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CFO's letter

Considering interests of equity and debt holders

TELUS continues its long-standing orientation to manage capital in a manner that considers the interests of equity and debt holders, and optimizes the cost and availability of capital at an acceptable level of risk. We have acted to maintain our strong credit ratings and 2010 represents the sixth consecutive year that we have achieved our long-term financial policy on net debt to EBITDA of 1.5 to 2.0 times. At the same time, we have continued to return cash to our shareholders once core investments have been made.

TELUS' dividend payout ratio guideline was increased by the Board of Directors in May 2010 to 55 to 65 per cent of sustainable net earnings on a prospective basis. This signalled confidence in the outlook for the Company's earnings and cash flow, moderating capital expenditures, and aligned with our dividend growth model. In 2010, the Company announced two dividend increases of five per cent each, taking the current dividend to a record high of $2.10 annually.

Indicative of our strong cash flow position, commencing in March 2011, we are reducing share dilution by purchasing shares in the open market under our dividend reinvestment and share purchase program, rather than issuing shares from treasury.


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