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ANNUAL
ANNUAL
REPORT
REPORT
2021
2021
Contents
2 The Atlas Arteria Business
3 2021 at a Glance
4 Chairpersons’ Review
6 From the CEO and Managing Director
8 Strategic Framework
10 Portfolio and Performance
18 Sustainability
20 Risk Management
22 Corporate Governance
27 Financial Overview
32 Remuneration Report
51 Directors’ Reports
56 Financial Report
108 Securityholder Information
IBC Corporate Directory
We are Atlas Arteria. We are a global owner, operator and developer of toll roads.
We work to create long-term value for our investors through considered and disciplined
management and sustainable business practices.
OUR VISION
OUR VALUES
To provide the communities in which we operate
with high quality, well maintained infrastructure
and associated amenities that:
− enhance safety;
− provide economic benefi ts through reduced travel
time and greater time certainty;
− improve environmental outcomes through reduced
fuel consumption and carbon emissions; and
− provide a positive customer experience.
Our values guide the decisions we make and the way
we behave as we work together towards our vision.
In living our values, we aim to create strong growth for
securityholders and better outcomes for our customers,
our communities and our people.
To us, great performance is as much about the way we
get there as it is about the result. That’s why our people’s
success is evaluated against our fi ve values, along
with their role responsibilities.
Atlas Arteria (‘ALX’) comprises Atlas Arteria International Limited (Registration No. 43828) (‘ATLIX’) and Atlas Arteria Limited
(ACN 141 075 201) (‘ATLAX’). ATLIX is an exempted mutual fund company incorporated and domiciled in Bermuda with limited liability
and the registered offi ce is 4th Floor, Cedar House, 41 Cedar Avenue, Hamilton, HM12, Bermuda. ATLAX is a company limited by shares
incorporated and domiciled in Australia and the registered offi ce is Level 1, 180 Flinders Street, Melbourne, VIC 3000, Australia.
KEEPING COMMUNITIES
CONNECTED AND
ECONOMIES MOVING,
FOR THE THINGS IN LIFE
THAT MATTER MOST
OUR GUIDING VALUES
When we are steered by these values, we are acting in the best interests of one another, our securityholders,
our customers and our communities. In this way, together, we’re driving better outcomes.
Safety is at
our heart
Transparency
in all we do
Engage for
better outcomes
We are always focused
on delivering safe
outcomes for our
employees, contractors,
customers and visitors
to our offices and roads;
because nothing is
so important that we
cannot take the time
to do it safely.
We are honest about
what we do and how
we do it. We are
accountable for our
actions. If we make
a mistake, we will be
open about it, learn
and improve from it.
We engage with
one another and our
stakeholders with a
spirit of curiosity and
with a learning mindset.
We seek to understand
people’s needs so we
can deliver better
outcomes. We are
open and adaptable to
change and committed
to continuous
improvement.
Environmentally
and socially
responsible
We care for our
communities and the
environment. We are
committed to enhancing
our communities
and are proactive in
reducing environmental
impacts by embedding
responsible and
sustainable business
practices.
Respect in every
interaction
We are respectful
of everyone in every
situation. We celebrate
diversity. We know that
a culture of inclusion
and diversity breeds
success. We respect the
rules and the spirit of
the law and will always
act ethically, lawfully
and responsibly.
ATLAS ARTERIA ANNUAL REPORT 2021 | 1
THE ATLAS ARTERIA BUSINESS
Atlas Arteria is a global owner, operator and developer of toll
roads, with a portfolio of four toll roads in France, Germany and
the United States. We are focused on ensuring our customers,
and the communities in which we operate, are well served
by the transport links we provide.
2
1
3
Luxembourg
European HQ
Australia
Global Corporate HQ
Bermuda
ATLIX Board
1
France
2
Rostock, Germany
3
Virginia, United States
WARNOW TUNNEL
Ownership: 100%
2.1km road and tunnel in
Rostock, Germany
2053 concession expiry
DULLES GREENWAY
Ownership: 100%3
22km commuter route into the
greater Washington DC area
2056 concession expiry
APRR
Ownership: 31.14%1
2,318km motorway network
in Eastern France
2035 concession expiry2
ADELAC
Ownership: 31.17%1
20km commuter road connecting
Annecy to Geneva
2060 concession expiry
1. On 2 March 2020, Atlas Arteria completed a transaction to acquire an additional 6.14% in APRR and ADELAC, increasing our interest from 25.00% in APRR
to 31.14% and from 25.03% in ADELAC to 31.17%.
2. APRR concession expires in November 2035, AREA concession expires in September 2036.
3. 100% economic ownership.
2 | ATLAS ARTERIA ANNUAL REPORT 2021
2021 AT A GLANCE
Proportionate EBITDA by Business
Calendar of Events
A P R R 1 0 0 % ( € m )
Traffic (VKTm)
Operating revenue
Operating expenses
Total EBITDA
2021
2020 % change
23,195
19,413
2,569.2
2,169.2
(676.5)
(619.7)
1,892.8
1,549.5
19.5%
18.4%
(9.2%)
22.2%
22.2%
Total EBITDA (proportional, A$m)1, 2
928.7
760.3
A D E L A C 1 0 0 % ( € m )
Traffic (m)
Operating revenue
Operating expenses
Total EBITDA
Total EBITDA (proportional, A$m)1, 2
W a r n o w T u n n e l 1 0 0 % ( € m )
Traffic (m)
Operating revenue
Operating expenses
Total EBITDA
Total EBITDA (proportional, A$m)1, 2
Dulles Greenway 100% (US$m)
Traffic (m)
Operating revenue
Operating expenses
Total EBITDA
Total EBITDA (proportional, A$m)1, 2
Atlas Arteria proportionate (A$m)1, 2
Traffic (Weighted Average)3
Toll revenue
Operating revenue
Operating expenses
Total EBITDA
2021
8.9
47.9
(8.0)
39.8
19.6
2021
4.4
12.7
(4.0)
8.7
13.7
2021
11.6
60.4
(13.8)
46.6
62.1
2021
n.a.
2020 % change
7.7
41.5
(7.5)
34.0
16.7
15.4%
15.4%
(7.3%)
17.2%
17.2%
2020 % change
4.6
12.8
(3.7)
9.1
14.4
(4.3%)
(1.1%)
(8.5%)
(5.0%)
(5.0%)
2020 % change
10.2
52.0
(13.6)
38.4
51.2
13.3%
16.1%
(1.5%)
21.3%
21.3%
2020 % change
n.a.
18.6%
17.1%
17.9%
(8.7%)
21.5%
1,334.1
1,139.7
1,384.6
1,174.3
(360.6)
1,024.0
(331.7)
842.5
Atlas Arteria 2021
proportional Revenue
Atlas Arteria 2021
proportional EBITDA
5.8%
1.4%
6.1%
1.3%
1.7%
1.9%
91.1%
90.7%
APRR
ADELAC
Dulles Greenway
Warnow Tunnel
Note: Revenue and operating costs are presented under IFRS, excluding the impact of IFRIC 12.
1. Average foreign currency exchange rates from the current period AUD = 0.750 USD and AUD = 0.635 EUR.
2. EBITDA for 2020 has been derived by restating the 2020 results with the current asset ownership
percentage and foreign currency exchange rates from the current period.
3. Traffic growth is weighted by Atlas Arteria’s beneficial interests in the revenue from each business,
in AUD using the average exchange rates in the period.
January
− Released toll revenue and traffic
statistics for the December quarter
2020 (Q4 2020).
February
− Announced results for the year ended
31 December 2020.
March
− Ariane Barker joined the board
of ATLAX as an Independent
Non-executive Director.
− Completion of the Warnow Tunnel
capital restructure diversifying Atlas
Arteria’s sources of cash flow.
− Declared a 13.0 cps distribution
for H2 2020
April
− Released toll revenue and traffic
statistics for the March quarter 2020
(Q1 2021).
− Outcome reached for the Dulles
Greenway rate case submission.
The SCC granted a 5.3% increase
in 2021 and 5.0% increase in 2022
for off-peak tolls.
− Held Atlas Arteria’s 2021 Annual
General Meeting.
June
− Released our first Modern
Slavery Statement.
July
− A41 widening capital project at APRR
opened to traffic.
− A71 ‘Montmarault’ intersection capital
project at APRR opened to traffic.
− Released toll revenue and traffic
statistics for the June quarter 2021
(Q2 2021).
August
− A75 widening capital project at APRR
opened to traffic.
− Announced results for the half year
ended 30 June 2021.
September
− S&P affirmed its ‘A-/A-2’ long-term
and short-term issuer credit ratings
for APRR, and maintained its outlook
as ‘stable’.
− Declared a 15.5 cps distribution
for H1 2021.
October
− Released toll revenue and traffic
statistics for the September quarter
2021 (Q3 2021).
− Fitch affirmed its A- credit rating
for APRR, and maintained its outlook
as ‘stable’.
November
− Announced APRR successfully
priced € 500 million of bonds with
a 0% coupon under its Euro Medium
Term Note Programme.
− Held Atlas Arteria’s 2021 Investor Day.
December
− Substantial completion of the West
End Leesburg Bypass Improvements
capital project at Dulles Greenway.
ATLAS ARTERIA ANNUAL REPORT 2021 | 3
FINANCIAL REPORTDIRECTORS’ REPORTSREMUNERATION REPORTFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS CHAIRPERSONS’
REVIEW
Dear Securityholder,
We are pleased to present the 2021 Annual Report.
During another extraordinary year of disruptions due to the
COVID-19 pandemic, we have continued to focus on the safety
and wellbeing of our people, customers and the community.
Measures put in place at the start of the COVID-19 pandemic
meant our teams have been able to maintain seamless
operations, quickly adapting to changing conditions. Our roads
are critical in keeping communities connected and in France
they are essential to Trans-European trade flows. Our priority
has been to keep roads open and traffic moving.
We have remained squarely focused on driving growth and
value for our securityholders, notwithstanding the challenging
environment. In 2021 we delivered on a number of strategic
objectives, with the capital restructure at Warnow Tunnel a
notable achievement. This not only diversified Atlas Arteria’s
sources of cash flows but, by bringing forward distributions,
substantially increases the value of the business.
The Boards are expecting to pay a record distribution for the
2021 year on the back of a strong performance at APRR and
the Warnow Tunnel capital restructure, from which we have
already begun to receive distributions.
Enhancing engagement with our securityholders
During 2021, over 150 investors attended our inaugural
Investor Day. During the briefing, which we encourage you
to view on our website via this link, investors were briefed on:
− Strategic progress made over the last 2.5 years since
internalisation.
− A review of economic activity from guest speaker
Jean-François Robin, Global Head of Research, Corporate
& Investment Banking at Natixis.
− In-depth assessment of the operations and government
policy setting in France, home of APRR, our largest business
from Jean-Georges Malcor, Non-executive Director of Atlas
Arteria and Vincent Portal-Barrault, COO at Atlas Arteria.
− Insights into the Dulles Greenway operations and political
environment from Renée Hamilton, CEO at Dulles Greenway,
Pierce Homer, Director of Dulles Greenway and James
Lerner, Director US Operations at Atlas Arteria.
− Summary of the operations of the Warnow Tunnel presented
by Yvonne Osterkamp, Managing Director at Warnow Tunnel.
− An overview of our traffic forecasting capability, which
continues to evolve and grow in sophistication.
− An update on the Company’s financial position and
strategy going forward by our CFO Nadine Lennie
and CEO Graeme Bevans.
4 | ATLAS ARTERIA ANNUAL REPORT 2021
Culture and values continue to drive better outcomes
We are committed to playing a positive role in society
and creating long-term value for our stakeholders. In 2021
we continued to deliver on our sustainability priorities
of safety, customers and community, our people and
environmental stewardship. A particular focus was the
establishment of performance targets across all four
of our sustainability priorities.
Taking steps to reduce the impacts of our business on the
environment is a high priority. In 2019, we first reported on
APRR’s green house gas emissions footprint and in 2020
we expanded Scope 1 and 2 data to encompass all of our
businesses. In 2021 we established targets aligned with
a 1.5°C warming scenario, a 25% reduction in Scope 1 and 2
green house gas emissions by 2025, and 46% by 2030
(compared to a 2019 baseline).
We have also released targets across safety, customers and
community and our people with an expanded set of metrics
for improved measurement and management. We have also
maintained our commitment to a 40% gender balance and to
evolve representation of women across and within our teams.
The publication of our first Sustainability Report has been
deferred until early April in order for us to gather and review
the data required, and to align the timing of our report with that
of Eiffage, our partner at APRR. Our sustainability achievements
in 2021 are summarised on pages 18 to 19 of the Annual Report.
Distributions
Disciplined capital management and sustainable business
practices continue to be a focus for the Boards.
It is with this approach top of mind that the Groups are
expecting to pay a record distribution for the 2021 year. A first
half distribution of 15.5 cents per security was declared in
September 2021 with guidance for our final 2021 distribution
of 20.5 cents per security, reflecting the continued strong
performance of APRR coupled with distributions of cash from
Warnow Tunnel.
This will bring the total payout for the year to 36.0 cents
reflecting the ongoing growth and resilience of our operations.
This is in line with our strategy to deliver strong and
sustainable distributions to securityholders by optimising the
performance and cash flow from our portfolio of businesses.
Continued Board renewal
Board renewal has been a focus in recent years. One new
director joined the ATLAX board during 2021. Three new
Bermudian based directors have joined the ATLIX Board over
the past two years under the leadership of our longest serving
director and ATLIX Chair, Jeff Conyers. Jeff joined the ATLIX
Board on inception in 2009 and has played a key role in the
internalisation of management in 2019, the ongoing delivery
of our strategy and more recently, in supporting the smooth
transition of new board members.
Consideration is being given to ATLIX Chair succession and an
orderly transition to a new Chair. Once this process is complete,
it is Mr Conyers’ intention to retire from the Board. Following
Mr Conyers’ retirement it is intended that the ATLIX board will
comprise four directors.
Outlook
While uncertainty remained during 2021 as a result of the
COVID-19 pandemic, our people and the local communities in
which we operate have adapted well. The 2021 year demonstrated
that our APRR network plays an essential role in the movement
of goods and services and therefore to the economies of
Western Europe.
The resilience of our businesses provides us with cautious
optimism going into 2022. We will continue to focus on
leveraging our strengths to improve the cash flows from
each of our businesses as well as developing an appropriate
growth agenda, with the goal of growing value and distributions
to securityholders.
On behalf of Atlas Arteria, we would like to thank our people,
our customers, local communities and our securityholders for
your support during the year, and as we continue to build and
grow the Company in the years to come.
Debbie Goodin
Chair
Atlas Arteria Limited
Jeffrey Conyers
Chair
Atlas Arteria International Limited
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ATLAS ARTERIA ANNUAL REPORT 2021 | 5
FROM THE CEO AND
MANAGING DIRECTOR
This strong traffic performance continued through to the fourth
quarter. Despite a resurgence of COVID-19 cases in late 2021,
high vaccination rates, the successful rollout of booster shots
and the health pass have largely allowed people to continue
with everyday life.
As part of APRR’s commitment to protecting the environment,
we are more than halfway through equipping all service areas
with very-high power charging stations, a project which will
be completed by the end of 2022. In terms of protecting animal
species, APRR has built a wide range of structures on the
network as part of the 2018 motorway investment plan with
the objective of constructing 19 wildlife crossings across the
network by 2024.
APRR continues to deliver on its pipeline of capital projects
ensuring our network meets the changing needs of our
customers and positioning us to support the French
Government in meeting its ESG commitments.
Warnow Tunnel
Traffic at the Warnow Tunnel was heavily impacted in 2021
by strict mobility restrictions from January until May, partially
offset by the continuation of roadworks on competing routes,
though to a lesser extent than in prior years. Traffic decreased
4.3%, with toll revenue down 1.8%, and EBITDA was down
5.0% compared with 2020.
