26long-term debt

(a)Details of long-term debt

As at (millions)	Note	June 30, 2018		December 31, 2017
TELUS Corporation notes	(b)	$	13,090	$	11,561
TELUS Corporation commercial paper	(c)	3		1,140
TELUS Communications Inc. debentures		620		620
TELUS International (Cda) Inc. credit facility	(e)	432		339

Long-term debt		$	14,145	$	13,660

Current		$	1,009	$	1,404
Non-current		13,136		12,256

Long-term debt		$	14,145	$	13,660

(b)TELUS Corporation notes

The notes are senior, unsecured and unsubordinated obligations and rank equally in right of payment with all of our existing and future unsecured, unsubordinated obligations, are senior in right of payment to all of our existing and future subordinated indebtedness, and are effectively subordinated to all existing and future obligations of, or guaranteed by, our subsidiaries. The indentures governing the notes contain certain covenants which, among other things, place limitations on our ability and the ability of certain of our subsidiaries to: grant security in respect of indebtedness; enter into sale-leaseback transactions; and incur new indebtedness.

									Principal face amount		Redemption present value spread
Series 1	Issued	Maturity	Issue price				Effective interest rate 2		Originally issued	Outstanding at financial statement date	Basis points	Cessation date
5.05% Notes, Series CG	December 2009	December 2019 3	$	994.19			5.13	%	$1.0 billion	$1.0 billion	45.5 4	N/A
5.05% Notes, Series CH	July 2010	July 2020	$	997.44			5.08	%	$1.0 billion	$1.0 billion	47 4	N/A
3.35% Notes, Series CJ	December 2012	March 2023	$	998.83			3.36	%	$500 million	$500 million	40 5	Dec. 15, 2022
3.35% Notes, Series CK	April 2013	April 2024	$	994.35			3.41	%	$1.1 billion	$1.1 billion	36 5	Jan. 2, 2024
4.40% Notes, Series CL	April 2013	April 2043	$	997.68			4.41	%	$600 million	$600 million	47 5	Oct. 1, 2042
3.60% Notes, Series CM	November 2013	January 2021	$	997.15			3.65	%	$400 million	$400 million	35 5	N/A
5.15% Notes, Series CN	November 2013	November 2043	$	995.00			5.18	%	$400 million	$400 million	50 5	May 26, 2043
3.20% Notes, Series CO	April 2014	April 2021	$	997.39			3.24	%	$500 million	$500 million	30 5	Mar. 5, 2021
4.85% Notes, Series CP	Multiple 6	April 2044	$	987.91		6	4.93	%6	$500 million 6	$900 million 6	46 5	Oct. 5, 2043
3.75% Notes, Series CQ	September 2014	January 2025	$	997.75			3.78	%	$800 million	$800 million	38.5 5	Oct. 17, 2024
4.75% Notes, Series CR	September 2014	January 2045	$	992.91			4.80	%	$400 million	$400 million	51.5 5	July 17, 2044
1.50% Notes, Series CS	March 2015	March 2018	$	999.62			1.51	%	$250 million	$NIL	N/A 7	N/A
2.35% Notes, Series CT	March 2015	March 2022	$	997.31			2.39	%	$1.0 billion	$1.0 billion	35.5 5	Feb. 28, 2022
4.40% Notes, Series CU	March 2015	January 2046	$	999.72			4.40	%	$500 million	$500 million	60.5 5	July 29, 2045
3.75% Notes, Series CV	December 2015	March 2026	$	992.14			3.84	%	$600 million	$600 million	53.5 5	Dec. 10, 2025
2.80% U.S. Dollar Notes 8	September 2016	February 2027	US$		991.89		2.89	%	US$600 million	US$600 million	20 9	Nov. 16, 2026
3.70% U.S. Dollar Notes 10	March 2017	September 2027	US$		998.95		3.71	%	US$500 million	US$500 million	20 9	June 15, 2027
4.70% Notes, Series CW	Multiple 11	March 2048	$	998.06		11	4.71	%11	$325 million 11	$475 million 11	58.5 5	Sept. 6, 2047
3.625% Notes, Series CX	February 2018	February 2028	$	989.49			3.75	%	$600 million	$600 million	37 5	Dec. 1, 2027
4.60% U.S. Dollar Notes 12	June 2018	November 2048	US$		987.60		4.68	%	US$750 million	US$750 million	25 9	May 16, 2048

(1)

Interest is payable semi-annually. The notes requires us to make an offer to repurchase the notes at a price equal to 101% of their principal amount plus accrued and unpaid interest to the date of repurchase upon the occurrence of a change in control triggering event, as defined in the supplemental trust indenture.

(2)

The effective interest rate is that which the notes would yield to an initial debt holder if held to maturity.

