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TELUS Reports Strong Results for First Quarter 2015

VANCOUVER, BRITISH COLUMBIA — (Marketwired) — 05/07/15 — (TSX: T)(NYSE: TU) – TELUS Corporation–s consolidated operating revenue grew 4.6 per cent in the first quarter of 2015, from a year earlier. Earnings before interest, income taxes, depreciation and amortization (EBITDA) increased by 5.4 per cent to $1.1 billion. Net income of $415 million was higher by 10 per cent, while basic earnings per share (EPS) rose by 11.5 per cent to $0.68.

Darren Entwistle, TELUS Executive Chair said “The positive start to 2015 continues to reflect our team–s world-leading engagement and ongoing commitment to delivering the best customer experience amongst our global telecom industry peers each and every day. Indeed, their unwavering dedication in this regard was reflected in the net addition of 81,000 new wireless postpaid, TV and high-speed subscribers in the first quarter.”

Mr. Entwistle added, “Our strong results underscore the efficacy of our 15 year strategy focusing on the growth of wireless and wireline data technologies and services. This focus, combined with client service excellence, continues to support our ongoing ability to return significant amounts of cash to our shareholders through our multi-year share purchase and dividend growth programs. Indeed, through the first four months of 2015, TELUS has returned $664 million to shareholders, building on the more than $3.4 billion returned over the prior two years. Moreover, I am pleased to announce that we are once again raising our quarterly dividend to 42 cents per share, a 10.5 per cent increase year-over-year. This is our ninth dividend increase since announcing our multi-year dividend growth program in May 2011.”

TELUS President and CEO Joe Natale said, “Our persistent focus on customer service continues to distinguish TELUS from the competition and provide customers with a clear choice. Once again we demonstrated the impact strong customer loyalty can have on financial performance, as both our wireless and wireline operations experienced revenue and customer growth. Importantly, our monthly postpaid wireless churn of 0.91 per cent remained below one per cent for the seventh consecutive quarter and is the lowest of any national carrier by a substantial margin. These results validate our strategy and motivate and inspire our team to continue to deliver for our customers and shareholders.”

John Gossling, TELUS Executive Vice-President and CFO said, “Our consistent financial results and strong operational performance continue to be supported by our investment grade balance sheet. During this recent period of an unprecedented number of spectrum auctions, capital markets have confidently supported our strategy of investing in this core long-term asset. As a result, we have enhanced the company–s future growth opportunities while simultaneously strengthening our balance sheet by extending our average term to maturity to an impressive 11.1 years and lowering our average cost of long-term debt to an industry-best 4.42 per cent.”

CONSOLIDATED FINANCIAL HIGHLIGHTS

Consolidated revenue growth was generated by higher data revenue in both wireless and wireline operations. Wireless data revenue was up 19 per cent, leading to overall network revenue growth of 6.4 per cent, while wireline data revenue was up 7.2 per cent from a year ago. In wireless, data revenue was driven by subscriber growth, increased customer adoption of higher-rate two-year rate plans, higher data usage as a result of continued smartphone growth and other data-centric devices, increased data roaming and the expansion of TELUS– LTE network coverage. Wireline data revenue growth was generated by an increase in Internet and enhanced data service revenue from continued high-speed Internet subscriber growth and higher revenue per customer, TELUS TV subscriber growth, as well as growth in business process outsourcing services and TELUS Health revenues.

In the quarter, TELUS attracted 37,000 new wireless postpaid customers, 23,000 high-speed Internet subscribers, and 21,000 TELUS TV customers. These gains were partially mitigated by the loss of wireless prepaid customers and network access lines. TELUS– total wireless subscriber base is up 3.1 per cent from a year ago to 8.3 million (which includes Public Mobile subscribers in both periods), high-speed Internet connections are up 5.8 per cent to 1.5 million, and TELUS TV subscribers are up 11 per cent to 937,000.

TELUS– ongoing focus on putting customers first delivered a year-over-year improvement of 8 basis points in monthly postpaid wireless subscriber churn to 0.91 per cent. This is the seventh consecutive quarter this important metric was below 1 per cent.

Free cash flow of $271 million was lower by 6.9 per cent from a year ago as higher EBITDA and lower income tax payments were offset by high capital expenditures due mainly to investments in wireless and wireline broadband infrastructure to support TELUS– long-term growth.

The company–s net debt to EBITDA – excluding restructuring and other like costs ratio has increased to 2.30 times at the end of the quarter due to the acquisition of significant additional spectrum which has been auctioned in unprecedented amounts over the past 15 months. We have revised our long-term financial objective to 2.00 to 2.50 times (previously 1.50 to 2.00 times). The company believes that this new range optimizes our cost of capital and puts TELUS– leverage in line with global peers. The company–s strategy is to maintain investment grade credit ratings in the range of BBB+ or the equivalent.

In the first quarter of 2015, TELUS returned $400 million to shareholders including $244 million in dividends paid and $156 million in share purchases under its 2015 normal course issuer bid (NCIB) program. Through the end of April, TELUS has returned $664 million to shareholders, including $487 million in dividends paid and the purchase of 4.3 million shares for $177 million under its 2015 NCIB program.

