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Telstra Corp. Ld (50IM)

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Friday 22 March, 2002

Telstra Corp. Ld

Normalisation Schedule

Telstra Corporation Ld
20 March 2002

             Telstra Corporation Limited (ABN 033 051 775 556)
                      Half Year ended 31 December 2001
                         Normalisation Schedule

This schedule details the adjustments made to the reported results for the half 
years ended 31 December 2001 and 2000 to arrive at the underlying business 
performance.

$m                          A         A         A             A         A         B          C          D     
                                                           Telstra               Asset/
                Reported                      Telstra      Clear(pre             Invest-   Restruct-          Underlying
                Dec 01/02   RWC   Keycorp     Clear (Dec   acquisition           ment      uring     Diminu-  Dec
                                              month)       costs       Reach     Sales     Charges   tion     01/02

Basic Access       1,343                                                                                       1,343
Local Calls        1,023                                                                                       1,023
Fixed to Fixed       588                                                                                         588
Fixed to Mobile      707                                                                                         707
International
telephone services   216                                                                                         216
Mobile Services    1,631                                                                                       1,631
Mobile Handsets      122                                                                                         122
Data & Internet
services           1,580                                                                                       1,580
Directory services   714                                                                                         714
Customer premise
equipment            125                                                                                         125
Intercarrier 
services             568                                                                                         568
Inbound calling
products             193                                                                                         193
Solutions
management           162                                                                                         162
Other sales & 
service            1,294  (577)      (25)       (39)                                                             653
Sales Revenue     10,266  (577)      (25)       (39)          -          -            -        -         -     9,625

Other revenue        346                          -                                 125                          221
Total revenue     10,612  (577)      (25)       (39)          -          -        (125)        -         -     9,846
Less interest
revenue               67                                                                                          67
Total revenue 
(excl. interest)  10,545  (577)      (25)       (39)          -          -        (125)        -         -     9,779

Expenses
Labour             1,459   (47)      (13)        (9)                                                           1,390
Restructuring 
Costs    (*)          93                                                                    (93)                   -
Direct cost of 
sales              1,962  (230)      (22)       (25)                                                           1,685
Other              1,921  (128)       (9)        (6)                              (113)               (26)     1,639
Expenses before 
Equity Acc/Depn/
Amort/Interest     5,435  (405)      (44)       (40)          -          -        (113)     (93)      (26)     4,714
Share of net
Equity Accounted
Losses                93                                   (48)         20                                        65
Total Expenses 
before Depn/Amort/
Interest           5,528  (405)      (44)       (40)       (48)         20        (113)     (93)      (26)     4,779
EBITDA             5,017  (172)        19          1         48       (20)         (12)       93        26     5,000

EBITDA excl
Associates/
Joint Ventures     5,110  (172)        19          1          -          -         (12)       93        26     5,065

Depreciation       1,259   (45)       (1)       (11)                                                           1,202
Amortisation(excl
goodwill)            273   (60)       (1)        (1)                                                             211
Goodwill
Amortisation          42   (37)                  (1)                                                               4
Total Depn/Amort   1,574  (142)       (2)       (13)          -          -            -        -         -     1,417
Total Expenses     7,102  (547)      (46)       (53)       (48)         20        (113)     (93)      (26)     6,196


EBIT               3,443   (30)        21         14         48       (20)         (12)       93        26     3,583

EBIT excl 
Associates/Joint
Ventures           3,536    -30        21         14          0          0          -12       93        26     3,648

Net interest         350      3        -2         -3                                                             348

PBT                3,093    -33        23         17         48        -20          -12       93        26     3,235

Tax (excl.
unusuals 
effect)    (**)      992    -22         7          0                                 -4       28               1,001

PAT (bef.Min Int)  2,101    -11        16         17         48        -20           -8       65        26     2,234

Minority Interest      3    -19         9          7                                                               0
PAT                2,098      8         7         10         48        -20           -8       65        26     2,234
Effective tax
rate               32.1%                                                                                       30.9%
EBITA Margin on
Sales revenue      48.9%                                                                                       51.9%
EBIT Margin on 
Sales revenue      33.5%                                                                                       37.2%
Earnings per share
(12866.6m shares)  16.3 cents                                                                                   17.4

Note:   (*) No provision for restructuring in 01/02
        (**) Underlying tax calculations represent management's best estimates
                                       
                            Normalisation Schedule   .......CONTINUED

This schedule details the adjustments made to the reported results for the half 
years ended 31 December 2001 and 2000 to arrive at the underlying business 
performance.

