segment information

6 Months Ended

Jun. 30, 2023

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. Effective September 1, 2022, we embarked upon the modification of our internal and external reporting processes, systems and internal controls concurrent with the acquisition and integration of LifeWorks Inc. and correspondingly we are assessing our segmented reporting structure.

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 services, software and technology solutions (including employee and family assistance programs and benefits administration); 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 (DLCX) segment, 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, 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 experiences –
	TELUS technology solutions												TELUS
	Mobile				Fixed				Segment total				International 1				Eliminations				Total
Three-month periods ended June 30 (millions)	2023		2022		2023		2022		2023		2022		2023		2022		2023		2022		2023		2022
Operating revenues
External revenues
Service	$	1,748	$	1,647	$	1,887	$	1,538	$	3,635	$	3,185	$	723	$	672	$	—	$	—	$	4,358	$	3,857
Equipment		489		435		87		81		576		516		—		—		—		—		576		516
Revenues arising from contracts with customers	$	2,237	$	2,082	$	1,974	$	1,619		4,211		3,701		723		672		—		—		4,934		4,373
					Other income (Note 7)					12		28		—		—		—		—		12		28
										4,223		3,729		723		672		—		—		4,946		4,401
					Intersegment revenues					4		4		173		125		(177)		(129)		—		—
									$	4,227	$	3,733	$	896	$	797	$	(177)	$	(129)	$	4,946	$	4,401
					EBITDA 2				$	1,457	$	1,417	$	131	$	176	$	—	$	—	$	1,588	$	1,593
					Restructuring and other costs included in EBITDA (Note 16)					94		19		21		10		—		—		115		29
					Adjusted EBITDA 2				$	1,551	$	1,436	$	152	$	186	$	—	$	—	$	1,703	$	1,622
					Capital expenditures 3				$	773	$	1,016	$	34	$	38	$	—	$	—	$	807	$	1,054
					Adjusted EBITDA less capital expenditures 2				$	778	$	420	$	118	$	148	$	—	$	—	$	896	$	568
																	Operating revenues – external and other income (above)				$	4,946	$	4,401
																	Goods and services purchased					1,790		1,637
																	Employee benefits expense					1,568		1,171
																	EBITDA (above)					1,588		1,593
																	Depreciation					598		536
																	Amortization of intangible assets					408		295
																	Operating income					582		762
																	Financing costs					323		97
																	Income before income taxes				$	259	$	665

													Digitally-led
													customer experiences –
	TELUS technology solutions												TELUS
	Mobile				Fixed				Segment total				International 1				Eliminations				Total
Six-month periods ended June 30 (millions)	2023		2022		2023		2022		2023		2022		2023		2022		2023		2022		2023		2022
Operating revenues
External revenues
Service	$	3,473	$	3,247	$	3,751	$	3,059	$	7,224	$	6,306	$	1,479	$	1,316	$	—	$	—	$	8,703	$	7,622
Equipment		978		852		178		155		1,156		1,007		—		—		—		—		1,156		1,007
Revenues arising from contracts with customers	$	4,451	$	4,099	$	3,929	$	3,214		8,380		7,313		1,479		1,316		—		—		9,859		8,629
					Other income (Note 7)					51		54		—		—		—		—		51		54
										8,431		7,367		1,479		1,316		—		—		9,910		8,683
					Intersegment revenues					8		8		345		240		(353)		(248)		—		—
									$	8,439	$	7,375	$	1,824	$	1,556	$	(353)	$	(248)	$	9,910	$	8,683
					EBITDA 2				$	2,910	$	2,817	$	299	$	345	$	—	$	—	$	3,209	$	3,162
					Restructuring and other costs included in EBITDA (Note 16)					235		54		39		14		—		—		274		68
					Equity (income) loss related to real estate joint venture					(1)		—		—		—		—		—		(1)		—
					Adjusted EBITDA 2				$	3,144	$	2,871	$	338	$	359	$	—	$	—	$	3,482	$	3,230
					Capital expenditures 3				$	1,466	$	1,818	$	54	$	69	$	—	$	—	$	1,520	$	1,887
					Adjusted EBITDA less capital expenditures 2				$	1,678	$	1,053	$	284	$	290	$	—	$	—	$	1,962	$	1,343
																	Operating revenues – external and other income (above)				$	9,910	$	8,683
																	Goods and services purchased					3,593		3,231
																	Employee benefits expense					3,108		2,290
																	EBITDA (above)					3,209		3,162
																	Depreciation					1,238		1,087
																	Amortization of intangible assets					790		586
																	Operating income					1,181		1,489
																	Financing costs					643		276
																	Income before income taxes				$	538	$	1,213

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, adjusted EBITDA and adjusted EBITDA less capital expenditures, 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 See Note 31(a) for a reconciliation of capital asset additions, excluding spectrum licences, to cash payments for capital assets, excluding spectrum licences, reported in the Consolidated statements of cash flows.