Telstra 2001 Annual Report Download - page 53

P.51
(i) Refer to note 1 (b) Revenue recognition.
(ii) T
Teellssttrraa’’ss AAssiiaann VVeennttuurreess
On 7 February 2001, we completed our strategic alliance with Pacific Century CyberWorks (PCCW). Under these arrangements,
the following unusual items have been recognised in the statement of financial performance:
Year ended
30 June 2001
$m
Reach Ltd
Unusual revenue items 2,372
(a) Sale of global wholesale business and controlled entities to Reach Ltd.
This item represents the fair value of the total consideration received for the divisions and controlled entities
of Telstra contributed to Reach Ltd.
Unusual expense items 1,520
(b) Book value of the sale of our global wholesale business and controlled entities to Reach Ltd.
This item represents the book value of the divisions and controlled entities of Telstra that were contributed
to Reach (including associated costs) together with the effect of the deferral of the unrealised profit (after tax),
and is calculated as follows:
Book value of businesses and controlled entities contributed to Reach and associated costs 668
Deferral of unrealised profit before tax 852
Total 1,520
Profit is considered to be unrealised to the extent that we retain an ownership interest in Reach. The amount
deferred is brought to account in the statement of financial performance (through the share of net losses
of associates and joint venture entities) on a straight-line basis over a period of 20 years.
RWC
Unusual expense items 999
(a) Write-off of acquisition costs
This item represents the value of acquisition costs written-off as a result of our acquisition of 60%
of Joint Venture (Bermuda) No. 2 Limited. This item forms part of the reduction in value of the investments.
Net unusual items – Telstra’s Asian ventures
The net once-off unusual items recognised as a result of Telstra’s Asian ventures is a $147 million loss before tax.
(iii) On 29 August 2000, the trustee of the Telstra Superannuation Scheme (TSS) and the Commonwealth (who guaranteed our
payments) released us from our obligation to contribute $121 million per annum to the TSS to 30 June 2011. As part of the
terms of the release, we have agreed to provide such future employer contributions to the TSS as may be required to maintain
the vested benefits index (VBI – the ratio of fund assets to members vested benefits) in the range of 100-110%.
The removal of our obligation reduced the assets of the TSS and resulted in the VBI of the defined benefit divisions reducing
from approximately 167% at 30 June 2000 to approximately 147% as at 30 June 2001.
The trustee agreed to the release of the obligation based on actuarial advice that the removal of these additional
contributions, coupled with the employer contribution commitment from us, will maintain the solvency level of the TSS
at a satisfactory level.
We anticipate that the surplus in the TSS will continue and no employer contributions will be required in the current year
or in fiscal 2002 and 2003, assuming the continued sound performance of the TSS.
The net present value of our commitment to the TSS was shown as a liability on our statement of financial position as at
30 June 2000. This liability has been written-back to the statement of financial performance in the year ended 30 June 2001
and has increased our result as follows:
Year ended
30 June 2001
$m
Write-back of TSS additional contribution liability 725
Tax effect at 34% (247)
478
Our interest expense associated with the TSS liability in the current period was $nil (2000: $89 million).
Interest expense arose from the difference between the actual amount of payments we were required to make
and the recorded amount of these discounted commitments. No interest expense was incurred in the year ended
30 June 2001 due to the release of our obligations to the TSS.
44.. UUnnuussuuaall iitteemmss ccoonnttiinnuueedd