segment information

6 Months Ended

Jun. 30, 2022

segment information

segment information

5 segment information

General

Operating segments are components of an entity that engage in business activities from which they earn revenues and incur expenses (including revenues and expenses related to transactions with the other component(s)), the operations of which can be clearly distinguished and for which the operating results are regularly reviewed by a chief operating decision-maker to make resource allocation decisions and to assess performance.

The TELUS technology solutions segment includes: network revenues and equipment sales arising from mobile technologies; data revenues (which include internet protocol; television; hosting, managed information technology and cloud-based services; and home and business security); healthcare software and technology solutions; agriculture and consumer goods services (software, data management and data analytics-driven smart-food chain and consumer goods technologies); voice and other telecommunications services revenues; and equipment sales.

The digitally-led customer experiences – TELUS International segment (DLCX), which has the U.S. dollar as its primary functional currency, is comprised of digital customer experience and digital-enablement transformation solutions, including artificial intelligence and content management solutions, provided by our TELUS International (Cda) Inc. subsidiary.

Intersegment sales are recorded at the exchange value, which is the amount agreed to by the parties.

The segment information regularly reported to our Chief Executive Officer (our chief operating decision-maker), and the reconciliations thereof to our products and services view of revenues, other revenues and income before income taxes, are set out in the following table.

													Digitally-led customer
	TELUS technology solutions												experiences – TELUS
	Mobile				Fixed				Segment total				International 1				Eliminations				Total
Three-month periods ended June 30 (millions)	2022		2021		2022		2021		2022		2021		2022		2021		2022		2021		2022		2021
Operating revenues
External revenues
Service	$	1,647	$	1,544	$	1,538	$	1,465	$	3,185	$	3,009	$	672	$	550	$	—	$	—	$	3,857	$	3,559
Equipment		435		487		81		63		516		550		—		—		—		—		516		550
Revenues arising from contracts with customers	$	2,082	$	2,031	$	1,619	$	1,528		3,701		3,559		672		550		—		—		4,373		4,109
	Other income (Note 7)									28		2		—		—		—		—		28		2
										3,729		3,561		672		550		—		—		4,401		4,111
	Intersegment revenues									4		5		125		108		(129)		(113)		—		—
									$	3,733	$	3,566	$	797	$	658	$	(129)	$	(113)	$	4,401	$	4,111
	EBITDA 2								$	1,417	$	1,323	$	176	$	128	$	—	$	—	$	1,593	$	1,451
	Restructuring and other costs included in EBITDA (Note 16)									19		29		10		9		—		—		29		38
	Equity losses related to real estate joint venture									—		1		—		—		—		—		—		1
	Adjusted EBITDA 2								$	1,436	$	1,353	$	186	$	137	$	—	$	—	$	1,622	$	1,490
	CAPEX excluding spectrum licences 3								$	1,016	$	882	$	38	$	31	$	—	$	—	$	1,054	$	913
									Operating revenues – external and other income (above)												$	4,401	$	4,111
									Goods and services purchased													1,637		1,609
									Employee benefits expense													1,171		1,051
									EBITDA (above)													1,593		1,451
									Depreciation													536		527
									Amortization of intangible assets													295		266
									Operating income													762		658
									Financing costs													97		203
									Income before income taxes												$	665	$	455

													Digitally-led customer
	TELUS technology solutions												experiences – TELUS
	Mobile				Fixed				Segment total				International 1				Eliminations				Total
Six-month periods ended June 30 (millions)	2022		2021		2022		2021		2022		2021		2022		2021		2022		2021		2022		2021
Operating revenues
External revenues
Service	$	3,247	$	3,070	$	3,059	$	2,906	$	6,306	$	5,976	$	1,316	$	1,085	$	—	$	—	$	7,622	$	7,061
Equipment		852		939		155		131		1,007		1,070		—		—		—		—		1,007		1,070
Revenues arising from contracts with customers	$	4,099	$	4,009	$	3,214	$	3,037		7,313		7,046		1,316		1,085		—		—		8,629		8,131
	Other income (Note 7)									54		4		—		—		—		—		54		4
										7,367		7,050		1,316		1,085		—		—		8,683		8,135
	Intersegment revenues									8		10		240		212		(248)		(222)		—		—
									$	7,375	$	7,060	$	1,556	$	1,297	$	(248)	$	(222)	$	8,683	$	8,135
	EBITDA 2								$	2,817	$	2,659	$	345	$	253	$	—	$	—	$	3,162	$	2,912
	Restructuring and other costs included in EBITDA (Note 16)									54		57		14		22		—		—		68		79
	Equity losses related to real estate joint venture									—		2		—		—		—		—		—		2
	Adjusted EBITDA 2								$	2,871	$	2,718	$	359	$	275	$	—	$	—	$	3,230	$	2,993
	CAPEX, excluding spectrum licences 3								$	1,818	$	1,544	$	69	$	54	$	—	$	—	$	1,887	$	1,598
									Operating revenues – external and other income (above)												$	8,683	$	8,135
									Goods and services purchased													3,231		3,157
									Employee benefits expense													2,290		2,066
									EBITDA (above)													3,162		2,912
									Depreciation													1,087		1,051
									Amortization of intangible assets													586		531
									Operating income													1,489		1,330
									Financing costs													276		410
									Income before income taxes												$	1,213	$	920

1 The digitally-led customer experiences – TELUS International segment is comprised of our consolidated TELUS International (Cda) Inc. subsidiary. All of our other international operations are included in the TELUS technology solutions segment.

2 Earnings before interest, income taxes, depreciation and amortization (EBITDA), both unadjusted and adjusted, are not standardized financial measures under IFRS-IASB and may not be comparable to similar measures disclosed by other issuers (including those disclosed by TELUS International (Cda) Inc.); we define EBITDA as operating revenues and other income less goods and services purchased and employee benefits expense. We calculate adjusted EBITDA to exclude items that do not reflect our ongoing operations and, in our opinion, should not be considered in a long-term valuation metric or included in an assessment of our ability to service or incur debt. We report EBITDA and adjusted EBITDA because they are key measures that management uses to evaluate the performance of our business, and EBITDA is also utilized in measuring compliance with certain debt covenants.

3 Total capital expenditures (CAPEX); see Note 31(a) for a reconciliation of capital expenditures, excluding spectrum licences, to cash payments for capital assets, excluding spectrum licences, reported in the Consolidated statements of cash flows.