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We are on a journey,each and every day.A journey that puts our customers first andadvances us toward our goal to be the mostrecommended company in the markets weserve. We are listening closely, developinginnovative and reliable products and servicesthat delight our customers, and working hardto continue delivering exceptional value forour customers, team members, investorsand the communities we serve.4 TELUS 2014 ANNUAL REPORT

Ourstrategic intentOur strategicimperativesOur valuesOurcustomers firstcommitmentsTo unleash the power of the Internet to deliver the best solutionsto Canadians at home, in the workplace and on the move.Our six strategic imperatives guide our team as we work togetherto advance our national growth strategy. Focusing relentlessly on growth markets of data, IP and wireless Providing integrated solutions that differentiate TELUS from ourcompetitors Building national capabilities across data, IP, voice and wireless Partnering, acquiring and divesting to accelerate the implementationof our strategy and focus our resources on core business Going to market as one team, under a common brand, executinga single strategy Investing in internal capabilities to build a high-performance cultureand efficient operation.The TELUS team works together to deliver future friendly servicesand our values lead the way. We embrace change and initiate opportunity We have a passion for growth We believe in spirited teamwork We have the courage to innovate.Our commitments help guide our actions and interactions withour customers, each and every day. We take ownership of every customer experience We work as a team to deliver on our promises We learn from customer feedback and take actionto get better, every day We are friendly, helpful and thoughtful.TELUS 2014 ANNUAL REPORT 5

2014 RESULTS AND 2015 TARGETSEvery day, we are workingto achieve the goals we set.2014targets2014results2015targetsWe continued to pursueour proven nationalgrowth strategyfocused on wirelessand dataWe achieved profitablegrowth in revenues andadded customers whilealso investing inour networksOur goals for wirelessand wireline revenue andearnings growth reflectcontinued networkinvestmentsAt TELUS, we believe in setting annual financial targets toWe are currently guided by our long-term financial objectives,provide clarity for investors and help drive our performance.policies and guidelines, which include generally maintaining aThis scorecard shows TELUS’ 2014 performance against ourminimum of 1 billion of unutilized liquidity, a Net debt to EBITDAoriginal consolidated targets, as well as our targets for 2015.(excluding restructuring and other like costs) ratio in the range ofIn 2014, our achievement of three of the four targets reflects1.50 to 2.00 times, with the goal of main taining credit ratings instrong profitable growth in wireless network revenues and wirelinethe range of BBB or A-, or equivalent, and our dividend payoutdata revenues. This was driven by a growing wireless and wirelineratio guideline of 65 to 75 per cent of sustainable net earningssubscriber base and higher data usage, and complemented byon a prospective basis.our ongoing operational efficiency initiatives. Capital expendituresWith these policies in mind, our 2015 consolidated financialexceeded our target due to a continued focus on investmentstargets reflect continued execution of our successful nationalin our wireline and wireless broadband infrastructure, includinggrowth strategy focused on wireless and data. In each ofconnecting more homes and businesses directly to fibre-opticthe past five years, we have met three of four consolidatedcable and the deployment of recently acquired 700 MHz spectrum,financial targets, which has supported the return of capitalas well as in network and system reliability to support our ongoingto shareholders through our multi-year dividend and sharecustomers first initiatives.purchase programs. For more information and a completeFor further information, including performance againstset of 2015 financial targets and assumptions, see oursegmented targets, see Section 1.4 of Management’s discussionfourth quarter 2014 results and 2015 targets report issuedand analysis in this report.February 12, 2015.Caution regarding forward-looking statements summaryThis annual report contains forward-looking statements about expected events relating to our 2015 consolidated and segmented targets, 2015 normal course issuer bid,multi-year dividend growth and share purchase programs, and the performance of TELUS. By their nature, forward-looking statements do not refer to historical facts andrequire the Company to make assumptions and predictions, and are subject to inherent risks. There is significant risk that the forward-looking statements will not prove tobe accurate and there can be no assurances that TELUS will complete all purchases under the 2015 normal course issuer bid and maintain its multi-year dividend growthand share purchase programs. Readers are cautioned not to place undue reliance on forward-looking statements as a number of factors (such as regulatory developments,government decisions, competition, our earnings and free cash flow, our capital expenditures and spectrum licence purchases, and a change in our intent to purchaseshares) could cause actual future performance and events to differ materially from those expressed in the forward-looking statements. Accordingly, this document is subjectto the disclaimer and qualified by the assumptions (including assumptions for 2015 targets, semi-annual dividend increases to 2016, and our ability to sustain and completeour multi-year share purchase program to 2016), qualifications and risk factors referred to in Management’s discussion and analysis, starting on page 42 of this annualreport, 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 EDGARat sec.gov). Except as required by law, TELUS disclaims any intention or obligation to update or revise forward-looking statements.6 TELUS 2014 ANNUAL REPORT

