6-K
 

 
 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 6-K

REPORT OF FOREIGN ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934

Date: For the period ending 30 June 2005

TELSTRA CORPORATION LIMITED

ACN 051 775 556

242 Exhibition Street
Melbourne Victoria 3000
Australia

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

     
Form 20-F þ   Form 40-F o

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934

     
Yes o   No þ

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):

 
 

 


 

INDEX

Fixed Income Investor Presentation

Telstra Eurobond Issue 2005 – Supplementary Information Memorandum

Telstra announces successful 1billion Eurobond issue

Telstra Eurobond Issue 2005 – Additional Supplementary Information Memorandum

 


 

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Telstra Corporation Limited Fixed Income Investor Presentation John Stanhope Chief Financial Officer Page 11 1

 


 

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Disclaimer 3ThefinancialinformationinthispackisbasedonTelstra’’’’sspubliclyreleased financialresultsasat30June2004& 31December2004.CautionshouldbeusedinextrapolatingTelstra’’ssFY05resultsfrom the’’informationinthispack.Telstra’’’’ssfinalFY05resultswillbe releasedon11August2005. 3EstimatesinthispackhavebeendevelopedbyTelstrabasedoninformationandassumptions knowntodate.Theyaresubjecttouncertaintiesatthisstage. 3Actualresultscouldvarymateriallyfromtheseestimates.Theyarenotaforecastora representationbyTelstraoranyotherpersonastowhatwillhappeninthefuture. Page222

 


 

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Agenda Telstra444 3PrivatisationProcess(T3)9 3Business13 3Financials26 3Regulation37 3DebtManagement41 3Summary48 Appendices50 3AustralianEconomy51 3NewCEOannounced54 3TelstraBackground58 3Sensis61 3A-IFRS64 Page333

 


 

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Telstra Page444

 


 

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Telstra–whoarewe? 3Australia’’s’’sleadingtelecommunicationsandinformationserviccesescompany 314thlargesttelcogloballybymarketcapitalisation(30Jun04) 3Fullservice,fullyintegratedoperatingmodel 3TelstrahasinAustralia: 3Access:>10.1mlines 3Mobiles:>8.1mcustomers 3Online:>2.7minternet customers 3PayTV:>1.3mcustomers 3InternationalpresenceinNewZealand,HongKongandregionalnetworetworks 3Continuous,rigorous,public,politicalandregulatoryscrutiny Telstra— awellestablished,worldclasstelco Page555

 


 

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TelstraStructure CEOCEOCEO SolomonTrujillo CustomerBusinessUnitsCorporateEnablingUnitsService&ProvisionUnitsStaff: 13kStaff:4kStaff:20k Revenue$bp.a.MainFunctionsNo.OfEmployees(Approx)*Finance&AdminM&A,IT, Risk(Approx)Consumer&Marketing(JohnStanhope)Mngt&Audit,InfrastructureServices(David Moffatt)5.3FinanceServices,(MichaelRocca)18,000Productivity,TelstraCountryWide5.0 Treasury,(DougCampbell)InvestorRelationsBusiness&Government4.3CorporateSecretary TelstraTechnologies&IP2,000(DavidThodey)(DouglasGration)(TedPretty) Sensis1.4 (BruceAkhurst)Corporate&HumanRelations (BillScales)HumanResourcesWholesale2.6CorporateRelations(DeenaShiff) RegulatoryBigPond0.6Health&Safety(JustinMilne/PhilipJones) International1.3Legal(BrianPilbeam)(WillIrving) NewCEOstarts1July 2005 Page666

 


 

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Strengthfromfullservicefullyintegratedmodel VirtualMobileInternetDataPrivate(CDMA&GSM)Networks DomesticLongLastMileSatellitePSTN DistanceAccessServices BroadbandBroadbandInternational DirectoriesHFCADSLCalls Research&RegionalPayTVContentVenturesDevelopmentInvestments Allproducts,allmarkets: totalcommunicationandentertainmentsolutions Page777

 


 

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Ownership Public&Institutions Governmentof AustraliaAustralianInternationa RetailInstitutionslInstitutions(26%)(16%)(6%) 51.8%48.2% FullMarketCapitalisation:A$$626262bbbb(1)(1)(1) (H((HHH37b)37b)MarketCap.(FreeFloat):A$30b(1)(1) (1)(((HHHH18b)18b)Shareholders:1.7m T3— (1)$5.00perTLSshare.Exchangerate:H0.60=A$1.00 fullprivatisationplannedfor2006 Page888

 


 

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PrivatisationProcess(T3) Page999

 


 

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T3-possibletimeline Q1Q2Q3Q4Q4Q4Q1Q2Q3Q3Q3Q4Q4Q4MarchJuneSeptemberDecemberMarchJune SeptemberDecember20052005200520052006200620062006 Offerstructureformulated ScopingStudyT3T3T3 2004/05AnnualResultson 2005 /06AnnualResultsin 11 August2005midmidmid—August 2006 T3enabling legislationtabled T3dependson newlegislation,marketconditions&otherfactors Page101010

 


 

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T3-Scoping&StructureIssues(1) 3T3possiblebutnotcertain 3marketconditions 3legislativechanges3other 3ScopingStudyforgovernmentdue30June 3conductedbyUBS&CaliburnPartnersandexpectedtoinclude: 3capitalstructure3corporate structure3operationalseparation3 offerstructure3sale process/timing/logistics Page111111

 


 

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T3-Scoping&StructureIssues(2) 3GovernmentIssues 3decisiontoproceed3 legislativechanges3saleprocess andinstruments3other 3TelstraBoard&ManagementIssues 3corporatestructure 3capitalstructure3 other 3Government&Telstraworkingonaco—ordinated,constructivebasis(asperT1&T2) Page121212

 


 

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Business Page131313

 


 

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Strategy AligninvestmenttogrowthdriversImprovecustomerservice3Broadband 3Wireless 3AdvertisingStrong 3IPNetworks earningsandfreecash Costandproductivityflows Managemigrationimprovements 3Bundling 3sixsigma3FixedSMS3crosscompanyprocessreview3reducingcostofservicedelivery Executionwilldeliver strongershareholderreturns Page141414

 


 

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Telstra’smarketshareremainsstrong BasicAccessLocalDomesticLDInternationalLD18%20%(16%)(18%)71%71% 63%50%(74%)(65%)(52%)(75%) SensisAdvertisingMobileDataSubscriptionTV(mainmedia)13% 45%64%59%(46%)(64%)(58%) NarrowbandBroadbandInternet&IP Telstrashare 26%38% (26%)38%41%(37%) (42%)(39%)Other Resold Fullservicemodel()previousyear Source: Managementestimates 04/05&(03/04) providescompetitiveadvantages Page151515

 


 

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MarketcompetitioninAustralia CarrierFixedVoiceMobilesData (%)(1)(1)(1) (%)(1)(1)(1)(%)(1)(1)(1) Telstra717171464646474747Optus/SingTel111111353535202020AAPT/TCNZ444 —666Vodafone—151515—Hutchison—444—Other141414—272727 Telstraleads Source:CSFBreport2005(1.%of revenue) inallmarketsegments Page161616

 


 

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Diverserevenuestreams VariousIntercarrierSolutionsControlled ServicesManagementEntities 2%2%2%8%8%8%OtherSales5%5%5% &Service*11%1111%%%Data&Internet13%13%13% BasicInboundAccessCalling14%14%14%Products2%2%2%LocalCallsMobiles PSTN7%7%7%17%17%17%Sensis(AdvertisingNationalFixedtoValue & Directories)MobileLongAdded6%6%6% Internat.DistanceServices7%7%7% Direct6%6%6%1%1%1%1%1%1% Strengthandstability *OtherSales&Serviceincludesothersales&service,payphones& throughdiversitycustomerpremiseequipment,investmentincome Page171717

 


 

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IntegratedIPfuture YesterdayTomorrow Fixednetwork andservices Wirelessaccess Mobilenetworkand services IPNETWORK InternetnetworkandservicesFixedaccess ShifttoIP canbemanagedeffectively Page181818

 


 

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Broadbandlifts-off BroadbandSubscribers(000s) 1,479 1,233 761761 761 806806806611611611 508508508 379379379361361 361 220220220 245245245718718718 121121121622622622Wholesale575757427427427 240240240288288288Retail188188188 Dec02Jun03Dec03Jun04Dec04Mar05 Broadband— continuedstronggrowth Page19191

 


 

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FOXTELPayTVJV–akeyasset 3FoxtelPayTV–akeyelementinTelstraproductbundle 3Interactivecontentfuelsdemand 3Deliveryviasatelliteandcable 3Digitalroll-outwithmoresophisticatedsettopbox 3Committedtoour50%shareholding(NewsLtd&PBL25%each) FOXTEL— deliveringabetterTVexperience Page202020

 


 

