financial instruments

6 Months Ended

Jun. 30, 2026

4	financial instruments

(a)

Credit risk

Excluding credit risk, if any, arising from currency swaps settled on a gross basis, the best representation of our maximum exposure (excluding income tax effects) to credit risk, which is a worst-case scenario and does not reflect results we expect, is set out in the following table.


		June 30,			December 31,
As at (millions)		2026			2025
Cash and temporary investments, net		$	1,387		$	2,621
Accounts receivable			4,071			4,383
Contract assets			696			731
Derivative assets			229			48
		$	6,383		$	7,783

Cash and temporary investments, net

Credit risk associated with cash and temporary investments is managed by ensuring that these financial assets are placed with: governments; major financial institutions that have been accorded strong investment grade ratings by a primary rating agency; and/or other creditworthy counterparties. An ongoing review evaluates changes in the status of counterparties.

Accounts receivable

Credit risk associated with accounts receivable is inherently managed through the size and diversity of our large customer base, which encompasses substantially all consumer and business sectors in Canada. A program of credit evaluations of customers is followed and the amount of credit extended is limited when we deem it to be necessary. Accounts are considered to be past due (in default) when customers have failed to make contractually required payments when due, which is generally within 30 days of the billing date. Any late payment charges are levied at an industry-based market rate or a negotiated rate on outstanding non-current customer account balances.

Customer accounts receivable, net of allowance for doubtful accounts


As at (millions)		Note		Gross			Allowance			Net ¹
June 30, 2026
Less than 30 days past billing date				$	1,131		$	(18)		$	1,113
30-60 days past billing date					336			(17)			319
61-90 days past billing date					96			(21)			75
More than 90 days past billing date					177			(46)			131
Unbilled customer finance receivables					1,494			(37)			1,457
				$	3,234		$	(139)		$	3,095
Current ²		6(b)		$	2,669		$	(126)		$	2,543
Non-current ³		20			565			(13)			552
				$	3,234		$	(139)		$	3,095
December 31, 2025
Less than 30 days past billing date				$	1,002		$	(23)		$	979
30-60 days past billing date					466			(19)			447
61-90 days past billing date					146			(21)			125
More than 90 days past billing date					206			(45)			161
Unbilled customer finance receivables					1,588			(35)			1,553
				$	3,408		$	(143)		$	3,265
Current ²		6(b)		$	2,809		$	(130)		$	2,679
Non-current ³		20			599			(13)			586
				$	3,408		$	(143)		$	3,265

1	Net amounts represent customer accounts receivable for which an allowance had not been made as at the dates of the Consolidated statements of financial position (see Note 6(b)).

2	Presented in the Consolidated statements of financial position as Accounts receivable.

3	Presented in the Consolidated statements of financial position as Other long-term assets.

We maintain allowances for lifetime expected credit losses related to doubtful accounts. Factors considered when determining allowances for past - due accounts include: current economic conditions (including forward-looking macroeconomic data); historical information (including credit agency reports, if available); reasons for the accounts being past due; and the line of business from which the customer accounts receivable originated. These factors are also considered when determining whether to write off amounts charged to the allowance for doubtful accounts against customer accounts receivable. The doubtful accounts expense is calculated on a specific-identification basis for customer accounts receivable balances above a specific threshold and on a statistically derived allowance basis for the remainder. No customer accounts receivable are written off directly to the doubtful accounts expense; doubtful accounts expense is included in the Consolidated statements of income and other comprehensive income as a part of Goods and services purchased.

The following table presents a summary of the activity related to our allowance for doubtful accounts.


		Three months						Six months
Periods ended June 30 (millions)		2026			2025			2026			2025
Balance, beginning of period		$	145		$	139		$	143		$	134
Additions (doubtful accounts expense)			35			38			63			87
Accounts written off ¹less than recoveries			(43)			(37)			(72)			(85)
Other			2			(1)			5			3
Balance, end of period		$	139		$	139		$	139		$	139

1	For the three-month and six-month periods ended June 30, 2026, accounts that were written off but were still subject to enforcement activity totalled $60 (2025 – $66) and $118 (2025 – $131), respectively

Contract assets

Credit risk associated with contract assets is inherently managed through the size and diversity of our large customer base, which encompasses substantially all consumer and business sectors in Canada. A program of credit evaluations of customers is followed and the amount of credit extended is limited when we deem it to be necessary.


