Document


		Three months				Nine months
Periods ended September 30 (US$ millions except earnings per share)	Note	2022		2021		2022		2021
REVENUE	3	$	615	$	556	$	1,838	$	1,594

OPERATING EXPENSES
Salaries and benefits		346		309		1,044		890
Goods and services purchased		111		110		344		307
Share-based compensation	4	6		21		20		66
Acquisition, integration and other		7		6		17		18
Depreciation	10	29		29		88		85
Amortization of intangible assets	11	32		34		102		106
		531		509		1,615		1,472

OPERATING INCOME		84		47		223		122

OTHER EXPENSES

Interest expense	5	10		10		29		36
Foreign exchange (gain) loss		(11)		(1)		(25)		1
INCOME BEFORE INCOME TAXES		85		38		219		85
Income tax expense	6	26		15		70		43
NET INCOME		59		23		149		42

OTHER COMPREHENSIVE INCOME (LOSS)
Items that may subsequently be reclassified to income
Change in unrealized fair value of derivatives designated as held-for-hedging		26		11		67		30
Exchange differences arising from translation of foreign operations		(79)		(30)		(176)		(72)
		(53)		(19)		(109)		(42)




COMPREHENSIVE INCOME		$	6	$	4	$	40	$	—

EARNINGS PER SHARE	7
Basic		$	0.22	$	0.09	$	0.56	$	0.16
Diluted		$	0.22	$	0.09	$	0.55	$	0.16

TOTAL WEIGHTED AVERAGE SHARES OUTSTANDING (millions)
Basic	7	266		266		266		263
Diluted	7	269		269		269		265


As at (US$ millions)	Note	September 30, 2022		December 31, 2021
ASSETS
Current assets
Cash and cash equivalents		$	143	$	115
Accounts receivable	8	427		414
Due from affiliated companies	15(a)	50		53
Income and other taxes receivable		1		6
Prepaid and other assets		47		36
Current portion of derivative assets	9	19		3
		687		627
Non-current assets
Property, plant and equipment, net	10	417		405
Intangible assets, net	11	1,007		1,158
Goodwill	11	1,288		1,380
Derivative assets	9	39		—
Deferred income taxes		9		23
Other long-term assets	16(b)	26		33
		2,786		2,999
Total assets		$	3,473	$	3,626

LIABILITIES AND OWNERS’ EQUITY
Current liabilities

Accounts payable and accrued liabilities	16(b)	$	295	$	336
Due to affiliated companies	15(a)	81		71
Income and other taxes payable		83		67
Current maturities of long-term debt	12	315		328
Current portion of derivative liabilities	9	9		5
		783		807
Non-current liabilities
Long-term debt	12	671		820
Derivative liabilities	9	—		17
Deferred income taxes		280		305
Other long-term liabilities		21		22
		972		1,164
Total liabilities		1,755		1,971

Owners’ equity		1,718		1,655
Total liabilities and owners’ equity		$	3,473	$	3,626

Contingent liabilities	14


(millions)	Note	Number of shares	Share capital		Contributed surplus		Retained earnings		Accumulated other comprehensive income (loss)		Total









Balance as at January 1, 2021		245	$	989	$	—	$	33	$	89	$	1,111
Net income		—	—		—		42		—		42
Other comprehensive loss		—	—		—		—		(42)		(42)
Class A to E shares exchanged or redesignated		(245)	(994)		—		—		—		(994)
Multiple Voting Shares redesignated from Class A to D shares		236	884		—		—		—		884
Subordinate Voting Shares redesignated from Class C to E shares		9	110		—		—		—		110
Multiple Voting Shares converted to Subordinate Voting Shares		(36)	(132)		—		—		—		(132)
Subordinate Voting Shares converted from Multiple Voting Shares		36	132		—		—		—		132
Subordinate Voting Shares issued in public offering		21	525		—		—		—		525
Share issuance costs, net of taxes		—	(25)		—		—		—		(25)
Share-based compensation	4	—	(1)		18		(1)		—		16
Balance as at September 30, 2021		266	$	1,488	$	18	$	74	$	47	$	1,627

Balance as at January 1, 2022		266	$	1,490	$	24	$	107	$	34	$	1,655
Net income		—	—		—		149		—		149
Other comprehensive loss		—	—		—		—		(109)		(109)

Share-based compensation	4	—	10		14		(1)		—		23
Balance as at September 30, 2022		266	$	1,500	$	38	$	255	$	(75)	$	1,718


