Telstra Annual Report 2005 Annual Report Telstra innovation – making thinking work Annual Report 2005 digital entertainment security and wireless connectivity automation fixed line broadband internet i-mode® investor information We are providing our report to shareholders in two parts: • Annual Review 2005; and Financial Calendar 2006 • Annual Report 2005 Both parts will be lodged with the Australian Stock Exchange (ASX) and the Australian Securities and 9 Feb Half year results announcement Investments Commission (ASIC) and are available on the Internet: 20 Feb Ex-dividend share trading commences http://www.telstra.com.au/abouttelstra/investor/annual_reports.cfm 24 Feb Record date for interim dividend This Annual Report is a detailed report that has been prepared by Telstra Corporation Limited as part of its 24 Mar Interim dividend paid statutory annual reporting obligations under section 314 of the Australian Corporations Act 2001 (Cwth). The Annual Report does not represent or summarise all publicly available information in relation to Telstra. 10 Aug Annual results announcement There is other publicly available information in relation to Telstra that has been notified to the ASX and ASIC. 21 Aug Ex-dividend share trading commences Some of this information has also been lodged with the United States Securities and Exchange Commission (SEC). Copies of documents lodged with the ASX and ASIC may be obtained from ASIC and copies of documents 25 Aug Record date for final dividend lodged with the SEC may be obtained from the SEC. 22 Sep Final dividend paid Nothing in this Annual Report is or shall be taken to be an invitation or an application or an offer to subscribe 14 Nov Annual General Meeting for, or buy shares in, Telstra. Note: Timing of events may be subject to change Terms used in this report: • We,Telstra,Telstra Group and the Company – all mean Telstra Corporation Limited, an Australian corporation, and its controlled entities as a whole; and contact details • Telstra entity is the legal entity, Telstra Corporation Limited. Telstra Corporation Limited The Telstra Share Registrar Our fiscal year ends on 30 June. Unless we state differently, the following apply: Incorporated in the Australian ASX Perpetual Registrars Limited Capital Territory PO Box 14300 • Year or a fiscal year means the year ended 30 June; and Telstra is listed on Stock Exchanges Melbourne Victoria 8001 Australia • 2005 means fiscal 2005 and similarly for other fiscal years. in Australia, New Zealand (Wellington), Shareholder Enquiries and USA (New York) Australia: 1300 88 66 77 All amounts are expressed in Australian dollars (A$) unless otherwise stated. Telstra Enquiries All other: +61(3) 9615 9126 email: [email protected] A glossary of other terms used is provided to assist with the general understanding of the report. Australia: 1300 368 387 All other: +61(8) 8308 1721 website: www.asxperpetual.com.au/telstra Facsimile: +61(3) 9615 9911 Registered Office Level 41, 242 Exhibition Street Annual Report Hotline Melbourne Victoria 3000 Australia To receive copies of the Annual Report or Annual Review, please call 1300 88 66 77 Douglas Gration Company Secretary Website Ph: +61(3) 9634 6400 The Annual Review and Annual Report may also be found via Telstra’s Telstra Corporation Limited Principal Australian Office Investor Relations home page at: 242 Exhibition Street http://www.telstra.com.au/abouttelstra Australian Business Number: 33 051 775 556 Melbourne Victoria 3000 Australia /investor Registered Office: 41/242 Exhibition Street Investor Relations Unit Depositary for American Melbourne Vic 3000 Level 36,242 Exhibition Street Depositary Receipts Australia Melbourne Victoria 3000 Australia The Bank of New York David Anderson 101 Barclay Street – 22 W General Manager New York, New York 10286 Ph: +61(3) 9634 8632 Ph: +1(212) 815 5838 Facsimile: +1(212) 571 3050 Designed and produced by The Ball Group Melbourne and Sydney TEL0065 9/05 AnnualReport_04-05.book Page 1 Friday, September 2, 2005 10:39 PM Telstra Corporation Limited and controlled entities Contents Contents Summary Overview . 3 Key Information. 4 Selected financial data . .4 Exchange rate information . .5 Risk factors . .6 Cautionary statement regarding “forward-looking statements” . .11 Information on the Company. 12 History and development of the Company . .12 Organisational structure . .12 Marketing and customer service . .15 Products and services . .17 International investments . .25 Capital Expenditures and Divestitures . .26 Networks and systems . .26 Property, plant and equipment . .33 Competition and Regulation. 35 Competition . .35 Regulation . .38 Operating and Financial Review and Prospects . 57 Overview of key factors affecting our business and financial performance . .57 Management estimates and judgements in the application of our critical accounting policies . .64 Results of operations . .73 Operating revenue . .75 Operating expenses . .99 International business ventures . 109 Financial position . 112 Liquidity and capital resources . 114 Contractual obligations and commercial commitments . 121 Off balance sheet arrangements . 123 Related party transactions . 125 Research and development . 128 Segment information . 129 Directors, Management and Employees . 136 Directors . 136 Senior executives . 136 Business address . 139 Employees . 140 Major Shareholders and Related Parties . 142 Major shareholders.