Since January 2021, electricity consumption is 100% from
renewable energy sources while we streamlined our customer
interface with the ability to recharge customer Smart Cards
online, making the process contact-free. Credit card readers
are currently being installed in lanes to avoid any direct
contact and, at the same time, to reduce friction in the
payment processes.
We successfully completed the capital restructure of Warnow
Tunnel in March, which will support the ongoing success
of the business.
Dulles Greenway
At Dulles Greenway, traffic was up 13.3%, and toll revenue up
16.2% from the prior year. Despite the impact of the COVID-19
pandemic, several initiatives were completed during the year.
In preparation for the winter season, we improved the safety
of snow operations in our maintenance yard. We also
completed the two capital improvements projects at the
west end of the Dulles Greenway which aim to help alleviate
congestion and create a safer merge of Greenway traffic onto
the Leesburg Bypass.
As a result of the changes to the Greenway’s governing
legislation, submissions to the Commission will be made on
an annual basis going forward, assuming no further alterations
to our regulatory framework. In April the Greenway was granted
a 5.3% increase to off-peak tolls in 2021 and 5.0% in 2022 by
the Virginia State Corporation Commission (SCC).
Following recent elections in Virginia we remain focused
on establishing a strong relationship with the incoming
administration to deliver win-win solutions for all stakeholders.
As a result of the performance for the year, the Dulles
Greenway again failed to pass the lock-up tests as defined
under the debt covenants. As at 31 December 2021 Dulles
Greenway had approximately US$221 million in cash
reserves including cash that would otherwise be available
for distribution to Atlas Arteria.
Dear Securityholder,
In 2021, as the world continued to navigate the COVID-19
pandemic, Atlas Arteria demonstrated its resilience. Our
largest business APRR performed strongly, underpinned
by continued growth in heavy vehicle traffic, and reinforcing
APRR’s role as a fundamental and essential part of the logistics
network in France. In the second half, we achieved record
light vehicle traffic flows at APRR reflecting strong domestic
tourism demand over the European summer, following
movement restrictions in place earlier in the year.
The political environment in Europe remains supportive
of growth at APRR and we continue to build constructive
relationships at all levels of government. A key focus is
working with the French Government to deliver on its ESG
objectives, and we continue to position the business for future
infrastructure capital investment to meet the objectives
of the French Government.
In Virginia, we are continuing to build stronger stakeholder
relationships in the region, including with the incoming
Governor and his administration.
More broadly we are very proud of the internal capabilities
we are developing within the business, in particular in traffic
forecasting and data analytics where new models have been
developed both to better understand our existing businesses
and to evaluate new opportunities.
We have a nimble and passionate team, both on the ground
at each business and at our corporate offices. As a team we
have a deep history in successful investing and thinking outside
the box, and we are adept at unlocking value in complex multi-
party transactions.
Our financial position is very strong, and we are well positioned
to take advantage of opportunities as they arise.
Business Performance
APRR and ADELAC
APRR contributed 91% of our proportional revenue and
continued to underpin Company cashflows. Across the full year,
traffic was up at APRR by 19.5%, and toll revenue increased
by 17.5% with a 22.2% increase in EBITDA and a 48.5%
increase in NPAT relative to 2020 levels. The strong second
half performance followed the easing of movement restrictions
implemented during a third lock-down which started in
April 2021. Movement restrictions were progressively lifted
leading into the summer and the EU health pass system was
implemented. Despite the marked absence of non-European
tourism, APRR had a strong summer season with traffic in the
third quarter reaching its highest levels ever seen.
6 | ATLAS ARTERIA ANNUAL REPORT 2021
Strategic Focus
Investors in Atlas Arteria have exposure to a strong portfolio
of four international toll road businesses. Toll charges are
positively correlated with inflation, so combined with low cost
long term debt funding in place across the portfolio, Atlas
Arteria is well placed to outperform as global economies
recover and inflation rises.
Our strategy is to leverage all of our strengths to improve
the cash flows from each of our businesses with the goal
of growing value and distributions to securityholders.
To that end we are focused on:
− continuing to reduce legacy complexity,
− maximising operational efficiencies in our existing
businesses,
− applying a disciplined capital management approach
to underpin distributions,
− lengthening our average concession life, and
− diversifying and managing our risks.
Being an infrastructure business, we work on long term
value creation and therefore we are very pleased with the
progress we have made in the short time since management
internalisation in April 2019.
The disciplined and consistent execution of our strategy over
this period since internalisation has significantly decreased
head office management costs relative to fees that would
have otherwise been paid to the former external manager
Macquarie, increased capability with traffic forecasting and
data and has seen us increase our stake in APRR to 31% while
enhancing our governance rights and access to cash flows.
In 2020, we successfully restructured our balance sheet to
support future growth opportunities in France and across our
businesses and in early 2021, we restructured the balance
sheet at Warnow Tunnel which allows for an optimised
cash management strategy so that for the first time we are
receiving distributions.
The implementation of our strategy since internalisation has
materially increased the value of both APRR and Warnow, and
in doing so, significantly improved the value of Atlas Arteria.
But there is more to do and a lot more value to unlock.
Building our Future
We have strong growth potential within and external to the
current businesses to deliver growth. We are very excited about
the opportunities we have ahead of us.
I want to thank our teams who again have proved they are
extremely capable of managing through unprecedented and
severe disruption. We are also grateful to our securityholders
for their continued support during the year.
We look forward to continuing to make progress in delivering
value to our securityholders over the coming years.
Graeme Bevans
CEO and Managing Director
Atlas Arteria
Executive Team
Graeme Bevans
CEO and Managing Director
A CEO and Managing Director with deep experience in complex
infrastructure investments in Australia, Europe and North
America. Passionate about driving the strategic direction and
culture of Atlas Arteria to ensure a strong, successful and
sustainable business now and for the long-term.
Nadine Lennie
Chief Financial Officer
An experienced CFO with a
strong track record in disciplined
infrastructure investment,
strategic financial management
and risk. Passionate about
making strategic and financial
decisions that add value for
customers and shareholders.
Vincent Portal-Barrault
Chief Operating Officer
A COO with extensive experience
in operational monitoring and the
improvement of infrastructure
businesses. Passionate about
improving the customer experience
on Atlas Arteria’s roads and giving
people more time for what’s
important to them.
Clayton McCormack
General Counsel and
Company Secretary
A highly experienced lawyer and
company secretary with strong
transactional, legal governance
and risk advisory experience.
Passionate about embedding
a governance framework and
culture that sustains Atlas
Arteria now and into the future.
Jim Dickson
Corporate Development and
Strategy Executive
An executive with extensive
experience in the infrastructure
sector with a focus on corporate
development. Passionate about
delivering on Atlas Arteria’s
strategic framework to provide
long-term sustainable growth
for shareholders.
ATLAS ARTERIA ANNUAL REPORT 2021 | 7
FINANCIAL REPORTDIRECTORS’ REPORTSREMUNERATION REPORTFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS STRATEGIC FRAMEWORK
Strategic Theme
Initiatives
Progress
Reduce legacy
complexity and
optimise the value
of what we own
Relationship building
to deliver growth
at APRR
Building on successful outcomes achieved in 2020 which saw completion of the transition
from an externally managed portfolio to an independent internal management team, and
enhanced governance rights at APRR. We have continued to develop a strong relationship
with Eiffage, and work together to promote APRR’s capability to deliver on the French
Government’s infrastructure agenda.
Price path certainty
for the Dulles
Greenway
Received an outcome on the SCC rate case process in April 2021 which provided for toll
price increases over 2 years.
Working on restructuring the Dulles Greenway concession to introduce distance-based
tolling, enhance the regulatory framework for the business and improve the efficiency
of the road network in Northern Virginia.
Warnow Tunnel
capital restructure
Capital restructure of the Warnow Tunnel completed in March 2021 and payment of its
first distribution in August 2021 assists in diversifying cash flows and contributed to the
payment of a 15.5 cents per security distribution for H1 2021 and expectations for a final
distribution of 20.5 cents per security.
People
Active operational
management to
improve earnings
and value
ESG and
environmental
performance
Continued to build out capabilities within the management team, recruiting an additional
13 people and implementing leadership and team effectiveness courses. This continues
to result in lower head-office costs than would otherwise have been paid to Macquarie.
Developed a small but highly skilled traffic team with experts based in Melbourne and
Virginia in the US. They gather data on traffic and collect and mine data on a range of
factors. The data is used to develop quantitative models, using econometric, time series,
and network modelling tools. The models provide better understanding of both our
existing businesses and new opportunities.
We achieved our target of a 40% gender balance at Board level, within senior executives1
and across the organisation.
For 2021, Atlas Arteria was ranked 7th out of 169 peers for ESG performance
by Sustainalytics.
Atlas Arteria also achieved a B rating in the Global Real Estate Sustainability
Benchmark’s (GRESB) Infrastructure Public Disclosure assessment with a score of 63.
APRR ranked 2nd in the European motorway sector in GRESB’s Infrastructure Assessment.
Atlas Arteria continued to facilitate a reduced customer footprint. Along APRR and AREA
this includes additional car park spaces to encourage shared mobility, an eco-mobility
education program and 254 electric vehicle charging points, or 58% of the total rollout.
During 2021, we developed overarching targets for each of our four priority areas of
safety; customers and community; our people; and environmental stewardship. These are
underpinned by a set of metrics and actions to support achievement of our targets.
Our progress in this area will be outlined in a separate Sustainability Report to be
released in early April 2022. A summary is provided on pages 18 to 19 of this report.
Safety
Embedding a safety-first culture, we implemented further initiatives to minimise
dangerous driver behaviour on our roads and developed specialised operational
technology for hazard prevention.
Customers
APRR met its ambitious target to keep their lost time injury frequency rate (LTIFR)2 <3,
recording a rate of 2.85. This is the second year in a row LTIFR has been kept below 3.
At Warnow Tunnel there were two lost time injuries, while at Dulles Greenway no lost
time injuries were recorded in 2021.
Undertaken in-depth analysis of underlying traffic trends and conducted detailed
customer surveys to understand how customers can be better served through the
operational management of Atlas Arteria road networks, for example the implementation
of improved signage and toll payment options.
Completion of key projects such as the Leesburg Bypass improvements at the Dulles
Greenway which helps to alleviate congestion and creates safer travel for customers.
Continuing to work towards providing Greenway users with distance-based tolling, which
could bring toll relief to many of our customers and support those who want to use the
Greenway for shorter trips.
1. ‘Senior executives’ is defined as Atlas Arteria executive team members, their direct reports and CEOs of wholly owned businesses.
2. LTIFR = number of lost-time injuries per one million hours worked.
8 | ATLAS ARTERIA ANNUAL REPORT 2021
Strategic Theme
Initiatives
Progress
Disciplined capital
management to
underpin strong
and sustainable
distributions to
securityholders
Implementing
a quick recovery
in distributions
to securityholders
The strong balance sheet position which was established in response to the COVID-19
pandemic has enabled the business to deliver on the distribution recovery.
A H1 distribution of 15.5 cents per security was declared in September 2021 with
guidance for our final 2021 distribution of 0.5 cents per security, reflecting the continued
performance of APRR coupled with distributions of cash from Warnow Tunnel.
Based on guidance provided, this would result in total distributions for the 2021 year
of 36.0 cents, a record distribution for Atlas Arteria.
Maintaining balance
between debt and
equity funding
over time
The objective is to maintain a dual focus on cash flow and the balance sheet to enable
flexibility in funding for future growth. To this end the Atlas Arteria’s corporate balance
sheet held A$134m equivalent as at 31 December 2021, with no holding company debt.
APRR is rated A- by both S&P and Fitch with a stable outlook, with € 3.2bn in liquidity as
at 31 December 2021 while Dulles Greenway had liquidity of US$221m as at
31 December 2021.
Focus on investment
grade metrics
and unlocking
distributions
Continued focus on appropriate gearing across the portfolio with the capital restructure
successfully implemented for Warnow Tunnel in March 2021 and the ongoing evaluation
of strategies to deliver sustainable contributions from Dulles Greenway.
Lengthen average
concession life
Pursue growth
opportunities
Success in winning and implementing RCEA (48 year concession contract) and we are
working with various levels of the French Government to achieve capital works projects
that enhance value and extend our average concession term. We continue to bid for new
concessions in France which are progressively coming to market.
Removing
constraints
to growth
Repayment of the holding company debt allows Atlas Arteria to support growth and
developments at APRR.
Diversify and
manage risk
Further develop
risk management
Updated and further refined governance structures, the risk management plan, policies
and internal audit activities.
Diversification
of cash flow
Capital restructure of the Warnow Tunnel completed, thereby diversifying Atlas Arteria’s
sources of cash flow.
Work to unlock distribution capability at the Dulles Greenway continues.
ATLAS ARTERIA ANNUAL REPORT 2021 | 9
FINANCIAL REPORTDIRECTORS’ REPORTSREMUNERATION REPORTFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS APRR AND ADELAC
FRANCE
APRR is a 2,318 kilometre motorway network in the south-east of
France, including ADELAC’s 20 kilometres. It is the second-largest
motorway network in France and the fourth largest in Europe.
Paris
Orléans
Troyes
Toul
Stuttgart
Germany
Mulhouse
Cosne-Cours-sur-Loire
Dijon
Bourges
France
Besançon
Zurich
Switzerland
Vichy
Geneva
Clermont-Ferrand
Lyon
Chambéry
Grenoble
Italy
Milan
Bordeaux
Valence
APRR
AREA/ADELAC
Atlas Arteria interest
in APRR and
31.14%
31.17%
in ADELAC
Concession term
APRR: 30 November 2035
AREA: 30 September 2036
ADELAC: 31 December 2060
APRR (including AREA)
Traffi c: up 19.5% on pcp
Toll Revenue: up 17.5% on pcp
EBITDA: up 22.2% on pcp
ADELAC
Traffi c: up 15.4% on pcp
Toll Revenue: up 15.4% on pcp
EBITDA: up 17.2% on pcp
10 | ATLAS ARTERIA ANNUAL REPORT 2021
July saw the opening of both the A41 Widening (€ 90m project)
and the A71 ‘Montmarault’ intersection, a € 86m project that
provides a more effi cient connection between APRR and
the RCEA project (future A79). The A75 Widening was also
opened to traffi c in August. This was the largest capital project
completed this year, costing € 179m and reduces congestion
during the summer period in particular which experiences
around a third of the annual traffi c.
An additional 98 car park spaces were also opened during
the year to encourage shared mobility, reducing congestion
and carbon emissions.
Improving customer services
Several network improvements were made during the year.
The customer service offering for electric vehicles has been
expanded to 254 very high and high power charging points
across the network, representing 58% of service areas in place
at the end of 2021. The expansion included four Fastned very
high-power stations which were deployed in December 2021.
Fastned stations can charge up to 300km of range in just
15 minutes using 100% renewable energy. An additional fi ve
Fastned charging stations have since been added to the APRR
network in 2022. APRR is expecting to equip all service areas
on the APRR and AREA network with high or very-high power
terminals over the coming 12 months.
APRR also focused on initiatives to reduce its own emissions
expanding its fl eet of electric vehicles from 11 to 42 vehicles.
APRR is targeting an additional 366 electric vehicles by the
end of 2023 (total fl eet of 408 electric vehicles).
The Mango Mobilités mobile application was upgraded during
the year providing an interactive map showing the location
of motorway service areas and electric vehicle charging
stations across France as well as providing access to
KiWhiPass accounts.
Six Fulli stations are now open across the APRR network
providing customers access to fuel at a much lower price
and without needing to divert from the APRR network thereby
reducing their travel time. Wi-Fi access is also available
at 100% of the service areas across the network.
