Exhibit 99.1
TELUS INTERNATIONAL (CDA) INC.
CONDENSED INTERIM CONSOLIDATED
FINANCIAL STATEMENTS
(UNAUDITED)
March 31, 2021
TELUS International (Cda) Inc.
Condensed Interim Consolidated Statements of Income and Other Comprehensive Income (Loss)
(unaudited)
Three months | ||||||||||
Periods ended March 31 (US$ millions except earnings per share) | Note | 2021 | 2020 | |||||||
REVENUE | 3 | $ | 505 | $ | 322 | |||||
OPERATING EXPENSES | ||||||||||
Salaries and benefits | 282 | 206 | ||||||||
Goods and services purchased | 94 | 48 | ||||||||
Share-based compensation | 4 | 26 | 2 | |||||||
Acquisition, integration and other | 5 | 5 | 19 | |||||||
Depreciation | 11 | 27 | 21 | |||||||
Amortization of intangible assets | 12 | 36 | 13 | |||||||
470 | 309 | |||||||||
OPERATING INCOME | 35 | 13 | ||||||||
OTHER (INCOME) EXPENSES | ||||||||||
Changes in business combination-related provisions | — | (23 | ) | |||||||
Interest expense | 6 | 14 | 13 | |||||||
Foreign exchange loss | 3 | — | ||||||||
INCOME BEFORE INCOME TAXES | 18 | 23 | ||||||||
Income tax expense | 7 | 15 | 12 | |||||||
NET INCOME | 3 | 11 | ||||||||
OTHER COMPREHENSIVE INCOME (LOSS) | ||||||||||
Items that may subsequently be reclassified to income | ||||||||||
Change in unrealized fair value of derivatives designated as held-for-hedging | 21 | (4 | ) | |||||||
Exchange differences arising from translation of foreign operations | (33 | ) | (12 | ) | ||||||
(12 | ) | (16 | ) | |||||||
COMPREHENSIVE LOSS | $ | (9 | ) | $ | (5 | ) | ||||
EARNINGS PER SHARE | 1(a),8 | |||||||||
Basic | $ | 0.01 | $ | 0.05 | ||||||
Diluted | $ | 0.01 | $ | 0.05 | ||||||
TOTAL WEIGHTED AVERAGE SHARES OUTSTANDING (millions) | ||||||||||
Basic | 8 | 257 | 209 | |||||||
Diluted | 8 | 259 | 210 | |||||||
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
1
TELUS International (Cda) Inc.
Condensed Interim Consolidated Statements of Financial Position
(unaudited)
As at (US$ millions) | Note | March 31, 2021 | December 31, 2020 | |||||||
ASSETS | ||||||||||
Current assets | ||||||||||
Cash and cash equivalents | $ | 117 | $ | 153 | ||||||
Accounts receivable | 9 | 346 | 303 | |||||||
Due from affiliated companies | 17(a) | 49 | 49 | |||||||
Income and other taxes receivable | 7 | 14 | 18 | |||||||
Prepaid expenses | 40 | 23 | ||||||||
Current derivative assets | 10 | 1 | 2 | |||||||
567 | 548 | |||||||||
Non-current assets | ||||||||||
Property, plant and equipment, net | 11 | 358 | 362 | |||||||
Intangible assets, net | 12 | 1,235 | 1,294 | |||||||
Goodwill | 12 | 1,456 | 1,487 | |||||||
Deferred income taxes | 19 | 7 | ||||||||
Other long-term assets | 25 | 34 | ||||||||
3,093 | 3,184 | |||||||||
Total assets | $ | 3,660 | $ | 3,732 | ||||||
LIABILITIES AND OWNERS’ EQUITY | ||||||||||
Current liabilities | ||||||||||
Accounts payable and accrued liabilities | 18(b) | $ | 281 | $ | 254 | |||||
Due to affiliated companies | 17(a) | 39 | 31 | |||||||
Income and other taxes payable | 82 | 101 | ||||||||
Advance billings and customer deposits | 4 | 8 | ||||||||
Current portion of provisions | 13 | 12 | 17 | |||||||
Current maturities of long-term debt | 14 | 94 | 92 | |||||||
Current portion of derivative liabilities | 10 | 3 | 1 | |||||||
515 | 504 | |||||||||
Non-current liabilities | ||||||||||
Provisions | 13 | 17 | 20 | |||||||
Long-term debt | 14 | 1,137 | 1,674 | |||||||
Derivative liabilities | 10 | 35 | 57 | |||||||
Deferred income taxes | 344 | 353 | ||||||||
Other long-term liabilities | 7 | 13 | ||||||||
1,540 | 2,117 | |||||||||
Total liabilities | 2,055 | 2,621 | ||||||||
Owners’ equity | 15 | 1,605 | 1,111 | |||||||
Total liabilities and owners’ equity | $ | 3,660 | $ | 3,732 | ||||||
Contingent liabilities | 16 |
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
2
TELUS International (Cda) Inc.
