TELUS Corporation

Good day, everyone. Welcome to the TELUS 2026 Q2 Earnings Conference Call. I would like to introduce your speaker, Ian McMillan. Please go ahead.

Thank you, Carl, and hello, everyone. Thank you for joining us. Our second quarter, 2026, news release, MD&A, financial statements, and detailed supplemental investor information were posted on our website earlier this morning. Today's agenda will include opening remarks from Victor Dodig, President and Chief Executive Officer, and Gopi Chande, our Executive Vice President and Chief Financial Officer. After the presentation, there will be a question and answer period, followed by brief closing remarks by Victor. Turning to slide two. Prepared remarks, slides, and answers to questions contain forward-looking statements. Actual results could vary from these statements. Additionally, please note that all dollar amounts referenced today are in Canadian dollars unless otherwise stated. The assumptions on which they are based and the material risks that could cause them to differ are outlined in our public filings with security commissions in Canada and the United States, including our Q2 2026 and 2025 annual MD&A. With that, let me turn the meeting over to Victor, beginning on slide three.

Thank you, Ian. Hello, everyone, and thank you for joining us on today's earnings call, which is my first as President and CEO of TELUS. I'm excited to be here, and I look forward to working with all of you. I want to start by recognizing Darren Entwistle, Over the past 26 years, together with our team, Darren built the network, the culture, and the foundation of our company. And we are grateful for his service and the impact that he's had. For those of you who are new to TELUS, or new to me, let me provide a brief background for context. Prior to joining TELUS as CEO, I was President and CEO of CIBC for 11 years. Before my planned retirement in October 2025, I spent over 20 years with the bank, leading businesses and gaining financial and operational experience. Working for and leading CIBC has given me a deep understanding and appreciation for customer service excellence, managing in highly regulated industries, building a collaborative culture, and nurturing the strategic plan, talent, and execution discipline required to transform an organization. In addition, I've served as a director of the TELUS board for three years, which has provided the on-ramp to shepherd the work we need to do here going forward. So please turn to slide four. Today I will discuss how we're accelerating the TELUS transformation and driving progress with intentionality and with speed to deliver improved performance. The plan which I will outline will see us build on our strong foundation. We will drive financial discipline. We will simplify our business. We will restore balance sheet strength, we will drive greater operational discipline, and we will focus investments in our core telecom, business, and digital infrastructure, which are our crown jewel assets. All of this to ensure that TELUS is in the best position to deliver sustained value to our customers, opportunity for our team members, and returns to our shareholders over the long term. These guiding principles of focus, of simplicity and of discipline are central to our plan. Importantly, our second quarter 2026 results and our 2026 guidance update underscore a company that's in active transition, leveraging our strengths and addressing challenges to position TELUS for long-term success. Gopi will cover our performance and outlook in greater detail later on in the call. Turning to slide five. To support our plan, we made strategic changes to our executive leadership team and organizational structure. First, I'm excited to be joined by our new CFO, Gopi Chande, who's right here in the room with me as we execute together on our transformation and deliver value for all our stakeholders. Further, as you saw last week, I'm also very pleased to welcome Dave Fuller back to TELUS. Now as Executive Vice President, and Group President of Communications. Dave brings 25 years of telecom industry experience, including 15 years at TELUS and a number of senior executive roles across both our business and consumer organizations. Dave will lead our newly established telecom business, which will be known as TELUS Communications, that brings together our consumer and business solutions teams under a single accountable leader. This structure is designed to simplify decision-making, to sharpen our operational focus, and to accelerate execution against our priorities. I look forward to working closely with Dave in the years ahead. Navin Arora, now as Executive Vice President and Group President, will lead our global platform businesses, a portfolio that includes Telus Digital, Telus Health, and Telus Agriculture and Consumer Goods. In addition, Navin will assume oversight of enterprise corporate strategy, corporate development, our AI data center strategy and execution, as well as Telus Global Ventures, bringing together the strategic and financial discipline governing this portfolio together under one leader. These changes give us clear lines of accountability. A focused operator leading our core telecom business and a disciplined steward managing your global platform portfolio. This is an important step as we set up to execute the priorities ahead with focus and with speed. As part of these changes, Zainul Mawji will depart Telus September the 1st. Her numerous contributions to her company over the past 25 years are immeasurable and we wish Zainul every success going forward. Please turn to slide six. Now let me spend a few minutes and offer some initial observations about our business, and Current Industry Dynamics. This is really important context for the discussion on strategy that's going to follow. On the first of May, I joined the management team at TELUS's CEO designate. During the two months before becoming president and CEO on July the 1st, I worked alongside Darren and the rest of the leadership team to gain a deep understanding of our business from all angles, which surfaced important insights into our company and our operating environment. The inherent strength of our organization is undeniable. We have a true leadership position in our TELUS pure fiber network, sustained customer growth and loyalty, and we're advancing the next generation of AI-enabling capabilities. We're investing in true nation-building infrastructure projects, including sustainable, sovereign AI data centers that will support Canada's technological independence and drive economic prosperity. This foundation is strong and it offers TELUS real opportunities for growth. Yet at the same time, we have challenges. While I'm mindful that our industry is inherently competitive, we're navigating macroeconomic headwinds and we lower immigration, which is translating into lower demand for certain core products across all carriers. In addition, there's a need for greater simplicity at TELUS and a return to our roots. To that end, I see a real opportunity to focus on our core business, harness our technology, and encourage a culture of innovation and a culture of efficiency. I see the opportunity to further deepen our customer relationships, something our Telus team is exceptional at, and double down on our competitive advantage here. And I see the opportunity to invest in the technology and infrastructure that will play a vital role in Canada's economic growth and prosperity at a critical moment for our country. Now to be certain, our strategic plan is built on what we can control and execute on. So with