I
S
S
E
N
S
U
B
R
U
O
Y
T
I
L
I
B
A
N
I
A
T
S
U
S
D
N
A
K
S
I
R
E
C
N
A
N
R
E
V
O
G
L
A
I
C
N
A
N
I
F
W
E
I
V
R
E
V
O
T
R
O
P
E
R
N
O
I
T
A
R
E
N
U
M
E
R
S
T
R
O
P
E
R
’
S
R
O
T
C
E
R
I
D
T
R
O
P
E
R
L
A
I
C
N
A
N
I
F
The APRR business owns two separate concessions, the APRR
Concession and the AREA Concession. It also owns a minority
interest in the ADELAC Concession. Together, these represent
a vital motorway network that is part of several transportation
corridors for major Western European and intra-France trade
and tourism, and provides essential connectivity between
Paris and Lyon, France’s two largest metropolitan areas.
Year in Review
The team continued to manage the business well through
ongoing disruption, focused on the safety of its employees,
customers, and communities. Whilst there was a dedicated
crisis management team in place at the beginning of the
COVID-19 pandemic, operating in a COVID-19 safe manner
is now part of normal business practice.
Traffi c over the second half of 2021 was the highest second half
traffi c performance recorded by APRR, up by 19.4% compared
to the prior corresponding period and up 4.5% compared to
H2 2019. This followed strict movement restrictions which
were in place across France for the majority of the fi rst half
of the year. Restrictions began to ease from early May, fi rst
with the re-opening of schools, then restaurants and bars, and
non-essential shops and services. The EU health pass system
launched on 1 July allowing cross border travel to recommence
in time for the European summer.
The summer period at APRR is typically characterised by a
strong increase in leisure travel. In 2021, elevated levels of
leisure traffi c also continued into September. French domestic
hotel nights reached record levels in the summer of 2021, and
inbound tourist demand from Western European countries was
signifi cantly higher than the prior year. Traffi c continued its
strong performance in Q4 2021 as France administered booster
vaccinations to extend immunity into the European winter.
Traffi c at APRR fi nished the year up by 19.5%, resulting
in toll revenue increasing by 17.5% and EBITDA up 22.2%.
Driven by the traffi c recovery in the second half, toll price
increases and lower French corporate tax rates, APRR profi t
for the year was up by 48.5%. The resilience of the APRR
network has been evident during the COVID-19 pandemic
and we look forward to a continued recovery in 2022.
Building the network
APRR continued to invest in the network and improve the
customer experience with around € 400m spent on capital
projects during the year, including those previously agreed
with the French Government being the 2014-2018 Management
Contract, the 2015 Stimulus Package and the 2018 New
Motorway Investment Plan.
Traffic (VKTm over past 6 years)
Toll Revenue ( m)
30000
25000
20000
15000
10000
5000
0
23,061
23,810
24,322
24,581
19,580
20,124
20,464
20,695
23,195
19,284
19,413
15,856
3,481
3,686
3,859
3,886
3,557
3,911
2016
2017
2018
2019
2020
2021
Heavy vehicles
Light vehicles
Total traffic
3000
2500
2000
1500
1000
500
0
2
5
7
5
0
5
,
1
7
9
7
6
5
5
,
1
7
4
8
6
1
6
,
1
8
6
8
6
6
6
,
1
5
8
8
3
8
5
,
1
2
1
8
8
8
2
,
1
2016
2017
2018
2019
2020
2021
Light vehicles
Heavy vehicles
ATLAS ARTERIA ANNUAL REPORT 2021 | 11
APRR AND ADELAC
FRANCE
Awards continue
APRR was named France’s Best Employer in its sector for the
seventh year in a row by Capital magazine in 2021. The French
State also renewed APRR’s ‘Label Diversité’ in recognition
of its achievements promoting diversity, equal opportunities,
and discrimination prevention.
APRR again improved its GRESB score from 77 to 87 and
maintained its second place in the road sector.
Reinforcing financial stability
APRR remains in a strong financial position with € 3.2bn of
liquidity comprising a € 2.0bn undrawn revolving credit facility
and € 1.2bn cash at the end of December 2021.
In September, S&P reaffirmed its ‘A-/A-2’ long-term and
short-term issuer credit ratings and stable outlook for APRR
despite the impacts and outlook for the COVID-19 pandemic.
In October, Fitch also affirmed its A- credit rating for APRR
and maintained its outlook as ‘stable’.
In November, APRR successfully priced € 500m of bonds under
its Euro Medium Term Note Programme at a zero percent
coupon providing additional liquidity, further reducing its
average cost of debt and extending its weighted average
debt maturity.
Adding future value
APRR has a strong pipeline of growth projects due to complete
in the coming years including the A48/A480 project, the
A43-A41 Chambery junction, and the completion of the 19
wildlife crossings. Further, there are many opportunities to
continue to expand the APRR network and provide solutions
to the French Government at a state and local level. The
additional 98 car park spaces are just one example of APRR
ESG initiatives.
Capital expenditure for the next two years is expected to be
approximately € 650m – € 700m and on average approximately
€ 200m to € 250m per annum thereafter (excluding RCEA and any
future investment plans agreed with the French Government).
Construction of the RCEA/A79 project is progressing well
and is expected to complete in late 2022. The RCEA/A79 is
a strategic road for intra-European trade flows. The changes
will significantly improve safety on the road with 88km of the
existing sub-section of the RCEA being upgraded to 2x2 lanes
plus a hard shoulder. The construction cost of the project
is estimated to be € 650m – € 700m.
APRR continues an ongoing dialogue with the French
Government to provide support for the French Government’s
road development objectives.
12 | ATLAS ARTERIA ANNUAL REPORT 2021
Case study
Keeping the economy moving
Vincent is a corporate truck driver. He hauls car parts
between a manufacturing plant in Barcelona and a car
manufacturing plant in Wolfsburg, Germany. This is a
competitive market, and car and car parts form around
5% of total Spanish exports to the EU (by weight).
For the trip across France, there is limited ability to
use local roads given restrictions in place for heavy
vehicles. The options for the journey through France:
– A Western route: c. €110 incl. of c. €34 on the
APRR network (18 hour trip using different toll
road networks)
– An Eastern route: c. €242 incl. of c. €110 on the APRR
network (14 hour trip using a greater proportion
of the APRR network)
By taking the Eastern route and a greater proportion of
the APRR network, Vincent saves 8 hours and shortens
the journey by 200kms over a return trip compared
to the Western route. This improves the utilisation of
the corporate truck, including fuel costs, and reduces
labour costs.
In addition, Vincent will benefit from showers at 8
secure locations (compared to 4 on the Western route).
The APRR network also offers free Wi-Fi, quality food,
amenities and easily accessible heavy vehicle parking
facilities making his trips even more efficient.
Germany
APRR
Western Route
Time: ~18 hrs
(France segment)
Cost: 110
( 34 on APRR network)
€
€
Clermont-Ferrand
Lyon
Eastern Route
Time: ~14 hrs
(France segment)
Cost: 242
( 110 on APRR network)
€
€
Montpellier
Spain
Case study
Spending time with family
Sophia lives in Saint Étienne. She recently purchased
a new electric car and with the lifting of the COVID-19
pandemic related movement restrictions for the 2021
European summer, she was keen to visit family in
Dijon and consider cost effective options that were also
environmentally friendly.
She had three options for the trip:
– Train: over 4 hours at a cost of more than €69 and
two inter-changes
– APRR network: approximately 2.5 hours at a cost
of €15.90 with 58 electric charging points across
11 locations en route
– Local non tolled roads: approximately 3.5 hours
and 27 electric charging points across 7 charging
locations at the start and end of the journey
Using the APRR network will be much more time
efficient and Sophia can be confident of using and
charging her new car as an environmentally friendly
travel option.
Dijon
APRR
Free roads
Time: 3 hr, 30 min
APRR
Time: 2 hr, 20 min
Cost: 15.90
€
Saint-Étienne
ATLAS ARTERIA ANNUAL REPORT 2021 | 13
FINANCIAL REPORTDIRECTORS’ REPORTSREMUNERATION REPORTFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS WARNOW TUNNEL
ROSTOCK, GERMANY
The Warnow Tunnel is a 2.1 kilometre toll road, including a
0.8 kilometre tunnel under the Warnow River. It offers customers
a reliable, cost-effective way to travel across the river.
Warnemünde
Warnow Tunnel
Rostock
Hamburg
Berlin
Atlas Arteria interest
100%
Concession expiry: 2053
Traffi c: down 4.3% on pcp
Toll Revenue: down 1.8% on pcp
EBITDA: down 5.0% on pcp
Traffic (Trips (m) over past 6 years)
Toll Revenue ( m)
5.20
5.04
4.88
4.72
4.56
4.40
4.24
4.08
3.92
3.76
3.60
4.94
4.73
4.56
4.37
4.22
4.28
2016
2017
2018
2019
2020
2021
16.0
12.8
9.6
6.4
3.2
0.0
6
.
2
1 1
.
1
1
6
.
0
1
6
.
3
1
7
.
2
1
5
.
2
1
2016
2017
2018
2019
2020
2021
14 | ATLAS ARTERIA ANNUAL REPORT 2021
The Warnow Tunnel is located in Rostock in North Eastern
Germany. The Port of Rostock is the fourth largest port in
Germany. The Warnow Tunnel offers an alternative to using
the ferry to cross the river or 19km of untolled roads through
the shopping precinct of Rostock which often suffers from
congestion during peak periods.
Year in Review
Traffic for the full year was down 4.3% compared with 2020
which, with an average toll increase of 2.5% saw a decrease
of only 1.8% in toll revenue.
The federal state in which Warnow Tunnel is located was more
significantly impacted by the COVID-19 pandemic related
restrictions during the first half of 2021 than in any period of
2020. A hard lockdown which closed non-essential services and
schools and limited social gatherings was initially expected to
last four weeks but was in place for the first quarter of the year.
Schools returned in mid-May with most shops and restaurants
opened by late May and domestic tourism only permitted from
early June.
Higher vaccination levels, relaxation of restrictions, and more
tourism led to a recovery in traffic over the traditional summer
holiday period. Traffic was also supported by the return of
cruise ship travel through Rostock. Continuing roadworks on
competing routes in the City of Rostock also supported traffic,
primarily in the first half of the year.
Germany’s fourth COVID-19 pandemic wave began in
October 2021, resulting in the tightening of restrictions,
primarily for the unvaccinated. The positive impact of a more
modest set of restrictions in late 2021 compared to late 2020
saw a 3% increase in traffic by the fourth quarter compared
with the same quarter in 2020.
The capital restructure of Warnow Tunnel was successfully
completed in March. The new arrangements support the
ongoing success of the Warnow Tunnel business and allow for
an optimised cash management strategy. The first distribution
was paid to Atlas Arteria in August 2021.
A customer behaviour study was undertaken in 2020 to address
dangerous driving at the toll plaza. In 2021 initiatives from
these findings were implemented including a new ‘Last Exit’
sign, enhanced LED-overhead signage and banning parking
in dangerous areas.
Improved customer payment options were implemented at
Warnow Tunnel during the period. Credit card terminals are
now available in 25% of the lanes with 100% to be equipped
with credit card terminals by the end of H1 2022. Customers
are also now able to recharge their toll payment cash-cards
‘Oscards’ online.
Warnow Tunnel transitioned to 100% of electricity consumption
coming from renewable energy sources.
Investing in the Tunnel
This year’s annual maintenance program confirmed the good
condition of the tunnel equipment. The low voltage switching
cabinets in the southern tunnel tube were replaced as planned.
Works planned for 2022 include upgrades to the tunnel
ventilation and power supply systems to comply with recently
increased tunnel standards in Germany.
Adding future value
Warnow Tunnel is focused on implementing further safety
improvements for customers including new road marking
and improved overhead lane signage. Work will also continue
to improve customer payment options with an ‘Oscard’
contactless reader to be installed outside the toll booth and
credit card terminals to be installed in all lanes. All lanes will
also be equipped with more advanced cameras for license
plate recognition and toll enforcement.
Case study
Making time for activities
Fynn lives on the western side of the Warnow river in
Rostock. Every day he travels to work on the eastern
side of the river. Using the Warnow Tunnel means
Fynn can save up to 30 minutes each way compared
to using the free alternative route. Given his regular
use of the tunnel, Fynn enjoys his journey for the
discounted price of €2.84 each way.
Fähre Rostock
nach Trelleborg
Warnow Tunnel
Time: ~16 min
Cost: 2.84
€
Warnow
Tunnel
Ortsamt 4
Free roads
Time: ~50 min
ATLAS ARTERIA ANNUAL REPORT 2021 | 15
FINANCIAL REPORTDIRECTORS’ REPORTSREMUNERATION REPORTFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS DULLES GREENWAY
VIRGINIA, USA
The Dulles Greenway is a 22 kilometre toll road in Loudoun County,
Virginia in the USA. It offers customers a cost-effective way to travel
between Northern Virginia and the greater Washington area.
Leesburg
Dulles
Greenway
Loudoun
County
Dulles
International
Airport
Rockville
Bethesda
Maryland
Silver
Spring
Tysons Corner
Falls
Church
Washington DC
Arlington
Reagan
National
Airport
Fairfax
Virginia
Atlas Arteria economic interest
100%
Certifi cate of Authority expiry: 2056
Traffi c: up 13.3% on pcp
Toll Revenue: up 16.2% on pcp
EBITDA: up 21.3% on pcp
Traffic (Trips (m) over past 6 years)
Toll Revenue (US$m)
25
20
15
10
5
0
19.49
19.18
18.32
17.80
10.20
11.56
2016
2017
2018
2019
2020
2021
100
80
60
40
20
0
5
.
0
9
7
.
1
9
4
.
0
9
3
.
9
8
9
.
9
6 5
.
1
5
2016
2017
2018
2019
2020
2021
16 | ATLAS ARTERIA ANNUAL REPORT 2021
The Greenway is located in one of the fastest growing
and more affluent counties in the United States, providing
customers with a reliable and safe connection from Leesburg,
VA to the west, through Loudoun County to Dulles International
Airport and connector roads to Washington DC to the east.
For over 25 years, the Greenway has connected commuters
to their jobs, communities to recreational venues, and families
to each other by providing a safe, predictable and faster
transport option.
The Year in Review
Traffic at the Dulles Greenway in Northern Virginia continued
the trend of recovery since the COVID-19 pandemic started
prompted by the gradual return of commuters and the overall
increase in mobility in the region over the year. Overall traffic
was up 13.3% translating to a 16.2% increase in toll revenue
and a 21.3% increase in EBITDA.
Several major milestones were achieved during the year.
The layout of the maintenance yard was improved to provide
for the safer and more efficient manoeuvring of snow trucks
when refilling with salt and brine.
The Leesburg Bypass Improvement Project at the west end
of the roadway was completed in conjunction with Loudoun
County and the Town of Leesburg. This joint project has been
funded 50/50 with the County and has involved the extension
of an inside lane along the westbound Leesburg Bypass as
well as a complete reconstruction of the northbound exit
ramp to King Street. This project, in conjunction with the ramp
reconfiguration completed at the west end of the Greenway in
2020, has been designed to help alleviate evening congestion
through this area and create a safer merge of Greenway traffic
onto the Leesburg Bypass.
The 2021 Virginia legislative session saw the passing of
legislation that impacts the regulatory environment in which
the Dulles Greenway operates. The legislation amends the
Virginia Highway Corporation Act (1988) preventing the SCC
approving more than one year of toll rate increases per
application and defines the threshold at which toll increases
would be considered to ‘materially discourage use’ as a
3% fall in traffic, adjusted for population growth. This
legislation became law and took effect from 1 July 2021.
We continue to work with all government and community
stakeholders to develop a better long term pathway for
the Greenway.