Condensed Interim Consolidated Statements of Changes in Owners’ Equity
(unaudited)
(millions) | Note | Number of shares | Share capital | Contributed surplus | Retained earnings (deficit) | Accumulated other comprehensive income (loss) | Total | |||||||||||||
Balance as at January 1, 2020 | 1(a) | 190 | $ | 284 | $ | — | $ | (54 | ) | $ | 15 | $ | 245 | |||||||
Net income | — | — | — | 11 | — | 11 | ||||||||||||||
Other comprehensive loss | — | — | — | — | (16 | ) | (16 | ) | ||||||||||||
Class A shares issued | 1(a) | 15 | 124 | — | — | — | 124 | |||||||||||||
Class B shares issued | 1(a) | 8 | 68 | — | — | — | 68 | |||||||||||||
Class C shares issued | 1(a) | — | 2 | — | — | — | 2 | |||||||||||||
Class E shares issued | 1(a) | 7 | 90 | — | — | — | 90 | |||||||||||||
Balance as at March 31, 2020 | 1(a) | 220 | $ | 568 | $ | — | $ | (43 | ) | $ | (1 | ) | $ | 524 | ||||||
Balance as at January 1, 2021 | 245 | $ | 989 | $ | — | $ | 33 | $ | 89 | $ | 1,111 | |||||||||
Net income | — | — | — | 3 | — | 3 | ||||||||||||||
Other comprehensive loss | — | — | — | — | (12 | ) | (12 | ) | ||||||||||||
Class A to E shares exchanged or redesignated | 15 | (245 | ) | (994 | ) | — | — | — | (994 | ) | ||||||||||
Multiple Voting Shares redesignated from Class A to D shares | 15 | 236 | 884 | — | — | — | 884 | |||||||||||||
Subordinate Voting Shares redesignated from Class C to E shares | 15 | 9 | 110 | — | — | — | 110 | |||||||||||||
Multiple Voting Shares converted to Subordinate Voting Shares | 15 | (22 | ) | (81 | ) | — | — | — | (81 | ) | ||||||||||
Subordinate Voting Shares converted from Multiple Voting Shares | 15 | 22 | 81 | — | — | — | 81 | |||||||||||||
Subordinate Voting Shares issued in public offering | 15 | 21 | 525 | — | — | — | 525 | |||||||||||||
Share issuance costs, net of taxes | 15 | — | (24 | ) | — | — | — | (24 | ) | |||||||||||
Share-based compensation | 4 | — | — | 2 | — | — | 2 | |||||||||||||
Balance as at March 31, 2021 | 266 | $ | 1,490 | $ | 2 | $ | 36 | $ | 77 | $ | 1,605 |
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
3
TELUS International (Cda) Inc.
Condensed Interim Consolidated Statements of Cash Flows
(unaudited)
Three months | ||||||||||
Periods ended March 31 (US$ millions) | Note | 2021 | 2020 | |||||||
OPERATING ACTIVITIES | ||||||||||
Net income | $ | 3 | $ | 11 | ||||||
Adjustments: | ||||||||||
Depreciation and amortization | 11,12 | 63 | 34 | |||||||
Interest expense | 6 | 14 | 13 | |||||||
Income tax expense | 7 | 15 | 12 | |||||||
Share-based compensation | 4 | 26 | 2 | |||||||
Changes in business combination-related provisions | — | (23 | ) | |||||||
Change in market value of derivatives and other adjustments | 29 | — | ||||||||
Net change in non-cash operating working capital | 18(c) | (53 | ) | 24 | ||||||
Share-based compensation payments | 4 | (17 | ) | — | ||||||
Interest paid | (9 | ) | (8 | ) | ||||||
Income taxes paid, net | (35 | ) | (31 | ) | ||||||
Cash provided by operating activities | 36 | 34 | ||||||||
INVESTING ACTIVITIES | ||||||||||
Cash payments for capital assets | (14 | ) | (1 | ) | ||||||
Cash payments for acquisitions, net | — | (805 | ) | |||||||
Cash used in investing activities | (14 | ) | (806 | ) | ||||||
FINANCING ACTIVITIES | ||||||||||
Shares issued | 15 | 525 | 284 | |||||||
Share issuance costs | 15 | (32 | ) | — | ||||||
Repayment of long-term debt | 18(d) | (547 | ) | (589 | ) | |||||
Long-term debt issued | — | 1,145 | ||||||||
Cash (used in) provided by financing activities | (54 | ) | 840 | |||||||
Effect of exchange rate changes on cash and cash equivalents | (4 | ) | — | |||||||
CASH POSITION | ||||||||||
(Decrease) increase in cash and cash equivalents | (36 | ) | 68 | |||||||
Cash and cash equivalents, beginning of period | 153 | 80 | ||||||||
Cash and cash equivalents, end of period | $ | 117 | $ | 148 |
The accompanying notes are an integral part of these condensed interim consolidated financial statements.
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TELUS International (Cda) Inc.
Notes to Condensed Interim Consolidated Financial Statements
(unaudited)
TELUS International (Cda) Inc. (TELUS International) is a global provider of customer experience and digital business services.
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 | 7 |
4. Share-based compensation | 7 |
5. Acquisition, integration and other | 9 |
6. Interest expense | 9 |
7. Income taxes | 9 |
8. Earnings per share | 10 |
Consolidated financial position focused | |
9. Accounts receivable | 10 |
10. Financial instruments | 11 |
11. Property, plant and equipment | 13 |
12. Intangible assets and goodwill | 13 |
13. Provisions | 14 |
14. Long-term debt | 14 |
15. Share capital | 15 |
16. Contingent liabilities | 16 |
Other | |
17. Related party transactions | 17 |
18. Additional financial information | 18 |
1. Condensed interim consolidated financial statements
(a) | Basis of presentation |
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, 2020, 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, 2020, 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 connection with our initial public offering (IPO) on February 3, 2021 and related 4.5-for-one share subdivision, we have retrospectively adjusted all per share and number of share amounts presented in these condensed interim consolidated financial statements (see Note 15).
These condensed interim consolidated financial statements for the three-month period ended March 31, 2021, were authorized by our Board of Directors for issue on May 6, 2021.
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(b) | Change in presentation |
In our condensed interim consolidated statements of income and other comprehensive income, we have reclassified certain employee benefits previously included in salaries and benefits to share-based compensation. In addition, we have reclassified certain costs previously included in goods and services purchased to acquisition, integration and other, which are costs that primarily relate to costs incurred in connection with business acquisitions. We believe this presentation provides a more useful presentation of our profit and loss. All amounts presented for comparative periods have been reclassified to conform with current period presentation.