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Wireless&mobilityexpansion 2G2G2G2.5G3G3G3G Infrastructureshare GSM EDGE 100Kbps25Kbps2-10Km GSM5-5-35Km3GSM (WCDMA)Telstra 9Kbps GPRS250KbpsHSDPA 5-35KmStrategic 2-10Km3Mbps Position CDMACDMAActiverollout 1xEVDV 1xRTTRetainingoption14Kbps80Kbps1xEVDO1xEVNotcurrently9-60Km -9-50Km-DOpursuingRevA 300-600Kbps National600–700Kbps 9-30Km 9-30Km rollout- Flarion BroadbandIP1.5Mbpswireless3-8Km Tria l WiMax 3GSMnetwork readysecondhalf2005 Page212121

 


 

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WirelesscapabilityinAustralia 32.5G 31xNationalrolloutcomplete3i-mode 3PushToTalk 33GGSM 3JVEstablished-nationalmetrocoverage 3Networkextensionunderway 3Servicestobeoffered1H05/06 33GCDMA 3EVDO-capitalcityandselectedregionalcoverage 3SeamlesshandovertoCDMA1x 33GWiFi 3Locationsexpandingincludingpublicpayphones Roll—outslargelytimed tomeetcustomerdemand Page222222

 


 

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Sensis–acleargrowthstrategy M&ADomesticLocalAdvertisingM&ABusinessServices andM&A searchEstablishandgrowSensisSearch viasensis.com.au/sensis1234/SensisWireless LocalAdvertisingBrands BusinessServices YellowPages TradingPostFutureWhitePages AutoTrader™™™InvizageTechnologychannelCitySearchLocation& NavigationJustListed™™™growthWhereisBusiness InformationServicesZestforlifeMediaSmartNewPrintOnline VoiceWirelessiTViTViTV Corebusiness—integrate,expandandgrow Commercialsearch isthefutureforSensis Page232323

 


 

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PSTNVoice–managingthemigration Challenges mobilecompetitivedisruptiveregulatorysubstitutionPressurestechnologies intervention(VOIP/ULL) PSTN Response Investigatingpricingstrategy TriallingVOIP F2MConvergenceframework Product/Packagedevelopment PSTN stillasignificantcashflowgenerator Page242424

 


 

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Maininternationaloperations-keyfinancials CSLTelstraClearReach (HKMobiles)(NZ’(NZ(NZ’’’ssNo 2telco)(Int.connectivityJV)(Standalonebasis) (Standalonebasis) 1H041H051H041H05CY04HK$mNZ$mUS$mTotalrevenue2,0142,173337351 323EBITDA6626237878100EBIT252208(5)1 3Successfullaunchof3G3Retailrevenue3OutsourcedmodelCommentsinDec 04growth7%focusedonparents’ 3Pricingpressure3Strengthened ITcapacityrequirementsremainsintensecapabilities KeyInternationalventures insoundcondition Page252525

 


 

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Financials Page262626

 


 

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5yearfinancialsummary Yearended30June(1) A$b20002001200220032004 Totalrevenue20.623.1(3)(3)(3)20.921.721.3 EBITDA8.6689.8899.5599.210.2 EBIT5.9957.0076.2265.76.6Profitaftertax&minorities3.7734.1143.7(4) (4)(4)3.4(4)(4)(4)4.114Shareholders’’’’equity (3((3)33)))11.613.714.115.415.4Operatingcashflow6.5 566.6667.1177.17.4Returnonaverageequity(%)33.732.726.8(4)(4) (4)23.2(4)(4)(4)26.8Freecashflow(aftercapex)1.7 710.2(2)(2)(2)3.8834.64.2Operatingcapex4.7744.4443.5533.3 3.0 Steadyresults1.AuditedannualfinancialstatementsasperAGAAP 2. Afterproviding A$2.8bcashflow for AsianJVs(PCCW) 3.IncludesA$3bfromrevenuefromsaleofassets(PCCWJV)inperiodof industryturmoil4.Note:Approx.A$1bwritedowninCSLYE02andapprox. A$1bwritedownfor ReachYE03impact thePATandROE Page272727

 


 

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Underlyingresults(1H05) $bb 1H041H05% SalesRevenue10.4610.954.8UnderlyingDomesticSalesRevenue9.7410.184.5 OperatingExpenses5.355.553.8EBITDA5.265.494.3EBIT3.463.665.9NPAT2.132.32 8.8EBITDAMargin50.3%50.1%(0.2)EBITMargin33.1%33.4%0.3DomesticOperatingCapex (inc.3G)1.331.833FreeCashFlow1.832.1820 Deliveringon*Caution—shouldnot extrapolatehalf improvedbusinessperformanceyeartofullyear Page282828

 


 

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PSTNvoiceproducts —1.9% $4,200$90m($89m) $4,100PSTN $4,047m($51m) PSTNMaximisingPSTN ($15m)($2m)$4,000($8m)$3,972m voicethrough: $3,9003Bundling$3,8003Rebalancing 3Featurepenetration $3,700 3C allcompletion $3,600 $3,500 1H04BasicLocalSTDIDIDIDFixedtoVAS1H05AccessCallsMobile Optimisingcashflow*Caution—should notextrapolatehalf fromfixednetworkyeartofullyear Page292929

 


 

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Mobiles–continuingtodeliver IncludingTerminatingRevenue MobileARPUspermonth($) $2,62020m2020mmm100100100 Inclterminating $2,43333m3333mmm+7..7%77%%% $198m808080Postpaid$77 Handsets $186m $526m606060Blended$53 Terminating$507m+3.7%404040 Pre paid$19 202020 000 Dec02Jun03Dec03Jun04Dec04 MobileServices$1,896m$1,740m +9.0% 3SIOgrowth14% 3PrepaidSIOgrowth32%,postpaid4%1H041H053Mobile datagrowth24% Solidperformancein*Caution—should notextrapolatehalf increasinglycompetitivemarketyeartofullyear Page303030

 


 

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Sensis–consistentgrowthstory RevenueEBIT UnderlyingGrowthUnderlyingGrowth $508m $952m$453m$22mTPGTPGTPG $76mTPGTPGTPG +7.3% +8.3% Sensis $809m$876m$486m $453m (inc.$40m(inc.$62m(inclother) Other)SensisOther) (incOther) 1H041H051H041H05 3Growthinonline&voice 3Higher1HduetometroYellowPagesreleasein2Q 3TradingPost(TPG)meetingexpectations OtherreportedeportedinTelstraacrossothersalesandservice,solutions managementagementandotherrevenue * Sensis—Caution—should not extrapolatehalf year deliveringonstrategytofullyear Page313131

 


 

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Underlyingsalesdrivers-1H05 MovementDriversofA$MGrowthA$MRevenueGrowthActual% 168Totalmobiles2,0948.7155Internet &IPsolutions62433100OtherSales&Service37636.2 565656PayTV12186.2454545Advertising& Directories8145.9 -2020ISDN453(4.2)-2121SpecialisedData495(4.1)-75 75PSTN3,972(1.9) StronggrowthinMobiles,Internet&IP*Caution—should notextrapolatehalf asPSTNvoicefallsyearto fullyear Page323232

 


 

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Underlyingoperatingexpenses +3.8%$5,547m($1)m$5,345mmmm $29mEquity Labour+1.3% Accounted losses$1,656mmmm3Salaryincreasesabsorbed$1,635mmmm 3Lowerredundancyexpense 3Greaterfrontofhousecapability Goods&ServicesPurchased+17.0% 3Satisfyingcustomerdemand$1,737m$2,033m3Handsetsubsidies 3Growthinnetworkpayments 3PayTVbundling Otheroperati ngexp.—4.4% 3LowerITsupportcosts$1,944m$1,859m 3Improvedcreditmanagement 3Focussedmarketingcampaigns 3Lowerplant&equipmentcosts 1H041H05 Costgrowth*Caution—shouldnotextrapolatehalf largelydemanddrivenyeartofullyear Page333333

 


 

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Capitalexpenditure&depreciation CAPEXD&A 1H051H05DomesticcoreDepreciation& Total=$1,774mTotal=$1,824m CapexallocatedAmortisation 777777313131616161 tomeetdemand.........131131131growth 315315315 isslowing......... 215215215 934934934 1H043863863861H04 1,448 Total=$1,332mTotal=$1,802m +33%+1.2%292929606060120120120 MeetCurrentDemand298298298 111111111 NewRevenueGrowth Including3G 143143143DepreciationAssetLifecycleMgt 771771771AmortisationEfficiency158158158(exgoodwill)Retention 1,444GoodwillCompliance FY05capexguidance*Caution—should notextrapolatehalf $3.3billionincluding3Gyeartofullyear Page343434

 


 

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Capitalmanagementdrivers 3Stableoperatingandregulatoryenvironment 3Focusondomesticcorebusiness(includesNZmarket) 3Robustcashflows 3Ongoingproductivityimprovements Largelydrivenby coredomesticbusinessenvironment Page353535

