing costs include long-term debt prepayment premiums of approximately $13 million in the third quarter of 2014 and $23 million in the second quarter of 2013, partly offset by lower employee defined benefit plan net interest in 2014 from a decrease in discount rate for the employee defined benefit pension plans and their associated deficit at the end of 2012 moving to a nominal surplus at the end of 2013. In addition, financing costs for the eight periods shown include varying amounts of foreign exchange gains or losses and varying amounts of interest income. Employee defined benefit plans net interest is expected to increase in 2015 as a result of the change in net surplus to a net deficit and the application of a lower discount rate at December 31, 2014.

The trend in net income reflects the items noted above, as well as adjustments arising from legislated income tax changes and adjustments recognized in the current period for income tax of prior periods, including any related after-tax interest on reassessments. The trend in basic EPS also reflects the impact of share purchases under our NCIB program.

The trend in cash provided by operating activities reflects growth in consolidated EBITDA, net of higher interest expenses related to re-financing activities and increased income tax payments. The trend in free cash flow also reflects the factors in cash provided by operating activities, as well as increases in capital expenditures (excluding spectrum licences), but excludes the effects of certain changes in working capital, such as trade accounts receivable and trade accounts payable. Our expenditures on spectrum licences are expected to continue as we expect to participate in future spectrum auctions.

2.3 Consolidated operations

The following is a discussion of our consolidated financial performance. Segmented discussion is provided in Section 2.4 Wireless segment,Section 2.5 Wireline segment and in Section 4.3 Cash used by investing activities – capital expenditures.

Consolidated operating expenses increased year over year by $137 million in the fourth quarter of 2014 and $431 million in the full year of 2014.

In December 2014, we carried out our annual impairment testing for intangible assets and goodwill. It was determined that there were no impairments.

Operating income increased year over year by $43 million in the fourth quarter of 2014 and $167 million in the full year of 2014. In the fourth quarter, this was composed of increases in wireless EBITDA of $37 million and wireline EBITDA of $13 million, partly offset by a $7 million increase in total depreciation and amortization expenses. Higher operating income in the full year of 2014 was composed of increases in wireless EBITDA of $123 million and wireline EBITDA of $75 million, partly offset by a $31 million increase in total depreciation and amortization expenses.

Financing costs increased year over year by $5 million in the fourth quarter of 2014 and $9 million in the full year of 2014, mainly due to the following factors:

Re-financing activities reduced near-term long-term debt re-financing risk by extending our average term-to-maturity of long-term debt (excluding commercial paper) to approximately 11 years at December 31, 2014, from approximately nine years at December 31, 2013. Our weighted-average interest rate on long-term debt (excluding commercial paper) was 4.72% at December 31, 2014, as compared to 5.00% one year earlier. TELUS– short-term commercial paper issuance is back-stopped by a committed term credit facility that expires May 31, 2019. For additional details, see Long-term debtissues and repayments in Section 4.4.

The total income tax expense increased year over year by $16 million in the fourth quarter of 2014 and $27 million in the full year of 2014. This resulted mainly from increased basic blended income tax, at weighted average statutory income tax rates due to growth in pre-tax income. For the full year, this increase was partly offset by the $22 million revaluation of the deferred income tax liability in 2013 to reflect the increase in the B.C. provincial corporate income tax rate from 10% to 11% effective April 2013.

Comprehensive income decreased by approximately $1.3 billion in the fourth quarter and full year of 2014, primarily due to a decrease in employee defined benefit plan re-measurements (a year-over-year decrease in the discount rate being only partially offset by employee defined benefit plan returns in excess of the discount rate), partly offset by an increase in net income. Items that may be subsequently reclassified to income are composed of changes in the unrealized fair value of derivatives designated as cash flow hedges, foreign currency translation adjustments arising from translating financial statements of foreign operations, and changes in the unrealized fair value of available-for-sale investments.

2.4 Wireless segment

Operating revenues – wireless segment

Total wireless operating revenues increased year over year by $163 million or 10% in the fourth quarter of 2014 and by $464 million or 7.5% in the full year of 2014, due to ARPU growth driven by a 25% increase in data network revenue in the fourth quarter of 2014, as well as equipment sales, partly offset by a decline in voice network revenue. Included in the total are Public Mobile–s network, equipment and other revenues totalling $16 million in the fourth quarter of 2014, and $84 million for the full year of 2014.