		Three months				Nine months
Periods ended September 30 (US$ millions)	Note	2022		2021		2022		2021
OPERATING ACTIVITIES
Net income		$	59	$	23	$	149	$	42
Adjustments:
Depreciation and amortization	10,11	61		63		190		191
Interest expense	5	10		10		29		36
Income tax expense	6	26		15		70		43
Share-based compensation	4	6		21		20		66

Change in market value of derivatives and other		(26)		(1)		(23)		(6)
Net change in non-cash operating working capital	16(c)	17		(11)		(19)		(29)
Share-based compensation payments	4	(8)		(13)		(14)		(30)
Interest paid		(5)		(5)		(16)		(21)
Income taxes paid, net		(16)		(16)		(49)		(74)
Cash provided by operating activities		124		86		337		218

INVESTING ACTIVITIES
Cash payments for capital assets	16(c)	(26)		(29)		(76)		(67)
Cash receipts (payments) for other assets		7		—		(13)		—
Cash payments for acquisitions, net		—		(11)		—		(11)
Cash used in investing activities		(19)		(40)		(89)		(78)

FINANCING ACTIVITIES
Shares issued		—		1		2		526
Share issuance costs		—		(2)		—		(34)
Withholding taxes paid related to net share settlement of equity awards	4(b)	—		(3)		(1)		(3)
Repayment of long-term debt	16(d)	(78)		(69)		(207)		(688)
Long-term debt issued	16(d)	—		39		—		39
Cash used in financing activities		(78)		(34)		(206)		(160)

Effect of exchange rate changes on cash and cash equivalents		(7)		(1)		(14)		(3)

CASH POSITION
Increase (decrease) in cash and cash equivalents		20		11		28		(23)
Cash and cash equivalents, beginning of period		123		119		115		153
Cash and cash equivalents, end of period		$	143	$	130	$	143	$	130


TELUS International (Cda) Inc. (TELUS International) is a leading digital customer experience innovator that designs, builds and delivers next-generation solutions, including AI and content moderation, for global and disruptive brands. TELUS International was incorporated under the Business Corporations Act (British Columbia) on January 2, 2016, and is a subsidiary of TELUS Corporation. TELUS International maintains its registered office at 510 West Georgia Street, Vancouver, British Columbia. The terms we, us, our or ourselves are used to refer to TELUS International and, where the context of the narrative permits or requires, its subsidiaries. Additionally, the term TELUS Corporation is a reference to TELUS Corporation, and where the context of the narrative permits or requires, its subsidiaries, excluding TELUS International.	Notes to the condensed interim consolidated financial statements		Page
	General application
	1.	Condensed interim consolidated financial statements	5
	2.	Capital structure financial policies	6
	Consolidated results of operations focused
	3.	Revenue	6
	4.	Share-based compensation	7
	5.	Interest expense	9
	6.	Income taxes	9
	7.	Earnings per share	10
	Consolidated financial position focused
	8.	Accounts receivable	11
	9.	Financial instruments	12
	10.	Property, plant and equipment	13
	11.	Intangible assets and goodwill	13
	12.	Long-term debt	14
	13.	Share capital	15
	14.	Contingent liabilities	16
	Other
	15.	Related party transactions	16
	16.	Additional financial information	18

The notes presented in our condensed interim consolidated financial statements include only significant events and transactions and are not fully inclusive of all matters normally disclosed in our annual audited financial statements; thus, our interim consolidated financial statements are referred to as condensed. Our financial results may vary from period to period during any fiscal year. The seasonality in our business, and consequently, our financial performance, mirrors that of our clients. Our revenues are typically higher in the third and fourth quarters than in other quarters.

These condensed interim consolidated financial statements should be read in conjunction with our audited consolidated financial statements for the year ended December 31, 2021, and are expressed in United States dollars and follow the same accounting policies and methods of their application as set out in our audited consolidated financial statements for the year ended December 31, 2021, other than as described in the section “Change in presentation” below. The generally accepted accounting principles that we use are International Financial Reporting Standards as issued by the International Accounting Standards Board (IFRS-IASB). Our condensed interim consolidated financial statements comply with International Accounting Standard 34, Interim Financial Reporting and reflect all adjustments (which are of a normal recurring nature) that are, in our opinion, necessary for a fair statement of the results for the interim periods presented.

In February 2021, the International Accounting Standards Board issued narrow-scope amendments to IAS 1, Presentation of Financial Statements, IFRS Practice Statement 2, Making Materiality Judgements and IAS 8, Accounting Polices, Changes in Accounting Estimates and Errors. The amendments are effective for annual periods beginning on or after January 1, 2023, although earlier application is permitted. The amendments will require the disclosure of material accounting policy information rather than disclosing significant accounting policies and clarify how to distinguish changes in accounting policies from changes in accounting estimates. We are currently assessing the impacts of the amended standards, but do not expect that our financial disclosure will be materially affected by the application of the amendments.