2014 original targets12014 results and growth12015 targetsREVENUESTargeting betweenTargeted between 11.9 and 12.1 billion 11.9 billion 12.35 and 12.55 billionan increase ofan increase ofan increase of4 to 6%4.6%3 to 5%EBITDA2Targeted betweenTargeting between 4.15 and 4.35 billion 4.23 billion 4.325 and 4.500 billionan increase ofan increase ofan increase of3 to 8%5.0%3 to 7%EARNINGS PER SHARE (EPS) – BASICTargeting betweenTargeted between 2.25 and 2.45 2.33 2.40 and 2.60an increase ofan increase ofan increase of11 to 21%15%4 to 13%CAPITAL EXPENDITURES EXCLUDING SPECTRUM LICENCES 2.36 billionTargeted approximately 2.2 billion3an increase ofSimilar to 201412%Operating revenues1 15 target( billions)12.35 to 12.55141311.911.4EPS – basic1 15 target( )2.40 to 2.601413Targeting a 3 to5% increase,driven by growthin wireless andwireline data2.332.03Targeting a 4 to13% increase,driven by EBITDAgrowth and areduction in sharesoutstandingEBITDA1,2 15 target1413( billions)4.325 to 4.5004.24.0Capital expenditures excludingspectrum licences 15 targetsimilar to 201414132.362.11Targeting 3 to7% growth,generated bywireless andwireline( billions)Continuing networkinvestments tosupport customergrowth, tech nologyevolution andreliability1 The 2013 results and 2014 targets, results and growth rates exclude Public Mobile.2 EBITDA is a non-GAAP measure and does not have a standardized meaning under IFRS-IASB. Therefore, it is unlikely to be comparable to similar measures presentedby other companies. See Section 11 of Management’s discussion and analysis in this report.3 The capital expenditures guidance was revised to approximately 2.3 billion in the third quarter of 2014.TELUS 2014 ANNUAL REPORT 7

EXECUTIVE CHAIR LETTER TO INVESTORSEach and every day, we are deliveringexceptional results for our customers,investors and communities#1 globally0.93%in team memberengagement forthe secondconsecutive yearclient loyalty andretention result,the best inNorth America 12.1 billion338% 396 million6 million hoursreturned toshareholders throughshare purchases anddividends and a globalbest total shareholderreturn since 2000contributed by ourTELUS family tolocal communitiessince 2000In 2014, TELUS once again realized industry-leadingoperational and financial performance. Your Company’songoing success reflects our world-leading employeeengagement focused on earning the privilege of serving ourvalued customers. Thanks to the unwavering dedicationof our employees, TELUS continues to execute successfullyon our winning strategy, yielding a global best totalshareholder return to our investors.8 TELUS 2014 ANNUAL REPORT