(c) | Accounting policy developments |
i) | Initial application of standards, interpretations and amendments to standards and interpretations |
In August 2020, the International Accounting Standards Board issued Interest Rate Benchmark Reform—Phase 2, which amends IFRS 9 Financial Instruments, IAS 39 Financial Instruments: Recognition and Measurement, IFRS 7 Financial Instruments: Disclosures, IFRS 4 Insurance Contracts and IFRS 16 Leases. The amendments are effective for periods beginning on or after January 1, 2021. Interest rate benchmarks such as interbank offer rates (IBORs) play an important role in global financial markets as they index a wide variety of financial products, including derivative financial instruments. Market developments have impacted the reliability of some existing benchmarks and, in this context, the Financial Stability Board has published a report setting out recommendations to reform such benchmarks. The Interest Rate Benchmark Reform—Phase 2 amendments focus on the effects of the interest rate benchmark reform on a company’s financial statements that arise when an interest rate benchmark used to calculate interest is replaced with an alternative benchmark rate; most significantly, there will be no requirement to derecognize or adjust the amount of financial instruments for changes required by the reform, but will instead update the effective interest rate to reflect the change to the alternative benchmark rate. The effects of these amendments on our financial performance and disclosure will be dependent upon the facts and circumstances of future changes in the derivative financial instruments we use, if any, and any future changes in interest rate benchmarks, if any, referenced by such derivative financial instruments we use.
ii) | Standards, interpretations and amendments to standards and interpretations issued but not yet effective |
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 clarifies 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.
2. Capital structure financial policies
Our objective when managing capital is to maintain a flexible capital structure that optimizes the cost and availability of capital at acceptable risk levels.
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 long-term debt items, 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 14).
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 subordinate voting 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.
6
On February 3, 2021, we completed an initial public offering (IPO) and issued 20,997,375 subordinate voting shares at $25.00 per share. Net cash proceeds were used to repay a portion of outstanding borrowings under our credit agreement (see Notes 14 and 15).
3. Revenue
We earn revenue pursuant to contracts with our clients, who operate in various industry verticals. The following presents our earned revenue disaggregation by industry vertical for each period ended March 31:
Three months | ||||||||
Periods ended March 31 (millions) | 2021 | 2020 | ||||||
Tech and Games | $ | 224 | $ | 119 | ||||
Communications and Media | 129 | 111 | ||||||
eCommerce and FinTech | 55 | 36 | ||||||
Travel and Hospitality | 14 | 14 | ||||||
Healthcare | 12 | 9 | ||||||
Other | 71 | 33 | ||||||
$ | 505 | $ | 322 |
We deliver our services from multiple delivery locations across four geographic regions. The following presents our earned revenue disaggregation by geographic region for each period ended March 31:
Three months | ||||||||
Periods ended March 31 (millions) | 2021 | 2020 | ||||||
Europe | $ | 187 | $ | 120 | ||||
North America | 150 | 65 | ||||||
Asia-Pacific | 94 | 83 | ||||||
Central America | 74 | 54 | ||||||
$ | 505 | $ | 322 |
4. Share-based compensation
(a) | Restricted share unit plan |
Restricted share units
We have equity-settled restricted share units (RSUs), cash-settled restricted share units (Phantom RSUs), and cash-settled phantom performance restricted share units (Phantom PSUs). Each RSU, Phantom RSU and Phantom PSU is nominally equal in value to one TELUS International subordinate voting share. All restricted share units granted prior to December 31, 2020 were Phantom RSUs or Phantom PSUs, whereas restricted share units granted in the current quarter were RSUs. The following table presents a summary of the activity related to our restricted share units:
Three months | ||||||||||||
Number of units | Weighted average grant-date | |||||||||||
Period ended March 31, 2021 | Non-vested | Vested | fair value | |||||||||
Outstanding, January 1, 2021 | 1,383,642 | — | $ | 7.94 | ||||||||
Granted | 670,292 | — | 25.00 | |||||||||
Forfeited | (14,346 | ) | — | 7.90 | ||||||||
Outstanding, March 31, 2021 | 2,039,588 | — | $ | 13.55 |
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During the current quarter, we granted 670,292 RSUs which will vest in four equal annual instalments and will be equity-settled. These RSUs are eligible for dividend reinvestment units, if declared and paid by TELUS International, as such the fair value was determined to be equal to the market price of a subordinate voting share of TELUS International on the date of grant of $25.00.
As at March 31, 2021, the outstanding restricted share units were comprised of 670,292 RSUs, 730,513 Phantom RSUs, and 638,783 Phantom PSUs.
Phantom TELUS Corporation restricted share units (Phantom TELUS Corporation RSU)
Each Phantom TELUS Corporation RSU is nominally equal in value to the market price of one TELUS Corporation common share. The following table presents a summary of the activity related to Phantom TELUS Corporation RSU:
Three months | ||||||||||||
Period ended March 31, 2021 | Number of units | Weighted | ||||||||||
Canadian $ denominated | Non-vested | Vested | date fair value | |||||||||
Outstanding, January 1, 2021 | 156,749 | — | $ | 24.17 | ||||||||
Dividends | 1,629 | — | 25.20 | |||||||||
Forfeited | (15,050 | ) | — | 24.83 | ||||||||
Outstanding, March 31, 2021 | 143,328 | — | $ | 24.11 |
The Phantom TELUS Corporation RSUs are historic grants made to certain employees. No new grants are expected to be made under this plan.
(b) Share option award plan
We have equity-settled share option awards (Share Options), and cash-settled 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 Options and Phantom Share Options were precluded from being exercised prior to the completion of our IPO or other liquidity event. In connection with our IPO, certain vested Phantom Share Options became exercisable and were exercised in the first quarter of 2021.