In May 2021, the International Accounting Standards Board issued targeted amendments to IAS 12, Income Taxes. The amendments are effective for annual periods beginning on or after January 1, 2023, although earlier application is permitted. With a view to reducing diversity in reporting, the amendments will clarify that companies are required to recognize deferred taxes on transactions where both assets and liabilities are recognized, such as with leases and asset retirement (decommissioning) obligations. Based upon our current facts and circumstances, we do not expect our financial performance or disclosure to be materially affected by the application of the amended standard.

In the management of capital and in its definition, we include owners’ equity (excluding accumulated other comprehensive income), long-term debt (including long-term credit facilities and any hedging assets or liabilities associated with our long-term debt, net of amounts recognized in accumulated other comprehensive income and excluding lease liabilities) and cash and cash equivalents. We manage capital by monitoring the financial covenants in our credit facility (Note 12).

We manage our capital structure and make adjustments to it in light of changes in economic conditions and the risk characteristics of our business. In order to maintain or adjust our capital structure, we may issue new shares, issue new debt with different terms or characteristics, which may be used to replace existing debt, or pay down our debt balance with cash flows from operations.

We earn revenue pursuant to contracts with our clients, who operate in various industry verticals. In the first quarter of 2022, we revised our revenue by vertical disaggregation to include our top strategic and growth verticals, including Banking, Financial Services and Insurance vertical, and we have grouped our Healthcare vertical as part of Other.


	Three months				Nine months
Periods ended September 30 (millions)	2022		2021		2022		2021
Tech and Games	$	289	$	251	$	856	$	719
Communications and Media	150		136		432		397
eCommerce and FinTech	67		70		221		186
Banking, Financial Services and Insurance	42		25		127		69
Travel and Hospitality	19		16		55		43
Other	48		58		147		180
	$	615	$	556	$	1,838	$	1,594

We serve our clients, who are primarily domiciled in North America, from multiple delivery locations across four geographic regions. In addition, our TIAI Data Solutions business has clients that are largely supported by crowdsourced contractors that are globally dispersed and not limited to the physical locations of our delivery centres. The following table presents our earned revenue disaggregated by geographic region, based on location of our delivery centre or where service was provided, for the following periods:

We have various restricted share unit award types, including equity-accounted restricted share units (RSUs) and performance restricted share units (PSUs), and liability-accounted restricted share units (Phantom RSUs) and performance restricted share units (Phantom PSUs). All restricted share units are nominally equal in value to one TELUS International subordinate voting share, and liability-accounted restricted share units are settled in cash. Beginning January 1, 2021, restricted share unit awards granted were equity-accounted. The following table presents a summary of the activity related to our restricted share units:


	Three months				Nine months
	Number of units		Weighted average grant-date		Number of units		Weighted average grant-date
Period ended September 30, 2022	Non-vested	Vested	fair value		Non-vested	Vested	fair value
Outstanding, January 1, 2022	1,965,413	—	$	25.47	1,850,807	—	$	21.94
Granted or exchange of rights	—	59,512	29.41		806,395	59,512	26.52
Vested	(1,072)	1,072	35.01		(520,717)	520,717	17.76
Exercised1	—	(59,512)	29.41		—	(579,157)	18.93
Forfeited	(16,112)	—	23.89		(188,256)	—	17.70
Outstanding, September 30, 2022	1,948,229	1,072	$	25.48	1,948,229	1,072	$	25.48

1During the three-month period ended September 30, 2022, 59,512 restricted share units were exercised and settled with subordinate voting shares issued from treasury. During the nine-month period ended September 30, 2022, 579,157 restricted share units were exercised, of which 323,031 RSUs were exercised and settled with subordinate voting shares issued from treasury, and 256,126 Phantom RSUs were cash-settled for $6 million based on an average share price of $23.75.