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 first quarter Management–s discussion and analysis and in the 2014 annual report, and in other TELUS public disclosure documents and filings with securities commissions in Canada (on SEDAR at sedar.com) and in the United States (on EDGAR at sec.gov). Except as required by law, TELUS disclaims any intention or obligation to update or revise forward-looking statements, and reserves the right to change, at any time at its sole discretion, its current practice of updating annual targets and guidance.

Corporate Highlights

In the first quarter of 2015, 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

Dividend Declaration – increased to 42 cents per quarter, up 10.5 per cent from a year ago

The TELUS Board of Directors has declared a quarterly dividend of 42 cents ($0.42) Canadian per share on the issued and outstanding Common Shares of the Company payable on July 2, 2015 to holders of record at the close of business on June 10, 2015.

This second quarter dividend represents a four cent or 10.5 per cent increase from the $0.38 quarterly dividend paid on July 2, 2014.

About TELUS

TELUS (TSX: T)(NYSE: TU) is Canada–s fastest-growing national telecommunications company, with $12.1 billion of annual revenue and 13.9 million customer connections, including 8.3 million wireless subscribers, 3.1 million wireline network access lines, 1.5 million high-speed Internet subscribers and 937,000 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, and our full 2014 annual report at telus.com/investors.

TELUS– first quarter 2015 conference call is scheduled for May 7, 2015 at 3:30pm ET (1:30pm MT, 12:30pm 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 May 7 until June 20 at 1-855-201-2300. Please use reference number 1178137# 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 discussion and analysis

2015 Q1

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. An update to our assumptions for 2015 is presented in Section 9 Update to assumptions in this Management–s discussion and analysis (MD&A).

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, the following:

Management–s discussion and analysis

May 7, 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 this Management–s discussion and analysis (MD&A).

1.1 Preparation of the MD&A

The following sections are a discussion of the consolidated financial position and financial performance of TELUS for the three-month period ended March 31, 2015 and should be read together with TELUS– March 31, 2015 condensed interim consolidated financial statements (subsequently referred to as the interim consolidated financial statements). 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 interim consolidated financial statements comply with IFRS-IASB and Canadian GAAP and have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting. Our use of the term IFRS in this MD&A 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 11.1. 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 MD&A and the interim consolidated financial statements were reviewed by TELUS– Audit Committee and authorized by the Board of Directors for issuance on May 7, 2015.

1.2 The environment in which we operate

Economic growth

We estimate that economic growth in Canada will be 2.1% in 2015 and 2.2% in 2016, based on a composite of estimates from Canadian banks and other sources. The Bank of Canada–s April 2015 Monetary Policy Report estimated economic growth for Canada at 1.9% in 2015 and 2.5% in 2016. In respect of the national unemployment rate, Statistics Canada–s Labour Force Survey reported a rate of 6.8% for March 2015 (6.6% reported for December 2014 and 6.9% reported for March 2014).

Regulatory developments

There were a number of regulatory developments in the first quarter of 2015. See Section 10.1 Regulatory matters.

1.3 Consolidated highlights

AWS-3 and 2500 MHz spectrum auctions

In March 2015, we purchased 15 wireless spectrum licences across Canada–s most-populated provinces in Industry Canada–s AWS-3 wireless spectrum auction. The licences, acquired for $1.5 billion ($3.02/MHz/POP, where POP refers to person of population), equate to a national average of 15 MHz and are complementary to the 16.1 MHz of national AWS spectrum we purchased in 2008 that is now the foundation of our 4G wireless network. The AWS-3 acquisitions increased our spectrum holdings by 16% by adding 20 MHz of spectrum in each of Quebec, British Columbia, Alberta, Saskatchewan and Manitoba, as well as 10 MHz of spectrum in Southern Ontario. AWS-3 spectrum is well-suited for delivering both coverage and added capacity in urban and rural environments and we expect to incorporate it into our existing network within the next three years. We paid a $302 million deposit in the first quarter of 2015 for the AWS-3 spectrum licences, and remitted the balance of $1,209 million in April 2015.

TELUS is participating in Industry Canada–s 2500 MHz spectrum auction that began on April 14, 2015. Under the auction rules, all participants are limited by a 40 MHz cap on bidding on this spectrum in each licence region. In those regions where carriers exceed the spectrum cap, they will not be required to relinquish any existing spectrum holdings, however, they will not be allowed to purchase any additional spectrum holdings. As TELUS does not currently hold any such spectrum, the auction provides us with an opportunity to materially increase our spectrum holdings and provide additional capacity for our long-term evolution (LTE) wireless network. The auction of liberated and unallocated 2500 MHz spectrum represents less than half the band, but no less than 60 MHz, in each market. Bell and Rogers– ability to bid is significantly restricted in many licence areas by their present 2500 MHz spectrum holdings.

Changes to the Board of Directors

Effective February 1, 2015, Lisa de Wilde, the Chief Executive Officer of TVO and Chair of the Toronto International Film Festival, joined our Board of Directors. 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.

On April 2, 2015, we announced that Charlie Baillie, an independent director who has served since 2003, has decided to retire and will not be standing for re-election at the 2015 annual general meeting (AGM). In addition to his other duties as a Board and committee member, Charlie served as Chair of the Human Resources and Compensation Committee from 2007 to 2014. His efforts have been important in allowing us to properly consider the interests of our various shareholders and facilitating a deeper understanding of our approach to executive compensation.

