TELSTRA GROUP LIMITED — Capital/Financing Update 2005

Apr 5, 2005

6 April 2005

The Manager

Company Announcements Office Australian Stock Exchange
4^th 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 updates shareholders on future changes to accounts

In accordance with the listing rules, I attach an announcement for release to the market.

Yours sincerely

Pont brake

Douglas Gration Company Secretary

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

Media Release

6 April 2005

131/2005

Telstra updates shareholders on future changes to accounts

Telstra today undertook a shareholder education initiative to raise awareness of future changes and impacts on Telstra's financial statements as a result of the move to the Australian equivalents of International Financial Reporting Standards (A-IFRS) from 01 July 2005.

Speaking at a financial market and media briefing Telstra Chief Financial Officer, Mr John Stanhope, said the briefing would reduce confusion by clearly distinguishing between A-IFRSrelated changes in reported financial results and those that arise from changes in the underlying business.

"A-IFRS will not significantly affect net cash flow, our ability to borrow funds, or our dividends capacity. There will be no change to our previous commitments and no change to returns to shareholders," Mr Stanhope said.

"While earnings may be more volatile through the application of the new standards, net cash flow would be unaffected."

In February 2003 Telstra established a project team led by Telstra's Director, Business and Finance Services, Mr Geoff Nicholson, to manage the convergence to A-IFRS and Telstra's first set of A-IFRS financial statements for the half year ended 31 December 2005.

Mr Stanhope said the project schedule was on track and had identified significant changes in policy across: share-based payment (AASB 2); business combinations (AASB 3); income taxes (AASB 112); employee benefits (AASB 119); borrowing costs (AASB 123); impairment of assets (AASB 136); and, financial instruments (AASB 132 and 139).

As part of the move to raise awareness of A-IFRS Telstra had included the known estimable transition impacts of adopting A-IFRS in Note 1 to the 31 December 2004 half-year financial statements. This note discussed in detail each adjustment that is likely to be made and whether it was a mandatory adjustment, or an election made under the standards. The Company has estimated a net reduction to retained earnings of \$907 million if the transition date is 1 July 2003 or \$852 million if the date is 1 July 2004.

This net reduction to retained earnings is to adjust the financial statements to reflect the position had Telstra always been applying A-IFRS. Telstra provided the impact at both dates to comply with US Securities and Exchange Commission requirements to provide two years of comparative information. The SEC has proposed relief from this requirement for foreign registered companies, however a final ruling has yet to be released.

المنعط

There are also some technical aspects of the income taxes standard that are the subject of further clarification as to how they will apply to Telstra. These matters have been referred to the Australian Accounting Standards Board (AASB) and the International Interpretations body for consideration. Finalisation of these matters could give rise to further transitional adjustments.

To provide an indication of the ongoing impact of A-IFRS on Telstra's results, the 31 December 2004 half-year Income Statement has been restated to take account of the known A-IFRS changes. At this stage the main effects on the 31 December 2004 half year Income Statement is to increase net profit attributable to shareholders by \$54 million.

This excludes any potential impact of the financial instruments standard, which will be applied from 1 July 2005. The main contributors to the increase in net profit under A-IFRS were:

• Lower EBITDA attributable to an increase in total expenses due mainly to additional labour expense from the recognition of Telstra's defined benefit schemes, partially offset by the benefit arising from the change in treatment for share-based payments;
• Lower depreciation expense due to Telstra's election to cease capitalising interest on capital projects. Amortisation is also reduced due to the cessation of amortisation of goodwill under A-IFRS;
• Higher EBIT due to the benefit arising from depreciation and amortisation, which exceeds the additional expenses referred to above;
• Interest costs increase due to the cessation of capitalising interest; and ■ ■
• Income tax expense decreases mainly due to the change in income tax methodology to the balance sheet approach. In addition, the cessation of goodwill amortisation, which is not subject to tax, has a favourable impact on tax expense.

These factors all contribute to an improvement in net profit after tax under A-IFRS for the halfyear ended 31 December 2004.