Contract assets, net of impairment allowance

As at (millions)		Gross			Allowance			Net (Note 6(c))
June 30, 2026
To be billed and thus reclassified to accounts receivable during:
The 12-month period ending one year hence		$	576		$	(22)		$	554
The 12-month period ending two years hence			231			(9)			222
Thereafter			43			(2)			41
		$	850		$	(33)		$	817
December 31, 2025
To be billed and thus reclassified to accounts receivable during:
The 12-month period ending one year hence		$	612		$	(22)		$	590
The 12-month period ending two years hence			240			(9)			231
Thereafter			44			(1)			43
		$	896		$	(32)		$	864

We maintain allowances for lifetime expected credit losses related to contract assets. Factors considered when determining the amounts of these allowances include: current economic conditions; historical information (including credit agency reports, if available); and the line of business from which the contract assets originated. These same factors are considered when determining whether to write off amounts charged to the impairment allowance for contract assets against contract assets.

Derivative assets (and derivative liabilities)

Counterparties to our material foreign exchange derivatives are major financial institutions that have been accorded investment grade ratings by a primary credit rating agency. Credit exposure to any single financial institution is limited and counterparties’ credit ratings are monitored. We do not give or receive collateral on swap agreements and hedging items due to our credit rating and those of our counterparties. While we are exposed to the risk of credit losses due to the potential non-performance of our counterparties, we consider this risk remote. Our derivative liabilities do not have credit risk-related contingent features.

(b)

Liquidity risk

As a component of our capital structure financial policies, discussed further in Note 3, we manage liquidity risk by:

●	maintaining a daily cash pooling process that enables us to manage our available liquidity and our liquidity requirements according to our actual needs;

●

maintaining a short - term borrowing agreement associated with trade receivables and unbilled customer finance receivables (Note 22), a non - revolving syndicated credit facility (Note 22), bilateral bank facilities (Note 22), a supply chain financing program (Note 23), a commercial paper program (Note 26(c)) and syndicated credit facilities (Note 26(d));

●	maintaining an in-effect shelf prospectus;

●	continuously monitoring forecast and actual cash flows; and

●	managing maturity profiles of financial assets and financial liabilities.

Our debt maturities in future years are disclosed in Note 26(i). As at June 30, 2026, unchanged from December 31, 2025, TELUS Corporation could offer an unlimited amount of securities in Canada, and $1.9 billion of securities in the United States, qualified pursuant to a Canadian shelf prospectus in effect until January 2029 (December 31, 2025 - January 2029). We believe our investment grade credit ratings contribute to reasonable access to capital markets.

We closely match the contractual maturities of our derivative financial liabilities with those of the risk exposures they are being used to manage.

The expected maturities of our undiscounted financial liabilities do not differ significantly from the contractual maturities, other than as noted in the accompanying tables. The contractual maturities of our undiscounted financial liabilities, including interest thereon (where applicable), are set out in the accompanying tables.


		Non-derivative												Derivative

								Composite long-term debt
								Long-term
		Non-interest						debt,
		bearing						excluding						Currency swap agreement									Currency swap agreement
		financial			Short-term			leases ¹			Leases			amounts to be exchanged									amounts to be exchanged ³
(millions)		liabilities			borrowings ¹			(Note 26)			(Note 26)			(Receive) ²			Pay			Other			(Receive)			Pay			Total
As at June 30, 2026
2026 (remainder of year)		$	3,000		$	22		$	3,067		$	331		$	(2,350)		$	2,257		$	2		$	(468)		$	453		$	6,314
2027			259			1,252			2,830			603			(1,988)			1,841			4			(454)			430			4,777
2028			64			—			3,111			528			(387)			347			3			(486)			510			3,690
2029			8			—			2,493			434			(387)			347			3			—			—			2,898
2030			6			—			2,695			356			(1,381)			1,309			3			—			—			2,988
2031 - 2035			6			—			10,596			789			(4,678)			4,379			15			—			—			11,107
Thereafter			—			—			24,289			805			(3,134)			2,937			16			—			—			24,913
Total		$	3,343		$	1,274		$	49,081		$	3,846		$	(14,305)		$	13,417		$	46		$	(1,408)		$	1,393		$	56,687