At the 2015 AGM, we are proposing Sabi Marwah as a new independent nominee for election. Sabi retired as Vice Chairman and Chief Operating Officer of the Bank of Nova Scotia (Scotiabank) in 2014. As Vice Chairman, Sabi was actively involved in developing the bank–s strategic plans and was responsible for its financial and administrative functions.

New $1.75 billion debt offering

On March 27, 2015, we announced the closing of a debt offering of $1.75 billion in senior unsecured notes in three series: a $250 million 1.50% offering due March 27, 2018, a $1.0 billion 2.35% offering due March 28, 2022 and a $500 million 4.40% offering due January 29, 2046. The net proceeds were used to fund the remaining $1.2 billion of the purchase price of the AWS-3 spectrum licences, with the remaining balance used for general corporate purposes. These debt issues, combined with those in the third quarter of 2014, contributed to the increase in our average term to maturity of long-term debt (excluding commercial paper) to approximately 11.1 years at March 31, 2015 (10.9 years at December 31, 2014). Additionally, our weighted average cost of long-term debt declined to 4.42% at March 31, 2015, as compared to 4.72% at December 31, 2014.

Sale of TELUS office tower in Vancouver, B.C.

In February 2015, we announced that Vancouver, B.C.-based Avigilon Corp., a global provider of end-to-end security solutions, agreed to purchase TELUS– existing office building on Robson Street in downtown Vancouver for $42 million. We expect the sale to close in the fourth quarter of 2015. TELUS team members will be moving from the Robson Street building to the new TELUS Garden office re-development in downtown Vancouver in the May to July 2015 timeframe.

Share purchase programs

On September 23, 2014, the Toronto Stock Exchange (TSX) approved our 2015 normal course issuer bid (2015 NCIB) to purchase and cancel up to 16 million of our Common Shares with a value of up to $500 million over a 12-month period, commencing October 1, 2014. Such purchases may be made through the facilities of the TSX, the New York Stock Exchange (NYSE) and alternative trading platforms or otherwise as may be permitted by applicable securities laws and regulations. This represents up to 2.6% of the Common Shares outstanding at the date of the 2015 NCIB notice to the TSX. The Common Shares will be purchased only when and if we consider it advisable. As of April 30, 2015, pursuant to our 2015 NCIB, we had purchased approximately 7.1 million Common Shares for cancellation for $292 million, at an average price of $40.86 per share.

For additional information on our multi-year share purchase program, see Section 4.3. Also see Caution regarding forward-looking statements – Ability to sustain and complete multi-year share purchase program through 2016.

Operating highlights

Liquidity and capital resource highlights

2. Core business and strategy

Our discussion in this section is qualified in its entirety by the Caution regarding forward-looking statements at the beginning of this MD&A.

Our core business was described in our annual 2014 MD&A. The following are business updates grouped under our strategic imperatives.

Focusing relentlessly on growth markets of data, IP and wireless

External wireless revenues and wireline data revenues totalled $2.6 billion in the first three months of 2015, up by $178 million or 7.4% from the same period in 2014, while wireline voice and other revenues and Other operating income totalled $0.4 billion in the first quarter of 2015, down $45 million or 9.0% from the same period in 2014. Combined wireless revenues and wireline data revenues represented 85% of TELUS– consolidated revenues for the first three months of 2015, as compared to 83% in the same period in 2014.

Providing integrated solutions that differentiate TELUS from our competitors

Continuing with our long-standing clear and simple approach to wireless pricing and putting our customers first, we are no longer charging the incoming short messaging service (SMS) fee for customers roaming outside Canada. Our customers can now receive unlimited incoming text messages free of charge and feel more comfortable using their mobile phones while travelling abroad.

In March 2015, we carried out a national launch of TELUS Business Connect, an integrated business-communications solution for small businesses. This cloud-based solution provides businesses with a full suite of communications tools for both office and mobile use, including an automated attendant, call routing, teleconferencing and video-conferencing and toll-free numbers, as well as a wireless back-up for office Internet access. Business Connect allows users to use a single number across their mobile phone, tablet, desk phone and computers through voice over IP (VoIP) technology.

Building national capabilities across data, IP, voice and wireless

In March 2015, we were a successful bidder on 15 wireless spectrum licences across the most populous Canadian provinces in Industry Canada–s AWS-3 wireless spectrum auction. AWS-3 spectrum is a valuable addition to our spectrum portfolio and is vital to handling the growing demand of streaming video and other data-intensive features of the latest smartphones.

Partnering, acquiring and divesting to accelerate the implementation of our strategy and focus our resources on core business

In the first quarter of 2015, we partnered with Jasper Technologies Inc., a California-based global Internet of Things (IoT) platform leader to implement IoT self-serve solutions for our own IoT platform, the TELUS Control Centre. The new platform aims to help Canadian businesses simplify the deployment and management of IoT services by offering automated device provisioning, real-time diagnostics, integrated billing and cost-management features. The TELUS Control Centre will help manage the entire life cycle of an IoT service, enabling companies to introduce new business models, go to market faster and scale over time to meet market demand. It will be offered alongside our IoT Marketplace, an online portal through which companies can browse IoT applications.