The following table presents a summary of the activity related to our share option awards:
U.S.$ denominated | Canadian $ denominated | |||||||||||||||||||||||
Number of share option award units | Weighted average | Number of share option award units | Weighted average | |||||||||||||||||||||
Period ended March 31, 2021 | Non-vested | Vested | exercise price | Non-vested | Vested | exercise price | ||||||||||||||||||
Outstanding, January 1, 2021 | 654,633 | 3,267,423 | $ | 6.94 | — | 242,244 | $ | 4.75 | ||||||||||||||||
Granted | 579,949 | — | 25.00 | — | — | — | ||||||||||||||||||
Exercised for cash | — | (409,036 | ) | 6.06 | — | (242,244 | ) | 4.75 | ||||||||||||||||
Outstanding, March 31, 2021 | 1,234,582 | 2,858,387 | $ | 9.59 | — | — | $ | — | ||||||||||||||||
Exercisable, March 31, 2021 | — | 2,858,387 | $ | 6.95 | — | — | $ | — |
The exercise price for options outstanding as at March 31, 2021 ranged from $4.87 to $8.95 for 3,513,020 options with a weighted-average remaining contractual life of 6.5 years, and $25.00 for 579,949 options with a weighted-average remaining contractual life of 9.8 years.
8
During the current quarter, we granted 579,949 Share Options which will vest in four equal annual instalments and expire in ten years.
During the current quarter, we cash-settled 651,280 Phantom Share Options for $17 million, reflecting the intrinsic value at the date of settlement and a weighted average share price at the date of exercise of $31.17.
The weighted average fair value of Share Options granted during the three-month period ended March 31, 2021, and the weighted average assumptions used in the fair value estimation at the time of grant, calculated by using the Black-Scholes model, are as follows:
Period ended March 31, 2021 | Three months | |||
Share option award fair value (per share option) | $ | 5.34 | ||
Risk free interest rate | 0.73 | % | ||
Expected lives (years) | 6.50 | |||
Expected volatility | 19.3 | % | ||
Dividend yield | — |
5. Acquisition, integration and other
We incur charges that relate to our business acquisitions, including transaction costs and integration activities, which could vary from year to year depending on the volume, nature and complexity of the transactions completed in each fiscal year. We also, from time to time, incur costs associated with streamlining our operations.
Three months | ||||||||
Period ended March 31 (millions) | 2021 | 2020 | ||||||
Acquisition and integration costs | $ | 2 | $ | 18 | ||||
Other | 3 | 1 | ||||||
$ | 5 | $ | 19 |
6. Interest expense
Three months | ||||||||
Periods ended March 31 (millions) | 2021 | 2020 | ||||||
Interest expense | ||||||||
Interest on long-term debt, excluding lease liabilities | $ | 9 | $ | 7 | ||||
Interest on lease liabilities | 4 | 3 | ||||||
Interest on short-term borrowings and other | 1 | 1 | ||||||
Interest accretion on provisions | — | 2 | ||||||
$ | 14 | $ | 13 |
7. Income taxes
Three months | ||||||||
Periods ended March 31 (millions) | 2021 | 2020 | ||||||
Current income tax expense | ||||||||
For current reporting period | $ | 21 | $ | 11 | ||||
Adjustments recognized in the current period for income tax of prior periods | — | (2 | ) | |||||
21 | 9 | |||||||
Deferred income tax expense (recovery) | ||||||||
Arising from the origination and reversal of temporary differences | (6 | ) | 1 | |||||
Adjustments recognized in the current period for income tax of prior periods | — | 2 | ||||||
(6 | ) | 3 | ||||||
$ | 15 | $ | 12 |
9
Our income tax expense and effective income tax rate differs from that calculated by applying the applicable statutory rates for the following reasons:
Three months | ||||||||||||||||
Periods ended March 31 (millions except percentages) | 2021 | 2020 | ||||||||||||||
Income taxes computed at applicable statutory rates | $ | 4 | 21.5 | % | $ | 7 | 27.7 | % | ||||||||
Non-deductible items | 6 | 2 | ||||||||||||||
Withholding and other taxes | 4 | 2 | ||||||||||||||
Losses not recognized | 2 | 2 | ||||||||||||||
Other | (1 | ) | (1 | ) | ||||||||||||
Income tax expense | $ | 15 | 81.8 | % | $ | 12 | 52.5 | % |
8. Earnings per share
(a) | Basic earnings per share |
Basic earnings per share is calculated by dividing net income by the total weighted average number of equity shares outstanding during the period.
Three months | ||||||||
Periods ended March 31 (millions except earnings per share) | 2021 | 2020 | ||||||
Net income for the period | $ | 3 | $ | 11 | ||||
Weighted average number of equity shares outstanding | 257 | 209 | ||||||
Basic earnings per share | $ | 0.01 | $ | 0.05 |
(b) | Diluted earnings per share |
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 | ||||||||
Periods ended March 31 (millions except earnings per share) | 2021 | 2020 | ||||||
Net income for the period | $ | 3 | $ | 11 | ||||
Weighted average number of equity shares outstanding | 257 | 209 | ||||||
Dilutive effect of share-based compensation | 2 | 1 | ||||||
Weighted average number of diluted equity shares outstanding | 259 | 210 | ||||||
Diluted earnings per share | $ | 0.01 | $ | 0.05 |
9. Accounts receivable
(a) | Accounts receivable |
As at (millions) | March 31, 2021 | December 31, 2020 | ||||||
Accounts receivable – billed | $ | 170 | $ | 163 | ||||
Accounts receivable – accrued | 145 | 125 | ||||||
Other receivables | 36 | 20 | ||||||
351 | 308 | |||||||
Allowance for doubtful accounts | (5 | ) | (5 | ) | ||||
Total | $ | 346 | $ | 303 |
10
The following table presents an analysis of the age of customer accounts receivable. Any late payment charges are levied at a negotiated rate on outstanding non-current customer account balances.