The main impact of the new accounting standards on the Balance Sheet is a reduction in net assets mainly reflecting the transitional adjustments. The adjustments will be:

• $\blacksquare$ Reduction in property, plant and equipment balance due to Telstra electing to expense borrowing costs as incurred, rather than capitalising a portion to capital projects to be included in depreciation in future periods. Due to this election, it is necessary to reverse previously capitalised borrowing costs still to be amortised on adoption of A-IFRS;
• $\blacksquare$ An additional asset is to be recognised for the net asset position of the defined benefit schemes:
• $\blacksquare$ Reinstatement of equity accounting against the capacity prepayment asset, which is deemed to be an extension of an investment under A-IFRS. The increase in the deemed investment balance is, however, absorbed by the carried forward losses not previously recognised. This reduces the capacity prepayment balance to nil as part of the transition to A-IFRS:

المند

• $\blacksquare$ A reduction in goodwill to reflect the adoption of an option to reset overseas goodwill balances, related to foreign controlled entities, from being denominated in Australian dollars to the applicable foreign currency at the original date of acquisition;
• Additional deferred tax liabilities due to the tax effect of other A-IFRS standards, and the $\blacksquare$ change in method of accounting for income taxes from an income statement approach to a balance sheet approach, resulting in items not previously required to be recognised now being booked; and
• Reduction in receivables and share capital for the consolidation of the employee share $\blacksquare$ plan trusts and the treatment of employee share loans as options. Companies that have established employee benefit trusts must determine whether they control these entities. Under Australian Generally Accepted Accounting Principles (AGAAP) Telstra does not have control, however under A-IFRS it is considered to have control and hence must consolidate these entities.

On the Statement of Cash Flows there is a minor impact as most of the changes brought about by the move to A-IFRS do not have any cash implications. Free cash flows increase mainly due to borrowing costs being reclassified from operating to financing activities, and bills of exchange being reclassified from financing to investing activities.

The information contained above should be considered as preliminary and remains subject to change. This information has been calculated based on A-IFRS standards and currently available interpretations as at 1 March 2005. Telstra's external auditors have reviewed the transitional adjustments included in the half-year financial report. The restated information for the six months to 31 December 2004 is unaudited.

Telstra Media Contact

Kerrina Lawrence Telephone: 03 9634 5611 Mobile: 0419 352 313

(The slide pack that accompanied the media/analyst briefing can be located at http://www.telstra.com.au/communications/calendar/calendarevent.cfm?ObjectID=821

Telstra's national media inquiry line is 131639 and the Telstra Corporate Communications Centre is located at: www.telstra.com.au/communications/media/index

Telstra Corporation Limited Transition to A-IFRS

JOB SHAND Chief Financial Officer

Cautionary statement

• The figures presented today are our current best estimate of the consequence with the ua of adopting A-IFRS – accordingly, they regrain subject to change
• All amounts are preliminate and unaudited, but reflect the work-the second in the state of the project team, and are based on ATPRS standards and interpretations and the common
• All forward tooking statements represent our best estimate to different that the state ieled bood dagulidas skild slve stakuteri of digitasside minimum minimum utimately adapted in FY06
• FORMATA LOCKING STARRING IS A CHARGE ACAMAR DIN CHARGE AS SALARIA AND ALL AND ALL ossumptions, expectations, understandings, analysis gwill in a surface and the state of ta be concert
• The forward tooking statements contained in this downard south and a statement W. NAISDI KIPANGAN TEKABETADED MADARKETA KE BELIHING DI BIRANG KALENDAR KE PER to reflect events or circumstances after the date hanging and state the state of unantanated events
• Our estimates do not induce the effect or likely free specifically in the street Ventures/acquisitions on linguickit states, with the states of a significant November 1994.
• The company, through thvestor Relations Mathematics and the strike information makacamanis presentations in the state of the first ittiva estrantes abbre tutus spagnamamanamanamana
• The transition date cannot be flags all the second stages in the

Agenda

· Key messages

• NATION IN THE MODEL OF A STATE
• Financial Impacts and significant charge the way
• · Sensitivities
• · Summary
• · Questions

A-IFRS at Telstra - key messages

· No impact on Telstra's strategy and business performance:

^In Management decisions are not affected by A-IFRS

• Telstra's operations are not impacted
• " Under A HRS Trere is likely to be highly said the eammas
• " A-IFRS will not significantly of the state of the state borrow funds, or dividends, and the
• ^¤ No change to commitments
• E No change to returns to shareholders

Focus on free cash flows and shareholder returns is not compromised

A-IFRS implementation timeline

• Eonnal IRS project team to manage convergisting INS
• · Our first set of A IFRS financial stateneous states half-uear ended 31, becember 2005, ages see alle and Uccirente de 195 brie 2006