In February 2015, we partnered with Public Safety Canada to launch the #BeAppSafe campaign to inform, educate and inspire action among Canadians to secure the personal information they store on the Internet and their mobile devices. Through our work with Public Safety Canada and TELUS WISE (wise Internet and smartphone education), we are committed to educating Canadians and their families about Internet and smartphone safety. TELUS WISE is the first program of its kind in Canada. Since its inception in 2013, we have educated more than 500,000 Canadians on how to stay safe online.

In March 2015, we partnered with Alcatel-Lucent as a first customer for Enterprise Small Cell solution, the small cell technology capable of extending LTE and Wi-Fi connectivity and coverage into offices and other densely populated buildings. This technology will help relieve the congestion and offload traffic from the macro cell network to deliver seamless connectivity and high performance to public and enterprise indoor environments.

Also in March 2015, we completed our acquisition of Medesync, a certified electronic medical records (EMR) product, which will bring a bilingual web-based interface to our EMR portfolio in Quebec. Medesync uses the latest cloud-based and mobile technologies to bring access to EMRs to physicians from any computer or mobile device. Medesync–s EMR technology features a number of tools for managing and accessing all aspects of a clinic–s operations, including scheduling, prescribing, billing and electronic lab results.

Going to market as one team under a common brand, executing a single strategy

Our top corporate priority is putting customers first as we strive to consistently deliver exceptional client experiences and become the most recommended company in the markets we serve. In April 2015, the Commissioner for Complaints for Telecommunications Services (CCTS) issued its first mid-year report and, once again, TELUS received significantly fewer customer complaints. At only 4.4% of the total complaints submitted to the CCTS, TELUS had the lowest number of complaints when compared to other national wireless carriers in Canada. Complaints against TELUS decreased 46% from mid-year 2014, continuing our trend of consistent improvement since 2011 and resulting in the CCTS removing TELUS from the list of the five brands with the highest number of complaints. In addition, Koodo Mobile demonstrated a 26% reduction in customer complaints from mid-year 2014. At only 1.4%, Koodo Mobile leads Canada–s flanker brands in the lowest number of complaints submitted to the CCTS.

3. Corporate priorities for 2015

Our corporate priorities for 2015 were listed in our annual 2014 MD&A.

4. Capabilities

Our discussion in this section is qualified in its entirety by the Caution regarding forward-looking statements at the beginning of this MD&A.

4.1 Principal markets addressed and competition

For a full discussion of our principal markets and an overview of competition, please refer to Section 4.1 of our annual 2014 MD&A.

4.2 Operational resources

For a discussion of our Operational resources, please refer to Section 4.2 of our annual 2014 MD&A. The following discussion reflects changes that occurred since then.

In the first quarter of 2015, we continued to deliver leading customer churn on a global basis. The first quarter of 2015 represents the seventh consecutive quarter that our monthly postpaid churn rate was below 1%. Blended churn of 1.28% in the first quarter of 2015 is among our lowest first quarter churn rates since we became a national carrier 15 years ago. This further exemplifies the success of our differentiated customers first culture and our ongoing focus on delivering outstanding customer service, coupled with attractive new products and services.

Wireless segment

During the first quarter of 2015, we acquired 15 wireless licences in Industry Canada–s AWS-3 wireless spectrum auction. These acquisitions increased our spectrum holdings by 16% by adding 20 MHz of spectrum in each of Quebec, British Columbia, Alberta, Saskatchewan and Manitoba, as well as 10 MHz of spectrum in Southern Ontario. AWS-3 spectrum is well-suited for delivering both coverage and added capacity in urban and rural environments and we expect to incorporate it into our existing network within the next three years. As well, in 2014, we acquired and commenced the deployment of the 700 MHz wireless spectrum, which we have begun to operationalize for the benefit of our customers. Over the past two spectrum auctions, we have increased our national spectrum holdings by more than 40% to support our top corporate priority of putting customers first. Wireless data consumption has been increasing rapidly and we have responded by investing to extend the capacity of our network to support the additional data consumption and growth in our wireless customer base.

At March 31, 2015, our 4G LTE network covered 92% of Canada–s population, up from more than 81% of the population covered at March 31, 2014. Outside of LTE coverage areas, the LTE devices we offer also operate on our HSPA+ network, which covered 99% of Canada–s population at March 31, 2015.

Wireline segment

We continue to invest in urban and rural communities with commitments to deliver broadband network capabilities to as many Canadians as possible. We are expanding our fibre footprint by connecting more homes and businesses directly to fibre. We also increased broadband Internet speeds, expanded our IP TV video-on-demand library and high-definition content and enhanced marketing of data products and bundles. As well, we have continued to invest in our state-of-the art Internet data centres (IDCs), creating an advanced and regionally diverse computing infrastructure in Canada. At March 31, 2015, our high-speed broadband coverage reached more than 2.8 million households in B.C., Alberta and Eastern Quebec.

4.3 Liquidity and capital resources

Capital structure financial policies

Our objective when managing capital is to maintain a flexible capital structure that optimizes the cost and availability of capital at acceptable risk.

In the management of capital and in its definition, we include Common Share equity (excluding Accumulated other comprehensive income), Long-term debt (including long-term credit facilities, commercial paper backstopped by long-term credit facilities and any associated hedging assets or liabilities, net of amounts recognized in Accumulated other comprehensive income), Cash and temporary investments, and securitized trade receivables.