 


 

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Targetfinancialparameters %1.PayoutRatio(OrdinaryDividendsDeclared)%2.Gearing–––Net Debt WeakerWeaker555555100TargetZone45—55%55%55%505050 TargetZone80%808080454545 606060404040 404040Stronger353535StrongerJun00Jun01Jun02Jun03Jun04Dec05 Jun00Jun01Jun02Jun03Jun04Dec05 Times3.InterestCover–––EBITDA/NetIntExpTimes4.DebtServicing––– NetDebt/EBITDA 151515Stronger2.002 WeakerTargetZonegreaterthan8times1.771TargetZone1.3–––1.7times 1010101.441 1. 1115550.880 0000.550 StrongerJun00Jun01Jun02Jun03Jun04Dec05WeakerJun00 Jun01Jun02Jun03Jun04Dec05 Targetparametersprovideflexibilityforthefuture withfurthercapitalreturnsof$1.5bpaovernext2years Page363636

 


 

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Regulation Page373737

 


 

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Industry/Regulatory framework OmbudsmanConsumerCompetitionTIOpolicypolicy PriceCaps Servicequality AccessdeficitConductregime USOInvestment Accessregime Other(egfreeDA)impact ACAACCC TechnicalregulationACIF ACCC=TheAustralianCompetitionandConsumer AustraliahaswelldevelopedCommission ACA=AustralianCommunicationsAuthoritycompetitivetelcoenvironment ACIF=AustralianCommunicationsIndustryForum TIO=TelecommunicationsIndustryOmbudsmanPage383838

 


 

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Australianregulatoryenvironment 31992–competitionintroduced(2networkcarrierlicenses,3mobiles) 31997–opencompetition(unlimitedentry) 3Socialregulation 3minimumnationalfixedlineservice(USO=UniversalServiceObligation)fundedby telcoindustry3pricecapofCPI+4%forbasicaccesswithoffsettingCPI-4.5% reductionsinfixedcalls(currentpricecapexpires1Julyandisbeingreviewed)3 minimumservicestandardsforoutlyingregions 3Competitionregulation 3Regulatedaccesspricingfordeclaredserviceshasscopefor commercialnegotiations.(Declaredservicesinc.unbundledlocalloop, originating/terminatingaccess,localcallresaleandspectrumsharing.) 3Localnumberportability1997 3Mobilenumberportability2001 TelstrahasdemonstratedtrackrecordNote:Pricecapsnowapply tolessthan50%ofTelstra’s ofeffectivelymanagingregulationrevenues Page393939

 


 

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Regulatoryissues Current 3Pricecapsreview 3Mobileterminationpricing 3FinaldecisiononULL/LSSundertakings 3USOcostingfor2005-2008 3T3regulatoryreview 3Regulationofbroadbandcompetition(ULL) 3Localcallservicereview Future 3FTTH,FTTNNextGenerationNetworks (Fibretothehome&node))) 3 VoIP(Voiceoverinternet protocol))) 3 T3—FullPrivatisation Regulatoryissues proactivelymanaged Page404040

 


 

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DebtManagement Page414141

 


 

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Longtermdebtmaturityprofile CurrentProfilevTarget A$bbA Years333Av.MaturityDuration Current4.8843.8832.552Target43336663333555 222Focusarea 1.551111 0.550 000 05/0606/0707/0808/0909/1010/1111/1212/1313/1414/1515/1616/1717/18 18/19+Years Nextborrowingtargetedto lengthenmaturityprofile Page424242

 


 

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05/06fundingrequirementsandsources FundingRequirements:A$b -Maturinglongtermdebt1.0 -Netinternalcashflow1.4Total2.4 FundingSources -Longtermborrowings1.6 -Reductioninliquidassets0.0 -Increasedshorttermborrowings0.8Total2.4 AH1bHH1bissuemeetslongtermborrowingsNote:Approximateonly. Areadjustedcontinually overplannedfor05/06 yeartoreflectcashflows, capitalinvestments,sales,etc. Page434

 


 

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343 DebtfacilitiesatJune05 SizeTypeDrawnLong:H8bDebtIssuanceProgramH2.3b(A$3.9b)US$1.25bSEC RegisteredShelf(US)nilShort:A$2bDomesticCPProgramnilUS$4bUS““H0.16b(US$0.2b) H4bEuro““NilNZ$(NA)NZ““H0.12b(NZ$0.2b)Standbys:A$0.8bCommittedstandbylines NiluptoA$1bSubstantialcommittedo/dNil Drawdownsandlowutilisationlevels giveamplecapacity Page444444

 


 

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Keydebtparameters (yearendJune30) A$b2001200220032004 GrossDebt14.113.712.311.9NetDebt(1)12.512.311.011.2InterestCover (2)(x)12.710.710.212.9NetDebtRatio(%)48.047.042.042.0DebtCoverageRatio (3)1.31.31.21.1 Reflectfinancial(1)Afterdeductingcash&liquidfinancialinvestmentsfromGrossDebt (2)NetinterestcoverbasedonEBITDA&includescapitalisedinterest strengthandflexibility(3)EBITDA/NetDebt Page454545

 


 

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Telcocreditratings(May05) SBCSBCSBC Moody’’ss’’Comm.FTFTFTBellSouthCorpDTDTDT VodafoneKPNKPNKPN TelstraTCNZKTCorpQWest TeliaC&WC&WC&W NTTSingTelTELEFBTBTBTSprintAT&TSonera(UK) Aa2Aa3A1A2A3Baa1Baa2Baa3Ba3Ba1 S&PS&PS&PSBCSBCSBCInvestmentNoninvestment Comm.grade grade BellSouthFTFT FTCorp average Telia DTDTDT OutlookSonera TelstraTELEF KPNKPNKPN NegativeSingTelVodafoneKTCorp VerizonBTBTBTSprintAT&TC&WC&WC&W NTTTCNZQWest Positive AAAA-A+AA-BBB+BBBBBB-BB+BBBB- Telstra remainsamongthestrongtelcos Page464646

 


 

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Telstracreditratings AgencyLongShortOutlook Standard&Poor’sA+A1NegativeMoody’sA1P1NegativeFitchA+F1Stable Negativeoutlook largelyreflectsincreasedT3eventrisk Page474747

 


 

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Summary Page484848

 


 

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Investmenthighlights 3Fullserviceandfullyintegratedtelco–––strongmarketposition&wide rangeofproducts&services 3Diversity–––fromanAustralianinvestment 3Regulatoryriskrelativelylow—welldevelopedcompetitiveenvironment 3StrongestAustralianfranchise(No.1positioninallsegments) 3Demonstratedtrackrecordinhighlycompetitiveenvironment 3Successfullymanagedderegulation 3Provencostcontrol 3Capexcontrol 3Strongcashflows 3EventriskincreasedduetoT3 Opportunityfor qualityinvestmentofferingdiversity Page494949

 


 

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Appendices Page505050

 


 

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Australian Economy Page515151

 


 

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Australia–keystatistics KeyStatistics: 3GDPUS$617b(calendar2004) 3Population20.2m 3LandMassArea:7.7msquarekms(similarsizetoUSAorEurope)Coastline:60 mmeters EconomicForecasts–––KeyVariables Variable02-0303-0404-05(f)05-06(f)06-07(f)GDP3.2%4.0%2.3%3.3%3.5% CPICPICPI3.1%2.4%2.5%2.3%2.6%Wagesgrowth3.5%3.6%3.7%4.0%3.4%Employmentgrowth 2.5%1.8%2.7%18%18%18%1.5%Unemploymentrate*6.2%5.8%5.1%5.4%5.3% Source:TelstraEconomics&ABS*Yearaveragelevel(f)=TelstraForecast Australia— politicallystablewithdiverseeconomicbase Page525252

 


 

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Australia–keystatistics GROWTHINMAJORECONOMIES400POPULATIONDENSITY 350Personsperkm22210%RealGDPGrowthoverYeartoMarch2005 3008%250 6%2001504%1002%50 0%0 JapanUSAustraliaUKFranceCanadaGermanyItalyChinaIndiaJapanIndiaUK GermanyChinaIndon.FranceUSANZAustralia -2% NOMINALGDPperCAPITA(2004)INDUSTRYCOMPOSITIONOFAUSTRALIA 40BasedonyeartoMar.2004 30OtherGovernmentannum17%17%per20AgricultureK US4%Finance $10Worldaverage Manufacturing23%12% 0Mining Communications USJapanUKFranceGermanyCanadaAustraliaItalyChinaIndia4% 3%ConstructionWholesale Australianeconomy—7%/retail 13% somekeycomparables Source:TelstraEconomics,ABS&GlobalInsightPage535353

 


 

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TelstraCEO Page545454

 


 

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NewCEO Page55

 


 

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5555 NewCEOcont Page565656

 