Project on schedule to meet implementation milestones

The move to A-IFRS

• · A-IFRS is not optional, has the force of law, appearing required to apply it from 1 July 2005
• In There are two components to the move
• ^# Transitional adjustment
  • . The effect of adjusting the existing AGAAP numbers to reflect the position as if A-IFRS had always been applied
  • · Comprised of both mandatory adjustments and optional elections
• ¹ Ongoing impact the effect on operating profit each period from applying the new rules

A-IFRS must be applied by Telstra from 1 July 2005

Key transition impacts

· Known estimable impages regoried in 31 Dec 2020 2020 half-yearthromaalstakenterits

THE REAL PROPERTY

Sannynis

E E LITTERATUR

38 enega
Ka

E No change to these estimated impacts to all the set

	I ANTING TAN SENIGI DI SAMA
New Zoolen II	a gunda wasa
Total realigition in Camig
A IFRS total equity
/ajor components - increase/(decrease) in equity.
Consolidadon o HSOP ana Growthshare Husts
Share based remuneration
Canying value differences from the tax base	tern)
De ined bene in papsion assets.	stan
Reftenstellen office overseas geoldwill belances	Grassin
Expensing of borrowing costs previously capitalised	a sou
Eanit accompling alcomative proportion at Reach the
Chitanal colusionants under ASITAS

Transition date to be determined based on SEC ruling

Ongoing impact - financial highlights

	Six months to St Determine 2004		harace (determe)
	RESERVE STAIRST (the waters)	SHILL Stallion (Orror Reco)	COLLANDIA EXHILLLLLLL Mikrochten
ncome statement
sales Revenue	REACT	idess:
Total income	History	ILE AN	W.
Total expenses	54375	532	2
ElipA	REPA	533	75
Depreciation and amorasation	II:HI	i bizan	550
Βū	EKIM	e mari	energi Selain
Net linance cosis	876	W Mariti
TA VE	2ærti	, ang pa	W.
tambasha sha
3asie	m	B	œ
Murad	it: 4	i ya	82
dividente stationidade d	TA SA	anasayang Mga malala	Hari
TARGKS3LS	STAND	1460)	MATE
Talzilan	SK 197	ET ST
TAKKARTANIAN	SANT	79. I
Protestiniow	MAN	W.W	- 367 (ST

The impact of AASB 132/139 Financial Instruments has been excluded from this analysis due to relevant transition date being 1 July 2005. Each of the above items is addressed in more detai the following pages and the Appendix.

Earnings may be more volatile, but net cash flow not affected

Significant changes in policy

· Telstra's high impact greas on convergence

• Share-based payment
• El Business combinations
• Income taxes
• Employee benefits
• Borrowing costs
• Impairment of assets
• Einancial instruments

AASB 2 "Share-Based Payment"

• · Cease recording an expense when funding provising the trust to purchase Telstra shares that under the same equity instruments issued
• " Recognise expense for all share-based residents Idel dining Milit reference for his rigging the sense of HASHUNGAISKSUGG GREG 7 NgVerilige 200

ETAPIZITIZ AM restausment Sn (brublich)

" Charged to the income statement with the state pendos, and is adjusted to religious solarism vesting. Under existing recipies as said that recognised intriedidtely Always

Benefit of recognishme and as easy we thing remod Consolidation of Growthshare Intsi Profit improvement after tax

AASB 3 "Business Combinations"

e yn Ffyfiri D'Agressier annon Sin (Onavalited)

• · Elmination of goodwill amortisation will reduce the company and increase earnings
• " Impairment testing on goodwill to be performally the reporting date Recognise impairment galaxies and the state in income statement if it occurs
• · Deferred tox balgnaces are to be regions and the beat doquisitions, which will result in the subscription of

Benefit of ceasing amortisation - controlled entities Benefit of ceasing amortisation - joint ventures and associates Profit improvement diterrex

AASB 112 "Income Taxes"

relst

• · Income tax on the profit for the year comprises current and the state toxes.
• · Tax expense is generally recognised in the incompagniture excert
• ¹ items recognised directly in equity, tax is in equity
• business combinations, tax is in goodwill
• · Generally recognise deferred tox balanger with the stage between the corrying value of an assessment the material This means that tax expense will be all the property that
• The lest for the recognition of hize services and the services certainty to a test of probability