Each Phantom TELUS Corporation RSU is nominally equal in value to the market price of one TELUS Corporation common share. The Phantom TELUS Corporation RSUs are historic grants made to certain employees, and no new awards are expected to be made. The following table presents a summary of the activity related to Phantom TELUS Corporation RSUs:


	Three months				Nine months
Period ended September 30, 2022	Number of units		Weighted average grant-date fair value		Number of units		Weighted average grant-date fair value
Canadian $ denominated	Non-vested	Vested			Non-vested	Vested
Outstanding, January 1, 2022	—	—	$	—	78,011	—	$	24.20
Vested	—	—	—		(59,549)	59,549	24.13
Exercised1	—	—	—		—	(59,549)	24.13
Dividends	—	—	—		1,568	—	30.85
Forfeited	—	—	—		(20,030)	—	24.92
Outstanding, September 30, 2022	—	—	$	—	—	—	$	—

We have equity-accounted share option awards (Share Options), and liability-accounted share option awards (Phantom Share Options). Share Options grant the right to the employee recipient to purchase and receive a subordinate voting share of TELUS International for a pre-determined exercise price. Phantom Share Options grant the right to the employee recipient to receive cash equal to the intrinsic value of the share option award, determined as the difference between the market price of a subordinate voting share of TELUS International and the exercise price. Share option awards are generally exercisable for a period of ten years from the time of grant. Beginning January 1, 2021, share option awards granted were equity-accounted.


	Three months				Nine months
	Number of share option award units		Weighted average exercise price		Number of share option award units		Weighted average exercise price
Period ended September 30, 2022	Non-vested	Vested			Non-vested	Vested
Outstanding, January 1, 2022	632,989	2,096,582	$	11.21	1,084,185	2,096,582	$	10.74
Vested	—	—	—		(293,860)	293,860	8.46
Exercised1	—	—	—		—	(293,860)	8.46
Forfeited	—	—	—		(157,336)	—	6.80
Outstanding, September 30, 20222	632,989	2,096,582	$	11.21	632,989	2,096,582	$	11.21
Exercisable, September 30, 2022	—	2,096,582	$	7.45	—	2,096,582	$	7.45

1During the nine-month period ended September 30, 2022, 293,860 share option awards were exercised at an average share price of $23.75; 159,354 Share Options were net-settled with subordinate voting shares issued from treasury, net of withholding taxes paid of $1 million, and 134,506 Phantom Share Options were exercised and cash-settled for $2 million.


	Three months				Nine months
Periods ended September 30 (millions)	2022		2021		2022		2021
Current income tax expense
For current reporting period	$	27	$	22	$	71	$	62
Adjustments recognized in the current period for income tax of prior periods	3		—		3		—
	30		22		74		62
Deferred income tax expense (recovery)
Arising from the origination and reversal of temporary differences	(5)		(5)		(5)		(17)
Adjustments recognized in the current period for income tax of prior periods	1		(2)		1		(2)
	(4)		(7)		(4)		(19)
	$	26	$	15	$	70	$	43


	Three months								Nine months
Periods ended September 30 (millions except percentages)	2022				2021				2022				2021
Income taxes computed at applicable statutory income tax rates	$	19	23.3	%	$	9	23.9	%	$	51	23.5	%	$	20	23.7	%
Non-deductible items	1				4				5				12
Withholding and other taxes	6				5				18				13
Losses not recognized	2				2				5				5
Foreign tax differential	(6)				(4)				(14)				(5)
Adjustments recognized in the current period for income tax of prior periods	4				(2)				4				(2)
Other	—				1				1				—
Income tax expense	$	26	30.6	%	$	15	39.5	%	$	70	32.0	%	$	43	50.6	%

Diluted earnings per share is calculated to give effect to the potential dilutive effect that could occur if additional equity shares were assumed to be issued under securities or instruments that may entitle their holders to obtain equity shares in the future, such as share option awards and restricted share units. The number of additional shares for inclusion in the diluted earnings per share calculation was determined using the treasury stock method.


	Three months				Nine months
Periods ended September 30 (millions except earnings per share)	2022		2021		2022		2021
Net income for the period	$	59	$	23	$	149	$	42
Weighted average number of equity shares outstanding	266		266		266		263
Dilutive effect of share-based compensation	3		3		3		2
Weighted average number of diluted equity shares outstanding	269		269		269		265
Diluted earnings per share	$	0.22	$	0.09	$	0.55	$	0.16


As at (millions)	September 30, 2022		December 31, 2021
Customer accounts receivable – billed, net of allowance for doubtful accounts
Less than 30 days past billing date	$	150	$	162
30-60 days past billing date	35		39
61-90 days past billing date	7		3
More than 90 days past billing date	10		7
	202		211
Accounts receivable – unbilled	209		175
Other receivables	16		28
Total	$	427	$	414

We maintain allowances for lifetime expected credit losses related to doubtful accounts. Current economic conditions (including forward-looking macroeconomic data), historical information (including credit agency reports, if available), reasons for the accounts being past due and line of business from which the customer accounts receivable arose are all considered when determining whether to make allowances for past-due accounts. The same factors are considered when determining whether to write off amounts charged to the allowance for doubtful accounts against the customer accounts receivable. The doubtful accounts expense is calculated on a specific-identification basis for customer accounts receivable over a specific balance threshold and on a statistically derived allowance basis for the remainder. No customer accounts receivable balances are written off directly to bad debt expense.

