TELUS is committed to building a healthy, sustainable company for our shareholders, customers, team members and communities for today and tomorrow. We remain steadfast in our approach to balance near-term profitability with long-term sustainability by proactively addressing the ongoing challenges, opportunities and responsibilities to the environment and society to meet the needs of our business, whilst considering the perspectives of our many stakeholders.

TELUS’ ongoing commitment to corporate social responsibility truly reflects my personal dedication as Chief Executive Officer and that of the entire TELUS team. We are of the firm belief that our enduring commitment to CSR provides a business advantage by differentiating us from our competition, assists us in managing risks and reveals new business opportunities. Moreover, it is the right thing to do for our country and our planet.

In this regard, I am pleased that in 2007, we maintained our status as the only North American telecommunications company in the global Dow Jones Sustainability Index for the seventh straight year. Indeed, we are one of just 10 Canadian companies in the Index last year. Additionally, we were named One of the Best 50 Corporate Citizens in Canada by Corporate Knights and TELUS also received the top Award of Excellence in Sustainable Development Reporting from the Canadian Institute of Chartered Accountants.

committed to operational improvement

Whilst continuing to advance our national telecom strategy, we encountered challenges in 2007. Amongst them, adverse federal government and regulatory decisions, including the framework for the May 2008 Advanced Wireless Spectrum auction, which included special features to facilitate new entrants into the market. Also, our higher wireless customer retention costs and increased customer churn in 2007 negatively affected our expenses and requires our ongoing focus. Our task ahead is to raise the bar on our performance in terms of customer retention to complement our record level of wireless client gross additions. On the wireline side of our business, gaining deregulation in three-quarters of our consumer urban markets and two-thirds of our total business lines in our incumbent territories provides TELUS with increased pricing and competitive flexibility.

TELUS’ share price, although down almost eight per cent in 2007, remained number two globally when compared to our incumbent telco peers worldwide over the last seven and a half years. We also remained a leader amongst our global peers in earnings growth, investing in core business and continuing to return cash to shareholders through dividends and share buybacks. At the consolidated level, TELUS achieved or exceeded three out of four 2007 financial targets, including our goals for operating earnings and earnings per share. However, given the competitive pressures on wireless pricing and several mid-year operational challenges, we ended the year one per cent below our revenue target. Our new public consolidated targets, which have been set for 2008, forecast continued growth across the board.

committed to achieving our environmental and social goals

TELUS continues to plan for tomorrow, recognising that our operations have an environmental footprint, and is taking steps to offset the impact of our business. Based on a third-party study performed in 2006, which identified gaps between our performance and the ISO 14001:2004 environmental management system (EMS) standard, we developed a threeyear plan to address our shortcomings. In 2007, we closed 47 per cent of the gaps, exceeding our full year target of 40 per cent. In 2008, we plan to complete 80 per cent of the gap closure plan. During the process, we also proactively identified more than 200 other environmental aspects that we plan to further address, including reducing overall corporate energy consumption, managing recycling and mitigating environmental property risk.

Further demonstrating our commitment to environmental sustainability, we will seek certification at the silver level of the LEED Canada rating system in new building construction for TELUS House Ottawa, newly completed in the fall of 2007. LEED (leadership in energy and environmental design) promotes a whole-building approach to sustainability by recognising performance in site development, water savings, energy efficiency, materials selection and indoor environmental quality. We are also developing carbon dioxide (CO₂) reduction plans for 2008 to integrate into our economic, social and environmental business practice strategies today and into the future.