As at (millions) | March 31, 2021 | December 31, 2020 | ||||||
Customer accounts receivable – billed, net of allowance for doubtful accounts | ||||||||
Less than 30 days past billing date | $ | 128 | $ | 121 | ||||
30-60 days past billing date | 28 | 28 | ||||||
61-90 days past billing date | 5 | 7 | ||||||
More than 90 days past billing date | 4 | 2 | ||||||
165 | 158 | |||||||
Accounts receivable – accrued | 145 | 125 | ||||||
Other receivables | 36 | 20 | ||||||
Total | $ | 346 | $ | 303 |
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 following table presents a summary of the activity related to our allowance for doubtful accounts:
Three months | ||||||||
Periods ended March 31 (millions) | 2021 | 2020 | ||||||
Balance, beginning of period | $ | 5 | $ | 2 | ||||
Additions | — | 1 | ||||||
Write-off or recovery | — | (2 | ) | |||||
Balance, end of period | $ | 5 | $ | 1 |
10. Financial instruments
General
The carrying values of cash and cash equivalents, accounts receivable, accounts payable and certain provisions approximate their fair values due to the immediate or short-term maturity of these financial instruments. The fair values are determined directly by reference to quoted market prices in active markets.
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).
11
Derivative
The derivative financial instruments that we measure at fair value on a recurring basis subsequent to initial recognition are as set out in the following table; all such items use significant other observable inputs (Level 2) for measuring fair value at the reporting date.
March 31, 2021 | December 31, 2020 | |||||||||||||||||||||||||||||||||||
As at (millions) | Designation | Maximum maturity date | Notional amount | Fair value value | Price or rate | Maximum maturity date | Notional amount | Fair value and carrying value | Price or rate | |||||||||||||||||||||||||||
Current assets1 | �� | |||||||||||||||||||||||||||||||||||
Derivatives used to manage | ||||||||||||||||||||||||||||||||||||
Currency risk arising from Philippine peso denominated purchases | HFT2 | 2021 | $ | 78 | $ | - | USD:1.00 PHP:48.83 | 2021 | $ | 68 | $ | 2 | USD:1.00 PHP:48.23 | |||||||||||||||||||||||
Foreign exchange arising from net investment in foreign operation | HFH3 | 2025 | $ | 5 | $ | 1 | USD:1.00 EUR:0.85 | - | $ | - | $ | - | - | |||||||||||||||||||||||
Current liabilities1 | ||||||||||||||||||||||||||||||||||||
Derivatives used to manage | ||||||||||||||||||||||||||||||||||||
Foreign exchange arising from net investment in foreign operation | HFH3 | - | $ | - | $ | - | USD:1.00 EUR:0.85 | 2025 | $ | 2 | $ | 1 | USD:1.00 EUR:0.85 | |||||||||||||||||||||||
Interest rate risk associated with non-fixed rate credit facility amounts drawn | HFH3 | 2022 | $ | 5 | $ | 3 | 2.64 | % | - | $ | - | $ | - | - | ||||||||||||||||||||||
Non-current liabilities1 | ||||||||||||||||||||||||||||||||||||
Derivatives used to manage | ||||||||||||||||||||||||||||||||||||
Foreign exchange arising from net investment in foreign operation | HFH3 | 2025 | $ | 394 | $ | 33 | USD:1.00 EUR:0.85 | 2025 | $ | 403 | $ | 52 | USD:1.00 EUR:0.85 | |||||||||||||||||||||||
Interest rate risk associated with non-fixed rate credit facility amounts drawn | HFH3 | 2022 | $ | 95 | $ | 2 | 2.64 | % | 2022 | $ | 101 | $ | 5 | 2.64 | % |
1 | Notional amounts of derivative financial assets and liabilities are not set off. | |
2 | Foreign currency hedges are designated as held for trading (HFT) upon initial recognition; hedge accounting is not applied. | |
3 | Designated 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. |
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11. Property, plant and equipment
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, 2021 | $ | 46 | $ | 95 | $ | 207 | $ | 15 | $ | 363 | $ | 264 | $ | 627 | ||||||||||||||
Additions | — | 1 | 5 | 11 | 17 | 10 | 27 | |||||||||||||||||||||
Dispositions, retirements and other | (1 | ) | — | (1 | ) | (1 | ) | (3 | ) | — | (3 | ) | ||||||||||||||||
Transfers | 3 | 2 | 4 | (9 | ) | — | — | — | ||||||||||||||||||||
Foreign exchange | (1 | ) | — | (1 | ) | — | (2 | ) | (4 | ) | (6 | ) | ||||||||||||||||
As at March 31, 2021 | $ | 47 | $ | 98 | $ | 214 | $ | 16 | $ | 375 | $ | 270 | $ | 645 | ||||||||||||||
Accumulated depreciation | ||||||||||||||||||||||||||||
As at January 1, 2021 | $ | 23 | $ | 32 | $ | 126 | $ | — | $ | 181 | $ | 84 | $ | 265 | ||||||||||||||
Depreciation | 2 | 3 | 9 | — | 14 | 13 | 27 | |||||||||||||||||||||
Dispositions, retirements and other | — | — | (1 | ) | — | (1 | ) | — | (1 | ) | ||||||||||||||||||
Foreign exchange | — | (1 | ) | (1 | ) | — | (2 | ) | (2 | ) | (4 | ) | ||||||||||||||||
As at March 31, 2021 | $ | 25 | $ | 34 | $ | 133 | $ | — | $ | 192 | $ | 95 | $ | 287 | ||||||||||||||
