TELUS Corporation ("TELUS" or the "Company") today provided an updated mid-term outlook and further details of its enhanced capital allocation framework, including a new multi-year free cash flow growth target. In addition, TELUS will systematically step down its Discounted DRIP beginning in early 2026 and pause its dividend growth while continuing to pay its quarterly dividend at the most recent level of $0.4184 per share. These actions augment TELUS' plan to reduce its net debt to EBITDA leverage ratio1 to approximately 3-times by the end of 2027. As of September 30, 2025, the Company's leverage ratio improved to 3.5-times, supported by its successful Terrion partnership, hybrid note issuances, other strategic partnerships and non-core asset divestitures, and continued access to TELUS Digital's strong cash flow generation. We expect further improvement to approximately 3.3-times by the end of 2026, supported by considerable deleveraging initiatives, potential hybrid note offerings and meaningful free cash flow generation.
"TELUS is advancing its capital allocation strategy, supported by strong business fundamentals and significant free cash flow generation," said Darren Entwistle, President and CEO of TELUS. "Our confidence in delivering free cash flow growth at a minimum 10 per cent compounded annual growth rate through 2028 reflects our strong financial momentum. Additionally, we are executing on our clearly defined plan to advance and systematically step down the Discounted DRIP beginning in Q1 2026. Importantly, it is our intention to continue paying the dividend at its current nominal level. We will, however, moderate our dividend growth model of 3 to 8 per cent according to our dividend yield, including pausing our dividend growth until such time as our share price and associated dividend yield better reflects the considerable growth prospects of TELUS. These actions will be augmented by a range of opportunities that we are actively pursuing, including a strategic partner for TELUS Health and accelerated monetization of considerable real estate and copper assets. Collectively, these undertakings reinforce our strong progress on deleveraging, with our leverage ratio expected to reach approximately 3.3-times by the end of 2026 as we advance toward our target of approximately 3-times by the end of 2027."
Three-year free cash flow growth target
Consistent with our public targets, TELUS expects to generate approximately $2.15 billion in free cash flow1 in 2025. For the subsequent three years, from 2026 through 2028, TELUS expects to grow its free cash flow at a minimum 10 per cent compounded annual growth rate. Our preliminary target for free cash flow for 2026 is $2.4 billion, with capital expenditure target for 2026 at approximately $2.3 billion.
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