In April 2021 the SCC released its ruling regarding our
application for tolling increases at the Greenway. The SCC
found that the Greenway had satisfied the criteria for approval
of certain peak and off-peak toll increases, however exercised
its discretion to allow off-peak toll increases only for 2021
and 2022, due to the uncertainty brought about by the
COVID-19 pandemic. Off-peak tolls were increased by 5.3%
in 2021 and 5.0% in 2022.
Financial Strength
Dulles Greenway remains well placed from a liquidity
perspective, with US$221.0m of cash on the balance sheet
as of 31 December 2021. Whilst theoretically, US$78.9m was
available for distribution, due to the reduced traffic in 2021,
the Greenway did not pass its 1 year and 3 year lock up tests
as at 31 December 2021.
Adding future value
As a result of the changes to the Greenway’s governing
legislation earlier in the year as outlined above, submissions
to the Commission will be on an annual basis going forward,
assuming no further alterations to the regulatory framework.
We are committed to fully optimising the value of the Greenway
business, reducing risk and improving cash flows to Atlas
Arteria and its securityholders. We continue to work closely
with our communities and key stakeholders including the
government to deliver mutually beneficial outcomes.
Case study
Getting more done
Thomas lives in Broadlands and owns his own HVAC
company with clients all over Northern Virginia.
Thomas has morning appointments in Reston, but
also wants to attend his daughter’s ‘Doughnuts with
Dads’ event before school starts. Taking the Dulles
Greenway could save Thomas up to 30 minutes of
travel time, allowing him to spend more time at his
daughter’s school event before beginning work.
Taking the Greenway also allows Thomas to provide
a more accurate arrival time for his clients as well as
the opportunity to serve more clients during his day,
helping his business grow faster.
Broadlands
Free roads
Time: 22–45 min
Dulles
Greenway
Dulles Greenway
Time: 16–22 min
Cost: US$5.80 for DG
and US$1.50 for DTR
Reston
ATLAS ARTERIA ANNUAL REPORT 2021 | 17
FINANCIAL REPORTDIRECTORS’ REPORTSREMUNERATION REPORTFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS SUSTAINABILITY
At Atlas Arteria, we are committed to playing a positive role
in society and creating long-term value for our stakeholders.
From investors and customers, to employees and communities,
we take our responsibilities seriously, embedding sustainable
business practices as core to our growth.
SUSTAINABILITY PRIORITIES
Safety
Whether working or
travelling with us, safety
is our primary focus,
and we pursue a
zero-harm culture.
Customers
and community
We provide positive
customer experiences,
contribute to our
communities and
provide safer, faster
transport options that
make life easier.
Our
people
We promote inclusive
work environments,
fostering an engaged,
collaborative and diverse
workforce towards
business success.
Environmental
stewardship
We actively manage our
environmental impacts,
provide solutions that
enable customers to
minimise their footprint,
and contribute to a
low-carbon future.
Governance
We are accountable and
transparent in all our
business dealings.
BUSINESS FUNDAMENTALS
Ethics, values
and culture
We act ethically and
promote a culture
founded on our five values:
Safety, Transparency,
Engagement, Environment
and Respect.
Sustainable
growth
We focus on growing
our business and
returns for the
long-term while
delivering positive
social benefit.
Innovation
and technology
We monitor innovations
and technology and
proactively respond
to changing needs
and expectations.
Implemented through policies and programs. Monitored through metrics and targets.
18 | ATLAS ARTERIA ANNUAL REPORT 2021
Our Sustainability Strategy focuses our attention on four
priority areas:
− keeping those who work and travel with us safe;
− keeping customers, communities and commerce connected;
− fostering an inclusive, engaged and collaborative workforce; and
− actively managing our impact on the environment and
providing solutions towards a low-carbon future.
This year further meaningful steps were taken. We have
set targets to guide our direction, expanded our metrics for
improved measurement and management and continued
to implement initiatives to support continuous improvement.
The expansion of the metrics we disclose has necessitated
the separation of our Sustainability Report from our Annual
Report. The separation enables us to robustly gather and
review the data, while aligning our report timing with that
of Eiffage, our partner at APRR.
In this Annual Report, we are providing a summary of work
undertaken this year. Further information will be contained
in our Sustainability Report, to be released in April.
Safety
Safety across our businesses is our top priority. We focus on
a safety-first culture while having the right equipment and the
right training to do the job. We seek to ensure that all people
who work for us and use our roads return home safely.
The continued impacts of the COVID-19 pandemic placed
additional emphasis on ensuring the safety of our people
throughout 2021. Front-line employees were supplied with
key protective gear including gloves, masks and face shields;
online safety training was employed to minimise contact; and
working from home policies continued, where appropriate.
On our roads, initiatives have included improving the layout for
vehicle access and handling in the maintenance yard at Dulles
Greenway, installation of signage at Warnow Tunnel to better
guide customers on their journey and reduce dangerous driving
and a customer awareness campaign at APRR, focused on the
seven main reasons for accidents.
Headline targets: LTIFR1 target for large businesses <3
and LTI target for small businesses <1.
Customers and community
Connecting customers and communities is what we do. Improved
safety, reduced travel times, enhanced comfort and mobility
at a reasonable cost are core offerings of our businesses.
Throughout the COVID-19 pandemic, the ability for our
communities to connect has at times been severely reduced.
This has highlighted the importance of our road networks in
supporting local economies with safe and efficient connections,
and efficient delivery of goods and services between locations.
Improvements to our networks include finalisation of the
Leesburg Bypass Improvement Project on Dulles Greenway
to improve safety and relieve congestion. At APRR, the A41,
A75 and A71 projects were completed and opened to traffic,
growing the network and improving the customer experience.
We have also implemented additional payment options at
Warnow Tunnel to improve efficiency.
Understanding customers’ views on our networks is key to
ensuring we provide positive experiences. Our periodic surveys
at APRR and Warnow Tunnel will be further supplemented
with a review of customer satisfaction at Dulles Greenway.
This will provide us with additional insight and a baseline
for performance measurement going forwards.
Headline target: Establish a baseline customer satisfaction
score in 2022.
1. LTIFR = number of lost-time injuries per one million hours worked.
Our People
Our people are essential to our success. We are committed
to building a team of diverse, passionate, driven and
innovative people, inspiring and readying teams to deliver
sustainable growth.
We have geographically diverse operations, and the continuation
of the COVID-19 pandemic related movement and travel
restrictions meant that even team members based in the
same location have been separated for quite some time. Team
engagement, wellbeing and effectiveness have therefore been
important themes this year.
At a corporate level, we have established an Employee
Assistance Program, delivered workshops focused on resilience
and team effectiveness and rolled out inclusive leadership
training to all managers. This training has also supported our
focus on an equitable, inclusive and diverse team and culture.
We are pleased to have maintained our commitment around
gender diversity across key levels in the organisation and have
made headway in achieving improved balance within specific
teams. We have also included diversity as a factor in supplier
assessment through our revised Supplier Code of Conduct.
Other key initiatives and actions include the introduction of
our Flexible Working Policy, and considerations for transition
to retirement and succession planning at Warnow Tunnel and
Dulles Greenway. We continue to adapt, seeking options that
will best support our people and deliver business success.
Headline target: Maintain our 40% commitment to gender
balance and evolve representation across and within teams.
Environmental Stewardship
Combating climate change and protecting our environments
are commercial, social and environmental imperatives.
Effective and proactive management enables us to reduce
costs, support the health of our ecosystems and better
engage our stakeholders, including investors, governments,
employees and customers.
We are committed to taking the steps necessary to reduce
the impacts of our networks and providing infrastructure that
enables our customers to transition to a lower-carbon economy.
Of particular note this year is the establishment of greenhouse
gas emission reduction targets. Since our transition to
independent management in 2019, when we first reported
on APRR’s green house gas emissions footprint, we have
been on a journey to understand and address our complete
carbon footprint. In 2020 we expanded Scope 1 and 2 data to
encompass all of our businesses. This year, alongside our 2021
footprint, we established a 2019 baseline to set forward-looking
targets out to 2030. These are aligned with a 1.5°C warming
scenario and calculated based on the Science Based Targets
Initiative (SBTi) methodology.
We also identified additional metrics that will help us improve our
monitoring and management and undertook a gap analysis for
a Task Force on Climate-Related Financial Disclosures (TCFD)
aligned reporting. Looking to 2022, we’ll seek to better understand
our Scope 3 emissions and continue the TCFD journey.
In France, APRR continued projects for wildlife protection,
completing construction of two large wildlife crossings in the
year. Another 17 are due for delivery by 2024. Dulles Greenway
also partnered with local organisations to enable live-streaming
of two nesting bald eagles in the Dulles Greenway wetlands.
The Greenway will be engaging with local public schools
in 2022 as part of this educational opportunity.
Headline target: 25% reduction in Scope 1 and 2
green house gas emissions by 2025, and 46% by 2030,
compared to a 2019 baseline.
ATLAS ARTERIA ANNUAL REPORT 2021 | 19
FINANCIAL REPORTDIRECTORS’ REPORTSREMUNERATION REPORTFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS RISK MANAGEMENT
Risk Management Framework
The proactive and disciplined management of risk is critical
to Atlas Arteria’s business strategy and organisational culture.
The Company’s risk management framework sets out its
approach and direction in relation to risk management
and includes a risk management policy and risk appetite
statements that provide clarity as to the level of risk that the
business is willing to take in achieving its strategic objectives.
These are reviewed annually by management and the Boards
to ensure the Company’s approach continues to be sound and
that it achieves an appropriate balance between effective risk
management and the achievement of our strategic objectives.
Atlas Arteria has adopted the ‘Three Lines of Accountability’
model to support effective monitoring and oversight of risk
across its operations. This model is consistent with Atlas
Arteria’s objective to actively manage risk rather than
eliminate it, recognising that risk presents opportunities
as well as challenges.
The first line of the ‘Three Lines of Accountability’ is the
CEO and staff across the corporate functions and underlying
businesses. They are charged with identifying, assessing,
managing, monitoring and mitigating risks in business
processes. The second line of accountability is the risk
management and compliance function which is responsible
for, among other things, reviewing and challenging the first
line. The third line of accountability is the internal and external
audit functions. These roles are further described in the
risk management policy that can be found on the Atlas
Arteria website.
Role of the Boards in risk management
Risk management is a critical area of responsibility for the
Boards and a core component of its governance framework.
While ultimate responsibility for Atlas Arteria’s risk management
framework rests with the ATLAX and ATLIX Boards, they have
both established Audit and Risk Committees (ARCs) to oversee
the risk management framework and ensure its ongoing
effectiveness. The charters for the ARCs are available on
the Atlas Arteria website. As set out in the Charters the ARCs
are responsible for monitoring and reviewing the effectiveness
of the risk management framework and internal controls and
compliance with key risk management policies, including the
processes for identifying, assessing and responding to risks
in a manner consistent with the risk appetite statements.
The Boards and ARCs receive regular reports on the key
financial and non-financial risks facing the organisation,
including an assessment of whether the risk is within appetite,
and the measures undertaken to manage the risk. The internal
and external audit functions also have direct lines of reporting
to the ARCs.
Risk management in practise
Atlas Arteria has identified key risks which it actively manages
in pursuit of its strategic objectives. These risks cover all aspects
of the business and are regularly reviewed and monitored by
management and the Board to ensure they remain appropriate.
20 | ATLAS ARTERIA ANNUAL REPORT 2021
Nature of Risk
Description
Management of Risk
Economic
and Market
Conditions
The business is exposed to higher and lower
economic activity across its underlying
operations. The impact of the COVID-19
pandemic on traffic volumes across our
businesses in France, Germany and the
US brought this into sharp focus.
− Ongoing monitoring and assessment of economic variables
and understanding how these impact traffic volumes
and mix as well as growth opportunities at each business.
− Ongoing assessment of local and global economic events
and their impact on financial results, access to capital and
liquidity across the business.
Market conditions can affect Atlas Arteria’s
ability to achieve its long-term growth objectives.
− Assessment of traffic scenarios under various economic
and market conditions enables forward based planning.
Government
and Regulatory
Policies
Changes in government policy or regulations
could impact Atlas Arteria’s ability to achieve
its long-term strategic objectives.
Environmental,
Social and
Governance
Practices
Atlas Arteria’s Sustainability Framework
drives continual improvement in the
identification and management of ESG
issues by identifying and managing ESG
outcomes across the organisation.
− Management from Atlas Arteria and each business regularly
engage with various levels of government and regulatory
authorities across a wide range of forums in their respective
jurisdictions. This includes participation in relevant policy
discussions and education as to how our roads form effective
parts of the relevant transport networks.
− Atlas Arteria prepares an annual Sustainability Report which
outlines material safety, environmental and social risks, how
Atlas Arteria intends to manage those risks and its material
safety, environmental and social priorities.
− Atlas Arteria has established targets and metrics to track
its performance across material ESG matters.
− Atlas Arteria has undertaken a TCFD readiness review to identify
an appropriate pathway for TCFD reporting. The review identified
the gaps in functionality and practices required to support
TCFD reporting, and identifies actions to address these.
Organisational
Capability
The corporate team at Atlas Arteria is lean but
it is important that at the head office and at each
business there is sufficient depth, understanding
and expertise to effectively deliver on the
company’s strategy.
− Atlas Arteria has a strong employee value proposition designed
to attract and retain the right mix of talent and skill sets.
− People processes are supported by a clear vision and values
statement, learning and development framework and flexible
working policy.
Technology
It is important that Atlas Arteria and its
underlying businesses have the right technology
systems in place to provide timely, accurate
and secure information and allow for efficient
operational processes that are executed with
complete integrity.
− There are regular reviews of employee engagement and
culture, which are also considered by the Boards.
− Atlas Arteria and its underlying businesses undertake
regular reviews across key technology platforms to ensure
they are fit-for-purpose, and maintain effective security
management practices.
− Atlas Arteria maintains effective data and cyber risk
management practices to protect its businesses and
customers from exposure to data breaches.
− Atlas Arteria’s businesses actively seek out innovation
opportunities and participate in development and testing
of low-emission technology.
Financial
Structure
Atlas Arteria and each of its businesses
needs to be appropriately structured to best
meet strategic objectives, support business
growth, and provide appropriate returns
to securityholders.
− Management undertakes regular scenario analysis
to understand the range of economic outcomes and
the most appropriate strategies to manage these.
− Management values the relationships with all suppliers
of capital and seeks to ensure they remain supportive
of the businesses and their practices.
Operational
Risk
Management
It is important that each business and their
operations have effective controls in place
to ensure the long-term sustainability
of returns through a balance of investment
and cash flow management.
− The management teams each employ a disciplined approach
to operations and maintenance to optimise business
performance and customer experience.
− Operational risk management arrangements including
contractual and legal frameworks are regularly reviewed
to ensure that the organisational needs are met.
− A risk management policy and framework, and internal
reviews support compliance with regulatory obligations
and key business processes.
ATLAS ARTERIA ANNUAL REPORT 2021 | 21
FINANCIAL REPORTDIRECTORS’ REPORTSREMUNERATION REPORTFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS CORPORATE GOVERNANCE
Legal framework
Atlas Arteria comprises Atlas Arteria Limited (ACN 141 075 201)
(ATLAX), an Australian public company, and Atlas Arteria
International Limited (Registration No. 43828) (ATLIX), an
exempted mutual fund company incorporated in Bermuda.
Atlas Arteria is listed as a stapled structure on the Australian
Securities Exchange (ASX). The securities of ATLAX and
ATLIX are stapled and must trade and otherwise be dealt with
together. ATLAX and ATLIX have entered into a cooperation
deed which provides for sharing of information, adoption of
consistent accounting policies and coordination of reporting
to securityholders (Atlas Arteria Cooperation Deed).