The fair values of the derivative financial instruments we use to manage our exposure to currency risks are estimated based upon quoted market prices in active markets for the same or similar financial instruments or on 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 subject to similar risks and maturities (such fair value estimates being largely based on the European euro: US$ and Philippine peso: US$ forward exchange rates as at the statement of financial position dates).


		September 30, 2022							December 31, 2021
As at (millions)	Designation	Maximum maturity date	Notional amount		Fair value and carrying value		Price or rate		Maximum maturity date	Notional amount		Fair value and carrying value		Price or rate
Current assets1
Derivatives used to manage
Currency risks arising from Indian rupee denominated purchases	—	—	$	—	$	—	—		2022	$	10	$	—	USD:1.00 INR:76.21
Currency risks arising from Euro business acquisition	HFH3	2023	$	21	$	19	USD:1.00 EUR:0.86		2022	$	21	$	3	USD:1.00 EUR:0.86

Non-current assets
Derivatives used to manage
Currency risks arising from Euro business acquisition	HFH3	2025	$	347	$	39	USD:1.00 EUR:0.86		—	$	—	$	—	—



Current liabilities1
Derivatives used to manage
Currency risks arising from Indian rupee denominated purchases	HFT2	2022	$	—	$	—	—		2022	$	2	$	—	USD:1.00 INR:74.99
Currency risks arising from Philippine peso denominated purchases	HFT2	2023	$	109	$	9	USD:1.00 PHP:52.05		2022	$	92	$	3	USD:1.00 PHP:50.1
Interest rate risk associated with non-fixed rate credit facility amounts drawn	HFH3	2022	$	90	$	—	2.64	%	2022	$	95	$	2	2.64	%

Non-current liabilities1
Derivatives used to manage
Currency risks arising from Euro business acquisition	—	—	$	—	$	—	—		2025	$	362	$	17	USD:1.00 EUR:0.86

3Designated as held for hedging (HFH) upon initial recognition (cash flow hedging item); 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.


	Owned assets										Right-of-use lease assets
(millions)	Computer hardware and network assets		Buildings and leasehold improvements		Furniture and equipment		Assets under construction		Total		Buildings		Total
At cost
As at January 1, 2022	$	48	$	119	$	231	$	26	$	424	$	317	$	741
Additions	1		7		18		45		71		51		122
Dispositions, retirements and other	(1)		(3)		(10)		(2)		(16)		(4)		(20)
Transfers	2		14		21		(37)		—		—		—
Foreign exchange	(2)		(6)		(11)		(2)		(21)		(20)		(41)
As at September 30, 2022	$	48	$	131	$	249	$	30	$	458	$	344	$	802
Accumulated depreciation
As at January 1, 2022	$	26	$	45	$	138	$	—	$	209	$	127	$	336
Depreciation	5		11		30		—		46		42		88
Dispositions, retirements and other	(1)		(5)		(9)		—		(15)		(4)		(19)
Foreign exchange	(1)		(1)		(7)		—		(9)		(11)		(20)
As at September 30, 2022	$	29	$	50	$	152	$	—	$	231	$	154	$	385
Net book value
As at December 31, 2021	$	22	$	74	$	93	$	26	$	215	$	190	$	405
As at September 30, 2022	$	19	$	81	$	97	$	30	$	227	$	190	$	417


(millions)	Customer relationships		Crowdsource assets		Software		Brand and other		Total intangible assets		Goodwill		Total intangible assets and goodwill
At cost
As at January 1, 2022	$	1,182	$	120	$	57	$	37	$	1,396	$	1,380	$	2,776
Additions	—		—		9		—		9		—		9
Dispositions, retirements and other	—		—		(11)		—		(11)		—		(11)
Foreign exchange	(74)		—		(1)		(5)		(80)		(92)		(172)
As at September 30, 2022	$	1,108	$	120	$	54	$	32	$	1,314	$	1,288	$	2,602
Accumulated amortization
As at January 1, 2022	$	173	$	15	$	31	$	19	$	238	$	—	$	238
Amortization	72		11		11		8		102		—		102
Dispositions, retirements and other	—		—		(11)		—		(11)		—		(11)
Foreign exchange	(17)		—		(1)		(4)		(22)		—		(22)
As at September 30, 2022	$	228	$	26	$	30	$	23	$	307	$	—	$	307
Net book value
As at December 31, 2021	$	1,009	$	105	$	26	$	18	$	1,158	$	1,380	$	2,538
As at September 30, 2022	$	880	$	94	$	24	$	9	$	1,007	$	1,288	$	2,295