Our TELUS family has embracedour simple, engaging and heartfeltcommunity philosophy – we givewhere we live – in order to have athoughtful and meaningful impacton our most vulnerable citizensin need of compassion and care.Darren EntwistleExecutive ChairDarren Entwistle and his daughter volunteered at our 2014 TELUS Day of Giving,planting a garden at the Dr. Peter Centre in Vancouver, B.C. More than 1,000volunteer activities were held in 36 communities across Canada.At the heart of our many achievements in 2014 is oursteadfast commitment to putting customers first, each andevery day. This powerful differentiator and key competitiveadvantage continues to ensure that Canadians are choosingTELUS and staying with us longer. In 2014, our dedicatedteam once again delivered the best customer experienceamong our Canadian peers according to the annual reportfrom the Commissioner for Complaints for TelecommunicationsServices. Moreover, TELUS achieved the top customersatisfaction ratings in J.D. Power and Associates’ annualclient satisfaction survey. Notably, our industry-leadingwireless loyalty and retention result of 0.93 per cent for 2014was the best full-year result in the history of our Company.Leading the global telecom industryin total shareholder returnDriven by the operational success realized by our team,TELUS achieved a total shareholder return of 19 per cent in2014, exceeding the Toronto Stock Exchange’s total returnof 11 per cent. Since 2000 through February 2015, TELUShas been the top performing incumbent telecommunicationscompany in the world, achieving a 338 per cent return andsurpassing the second place finisher by 82 percentage points.Our strong and consistent financial performance, assetquality and breadth, and industry-leading balance sheet haveenabled your Company to invest in broadband technologyexpansion and product innovation to support sustainablebusiness growth. Indeed, TELUS continues to generate robustcash flow of more than 1 billion. In combination with ourbalance sheet, this financial position is enabling ourongoing strategic investments for sustainable future growth.We are also able to simultaneously reward our shareholdersthrough our multi-year share purchase and dividend growthprograms. In this regard, we completed our 2014 sharepurchase program in September, returning 500 million toour shareholders. This builds upon our 1 billion sharepurchase program completed in 2013.Your Company also advanced our 2015 share purchaseprogram to purchase and cancel up to 16 million TELUScommon shares valued at up to 500 million. This representsan additional 2.6 per cent of outstanding TELUS commonshares. Impressively, since 2013 through the end of January2015, we have purchased and cancelled 47.5 million TELUScommon shares for 1.6 billion, reflecting an average purchaseprice of 34.42. This represents a 23 per cent discount to ourall-time high closing share price of 44.57 on February 23,2015. Moreover, TELUS is intent on concluding the remaining 500 million tranche of our multi-year share purchase programof 2.5 billion before the end of 2016.The TELUS team continues to execute against our dividendgrowth program, having raised our quarterly dividend twicein 2014. Since first announcing our program in May 2011,we have made eight dividend increases. Our annual dividendis now at 1.60 annually, up 11 per cent from one year ago.Importantly, it is our intention to target two dividend increasesper year through 2016 of circa 10 per cent annually. Consistentwith our goals to provide sustained and superior investmentreturns, TELUS has returned 12.1 billion in total cash to ourshareholders since 2000, representing 20 per share.TELUS 2014 ANNUAL REPORT 9