Governance disclosures
We recommend that you also read the following documents
on the Atlas Arteria website:
− Overview of Legal Framework
− ATLIX Bye-Laws
− ATLAX Constitution
− Atlas Arteria Cooperation Deed
− ATLAX and ATLIX Board & Committee Charters
− Atlas Arteria Corporate Policies.
More detail about our operational and governance arrangements
can also be found in the ASIC Regulatory Guide 231 disclosure
on the Atlas Arteria website. This disclosure is required
by ASIC and seeks to improve disclosure for retail investors
in infrastructure entities.
For more information go to atlasarteria.com
Corporate Governance Statement
The Atlas Arteria Boards determine the corporate governance
arrangements for Atlas Arteria with regard to what they
consider to be in the long-term interests of the business
and its investors, and consistent with its responsibilities
to other stakeholders. Atlas Arteria’s corporate governance
arrangements conform to the Corporate Governance
Principles and Recommendations (4th edition) issued
by the ASX Corporate Governance Council.
Atlas Arteria’s Corporate Governance Statement has been
approved by the Boards and outlines our main corporate
governance practices for the year ended 31 December 2021.
Included in the statement are details relating to:
− Board composition, skills matrix and performance;
− structure and role of Board Committees;
− Director independence;
− diversity and inclusion;
− key governance documents including Vision and Values
Statement, Code of Conduct, Whistleblower Policy, Securities
Trading Policy and Anti-Bribery & Corruption Policy;
− external communications and market disclosures; and
− risk management and corporate reporting.
Atlas Arteria’s Corporate Governance Statement, as well as
other governance documents referred to within the statement,
can be viewed on Atlas Arteria’s website at www.atlasarteria.
com/about. These governance documents are regularly
reviewed and updated to ensure that they remain consistent
with the objectives of the Boards.
For more information go to atlasarteria.com
22 | ATLAS ARTERIA ANNUAL REPORT 2021
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BOARD OF DIRECTORS – ATLAX BOARD
Debra (Debbie) Goodin
BEc (AU), FCA
Non-executive Director of ATLAX appointed on 1 September 2017, Chair of ATLAX effective
1 November 2020. Non-executive Director of ATLIX appointed on 1 November 2020. Chair
of the ATLAX Nomination and Governance Committee.
Debbie Goodin has extensive director experience as well as over 20 years’ senior management
experience with professional services fi rms, government authorities and ASX-listed companies
across a broad range of industries and service areas.
Among other executive roles, Debbie was COO for an ANZ subsidiary of Downer EDI Limited,
Acting CFO and Head of Mergers and Acquisitions, and also Global Head of Operations at Coffey
International Limited.
Other listed company directorships (past three years): Non-executive Director, APA Group
(ASX:APA) (joined September 2015). Non-executive Director, Senex Energy Limited (ASX:SXY)
(2014 to 2020). Non-executive Director, Ooh! Media Limited (ASX:OML) (2014 to 2020).
Other directorships and appointments: Director and Audit Committee Chair of Australia Pacifi c
Airports Corporation Limited as an IFM owners’ representative.
Graeme Bevans
Chief Executive Offi cer and Managing Director of ATLAX since 1 April 2019.
Graeme Bevans has more than 25 years’ experience in the global infrastructure sector, where
he has completed the acquisition, development and management of 17 infrastructure businesses
with a total enterprise value of over $40 billion.
Prior to joining Atlas Arteria, Graeme was Founder and CEO of Annuity Infrastructure in the UK.
He has also held senior roles globally, including as Head of Infrastructure at CPPIB in Canada,
Partner at Alinda Capital Partners in the USA, and Head of Infrastructure Investment at IFM
Investors in Australia.
Graeme has overseen very complex joint venture arrangements in global infrastructure both in
Australia and abroad, particularly in Europe and the Americas. He has served as an active Director
of 10 of those investee companies in Europe, Australia, North America and South America.
Graeme is Managing Director of ATLAX and holds no other current directorships.
David Bartholomew
BEc (Hons) (AU), MBA (AGSM)
Non-executive Director of ATLAX appointed on 1 October 2018.
Chair of the ATLAX People and Remuneration Committee.
David Bartholomew has over 30 years’ experience across the energy utilities, transportation
and industrial sectors.
David was CEO of DUET Group, where he oversaw the ASX listed company’s transition to a fully
internalised management and governance structure. He also held executive roles at Hastings
Funds Management, Lend Lease, The Boston Consulting Group and BHP Minerals. David has
also served on the Boards of Interlink Roads (Sydney’s M5 Motorway) and Statewide Roads
(Sydney’s M4 Motorway) representing investors managed by Hasting Funds Management.
Other listed company directorships (past three years): Chair, Iris Energy Limited (NASDAQ:
IREN) (from March 2021).
Other directorships and appointments: Director, Endeavour Energy. Director, Power & Water
Corporation (Northern Territory). Director, Keolis Downer. External Independent Chair of the
Executive Price Review Steering Committee of AusNet Services. Director, The Helmsman Project.
Jean-Georges Malcor
Ecole Centrale de Paris (Eng), Stanford (MSc)
Non-executive Director of ATLAX appointed on 1 November 2018.
Jean-Georges Malcor is an experienced executive and Non-executive Director and has a long
track record in large international projects and developments.
His executive experience includes eight years as CEO at CGG, a Euronext-listed French
geoscience company in the global oil and gas industry. Prior to this, he spent 25 years
at Thales Group (EPA: HO) in France and Australia and was the fi rst Managing Director
of the newly privatised ADI (Australian Defence Industry).
Jean-Georges has demonstrated expertise in corporate governance, risk mitigation, strategy,
technology, fi nancing and restructuring. He is also an offi cer of the French Légion d’Honneur
Order and National Order of Merit.
Other listed company directorships (past three years): Director, STMicroelectronics N.V.
(NYSE:STM, Borsa Italiana:STIM.MI, Euronext Paris:STM.PA) (2011 to 2020).
Other directorships and appointments: Director, ORTEC. Director, Fives’ Group. Chair, ENSTA
Bretagne School of Engineering.
ATLAS ARTERIA ANNUAL REPORT 2021 | 23
CORPORATE GOVERNANCE
BOARD OF DIRECTORS – ATLAX BOARD
Ariane Barker
BEc&Math (BU)
Non-executive Director of ATLAX appointed on 1 March 2021.
Chair of the ATLAX Audit and Risk Committee.
Ariane Barker brings extensive business and fi nancial services experience, with over 20 years’
experience in senior executive roles in Australia and overseas at JBWere (part of National
Australia Bank), HSBC, Goldman Sachs and Merrill Lynch.
Ariane was previously the CEO of Scale Investors Ltd where she worked to activate investment
capital for female entrepreneurs and gender balanced startups to support growth for early
stage businesses.
She is a former Board Member of Emergency Services & State Superannuation (ESSSuper).
Other listed company directorships (past three years): Non-executive Director, IDP Education
Limited (ASX:IEL) (joined November 2015).
Other directorships and appointments: Director, Commonwealth Superannuation Corporation.
Member of the Investment Committee at the Murdoch Children’s Research Institute.
BOARD OF DIRECTORS – ATLIX BOARD
Jeffrey Conyers
BA (Toronto)
Chair and Non-executive Director of ATLIX since establishment on 16 December 2009.
Chair of the ATLIX Nomination and Governance Committee.
Jeffrey Conyers is a Director of numerous companies in Bermuda and is the former Chief Executive
Offi cer of First Bermuda Securities Limited, which provides advisory and execution services
on worldwide offshore mutual funds to individuals and local companies based in Bermuda.
Jeffrey is a Founding Executive Council Member and Deputy Chair of the Bermuda Stock Exchange.
Other directorships and appointments: Founding Executive Council Member and Deputy Chair
of the Bermuda Stock Exchange. Director, The Steamship Mutual Underwriting Association
Trustees (Bermuda) Limited. Director, Polaris Holding Company Limited. Director, Bermuda
Aviation Services Limited.
Debbie Goodin
See page 23 for full details.
24 | ATLAS ARTERIA ANNUAL REPORT 2021
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BOARD OF DIRECTORS – ATLIX BOARD
Fiona Beck
BMS (Hons) Waikato (NZ) CA
Non-executive Director of ATLIX appointed on 13 September 2019.
Chair of the ATLIX People and Remuneration Committee.
Fiona Beck has over 20 year’s leadership experience in listed and unlisted companies, having
held senior executive and governance positions in large infrastructure companies, including as
the President and CEO of Southern Cross Cable Limited, a submarine fi beroptic cable company,
for 13 years.
In addition, Fiona is a Chartered Accountant and brings expertise in technology, cyber security,
data analysis, and infrastructure asset management in a global environment.
Other listed company directorships (past three years): Non-executive Director, IBEX Limited
(NASDAQ:IBEX) (since July 2020). Non-executive Director, Oakley Capital Investments Limited
(LSE:OCI) (since October 2020). Non-executive Director, Ocean Wilsons Holdings Limited (LSE/
BSX: OCN) (since April 2020). Non-executive Director, One Communications Ltd (BSX:ONE.BH)
(2013 to 2020).
Other directorships and appointments: Chair, SAEx International Ltd. Director, Bermuda
Business Development Agency.
Caroline Foulger
BA (Hons) University of London UK, FCA (England & Wales), CA (Bermuda)
Non-executive Director of ATLIX appointed on 19 May 2020.
Chair of the ATLIX Audit and Risk Committee.
Caroline Foulger has extensive board and executive experience in the fi nancial services sector
with a particular focus on insurance audit and advisory services. She is a Chartered Accountant
having spent the bulk of her executive career with PwC where she was a partner for twelve years,
leading the insurance practice in Bermuda.
Caroline served in 2017 as a member of the Blue Ribbon Committee regarding the feasibility
and fi nancing of a new Bermuda Airport which has subsequently been constructed and
is now operational.
Other listed company directorships (past three years): Non-executive Director, Hiscox Limited
(LSE:HSX) (since January 2013). Non-executive Director, Oakley Capital Investments Limited
(LSE:OCI) (since June 2016). Non-executive Director, Ocean Wilsons Holdings Limited (LSE/BSX:
OCN) (since June 2020).
Other directorships and appointments: Non-executive Director, Catalina Holdings.
Andrew Cook
BA (UWO), CPA (Ontario)
Non-executive Director of ATLIX appointed on 26 November 2020.
Andrew Cook has extensive executive, fi nancial, operational and capital market experience
having been the founding CFO of several organisations and overseeing the development and
growth of accounting, fi nance, treasury and investor relations departments.
He brings signifi cant global M&A experience having served as the President and CFO of Harbor
Point (and later as President of Alterra Bermuda) as well as leading successful IPO’s at LaSalle
Re, Axis Capital and Global Partner Acquisition Corp.
Andrew was formerly the Chief Executive Offi cer of GreyCastle Life Reinsurance and was on the
Boards of Blue Capital Reinsurance Holdings Limited and GreyCastle Life Reinsurance (SAC) Ltd.
Other listed company directorships (past three years): Non-executive Director, Global Partner
Acquisition Corp II (NASDAQ:GPACU) (since January 2021). Non-executive Director, Blue Capital
Reinsurance Holdings Limited (NYSE:BCRH) (2013 to 2020).
Other directorships and appointments: Chair, OmegaCat Reinsurance Ltd. Director, Aspida Re
(Bermuda) Ltd.
ATLAS ARTERIA ANNUAL REPORT 2021 | 25
CORPORATE GOVERNANCE
The number of Board, and Board Committee, meetings held during the year and each Directors’ attendance at those meetings
are set out below:
ATLIX Directors
Fiona Beck
Jeffrey Conyers
Andrew Cook
Caroline Foulger (d)
Debbie Goodin
ATLAX Directors
Debbie Goodin
David Bartholomew (b)
Graeme Bevans
Jean-Georges Malcor (c)
Ariane Barker (a)
Board
Audit and Risk Committee
Nomination and Governance
Committee
People and Remuneration
Committee
Meetings
held
Meetings
attended
Meetings
held
Meetings
attended
Meetings
held
Meetings
attended
Meetings
held
Meetings
attended
11
11
11
11
11
11
11
11
9
11
6
6
N/A
6
6
6
6
N/A
6
6
4
4
4
4
4
4
4
4
4
4
6
6
6
N/A
6
6
6
6
N/A
6
Board
Audit and Risk Committee
Nomination and Governance
Committee
People and Remuneration
Committee
Meetings
held
Meetings
attended
Meetings
held
Meetings
attended
Meetings
held
Meetings
attended
Meetings
held
Meetings
attended
11
11
11
11
7
11
11
11
11
7
6
2
N/A
6
4
6
2
N/A
6
4
4
4
N/A
4
3
4
4
N/A
4
3
6
6
N/A
2
4
6
6
N/A
2
4
(a) Ariane Barker appointed to the ATLAX Board, Audit & Risk Committee, People & Remuneration Committee & Nomination & Governance Committee on 1 March 2021.
(b) David Bartholomew resigned from the ATLAX Audit & Risk Committee on 1 March 2021.
(c) Jean-Georges Malcor resigned from the ATLAX People & Remuneration Committee on 1 March 2021.
(d) Caroline Foulger was absent due to pre-existing commitments and made appropriate arrangements to ensure her views were represented at the Board meetings.
Company Secretaries
Clayton McCormack, BCom, LLB
General Counsel and Company Secretary
Appointed as Company Secretary of Atlas Arteria Limited on 1 April 2019.
A lawyer and company secretary with over 25 years’ experience in private practice and corporate roles.
Paul Lynch, BCom, LLB
Joint Company Secretary
Appointed as an additional Company Secretary of Atlas Arteria Limited on 26 August 2021.
A company secretary and lawyer with approximately 15 years’ experience working in the ASX listed environment.
26 | ATLAS ARTERIA ANNUAL REPORT 2021
FINANCIAL OVERVIEW
Financial Highlights
Statutory results
Atlas Arteria consolidates results for both Dulles Greenway and Warnow Tunnel and equity accounts for its investments in APRR
and ADELAC. Accordingly, the results for APRR and ADELAC are disclosed in Atlas Arteria’s income statement under the ‘Share
of net profits/(losses) in associates’ line item, and in the ‘Investments in associates’ line item in Atlas Arteria’s balance sheet.
Combined with the corporate level expense, these make up the Atlas Arteria statutory results for the period.
Included within the statutory results are a number of ‘Notable Items’ that are either not expected to recur, or are not related
to operational performance.
Revenue and other income
− Toll Revenue
− Other income
Operating expenses
− Business operations
− Corporate costs
Finance costs
Depreciation and amortisation
Share of net profits/(losses) in associates*
Income tax benefit/(expense)
Net Profit/(loss) from operations after tax (excluding Notable Items)
Notable Items
− Warnow Tunnel net accounting impacts of capital restructure (non-cash)
− Macquarie management fees
− FX impacts of significant transactions during period (non-cash)
− Impairments and asset revaluations
− Income tax benefit/(expense) of notable items
Net Profit/(loss) from operations after tax
ALX
Year ended
31 Dec 2021
$’000
Year ended
31 Dec 2020
$’000
% change
99,530
1,125
95,253
11,397
(34,882)
(29,068)
(81,055)
(61,480)
284,051
904
179,125
(15,428)
–
–
–
–
163,697
(43,420)
(22,339)
(101,302)
(67,439)
152,681
1,346
26,177
–
(2,051)
14,217
(143,896)
6,343
(99,210)
4%
(90%)
20%
(30%)
20%
9%
86%
(33%)
584%
–
–
–
–
–
265%
* The previous year financial statements have been revised. Refer to the Financial Statements for details.
The net profit from operations for 2021 reflects stronger traffic performance at APRR over the European summer in particular
post the easing of movement restrictions, lower finance costs as a result of the repayment of the holding company debt facility
and refinancing the Warnow Tunnel legacy debt facility, and the higher average value of the Australian dollar over 2021.
