TELSTRA 2012 ANNUAL REPORT IT’S HOW WE CONNECT TELSTRA 2012 ANNUAL REPORT ANNUAL REPORT Key Highlights i Our Performance x Sustainability xviii Results ii Improve Customer Satisfaction x Our Customers xx Our People xxii Chairman and CEO Message iv Retain and Grow Customer xii Numbers Our Communities xxiv Board of Directors vi Simplify the Business xiv Our Environment xxvi Our Business viii Develop New Growth Businesses xvi FULL ANNUAL REPORT 1 Becoming an e-Shareholder Use the following sections to help you locate Communicating With Our Shareholders Telstra encourages shareholders to elect to receive information about your Telstra holding(s): Our online Investor Centre www.telstra.com/ their communications electronically. 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Additional Sustainability Reporting Please refer to the Managing my Telstra Selected graphs and data presented in this report Shareholding Online section below for Communication – use this section to are included in our Bigger Picture sustainability instructions on how to do this. become an e-Shareholder. You can update reporting series. This series provides detailed your postal address, email address and information and analysis for our stakeholders Please contact our share registry on communication elections here. 1300 88 66 77 or email on Telstra’s sustainability performance. We [email protected] Annual Report develop our reporting with reference to industry and sustainability standards including the United should you require any further information Telstra’s 2012 Annual Report is available to relating to your shareholding. Nations Global Compact Communication on all shareholders on our Investor Website at Progress, Global Reporting Initiative (GRI) Managing my Telstra Shareholding Online www.telstra.com.au/annualreports. To receive G3 Sustainability Reporting Guidelines and a hardcopy of the statutory Annual Report Telecommunications Sector Supplement (pilot). 1. Go to www.linkmarketservices.com.au/telstra (free of charge) you can call our Share Registry 2. Enter your SRN/HIN (this can be found on The GRI Index and Bigger Picture series can be on 1300 88 66 77 and request the report found online at www.telstra.com.au/sustainability. your latest dividend statement), your post be sent to you. You may also update your code, the security code displayed and read communication election online to receive future and accept the terms and conditions. copies of the Annual Report. Please refer to the Managing my Telstra Shareholding online section for instructions on how to do this. 2012 KEY HIGHLIGHTS NEW MOBILE CUSTOMERS 1.6M IN AUSTRALIA REDUCTION IN CARBON EMISSIONS 36% INTENSITY NBN 28 AGREEMENTS FULLY-FRANKED DIVIDEND PER FINALISED SHARE SOCIAL AND COMMUNITY $240M INVESTMENT OVER 7M 30% CALLS HANDLED GROWTH IN OUT OF HOURS BUNDLED CUSTOMERS i FINANCIAL RESULTS FIVE YEAR SUMMARY 2012 2011 2010 2009 2008 $m $m $m $m $m 6DOHVUHYHQXH 25,232 24,983 24,813 25,371 24,657 EBITDA(1) 10,234 10,151 10,847 10,948 10,416 EBIT(2) 5,822 5,692 6,501 6,558 6,226 3UR¿WDIWHUWD[ 3,424 3,250 3,940 