Network revenues from external customers increased year over year by $115 million in the fourth quarter of 2014 and $367 million in the full year of 2014. Network revenues, excluding Public Mobile, were $1.5 billion in the fourth quarter of 2014 and $5.9 billion for the full year of 2014, an increase of $106 million or 7.4% in the fourth quarter and $298 million or 5.3% in the full year when compared to the same periods in 2013. Data network revenue, excluding Public Mobile, increased year over year by 24% in the fourth quarter of 2014 and 21% in the full year of 2014. The increases reflect growth in the subscriber base, higher data usage from continued adoption of smartphones and other data-centric wireless devices, the expansion of our LTE network coverage, higher wholesale data roaming revenues and increased proportion of higher-rate two-year plans in the revenue mix. Voice network revenue, excluding Public Mobile, decreased year over year by 7.4% in the fourth quarter of 2014 and 7.5% in the full year of 2014. The decline in voice revenue is due to the increased adoption of unlimited nationwide voice plans, as well as continued but moderating substitution to data services and features.

Equipment and other revenues increased year over year by $44 million in the fourth quarter of 2014 and by $90 million in the full year of 2014. Equipment and other revenues, excluding Public Mobile, increased by $46 million in the fourth quarter and by $84 million in the full year of 2014, mainly due to higher retention volumes, a higher proportion of smartphones in the sales mix, increased availability of iconic devices in the fourth quarter and higher retention volumes, partly offset by lower gross additions in the full year of 2014.

Intersegment revenue in the wireless segment represents network services provided to the wireline segment. Such revenues are eliminated upon consolidation along with the associated expenses.

Wireless operating expenses increased year over year by $126 million in the fourth quarter of 2014 and by $341 million in the full year of 2014, when compared to the same periods in 2013. This includes Public Mobile operating expenses of $13 million in the fourth quarter and $97 million in the full year of 2014. Wireless expenses, excluding Public Mobile, increased by $132 million in the fourth quarter and by $263 million in the full year of 2014.

Equipment sales expenses increased year over year by $74 million in the fourth quarter of 2014 and by $144 million in the full year of 2014. Excluding Public Mobile, the increase was $77 million for the fourth quarter and $142 million for the full year of 2014, reflecting a high proportion of smartphones sold to new and existing customers in the fourth quarter of 2014, increased retention volumes, and for the fourth quarter, higher gross additions.

Network operating expenses increased year over year by $13 million in the fourth quarter and by $69 million in the full year of 2014. Excluding Public Mobile, the increase was $15 million in the fourth quarter and $45 million in the full year of 2014, as higher costs associated with operating the expanding LTE network and supporting the growing subscriber base, along with higher data and voice roaming expenses, were partly offset by reduced roaming rates.

Marketing expenses increased by $12 million year over year in the fourth quarter and by $3 million in the full year of 2014. Excluding Public Mobile, the increase was $12 million in the fourth quarter of 2014 and was flat in the full year of 2014. The increase in the quarter was due to the timing of promotional campaigns focused on the fourth quarter and higher commissions associated with stronger retention loading.

Other goods and services purchased increased year over year by $26 million in the fourth quarter and by $96 million in the full year of 2014. Excluding Public Mobile, the increase was $25 million in the fourth quarter and $61 million in the full year of 2014, resulting from greater external labour costs, higher administrative costs and increased bad debt provision to support the growing subscriber base, the expansion of our distribution channels and increased roaming volumes.

Employee benefits expense increased year over year by $1 million in the fourth quarter and by $29 million in the full year of 2014. Excluding Public Mobile, the increase was $3 million in the fourth quarter and $15 million in the full year of 2014 due to higher compensation and benefit costs, including share-based compensation, partly offset by an increase in capitalized labour costs and a decrease in the number of FTEs from our ongoing operational efficiency initiatives.

Wireless EBITDA increased year over year by $37 million or 6.3% in the fourth quarter and by $123 million or 4.7% in the full year of 2014. Wireless EBITDA, excluding Public Mobile, was $626 million in the fourth quarter of 2014 or a year-over-year increase of 4.1% and $2.7 billion in the full year of 2014 or a year-over-year increase of 4.9%. Wireless EBITDA excluding restructuring and other like costs increased year over year by $31 million or 5.1% in the fourth quarter and by $123 million or 4.7% in the full year of 2014. The increases in EBITDA reflect network revenue growth driven by higher ARPU and a larger customer base, partly offset by higher retention spend, increased customer service, network operating and distribution channel expenses.

2.5 Wireline segment

Total wireline operating revenues increased year over year by $22 million or 1.6% in the fourth quarter of 2014 and by $147 million or 2.7% in the full year of 2014, driven by continued growth in data revenue resulting from a larger subscriber base, partly offset by ongoing declines in legacy voice and equipment revenues, as well as continued competitive pressures.