On October 27, 2022, we announced a definitive agreement to acquire WillowTree, a full-service digital product provider focused on end user experiences, such as native mobile applications and unified web interfaces. Under the agreement, TELUS International will acquire WillowTree for a total agreed-upon enterprise value of $1,225 million, inclusive of $210 million of assumed debt. Of the remainder, $125 million will be in the form of TELUS International subordinate voting shares, approximately $160 million is expected to be retained by certain eligible management team members and will be settled subject to certain performance-based criteria, and the balance will be paid in cash upon closing. The acquisition is anticipated to close in January 2023, and is subject to customary closing conditions and regulatory approvals.

The portion retained by WillowTree management team members is expected to be approximately 15% of the total WillowTree equity, subject to final determination, and we will provide written put options which will become exercisable in tranches over a three-year period starting in 2026. We currently estimate the acquisition-date fair value of these written put options for accounting purposes to be approximately $200 million, which may be settled in cash or in a combination of cash and up to 70% in subordinate voting shares at our option, and this will be recorded as a provision. Concurrent with this acquisition, WillowTree management team members will provide us with purchased call options, which substantially mirror the written put options. The cash portion of the purchase consideration will be funded with available cash and borrowings under an amended credit facility.

Concurrent with our agreement to acquire WillowTree, we have secured a commitment from our lender to expand our existing credit facility to an aggregate $2 billion credit facility, consisting of an $800 million revolving credit facility and
$1.2 billion in term loans payable in five years, subject to the closing of the WillowTree acquisition. We expect to borrow under the expanded credit facility at the time of the closing to fund a portion of the cash purchase consideration of the WillowTree acquisition.

As at September 30, 2022, we had a credit facility secured by our assets with a syndicate of financial institutions, expiring on January 28, 2025. The credit facility is comprised of $850 million revolving components, and amortizing $775 million term loan components (comprised of term loans with $547 million and $228 million outstanding balances). The outstanding revolving and term loan components had an effective interest rate of 4.57% as at September 30, 2022 (December 31, 2021 - 1.87%).


As at (millions)	September 30, 2022						December 31, 2021
	Revolving component		Term loan component1		Total		Revolving component		Term loan component1		Total
Available	$	839	N/A		$	839	$	716	N/A		$	716
Outstanding
Due to TELUS Corporation	$	1	$	68	$	69	$	16	$	71	$	87
Due to Other	10		707		717		118		736		854
	$	11	$	775	$	786	$	134	$	807	$	941
Total	$	850	$	775	$	1,625	$	850	$	807	$	1,657

The credit facility bears interest at prime rate, U.S. dollar base rate, a bankers’ acceptance rate or London interbank offered rate (LIBOR) (all such terms as used or defined in the credit facility), plus applicable margins. The credit facility contains customary representations, warranties and covenants, including two financial quarter-end ratio tests. Net debt to EBITDA ratio

must not exceed 4.50:1.00 for each quarter in fiscal 2022 and 3.75:1.00 subsequently. The EBITDA to debt service (interest and scheduled principal repayment) ratio must not be less than 1.50:1.00, all as defined in the credit facility. If an acquisition with an aggregate cash consideration in excess of $60 million occurs in any twelve-month period, the maximum permitted net debt to EBITDA ratio per credit agreement may be increased to 4.50:1.00 and shall return to 3.75:1.00 after eight fiscal quarters.

The term loan component of our credit facility is subject to an amortization schedule requiring that 1.25% of the principal advanced be repaid each quarter of the term of the agreement, with the balance due at maturity. The $228 million term loan matures on December 22, 2022 and the $547 million term loan matures on January 28, 2025.

Subsequent to September 30, 2022, as described in Note 11(b), concurrent with our announcement to acquire WillowTree, we have secured a commitment from our lender to expand our existing credit facility to an aggregate $2 billion credit facility, consisting of an $800 million revolving credit facility and $1.2 billion in term loans payable in five years, subject to the closing of the WillowTree acquisition.