(3)

On June 28, 2018, we exercised our right to early redeem, on August 1, 2018, all of our 5.05%, Series CG Notes. The long-term debt prepayment premium has been recorded in the three-month period ending September 30, 2018, and was $34 million before income taxes.

(4)

The notes are redeemable at our option, in whole at any time, or in part from time to time, on not fewer than 30 and not more than 60 days’ prior notice. The redemption price is equal to the greater of (i) the present value of the notes discounted at the Government of Canada yield plus the redemption present value spread, or (ii) 100% of the principal amount thereof. In addition, accrued and unpaid interest, if any, will be paid to the date fixed for redemption.

(5)

At any time prior to the respective maturity dates set out in the table, the notes are redeemable at our option, in whole at any time, or in part from time to time, on not fewer than 30 and not more than 60 days’ prior notice. The redemption price is equal to the greater of (i) the present value of the notes discounted at the Government of Canada yield plus the redemption present value spread calculated over the period to maturity, other than in the case of the Series CT, Series CU, Series CW and Series CX notes, where it is calculated over the period to the redemption present value spread cessation date, or (ii) 100% of the principal amount thereof. In addition, accrued and unpaid interest, if any, will be paid to the date fixed for redemption. On or after the respective redemption present value spread cessation dates set out in the table, the notes are redeemable at our option, in whole but not in part, on not fewer than 30 and not more than 60 days’ prior notice, at redemption prices equal to 100% of the principal amount thereof.

(6)

$500 million of 4.85% Notes, Series CP were issued in April 2014 at an issue price of $998.74 and an effective interest rate of 4.86%. This series of notes was reopened in December 2015 and a further $400 million of notes were issued at an issue price of $974.38 and an effective interest rate of 5.02%.

(7)

The notes were not redeemable at our option, other than in the event of certain changes in tax laws.

(8)

We have entered into a foreign exchange derivative (a cross currency interest rate exchange agreement) which effectively converted the principal payments and interest obligations to Canadian dollar obligations with a fixed interest rate of 2.95% and an issued and outstanding amount of $792 million (reflecting a fixed exchange rate of $1.3205).

(9)

At any time prior to the respective maturity dates set out in the table, the notes are redeemable at our option, in whole at any time, or in part from time to time, on not fewer than 30 and not more than 60 days’ prior notice. The redemption price is equal to the greater of (i) the present value of the notes discounted at the U.S. Adjusted Treasury Rate plus the redemption present value spread calculated over the period to the redemption present value spread cessation date, or (ii) 100% of the principal amount thereof. In addition, accrued and unpaid interest, if any, will be paid to the date fixed for redemption. On or after the respective redemption present value spread cessation dates set out in the table, the notes are redeemable at our option, in whole but not in part, on not fewer than 30 and not more than 60 days’ prior notice, at redemption prices equal to 100% of the principal amounts thereof.

(10)

We have entered into a foreign exchange derivative (a cross currency interest rate exchange agreement) which effectively converted the principal payments and interest obligations to Canadian dollar obligations with a fixed interest rate of 3.41% and an issued and outstanding amount of $667 million (reflecting a fixed exchange rate of $1.3348).

(11)

$325 million of 4.70%, Series CW were issued in March 2017 at an issue price of $990.65 and an effective interest rate of 4.76%. This series of notes was reopened in February 2018 and a further $150 million of notes were issued at a price of $1,014.11 and an effective interest rate of 4.61%.

(12)

We have entered into a foreign exchange derivative (a cross currency interest rate exchange agreement) which effectively converted the principal payments and interest obligations to Canadian dollar obligations with a fixed interest rate of 4.41% and an issued and outstanding amount of $974 million (reflecting a fixed exchange rate of $1.2985).

(c)TELUS Corporation commercial paper

TELUS Corporation has an unsecured commercial paper program, which is backstopped by our $2.25 billion syndicated credit facility (see (d)) and is to be used for general corporate purposes, including capital expenditures and investments. This program enables us to issue commercial paper, subject to conditions related to debt ratings, up to a maximum aggregate amount at any one time of $1.4 billion (December 31, 2017 – $1.4 billion). Foreign currency forward contracts are used to manage currency risk arising from issuing commercial paper denominated in U.S. dollars. Commercial paper debt is due within one year and is classified as a current portion of long-term debt, as the amounts are fully supported, and we expect that they will continue to be supported, by the revolving credit facility, which has no repayment requirements within the next year. As at June 30, 2018, we had $3 million of commercial paper outstanding, all of which was denominated in U.S. dollars (US$2 million), with an effective weighted average interest rate of 2.77%, maturing through July 2018.