Our world-leading engagement scoreof 85 per cent reflects the skill andgrit of our team driving the successof our strategy. The dedication ofour employees is fostering strongerclient experiences and elevating thelikelihood that our customers willrecommend our products and services.Leveraging world-leading team engagementto deliver best-in-class resultsWe give where we live with our hearts,our hands and our resourcesUndoubtedly, 2015 will be an exciting year with manychallenges, opportunities and notable events. In this regard,the TELUS team has a significant track record of successfullynavigating and overcoming economic, commercial andregulatory challenges. I am confident the future in this respectwill be no different.Our competitors may be able to replicate our products,services and technologies, but a potent corporate culturewith the resulting business outcomes it yields takes years tobuild and is difficult to emulate. Indeed, our world-leadingengagement score of 85 per cent reflects the skill and grit ofour team driving the success of our strategy. The dedicationof our employees is fostering stronger client experiences andelevating the likelihood that our customers will recommendour products and services. Our robust customer-centricculture offers a clear indication that we will continue todeliver leading outcomes to our investors, customers, teammembers and communities.Our 2015 outlook further reflects our confidence inexecuting against our growth strategy to achieve revenueand operating profitability growth of up to five andseven per cent, respectively, and continued robust cashflow generation of up to 1.3 billion. Notably, in each of thepast five years, we have met three of four consolidatedfinancial targets. Moreover, your Company has a significant15-year track record of meeting or exceeding 77 per centof our consolidated financial targets since 2000.Our strong results, driven by our highly engaged teamexecuting on a winning strategy, have empowered usto give back to our communities at an unprecedented levelin 2014. Indeed, your Company’s extraordinary success ismatched only by the remarkable commitment we havedemonstrated to the communities where we live, work andserve. Our TELUS family has embraced our simple, engagingand heartfelt community philosophy – we give where welive – in order to have a thoughtful and meaningful impacton our most vulnerable citizens in need of compassionand care.In communities across Canada and in the markets weserve around the globe, the TELUS team has an unwaveringpassion for empowering youth, helping families in need,keeping citizens safe online and providing access totechnology, the arts and sport for underprivileged children.In May 2014, a record 15,000 team members, family andfriends volunteered at TELUS Day of Giving events acrossthe country to demonstrate their support. Similar eventswere held in seven other countries by 6,500 TELUSInternational team members, multiplying our effortsaround the world. Moreover, for almost a decade, ourTELUS Community Boards have leveraged the expertiseof local business leaders and community builders toprovide funding to hundreds of grassroots organizationstypically overlooked by other corporate giving initiatives.10 TELUS 2014 ANNUAL REPORT

In communities across Canadaand in the markets we serve aroundthe globe, the TELUS team has anunwavering passion for empoweringyouth, helping families in need, keepingcitizens safe online and providingaccess to technology, the arts andsport for underprivileged children.Since their inception in 2005, our 14 Community Boardsin Canada and internationally contributed 47 million insupport of more than 3,700 projects. These initiativespositively impacted more than 2.1 million youth – a recordlevel of support for extraordinarily worthy causes.Our innovative Give Where You Live high school curriculum,developed in partnership with Free The Children, has nowreached over 120 schools and 46,000 youth across Canada.Additionally, our TELUS WISE Internet safety and responsibilityinitiative has helped more than 450,000 Canadians stay safeonline. You have my commitment that our pursuit of innovationin giving back will continue in 2015.Since 2000, TELUS has contributed 396 million andmore than six million compassionate volunteer hours withour hearts and our hands within our communities. I continueto be inspired by this record of unprecedented socialresponsibility and community contribution realized by ourCompany and team members. TELUS’ ability to give backderives directly from our customers and we remain deeplygrateful for their patronage. Encouragingly, TELUS hasexperienced a significant increase in the value of our brandand the loyalty it engenders in the past number of years.This reflects the powerful combination of our customers firststrategy in concert with our charitable giving endeavours.These results speak volumes about the efficacy of ourcommunity investment strategy. Most importantly, theymake our giving more sustainable so we can continueto do good in our communities.I look forward to an exceptional year ahead. I can think ofno better way of aligning with the interests of our customers,investors and the many Canadians we support than by takingthe entirety of my 2015 annual cash salary compensation inTELUS shares for the sixth consecutive year.Thank you for your continued support, each and every

A quick view TELUS wireless TELUS wireline 2014 external revenue and annual growth 6.59 billion, an increase of 7.5% 5.42 billion, an increase of 2.7% Share of TELUS consolidated revenue 55% 45% 2014 EBITDA and annual growth 2.73 billion, an increase of 4.7% 1.49 billion, an increase of 5.3% Share of TELUS consolidated EBITDA 65% 35%