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management discussion and analysis (dollar amounts in Canadian dollars unless otherwise indicated) The following is a discussion of the consolidated financial condition and results of operations of TELUS Corporation (TELUS or the Company) for the years ended December 31, 2000, and 1999, and of certain factors the Company believes are likely to affect its prospective financial condition. This discussion contains forward-looking information that is qualified by reference to, and should be read in conjunction with, the Company's discussion regarding forward-looking statements. See "Forward-Looking Statements." The following should also be read in conjunction with the Consolidated Financial Statements of TELUS and notes thereto (Financial Statements). The financial statements have been prepared in accordance with Canadian generally accepted accounting principles (GAAP), which differ in certain respects from U.S. GAAP. See Note 20 to the Financial Statements for a summary of the principal differences between Canadian and U.S. GAAP as they relate to TELUS.

CORPORATE BACKGROUND TELUS Corporation was created in February 1999 from the merger of BC Telecom and TELUS. These long-established, regional, full-service telecommunications companies provided service to 7.0 million people (23% of Canada's population) in the two western provinces of British Columbia (B.C.) and Alberta. In 1999, TELUS announced plans to begin providing telecommunications service in other areas of Canada. These national plans were greatly accelerated during 2000 in Québec and nationally with the purchase of 70% of QuébecTel, a regional full-service operator, and the acquisition of Clearnet, a fast-growing national digital wireless operator. TELUS' business segments for the year 2000 were: TELUS Communications, which provided local, long distance, and other services principally in B.C. and Alberta TELUS Mobility, which provided digital PCS and ESMR, analogue cellular and paging services in B.C. and Alberta and national services through wireless resale (since March 2000), through QuébecTel Mobilité in Eastern Québec (since June 2000), and across the country through Clearnet (since October 20, 2000) TELUS Advanced Communications, which provided data, Internet, and information management services primarily in B.C. and Alberta "Other," which included TELUS Advertising Services' directory publishing in B.C., Alberta, and parts of Ontario and the U.S.; and QuébecTel communications, data, Internet, directory publishing and other services OVERVIEW The major financial events and trends for 2000 were: 1. Revenue growth of 18% in the fourth quarter and 10% for the year through acquisitions as well as organic growth. 2. Developing a national telecommunications presence with the acquisitions of Clearnet and QuébecTel. Acquired Clearnet Communications on October 20 for $4.1 billion with approximately equal parts cash and TELUS non-voting shares, and at closing, with fair market value adjustments, recognized $6.0 billion of identifiable assets and assumed total Clearnet liabilities of $3.45 billion under Canadian GAAP (see Note 4). For the period of just over two months, this increased TELUS revenues by $125 million, while reducing EBITDA by $27 million. On a pro forma basis, TELUS led the Canadian wireless industry with the highest increase in revenues for 12 months ($346 million), and highest total revenues for 12 months ($1,710 million). Acquired 70% of QuébecTel for $584 million effective June 1. For seven months, this provided TELUS with over $224 million of new revenue and a positive contribution to EBITDA of over $78 million. Acquisitions caused an increase in revenue and EBITDA growth, while decreasing cash and basic earnings per share due to higher interest costs and 49.7 million new non-voting shares issued, as well as decreasing basic EPS due to higher amortization charges. As a result of these acquisitions, debt levels increased to $8.1 billion from $2.1 billion at the start of the year. 3. Achievement of $130 million of additional TELUS/ BC TELECOM merger-related synergies in 2000 for a cumulative total of $199 million over two years. 4. Maintained strong local and long distance market shares and more than tripled our high-speed Internet base in the West. 5. Maintained a 4% growth in cash flow despite an increase in financing costs. Cash flow per share decreased by three cents due to an increase in the average number of shares outstanding.