(d)TELUS Corporation credit facility

As at June 30, 2018, TELUS Corporation had an unsecured revolving $2.25 billion bank credit facility, renewed in May 2018 and expiring on May 31, 2023, (December 31, 2017 – expiring May 31, 2021) with a syndicate of financial institutions, which is to be used for general corporate purposes, including the backstopping of commercial paper.

TELUS Corporation’s credit facility bears interest at prime rate, U.S. Dollar Base Rate, a bankers’ acceptance rate or London interbank offered rate (LIBOR) (all such terms as used or defined in the credit facility), plus applicable margins. The credit facility contains customary representations, warranties and covenants, including two financial quarter-end ratio tests. These tests are that our net debt to operating cash flow ratio must not exceed 4.00:1.00 and our operating cash flow to interest expense ratio must not be less than 2.00:1.00, all as defined under the credit facility.

Continued access to TELUS Corporation’s credit facility is not contingent on TELUS Corporation maintaining a specific credit rating.

As at (millions)	June 30, 2018		December 31, 2017
Net available	$	2,247	$	1,110
Backstop of commercial paper	3		1,140

Gross available	$	2,250	$	2,250

We had $206 million of letters of credit outstanding as at June 30, 2018 (December 31, 2017 – $224 million), issued under various uncommitted facilities; such letter of credit facilities are in addition to the ability to provide letters of credit pursuant to our committed bank credit facility.

(e)TELUS International (Cda) Inc. credit facility

As at June 30, 2018, TELUS International (Cda) Inc. had a bank credit facility, secured by its assets, expiring on December 20, 2022, with a syndicate of financial institutions. The credit facility is comprised of a US$350 million (December 31, 2017 – US$350 million) revolving component and an amortizing US$120 million (December 31, 2017 – US$120 million) term loan component. The credit facility is non-recourse to TELUS Corporation. As at June 30, 2018, $439 million ($432 million net of unamortized issue costs) was outstanding, all of which was denominated in U.S. dollars (US$334 million), with the revolving component having a weighted average interest rate of 4.11%.

As at (millions)

June 30, 2018

December 31, 2017

Revolving component

Term loan component 1

Total

Revolving component

Term loan component

Total

Available

US$

132

US$

N/A

US$

132

US$

193

US$

N/A

US$

193

Outstanding

218

116

334

157

119

276

US$

350

US$

116

US$

466

US$

350

US$

119

US$

469

(1)

We have entered into a receive-floating, pay-fixed interest rate exchange agreement which effectively converts our interest obligations on the debt to a fixed rate of 2.64%.

TELUS International (Cda) Inc.’s credit facility bears interest at prime rate, U.S. Dollar Base Rate, a bankers’ acceptance rate or London interbank offered rate (LIBOR) (all such terms as used or defined in the credit facility), plus applicable margins. The credit facility contains customary representations, warranties and covenants, including two financial quarter-end ratio tests. These tests are that TELUS International (Cda) Inc.’s net debt to operating cash flow ratio must not exceed 3.25:1.00 and its operating cash flow to debt service (interest and scheduled principal repayment) ratio must not be less than 1.50:1.00, all as defined in the credit facility.

The term loan is subject to an amortization schedule which requires that 5% of the principal advanced be repaid each year of the term of the agreement, with the balance due at maturity.

(f)Long-term debt maturities

Anticipated requirements to meet long-term debt repayments, calculated upon such long-term debts owing as at June 30, 2018, for each of the next five fiscal years are as follows:

Long-term debt denominated in	Canadian dollars		U.S. dollars
					Derivative liability
Years ending December 31 (millions)	Debt		Debt		(Receive) 1			Pay		Total		Total
2018 (balance of year)	$	1,000	$	7	$	(3	)	$	3	$	7	$	1,007
2019	—		8		—			—		8		8
2020	1,000		8		—			—		8		1,008
2021	1,075		8		—			—		8		1,083
2022	1,249		412		—			—		412		1,661
Thereafter	7,075		2,436		(2,439		)	2,436		2,433		9,508

Future cash outflows in respect of long-term debt principal repayments	11,399		2,879		(2,442		)	2,439		2,876		14,275
Future cash outflows in respect of associated interest and like carrying costs 2	5,674		1,893		(1,810		)	1,730		1,813		7,487

Undiscounted contractual maturities (Note 4(c))	$	17,073	$	4,772	$	(4,252	)	$	4,169	$	4,689	$	21,762

(1)

Where applicable, principal-related cash flows reflect foreign exchange rates at June 30, 2018.

(2)

Future cash outflows in respect of associated interest and like carrying costs for commercial paper and amounts drawn under our credit facilities (if any) have been calculated based upon the rates in effect at June 30, 2018.