Net book value | ||||||||||||||||||||||||||||
As at December 31, 2020 | $ | 23 | $ | 63 | $ | 81 | $ | 15 | $ | 182 | $ | 180 | $ | 362 | ||||||||||||||
As at March 31, 2021 | $ | 22 | $ | 64 | $ | 81 | $ | 16 | $ | 183 | $ | 175 | $ | 358 |
12. Intangible assets and goodwill
(millions) | Customer relationships | Crowdsource assets | Software | Brand and other | Total intangible assets | Goodwill | Total intangible assets and goodwill | |||||||||||||||||||||
At cost | ||||||||||||||||||||||||||||
As at January 1, 2021 | $ | 1,223 | $ | 120 | $ | 57 | $ | 39 | $ | 1,439 | $ | 1,487 | $ | 2,926 | ||||||||||||||
Additions | — | — | 1 | — | 1 | — | 1 | |||||||||||||||||||||
Foreign exchange | (26 | ) | — | (1 | ) | (2 | ) | (29 | ) | (31 | ) | (60 | ) | |||||||||||||||
As at March 31, 2021 | $ | 1,197 | $ | 120 | $ | 57 | $ | 37 | $ | 1,411 | $ | 1,456 | $ | 2,867 | ||||||||||||||
Accumulated amortization | ||||||||||||||||||||||||||||
As at January 1, 2021 | $ | 103 | $ | — | $ | 32 | $ | 10 | $ | 145 | $ | — | $ | 145 | ||||||||||||||
Amortization | 27 | 4 | 2 | 3 | 36 | — | 36 | |||||||||||||||||||||
Foreign exchange | (4 | ) | — | (1 | ) | — | (5 | ) | — | (5 | ) | |||||||||||||||||
As at March 31, 2021 | $ | 126 | $ | 4 | $ | 33 | $ | 13 | $ | 176 | $ | — | $ | 176 | ||||||||||||||
Net book value | ||||||||||||||||||||||||||||
As at December 31, 2020 | $ | 1,120 | $ | 120 | $ | 25 | $ | 29 | $ | 1,294 | $ | 1,487 | $ | 2,781 | ||||||||||||||
As at March 31, 2021 | $ | 1,071 | $ | 116 | $ | 24 | $ | 24 | $ | 1,235 | $ | 1,456 | $ | 2,691 |
Our goodwill balance as at December 31, 2020 was reduced by $13 million related to a change in the purchase price allocation for our LAI acquisition, with a corresponding adjustment to deferred tax liability.
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13. Provisions
(millions) | Employee related | Other | Total | |||||||||
As at January 1, 2021 | $ | 20 | $ | 17 | $ | 37 | ||||||
Additions | 3 | 3 | 6 | |||||||||
Use | (5 | ) | (9 | ) | (14 | ) | ||||||
As at March 31, 2021 | $ | 18 | $ | 11 | $ | 29 | ||||||
Current | 1 | 11 | 12 | |||||||||
Non-current | 17 | — | 17 | |||||||||
As at March 31, 2021 | $ | 18 | $ | 11 | $ | 29 |
14. Long-term debt
As at (millions) | March 31, 2021 | December 31, 2020 | ||||||
Credit facility | $ | 1,038 | $ | 1,568 | ||||
Deferred debt transaction costs | (10 | ) | (11 | ) | ||||
1,028 | 1,557 | |||||||
Lease liabilities | 203 | 209 | ||||||
Long-term debt | $ | 1,231 | $ | 1,766 | ||||
Current | $ | 94 | $ | 92 | ||||
Non-current | 1,137 | 1,674 | ||||||
Long-term debt | $ | 1,231 | $ | 1,766 |
(a) | Credit facility |
As at March 31, 2021, 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 a $620 million and $230 million revolving components and amortizing $600 million and $250 million term loan components. The outstanding revolving components and term loan components had a weighted average interest rate of 2.86% (December 31, 2020 – 2.90%).
As at (millions) | March 31, 2021 | December 31, 2020 | ||||||||||||||||||||||
Revolving component | Term loan component1 | Total | Revolving component | Term loan component | Total | |||||||||||||||||||
Available | $ | 651 | $ | N/A | $ | 651 | $ | 132 | $ | N/A | $ | 132 | ||||||||||||
Outstanding | ||||||||||||||||||||||||
Due to TELUS Corporation | $ | 25 | $ | 74 | $ | 99 | $ | 65 | $ | 75 | $ | 140 | ||||||||||||
Due to Other | 174 | 765 | 939 | 653 | 775 | 1,428 | ||||||||||||||||||
$ | 199 | $ | 839 | $ | 1,038 | $ | 718 | $ | 850 | $ | 1,568 | |||||||||||||
Total | $ | 850 | $ | 839 | $ | 1,689 | $ | 850 | $ | 850 | $ | 1,700 |
1 | We have entered into a receive-floating interest rate, pay-fixed interest rate exchange agreement that effectively converts our interest obligations on $101 million of the debt to a fixed rate of 2.64% plus applicable margins. |
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 operating cash flow ratio must not exceed: 5.25:1.00 for each quarter in fiscal 2021; 4.50:1.00 for each quarter in fiscal 2022; and 3.75:1.00 subsequently. The operating cash flow 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 may be increased to 4.50:1.00 and shall return to 3.75:1.00 after eight fiscal quarters.
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The term loan components of our credit facility are subject to an amortization schedule which requires that 1.25% of the principal advanced be repaid each quarter of the term of the agreement, with the balance due at maturity and December 22, 2022, for the US$250 million component, respectively.
As at March 31, 2021, we were in compliance with all financial covenants, financial ratios and all of the terms and conditions of our credit facility.