Tricome Tox Denem Profit improvement after tax

AASB 119 "Employee Benefits"

ELLER LEVELLE

COMMUNISTER

03 : 23 JUUNIOU

um

• An experise will be recognised when the service cost except expected asset return
• The service components of the superambation results and the additional expense recognised in the income states with the expense will occur irrespective of whether communications being made to the fund
• · There are options for recognising actual states and elected to recognise actuarial gains NSS 2007 profits. This will result in furture vehicle will the state
• A portion of the defined benefit, a said and the set recognised in PP&E balances,

labour (expense) (incl. the effects of contribution taxes) Incometer of Jaram Professional dictator

Retained earnings (actuarial gains, incl. the effects of contribution taxes) Income tax movement in retained earnings (debit)/credit NGC moraldan mammalayan many

AASB 123 "Borrowing Costs"

Telstra

· Borrowing costs will be included in interest example: incurred, rather than capitalised and including depreciation in future periods, This results will be a difference in recognition the incomganisation

Beneffief casing depredation Borrowing (cost) TAGILAR BURGARA DE LA CARDIA Profit reduction diference

paping papagpanang William Contractor STROTTORER

W.

CASTIL

AASB 136 "Impairment of Assets"

• Property, plant and catiprical, goodwill, maringibles, grands W reviewed at each reporting date to determine whethis is a mag indications of impairment. If indications exist, the assessed to the impalment by comparing recoverable amount that the state that
• Telstra's Australiantelecommunications operating and allegally be assessed as asingle cash generating units as
• Each controlled entity, joint venture and behavior has been assessed, and generally each entity will said the state of the CONT
• Telstrahus previously chosen to get a serve the served that discounted basis, and this approach as a significant
• Potential for increased volgining in substanting Statenent if the mpought of the second to the state.

AASB 132 and AASB 139 Financial Instruments-Recognition and Disclosure

• · Application of AASB 132/139 is required to be applied prosecuting from 1 July 2005, and comparative information does in the line is restated
• . No change to Telstra's business and risk manage as a stage with and policies
• The mixed measurement model (some freuz singly also said to M cost or amortised cost) and the hedge agreement and that is makes AASB 139 a complicated standard was a
• The majorimpact to Telstra of adopting the state of a Œ. activities
• Enterna into derivatives contractes substants as W foreign arrency risk introduces substanting
• The religion accounting in May 200 meets and may Œ, position from the re-moggange and an anguar Hobities and the application and the control of

AASB 132 and AASB 139 Financial Instruments Areas that will Greate Volatility

Changes in the measurement basis of the following the state instruments will create voldfility in profit and/or easy.

Available-for-sale financial assets - eq listed securities	Measurement basis E to have the	Image: - Equito (if impulsed profit hibital	Key Variables that a a shekara ta 1970 - change inquoted makehotke
Derivatives in hedge relationship - eq cross currency swaps, interest rate swaps, forward FX contracts	Measurement basis Mah value	Impact - Profit or equity depending on hedge relationship (cash flow, ichturlig net istem myestment) and whether hedge enterio dre sabshed	Key Variables that affect value changes in mierest rates; - changes in foreign exchange totes
Hedged Items in fair value. hedge - foreign currency borrowings	Mansuraman basis 2 fair value to the extent of the risk haing haitea	Meusurementbusis randa	Key Variables that affect value - chonges in interest – chonces in forei extining with

AASB 132 and AASB 139 Financial Instruments -Fedging Overview

	Fairwalue hedges	IC GSh flow hedges	Alexandria de la Caracciona
Used for	U Foraton exchange and interest rate itsk on foreign borrowings	Ho conjunction with fair Volucionedores LForeign exchange risk on foreign borrowings and purancistas	H2dd2ddd1h51 expositic to forcial letigga te batsk
Profil IMPOCI	Revaluation to fair Value of foreign borrowing and derivative Movement in derivative not offset by movement in borrówing * Fedge ineffectiveness	Electoe ineffectiveness THE REPAIRING THE REAL equity to profit in same pedagos metadoria THE PUTTING THE REAL PROPERTY	e este poli ineffectiveness
la prof COUNTL Milbrea	ENORE	Revaluation to fair value GING BANG ILIY BAKARA SA KELIL Gregoria	Gains/Losseston translation and derivative are regognisadinik973