As part of its broader strategy to diversify sources of cash and build sustainable distributions for securityholders over time, Atlas
Arteria undertook a capital restructure at Warnow Tunnel. The capital restructure included a new € 115.0 million ($176.1 million)
debt facility and a cash injection from Atlas Arteria of € 42.0 million ($64.3 million), which were used to repay € 142.3 million
($217.9 million) of legacy debt, terminate the hedging arrangements, pay transaction costs and reserve funding requirements.
The new capital structure was created to support the ongoing success of the Warnow Tunnel business and allow the company
to distribute free cash to Atlas Arteria, rather than to lenders.
The reduced leverage, and increased likelihood of receiving cash flows significantly earlier in the life of the concession,
substantially increases the value of the business. The restructure has also strengthened the probability of future taxable profits
being available to utilise pre-existing income tax losses and resulted in the recognition of a $34.9 million (€ 22.3 million) deferred
tax asset. Extinguishing the debt facility also meant the fair value adjustment allocated to it after purchase of the remaining
30% interest in 2018 was expensed ($50.3 million (€ 31.9 million)). This action to remove a legacy position does not reflect the
value created for Atlas Arteria as a result of the transaction.
ATLAS ARTERIA ANNUAL REPORT 2021 | 27
FINANCIAL REPORTDIRECTORS’ REPORTSREMUNERATION REPORTFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS FINANCIAL OVERVIEW
Cashflows
Atlas Arteria received two distributions from APRR during 2021, being $151.1 million (€ 98.1 million) in March based on the second
half performance for 2020, and $156.8 million (€ 97.8 million) in September, reflecting the first half performance for 2021. Whilst
distributions from APRR continue to be the primary source of cash for Atlas Arteria, in August 2021 Atlas Arteria received its first
distribution from Warnow Tunnel of $4.1 million (€ 2.5 million) following the capital restructure and these cashflows, together with
cash on the Atlas Arteria balance sheet, fund corporate costs and distributions to Atlas Arteria securityholders.
The second half distribution for 2020 consisting of an ordinary dividend of 13.0 cents per stapled security (‘cps’) was paid in full
on 9 April 2021. The first half distribution for 2021 consisting of an ordinary dividend of 15.5 cps was paid in full by ATLIX
on 5 October 2021.
After the capital restructure at Warnow Tunnel, payment of distributions in April and October and operational activities for the year,
the corporate balance sheet held $133.8 million in cash as at 31 December 2021.
Business Operations
A summary of the underlying results for each business is shown in the table below.
Business
APRR
ADELAC
Warnow Tunnel
Dulles Greenway
Atlas Arteria Weighted Average1
Revenue
Contribution to
Atlas Arteria
Performance for 2021 vs 2020
Total Traffic
Toll Revenue
(local currency)
91.1%
1.7%
1.4%
5.8%
19.5%
15.4%
(4.3%)
13.3%
18.6%
17.5%
15.4%
(1.8%)
16.2%
17.1%
1. Weighted averages are based on portfolio revenue allocations from Atlas Arteria’s beneficial interests in its businesses in A$ using the average foreign currency
exchange rates in the current period (AUD/USD 0.7504, and AUD/EUR 0.6347).
The proportionate results, and weighted average results, aggregate the financial results of each of Atlas Arteria’s businesses
according to its economic interests from ongoing operations.
APRR Group
APRR 100% (€ m)
Toll revenue
Other revenue
Construction revenue under IFRIC 12
Total revenue
Purchases and external charges
Personnel costs
Taxes
Construction expenses under IFRIC 12
Other
Total expenses
Total EBITDA
Total EBITDA (proportional, A$m)
Provisions
Net interest expense
Depreciation and amortisation
APRR corporate income tax
Share of profits/(loss) of associates (incl ADELAC)
Other
Consolidated NPAT
2021
2020
% change
2,468.2
101.0
302.8
2,100.4
68.8
345.6
2,872.0
2,514.8
(155.2)
(213.6)
(315.7)
(302.8)
8.1
(979.2)
1,892.8
928.7
(48.9)
(94.4)
(473.2)
(330.1)
(2.6)
(10.4)
933.2
(114.4)
(199.6)
(309.0)
(345.6)
3.3
(965.5)
1,549.5
797.0
(56.9)
(98.5)
(454.0)
(310.1)
0.1
(1.8)
628.3
17.5%
46.9%
(12.4%)
14.2%
(35.7%)
(7.0%)
(2.2%)
12.4%
143.3%
(1.4%)
22.2%
16.5%
14.0%
4.1%
(4.2%)
(6.4%)
n.a
(462.9%)
48.5%
Traffic for 2021 was 19.5% higher than 2020 and only 5.6% lower than 2019, supported by strong heavy vehicle traffic throughout
the year and the return of strong light vehicle traffic over the European summer and autumn following movement restrictions
earlier in the year.
28 | ATLAS ARTERIA ANNUAL REPORT 2021
France started the year with a series of movement restrictions in place. Ski-lifts remained shut over the winter period and France
discouraged travel to other European resorts. A third nationwide lockdown was implemented from the start of April. Restrictions
began to ease from early May, first with the re-opening of schools, then restaurants and bars, and non-essential shops and
services. Cross border travel recommenced under the new EU Digital COVID Certificate (health pass) launched on 1 July. While
the lockdown measures impacted light vehicle traffic in the first half, heavy vehicle traffic remained strong as a result of
government support for uninterrupted economic activity throughout lockdowns and continued strong European trade flows.
APRR observed a strong increase in leisure travel during the summer months of July and August. French domestic hotel nights
reached record levels in the summer of 2021, while inbound tourist demand from Western European countries was higher than
the prior year. The strong traffic performance continued throughout the remainder of the second half with traffic finishing 19.4%
higher than H2 2020 and 4.5% higher than H2 2019.
For the 2021 year, light vehicle traffic as a percentage of total traffic increased from 81.7% in 2020 to 83.1% in 2021 such that the
light vehicle and heavy vehicle mix in 2021 was more in line with levels observed pre-pandemic (2019: 84.2% of total traffic was
light vehicles). As tariffs for heavy vehicles are approximately 3 times higher than those for light vehicles, weighted average tolls
also returned to more normalised levels in 2021. Total toll revenue for 2021 was € 2.5 billion (2020: € 2.1 billion) which comprised
64% from light vehicle traffic and 36% from heavy vehicle traffic (2020: 61% light vehicle and 39% heavy vehicle; 2019: 66% light
vehicle and 34% heavy vehicle).
APRR Light Vehicle/Heavy Vehicle Traffic and Toll Revenue Split
t
i
l
p
S
c
i
f
f
a
r
T
t
i
l
p
s
e
u
n
e
v
e
R
)
y
c
n
e
r
r
u
c
l
a
c
o
l
(
2021
2020
2019
2021
2020
2019
83%
82%
84%
64%
61%
66%
0%
20%
40%
60%
Light vehicle
Heavy vehicle
17%
18%
16%
36%
39%
34%
80%
100%
Other revenue was impacted for the first time during the year from the integrated Fulli business which generated € 26.7 million
of revenue during the period. Launched in late 2019, Fulli comprises APRR’s operated service areas, providing competitive fuel
prices to customers on the motorway enabling customers to complete their journey on the APRR network rather than diverting
to off-network fuel stations. During the year six Fulli stations were opened with revenues generated from retail sales and fuel
now reflected in other revenue.
Application of AASB Interpretation 12 Service Concession Agreements (‘IFRIC 12’) relating to capital spend during the year saw
revenue of € 302.8 million (2020: € 345.6 million) offset by a corresponding expense.
Operating costs (ex IFRIC 12 adjustments) increased by 9.2% as a result of costs associated with the integrated Fulli business
(€ 26.0 million), the full period impact of the Eiffage management fee, higher employee profit sharing costs due to increased
business earnings, higher winter maintenance costs and higher operating taxes. Operating taxes were driven by an increase
in the TAT tax as a result of higher traffic and a reduction in the CET tax as a result of recent changes to legislation.
2021 Operating costs
2020 Operating costs
46%
23%
31%
50%
18%
32%
Purchases and external charges
Personnel costs
Taxes
EBITDA margins have progressively improved since 2015 with 2020 and 2021 being exceptions given the impact of COVID-19
movement restrictions on traffic.
ATLAS ARTERIA ANNUAL REPORT 2021 | 29
FINANCIAL REPORTDIRECTORS’ REPORTSREMUNERATION REPORTFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS
FINANCIAL OVERVIEW
APRR EBITDA margins (excluding IFRIC 12)
90%
85%
80%
75%
70%
86.5%
87.1%
87.5%
87.9%
85.7%
86.0%
74.4%
72.4%
2016
73.2%
2017
73.8%
71.4%
73.7%
2018
2019
2020
2021
Excluding operating taxes
Including operating taxes
Net interest expense at APRR reduced by 4.1% driven by a reduction in debt balances over the period. During the year, APRR
issued $780.3 million (€ 500 million) of bonds under its Euro Medium Term Note Programme at a zero percent coupon, the
proceeds of which were used to refinance debt and for general corporate purposes. This demonstrates the continued support
by the financial markets for the APRR business. It provides APRR with additional liquidity, further reduces its average cost of debt,
extends its weighted average debt maturity and strengthens APRR’s capacity for future growth.
During the year, both S&P and Fitch re-affirmed their A- long term issuer ratings for APRR, and reflecting the strength of the
APRR balance sheet, maintained their outlook as ‘stable’.
As at year end, APRR had € 1,228.5 billion in cash on the balance sheet with a € 2.0 billion undrawn revolving credit facility.
Warnow Tunnel
Warnow Tunnel 100%
Toll revenue
Other revenue
Total Operating revenue
Operating expenses
Total EBITDA
€ m
A$m
2021
12.5
0.2
12.7
(4.0)
8.7
2020
12.7
0.1
12.8
(3.7)
9.1
% change
(1.8%)
76.5%
(1.1%)
8.5%
(5.0%)
2021
19.7
0.3
20.0
(6.3)
13.7
2020
21.1
0.2
21.3
(6.1)
15.2
% change
(6.7%)
58.5%
(6.1%)
4.0%
(10.2%)
Traffic for the year at Warnow Tunnel was 4.3% lower than 2020. Toll revenue for the year was 1.8% lower than 2020, partially
offset by a 2.5% increase in average toll prices following a toll increase implemented in November 2020.
The German state in which Warnow Tunnel is located was more significantly impacted by COVID-19 related restrictions during
the first half of 2021 than in any period in 2020.
Traffic returned to growth during the second half of the year as the lifting of the restrictions boosted summer holiday traffic with
further benefit from continuing roadworks on competing routes.
Costs at Warnow Tunnel increased by € 0.3 million (8.5%), driven primarily by higher employment costs and an increase
in maintenance activities during the year.
EBITDA margins progressively improved from 2016 to 2018 in line with the strong increase in traffic and revenues however margins
in 2020 and 2021 have been impacted by the pandemic.
Warnow Tunnel EBITDA (excluding IFRIC 12)
80%
75%
73.3%
70%
65%
76.8%
74.9%
75.3%
71.1%
68.3%
2016
2017
2018
2019
2020
2021
As of 31 December 2021, Warnow Tunnel had $17.3 million (€ 11.1 million) cash on the balance sheet.
30 | ATLAS ARTERIA ANNUAL REPORT 2021
Dulles Greenway
Dulles Greenway 100%
Toll revenue
Other revenue
Construction revenue under IFRIC 12
Total revenue
Transaction fees
Operating and maintenance expenses
Other operating expenses
Construction expenses under IFRIC 12
Total operating expenses
Total EBITDA
2021
59.9
0.5
–
60.4
(2.0)
(6.0)
(5.8)
–
(13.8)
46.6
US$m
2020
% change
51.6
0.4
5.8
57.8
(1.8)
(6.8)
(5.0)
(5.8)
(19.4)
38.4
16.2%
7.6%
(100%)
4.5%
14.4%
(11.5%)
14.2%
100%
(28.7%)
21.3%
2021
79.9
0.6
–
80.5
(2.7)
(8.0)
(7.7)
–
(18.4)
62.1
A$m
2020
74.2
0.6
8.3
83.1
(2.5)
(9.8)
(7.3)
(8.3)
(27.9)
55.2
% change
7.6%
0%
(100%)
(3.2%)
(6.0%)
18.0%
(5.7%)
100%
34.0%
12.3%
Traffic for the year at Dulles Greenway was 13.3% higher than 2020, however remained 35.1% lower than 2019 levels.
Across the year, traffic at the Greenway recovered slowly with the gradual return of commuters and the overall increase in mobility
in the region. Although restrictions eased in mid-May, remote working continued and a resurgence in COVID-19 cases associated
with the Delta variant, and then Omicron, delayed the plans of many businesses to return to the office.
In April the SCC released its ruling regarding future tolling at the Greenway. The SCC found that the Greenway had satisfied the
criteria for approval of certain peak and off-peak toll increases, however exercised its discretion to allow off-peak toll increases
only for 2021 and 2022, due to the uncertainty brought about by COVID-19. As a result off-peak toll prices increased by 5.3% effective
May 2021 and were increased by a further 5.0% in January 2022. This contributed to a toll revenue increase of 16.1% for 2021.
Operating costs increased by 28.7% compared to 2020 as a result of a number of factors including higher transaction costs in line with
increased traffic, higher maintenance costs required to manage heavier snow conditions early in the year, increases in marketing and
public relations spend and costs expensed for the West End Project 2. These increases were partially offset by lower property taxes.
2021 operating costs
(based on US$ costs)
2020 operating costs
(based on US$ costs)
16%
15%
12%
13%
12%
26%
31%
Transaction fees
O&M
26%
24%
Administrative expenses
Property taxes
Other
25%
EBITDA margins have been stable since 2016 with the exception of 2020 and 2021 given the impact of COVID-19 movement
restrictions on traffic. There were no upgrades to the toll road recognised in revenue and operating costs in 2021.
Dulles Greenway EBITDA (excluding IFRIC 12)
85%
80%
75%
70%
81.6%
81.4%
81.3%
82.2%
77.1%
73.8%
2016
2017
2018
2019
2020
2021
As of 31 December 2021, Dulles Greenway had $304.6 million (US$221.0 million) cash on the balance sheet. As previously disclosed,
failure to pass the lockup tests as defined under the debt covenants for this business means that around US$79.0 million that
would otherwise be available for distribution to Atlas Arteria remained included as part of the cash reserves. In February 2022,
US$17.6 million of cash was drawn down in order to supplement debt service funds to ensure bond service requirements were met.
ATLAS ARTERIA ANNUAL REPORT 2021 | 31
FINANCIAL REPORTDIRECTORS’ REPORTSREMUNERATION REPORTFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS
REMUNERATION REPORT AUDITED
MESSAGE FROM THE PEOPLE AND REMUNERATION COMMITTEE CHAIRS
On behalf of the ATLAX and ATLIX People and Remuneration
Committees (PRCs) and Boards, we are pleased to present the
Remuneration Report for the 2021 financial year. This report
contains detailed information regarding the remuneration
arrangements for the Directors and Senior Executives who
were Key Management Personnel (KMP) for Atlas Arteria
during the year.
The Atlas Arteria business continued to demonstrate its
resilience in 2021. The introduction of the EU health pass
in Europe, coupled with high vaccination rates led to a strong
summer season at our European businesses with the strongest
second half traffic performance recorded to date by APRR.
As a result, the Boards are expecting to pay a record distribution
to our securityholders for the 2021 year.
The operating practices developed by our teams have allowed
our businesses to continue to operate seamlessly through
2021. Our priority continues to be the safety of our staff,
customers and local communities to ensure working and
home life continue as smoothly as possible.
This year we also focused on setting targets across our four
sustainability pillars of safety, customers and community,
our people and the environment. These are underpinned
by a set of metrics and actions identified to support the
accomplishment of our objectives. Further information
on our performance and initiatives will be contained in our
Sustainability Report, to be released in April 2022 and are
summarised on pages 18 and 19.