(b) | Long-term debt maturities |
Anticipated requirements to meet long-term debt repayments, calculated upon such long-term debts owing as at March 31, 2021, are as follows:
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 | ||||||||||||||||||
2021 (remainder of year) | $ | 32 | $ | 13 | $ | 45 | $ | 10 | $ | 17 | $ | 72 | ||||||||||||
2022 | 268 | 17 | 285 | 11 | 17 | 313 | ||||||||||||||||||
2023 | 30 | 16 | 46 | 7 | 16 | 69 | ||||||||||||||||||
2024 | 30 | 7 | 37 | 5 | 13 | 55 | ||||||||||||||||||
2025 | 678 | 6 | 684 | 3 | 7 | 694 | ||||||||||||||||||
Thereafter | — | 8 | 8 | 15 | 15 | 38 | ||||||||||||||||||
Future cash outflows in respect of composite long-term debt principal repayments | 1,038 | 67 | 1,105 | 51 | 85 | 1,241 | ||||||||||||||||||
Future cash outflows in respect of associated interest and like carrying costs 1 | 107 | 14 | 121 | 11 | 19 | 151 | ||||||||||||||||||
Undiscounted contractual maturities | $ | 1,145 | $ | 81 | $ | 1,226 | $ | 62 | $ | 104 | $ | 1,392 |
1 | Future cash outflows in respect of associated interest and like carrying costs for amounts drawn under our credit facilities (if any) have been calculated based upon the rates in effect at March 31, 2021. |
15. Share capital
In connection with our IPO on February 3, 2021, TELUS Corporation, our controlling shareholder, exchanged its outstanding Class A, Class C and Class D shares for Class B shares. Each other holder of Class C and Class D shares exchanged their shares for Class E shares. Our Class B shares, which were then only held by TELUS Corporation and Baring Private Equity Asia, a non-controlling shareholder, were redesignated as multiple voting shares and our Class E shares were redesignated as subordinate voting shares. The rights of the holders of our multiple voting shares and subordinate voting shares are substantially identical, except subordinate voting shares have one vote per share and multiple voting shares have 10 votes per share. Concurrent with the redesignations, we eliminated all of our previously outstanding series of Class A, Class C and Class D shares and our authorized Class A and Class B preferred shares. Subsequent to the IPO, our equity shares were comprised only of subordinate voting shares and multiple voting shares.
Subsequent to the share redesignations, we also effected a 4.5-for-1 split of each of our outstanding multiple voting shares and subordinate voting shares. In all instances, unless otherwise indicated, the number of equity shares authorized, the number of equity shares outstanding, the number of equity shares reserved, per share amounts and share-based compensation information in our condensed interim consolidated financial statements and accompanying notes have been restated to reflect the impact of the 4.5-for-1 split.
In connection with our IPO, we issued 20,997,375 subordinate voting shares at $25.00 per share, for gross proceeds of $525 million and net proceeds of $501 million (net of share issuance costs of $32 million, which include underwriting fees and offering expenses, offset by deferred taxes of $8 million).
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TELUS Corporation and Baring Private Equity Asia also sold 21,552,625 subordinated voting shares in the IPO at the same price, which were issued following the conversion by them of an aggregate 21,552,625 multiple voting shares.
Our authorized and issued share capital as at March 31, 2021 is as follows:
Authorized | Issued | |||||||||||||||
As at (millions) | March 31, 2021 | December 31, 2020 | March 31, 2021 | December 31, 2020 | ||||||||||||
Preferred Shares | ||||||||||||||||
Convertible Redeemable Preferred A Shares | n/a | unlimited | n/a | — | ||||||||||||
Convertible Redeemable Preferred B Shares | n/a | unlimited | n/a | — | ||||||||||||
Equity Shares | ||||||||||||||||
Class A | n/a | unlimited | n/a | 149 | ||||||||||||
Class B, redesignated as Multiple Voting Shares | unlimited | unlimited | 214 | 82 | ||||||||||||
Class C | n/a | unlimited | n/a | 4 | ||||||||||||
Class D | n/a | unlimited | n/a | 3 | ||||||||||||
Class E, redesignated as Subordinate Voting Shares | unlimited | unlimited | 52 | 7 |
As at March 31, 2021, there were 19 million authorized but unissued subordinate voting shares reserved for issuance under the Long-Term Incentive Plan.
16. Contingent liabilities
(a) | Indemnification obligations |
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 March 31, 2021, we had no liability recorded in respect of indemnification obligations (December 31, 2020 - $NIL).
(b) | Claims and lawsuits |
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.
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17. Related party transactions
(a) | Transactions with TELUS Corporation |
General
TELUS Corporation produces consolidated financial statements available for public use and is the ultimate parent and controlling party of TELUS International.
Recurring transactions
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.
Certain of our employees also participate in TELUS Corporation share-based compensation plans. TELUS Corporation charges these amounts to us at cost, net of hedging effects where applicable.
We also participate in defined benefit pension plans that share risks between TELUS Corporation and its subsidiaries.
2021 | 2020 | |||||||||||||||||||||||
Three-month periods ended March 31 (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 | $ | — | $ | 82 | $ | 82 | $ | — | $ | 72 | $ | 72 | ||||||||||||
Goods and services purchased from | — | (10 | ) | (10 | ) | — | (1 | ) | (1 | ) | ||||||||||||||
— | 72 | 72 | — | 71 | 71 | |||||||||||||||||||
Receipts from related parties | — | (82 | ) | (82 | ) | — | (58 | ) | (58 | ) | ||||||||||||||
Payments to related parties | 5 | — | 5 | — | — | — | ||||||||||||||||||
Payments (made) collected by related parties on our behalf | (24 | ) | 21 | (3 | ) | 1 | (20 | ) | (19 | ) | ||||||||||||||
Foreign currency adjustments | — | — | — | — | 2 | 2 | ||||||||||||||||||
Change in balance | (19 | ) | 11 | (8 | ) | 1 | (5 | ) | (4 | ) | ||||||||||||||
Accounts with TELUS Corporation and subsidiaries | ||||||||||||||||||||||||
Balance, beginning of period | 27 | (9 | ) | 18 | 3 | 1 | 4 | |||||||||||||||||
Balance, end of period | $ | 8 | $ | 2 | $ | 10 | $ | 4 | $ | (4 | ) | $ | — | |||||||||||
Accounts with TELUS Corporation and subsidiaries | ||||||||||||||||||||||||
Due from affiliated companies | $ | 8 | $ | 41 | $ | 49 | $ | 4 | $ | 21 | $ | 25 | ||||||||||||
Due to affiliated companies | — | (39 | ) | (39 | ) | — | (25 | ) | (25 | ) | ||||||||||||||
$ | 8 | 2 | 10 | $ | 4 | $ | (4 | ) | $ | — |
In the consolidated statement of financial position, amounts due from affiliates and amounts due to affiliates are generally due 30 days from billing and are cash-settled on a gross basis.