that backdrop, let me turn to our priorities going forward. Moving to slide seven. Today we're introducing our transformation strategy, which comprises three financial and operational priorities. The first is to strengthen our financial foundation, which means getting our balance sheet to where it needs to be So TELUS has the financial flexibility to invest, to return capital, and to operate from a position of strength. This includes a capital allocation framework that is sustainable and sets us up for long-term success. The second is to hone our operational discipline, to control our costs, and to reinvest in our core business. This is about running our business with greater rigor and discipline, and a sharp focus on efficiency and returns on deployed capital. This will continue to enable competitive advantage across our telecom business and digital infrastructure. And the third priority flows from the first two. As we strengthen our financial foundation and hone our operational efficiency, we'll be in a better position to generate robust free cash flow and deploy resources to drive profitable, sustainable growth and returns to our shareholders over the long run. These three priorities will frame how I look at and how I talk about our performance going forward. We expect this plan to deliver minimum compounded annual free cash flow growth of 10% over 2027 and 2028. This is a number I'm holding myself and our team accountable to. Let me walk through each of these priorities more specifically. If you would please turn to slide 8, I'll start with the first priority, which is to strengthen our financial foundation. First, fortifying our balance sheet is the prerequisite for everything else. We're carrying approximately 3.5 times net debt to adjust the EBITDA. Our updated target is three times or lower by the end of 2028, a commitment that we are confident in achieving. The dividend reset we announced today is a direct action to accelerate that path to lower debt. We expect approximately $2.7 billion of cumulative cash savings from the dividend reset that we will use toward debt reduction. Specifically effective October 1st, our quarterly dividend will be 18.75 cents per share, which represents 75 cents per share annually, a reduction of 55%. In addition, were now targeting a payout ratio range of 45% to 60% of trailing 12-month free cash flow. The discount on the dividend reinvestment plan is also being terminated effective October 1st. It served a clear purpose during the peak of our network build. Preserving cash and capital intensity was at its highest. With our network build maturing and free cash flow growing, that mechanism is no longer necessary. To that end, we'll be driving greater capital discipline across our entire enterprise. And while in-year CapEx is going up slightly due to supply chain dynamics and inflation, as well as an incremental strategic investment in our infrastructure, this is not a retreat from our commitment to a multi-year 10% capital intensity target, which remains on track. It's about strengthening the foundation from which we can and which we will build To demonstrate our discipline, we have put a moratorium on acquisitions. Once we reach our targeted leverage level and fortify our balance sheet, we will revisit our capital allocation priorities. Finally, we remain committed to monetizing non-core assets to optimize our portfolio and pay down debt, which will ultimately support a stronger financial foundation for TELUS. I'm going to provide an update on this work stream in a minute. So please turn to slide 9 in our second priority, which is to hone operational discipline, control our costs, and reinvest in our core. Operational discipline comes down to three things. Value for every customer relationship, efficiency in how we deploy our resources, and return on invested capital. TELUS has an incredible heritage of customer service. It's in our DNA. And we're fortunate to have a team Thank you. Thank you. We will deploy a surgical process that will embrace technology, eliminate redundancies, and ensure every dollar is deployed with discipline. We're currently conducting extensive work to make sure our cost structure decisions are made thoughtfully and are in the best interest of the overall enterprise. Given the long-term importance of these decisions, we're focused on making the right ones rather than making fast ones. I expect to provide a detailed overview of the scope of this work on or before our third quarter earnings call in November. As we sharpen our focus and free up capital, we will recycle resources to the parts of our core business where we have the strongest competitive position and the clearest path to drive value-adding returns for our shareholders. Our governing principle is straightforward. We will invest where returns on invested capital Exceed our cost of capital, and we will seek to redeploy capital to areas of highest return potential. Every dollar, every dollar will be evaluated on this basis. Turning to slide 10 and our third priority, which is to deploy resources to drive profitable, sustainable growth and our returns. As part of our plan, we will expand Canada's digital infrastructure by strengthening the connectivity and networks people rely on every day. Thank you very much. and timing of these investments will depend in part on the state of our business and the progress we're making and executing the priorities I've just outlined. With that, let me provide an update on our strategic portfolio review and asset monetization efforts, which are already underway ahead of my appointment as CEO. I'm on slide 11. Before I speak to our active processes, I want to point to Cherion as an example of how we think about unlocking value from within our portfolio. In September 2025, we sold a 49.9% stake in Tarion, our wireless tower subsidiary for La Caisse. Through our partnership, Tarion now thrives as a standalone entity, providing superior network quality and service that TELUS customers continue to rely upon. This transaction resulted in proceeds of $1.26 billion, allowing us to reduce our net debt to adjusted EBITDA by 0.17 turns. It's a proof point for the approach and discipline we're bringing to our broader portfolio. Now, regarding Telus Health, I want to stress that this is a great business of great people. We remain active in the market around certain non-core assets, and we're encouraged by the discussions we're having with interested parties. We're also advancing the monetization process of our core non-real estate assets. Additional details on all these efforts will be provided as notable developments arise. So in summary, these processes are active and progressing. Together, they represent a significant source of proceeds that will go directly to paying down debt and accelerating our path to three times your lower leverage by year end 2028. In the meantime, our priority is supporting our team and supporting our clients and keeping them focused on the right things. So let me recap. Our second quarter results and reset of targets reflect a business in transition. And the decisions we announce today will advance the work already in flight. Our focus is on executing with discipline and positioning TELUS to deliver sustainable, profitable growth and returns over the long term. We are moving with clarity, and we're moving with urgency, and I'm confident, very confident, in the ability of our team to deliver. Now with that, I'll turn the call over to Gopi to provide an overview of financial and operational performance and her updated outlook for the balance of 2026. Gopi, over to you.