We manage our capital structure and make adjustments to it in light of changes in economic conditions and the risk characteristics of our telecommunications infrastructure. To maintain or adjust our capital structure, we may adjust the amount of dividends paid to holders of Common Shares, purchase shares for cancellation pursuant to our normal course issuer bids (NCIBs), issue new shares, issue new debt, issue new debt to replace existing debt with different characteristics and/or increase or decrease the amount of trade receivables sold to an arm–s-length securitization trust.

We monitor capital utilizing a number of measures, including the net debt to EBITDA – excluding restructuring and other like costs ratio and the dividend payout ratios. See definitions in Section 11.1.

Financing and capital structure management plans

4.4 Changes in internal control over financial reporting

There were no changes in internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

5. Discussion of operations

Our discussion in this section is qualified in its entirety by the Caution regarding forward-looking statements at the beginning of this MD&A.

5.1 General

Our operating segments and reportable segments are wireless and wireline. Segmented information in Note 5 of the interim consolidated financial statements is regularly reported to our Chief Executive Officer (CEO) (the chief operating decision-maker).

5.2 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 average revenue per subscriber unit (ARPU) driven by an increased proportion of higher-rate two-year plans, growth in data usage, a more favourable postpaid subscriber mix and increased data roaming, partly offset by a decline in voice revenue; (ii) wireless equipment revenue that has generally increased due to 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 continued declines in wireless voice revenues and wireline voice and other revenues.

Increasing wireless network revenues reflect growth from subscriber additions, an increased proportion of higher-rate two-year plans, growth in data usage and higher 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, as well as greater use of applications and other wireless data, and the expansion of our LTE network. Consequently, monthly blended ARPU has increased year over year for 18 consecutive quarters. The data revenue growth trend is impacted by competitive pressures driving larger allotments of data provided in rate plans, including data sharing, unlimited messaging rate plans and off-loading of data traffic to increasingly available Wi-Fi hotspots. We introduced two-year wireless rate plans in July 2013, 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 that recover device subsidies in two years instead of three years, 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 CRTC national Wireless Code continues to cause operational challenges due to two-year and three-year customer contracts that will end coterminously beginning in June 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 to the fourth quarter, due to continued competitive intensity and seasonal loading volumes. 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 spring and summer, followed by seasonal sequential declines in the fourth and first quarters. This seasonal effect on ARPU is expected to diminish in the future, as unlimited nationwide voice plans become prevalent and chargeable usage and long distance spikes become less pronounced.

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 11% in the 12-month period ended March 31, 2015), growth in business process outsourcing, growth in TELUS Health solutions and certain rate increases. Higher Internet service revenues are due to a larger high-speed Internet subscriber base (up 5.8% in the 12-month period ended March 31, 2015), bundling of offers with Optik TV and certain rate increases. A general trend of declining wireline voice revenues and network access lines (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 due to large customer installations, and investments in service and customer offerings in the small and medium-sized business (SMB) markets.

The trend in Goods and services purchased expense reflects increasing wireless equipment expenses associated with a higher-value smartphones in the sales mix and higher retention volumes, and increasing content costs due to a growing wireline TELUS TV subscriber base, partly offset by lower wireless network operating expenses from operational efficiency initiatives.

The trend in Employee benefits expense reflects increases in compensation, partly offset by a decrease in wireless full-time equivalent (FTE) employees and higher capitalized labour costs associated with increased capital expenditures, as described in Section 7.3. Employee benefits expense includes employee-related restructuring costs, which tend to fluctuate from quarter to quarter.

The general trend in depreciation and amortization is flat, as underlying increases related to growth in capital assets from acquisitions, the expansion of our broadband footprint and enhanced LTE network coverage are offset by adjustments related to our continuing program of asset life studies. The sequential decrease in the first quarter of 2015 includes effects of asset life revisions in 2014, as disclosed in Note 1(j) in our 2014 Consolidated financial statements, net of growth in capital assets.

The general trend in financing costs reflects an increase in long-term debt outstanding associated with significant investments in wireless spectrum licences acquired in Industry Canada auctions in 2014 and 2015. 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. Employee defined benefit net interest expense has increased for 2015, primarily due to the increase in the defined benefit plan deficit at December 31, 2014, as compared to the defined benefit plan surplus at December 31, 2013. Employee defined benefit plan net interest had decreased in 2014, relative to 2013, due to a decrease in the 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. Financing costs for the eight periods shown include varying amounts of foreign exchange gains or losses and varying amounts of interest income.

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 earnings per share (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 and lower income tax payments in 2015, net of higher interest expenses related to our financing activities. The trend in free cash flow 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 in the second quarter of 2015, due to remittance of the $1.2 billion final payment for the AWS-3 licences in April 2015 and our participation in the 2500 MHz spectrum auction that is expected to conclude in May.

5.3 Consolidated operations

The following is a discussion of our consolidated financial performance. Segmented information in Note 5 of the interim consolidated financial statements is regularly reported to our CEO (the chief operating decision-maker). We discuss the performance of our segments in Section 5.4 Wireless segment,Section 5.5 Wireline segment and capital expenditures in Section 7.3 Cash used by investing activities.