 

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NewCEOcont Page575757

 


 

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TelstraBackground Page585858

 


 

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595959Page

 


 

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arstel BellSouthTGSJBW Research GSJBWResearcharnemscooSis iawS Tel snoitItaliacai TelecomnummoC Zealand elefonicaT BCS NewmcoaicTeleonf VerizonTele mcomlecole TeeTecn ceran SalesGrowthFraFlanda EBITDAMarginhBellSout ZeNewelecommolecT mcoeTeleT erporegapo ainSingS lstraemkoT leTeschetDeuare komeonS Teliascheel tT DeupuGro izonreV BT keycomparablesSwisscomGroupBT Italia ecomle TCommunications Telstra-24.0%16.0%8.0%0.0%-8.0%60.0%40.0%20.0%0.0%SBC strong&wellpositioned Tels tra Integratedconsumercommunicationsvision HouseholdServices AccessLinePayTV&Videoon—Narrowband, DemandBroadband—Mediaserver HomeNetwork HomeSecurityoptionsMonitoring&—gateway,firewall, AutomationwirelessLAN Objective––– buildingstrongercustomerrelationships Page606060

 


 

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Sensis Page616161

 


 

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Sensis-newgrowthopportunities Commercialsearchisfragmenting PrintVoiceOnlineWirelessIncar 3Directories3Directory3Directories3Directories3Locationassistance 3Classifieds3Search3Search3Localbusiness 3Tele-searchenginesengines search 3Nichepublications3SMSservices3Classifieds3Classifieds3Localproductsearch 3 Auctions3Localbusiness andproduct 3 Comparisonsearch 3 Location 3Events 3 Verticalsearch 3 Location Page626262

 


 

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Sensis’network-wellplacedtosucceed Directory Directories Assistance Classifieds Verticals SearchSensisWireless Location& Navigation PrintOnlineVoiceInInIn—carcarcarWireless Page636363

 


 

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A-IFRS Page646464

 


 

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Cautionarystatement 3ThefigurespresentedareourcurrentbestestimateoftheconsequencesforTelstraof adoptingA-IFRS–accordingly,theyremain subjecttochange 3Allamountsarepreliminaryandunaudited,butreflectthework-in-progressofourIFRS projectteam,andarebasedonA-IFRSstandardsandinterpretationasat1March2005 3Allforwardlookingstatementsrepresentourbestestimatetodateandshouldnotberelied uponasafinalorexhaustivestatementofallpossibleeffectsofA-IFRSwhenultimately adoptedinFY06 3Forwardlookingstatementsareinherentlyuncertainastheyarebaseduponcurrent assumptions,expectations,understandings,analysisandforecaststhatmaynotturnouttobe correct ·Theforwardlookingstatementscontainedinthisdocumentspeakonlyasof thedateofthispresentation.Telstradoesnotundertaketoupdateanyforwardlooking statementstoreflecteventsorcircumstancesafterthedatehereof,ortoreflectthe occurrenceofunanticipatedevents. 3Ourestimatesdonotincludetheeffectorlikelyeffectoffuturetransactionsornew ventures/acquisitionsonfinancialstatements-theyarebasedoneventsupto30November 2004. Page656565

 


 

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A-IFRSatTelstra–keymessages 3NoimpactonTelstra’sstrategyandbusinessperformance: 3ManagementdecisionsarenotaffectedbyA-IFRS 3Telstra’soperationsarenotimpacted 3UnderA-IFRSthereislikelytobeincreasedvolatilityinearnings 3A-IFRSwillnotsignificantly affectnetcashflow,abilitytoborrowfunds,ordividendscapacity 3Nochangetocommitments 3Nochangetoreturnstoshareholders Focusonfreecashflows isnotcompromised Page666666

 


 

(PAGE 67)

A-IFRSimplementationtimeline 3IFRSprojectteamtomanageconvergencetoA—IFRS 3FirstsetofA—IFRSfinancialstatementswillbeforthehalf—yearended 31December2005,andforthefinancialyearended30June2006 A-IFRS–HalfA-IFRS–FullyearyearOfflinemodeldeveloped,andreportingto reportingtoFinalnarrativeassessmentofkeyTransitionalinclude1yearinclude1or2 transitionalTelstrastartsA-impactsandprojectstatusimpactsofyearsofimpactsIFRS projectdisclosedreportedcomparativescomparativesreported July 1July31Dec30June31Dec30June31Dec30June0n2 03030404050506 Projectonschedule tomeetimplementationmilestones Page676767

 


 

(PAGE 68)

Keytransitionimpacts 3Knownestimableimpactsreportedin31December2004half—yearfinancial statements 3Nochangetotheseestimatedimpactstodate Transitiondate1July2004$million(unaudited) AGAAPtotalequity15,361Totalreductioninequity(852)A-IFRStotal equity14,509 Majorcomponents-increase/(decrease)inequity: ConsolidationofTESOPandGrowthshareTrusts(291)Sharebased remuneration55Carryingvaluedifferencesfromthetaxbase(184) Definedbenefitpensionassets400Retranslationoftheoverseas goodwillbalances*(302)Expensingofborrowingcostspreviously capitalised*(322)Equityaccountingofcapacityprepaymentfor ReachLtd(208) *OptionaladjustmentsunderA-IFRS Transitiondateof1July04 applies Page686868

 


 

(PAGE 69)

Ongoingimpact-financialhighlights Sixmonthsto31December 2004Increase/(decrease) AGAAPA-IFRS31December 2004$million$million$ million(unaudited)(unaudited) (unaudited) Incomestatement SalesRevenue11,27511,275-Totalincome11,38211,360(22)Total expenses5,8455,87126EBITDA5,5375,489(48)Depreciationand amortisation1,8501,733(117)EBIT3,6873,75669Netfinancecosts 37142453NPAT2,3372,39154 Earningspershare Basic18.619.10.5Diluted18.619.00.4 Dividendpayoutratio74.5%72.9%-1.6% Netassets15,25414,508(746)Netdebt11,97211,967(5) Netcashflow4204222Freecashflow1,6091,976367 TheimpactofAASB132/139FinancialInstrumentshasbeenexcluded fromthisanalysisduetotherelevanttransitiondatebeing1July 2005.Eachoftheaboveitemsisaddressedinmoredetailinthe followingpagesandtheAppendix. Earningsmaybemorevolatile, butnetcashflownotsignificantlyaffected Page696969

 


 

(PAGE 70)

Targetfinancialparameters Sixmonthsto 31Increase/ December2004 (decrease) AGAAPA-IFRS31Dec.2004Target (unaudited)(unaudited)(unaudited) Payoutratio(ordinarydividendsdeclared)80%74.5%72.9%-1.6% Gearing-NetDebt45-55%44.0%45.2%1.2% InterestCover-EBITDA/Greater NetInterestExpensethan813.212.9(0.3) DebtServicing-Net1.3-1.7 Debt/EBITDAtimes1.11.10.0 TheimpactofAASB132/139FinancialInstrumentshasbeenexcludedfromthis analysisduetotherelevanttransitiondatebeing1July2005. Debtcoverageratios notmateriallyimpacted Page707070

 


 

(PAGE 71)

TelstraTreasuryWebsite http://www.telstra.com.au/communications/treasury/index.cfm Page717171

 


 

(TELSTRA LOGO)

     
14 June 2005
  Office of the Company Secretary
 
   
The Manager
  Level 41
 
  242 Exhibition Street
Company Announcements Office
  MELBOURNE VIC 3000
Australian Stock Exchange
  AUSTRALIA
4th Floor, 20 Bridge Street
   
SYDNEY NSW 2000
  Telephone 03 9634 6400
 
  Facsimile 03 9632 3215

ELECTRONIC LODGEMENT

Dear Sir or Madam

Telstra Eurobond Issue 2005 — Supplementary Information Memorandum

Please find attached a Supplementary Information Memorandum which has been lodged with the United Kingdom Listing Authority. This updates the original Information Memorandum dated 23 September 2004.

Yours sincerely

(DOUGLAS GRATION SIGNATURE)

Douglas Gration
Company Secretary

     
 
  Telstra Corporation Limited
 
  ACN 051 775 556
 
  ABN 33 051 775 556

 


 

Supplemental Information Memorandum

     (TELSTRA LOGO)

Telstra Corporation Limited
(ABN 33 051 775 556)
(incorporated with limited liability in the Commonwealth of Australia)

8,000,000,000
Debt Issuance Program

These supplementary listing particulars (“supplemental Information Memorandum”) are prepared in connection with the 8,000,000.000 Debt Issuance Program (“Program”) of Telstra Corporation Limited (“Issuer”) and are supplemental to. and should be read in conjunction with the Information Memorandum dated 23 September 2004 (“Original Information Memorandum”). This Supplemental Information Memorandum comprises supplementary listing particulars as required under section 81 of the Financial Services and Markets Act 2000 (“FSMA”).