4,076 3,711 'LYLGHQGVGHFODUHGSHUVKDUH FHQWV 28 28 28 28 28 7RWDODVVHWV 39,525 37,913 39,282 39,962 37,922 *URVVGHEW 17,222 16,232 16,031 17,036 16,285 1HWGHEW 13,277 13,595 13,926 15,655 15,385 7RWDOHTXLW\ 11,689 12,292 13,008 12,681 12,245 $FFUXHGFDSLWDOH[SHQGLWXUH 3,591 3,410 3,471 4,598 4,897 )UHHFDVKÀRZ 5,197 5,477 6,225 4,365 3,855 (1) OperatLQJSUR¿WEHIRUHLQWHUHVWGHSUHFLDWLRQDQGDPRUWLVDWLRQDQGLQFRPHWD[H[SHQVH(%,7'$LVXVHGDVDPHDVXUHRI¿QDQFLDOSHUIRUPDQFHE\H[FOXGLQJ FHUWDLQYDULDEOHVWKDWDIIHFWRSHUDWLQJSUR¿WVEXWZKLFKPD\QRWEHGLUHFWO\UHODWHGWRDOO¿QDQFLDODVSHFWVRIWKHRSHUDWLRQVRIWKHFRPSDQ\(%,7'$LVQRWD PHDVXUHRIRSHUDWLQJLQFRPHRSHUDWLQJSHUIRUPDQFHRUOLTXLGLW\XQGHU$,)562WKHUFRPSDQLHVPD\FDOFXODWH(%,7'$LQDGLIIHUHQWPDQQHUWRXV (%,7'$OHVVGHSUHFLDWLRQDQGDPRUWLVDWLRQ SALES PROFIT FOR REVENUE THE YEAR $3.9b $25.0b $25.2b $24.8b $3.4b $3.3b 2010 2011 2012 2010 2011 2012 FREE MOBILE CASHFLOW REVENUE $8.7b $6.2b $7.9b $5.5b $5.2b $7.3b 2010 2011 2012 2010 2011 2012 ii NON-FINANCIAL RESULTS KEY PERFORMANCE INDICATORS OUR CUSTOMERS 2EMHFWLYH 2012 2011 2010 &XVWRPHUVDWLVIDFWLRQ Score 7.2 7.3 6.9 6.8 7,2FRPSODLQWV Level 1 Complaints per month per 10,000 SIOs 1RPRUHWKDQ 1.9 3.1 'LVDELOLW\$FWLRQ3ODQ Percentage of commitments completed 66% 75% OUR PEOPLE (PSOR\HHHQJDJHPHQW Survey score 77% 77% 75% 75% +HDOWKDQGVDIHW\ Lost Time Injury Frequency Rate (LTIFR) 1.5 1.32 1.30 2.32 *HQGHUGLYHUVLW\ Women in executive management 25% 25.0% 22.7% 22.4% 9ROXQWHHULQJGXULQJ7HOVWUDWLPH Number of days 1,500 1,375 3D\UROO*LYLQJ Participation rate 3.0% 2.7% 3.5% OUR COMMUNITY 6RFLDODQGFRPPXQLW\LQYHVWPHQW Total (millions of dollars) Ongoing investment $239.8m $248.0m $262.1m Everyone Connected (targeted programmes) People impacted (VWDEOLVKEDVHOLQH 101,500 OUR ENVIRONMENT &DUERQHPLVVLRQV Tonnes of carbon dioxide equivalent (tCO2e) Minimise our impact 1,676,925 1,659,714 1,687,777 &DUERQHPLVVLRQVLQWHQVLW\ tCO2e per terabyte of data 15% reduction to 1.64 1.24 1.93 HZDVWH 0RELOH0XVWHU Tonnes collected WRQQHVFROOHFWHG 14.3 17.3 18.9 OUR GOAL IS TO BRING THE SOCIAL AND THE ENVIRONMENTAL INTO THE HEART OF THE ORGANISATION IN WAYS THAT CREATE VALUE. iii CHAIRMAN AND CEO MESSAGE WE CONTINUE TO FOCUS 'HDU6KDUHKROGHUV 7KLVIROORZHGRQIURPWKH VKDUHKROGHUYRWHDWRXU :HDUHSOHDVHGWRSUHVHQW\RXZLWK ON THE STRATEGIC $QQXDO*HQHUDO0HHWLQJZKLFK DUHYLHZRI7HOVWUD¶VRSHUDWLRQV PRIORITIES OF ZDVRYHUZKHOPLQJO\LQIDYRXURI DQGVXVWDLQDELOLW\LQLWLDWLYHVRYHU 7HOVWUD¶VSDUWLFLSDWLRQLQWKHUROORXW IMPROVING CUSTOMER WKH¿VFDO\HDU7KLV\HDUZH RIWKH1%17KH1%1$JUHHPHQWV KDYHEURXJKWWRJHWKHURXUDQQXDO SATISFACTION; DUHQRZLQSODFHDQGZHDUH DQGVXVWDLQDELOLW\UHSRUWVEHFDXVH ZRUNLQJFORVHO\ZLWK1%1&RLQ RETAINING AND ZHEHOLHYHWKHVHWZRWRSLFVDUH LPSOHPHQWLQJWKHP7HOVWUDKDV GROWING CUSTOMER LQWHUZRYHQ:HEHOLHYHWKDWDV DOVRODXQFKHGUHWDLODQGZKROHVDOH DEXVLQHVVRXUDELOLW\WRSURVSHU NUMBERS; SIMPLIFYING VHUYLFHVRYHUWKH RYHUWKHORQJHUWHUPKLQJHVRQRXU 1%1IROORZLQJVXFFHVVIXOWULDOV THE BUSINESS AND UHVSRQVHWRWKHFKDQJLQJVRFLDO LQWKHHDUO\UHOHDVHVLWHV DEVELOPING NEW DQGHQYLURQPHQWDOH[SHFWDWLRQVRI GROWTH BUSINESSES. 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