Telstra 2011 Annual Report Download - page 41

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Telstra Corporation Limited and controlled entities
Full year results and operations review - June 2011
Share of net profit from jointly controlled and associated entities
Our share of net profit from jointly controlled and
associated entities includes our share of both profits and
losses from equity accounted investments.
In respect to our investments in FOXTEL, Reach and
Australia-Japan Cable, as the carrying value of each has
been previously written down to nil, any share of loss/
(gain) from these entities is not currently recognised.
These entities will resume equity accounting once the
accumulated losses have been fully offset by our share
of profits derived from these entities.
As at 30 June 2011, our carried forward losses from our
share of FOXTEL amounted to $132 million compared to
$152 million at 30 June 2010. The decrease of $20
million during the fiscal year is mainly due to our share
of FOXTEL's profit for the year of $100 million offset by
the $70 million distribution recorded as revenue during
the year. There was also a movement in our share of
reserves of $10 million.
Our share of carried forward losses in Reach and
Australia-Japan Cable as at 30 June 2011 were $559
million and $148 million respectively. The restructure of
Reach and acquisition of assets as announced on 26
January 2011 resulted in an accounting gain for Telstra.
The gain will have no direct impact on our share of
carried forward losses from our 50% investment in
Reach. We will continue to account for our share of
Reach’s operating results and our carried forward losses
will reduce to the extent of any net profit reported by
Reach. Reach’s net operating results has been
impacted by the profit on sale of assets arising from the
restructured transaction.
Depreciation and amortisation
Total depreciation and amortisation expenditure
increased by 2.6% to $4,459 million.
Depreciation increased by 0.4% or $14 million from
fiscal 2010 primarily due to higher communications
plant and other plant and equipment depreciation. This
increase was driven by asset additions and
improvements predominantly within the core network
data, core network transport, core content-IP products,
mobile access and fixed access assets. This was
partially offset by land and buildings depreciation which
decreased due to the retirement of exchange sites
during the year in line with our divestment program.
Amortisation expense increased by 10.9% or $99
million predominantly due to software additions and
improvements to our asset base comprising customer
relations, network operations and workflow
management applications and our billing systems.
Year ended 30 June
2011 2010 Change Change
$m $m $m %
Share of net profit from jointly controlled and associated entities . . . . . . (1) (2) 1 (50.0)
Year ended 30 June
2011 2010 Change Change
$m $m $m %
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,454 3,440 14 0.4
Amortisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,005 906 99 10.9
Total depreciation and amortisation . . . . . . . . . . . . . . . . . . 4,459 4,346 113 2.6