Consolidated Operating revenues increased by $133 million or 4.6% in the first quarter of 2015 when compared to the first quarter of 2014, as follows:

Consolidated Operating expenses increased by $68 million or 3.0% in the first quarter of 2015, as compared to the first quarter of 2014, as follows:

Operating income increased by $65 million or 11% in the first quarter of 2015 when compared to the same period in 2014. This was composed of a $54 million increase in wireless EBITDA, a $4 million increase in wireline EBITDA and the $7 million decrease in total depreciation and amortization expenses.

Financing costs increased by $15 million or 15% in the first quarter of 2015 when compared to the same period in 2014, due to the following factors:

As a result of financing activities over the past 12 months, our weighted average interest rate on long-term debt (excluding commercial paper) was 4.42% at March 31, 2015, as compared to 4.89% one year earlier. For details on our first quarter 2015 financing activities, see Long-term debtissues and repayments in Section 7.4.

Total income tax expense increased by $12 million or 8.9% in the first quarter of 2015 when compared to the same period in 2014, resulting primarily from the increase in income before income taxes.

Comprehensive income increased by $110 million or 20% in the first quarter of 2015 when compared to the same period in 2014, primarily due to increases in employee defined benefit plan re-measurements and 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.

5.4 Wireless segment

Total wireless operating revenues increased by $118 million or 7.5% in the first quarter of 2015 when compared to the same period in 2014. The increase reflects growth in both network and equipment revenues.

Network revenues from external customers increased year over year by $92 million or 6.4% in the first quarter of 2015. Data network revenue increased year over year by 19% in the first quarter of 2015, reflecting growth in the subscriber base, an increased proportion of higher-rate two-year plans in the revenue mix, higher data usage from continued adoption of smartphones and other data-centric wireless devices, increased data roaming and the expansion of our LTE network coverage. Voice network revenue decreased year over year by 5.3% in the first quarter of 2015 due to the increased adoption of unlimited nationwide voice plans and continued but moderating substitution to data services.

Equipment and other revenues increased year over year by $25 million or 22% in the first quarter of 2015, mainly due to higher retention volumes and higher-value smartphones in the sales mix, partly offset by lower gross additions.

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 segment expenses increased by $64 million or 7.3% in the first quarter of 2015 when compared to the same period in 2014.

Equipment sales expenses increased year over year by $54 million or 18% in the first quarter of 2015, reflecting increased retention volumes and higher-value smartphones in the sales mix, partly offset by lower gross additions.

Network operating expenses decreased year over year by $9 million or 4.7% in the first quarter of 2015, due to lower network maintenance and support costs resulting from the turn down of the Public Mobile CDMA network in the third quarter of 2014, as well as lower data content share fees, partly offset by higher roaming costs driven by volumes.

Marketing expenses increased year over year by $7 million or 8.4% in the first quarter of 2015, primarily due to higher commissions expenses driven by higher retention volumes, as well as an increase in advertising and promotions expenses.

Other goods and services purchased increased year over year by $19 million or 14% in the first quarter of 2015, reflecting higher bad debt provisions to support the growing subscriber base, the expansion of our distribution channels, higher non-labour restructuring and other like costs, as well as increases in external labour and administrative costs.

Employee benefits expense decreased year over year by $7 million or 4.1% in the first quarter of 2015, reflecting a $3 million decrease in wages and salaries and a $4 million increase in capitalized labour costs. The decrease in salaries and wages primarily reflects a reduction in the number of FTEs from our ongoing operational efficiency initiatives, including the integration of Public Mobile.

Wireless EBITDA increased by $54 million or 7.8% in the first quarter of 2015 when compared to the same period in 2014. Wireless EBITDA – excluding restructuring and other like costs increased year over year by $57 million or 8.0%. The increase in EBITDA reflects network revenue growth driven by a larger customer base and higher ARPU, as well as ongoing operational efficiency initiatives including the integration of Public Mobile, partly offset by higher retention spend and increased customer service and distribution channel expenses.

5.5 Wireline segment

Total wireline operating revenues increased by $18 million or 1.3% in the first quarter of 2015 when compared to the same period in 2014. The increase reflects 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 from over-the-top (OTT) services and in the business sector.

Revenues arising from contracts with customers increased year over year by $19 million or 1.4% in the first quarter of 2015.

Other operating income decreased year over year by $3 million or 17% in the first quarter of 2015 as a result of a reduction in recoveries of employee costs under eligible government-sponsored programs and a decrease in amounts recognized from the regulatory price cap deferral account for provisioning broadband Internet services to eligible rural and remote communities.

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

Total wireline operating expenses increased by $14 million or 1.4% in the first quarter of 2015 when compared to the same period in 2014, due to the following factors:

Wireline EBITDA increased year over year by $4 million or 1.3% in the first quarter of 2015. EBITDA and EBITDA margin reflect similar rates of increase in revenues and in operating expenses including restructuring and other like costs. EBITDA – excluding restructuring and other like costs increased by 2.8%, as compared to a revenue increase of 1.3%, reflecting improving margins in data services, including Internet, TELUS TV, TELUS Health and business process outsourcing services, as well as execution on cost efficiency programs.

6. Changes in financial position

7. 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 this MD&A.