Sensitivities - Potential Financial Instruments Ongoing Impact

The Financial Instruments Standards are applicable to Telstra from 1,400 to the The potential impact on the income statement and balance she Bining D summarised below: The Time The County

	,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
	Caracant	2000 - 2000 - 2000 - 2000 - 2000 - 2000 - 2000 - 2000 - 2000 - 2000 - 2000 - 2000 - 2000 - 2000 - 2000 - 2000 SHI MARK STANDS AND STANDARD MARINA MARINA	$\begin{array}{ccc}\n\bullet & \bullet & \bullet & \bullet & \bullet & \bullet & \bullet & \bullet & \bullet & \bullet & \bullet & \bullet & \bullet & \bullet$ in en de leidel ERRETTING I KING a a ghearran a a a chaile ann an Chaill MARK TANDA E s a composição de Caractería 2000-100
IMPACTON PROFIT-ASSUMING 1/7/04 TRANSITION TO AASE 189	- 190	630	USUWA
Revaluation of borrowings and derivatives to fair value - net of tex	蹤	V.U.	8 Allian mana
Excluded component of hedges of net investments in foreign entities - net of tax
Total profit reduction/(improvement)	S.	k.,	W .
MPAGTON EQUITY - RESERVES - ASSUMING 1/7/04 TRANSITION TO AASB 139
Cashflow heaging instruments
-balance: luly2004-narofiav	arawan	87.	œw
- net movement- neteoktox	ter.	z	83
substand ada ilay hadda asarya-nafor tox	ananan	meer	e i
FOTR - Net investments in foreign entities.		mananan mananan
. Transfer from equity-excited form parent and office Available for sale financial as cas	73	Œ	Œ
Britanice fe l'ilip 2004	engr	œm	œu
-na mevement-net of tox
430-1014 (Available for Sale - Ferdinan	rman	eij	œ
lotal equity-reserves-reduction/(improvement) - net of tax	peranting Lilla 23	mm	œz
IMPACT ON NET DEBT - ADJUSTMENT TO AGAAP NET DEBT
Revaluation of derivatives and borrowings - net decrease in net debt	52	230
166 dalaa Milaaa harita	W	rww

Sensitivities - Potential Impacts

• An expense will be recognised under AASB 119 for defined benefit schemes irrespective of whether cash contributions at the same in
• ^p Net pension cost for the six months to 31 December 2004 recognised in the A-IFRS income statement was \$86 million

Telstra

• E A 1% movement in the discount rate would have changed the half-year income statement by \$21 million
• ¹¹ A 1% movement in the return on assets would have changed the half-year income statement by \$23 million
• Efter of gronge in exchange kites shift a sign and the translation reserve due to reflecting that the substantial ddiusinens in foreign autrencias samana and and t
• P Impact on the balance sheet of a 10% increase in exchange rates is to decrease FCTR by \$193 million.
• ¹ Impact on the balance sheet of a 10% decrease in exchange rates is to increase FCTR by \$236 million

Overview of ongoing impact

• Sales revenue no change, underlying business not impacted
• Operating expenses additional labout expense due to the import of the state of .
  Wr schemes pernelluoifse by the factor sinceron of the book value and the person
• ENDA töverette todduğu eleber expanse $\mathbf{u}_k$
• Depreciation reduced apply due to reversal of previous sense and any station N,
• Amortisation reduced charge due to cessation of amortisation as a station ju.
• EBIT an improvement as the benefit ansing trom departicular and all and a .iw. exceeds the additional expenses.
• " Interest increased erorge due to cessation of curry and the state
• ¹ After application of AASB 139 Financial Instruments increased charge due to inclusion of hedging impacts
• Income Tax, reduced due to increased exper W.
• Net cash flows + minor change write W.
• Ree ogstriows mercased mainly dys marine and starting the start ø. being fedusymed between operating as a sample of the standard in
• The Nation Annorange only
• $^\textsf{fit}$ After application of AASB 139 Financial Instruments Frevaluation due to inclusion of hedging impacts

Strategy and underlying business operations not impacted

Target financial parameters

The impact of AASB 132/139 Financial Instruments has been excluded from this analysis due to the relevant transition date being 1 July 2005.