Copies of this Supplemental Information Memorandum, which comprises supplementary listing particulars approved by the United Kingdom Listing Authority in accordance with Part VI of the FSMA, have been delivered for registration to the Registrar of Companies in England and Wales as required by section 83 of the FSMA.

Arranger

JPMorgan

6 June 2005

 


 

Important Notice

Responsibility

Unless otherwise defined in this Supplemental Information Memorandum, terms defined in the Original Information Memorandum have the same respective meaning where they appear in this Supplemental Information Memorandum.

The Issuer accepts responsibility for all information contained in this Supplemental Information Memorandum. To the best of the knowledge and belief of the issuer (which has taken all reasonable care to ensure that such is the case) the information contained in this Supplemental Information Memorandum is in accordance with the facts and does not omit anything likely to affect the import of such information.

Any reference in this document to listing particulars means this document excluding all information incorporated by reference. The Issuer has confirmed that any information incorporated by reference, including any such information to which readers of this document are expressly referred, has not been and does not need to be included in the listing particulars to satisfy the requirements of the Act or the Listing Rules. The issuer believes that none of the information incorporated therein by reference conflicts in any material respect with the information included in the listing particulars.

This Supplemental Information Memorandum should be read and construed with any amendment or supplement to it, with any Pricing Supplement and with any other documents incorporated by reference as set out under the section in the Original Information Memorandum entitled “Documents Incorporated by Reference” provided always that any such amendment or supplement and any other such documents incorporated by reference shall not form part of the listing particulars or the supplementary listing particulars as comprised by the Original Information Memorandum and this Supplemental Information Memorandum, respectively.

None of the Arranger nor, when appointed, the Dealers makes any representation or warranty, express or implied as to, nor assumes any responsibility or liability for the authenticity, origin, validity, accuracy or completeness of, or any errors or omission in any information statement, opinion or forecast contained in this Supplemental Information Memorandum.

No authorisation

No person has been authorised to give any information or make any representation not contained in this Supplemental Information Memorandum or in the Original Information Memorandum in connection with the Issuer, or its subsidiaries, the Program or the offer or subscription of the Notes. If given or made, such representation or information must not be relied upon as having been authorised by the issuer or its subsidiaries or the Arranger or, when appointed, any of the Dealers.

Currency of Information

Neither the delivery of this Supplemental Information Memorandum, the Original Information Memorandum or any Pricing Supplement nor the offer or subscription of Notes implies or should be relied upon as a representation or warranty that the information contained in this Supplemental Information Memorandum or the Original Information Memorandum concerning the issuer or its subsidiaries is correct at any time subsequent to the date of this Supplemental Information Memorandum or that any information supplied in connection with the Program is correct as of any time subsequent to the date indicated.

Distribution

The distribution of this Supplemental Information Memorandum, the Original Information Memorandum and any Pricing Supplement and the offer or subscription of the Notes may be restricted by law in certain jurisdictions. Persons into whose possession this Supplemental Information Memorandum (including any documents incorporated by reference in it) or any Notes come must inform themselves about and observe any such restrictions.

No registration in the United States

The Notes have not been and will not be registered under the Securities Act of 1933 of the United States (as amended), and include Notes in bearer form that are subject to U.S. tax law requirements. Subject to certain exceptions, Notes may not be offered, sold, delivered or transferred within the United States or to, or for the account of, U.S. persons (as defined in Regulation S under the Securities Act).

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No public offer in the United Kingdom

The Issuer has not authorised any offer to the public in the United Kingdom within the meaning of the Public Offers of Securities Regulations 1995, as amended, (the “Regulations”) of Notes having a maturity of one year or more which have not been admitted to listing in accordance with Part VI of the FSMA. Such Notes may not be lawfully offered or sold to persons in the United Kingdom except in circumstances which do not result in an offer to the public in the United Kingdom within the meaning of the Regulations or otherwise in compliance with all applicable provisions of the Regulations.

No offer

None of this Supplemental Information Memorandum, the Original Information Memorandum, nor any Pricing Supplement constitutes nor is it intended to constitute an offer or an invitation by or on behalf of the Issuer, or its subsidiaries, the Arranger or, when appointed, any Dealers to any person to subscribe for, purchase or otherwise deal in any Notes, nor it is intended to be used for the purpose of or in connection with offers or invitations to subscribe for, purchase or otherwise deal in any Notes.

No independent verification

The Arranger and, when appointed, the Dealers have not separately verified the information contained in this Supplemental Information Memorandum or in the Original Information Memorandum. None of this Supplemental Information Memorandum, the Original Information Memorandum nor any other information supplied in connection with the Program is intended to provide the basis of any credit or other evaluation and should not be considered as a recommendation by the Issuer, the Arranger or, when appointed, any of the Dealers that any recipient of this Supplemental Information Memorandum, the Original Information Memorandum or any other information supplied in connection with the Program should purchase the Notes nor does it constitute an offer or an invitation to subscribe for Notes. Each potential purchaser of Notes should determine for itself the relevance of the information contained in this Supplemental Information Memorandum and the Original Information Memorandum and any purchase of Notes should be based upon such investigation as it considers necessary. The Arranger and, when appointed, the Dealers do not undertake to review the financial condition or affairs of the Issuer during the life of the Program or to advise any investor or potential investor in the Notes of any information relating to the Issuer.

No significant change

Save as disclosed in this Supplemental Information Memorandum there has been no significant change and no significant new matter has arisen since the publication of the Original Information Memorandum.

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The information set out under the heading “General” on page 9 of the Original Information Memorandum is updated by inserting the following additional paragraph:

     Telstra announced continuing revenue growth in its 2004/2005 third quarter market update:

    reported sales revenue grew by 6.5% in the third quarter and 7.4% to A$16.6 billion year to date;
 
    underlying sales revenue grew by 3.3% in the third quarter and 4.3% to A$16.1 billion year to date;
 
    underlying domestic sales revenue grew by 2.8% in the third quarter and 4.0% to A$15 billion year to date;
 
    Internet & IP Solutions revenue grew by 38% in the third quarter and 35% or A$251 million year to date;
 
    mobiles revenue grew by 7.6% in the third quarter and 8.3% or A$238 million year to date; and
 
    underlying advertising and directories revenue grew by 15% in the third quarter and 8.3% or A$83 million year to date.

The information set out under the heading “3G wireless service” on page 14 of the Original Information Memorandum is updated by deleting the text from line six beginning “We entered into a network sharing agreement...” to “Brisbane, Adelaide and Perth.” and inserting the following:

    On 6 December 2004, we signed agreements with Hutchison 3G Australia Pty Ltd (H3GA), a subsidiary of Hutchison Telecommunications (Australia) Limited, to jointly own and operate H3GA’s existing third generation (3G) radio access network and fund future development. The final agreements with H3GA create an asset sharing arrangement, where we have acquired a 50% interest in H3GA’s existing 3G Radio Access Network (RAN) assets. The purchase price for the 50% interest in the 3G RAN assets was A$450 million, 5% of which has been paid with the balance payable by instalments until 1 July 2006..

The information set out under the heading “Data and Internet services” on page 16 of the Original Information Memorandum is updated by inserting the following additional paragraph:

    On 17 September, 2004, we acquired 100% of the issued share capital of ESA Holding Pty Limited and its controlled entities, Damovo (Australia) Pty Limited and Damovo HK Limited for A$64.3 million.

The information set out under the heading ‘Advertising and directories” on page 18 of the Original Information Memorandum is updated by inserting the following additional paragraph:

    On 20 December 2004, we acquired Universal Publishers Pty Ltd for A$46 million, including acquisition costs.

The information set out under the heading “Solutions Management” on page 20 of the Original Information Memorandum is updated by removing the phrase “On 19 July 2004, we completed the acquisition of KAZ Group Ltd (KAZ) for A$333 million.” and replacing it with:

    On 19 July 2004, we acquired 100% of the issued share capital of the KAZ Group Limited and its controlled entities for A$342 million, including acquisition costs;

and inserting the following additional paragraph immediately after the dot points:

    On 8 November 2004, we agreed in principle to sell our interest in Infonet Services Corporation to British Telecommunications plc for A$68.5 million. Once the proceeds of this sale are added to our share sales associated with Infonet’s initial public offering in December 1999, we expect to realise a pre-tax gain of approximately A$164.5 million.”

The information set out under the heading “International Investments” on page 21 of the Original Information Memorandum is updated by deleting the phrase at dot point four “On 25 August 2004, we announced our acquisition of PSINet UK for A$127 million (D50million),” and replacing it with:

4


 

    On 25 August 2004, we acquired 100% of the issued share capital of PSINet UK Limited and its controlled entities for A$127 million, including acquisition costs.