								Total (Note 26(i))									$	52,039
As at December 31, 2025
2026		$	3,106		$	37		$	3,754		$	837		$	(1,373)		$	1,356		$	3		$	(845)		$	841		$	7,716
2027			108			939			2,799			739			(1,917)			1,841			3			(52)			47			4,507
2028			62			—			3,137			589			(373)			347			3			(469)			505			3,801
2029			8			—			2,519			422			(373)			347			3			—			—			2,926
2030			6			—			2,977			276			(1,332)			1,309			3			—			—			3,239
2031 - 2035			7			—			10,500			648			(4,512)			4,379			11			—			—			11,033
Thereafter			—			—			23,842			646			(3,023)			2,937			3			—			—			24,405
Total		$	3,297		$	976		$	49,528		$	4,157		$	(12,903)		$	12,516		$	29		$	(1,366)		$	1,393		$	57,627

								Total									$	53,298

Cash outflows in respect of interest payments on our short-term borrowings, sustainability-linked notes, commercial paper, amounts drawn under our credit facilities (if any), other (unsecured) and junior subordinated notes have been calculated based upon the interest rates and, if applicable, foreign exchange rates, in effect as at the relevant statement of financial position date.

The amounts included in undiscounted non-derivative long-term debt in respect of U.S. dollar-denominated long-term debt, and the corresponding amounts in the long-term debt currency swap receive column, have been determined based upon the foreign exchange rates in effect as at the relevant statement of financial position date. The contractual amounts of hedged U.S. dollar-denominated long-term debt at maturity, in effect, are reflected in the long-term debt currency swap pay column as gross cash flows are exchanged pursuant to the currency swap agreements; however, the maturities and gross cash flows for the TELUS Corporation junior subordinated notes reflect the initial fixed-rate reset date.

The amounts included in undiscounted short-term borrowings in respect of U.S. dollar-denominated short-term borrowings, and the corresponding derivative liability amounts, if any, included in the currency swap pay column amounts, have been determined based upon the foreign exchange rates in effect as at the relevant statement of financial position date. The derivative liability hedging amounts, if any, for the contractual amounts of hedged U.S. dollar-denominated short-term borrowings are included in the currency swap pay column amounts as net cash flows are exchanged pursuant to the currency swap agreements. Gross cash flows are exchanged pursuant to European euro – U.S. dollar currency swaps and have been calculated based upon the interest rates and foreign exchange rates in effect as at the relevant statement of financial position date.

(c)

Market risks

Net income and other comprehensive income for the six-month periods ended June 30, 2026 and 2025, could have varied if the Canadian dollar: U.S. dollar exchange rate, the U.S. dollar: European euro exchange rate, market interest rates and virtual power purchase agreement forward element valuation varied by reasonably possible amounts from their actual statement of financial position date amounts.

The sensitivity analysis of our exposure to currency risk has been determined based upon a hypothetical change taking place at the relevant statement of financial position date. We used the U.S. dollar-denominated and European euro-denominated balances and the notional amounts of our derivative financial instruments as at the relevant statement of financial position dates in these calculations.

The sensitivity analysis of our exposure to interest rate risk has been determined based upon a hypothetical change taking place at the beginning of the relevant fiscal year and being held constant through to the statement of financial position date. We used the principal and notional amounts as at the relevant statement of financial position dates in these calculations.

The sensitivity analysis of our exposure to wind discount risk and solar premium risk is based upon a hypothetical change taking place at the relevant statement of financial position date. The notional amounts of the virtual power purchase agreements as at the relevant statement of financial position dates have been used in these calculations.

In the sensitivity analysis, income tax expense is presented on a net basis, using the applicable statutory income tax rates for the reporting periods.


