segment information

6 Months Ended

Jun. 30, 2024

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. We have embarked upon the modification of our internal and external reporting processes, systems and internal controls arising from the acquisition and ongoing 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 TELUS digital experience segment (formerly 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.

	TELUS technology solutions												TELUS digital
	Mobile				Fixed				Segment total				experience 1				Eliminations				Total
Three-month periods ended June 30 (millions)	2024		2023		2024		2023		2024		2023		2024		2023		2024		2023		2024		2023
Operating revenues
External revenues
Service	$	1,758	$	1,748	$	1,918	$	1,887	$	3,676	$	3,635	$	666	$	723	$	—	$	—	$	4,342	$	4,358
Equipment		479		489		79		87		558		576		—		—		—		—		558		576
Revenues arising from contracts with customers	$	2,237	$	2,237	$	1,997	$	1,974		4,234		4,211		666		723		—		—		4,900		4,934
					Other income (Note 7)					31		12		43		—		—		—		74		12
										4,265		4,223		709		723		—		—		4,974		4,946
					Intersegment revenues					3		4		227		173		(230)		(177)		—		—
									$	4,268	$	4,227	$	936	$	896	$	(230)	$	(177)	$	4,974	$	4,946
					EBITDA 2				$	1,522	$	1,457	$	166	$	131	$	(12)	$	—	$	1,676	$	1,588
					Restructuring and other costs included in EBITDA (Note 16)					109		94		12		21		—		—		121		115
					Adjusted EBITDA 2				$	1,631	$	1,551	$	178	$	152	$	(12)	$	—	$	1,797	$	1,703
					Capital expenditures 3				$	663	$	773	$	40	$	34	$	(12)	$	—	$	691	$	807
					Adjusted EBITDA less capital expenditures 2				$	968	$	778	$	138	$	118	$	—	$	—	$	1,106	$	896
																	Operating revenues – external and other income (above)				$	4,974	$	4,946
																	Goods and services purchased					1,825		1,790
																	Employee benefits expense					1,473		1,568
																	EBITDA (above)					1,676		1,588
																	Depreciation					608		598
																	Amortization of intangible assets					386		408
																	Operating income					682		582
																	Financing costs					382		323
																	Income before income taxes				$	300	$	259

	TELUS technology solutions												TELUS digital
	Mobile				Fixed				Segment total				experience 1				Eliminations				Total
Six-month periods ended June 30 (millions)	2024		2023		2024		2023		2024		2023		2024		2023		2024		2023		2024		2023
Operating revenues
External revenues
Service	$	3,525	$	3,473	$	3,798	$	3,751	$	7,323	$	7,224	$	1,348	$	1,479	$	—	$	—	$	8,671	$	8,703
Equipment		939		978		156		178		1,095		1,156		—		—		—		—		1,095		1,156
Revenues arising from contracts with customers	$	4,464	$	4,451	$	3,954	$	3,929		8,418		8,380		1,348		1,479		—		—		9,766		9,859
					Other income (Note 7)					58		51		82		—		—		—		140		51
										8,476		8,431		1,430		1,479		—		—		9,906		9,910
					Intersegment revenues					6		8		430		345		(436)		(353)		—		—
									$	8,482	$	8,439	$	1,860	$	1,824	$	(436)	$	(353)	$	9,906	$	9,910
					EBITDA 2				$	2,973	$	2,910	$	363	$	299	$	(22)	$	—	$	3,314	$	3,209
					Restructuring and other costs included in EBITDA (Note 16)					317		235		22		39		—		—		339		274
					Equity (income) related to real estate joint venture					—		(1)		—		—		—		—		—		(1)
					Adjusted EBITDA 2				$	3,290	$	3,144	$	385	$	338	$	(22)	$	—	$	3,653	$	3,482
					Capital expenditures 3				$	1,370	$	1,466	$	66	$	54	$	(20)	$	—	$	1,416	$	1,520
					Adjusted EBITDA less capital expenditures 2				$	1,920	$	1,678	$	319	$	284	$	(2)	$	—	$	2,237	$	1,962
																	Operating revenues – external and other income (above)				$	9,906	$	9,910
																	Goods and services purchased					3,635		3,593
																	Employee benefits expense					2,957		3,108
																	EBITDA (above)					3,314		3,209
																	Depreciation					1,298		1,238
																	Amortization of intangible assets					759		790
																	Operating income					1,257		1,181
																	Financing costs					776		643
																	Income before income taxes				$	481	$	538

1 The TELUS digital experience segment (formerly 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 determining 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.