Disciplined capital management and sustainable business
practices continue to be a focus. The restructuring of our
balance sheet in 2020 along with the successful capital
restructure at Warnow Tunnel in 2021 places Atlas Arteria
in a strong financial position. This, coupled with our nimble,
highly skilled and passionate team, positions us well to
pursue growth opportunities as they arise.
During the year we continued to deliver against our strategic
objectives to build sustainable cash flows and long-term value
for securityholders. These achievements have been outlined
in the Strategic Framework section on pages 8 and 9.
Significant achievements during the year included:
− We achieved strong weighted average traffic performance
for the year, up 18.6% compared with the prior year,
led by the recovery at APRR during the second half.
− We successfully completed the capital restructure at Warnow
Tunnel in March 2021, which diversifies Atlas Arteria’s
sources of cash flow, and substantially increases the value
of the business through reduced leverage and the delivery
of cash flows earlier in the life of the concession.
− At the Dulles Greenway we achieved toll price certainty with
a 5.3% increase to off-peak tolls in 2021 and 5.0% in 2022.
− We continued to build our internal capabilities, in particular
to deliver on strategic projects, traffic forecasting and
data analytics.
− We held our first Investor Day since internalisation showcasing
the quality and depth of our business and our exceptional
management team.
The first half distribution for 2021 of 15.5 cents per security
was paid in full on 5 October 2021 reflecting the performance
of both APRR and Warnow Tunnel. Following the continued
strong performance of these businesses, we have provided
distribution guidance of 20.5 cents per security expected to
be paid in April 2022. This reflects the cashflows we expect
to receive from APRR and Warnow Tunnel as a result of the
financial performance of the businesses in the second half
of 2021. The distribution remains subject to continued business
performance, movements in foreign exchange rates, and other
future events.
2021 remuneration outcomes
Atlas Arteria’s remuneration framework aims to ensure
executive remuneration is aligned both with the performance
of the business and the interests of securityholders.
Our people are critical to our success and in 2021 we have
continued to focus on attracting, developing, and retaining top
talent as we have invested in the growth of our business. We
have evolved the way we support and care for our people and
are proud of the wellbeing and flexible working initiatives we
have implemented across the business. We continue to foster
and build an engaged and inclusive culture that provides the
right environment for our diverse team to work together
as a high performance team.
32 | ATLAS ARTERIA ANNUAL REPORT 2021
The decisions implemented to align remuneration with
securityholder expectations more effectively during
2021 included:
− Remuneration Outcomes
− There was no increase to the fixed pay for the MD & CEO
and the CFO.
− Overall STI outcomes are between target and stretch
and are reflective of the performance of the business
and management during the year.
− The 2019 Long Term Incentive Plan (LTI) Award was
tested following the end of the performance period
on 31 December 2021. The result was below threshold
and hence the vesting outcome was nil.
− There was no increase in Non-executive Director (NED) fees.
− Changes to the remuneration structure
− A positive Total Shareholder Return (TSR) hurdle was
introduced for the 2021 LTI Award which applies in addition
to the existing relative TSR test. Therefore, irrespective of
the relative TSR performance, no awards under the 2021
LTI will vest unless the absolute TSR over the performance
period has been positive.
− Securityholder approval for the awards of Restricted
Securities under the STI Plan to the MD & CEO is now
sought on a retrospective basis. This is a change from
previous practice where approval has been obtained in
advance for a maximum number of awards with the final
number to be awarded determined by the Board.
Enhanced disclosure of STI outcomes incorporating
retrospective disclosure of targets and performance against
those targets were adopted for the 2020 Report and are
continued in this Report in response to feedback from
securityholders. On balance, the Boards concluded that
the outcomes for Atlas Arteria’s STI for 2021 are appropriate
and align with securityholder outcomes and expectations.
Enhancements to Remuneration Structure
The Boards are continually looking for opportunities to
improve and evolve the Company’s approach to remuneration
so that it remains appropriate to the business, aligned to
securityholders’ interests, and consistent with contemporary
practices. We take investor feedback seriously and we will
continue to engage with investors and their advisors in relation
to remuneration.
The PRCs reviewed the remuneration strategy during the year
to ensure the remuneration framework remains consistent
with business needs. The review identified a number
of changes for 2022 which will enable the remuneration
framework to address the business strategy more effectively
and to reflect evolving market practices. These include:
− Reflecting the importance of ESG to our business, ESG
measures will be incorporated in annual incentive plans; and
− Introducing a second LTI performance target directed at
driving our key strategic objectives of generating sustainable
cash flows from Dulles Greenway and improving the average
concession life of the Atlas Arteria portfolio.
In developing the proposed approach, the PRCs engaged
external remuneration advisers and consulted with investors
and their advisors in relation to the proposed changes.
The changes have been designed on the basis that there will
be no increase in the overall remuneration opportunity and that
vesting of awards will only occur where there are quantifiable
performance outcomes which improve securityholder value.
As a result, we propose to introduce the following changes
to the Atlas Arteria remuneration framework which will apply
for 2022:
− Fixed pay – to ensure we continue to attract and retain a
high performing management team, there will be a review
of fixed pay for executive KMP in 2022, with decisions on any
recommendations for change expected during the first half
2022, noting that the MD & CEO and CFO did not receive any
increase in fixed pay in 2021.
− Short Term Incentive Plan – to ensure we continue to meet
securityholder expectations in managing ESG, an ESG
measure with a 10% weighting will be introduced for 2022.
KPIs tied to our corporate ESG objectives will be set annually
reflecting the priorities for the year ahead. For 2022, we will
be focussing on Lost Time Injury Frequency Rates (LTIFR)
targets and milestones towards implementation of Task
Force on Climate-Related Financial Disclosures (TFCD).
Delivery of our financial targets will continue to be a priority
and the relative weighting to financials will be 60% of the total
scorecard with the balance of 40% applying to ESG (10%) and
strategic measures (30%).
ATLAS ARTERIA ANNUAL REPORT 2021 | 33
FINANCIAL REPORTDIRECTORS’ REPORTSREMUNERATION REPORTFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS Remuneration Governance
The PRCs are actively involved in ensuring our remuneration
policies reflect Atlas Arteria’s values and STEER principles
and encourage appropriate behaviours and actions which are
aligned with Atlas Arteria’s business strategy, performance
and securityholder interests.
Specifically, the PRCs seek to ensure management behaviours
are consistent with the creation of value for securityholders,
our commitments to safety, our people, environmental
stewardship, customers and communities. Activities
undertaken by the PRCs during the year were focussed
on enhancing our formal, rigorous and transparent HR
and remuneration framework.
At the commencement of the financial year, the Boards set
the KPIs for the MD & CEO, and the MD & CEO in consultation
with the Boards set the KPIs for each of the executive KMP. The
PRCs provide regular informal feedback on performance to the
MD & CEO in relation to both the MD & CEO and executive KMP.
At the end of the financial year, the MD & CEO and each of the
executive KMP have their performance assessed against these
KPIs and other relevant matters. The formal performance
review process has been completed for 2021. More information
in relation to the outcomes of the process for the executive
KMP can be found at section 6.2.
We trust you, our securityholders, find the 2021 Remuneration
Report provides clear and informative insights into our
remuneration policies, practices and outcomes.
David Bartholomew
Fiona Beck
Atlas Arteria Limited
Atlas Arteria International Limited
People & Remuneration
Committee Chair
People & Remuneration
Committee Chair
REMUNERATION REPORT
− Long Term Incentive Plan – A second LTI performance target
will be introduced equivalent to 50% of the current LTI. The
new strategic LTI will have a three year performance period
and will vest based on delivery of two strategic metrics.
− Creating a clear pathway to sustainable cash flows from
Dulles Greenway;
− Improving the average concession life of the Atlas
Arteria portfolio,
providing that quantifiable improvements in securityholder
value can be demonstrated.
To incentivise management to prioritise delivery of these
initiatives an opportunity for earlier vesting of the new
strategic LTI has been included in the plan allowing for some
or all of the awards to vest no earlier than two years and
no later than three years after the effective grant date, upon
delivery of quantifiable outcomes for securityholders.
The remaining 50% of the LTI will continue to be subject to
relative TSR with a positive absolute TSR gateway, assessed
over three years.
The Board believes the combination of relative TSR and
strategic performance targets provides an appropriate focus
on driving strategic projects that create long term value for
securityholders. This provides a clear incentive to secure
the strategic outcomes balanced with the incentive
to achieve above average securityholder returns relative
to comparator companies.
Securityholders will be asked to approve the equity based
STI and LTI Awards for the MD & CEO at the 2022 AGM.
The remuneration framework will be reviewed again based
on the expected needs of the business and evolving market
practice during 2022 to develop the appropriate approach
for 2023 and subsequent years.
Non-executive Director Fees
As there has been no increase in NED fees since 2019, the
Boards undertook a review of NED fees during 2021. The
review found that ATLAX director fees were below the median
of the comparator group. The review also highlighted that the
significant disparity between ATLIX and ATLAX director fees
is not reasonable given that ATLIX Directors have comparable
responsibilities and workload to ATLAX Directors.
As a result, it was decided to adjust ATLAX director fees to be
closer to, but just below the median for the comparator group
and to set ATLIX director fees closer to parity with ATLAX.
As referred to on page 3 of our Corporate Governance
Statement, once the current ATLIX Board succession process
is complete, the ATLIX Board will reduce from five to four
directors, resulting in a reduction in total fees which will
offset these increases. Further background on the review and
details of the revised fees which apply from 1 January 2022 are
contained at 7.2 below. No increase in the fee caps for ATLAX
or ATLIX is being proposed.
34 | ATLAS ARTERIA ANNUAL REPORT 2021
This Remuneration Report contains the following sections:
1 Introduction
2 Who is covered by this report?
3 Overview of the remuneration framework
4 2021 business performance highlights
5 Remuneration framework
6 2021 Remuneration outcomes
7 Non-executive Director fees
8 Remuneration governance
9 Statutory disclosures
Introduction
1.
The Directors of the Groups present the Remuneration Report prepared in accordance with section 300A of the Corporations
Act 2001 for the Groups and the consolidated entity for the year ended 31 December 2021. The information provided in this
Remuneration Report has been audited as required by section 308(3C) of the Corporations Act 2001. This Remuneration Report
forms part of the Directors’ Reports.
2. Who is covered by this report?
This Remuneration Report outlines the remuneration framework and outcomes for the ATLAX Group and Atlas Arteria Key
Management Personnel (KMP). The obligation under the Corporations Act to provide a remuneration report only applies to ATLAX
as an Australian listed Group. However, given the stapled security holding structure, the Boards and PRCs of both ATLAX and
ATLIX have worked together on the Remuneration Report with the disclosures extended to cover all of the Atlas Arteria KMP.
For the purposes of this Report, KMP are those persons having authority and responsibility for planning, directing and controlling
the major activities of the Groups.
The individuals covered by this Remuneration Report are:
Name
Role
Date of appointment
Management
Graeme Bevans
Nadine Lennie1
Managing Director & Chief Executive Officer
Chief Financial Officer
Vincent Portal-Barrault
Chief Operating Officer
1 April 2019
1 April 2019
1 April 2019
Non-executive Directors
Debbie Goodin2
Ariane Barker
David Bartholomew
Independent Non-executive Chair (ATLAX)
Independent Non-executive Director (ATLIX)
1 November 2020 as Chair of ATLAX
(Director of ATLAX from 1 September 2017)
and Director of ATLIX from 1 November 2020
Independent Non-executive Director (ATLAX)
Audit and Risk Committee (ARC) Chair
1 March 2021
ARC Chair with effect from 1 March 2021
Independent Non-executive Director (ATLAX)
People and Remuneration Committee (PRC) Chair
1 October 2018
Jean-Georges Malcor
Independent Non-executive Director (ATLAX)
1 November 2018
ARC Chair with effect from 1 November 2020
until 1 March 2021
Jeffrey Conyers
Fiona Beck
Andrew Cook
Caroline Foulger
Independent Non-executive Chair (ATLIX)
16 December 2009
Independent Non-executive Director (ATLIX)
People and Remuneration Committee (PRC) Chair
13 September 2019
PRC Chair with effect from 19 May 2020
Independent Non-executive Director (ATLIX)
25 November 2020
Independent Non-executive Director (ATLIX)
Audit and Risk Committee (ARC) Chair
19 May 2020
ARC Chair with effect from 21 September 2020
1. On 17 January 2022 it was announced that Nadine Lennie will be stepping down from her role as Group Chief Financial Officer and leaving the organisation
with effect from 31 March 2022. Details of Ms Lennie’s termination arrangements will be included in the 2022 Remuneration Report.
2. As contemplated by the Co-operation Deed in place between ATLAX and ATLIX, the ATLIX Board includes a Director of ATLAX (Debbie Goodin) to facilitate
and promote co-operation and consultation between the two Boards.
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3. Overview of the remuneration framework
Included below is a summary of the 2021 remuneration framework for the executive team. Further details regarding
our remuneration arrangements are provided in the remainder of this Remuneration Report.
Remuneration Framework Overview
Remuneration
Principles
Remuneration
elements
Purpose
How aligned to
performance
Performance
measures
Simple
Reflect role complexity
Balance short and long-term needs
Reflect our values and behaviours
Specific and differentiated
performance outcomes
Securityholder alignment
Fixed Remuneration
Short Term Incentive
Long Term Incentive
Salary and superannuation
Reviewed annually against
comparator benchmarks
Executive remuneration levels
should be competitive with
companies of similar size
and complexity
Annual incentive delivered
50% in cash and 50%
in restricted securities
To align the interests of
securityholders, executives and
other participants as determined
by the Boards
Recognises the market value of
an individual’s skills, experience,
accountability and their contribution
in delivering the requirements
of their roles
A combination of financial
measures and non-financial
measures relating to specific
business outcomes and taking
account of behaviours and conduct
Annual award of performance rights
with a 3 year performance period
Rewards long-term value creation
for securityholders
Vesting based on achieving
challenging performance targets
An individual’s skills, experience,
accountability and contribution
in delivering the requirements
of their roles
Performance targets Measures are set to reward delivery
Alignment to
securityholders
of returns and value creation for
securityholders
Minimum security holding
requirements to be accumulated
within five years
Assessment of performance
against a balanced scorecard of
financial measures (weighted
70%) and non-financial measures
(weighted 30%) linked to key
financial and business objectives
Relative Total Securityholder Return
compared to a comparator group
of local and international
infrastructure companies
A positive TSR gateway applies for 2021
Measures are set to reward delivery
of returns and value creation for
securityholders
Measures performance
against local and international
infrastructure companies
STI deferral to restricted securities Measures aligned to creation
of value for securityholders
Governance
Ability to exercise discretion as required over remuneration decisions to ensure that:
− Remuneration outcomes reflect the performance of the Groups and the individual executives; and
− Are consistent with securityholder expectations.
All variable remuneration is subject to malus adjustment.
Proposed changes for 2022
Reflecting the central importance of ESG to our business, an ESG measure with a 10% weighting will be introduced to the Short
Term Incentive Plan for 2022. The relative weightings between financials and non-financials in the STI Plan will be changed from
70:30 to 60:40 to accommodate the ESG measure.
The LTI structure for 2022 is also being changed to re-direct one half of the current LTI opportunity to a new strategic LTI
with a three year performance period.
The new LTI will have two strategic metrics:
− Creating a clear pathway to sustainable cash flows from Dulles Greenway;
− Improving the average concession life of the Atlas Arteria portfolio,
providing that quantifiable improvements in securityholder value can be demonstrated.