								Other comprehensive
Six-month periods ended June 30		Net income						income						Comprehensive income
(increase (decrease) in millions)		2026			2025			2026			2025			2026			2025
Reasonably possible changes in market risks ¹
10% change in C$: US$ exchange rate
Canadian dollar appreciates		$	—		$	(6)		$	(57)		$	47		$	(57)		$	41
Canadian dollar depreciates		$	—		$	6		$	57		$	(39)		$	57		$	(33)
10% change in US$: € exchange rate
U.S. dollar appreciates		$	(40)		$	14		$	(13)		$	(73)		$	(53)		$	(59)
U.S. dollar depreciates		$	40		$	(14)		$	13		$	73		$	53		$	59
25 basis point change in interest rates
Interest rates increase
Canadian interest rate		$	(4)		$	(3)		$	102		$	72		$	98		$	69
U.S. interest rate		$	(2)		$	—		$	(98)		$	(86)		$	(100)		$	(86)
Combined		$	(6)		$	(3)		$	4		$	(14)		$	(2)		$	(17)
Interest rates decrease
Canadian interest rate		$	4		$	3		$	(106)		$	(75)		$	(102)		$	(72)
U.S. interest rate		$	1		$	—		$	102		$	89		$	103		$	89
Combined		$	5		$	3		$	(4)		$	14		$	1		$	17
20 basis point change in wind discount
Wind discount increases		$	—		$	—		$	(24)		$	(22)		$	(24)		$	(22)
Wind discount decreases		$	—		$	—		$	25		$	22		$	25		$	22
20 basis point change in solar premium
Solar premium increases		$	—		$	—		$	13		$	12		$	13		$	12
Solar premium decreases		$	—		$	—		$	(14)		$	(12)		$	(14)		$	(12)

These sensitivities are hypothetical and should be used with caution. Changes in net income and/or other comprehensive income generally cannot be extrapolated because the relationship of the change in assumption to the change in net income and/or other comprehensive income may not be linear. In this table, the effect of a variation in a particular assumption on the amount of net income and/or other comprehensive income is calculated without changing any other factors; in reality, changes in one factor may result in changes in another, which might magnify or counteract the sensitivities.

The sensitivity analysis assumes that we would realize the changes in exchange rates, market interest rates, wind discount and solar premium; in reality, the competitive marketplaces in which we operate would have an effect on this assumption.

(d)

Fair values

General

The carrying values of cash and temporary investments, accounts receivable, short-term obligations, short-term borrowings, accounts payable and certain provisions (including restructuring provisions) approximate their fair values due to their immediate or short-term maturity. The fair values are determined directly by reference to quoted market prices in active markets.

The fair values of our investment financial assets are based on quoted market prices in active markets or other clear and objective evidence of fair value.

The fair value of our long-term debt, excluding leases, is based on quoted market prices in active markets.

For derivative financial instruments used to manage our exposure to currency risk, we estimated their fair values based on either quoted market prices in active markets for the same or similar financial instruments or the current rates offered to us for financial instruments of the same maturity, as well as discounted future cash flows determined using current rates for similar financial instruments of similar maturities subject to similar risks (such fair value estimates being largely based on the Canadian dollar: U.S. dollar forward exchange rate as at the statements of financial position dates). The fair values of the derivative financial instruments we use to manage our exposure to price risk associated with the purchase of nature - dependent electricity are currently estimated using a discounted cash flow approach and are based on industry-standard forecasts from EDC Associates Ltd. utilizing observable market data. The significant unobservable inputs used in the fair value measurement of the Level 3 derivative financial instruments were wind discount, reflecting 55% (December 31, 2025 – 76%) of the Alberta Interconnected Electrical System pool price, and solar premium, reflecting 82% (December 31, 2025 – 82%) of the Alberta Interconnected Electrical System pool price.

Derivative

The derivative financial instruments that we measure at fair value on a recurring basis subsequent to initial recognition are set out in the following table.