The information set out under the heading “Competition Rule” on page 34 of the Original Information Memorandum is updated by deleting the paragraph beginning “A competition notice relating to changes to BigPond Broadband...” and replacing it with:

    The ACCC issued a Competition Notice on 19 March 2004 notifying that the ACCC had reason to believe that Telstra was engaging in anti-competitive conduct in breach of the Trade Practices Act 1974 in its supply of broadband ADSL services to wholesale and retail customers. The notice was revoked on 21 February 2005 following an agreement with Telstra resolving the matters raised in relation to the Competition Notice. Telstra did not admit liability for any breach under the Act. Telstra has agreed to adhere to a Notification Protocol for Broadband Pricing Changes for 12 months, in which Telstra must notify the ACCC in advance of future changes to retail broadband prices. Telstra also agreed to work with the ACCC, using independent expert advice, to determine a process for deciding the appropriate price relativities in future, as well as offering its wholesale customers revised pricing and a rebate totalling A$6.5 million.

The information set out under the heading “Retail price restrictions” on page 35 of the Original Information Memorandum is updated by deleting the paragraph beginning “The Commonwealth Government...” and replacing it with:

    The current price control arrangements made by the Minister for Communications, Information Technology and the Arts under the Telecommunications Act 1997 for our local, long distance and international fixed line calls, line rentals and connection services are due to expire on 30 June 2005. At the Minister’s direction, the ACCC held a public inquiry in relation to the current arrangements and released a draft report of its inquiry in November 2004. The final ACCC report was released on 30 March 2005, although no Government decision has yet been announced. If the Minister decides to adopt the ACCC’s recommendation to implement price controls that are more extensive than under the current arrangements, this may impact upon Telstra’s profitability.

The information set out under the heading “Access pricing” on page 37 of the Original Information Memorandum is updated by inserting the following additional paragraph:

    On 13 December 2004, we lodged four undertakings with the ACCC specifying the monthly usage charge and the connection and/or disconnection charge for each of Unconditioned Local Loop Service and Spectrum Sharing Service (also known as Line Sharing Service) in 2004/05 and 2005/06. Acceptance of the undertakings will provide certainty in the short term.

The information set out under the heading “Mobile terminating access” on page 38 of the Original Information Memorandum is updated by deleting all text from “The ACCC also proposed new pricing principles...” to “currently subject to an appeal lodged by another carrier.” and replacing it with:

    The ACCC also decided that the price for Mobile Terminating Access Service (“MTAS”) should be reduced. It published pricing principles for MTAS that included a ‘glide path’ of MTAS prices starting at 18 cents per minute (“cpm”) on 1 January 2005 and reducing by 3 cpm over each of the next two years to 12 cpm on 1 January 2007. Until recently, prices for MTAS were approximately 21 cpm. Telstra is a net outpayer of MTAS charges. Vodafone commenced a Federal Court action challenging the validity of the ACCC’s pricing principles and lodged an access undertaking with the ACCC containing pricing which is substantially higher than the ACCC’s, coupled with a “pass-through safeguard” which sets a maximum retail price for fixed to mobile services provided by an access seeker. Optus has also lodged an access undertaking with higher charges than those determined by the ACCC. The ACCC has commenced a public consultation on the Optus undertaking. Telstra has successfully concluded commercial negotiations with Vodafone and Optus on MTAS pricing.

The information set out under the heading ‘Universal service and digital data service obligations” on page 41 of the Original Information Memorandum is updated by inserting the following additional paragraph immediately after the second paragraph:

    At the direction of the Minister for Communications, Information Technology and the Arts, the Australian Communications Authority (ACA) has conducted a public enquiry and provided advice to the Minister on universal service obligation (USO) subsidies for the 2005-06 to 2007-08 financial years. These subsidies can be claimed by universal service providers (USP) for fulfilling the USO. Currently, Telstra is the sole USP. Subsidies are currently funded by all licensed telecommunications carriers on the basis of eligible revenue. The Minister has determined USO subsidies for the period up to and including 2004-05. The Telecommunications Act 1997 provides that the Minister may determine

5


 

    subsidies after receiving advice from the ACA. In the past, the Minster has set USO subsidies at a level that has not allowed Telstra to fully recover its costs of fulfilling the USO.

The information set out under the heading ‘Hong Kong Telecommunications Regulatory information” on page 44 of the Original Information Memorandum is updated by inserting the following additional paragraph immediately after the first paragraph:

    On 18 April 2005, Telstra and PCCW Limited (shareholders in REACH) announced changes to the REACH operational model, including:

    the allocation of dedicated components of REACH’s international cable capacity to Telstra and PCCW;
 
    Telstra and PCCW each paying REACH US$157 million (in Telstra’s case settled by way of a discharge of REACH’s liabilities under the Capacity Prepayment Agreement);
 
    Telstra and PCCW have each committed to funding a half share of REACH’s committed capital expenditure (up to 2022) being about US$106 million each;
 
    REACH will manage allocated capacity on behalf of Telstra and PCCW and provide Telstra and PCCW with outsourced and other services including data and voice; and
 
    Telstra and PCCW will each pay REACH an outsourcing fee on a cost-plus mark up basis. Satellite services will be purchased at market rates.

The information set out under the heading “Directors” on page 54 of the Original Information Memorandum is updated by deleting the text in table footnote (2) “On 27 August 2003, the Telstra Board...” and replacing it with:

    On 1 December 2004, Telstra announced that its Chief Executive Officer and Managing Director, Dr Zygmunt Switkowski, had agreed with the Telstra Board of Directors that he will step down on 1 July 2005, or earlier if a new CEO is appointed prior to that date.

The information set out under the heading “Capitalisation and indebtedness” on page 60 of the Original Information Memorandum is updated by deleting all of the text under the heading and replacing it with:

    The following table has been prepared in accordance with AGAAP (including but not limited to AGAAP applicable to interim financial reporting) and shows our capitalisation extracted from our reviewed half-year financial report for the half-year ended 31 December 2004.
         
    As at  
    31 December 2004 (5)  
    (in millions)  
    A$  
 
 
       
Short-term debt (1)
    3,360  
 
     
Long-term debt (2) Telecom/Telstra bonds
    2,616  
Loans
    6,884  
Cross currency swap hedge
    567  
Finance leases
    49  
 
     
Total long-term debt
    10,116  
 
     
 
       
Shareholders’ equity
       
Ordinary shares (12,443,074,357 fully paid ordinary shares issued)
    5,793  
Reserves
    (160 )
Retained profits (3)
    9,619  
Minority interests
    2  
 
     
Total shareholders’ equity
    15,254  
 
     
 
       
Total capitalisation (4)
    28,730  
 
     
 
(1)   Includes the current portion of long-term debt. A$3,355 million of short term debt is unsecured and unguaranteed. A$5 million of finance leases are secured but unguaranteed.
 
(2)   With the exception of the finance leases which are secured but unguaranteed, all long term debt is unsecured and unguaranteed.

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(3)   On 10 February 2005, we declared a fully franked interim dividend of A$0.14 per ordinary share and a fully franked special dividend of A$0.06 per ordinary share payable on 29 April 2005.
 
(4)   Total capitalisation consists of short-term debt, long-term debt and shareholders’ equity, including minority interests.
 
(5)   Except as described above, there has been no material change in the consolidated capitalisation or indebtedness of the Company since 31 December 2004.

    On 15 November 2004, we completed an off-market share buy-back of 185,284,669 ordinary shares as part of our ongoing capital management program. The ordinary shares were bought back at A$4.05 per share, for a total value of A$750 million including both a capital and dividend component. The shares bought back were subsequently cancelled, reducing the number of fully paid ordinary shares on issue. In total, 2.87% of our non Commonwealth owned ordinary shares were bought back.
 
    In March 2005 the Commonwealth Government commissioned a scoping study into the possible sale of its remaining shares in Telstra (being 51.8% of the number of issued shares). The scoping study will examine whether the sale will deliver an appropriate return and, if so, how and when the sale should occur. A sale could occur in one or more tranches and involve a restructuring of Telstra’s businesses, as well as share buy backs by Telstra. The scoping study is due to be presented to the Government in the middle of 2005.

The information set out under the heading “Contingent liabilities and contingent assets” on page 60 of the Original Information Memorandum is updated by deleting the text in the first line “30 June 2004” and replacing it with:

    31 December 2004

The information set out under the heading “Indemnities, performance guarantees and financial support” on page 61 of the Original Information Memorandum is updated by deleting the text under dot point five and replacing it with:

    As at 30 June 2004, we provided guarantees over the performance of third parties under defeasance arrangements, whereby lease payments are made on our behalf by the third parties over the remaining terms of finance leases. As at 31 December 2004, the lease payments over the remaining period of the leases (approximately 11 years) amount to A$858 million (30 June 2004: A$981 million). The reduction is predominantly due to movements in foreign exchange rates and semi-annual repayments.