7.1 Overview

In the first quarter of 2015, we paid a $302 million deposit for the wireless spectrum licences acquired in the AWS-3 spectrum auction that took place in March 2015, representing 20% of the total purchase price. On March 24, 2015, we publicly issued $1.75 billion in senior unsecured notes in three series and the proceeds were used to fund the balance of $1,209 million for the AWS-3 spectrum licences in April 2015 and for general corporate purposes.

In addition, in the first quarter we paid dividends of $244 million to the holders of Common Shares and returned $156 million of cash to shareholders through share purchases under our 2015 NCIB. On April 1, 2015, we paid dividends of $243 million to the holders of Common Shares, and during the month of April, purchased 0.5 million of our Common Shares by way of the automatic share purchase plan (ASPP) at a cost of $21 million.

Our capital structure financial policies, financing plan and report on financing and capital structure management plans are described in Section 4.3.

7.2 Cash provided by operating activities

Cash provided by operating activities increased year over year by $120 million or 20% in the first quarter of 2015.

7.3 Cash used by investing activities

Cash used by investing activities increased year over year by $99 million or 12% in the first quarter of 2015 and included the following:

Wireless segment capital expenditures increased year over year by $83 million or 50% in the first quarter of 2015, due to the continued investment in wireless broadband infrastructure to enhance our network coverage, speed and capacity, including the deployment of 700 MHz spectrum, as well as investments in efficiency initiatives. We continue to invest in system and network 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 EBITDA less capital expenditures was $496 million in the first quarter of 2015, compared to $525 million in the same period of 2014, as the increase in capital expenditures more than offset growth in EBITDA.

Wireline segment capital expenditures increased year over year by $56 million or 17% in the first quarter of 2015, primarily due to continuing investments in broadband infrastructure, which supports Optik TV and high-speed Internet subscriber growth and faster Internet speeds, and extends the reach and functionality of our healthcare solutions. We also continued our investments in system resiliency and reliability and to support business service growth. Wireline EBITDA less capital expenditures was $4 million in the first quarter of 2015, down from $56 million in the first quarter of 2014, as the increase in capital expenditures was only slightly offset by growth in EBITDA.

7.4 Cash provided (used) by financing activities

Net cash provided by financing activities was $1.7 billion in the first quarter of 2015, as compared to $55 million net cash used by financing activities in the same period in 2014. Financing activities included the following:

Dividends paid to the holders of Common Shares

Dividends paid to the holders of Common Shares were $244 million in the first quarter of 2015, an increase of $22 million from the first quarter of 2014. The increase reflects higher dividend rates under our dividend growth program, offset by lower outstanding shares resulting from shares purchased and cancelled under our normal course issuer bid (NCIB) program.

Purchase of Common Shares for cancellation

In the first quarter of 2015, we purchased approximately 3.8 million shares under our 2015 NCIB program. In April 30, 2015, we purchased approximately 0.5 million shares for $21 million. See Section 4.3 for details of our planned multi-year share purchase program through 2016.

Short-term borrowings

Short-term borrowings are composed primarily of amounts advanced to us from an arm–s-length securitization trust pursuant to the sale of trades receivables in securitization transactions (see Section 7.7 Sale of trade receivables). Proceeds were $100 million throughout the first quarter of 2015.

Long-term debt issues and repayments

Long-term debt issues, net of repayments, in the first quarter of 2015 were $2.1 billion and were composed of:

In comparison, Long-term debt issues, net of repayments, in the first quarter of 2014 were composed of a net increase in commercial paper to $626 million at March 31, 2014. Subsequent to the first quarter ended March 31, 2014, on April 4, 2014, we issued $1 billion in senior unsecured notes in two series: a $500 million offering at 3.20% due April 5, 2021, and a $500 million offering at 4.85% due April 5, 2044. The net proceeds were used to repay the $914 million of indebtedness drawn to fund a portion of the purchase price of the 700 MHz spectrum licences and the remainder was used for general corporate purposes.

These debt issues, combined with those in the third quarter of 2014, increased our average term to maturity of long-term debt (excluding commercial paper) to approximately 11.1 years at March 31, 2015, compared to approximately 9.2 years at March 31, 2014. Additionally, our weighted average cost of long-term debt (excluding commercial paper) was 4.42% at March 31, 2015, as compared to 4.89% at March 31, 2014, as a result of our 2014 and 2015 re-financing activities.

At March 31, 2015, no amounts were drawn against our five-year revolving credit facility (but $519 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 7.6 Credit facilities).

7.5 Liquidity and capital resource measures

Net debt was $10.0 billion at March 31, 2015, an increase of $1.8 billion when compared to one year earlier, resulting from our re-financing activities in 2014 and incremental debt issued (primarily for the acquisition of 700 MHz and AWS-3 spectrum licences and redemption of higher-rate debt), partly offset by an increase in Cash and temporary investments (pending final payment of approximately $1.2 billion for AWS-3 spectrum licences in April 2015).

Fixed-rate debt as a proportion of total indebtedness was 95% at March 31, 2015, up from 91% one year earlier, due to our 2014 re-financing activities and financing of 700 MHz and AWS-3 spectrum licence purchases with fixed-rate debt.