Debt coverage ratios not materially impacted

A-IFRS at Telstra - key messages

· No impact on Telstra's strategy and business performance:

^In Management decisions are not affected by A-IFRS

• Telstra's operations are not impacted
• " Under A HRS there is likely to be individually in the eammas
• " A-IFRS will not significantly of the state of the state borrow funds, or dividends, and the
• ^¤ No change to commitments
• E No change to returns to shareholders

Focus on free cash flows and shareholder returns is not compromised

Appendix

ana wa

Telstra

_______________________________________

______________________________________

______________________________________

Restated Income Statement

Telstra

			Srambinistor (244) ilida 2004
			MARITAN (ARAL 1999)
	20.00 Kamilian maanne.)	protestant 10000000000000000000000000000000000000 Finilian (Andriaci)	Z CZY PRZY CH adhanishe Randon Allandar Cap	RACIO COMPANY THE MAG ETARTIST RACCO COMPOSTER	KATE S Exit News MANTANA
Income
Revenue (excluding interest revenue)	11921:01	ra,		W	380
Other income		m
	FREAK	夜遊		enna Verkild	25 (23)
Board Labour	ESCRETE		ennia Zab	e	a politika
Goods and services purchased	2322				en de la
Other expenses	REAL	W.	e an	7	80.00
	Except	6.	8	r.	Sta
Net losses from joint ventores onderstockites	RAYS	enna. El	H 3	K. e e seg	m. 63961
EBITDA	MARK		m.	ang pang	57439
Depreciation and amonisation	BELLET		www.	80	SURASKI
EBIT	e tilla		W.	œ	2823
interest revenue Endner Costs	25 203		Ã	I w	83 zw
Našječnica češka	e Call		en.	unyung Mexica	77
Profile@orchichecerozesyporte			Ŧ	83	8389
Tregare comes and the	$\mathcal{L}(\mathcal{L})$		œ	$\langle 22 \rangle$	ow
NATIONAL	angeligen Ville til 1		W	52	2007
			IIIIIIIIIIII
Minority interest in net loss
Netprofit available to related atting shortage.	e de la G		w	82	200

The impact of AASB 132/139 Financial Instruments has been excluded from this analysis due to the relevant transition date being x Zuniference

Income

Tallian S

SK months ross December 2004
ZENTILON	Conflicit	STATION	Chailte
START	Tojin 40	OHRA	8010
Revenie	RACILLE	THE CITY	TERRETA
i ya	yangun SKOKA		xeant
		74
		MA	œz
		w
	88	70	œż
	m.		199,3730)
	38.WAG	yana	(unaudited) FZ4

Earnings Before Interest, Tax, Depredation and Amoritscrion (EBITDA)

711 Executive

em

GAAP earnings before interest, tax, depreciation and amortisation.	ונקודות המונית מקומי הקוויה מקו מקומי היו
HEIS adjustments = Improvement/(reduction)
resementon
rcome adjustments.
ASB 116 - Book value of non-current assets disposed
aasimminist
ncome aditistracints
ASB 2 - Recognition of expense for share-based payments
ASB 2 - Reversal of expense under AGAAP for share-based payments
ASB 3 - Reversal of goodwill amortisation for joint ventures and associates
ASB 119 - Defined benefit cost - TSS and HKCSL
ASB 128 - Other capacity prepayment adjustments
	Œ
AFRS earnings before interest, tax, depreciation and amortisation	Ma

The impact of AASB 132/139 Financial Instruments has been excluded from this analysis due to the relevant transition date being 1 10ft; 2005.

Earnings Before Interest and Tax (EBIT) Shanonia EYA DIGIN DA ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

Telstra

The impact of AASB 182/189 Einendel Instrumentshespeen excluded from this analysis due to the relevant transition date being 1 July 2005.

Net Profit After Tax (NPAT)

	Stanning T ELAPTA 111011 y Xeley A E TALLET MARITIKA I
AGAAP net profit after tax available to Telstra entity shareholders	746.77
A-IFRS adjustments - Improvement/(reduction) Production of the Second
BBIT adjustments
Addonnama
EBIT adjustments	43
AASB 2 - Elimination of interest revenue from Growthshare Trust	œ
AASB 112- Movement in additional deferred tox balances	FIR)
AASB 116 - Different discount rate for deferred consideration on acquisition of assets	83
AASB 119 - Tax effect of defined benefit cost	PZ
AASB 123 - Increase in finance costs from no longer capitalising interest	ka 1
AASB 123 - Tax effect adjustment of no longer capitalising interest
	89
A-IFRS net profit after tax available to Telstra entity shareholders	Zrejsk

The impact of AASB 132/139 Financial Instruments has been excluded from this analysis due to the relevant transidon data being 1 July 2005.