Composite long-term debt denominated in	U.S dollars						European euros		Other currencies
For each fiscal year ending December 31(millions)	Long-term debt, excluding leases		Leases		Total		Leases		Leases		Total
2022 (remainder of the year)	$	236	$	5	$	241	$	3	$	5	$	249
2023	30		20		50		12		22		84
2024	30		12		42		11		19		72
2025	490		11		501		9		12		522
2026 and thereafter	—		20		20		29		16		65
Future cash outflows in respect of composite long-term debt principal repayments	786		68		854		64		74		992
Future cash outflows in respect of associated interest and like carrying costs1	59		13		72		10		11		93
Undiscounted contractual maturities	$	845	$	81	$	926	$	74	$	85	$	1,085

In the normal course of operations, we provide indemnification in conjunction with certain transactions. The terms of these indemnification obligations range in duration. These indemnifications would require us to compensate the indemnified parties for costs incurred as a result of failure to comply with contractual obligations or litigation claims or statutory sanctions or damages that may be suffered by an indemnified party. In some cases, there is no maximum limit on these indemnification obligations. The overall maximum amount of an indemnification obligation will depend on future events and conditions and therefore cannot be reasonably estimated. Where appropriate, an indemnification obligation is recorded as a liability. Other than obligations recorded as liabilities at the time of such transactions, historically we have not made significant payments under these indemnifications. As at September 30, 2022, we had no liability recorded in respect of indemnification obligations (December 31, 2021 - $nil).

We are party to various legal proceedings and claims that arise in the ordinary course of business. The ultimate outcome of these matters is inherently uncertain. Therefore, if one or more of these matters were resolved against us for amounts in excess of management's estimates of loss, or if any outcome becomes more likely than not and estimable, our results of operations and financial condition could be adversely affected.

TELUS Corporation and its subsidiaries receive customer care, integrated business process outsourcing and information technology outsourcing services from us, and provide services (including people, network, finance, communications, and regulatory) to us. We also participate in defined benefit pension plans that share risks between TELUS Corporation and its subsidiaries.


	2022						2021
Three months ended September 30 (millions)	TELUS Corporation (parent)		Subsidiaries of TELUS Corporation		Total		TELUS Corporation (parent)		Subsidiaries of TELUS Corporation		Total
Transactions with TELUS Corporation and subsidiaries
Revenues from services provided to	$	—	$	108	$	108	$	—	$	90	$	90
Goods and services purchased from	—		(8)		(8)		—		(7)		(7)
	—		100		100		—		83		83
Receipts from related parties	—		(104)		(104)		—		(90)		(90)
Payments to related parties			12		12		3		—		3
Payments (made) collected by related parties on our behalf and other adjustements1	6		(9)		(3)		(19)		20		1
Foreign exchange	3		—		3		—		—		—
Change in balance	9		(1)		8		(16)		13		(3)
Accounts with TELUS Corporation and subsidiaries
Balance, beginning of period	(78)		39		(39)		(8)		4		(4)
Balance, end of period	$	(69)	$	38	$	(31)	$	(24)	$	17	$	(7)
Accounts with TELUS Corporation and subsidiaries
Due from affiliated companies	$	—	$	50	$	50	$	—	$	52	$	52
Due to affiliated companies	(69)		(12)		(81)		(24)		(35)		(59)
	$	(69)	$	38	$	(31)	$	(24)	$	17	$	(7)


	2022						2021
Nine months ended September 30 (millions)	TELUS Corporation (parent)		Subsidiaries of TELUS Corporation		Total		TELUS Corporation (parent)		Subsidiaries of TELUS Corporation		Total
Transactions with TELUS Corporation and subsidiaries
Revenues from services provided to	$	—	$	302	$	302	$	—	$	258	$	258
Goods and services purchased from	—		(20)		(20)		—		(23)		(23)
	—		282		282		—		235		235
Receipts from related parties	—		(307)		(307)		—		(258)		(258)
Payments to related parties	1		12		13		20		—		20
Payments (made) collected by related parties on our behalf and other adjustements1	(32)		25		(7)		(71)		50		(21)
Foreign exchange	6		—		6		—		(1)		(1)
Change in balance	(25)		12		(13)		(51)		26		(25)
Accounts with TELUS Corporation and subsidiaries
Balance, beginning of period	(44)		26		(18)		27		(9)		18
Balance, end of period	$	(69)	$	38	$	(31)	$	(24)	$	17	$	(7)
Accounts with TELUS Corporation and subsidiaries
Due from affiliated companies	$	—	$	50	$	50	$	—	$	52	$	52
Due to affiliated companies	(69)		(12)		(81)		(24)		(35)		(59)
	$	(69)	$	38	$	(31)	$	(24)	$	17	$	(7)

1Certain key management personnel at TELUS International participate in the Pension Plan for Management and Professional Employees of TELUS Corporation, a defined benefit pension plan. During the nine-month period ended September 30, 2022, TELUS Corporation incurred $2 million (September 30, 2021 - $nil) for these individuals, which are excluded from the table above.