$m                           A          A         B           C         D         E          F          G    
                           Global      Telstra   Asset/
                Reported   Wholesale   Saturn    Invest-   Restruct-                                  Tax    Underlying
                Dec 00/01 (from Jul 1) (Dec      ment      uring      Diminu-                         Rate   Dec 00/01
                                       month)    Sales     charges    tion      Super    SAB101       Change

Basic Access      1,146                                                                    3                   1,149    
Local Calls       1,113                                                                                        1,113
Fixed to Fixed      646                                                                                          646    
Fixed to Mobile     631                                                                                          631    
International
telephone services  524    (300)                                                                                 224    
Mobile services   1,453                                                                   (12)                 1,441    
Mobile Handsets     113                                                                                          113
Data & Internet
Services          1,645      (9)                                                                               1,636    
Directory Services  622                                                                                         
Customer premise                                                                           98                    720
equipment           147                                                                                          147
Intercarrier 
services            499      25                                                                                  524    
Inbound calling
products            229                                                                                          229    
Solutions
management          146                                                                                          146
Other sales & 
service             844    (123)                                                                                 721
Sales Revenue     9,758    (407)       -          -          -          -         -       89           -       9,440

Other revenue     1,553       -                 (652)                           (725)                            176
Total revenue    11,311    (407)       -        (652)        -          -       (725)     89           -       9,616 
Less interest
revenue              38                                                                                           38    
                                                                                           
Total revenue    11,273    (407)       -        (652)       -          -        (725)     89           -       9,578
(excl. interest)   

Expenses                                                                                         
Labour            1,568     (18)                                                                                1,550 
Restructuring 
Costs    (*)          3      (1)                          (2)                                                       -
Direct cost of 
sales             1,809    (197)                                                                                1,612   
Other             1,997     (25)                (425)                (41)                                       1,506   
Expenses before 
Equity Acc/Depn/
Amort/Interest    5,377    (241)       -        (425)     (2)        (41)         -      -           -          4,668   
Share of net
Equity Accounted
Losses              164               (10)                           (99)                                          55
Total Expenses 
before Depn/Amort/
Interest          5,541     (241)     (10)      (425)     (2)       (140)         -      -          -          4,723
EBITDA            5,732     (166)      10       (227)      2         140        (725)    89                    4,855

EBITDA excl
Associates/
Joint Ventures    5,896     (166)       -       (227)      2          41        (725)    89         -          4,910

Depreciation      1,180      (33)                                                                              1,147 
Amortisation(excl
goodwill)           184       (3)                                                                                181
Goodwill
Amortisation         13                                                                                           13
Total Depn/Amort  1,377       (36)      -          -       -          -            -     -         -           1,341 
Total Expenses    6,918       (277)   (10)      (425)     (2)        (140)         -     -         -           6,064 


EBIT              4,355       (130)    10       (227)      2          140       (725)    89        -           3,514

EBIT excl 
Associates/Joint
Ventures          4,519       -130      0       -227       2           41       -725     89        0           3,569    
   

Net interest        313                                                                                          313 

PBT               4,042       -130     10       -227       2          140       -725     89        0           3,201 

Tax (excl.        1,420        -45               -77       1                    -247     30       13           1,095
unusuals 
effect)(**)  

PAT (bef.Min Int) 2,622       -85      10       -150       1          140       -478     59     -13            2,106 

Minority Interest    -1                                                                                           -1
PAT               2,623       -85      10       -150       1          140       -478     59     -13            2,107 
Effective tax      35.1%                                                                                        34.2%
rate                                                                                                  
EBITA Margin on
Sales revenue      58.7%                                                                                        51.4%
EBIT Margin on 
Sales revenue      44.6%                                                                                        37.2%   
                                                                                        
Earnings per share
(12866.6m shares)  20.4                                                                                         16.4    
Note:   (*) No provision for restructuring in 01/02
        (**) Underlying tax calculations represent management's best estimates
                                       

                                   NORMALISATION SCHEDULE.....CONTINUED


                                        Reported    Underlying   Underlying
                                        Growth %    Growth %      M/ment 

Basic Access                              17.2%       16.9%          194
Local Calls                               -8.1%       -8.1%          (90)
Fixed to Fixed                            -9.0%       -9.0%          (58)
Fixed to Mobile                           12.0%       12.0%           76
International telephone services         -58.8%       -3.6%           (8)
Mobile services                           12.3%       13.2%          190
Mobile Handsets                            8.0%        8.0%            9
Data & Internet Services                  -4.0%       -3.4%          (56)
Directory Services                        14.8%       -0.8%           (6)
Customer premise equipment               -15.0%      -15.0%          (22)
Intercarrier services                     13.8%        8.4%           44
Inbound calling products                 -15.7%      -15.7%          (36)
Solutions management                      11.0%       11.0%           16
Other sales & service                     53.3%       -9.4%          (68)
Sales Revenue                              5.2%        2.0%          185

Other revenue                            -77.7%       25.6%           45
Total revenue                             -6.2%        2.4%          230 
Less interest revenue                     76.3%       76.3%           29
Total revenue (excl. interest)            -6.5%        2.1%          201

Expenses
Labour                                    -7.0%      -10.3%         (160)
Restructuring Costs                        N/M         N/M             -
Direct cost of sales                       8.5%        4.5%           73
Other                                     -3.8%        8.8%          133
Expenses before Equity Acc/Depn/
Amort/Interest                             1.1%        1.0%           46
Share of net Equity Accounted Losses     -43.3%       18.2%           10
Total Expenses before Depn/Amort/
Interest                                  -0.2%        1.2%           56
EBITDA                                   -12.5%        3.0%          145