Revenues arising from contracts with customers increased year over year by $26 million or 1.9% in the fourth quarter of 2014 and by $132 million or 2.5% in the full year of 2014.

Other operating income decreased year over year by $5 million in the fourth quarter of 2014 and increased year over year by $9 million in the full year of 2014, as a result of gains from the sale of certain real estate assets and other investments that were lower in the fourth quarter of 2014 and higher in the full year of 2014.

Intersegment revenue represents services provided to the wireless segment. Such revenue is eliminated upon consolidation together with the associated expenses.

Total wireline operating expenses increased by $9 million year over year in the fourth quarter of 2014 and by $72 million year over year in the full year of 2014, primarily due to the following factors:

Goods and services purchased increased by $7 million year over year in the fourth quarter of 2014 and by $38 million in the full year of 2014. The increase was due to growth in our subscriber base, higher TV content rates, higher costs associated with increased TELUS Health services revenue, including from acquisitions, and for the full year, a retroactive assessment of additional TV revenue contribution expense of approximately $15 million towards our Canadian programming funding requirements in the third quarter of 2014, partly offset by a decrease in business equipment cost of sales associated with lower equipment revenues, reduced advertising and promotions costs, and lower external labour utilization.

Employee benefits expense increased year over year by $2 million in the fourth quarter and by $34 million in the full year of 2014. The increases were due to higher compensation and benefit costs, including higher costs to support increased business process outsourcing revenue and an increase in domestic and international FTE staff from acquisitions and contractor conversions. For the fourth quarter, this was partly offset by recording more employee recognition expenses earlier in the year in 2014. For the full year of 2014, the increase was also due to higher share-based compensation expenses, partly offset by lower restructuring and other like costs.

Wireline EBITDA increased year over year by $13 million in the fourth quarter of 2014 and by $75 million in the full year of 2014, while EBITDA excluding restructuring and other like costs increased year over year by $12 million in the fourth quarter of 2014 and by $52 million in the full year of 2014. EBITDA and EBITDA margin increases resulted from year-over-over revenue growth of 1.6% in the fourth quarter of 2014 and 2.7% in the full year of 2014, which exceeded year-over-year increases in expenses of 0.9% in the fourth quarter of 2014 and 1.8% in the full year of 2014.

3. Changes in financial position

4. Liquidity and capital resources

Our discussion in this section is qualified in its entirety by the Caution regarding forward-looking statements at the beginning of the Management–s review of operations.

4.1 Overview

In 2014, we paid $1.14 billion for the purchase of the wireless spectrum licences acquired in the 700 MHz spectrum auction that took place in the first quarter of 2014. We paid dividends of $913 million to the holders of Common Shares and returned $612 million of cash to shareholders through share purchases under our advanced 2015 and completed 2014 NCIB programs. During the month ended January 31, 2015, 0.5 million of our Common Shares were purchased by way of the automatic share purchase plan at a cost of $21 million. As well, we issued $2.2 billion of long-term debt and early redeemed our $500 million 5.95% Series CE Notes. Subsequent to December 31, 2014, we paid dividends of $244 million to the holders of Common Shares in January 2015. We extended our bank facility for five years until May 31, 2019 and increased the overall facility to $2.25 billion. Our capital structure financial policies, financing plan, and report on financing and capital structure management plans are described in Section 4.3 of our annual 2014 MD&A.

4.2 Cash provided by operating activities

Cash provided by operating activities increased by $191 million in the fourth quarter of 2014 and by $161 million in the full year of 2014, when compared to the same periods in 2013.

4.3 Cash used by investing activities

Cash used by investing activities decreased year over year by $74 million in the fourth quarter of 2014 and increased by $1.3 billion in the full year of 2014, when compared to the same periods in 2013, and included the following:

Wireless segment capital expenditures decreased year over year by $25 million in the fourth quarter of 2014 and increased by $120 million year over year in the full year of 2014. The decrease in the fourth quarter of 2014 was primarily due to lower network build expenditures and ramping down of several service development projects in 2014. The increase in the full year was due to the continued investment in wireless broadband infrastructure to enhance our network coverage, speed and capacity, including the deployment of the recently acquired 700 MHz spectrum, as well as the continued investment in system resiliency and reliability in support of our ongoing customers first initiatives, and to ready the network and systems for future retirement of legacy assets. Wireless segment capital intensity was 11% in the fourth quarter of 2014, down from 13% in the fourth quarter of 2013, and 13% in the full year of 2014, up from 12% in the same period in 2013.