As at ($ in millions except price or rate)			June 30, 2026						December 31, 2025
			Maximum			Fair value ¹			Maximum			Fair value ¹
			maturity	Notional		and carrying			maturity	Notional		and carrying
		Designation	date	amount		value		Price or rate	date	amount		value		Price or rate
Current derivative assets ²
Derivatives used to manage currency risk associated with
U.S. dollar-denominated transactions		HFT ⁴	2027	$	26	$	—	US$1.00: ₱66	2026	$	30	$	—	US$1.00: ₱59
U.S. dollar-denominated transactions		HFH ³	2027	$	528		18	US$1.00: C$1.36	2026	$	134		1	US$1.00: C$1.35
U.S. dollar-denominated debt (Notes 22, 26(b)-(c))		HFH ³	2027	$	3,184		114	US$1.00: C$1.36	2026	$	1,170		1	US$1.00: C$1.37
European euro-denominated transactions swapped to U.S. dollar-denominated transactions		HFT ⁴	2028	$	48		10	€1.00: US$1.09	2028	$	33		6	€1.00: US$1.09
						$	142					$	8
Other long-term assets ² (Note 20)
Derivatives used to manage currency risk associated with
U.S. dollar-denominated long-term debt ⁵ (Note 26(b))		HFH ³	2055	$	6,550	$	87	US$1.00: C$1.31	2055	$	4,219	$	40	US$1.00: C$1.32

Current derivative liabilities²
Derivatives used to manage currency risk associated with
U.S. dollar-denominated transactions		HFT ⁴	2027	$	257	$	11	US$1.00: ₱59	2026	$	254	$	6	US$1.00: ₱58
U.S. dollar-denominated transactions		HFH ³	—	$	—		—	—	2026	$	374		7	US$1.00: C$1.39
U.S. dollar-denominated debt (Notes 22, 26(c))		HFH ³	2026	$	923		—	US$1.00: C$1.42	2026	$	733		10	US$1.00: C$1.39
Derivatives used to manage other price risk associated with
Purchase of electrical power		HFH ³	2047		0.3 TWh ⁶		10	$26.51/MWh⁶	2047		0.3 TWh ⁶		7	$32.41/MWh ⁶
						$	21					$	30
Other long-term liabilities ² (Note 27)
Derivatives used to manage currency risk associated with
U.S. dollar-denominated long-term debt ⁵ (Note 26(c))		HFH ³	2056	$	3,990	$	46	US$1.00: C$1.35	2056	$	7,332	$	102	US$1.00: C$1.33
European euro-denominated transactions swapped to U.S. dollar-denominated transactions		HFT ⁴	2028	$	533		30	€1.00: US$1.09	2028	$	568		44	€1.00: US$1.09
Derivatives used to manage other price risk associated with
Purchase of electrical power		HFH ³	2047		4.7 TWh ⁶		36	$41.63/MWh ⁶	2047		4.9 TWh ⁶		21	$40.92/MWh ⁶
						$	112					$	167

Fair value measured at the reporting date using significant other observable inputs (Level 2), except the fair value of virtual power purchase agreements (which we use to manage the price risk associated with the purchase of electrical power), which is measured at the reporting date using significant unobservable inputs (Level 3). Changes in the fair value of derivative financial instruments classified as Level 3 in the fair value hierarchy were as follows:


		Six months
Periods ended June 30		2026			2025
Unrealized changes in virtual power purchase agreements forward element
Included in net income, excluding income taxes (see (e))		$	3		$	2
Included in other comprehensive income, excluding income taxes (see (e))			(21)			17
Balance, beginning of period – asset (liability)			(28)			(38)
Balance, end of period – asset (liability)		$	(46)		$	(19)

2	Caption reflects line item in which derivative financial instruments are presented in the Consolidated statements of financial position. Derivative financial assets and liabilities are not set off.

Designated as held for hedging (HFH) upon initial recognition (cash flow hedging item), except for derivatives used to manage other price risk associated with the purchase of electrical power which were entered into prior to fiscal 2025 and were designated as HFH on January 1, 2025; hedge accounting is applied. Unless otherwise noted, hedge ratio is 1:1 and is established by assessing the degree of matching between the notional amounts of hedging items and the notional amounts of the associated hedged items (variable notional amounts of hedging items and variable notional amounts of associated hedged items in respect of virtual power purchase agreements).

