Telstra today announced it would reactivate its Dividend Reinvestment Plan (DRP) for its 1.4 million shareholders, making it available from the Financial Year 2015 final dividend, to be paid in September 2015. Telstra’s DRP last operated in 2008.

The Telstra Board’s decision to reactivate the DRP followed feedback from shareholders and is consistent with Telstra’s capital management framework.

Chief Executive Officer David Thodey said Telstra’s capital management framework was supported by clearly defined objectives and the principles of maintaining a tight financial discipline, delivering growth and maximising returns for shareholders.

“The Board’s decision to reactivate the DRP is consistent with these objectives, providing shareholders a way to increase their number of shares while maintaining our financial strength and the flexibility for future investments," Mr Thodey said.

"We expect our decision to reactivate the DRP will be welcomed by many of our shareholders and give them an easy and cost effective way to increase their shareholding.”

Telstra expects shares allocated to participants under the DRP for the final dividend to be sourced through an on-market purchase and transfer of shares to participating shareholders. No discount will apply to the allocation price under the DRP and no new share capital will be issued, although Telstra has the discretion to issue new shares in the future. The plan has been structured and will be managed in the most efficient way possible to minimise costs to Telstra and shareholders.

From September 2015 the DRP will enable shareholders to reinvest either all or part of their dividend payments into additional fully paid Telstra shares. No brokerage or other transaction costs will be payable by shareholders on shares acquired under the DRP.

Key features of the DRP (Subject to the DRP Rules)

• Participation in the DRP is optional and available to shareholders with registered addresses in Australia and New Zealand;
• Shareholders may participate for all or part of their shareholding and there is no minimum or maximum limit on the number of their shares that may participate;
• Shares allocated under the DRP will rank equally with existing shares on issue;
• Statements will be provided for each dividend the DRP applies to;
• Once a shareholder elects to participate, the DRP will continue to apply for future dividend payments, unless a participating shareholder advises otherwise;
• The Telstra Foundation will oversee a mechanism to donate any residual amount to selected charities. Shareholders may elect to opt out of donating their residual and roll forward any residual amount to the next payment.

To facilitate reactivation of the DRP for the final dividend, Telstra has amended the DRP Rules. A copy of the updated DRP Rules is included with this release.

Telstra recommends shareholders seek financial advice and read the full terms and conditions set out in the DRP Rules before deciding whether to participate.

In order to participate in the DRP for the final dividend, shareholders will need to ensure their DRP participation form is lodged, or their online election is made, by no later than 28 August 2015. More information regarding the DRP, including a personalised participation form, will be sent to shareholders with their interim dividend statement at the end of March.

For more information shareholders can go to www.telstra.com.au/aboutus/investors/ or contact the Telstra Share registry by phone on 1300 88 66 77.