In January 2021, we renewed our master service agreement with TELUS Corporation, which provides for a term of ten years beginning in January 2021 and a minimum annual spend of $200 million, subject to adjustment in accordance with its terms.
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(b) | Transactions with Baring Private Equity Asia |
General
Baring Private Equity Asia exercises significant influence over TELUS International.
Recurring transactions
As at, and during the three-month period ended March 31, 2021, there were no balances due to or due from, or recurring transactions with, Baring Private Equity Asia (December 31, 2020 – nil).
(c) | Transactions with key management personnel |
Our key management personnel have the authority and responsibility for overseeing, planning, directing and controlling our activities and consist of our Board of Directors and our Senior Leadership Team.
During the three-month period ended March 31, 2021, share-based compensation expense of $16 million was attributable to our key management personnel. We granted 643,292 RSUs and 579,049 Share Options to our key management personnel, with a grant-date fair value of $16 million and $3 million, respectively. Additionally during the current quarter, 516,996 Share Options attributable to our key management personnel were exercised which had an intrinsic value of $14 million at the time of exercise, reflecting a weighted average price at the date of exercise of $31.17.
18. Additional financial information
(a) | Statements of income and other comprehensive income |
We have two customers which account for more than 10% of our operating revenues for the three-month periods ended March 31, 2021, and 2020. In the three-month periods ended March 31, 2021, and 2020, TELUS Corporation and its affiliates accounted for 16% and 22%, respectively, of our operating revenue. One arm’s-length party accounted for approximately 16% and 12% of our operating revenues for the three-month periods ended March 31, 2021, and 2020, respectively.
(b) | Statements of financial position |
As at (millions) | March 31, 2021 | December 31, 2020 | ||||||
Other long-term assets | ||||||||
Prepaid lease deposits and other | $ | 22 | $ | 24 | ||||
Other | 3 | 10 | ||||||
$ | 25 | $ | 34 | |||||
Accounts payable and accrued liabilities | ||||||||
Trade accounts payable | $ | 28 | $ | 25 | ||||
Accrued liabilities | 85 | 64 | ||||||
Payroll and other employee-related liabilities | 101 | 103 | ||||||
Share-based compensation liability – current portion | 23 | 13 | ||||||
Other | 44 | 49 | ||||||
$ | 281 | $ | 254 |
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(c) | Statements of cash flows—operating activities and investing activities |
Three months | ||||||||
Periods ended March 31 (millions) | 2021 | 2020 | ||||||
Net change in non-cash operating working capital | ||||||||
Accounts receivable | $ | (43 | ) | $ | (1 | ) | ||
Due to and from affiliated companies, net | 8 | 5 | ||||||
Prepaid expenses | (17 | ) | 1 | |||||
Other long-term assets | 9 | (1 | ) | |||||
Accounts payable and accrued liabilities | 18 | 32 | ||||||
Income and other taxes receivable and payable, net | (8 | ) | (1 | ) | ||||
Advance billings and customer deposits | (4 | ) | (1 | ) | ||||
Provisions | (10 | ) | (10 | ) | ||||
Other long-term liabilities | (6 | ) | — | |||||
$ | (53 | ) | $ | 24 | ||||
Cash payments for capital assets | ||||||||
Capital asset additions | ||||||||
Capital expenditures | ||||||||
Property, plant and equipment, excluding right-of-use assets | $ | (17 | ) | $ | (11 | ) | ||
Intangible assets | (1 | ) | (2 | ) | ||||
(18 | ) | (13 | ) | |||||
Change in accrued payables related to the purchase of capital assets | 4 | 12 | ||||||
$ | (14 | ) | $ | (1 | ) |
(d) | Changes in liabilities arising from financing activities |
Statements of cash flows | Non-cash changes | |||||||||||||||||||||||
Three-month period ended March 31, 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 | — | $ | (530 | ) | — | — | $ | 1,038 | ||||||||||||||
Lease liabilities | 209 | — | (17 | ) | (2 | ) | 13 | 203 | ||||||||||||||||
Deferred debt transaction costs | (11 | ) | — | — | — | 1 | (10 | ) | ||||||||||||||||
$ | 1,766 | — | $ | (547 | ) | (2 | ) | 14 | 1,231 | |||||||||||||||
Statements of cash flows | Non-cash changes | |||||||||||||||||||||||
Three-month period ended March 31, 2020 (millions) | Beginning of Period | Issued or received | Redemptions, repayments or payments | Foreign exchange movement | Other | End of period | ||||||||||||||||||
Long-term debt | ||||||||||||||||||||||||
Credit facility | $ | 336 | $ | 1,145 | $ | (437 | ) | $ | — | $ | — | $ | 1,044 | |||||||||||
Lease liabilities | 189 | — | (14 | ) | (1 | ) | 42 | 216 | ||||||||||||||||
Deferred debt transaction costs | (4 | ) | — | — | — | (5 | ) | (9 | ) | |||||||||||||||
Other | — | — | (138 | ) | — | 138 | — | |||||||||||||||||
$ | 521 | $ | 1,145 | $ | (589 | ) | $ | (1 | ) | $ | 175 | $ | 1,251 |
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