4	Designated as held for trading (HFT) and classified as fair value through net income upon initial recognition; hedge accounting is not applied.

5	We designate only the spot element as the hedging item. As at June 30, 2026, the foreign currency basis spread included in the fair value of the derivative instruments, which is used for purposes of assessing hedge ineffectiveness, was $(24) (December 31, 2025 – $(22)).

6	Terawatt hours (TWh) are 1x10⁹ kilowatt hours and megawatt hours (MWh) are 1x10³ kilowatt hours.

Non-derivative

Our long-term debt, which is measured at amortized cost, and the fair value thereof, are set out in the following table.

As at (millions)

June 30, 2026

December 31, 2025

Carrying

 

value

Fair value

 

value

Fair value

Long-term debt, excluding leases (Note 26)

27,256

27,412

27,225

27,507

(e)	Recognition of derivative gains and losses

The following table sets out the gains and losses, excluding income tax effects, arising from derivative instruments that are classified as cash flow hedging items and their location within the Consolidated statements of income and other comprehensive income.

Credit risk associated with such derivative instruments, as discussed further in (b), would be the primary source of hedge ineffectiveness. With the exception of the virtual power purchase agreement derivatives, there was no ineffective portion of derivative instruments classified as cash flow hedging items for the periods presented. The ineffective portion of the virtual power purchase agreements arises because they are considered off-market hedging instruments by the transition rules of the amendments to IFRS Accounting Standards in respect of nature-dependent electricity.


		Amount of gain (loss)						Gain (loss) reclassified from other
		recognized in other						comprehensive income to income
		comprehensive income						(effective portion) (Note 11)
		(effective portion) (Note 11)								Amount
Periods ended June 30 (millions)		2026			2025			Location		2026			2025
THREE-MONTH
Derivatives used to manage currency risk associated with
U.S. dollar-denominated purchases		$	10		$	(24)		Goods and services purchased		$	3		$	1
U.S. dollar-denominated debt ¹ (Notes 22, 26(b)-(c))			57			(268)		Financing costs			217			(328)
Net investment in a foreign operation			—			(51)		Financing costs			—			1
			67			(343)					220			(326)
Derivatives used to manage other market risks
Purchase of electrical power			8			35		Goods and services purchased			2			—
Other			—			—		Financing costs			—			1
			8			35					2			1
		$	75		$	(308)				$	222		$	(325)
SIX-MONTH
Derivatives used to manage currency risk associated with
U.S. dollar-denominated purchases		$	21		$	(23)		Goods and services purchased		$	—		$	7
U.S. dollar-denominated debt ¹ (Notes 22, 26(b)-(c))			247			(228)		Financing costs			394			(333)
Net investment in a foreign operation			—			(72)		Financing costs			—			6
			268			(323)					394			(320)
Derivatives used to manage other market risks
Purchase of electrical power			(18)			19		Goods and services purchased			3			2
Other			—			(2)		Financing costs			—			1
			(18)			17					3			3
		$	250		$	(306)				$	397		$	(317)

Amounts recognized in other comprehensive income are net of the change in the foreign currency basis spread (which is used for purposes of assessing hedge ineffectiveness) included in the fair value of the derivative instruments; such amounts for the three-month and six-month periods ended June 30, 2026, totalled $10 (2025 - $8) and $15 (2025 - $(8)), respectively.

The following table sets out the ineffectiveness gains and losses included in Goods and services purchased in the Consolidated statements of income and other comprehensive income that arise from derivative instruments classified as held for hedging and designated as being in a hedging relationship.


	Gain (loss) on derivatives recognized in income
	Three months				Six months
Periods ended June 30 (millions)	2026		2025		2026		2025
Derivatives used to manage other market risks (purchase of electrical power)	$	(1)	$	2	$	—	$	3

The following table sets out the gains and losses included in Financing costs in the Consolidated statements of income and other comprehensive income that arise from derivative instruments classified as held for trading and not designated as being in a hedging relationship.

Gain (loss) on derivatives recognized in income

Three months

Six months

Periods ended June 30 (millions)

 

2026

 

2025

 

2026

 

2025

Derivatives used to manage currency risk

(7)

(1)

(8)

(6)