During the nine-month period ended September 30, 2022, share-based compensation expense of $10 million was recognized, and we granted 301,190 RSUs and 229,627 PSUs, with total grant-date fair value of $14 million. 338,499 equity-accounted awards were exercised and settled with subordinate voting shares issued from treasury, and 330,456 liability-accounted awards were exercised and cash-settled for $7 million.

During the nine-month periods ended September 30, 2022 and 2021, we had three customers which accounted for more than 10% of our operating revenue. Our largest client during the nine-month period ended September 30, 2022 and second largest client during the nine-month period ended September 30, 2021 was TELUS Corporation, our controlling shareholder, accounting for approximately 16.5% and 16.2% of our revenue, respectively. Our second largest client during the nine-month period ended September 30, 2022 and largest client during the nine-month period ended September 30, 2021, a leading social media company, accounted for approximately 16.1% and 17.0% of our revenue, respectively. Google, our third largest client, accounted for approximately 11.8% and 11.2% of our revenue for the nine-month periods ended September 30, 2022 and 2021, respectively.


As at (millions)	September 30, 2022		December 31, 2021
Other long-term assets
Lease deposits and other	$	20	$	26
Other	6		7
	$	26	$	33
Accounts payable and accrued liabilities
Trade accounts payable	$	16	$	79
Accrued liabilities	88		75
Payroll and other employee-related liabilities	170		144
Share-based compensation liability	9		22
Other	12		16
	$	295	$	336


	Three months				Nine months
Periods ended September 30 (millions)	2022		2021		2022		2021
Net change in non-cash operating working capital
Accounts receivable	$	(2)	$	(25)	$	(30)	$	(98)
Due to and from affiliated companies, net	—		3		21		25
Prepaid expenses	4		2		(2)		(14)
Other long-term assets	1		1		7		6
Accounts payable and accrued liabilities	1		6		(22)		63
Income and other taxes receivable and payable, net	15		(3)		8		(8)
Other long-term liabilities	(2)		5		(1)		(3)
	$	17	$	(11)	$	(19)	$	(29)
Cash payments for capital assets
Capital asset additions
Capital expenditures
Property, plant and equipment, excluding right-of-use assets	$	(24)	$	(22)	$	(71)	$	(63)
Intangible assets	(2)		(1)		(9)		(3)
	(26)		(23)		(80)		(66)
Change in accrued payables related to the purchase of capital assets	—		(6)		4		(1)
	$	(26)	$	(29)	$	(76)	$	(67)


			Statements of cash flows				Non-cash changes
Three-month period ended September 30, 2022 (millions)	Beginning of Period		Issued or received		Redemptions, repayments or payments		Foreign exchange movement		Other		End of period
Long-term debt
Credit facility	$	848	$	—	$	(62)	$	—	$	—	$	786
Lease liabilities	210		—		(16)		(10)		22		206
Deferred debt transaction costs	(7)		—		—		—		1		(6)
	$	1,051	$	—	$	(78)	$	(10)	$	23	$	986

			Statements of cash flows				Non-cash changes
Three-month period ended September 30, 2021 (millions)	Beginning of Period		Issued or received		Redemptions, repayments or payments		Foreign exchange movement		Other		End of period
Long-term debt
Credit facility	$	983	$	39	$	(52)	$	—	$	—	$	970
Lease liabilities	203		—		(17)		—		29		215
Deferred debt transaction costs	(10)		—		—		—		1		(9)
	$	1,176	$	39	$	(69)	$	—	$	30	$	1,176


			Statements of cash flows				Non-cash changes
Nine-month period ended September 30, 2022 (millions)	Beginning of Period		Issued or received		Redemptions, repayments or payments		Foreign exchange movement		Other		End of period
Long-term debt
Credit facility	$	941	$	—	$	(155)	$	—	$	—	$	786
Lease liabilities	215		—		(52)		(18)		61		206
Deferred debt transaction costs	(8)		—		—		—		2		(6)
	$	1,148	$	—	$	(207)	$	(18)	$	63	$	986

			Statements of cash flows				Non-cash changes
Nine-month period ended September 30, 2021 (millions)	Beginning of Period		Issued or received		Redemptions, repayments or payments		Foreign exchange movement		Other		End of period
Long-term debt
Credit facility	$	1,568	$	39	$	(637)	$	—	$	—	$	970
Lease liabilities	209		—		(51)		(2)		59		215
Deferred debt transaction costs	(11)		—		—		—		2		(9)
	$	1,766	$	39	$	(688)	$	(2)	$	61	$	1,176


TELUS INTERNATIONAL (CDA) INC. CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) September 30, 2022