The information set out under the heading ‘FOXTEL minimum subscriber guarantees” on page 61 of the Original Information Memorandum is updated by deleting the sentence “These involve commitments for minimum subscriber fees.” and replacing it with:

    At 31 December 2004, we have commitments of A$1,704 million (30 June 2004: A$2,075 million) under these agreements relating mainly to minimum subscriber guarantees. The contingent liability for minimum subscriber guarantees has been adjusted downward from the amount disclosed in our June 2004 financial report as FOXTEL has reviewed the original minimum subscriber guarantee contracts, and reassessed the applicable commitment period for certain contracts;

and deleting the sentence in the second paragraph beginning “As a result, our contingent liabilities...” and replacing it with:

    Our contingent liabilities arising from the above agreements have also been adjusted downward by A$371 million during the period.

The information set out under the heading “(h) other withholding taxes on payments in respect of Notes” on page 104 of the Original Information Memorandum is updated by inserting the following immediately after “section 12-140 of”:

    Schedule 1 to

The information set out under the heading “(j) supply withholding tax” on page 105 of the Original Information Memorandum is updated by inserting the following immediately after “section 12-190 of”:

    Schedule 1 to

The information set out under the heading “(j) goods and services tax (GST)” on page 105 of the Original Information Memorandum is updated by deleting “and” at the end of the paragraph.

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The information set out under the heading “(k) debt/equity rules” on page 105 of the Original Information Memorandum is updated by deleting “.” at the end of the paragraph and replacing it with “;”.

The information set out under the heading “Recent Developments” on page 105 of the Original Information Memorandum is updated by deleting all text from “3 Recent Developments” to “foreign exchange gains or losses arising from their holding of those Notes.” and replacing it with:

  (l)   additional withholdings from certain payments to non-residents - section 12-315 of Schedule 1 to the Taxation Administration Act gives the Governor-General power to make regulations requiring withholding from certain payments to non-residents after 1 July 2003.
 
      However, section 12-315 expressly provides that the regulations will not apply to interest and other payments which are already subject to the current IWT rules or specifically exempt from those rules. Further, regulations may only be made if the responsible minister is satisfied the specified payments are of a kind that could reasonably relate to assessable income of foreign residents. The regulations promulgated prior to the date of this Information Memorandum are not relevant to any payments in respect of the Notes. Any further regulations should also not apply to repayments of principal under the Notes, as in the absence of any issue discount, such amounts will generally not be reasonably related to assessable income. The possible application of any future regulations to the proceeds of any sale of the Notes will need to be monitored; and
 
  (m)   taxation of foreign exchange gains and losses - Divisions 775 and 960 of the Australian Tax Act contain rules to deal with the taxation consequences of foreign exchange transactions entered into on or after 1 July 2003 (unless a taxpayer elects for them to apply to earlier transactions).
 
      The rules are complex and may also apply to any Note holders who are Australian residents or non-residents that hold Notes that are not denominated in Australian dollars in the course of carrying on business in Australia. Any such Note holders should consult their professional advisors for advice as to how to tax account for any foreign exchange gains or losses arising from their holding of those Notes.

8


 

PRINCIPAL OFFICE OF THE ISSUER

Telstra Corporation Limited
242 Exhibition Street
Melbourne Victoria 3000

REGISTERED OFFICE OF THE ISSUER

Level 41
242 Exhibition Street
Melbourne Victoria 3000

ARRANGER

J.P. Morgan Securities Ltd.
125 London Wall
London EC2Y 5AJ

AUDITORS OF THE ISSUER

Ernst & Young
120 Collins Street
Melbourne Victoria 3000

FISCAL AGENT

Deutsche Bank AG, London Branch
Winchester House
1 Great Winchester Street
London EC2N 2DB

PAYING AGENTS

Deutsche Bank Luxembourg S.A.
2 Boulevard Konrad Adenauer
L-1115 Luxembourg

Deutsche Bank AG, London Branch
Winchester House
1 Great Winchester Street
London EC2N 2DB

AUSTRALIAN REGISTRAR

Austraclear Services Limited
30 Grosvenor Street
Sydney NSW 2000

NEW ZEALAND REGISTRAR

Computershare Investor Services Limited
Level 2
JD Edwards Building
159 Hurstmere Road
Takapuna
Auckland 1020

AUTHORISED ADVISER

J.P. Morgan Securities Ltd.
125 London Wall
London EC2Y 5AJ

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LEGAL ADVISERS

to the Issuer as
to Australian law

Mallesons Stephen Jaques
Level 50
Bourke Place
600 Bourke Street
Melbourne Victoria 3000

to the Issuer as
to New Zealand law

Bell Gully
Vero Centre
48 Shortland Street
Auckland

to the Dealers as
to English law

Clifford Chance Limited Liability Partnership
10 Upper Bank Street
London El4 5JJ

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(MEDIA RELEASE)   (TELSTRA LOGO SQUARE)
22 June 2005   202 / 2005

Telstra announces successful 1billion Eurobond issue

Telstra today announced the successful completion of a 1.0 billion Eurobond issue comprising two 0.5 billion tranches with five and ten year maturities.

The bond was almost four times over-subscribed and the order book closed early having received more than 250 individual orders from a wide range of major European and Asian fixed income investors.

The bond issue follows a recent well received roadshow led by Telstra’s Chief Financial Officer, Mr John Stanhope and Corporate Treasurer, Mr Cliff Davis.

“This was an exceptional result and all the more remarkable given our negative ratings outlook and the significant uncertainties surrounding Telstra’s transition to full privatisation,” Mr Stanhope said.

“It is a tribute to the depth, maturity and long standing support for Telstra in the Euro markets that we could get a superb result like this without having to pay a premium. We achieved our preferred maturity targets and pricing was right in line with fair value in the secondary market and telco comparables,” he said.

“This transaction is likely to be Telstra’s last issue in the public markets prior to privatisation which is expected in late 2006 and meets a significant part of Telstra’s known 2005/2006 funding requirements and puts Telstra in good shape going forward.”

The pricing for the fixed rate issues were equivalent to 37 and 57 basis points over the Euro five and ten year mid-swap levels and provides Telstra with a competitive cost of funding on an all-in cost basis after swapping into Australian dollars.

Issue proceeds will be mainly used for general working capital purposes and to refinance maturing debt.

The bond issue was jointly led by Barclays Capital, BNP Paribas, Deutsche Bank and JP Morgan.

Telstra is Australia’s leading telecommunications services provider with long term rating of A+ (negative outlook) by S&P, A1 (negative outlook) by Moody’s and A+ (stable) by Fitch.

Telstra Media Contact
Kerrina Lawrence
Telstra Media Relations
03 9634 5611
0419 352 313

Telstra’s national media inquiry line is 13 1639 and Telstra’s Media Centre is located at:
www.telstra.com.au/communications/media

Telstra Corporation Limited
ABN 33 051 775 556

 


 

(TELSTRA LOGO SQUARE)

27 June 2005

The Manager

Company Announcements Office
Australian Stock Exchange
4th Floor, 20 Bridge Street
SYDNEY NSW 2000

Office of the Company Secretary

Level 41
242 Exhibition Street
MELBOURNE VIC 3000
AUSTRALIA

Telephone 03 9634 6400
Facsimile 03 9632 3215



ELECTRONIC LODGEMENT

Dear Sir or Madam

Telstra Eurobond Issue 2005 – Additional Supplementary Information
Memorandum

Please find attached an additional Supplementary Information Memorandum which has been lodged with the United Kingdom Listing Authority. This updates the original Information Memorandum dated 23 September 2004 and the Supplementary Information Memorandum dated 6 June 2005.

Yours sincerely

(DOUGLAS GRATION SIGNATURE)

Douglas Gration
Company Secretary

Telstra Corporation Limited
ACN 051 775 556
ABN 33 051 775 556

 


 

Supplemental Information Memorandum

(TELSTRA LOGO)

Telstra Corporation Limited

(ABN 33 051 775 556)
(incorporated with limited liability in the Commonwealth of Australia)

8,000,000,000
Debt Issuance Program

These supplementary listing particulars (“Supplemental Information Memorandum”) are prepared in connection with the 8,000.000.000 Debt Issuance Program (“Program”) of Telstra Corporation Limited (“Issuer”) and are supplemental to, and should be read in conjunction with, the Information Memorandum dated 23 September 2004 (“Original Information Memorandum”) and the Supplemental Information Memorandum dated 6 June 2005. This Supplemental Information Memorandum comprises supplementary listing particulars as required under section 81 of the Financial Services and Markets Act 2000 (FSMA”).

Copies of this Supplemental Information Memorandum, which comprises supplementary listing particulars approved by the United Kingdom Listing Authority in accordance with Part VI of the FSMA, have been delivered for registration to the Registrar of Companies In England and Wales as required by section 83 of the FSMA.




Arranger

JPMorgan




23 June 2005

 


 

Important Notice

Responsibility

Unless otherwise defined in this Supplemental Information Memorandum, terms defined in the Original Information Memorandum have the same respective meaning where they appear in this Supplemental Information Memorandum.