Wireless EBITDA less capital expenditures was $441 million in the fourth quarter of 2014, as compared to $379 million in the fourth quarter of 2013, reflecting an increase of $62 million or 16.4% from higher EBITDA and lower capital expenditures. The wireless EBITDA less capital expenditures was $1.9 billion in both the full year of 2014 and 2013, as the increase in EBITDA was partly offset by higher capital expenditures.

Wireline segment capital expenditures increased year over year by $18 million in the fourth quarter of 2014 and by $129 million in the full year of 2014. We continued to invest in our broadband infrastructure, including connecting more homes and businesses directly to fibre-optic cable. Investments in broadband infrastructure support high-speed Internet and Optik TV subscriber growth and faster Internet speeds, and extend the reach and functionality of our healthcare solutions. We also continued to make investments to support business service growth, and added functionality to administrative, client care and service delivery systems and enhanced system resiliency and reliability in support of our ongoing customers first initiatives. Wireline segment capital intensity was 27% in both the fourth quarter and full year of 2014, up from 26% in the fourth quarter and the full year of 2013.

Wireline EBITDA less capital expenditures was $(10) million in the fourth quarter of 2014, down from $(5) million in the fourth quarter of 2013, and $(38) million in the full year of 2014, as compared to $16 million in the full year of 2013, reflecting higher capital expenditures being only partly offset by an increase in EBITDA.

4.4 Cash provided (used) by financing activities

Net cash used by financing activities was $370 million in the fourth quarter of 2014, as compared to cash provided by financing activities of $365 million in the same period of 2013. In the full year of 2014, cash used by financing activities decreased year over year by $613 million. Financing activities included the following:

Dividends paid to the holders of equity shares

Dividends paid to the holders of Common Shares were $233 million in the fourth quarter of 2014 and $913 million in the full year of 2014, or year-over-year increases of $20 million in the fourth quarter and $61 million in the full year. The increases reflect increased dividend rates under our dividend growth program, offset by lower outstanding shares resulting from shares purchased and cancelled under our NCIB programs.

Purchase of Common Shares for cancellation

In the full year of 2014, we purchased approximately 13 million shares under our 2014 NCIB program, reaching the bid maximum cost of $500 million on September 23, 2014. The shares purchased represent approximately 2.1% of the outstanding Common Shares prior to commencement of the NCIB. In respect of our 2015 NCIB, which commenced October 1, 2014, during the period of October 1 to December 31, 2014, we purchased approximately 2.9 million of our Common Shares at a cost of $115 million.

In January 2015, we purchased, by way of the ASPP, 492,000 Common Shares for cancellation under our 2015 NCIB.

Short-term borrowings

Short-term borrowings are composed primarily of amounts advanced to us from an arm–s-length securitization trust pursuant to transfer of receivables securitization transactions (see Section 4.7 Sale of trade receivables). Proceeds were $400 million throughout 2013 and were reduced by $300 million in the first quarter of 2014 to $100 million.

Long-term debt issues and repayments

Repayments, net of Long-term debt issues were $25 million in the fourth quarter of 2014, while Long-term debt issues, net of repayments were $1.8 billion in the full year of 2014, and were composed of:

These debt issues contributed to the increase in our average term to maturity of long-term debt (excluding commercial paper) to approximately 11 years at December 31, 2014, compared to approximately nine years at the end of 2013. Additionally, our weighted average cost of long-term debt was 4.72% at December 31, 2014, as compared to 5.00% at the end of 2013, as a result of our 2013 and 2014 re-financing activities.

On August 7, 2014, we exercised our right to early redeem, on September 8, 2014, all of our $500 million 5.95% Series CE Notes. The long-term debt prepayment premium recorded in the three-month period ended September 30, 2014, was approximately $13 million before income taxes.

At December 31, 2014, no amounts were drawn against our five-year credit facility (but $130 million was utilized to backstop outstanding commercial paper). Our commercial paper program provides low cost funds and is fully backstopped by this five-year committed credit facility (see Section 4.6 Credit facilities).

4.5 Liquidity and capital resource measures

Net debt was $9.4 billion at December 31, 2014, an increase of $1.8 billion when compared to one year earlier, resulting from our re-financing activities in 2014, incremental debt issued (primarily for acquisition of 700 MHz spectrum licences and redemption of higher-rate debt), and a decrease in Cash and temporary investments, net of a reduction in Short-term borrowings, as discussed above.