Earnings per Share

		Standnakatek Bradnica
	EGHC GJ I L (Ontaratica)	BILLET Cincitativa
ACAP complete a strong	rtin 1	838
A-IFRS adjustments-Improvement/(reduction) NPA colusinents	823	823
AASB 2 - Weighted average number of shares held by Growthshare hust indunder ISOP loans AASB 2 - Shares assumed to be issued for no consideration	10	** temn
A IFRS comings pershare	e de la	EC 20

Telstra

The impact of AASB 132/139 Financial Instruments has been excluded from this analysis due to the relevant transition date being 1 July 2005.

Restated Balance Sheet

ı г
ı i

	Sixmonths to 31 Dagmbar 2004
			htersters (filoerants)
	MOVE Exhibition Order (20)	MAGARET ddunais Finition Thritician	Addellining Za poznatku za predstavan EXAMPLE 20 arantray	Barbara 1992 1993 1994 ETARTY TARA KUNGUTHE S	ETHILLE ANTIFICATION
Current assets	tanyan	(Erge)	W	MAR	333
Non current assets	ZO GR	eang	CH	w.	n Mari
Total assets	River	KO	ennas		25402481
Corrent liabilities	TRUSH		an	en en de la familie de la familie de la familie de la familie de la familie de la familie de la familie de la	73
Non conceal liabilities	is Chip		anggan	engan	- 2007.92
Total liabilities	25 Jan 20		en en mangen Alfred Stadt	gangangan Kabupatèn	24.23%
Net assers	4327	enem	William	en 1	1.04308
Ennis
Share capital	-949	ang	83	ana	576729
Reserves	Œ		K.	my	KIN
Retained earnings	SIGNA		oning.	876.	804
Equity available to Telstra Entity shareholders	15252	a k	(SN)	(WAKO)	1.4.7.06
Mhómhneics					2
Töteltsharakoldeks egulaj	sta gregorija	GʻIST)	1633.C	62G)	- 436

The above assumes a 1 July 2003 transition date, and excludes the impact of AASB 132/139 Financial Instruments. A 1 July 2004 transition date would result in some differences to those noted above.

Net Debt

The impact of AASB 132/139 Financial Instruments has been excluded from this analysis due to the relevant transition date being 1 July 11 11 74063

Restated Cash Flow Statement

		Six months to St. December 2004
		MARINGER	Improvement/(reduction) Accements	IOZU NE
	ACAMP Eximinal (Untercificae)?	Refusingner Smiller (Onche R26)	Stalling	Millingheims SANITOIR THE FILL CONTRACT OF STREET AND THE	8888 EXLIQUEDEN (Chronoren)
Cash flows from operating activities	E JOET	杨维	Œ	70	BA
Cash flows from investing activities	(2BH22)	Œ		(cell	CALLER
Free cash flow	igan:	314.	H	ngan	a, svet
Cash flows from financing activities	toriu)	W.	B	eta	em ta
Ngjingaasa/(dagaasa) in dah	7740				702
Foreign dunency conversion Cash at the beginning or the period	ΠA: 74				ETH
Gestion in Eine of the partod	15002				4.3.6

The impact of AASB 132/139 Financial Instruments has been excluded from this analysis due to the relevant transition date Being Luib 2005

Pree dash flow dramagaza a sana ya manazarta operatify to monday when the state of the to investing activities

Hedging of interest rate risk

DERT

Epco

Floating

Profile

peritarget

• Domestic borrowings + Foreign Currency borrowings H-Cross Currency Swaps Saa alaa ahaysa taasa ENGINER

Index of a e a fan wen S. Existence

Hedging of interest rate risk

Telstra

Inglisha Ma

+ Domestic borrowings Fibomestic bottowings +Foreign Currency borrowings HOross Currency Swaps MAGICING INCIDE Y SONOWINGS H. Cross Currency Swaps -Cash / Short Term Investments ENGINEER

Borrowings denominated in foreign currency (not translation hedges)