EBITDA excl Associates/Joint Ventures    -13.3%        3.2%          155

Depreciation                               6.7%        4.8%           55
Amortisation (excl goodwill)              48.4%       16.6%           30
Goodwill Amortisation                    223.1%      -69.2%           (9)
Total Depn/Amort                          14.3%        5.7%           76
Total Expenses                             2.7%        2.2%          132  

EBIT                                     -20.9%        2.0%           69

EBIT excl Associates/Joint Ventures      -21.8%        2.2%           79

Net interest                              11.8%       11.2%           35

PBT                                      -23.5%        1.1%           34

Tax (excl. unusuals effect)(1)           -30.1%       -8.6%          (94)

PAT (bef.Min In)                         -19.9%        6.1%          128

Minority Interest                          N/M          N/M            1
PAT                                      -20.0%        6.0%          127
Effective tax rate                        -3.0%       -3.3%    
EBITA Margin on Sales revenue             -9.8%        0.5%
EBIT Margin on Sales revenue             -11.1%        0.0%
EPS                                      -20.0%        6.0%





Adjustments to Normalise results

(A)  New Business Ventures
We have removed from our reported results the effects of our new business 
ventures, Regional Wireless Company (RWC), Reach Ltd, Keycorp and TelstraClear.
-  We acquired 60% of RWC in February 2001.
-  We acquired a 50% interest in Reach Ltd in February 2001 and at the same time 
our Global Wholesale business was sold to Reach Ltd.

-  We acquired a controlling interest in Keycorp in December 2000 and 
   consolidated its results from 1 January 2001.
-  In December 2001 we increased our ownership in Telstra Saturn and began 
   consolidating its results.  At the same time Telstra Saturn acquired Clear 
   Communications and its name was changed to TelstraClear.


                                            31 December 2001


(B)  Asset Sales ($m)                                      Tax Effect    Profit
                               Proceeds    NBV      Profit     @ 30%     after
                                                           if applicable tax
Investments                         
Sausage share                    6          5        1         0         1
Sausage options                  4          4        0         0         0
New Skies                       10          9        1         1         0
Sales of listed and other 
  investments                   20         18        2         1         1            


Sale of PABX business           29          2       27         8        19

Total Investments sales         49         20       29         9        20
PC Lease                        23         24       -1         0        -1
Asset sales                     53         69      (16)       -5       -11
Total Asset sales               76         93      -17        -5       -12
                               125        113       12         4         8

(C) Restructuring Costs

We incurred restructuring costs for employee redundancies of $93 million in the 
2002 half year and $3 million in 2001 half year.


(D)  Investment write-downs ($m)     Diminution     Associates (1)     Total

Solution 6                                 9                              9
Corprocure                                 7                              7
CPI Card Group (Keycorp investment)        9                              9
Sausage shares                             1                              1

Investment write-downs                    26                     0       26

(1)  This relates to write-downs of the goodwill implicit in the carrying value 
of joint ventures and associates and is recorded in the share of associate 
profit/(Loss) in the profit and loss.      


                                            31 December 2000


(B)  Asset Sales ($m)                                       Tax Effect  Profit
                               Proceeds    NBV      Profit     @ 34%     after
                                                           if applicable  tax 
Investments                         
Computer Share                    386      199       187        64        123
Extant                             57       36        21         7         14
Sales of listed and other 
  investments                     443      235       208        71        137
Patents, trademarks & licenses      4        4         0         -          0
Sale of Atlas                       4       (4)        8         3          5
Sale of Business (Darna)            4        3         1         0          1

Total Investment sales            455      238       217        74        143
PC Lease                          111      111         0         0          0
Asset Sales                        86       76        10         4          6
Total Asset sales                 197      187        10         4          6
                                  652      425       227        77        150


(D) Investment write-downs ($m)     Diminution     Associates(1)   Total

Solution 6                             13               25            38
Sausage - Shares                       10                             10
Sausage - Options                      10                             10
Commander                              12                             12
Myprice                                 9                              9
Station 12                                              50            50
Ecard                                   9                              9
Telstra Saturn                        -22               21            -1
Myinternet                                               3             3
Investment Write-downs                 41               99           140     

(1) This relates to writedowns of the goodwill implicit in the carrying value of
joint ventures and associates and is recorded in the share of associate 
profit/(Loss) line in the profit and loss.

(E) Superannuation writebacks $725m
Telstra during the period has been released from its obligations to contribute 
$121m pa per annum to the Telstra Superannuation Scheme.  This obligation was
recorded as a liability on Telstra's balance sheet at 30 June 2000 at $725m.  It
is recorded as revenue in fiscal 2001 and needs to be removed out of revenue to
normalise the number.  There is no adjustment required for the first half of
fiscal 2002.

(F) SAB101
We began applying SAB101 revenue recognition in the second half of fiscal 2001.
We have adjusted the fiscal 2001 first half to include the effects of SAB101 
had it been applied then.


(G) Tax rate Change
From 1 July 2001 the Company tax rate reduced to 30%.  This adjustment restates 
the deferred tax balances at 31 December 2000 to 30%.



                      This information is provided by RNS
            The company news service from the London Stock Exchange
                                                         

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