Fixed rate debt as a proportion of total indebtedness was 98% at December 31, 2014, up from 95% one year earlier, due to our 2014 re-financing activities.

Total capitalization – book value was $16.8 billion at December 31, 2014, an increase of $1.2 billion from one year earlier due to the increase in net debt, partly offset by a reduction in share capital and retained earnings resulting from share purchases under our NCIB program, and higher dividend payments. Net debt to total capitalization increased to 55.9% at December 31, 2014, from 48.7% one year earlier.

Net debt to EBITDA – excluding restructuring and other like costs ratio was 2.19 times for the 12-month period ended December 31, 2014, up from 1.84 times one year earlier, due to an increase in net debt, partly offset by growth in EBITDA – excluding restructuring and other like costs. Our long-term policy guideline for this ratio is 1.50 to 2.00. As at December 31, 2014, this ratio is outside of the range of the long-term policy guideline as a result of funding the purchase of the 700 MHz spectrum licences; given the cash demands of upcoming spectrum auctions and other requirements, the assessment of the guideline and return to the range remains to be determined. Our strategy is to maintain credit ratings in the range of BBB+ to A-, or equivalent. We are well in compliance with the Leverage Ratio covenant in our credit facilities, which states that we may not permit our net debt to operating cash flow ratio to exceed 4.00:1.00 (see Section 4.6 Credit facilities).

Earnings coverage ratio for the 12-month period ended December 31, 2014 was 5.3 times, down from 5.5 times one year earlier. Higher borrowing costs decreased the ratio by 0.7, while growth in income before borrowing costs and income taxes increased the ratio by 0.5.

EBITDA – excluding restructuring and other like costs interest coverage ratio for the 12-month period ended December 31, 2014 was 9.75 times, down from 11.12 times one year earlier. An increase in net interest costs (including the September 2014 long-term debt prepayment premium) reduced the ratio by 1.85, while growth in EBITDA – excluding restructuring and other like costs increased the ratio by 0.48 (see Section 4.6 Credit facilities).

Dividend payout ratios: Our target guideline is 65 to 75% of sustainable earnings on a prospective basis. The basic and adjusted dividend payout ratios for the 12-month periods ended December 31, 2014 and 2013 were consistent with the target range.

4.6 Credit facilities

At December 31, 2014, we had available liquidity of $2.16 billion from unutilized credit facilities, as well as $400 million available under our trade receivables securitization program (see Section 4.7). This adheres to our objective of generally maintaining at least $1 billion of available liquidity.

Revolving credit facility

We have a $2.25 billion (or U.S. dollar equivalent) revolving credit facility with a syndicate of 15 financial institutions that was renewed in the second quarter of 2014 and expires on May 31, 2019. The revolving credit facility is used for general corporate purposes, including the backstop of commercial paper, as required.

TELUS credit and other bank credit facilities at December 31, 2014

Our revolving credit facility contains customary covenants, including a requirement that we not permit our consolidated Leverage Ratio to exceed 4.00 to 1.00 (our ratio was approximately 2.19 to 1.00 at December 31, 2014) and not permit our consolidated Coverage Ratio (EBITDA to interest expense on a trailing 12-month basis) to be less than 2.00 to 1.00 (approximately 9.75 to 1.00 at December 31, 2014 and expected to remain well above the covenant) at the end of any financial quarter. There are certain minor differences in the calculation of the Leverage Ratio and Coverage Ratio under the credit agreements, as compared with the calculation of Net debt to EBITDA – excluding restructuring and other like costs and EBITDA – excluding restructuring and other like costs interest coverage. Historically, the calculations have not been materially different. The covenants are not impacted by revaluation of Property, plant and equipment, Intangible assets or Goodwill for accounting purposes. Continued access to our credit facilities is not contingent on maintaining a specific credit rating.

Other letter of credit facilities

At December 31, 2014, we had $206 million of uncommitted letter of credit facilities, of which $78 million was utilized at December 31, 2014. We have also arranged incremental letters of credit to allow us to participate in Industry Canada–s AWS-3 auction and 2500 MHz auction, both to be held in 2015. Under the terms of the auctions, communications between bidders that would provide insights into bidding strategies, including reference to preferred blocks, technologies or valuations are precluded until the deadlines for the final payments in the auctions. Disclosure of the precise amount of our letters of credit could be interpreted as a signal of bidding intentions. The maximum amount of letters of credit, for the two auctions combined that we could be required to deliver is approximately $200 million.

4.7 Sale of trade receivables

TELUS Communi

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