The Issuer accepts responsibility for all information contained in this Supplemental Information Memorandum. To the best of the knowledge and belief of the Issuer (which has taken all reasonable care to ensure that such is the case) the information contained in this Supplemental Information Memorandum is in accordance with the facts and does not omit anything likely to affect the import of such information.

Any reference in this document to listing particulars means this document excluding all information incorporated by reference. The Issuer has confirmed that any information incorporated by reference, including any such information to which readers of this document are expressly referred, has not been and does not need to be included in the listing particulars to satisfy the requirements of the Act or the Listing Rules. The Issuer believes that none of the information incorporated therein by reference conflicts in any material respect with the information included in the listing particulars.

This Supplemental Information Memorandum should be read and construed with any amendment or supplement to it, with any Pricing Supplement and with any other documents incorporated by reference as set out under the section in the Original Information Memorandum entitled “Documents Incorporated by Reference” provided always that any such amendment or supplement and any other such documents incorporated by reference shall not form part of the listing particulars or the supplementary listing particulars as comprised by the Original Information Memorandum, the Supplemental Information Memorandum dated 6 June 2005 and this Supplemental Information Memorandum, respectively.

None of the Arranger nor, when appointed, the Dealers makes any representation or warranty, express or implied as to, nor assumes any responsibility or liability for the authenticity, origin, validity, accuracy or completeness of, or any errors or omission in any information statement, opinion or forecast contained in this Supplemental Information Memorandum.

No authorisation

No person has been authorised to give any information or make any representation not contained in this Supplemental Information Memorandum or in the Original Information Memorandum in connection with the Issuer, or its subsidiaries, the Program or the offer or subscription of the Notes. If given or made, such representation or information must not be relied upon as having been authorised by the Issuer or its subsidiaries or the Arranger or, when appointed, any of the Dealers.

Currency of Information

Neither the delivery of this Supplemental Information Memorandum, the Original Information Memorandum or any Pricing Supplement nor the offer or subscription of Notes implies or should be relied upon as a representation or warranty that the information contained in this Supplemental Information Memorandum or the Original Information Memorandum concerning the Issuer or its subsidiaries is correct at any time subsequent to the date of this Supplemental Information Memorandum or that any information supplied in connection with the Program is correct as of any time subsequent to the date indicated.

Distribution

The distribution of this Supplemental Information Memorandum, the Original Information Memorandum and any Pricing Supplement and the offer or subscription of the Notes may be restricted by law in certain jurisdictions. Persons into whose possession this Supplemental Information Memorandum (including any documents incorporated by reference in it) or any Notes come must inform themselves about and observe any such restrictions.

No registration in the United States

The Notes have not been and will not be registered under the Securities Act of 1933 of the United States (as amended), and include Notes in bearer form that are subject to U.S. tax law requirements. Subject to certain exceptions, Notes may not be offered, sold, delivered or transferred within the United States or to, or for the account of, U.S. persons (as defined in Regulation S under the Securities Act).

2


 

No public offer in the United Kingdom

The Issuer has not authorised any offer to the public in the United Kingdom within the meaning of the Public Offers of Securities Regulations 1995, as amended, (the “Regulations”) of Notes having a maturity of one year or more which have not been admitted to listing in accordance with Part VI of the FSMA. Such Notes may not be lawfully offered or sold to persons in the United Kingdom except in circumstances which do not result in an offer to the public in the United Kingdom within the meaning of the Regulations or otherwise in compliance with all applicable provisions of the Regulations.

No offer

None of this Supplemental Information Memorandum, the Original Information Memorandum, nor any Pricing Supplement constitutes nor is it intended to constitute an offer or an invitation by or on behalf of the Issuer, or its subsidiaries, the Arranger or, when appointed, any Dealers to any person to subscribe for, purchase or otherwise deal in any Notes, nor it is intended to be used for the purpose of or in connection with offers or invitations to subscribe for, purchase or otherwise deal in any Notes.

No independent verification

The Arranger and, when appointed, the Dealers have not separately verified the information contained in this Supplemental Information Memorandum or in the Original Information Memorandum. None of this Supplemental Information Memorandum, the Original Information Memorandum nor any other information supplied in connection with the Program is intended to provide the basis of any credit or other evaluation and should not be considered as a recommendation by the Issuer, the Arranger or, when appointed, any of the Dealers that any recipient of this Supplemental Information Memorandum, the Original Information Memorandum or any other information supplied in connection with the Program should purchase the Notes nor does it constitute an offer or an invitation to subscribe for Notes. Each potential purchaser of Notes should determine for itself the relevance of the information contained in this Supplemental Information Memorandum and the Original Information Memorandum and any purchase of Notes should be based upon such investigation as it considers necessary. The Arranger and, when appointed, the Dealers do not undertake to review the financial condition or affairs of the Issuer during the life of the Program or to advise any investor or potential investor in the Notes of any information relating to the Issuer.

No significant change

Save as disclosed in this Supplemental Information Memorandum there has been no significant change and no significant new matter has arisen since the publication of the Supplemental Information Memorandum dated 6 June 2005.

3


 

The information set out under the heading “Access pricing” on page 37 of the Original Information Memorandum (as amended by the Supplemental Information Memorandum dated 6 June 2005) is updated by inserting the following additional paragraph:

In April 2005, the ACCC commenced a review of local telecommunications services. The ACCC’s inquiry involves both a review of the current local carriage service declaration under Part XIC of the Trade Practices Act, and a more comprehensive review of the ACCC’s approach to regulating the fixed line local telecommunications market. Depending on its outcome, the review may impact on the access prices for various local call and/or basic access services provided by Telstra. The review is unlikely to be completed before late 2005.

The information set out under the heading “Directors” on page 54 of the Original Information Memorandum (as amended by the Supplemental Information Memorandum dated 6 June 2005) is updated by inserting the following additional text in table footnote (2):

On 9 June 2005, Telstra announced that it had appointed Solomon Trujillo as Chief Executive Officer and as an Executive Director. Mr Trujillo will take up his appointment on 1 July 2005.

The information set out under the heading “Zygmunt E Switkowski” on page 55 of the Original Information Memorandum is updated by deleting “since March 1999” in the third line and replacing it with:

until 1 July 2005

The biography information for each of the directors set out on pages 54 to 56 of the Original Information Memorandum is updated by inserting the following additional paragraph at the end of the existing information:

     Solomon Trujillo — BSc (Bus), MBA
     Age 53
     Chief Executive Officer (CEO) and Executive Director
     CEO and Executive Director as of 1 July 2005

Formerly Chief Executive Officer of Orange, formerly Chief Executive Officer of Gravitron, formerly Chairman, Chief Executive Officer and President of US West Inc. Mr Trujillo is currently sitting on the boards of Pepsi, Target, Gannett (the newspaper chain) and EDS. He will leave all but one of these board positions.

4


 

PRINCIPAL OFFICE OF THE ISSUER

Telstra Corporation Limited
242 Exhibition Street
Melbourne Victoria 3000

REGISTERED OFFICE OF THE ISSUER

Level 41
242 Exhibition Street
Melbourne Victoria 3000

ARRANGER

J.P. Morgan Securities Ltd.
125 London Wall
London EC2Y 5AJ

AUDITORS OF THE ISSUER

Ernst & Young
120 Collins Street
Melbourne Victoria 3000

FISCAL AGENT

Deutsche Bank AG, London Branch
Winchester House
1 Great Winchester Street
London EC2N 2DB

PAYING AGENTS

Deutsche Bank Luxembourg S.A.
2 Boulevard Konrad Adenauer
L-1115 Luxembourg

Deutsche Bank AG, London Branch
Winchester House
1 Great Winchester Street
London EC2N 2DB

AUSTRALIAN REGISTRAR

Austraclear Services Limited
30 Grosvenor Street
Sydney NSW 2000

NEW ZEALAND REGISTRAR

Computershare Investor Services Limited
Level 2
JD Edwards Building
159 Hurstmere Road
Takapuna Auckland 1020

AUTHORISED ADVISER

J.P. Morgan Securities Ltd.
125 London Wall
London EC2Y 5AJ

5


 

LEGAL ADVISERS

to the Issuer as
to Australian law

Mallesons Stephen Jaques
Level 50
Bourke Place
600 Bourke Street
Melbourne Victoria 3000

to the Issuer as
to New Zealand law

Bell Gully
Vero Centre
48 Shortland Street
Auckland

to the Dealers as
to English law

Clifford Chance Limited Liability Partnership
10 Upper Bank Street
London E14 5JJ

6


 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

     
TELSTRA CORPORATION LIMITED
(DOUGLAS GRATION SIGNATURE) 
 
Name:
  Douglas Gration
Title:
  Company Secretary
 
   
Date: 30 June 2005