Net debt to EBITDA – excluding restructuring and other like costs ratio was 2.30 times for the 12-month period ended March 31, 2015, up from 1.97 times one year earlier, resulting from an increase in net debt due to the issuance of incremental debt primarily for the acquisition of spectrum licences, which is being auctioned in unprecedented amounts, partly offset by growth in EBITDA – excluding restructuring and other like costs. Our revised financial objective for this measure, which is reviewed annually, is 2.00 to 2.50 times (previously 1.50 to 2.00 times). We revised the financial objective for this measure, as we believe that this new objective range optimizes our cost of capital in line with global peers. Our strategy is to maintain investment grade credit ratings in the range of BBB+ or the 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 7.6 Credit facilities).

Earnings coverage ratio for the 12-month period ended March 31, 2015 was 5.2 times, down from 5.4 times one year earlier. Higher borrowing costs reduced the ratio by 0.8, while growth in income before borrowing costs and income taxes increased the ratio by 0.6.

EBITDA – excluding restructuring and other like costs interest coverage ratio for the 12-month period ended March 31, 2015 was 9.4 times, down from 10.1 times one year earlier. An increase in net interest costs (including the September 2014 long-term debt prepayment premium) reduced the ratio by 1.1, while growth in EBITDA – excluding restructuring and other like costs increased the ratio by 0.4. See Section 7.6 Credit facilities.

Dividend payout ratios: Our financial objective is 65 to 75% of sustainable earnings on a prospective basis. The basic and adjusted dividend payout ratios for the 12-month periods ended March 31, 2015 and 2014 were consistent with the objective range.

7.6 Credit facilities

At March 31, 2015, we had available liquidity of $1.7 billion from unutilized credit facilities, as well as $400 million available under our trade receivables securitization program (see Section 7.7). 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 March 31, 2015

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 2.30 to 1.00 at March 31, 2015) 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 9.43 to 1.00 at March 31, 2015 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 revolving credit facility, 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.

Commercial paper

TELUS Corporation has an unsecured commercial paper program, which is backstopped by our revolving credit facility, enabling us to issue commercial paper up to a maximum aggregate amount of $1.2 billion, which is to be used for general corporate purposes, including capital expenditures and investments. Our ability to reasonably access the commercial paper market in Canada is dependent on our credit ratings (see Section 7.8 Credit ratings).

Other letter of credit facilities

At March 31, 2015, we had $307 million of uncommitted letter of credit facilities, of which $181 million was utilized. We have also arranged incremental letters of credit to allow us to participate in Industry Canada–s AWS-3 auction and 2500 MHz auction which were held in March 2015 and commenced in April 2015, respectively. Concurrent with funding the purchase of the AWS-3 spectrum licences on April 21, 2015, $65 million of these incremental lines of credit were extinguished. 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.

7.7 Sale of trade receivables

TELUS Communications Inc., a wholly owned subsidiary of TELUS, is a party to an agreement with an arm–s-length securitization trust associated with a major Schedule I Canadian bank, under which it is able to sell an interest in certain of its trade receivables for an amount up to a maximum of $500 million. The agreement is in effect until December 31, 2016 and available liquidity was $400 million at March 31, 2015. (See Note 19 of the interim consolidated financial statements.) Sales of trade receivables in securitization transactions are recognized as collateralized Short-term borrowings and thus do not result in our de-recognition of the trade receivables sold.

TELUS Communications Inc. is required to maintain at least a BB credit rating by DBRS Ltd. or the securitization trust may require the sale program to be wound down prior to the end of the term. (The necessary credit rating was exceeded as of May 7, 2015.

7.8 Credit ratings

On March 19, 2015, DBRS Ltd. issued a press release stating that it had placed TELUS Corporation–s issuer rating, Notes rating and commercial paper rating, as well as the senior debentures rating for TELUS Communications Inc., under review with negative implications due to actual and anticipated changes in the Company–s debt and interest coverage ratios. Specifically, DBRS cited the, then potential, issuance of debt to fund the acquisition of the AWS-3 spectrum licences as an event that would affect the Company–s financial risk profile. There can be no assurance that DBRS, or any other rating agency, will not downgrade its ratings of TELUS. DBRS–s announcement limits our ability to access the commercial paper markets in Canada. The Company expects that it will be able to continue to access short-term funding from other available sources. There were no changes to our investment grade credit ratings during the first quarter of 2015 or as of May 7, 2015. We believe adherence to most of our stated financial objectives and the resulting investment grade credit ratings, coupled with our efforts to maintain a constructive relationship with banks, investors and credit rating agencies, continue to provide reasonable access to capital markets.

7.9 Financial instruments, commitments and contingent liabilities

Financial instruments

Our financial instruments and the nature of certain risks that they may be subject to were described in Section 7.9 of our 2014 MD&A.

Liquidity risk

As of the date of this MD&A, we can offer $1.25 billion of debt or equity securities pursuant to a shelf prospectus that is effective until December 2016.

At March 31, 2015, we had credit facilities available, including a $2.25 billion facility expiring on May 31, 2019 (see Section 7.6 Credit facilities). We also had $1,579 million in cash and temporary investments at March 31, 2015. We believe that our investment grade credit ratings contribute to reasonable access to capital markets.

Commitments and contingent liabilities

Purchase obligations

As at March 31, 2015, our contractual commitments related to the acquisition of property, plant and equipment were $309 million through to December 31, 2016, as compared to $321 million over a period ending December 31, 2015, primarily driven by the increase in commitments related to broadband expansion.

Indemnification obligations