Provision has been made for earlier vesting of the strategic initiative component (50%) of the LTI opportunity to encourage earlier
implementation of these initiatives and thereby delivering the associated benefits to securityholders sooner. In any event, vesting
will occur no earlier than 2 years and no later than 3 years from the effective date of award. The balance of the LTI (50%) will
remain subject to relative TSR with an absolute TSR hurdle measured over a three year performance period.
Further details of the changes are included at 5.3 and 5.5.
36 | ATLAS ARTERIA ANNUAL REPORT 2021
What remuneration principles guide the design of the remuneration framework?
The following six principles underpin the management of the remuneration framework at Atlas Arteria. The principles provide
guidance on how remuneration decisions are made and how remuneration outcomes are determined.
The executive remuneration framework should be: Description
Simple
Be simple to understand, implement and communicate
Balance short and long-term needs
Reflect role complexity
Reflect our values and behaviours
Specific and differentiated
performance outcomes
Securityholder alignment
Support the delivery of the annual business plans, whilst also reflecting the long-term
needs of the business
Reflect the experience of the executive, complexity/nature of the role and the business
compared to the market
Encourage appropriate behaviours and actions which are aligned to Atlas Arteria’s
business strategy, performance and securityholders
Reflect specific performance measures which executives have the ability to influence,
and allow for differentiation of executive incentive outcomes
Encourage executive equity ownership so that executives have ‘skin in the game’,
aligning executives to securityholder returns
What decisions have been made regarding the remuneration structure during 2021 and why?
Key decision to enhance the alignment between executives and securityholders during 2021 include:
− There was a fixed pay freeze for the MD & CEO and the CFO.
− There was no increase in NED fees.
− A positive TSR hurdle was introduced for the 2021 LTI Award which will apply in addition to the existing relative TSR test.
Thus, irrespective of the relative TSR performance, no awards under the 2021 LTI will vest unless the absolute TSR over
the performance period has been positive.
− Securityholder approval for the actual awards of Restricted Securities under the STI Plan to the MD & CEO is now sought
on a retrospective basis. This is a change from previous practice where approval was obtained in advance for a maximum
number of awards with the final number to be awarded subsequently determined by the Board.
− Enhanced disclosure of STI outcomes incorporating retrospective disclosure of targets and performance against those targets.
− To support management’s focus on ESG, an ESG measure with a 10% weighting will be introduced to the STI Plan for 2022. The
relative weightings between financials and non-financials in the STI Plan will be changed from 70:30 to 60:40 to accommodate
the ESG measure.
− The LTI structure for 2022 is being changed to introduce a second LTI performance target with vesting based on the delivery of
quantifiable outcomes against the Groups’ strategic plans. The new strategic LTI has a three year performance period and can
vest earlier if the performance outcomes are achieved ahead of schedule. The balance of the LTI for 2022 will be on the same
terms as for 2021 (relative TSR with a positive absolute TSR gateway).
How are executive KMP remunerated and how is this aligned with Atlas Arteria performance?
The Boards recognise that to build sustainable long-term growth in securityholder wealth, Atlas Arteria must attract and retain
talented people and align their interests and behaviours with securityholders’ interests.
To do so, the Groups have developed a remuneration framework that aligns executive remuneration and the Groups’ performance.
The framework aims to achieve a balance between fixed and performance based remuneration and between short and long-term
performance incentives. To ensure our remuneration quantum and structure is market competitive, consideration has been given
to the market median remuneration of companies of a similar size and complexity to Atlas Arteria.
Target remuneration comprises:
MD & CEO
Executive KMP
33%
67%
57%
43%
■ Fixed remuneration
■ Variable remuneration
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Variable remuneration comprises both short and long term performance components:
1 The STI for 2021 was based on an assessment of performance against a balanced scorecard of financial measures (weighted
70%) and non-financial measures (weighted 30%) linked to key financial and business objectives. For further information
regarding the performance outcomes and STI structure for the MD & CEO and the executive KMP, see section 6.2
2 For the long-term incentive component, Atlas Arteria’s TSR performance is assessed relative to selected local and
international companies with similar characteristics to ensure there is alignment between the financial interests of executives
and securityholders. For further information regarding the LTI structure (including the changes introduced for 2021),
performance measure, relative TSR comparator group constituents and vesting schedule, see section 5.4.
Information on governance provisions such as clawback, malus, treatment of awards on cessation of employment and change
of control are provided in section 8.
What happens to variable remuneration awards in the event there is a change of control?
In the event of a change of control, the Boards have absolute discretion to determine the treatment of STI and LTI awards.
However, if the Boards do not exercise their discretion, the following default treatments will apply:
STI: Cash based STI will be assessed on a pro rata basis and paid at that time based on performance, and deferred STI will
vest in full on the basis that it relates to performance targets which have already been achieved.
LTIP: Vesting based on performance to the most recent assessment date and pro-rated for time.
4. 2021 business performance highlights
4.1 Overview of business performance
The strength of our portfolio and balance sheet has enabled the Groups to continue to deliver against strategy with a number
of key initiatives implemented that will drive long term value creation for securityholders. These have been discussed
on pages 8 to 9.
4.2 Atlas Arteria’s performance
The following table outlines the key financial metrics over the past five financial years up to and including 2021 that underpin
the STI and LTI plans.
Dividend Payments per Security ($)
Cash flow per security ($)
EBITDA proportionate ($m)1
Share price (@year end) ($)
Total Security Return
2021
0.285
0.30
1,024.4
6.92
11.46%
2020
0.11
0.31
884.0
6.50
-15.5%
2019
0.30
0.27
923.0
7.83
32.2%
2018
0.24
0.26
869.4
6.16
3.4%
2017
0.20
0.19
652.8
6.19
30.6%
1. Proportionate EBITDA from the underlying investments as reported for each financial year.
ALX share price (2010-2021)
$9.00
$8.00
$7.00
$6.00
$5.00
$4.00
$3.00
$2.00
$1.00
$0.00
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
38 | ATLAS ARTERIA ANNUAL REPORT 2021
5. Remuneration framework
The remuneration framework for the executive team aims to achieve balance – between fixed and performance-based
remuneration, between short and long-term performance incentives, and between financial, non-financial and strategic
outcomes – as well as providing a balance of remuneration received in cash and in securities.
Our objectives for the executive remuneration framework are to ensure that it:
− Is simple to understand, implement and communicate;
− Supports the delivery of the annual business plans whilst also reflecting the long-term needs of the business;
− Reflects the experience of the executive and complexity of the role and business compared to the market;
− Encourages behaviours that are aligned to our business strategy, performance and securityholders;
− Reflects performance measures which our executives have the ability to influence and allows differentiation of executive
incentive outcomes; and
− Encourages executive equity ownership so that executives have ‘skin in the game’ thus aligning executives to securityholders.
5.1 Positioning and mix of executive remuneration
To ensure our remuneration quantum and structure is market competitive, reference is made to the median of a group of
comparator companies of similar size and complexity to Atlas Arteria. The remuneration arrangements of selected industry
comparators are also considered for each role.
In 2021, the target and maximum remuneration framework for the MD & CEO and the executive KMP comprises fixed
remuneration, STI and LTI as in the graphs below.
Remuneration mix based on achieving ‘target’ performance
MD & CEO
Executive KMP
33%
33%
30%
17%
17%
13.5%
13.5%
43%
■ Fixed remuneration
■ Target STI – cash
■ Target STI – deferred
■ Target LTI
Remuneration mix based on achieving ‘maximum’ performance
MD & CEO
Executive KMP
29%
29%
21%
21%
27%
17%
17%
39%
■ Fixed remuneration
■ Maximum STI – cash
■ Maximum STI – deferred
■ Maximum LTI
Outlined below is further detail regarding the STI and LTI plans for the 2021 financial year.
5.2 Fixed pay
Fixed pay recognises the market value of an individual’s skills, experience, accountability and their contribution in delivering
the requirements of their roles. Fixed pay includes base pay and superannuation.
There were no increases in fixed pay during 2021 for the MD & CEO and the CFO, and the COO received a market based review
effective from 1 July 2021 and government index increase from 1 October 2021.
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5.3 Short-term incentive
Details regarding the STI arrangements for the executive KMP are set out below. The size of each STI award is capped at an agreed
percentage of fixed remuneration for each executive. The value of the STI payment made at the end of the performance period
is a function of performance against a balance of financial and non-financial performance measures aligned with Atlas Arteria’s
annual business plans.
Element
Description
Opportunity
The STI is subject to achievement of defined performance targets.
The target STI opportunity represents an opportunity to earn 100% of fixed remuneration for the MD & CEO
and 60% of fixed remuneration for the other executive KMP. When assessing performance, the Boards have
discretion to increase or decrease an STI Award subject to an overall cap of 150% of Target.
Performance period
Performance is measured over a one year performance period from 1 January to 31 December.
STI deferral
STI objectives
To assist in creating alignment with securityholders and in achieving the minimum securityholding requirement,
50% of the STI outcome is normally deferred into restricted securities for a one year period following the
conclusion of the performance period, subject to ongoing service and the discretion of the Boards.
STI targets set for 2021 comprised a combination of financial measures and non-financial measures relating
to specific strategic outcomes and taking account of culture and behaviours.
An ESG measure with a 10% weighting is being introduced to the STI Plan for 2022. Inclusion of an ESG measure reflects our
commitment to safety, the environment, our people, and our focus on customers and communities.
We will establish corporate KPIs across our four sustainability pillars which will be published in our Sustainability Report.
Remuneration objectives tied to these corporate objectives will be set annually and will reflect the priorities for the year
ahead where we believe we can make quantifiable improvements. For 2022, we will be focussing on safety (LTIFR) and TFCD
(implementation milestones).
The Board believes delivering strong financial performance for our securityholders continues to be a priority. Accordingly,
the financial component of the STI scorecard will have a 60% weighting with the remaining 40% applying to strategic (30%)
and ESG (10%) measures.
5.4 Long-term incentive
To align with the interests of securityholders, executives and other participants as determined by the Boards are eligible to
participate in an LTI. Details of the LTI arrangements of the MD & CEO and executive KMP are set out below. The size of each
year’s grant is capped at an agreed percentage of fixed remuneration for each executive. The value of the LTI award made at the
end of the vesting period is a function of:
− Atlas Arteria’s TSR performance relative to a group of Australian and international peer companies (which determines the
number of securities granted that vest);
− The change in the price per Atlas Arteria stapled security (which determines the value of each stapled security that vests); and
− The value of distributions that would have been made during the vesting period to the number of securities that vest
(distribution equivalents).
As a result, management incentives are aligned with the long-term interests of securityholders to achieve strong performance
relative to peers and to generate an appropriate balance of security price performance and distributions.
40 | ATLAS ARTERIA ANNUAL REPORT 2021
Element
Description
Opportunity
Vehicle
Performance target
The maximum grant value of LTI opportunities represents 100% of fixed remuneration for the MD & CEO and 70%
of fixed remuneration for the other executive KMP. The number of awards granted is based on face value and is
determined based on the 10 day VWAP immediately following the announcement by Atlas Arteria of its annual results.
Awards are delivered in the form of performance rights. A performance right is a right to acquire one fully paid
Atlas Arteria security, subject to meeting pre-determined performance targets.
For 2021 and earlier years LTI performance is assessed against relative TSR. Relative TSR was selected
as the sole performance target as it measures security holding value creation objectively, can be used for
comparing performance across different jurisdictions and is widely understood and accepted by stakeholders.
For the 2019 grant, Atlas Arteria’s TSR performance was assessed against a local and global industry
comparator group, comprising Abacus Property Group, APA Group, Aurizon Holdings Limited, AusNet
Services, Charter Hall Group, Growthpoint Properties Australia, Qube Holdings Limited, Spark Infrastructure
Group, Sydney Airport, Transurban Group, 3i Infrastructure, Cogent Communications Holdings Limited, Eiffage
SA, Genesee & Wyoming Inc., Getlink, Macquarie Group Infrastructure Corporation and Zayo Group Holdings,
Inc. These companies were selected as they operate in comparable industries, with asset size, market
capitalisation, jurisdiction of assets and operational control, in relevant ranges.
From 2020 Atlas Arteria’s TSR performance will be assessed against a group of approximately 125 OECD-
domiciled companies included in the Global Listed Infrastructure Organisation (GLIO) index.
The comparator group may, at the discretion of the Boards, be adjusted to take into account events during the
Performance Period including, but not limited to takeovers, mergers, de-mergers or de-listings, so that the
outcome appropriately reflects the circumstances.
A volume weighted average security price (VWAP) over a 40 business day period at the start and the end
of the performance period is used for the calculation of TSR performance for 2020 and subsequent awards.
A 40 business day averaging period for calculating the security price for TSR performance helps to eliminate
the impact of short-term security price movements on vesting outcomes.
Vesting schedule
Relative TSR performance is assessed on a sliding scale, with vesting determined as follows:
Atlas Arteria’s TSR performance
Below the 51st percentile
At the 51st percentile
% vesting
0%
50%
Between the 51st percentile & 75th percentile
Pro rata between 50% & 100%
At the 75th percentile
100%
Positive TSR Hurdle
The Boards retain discretion to adjust the relative TSR target in exceptional circumstances if considered
appropriate so that participants are neither advantaged nor disadvantaged by matters outside
management’s control.
A positive TSR hurdle was introduced for the 2021 LTI Award which applies in addition to the existing relative
TSR test. Thus, irrespective of the relative TSR performance, no awards under the LTI will vest unless absolute
TSR for the performance period is positive.
Performance period
Performance is measured over a three year performance period, from 1 January to 31 December.
The performance for 2021 grant will be measured from 1 January 2021 to 31 December 2023.
Vesting and allocation
of securities
If and when the Boards determine that the relative TSR performance target has been achieved, the
performance rights will automatically be exercised, and the relevant number of securities will be allocated.
Distribution equivalents Distribution equivalents will be payable (via a grant of securities or a cash payment, at the Boards’ discretion)
on performance rights that have vested, to the value of any distributions paid during the performance period
in respect of an equivalent number of Atlas Arteria securities.
5.5 Proposed changes to the remuneration framework for 2022
It is proposed to introduce a second LTI performance hurdle for 2022 to re-direct half of the current LTI opportunity to a new
strategic LTI with vesting based on the successful delivery of key strategic objectives.
Vesting of the new LTI will be based on delivery of two strategic metrics:
− Creating a clear pathway to distributions from Dulles Greenway;
− Improving the average concession life of the Atlas Arteria portfolio,
providing that quantifiable improvements in securityholder value can be demonstrated.
Earlier implementation of the strategic initiatives will result in securityholders obtaining the associated benefits sooner. While
these awards will have a three year performance period, there will be a Board discretion to vest the some or all the strategy based
rights earlier (but no earlier than two years from the start of the three year performance period) once the targets are achieved.
The Board considers that retaining relative TSR with the positive absolute TSR hurdle as one of the LTI performance targets while
introducing a second performance target aligned with strategy execution will provide a balanced incentive structure focussed on
delivery of outcomes that provide material benefits to securityholders. Thus, there is a clear incentive to secure the commercial
outcomes balanced with the incentive to achieve above average shareholder returns relative to comparator companies.
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The Board will retain full discretion over vesting on being satisfied that the strategic objectives have been met based on quantifiable
outcomes that improve securityholder value. Details of the quantifiable outcomes will be disclosed in the Remuneration Report
for the year of vesting.
The remuneration framework will be reviewed again during 2022 based on the expected needs of the business and evolving market
practice to develop the appropriate approach for 2023 and subsequent years.
5.6 Approval of MD & CEO Equity Based Awards
Securityholders will be asked to approve the following equity based awards for the MD & CEO at the 2022 AGM:
− The equity component of the 2021 STI Award; and
− The 2022 LTI Award.
5.7 Employee Equity Incentive Plan
The Group operates an employee equity plan to enable all corporate employees to become securityholders of the Group. The plan
was introduced in 2020 to support employee retention, develop the team with a common purpose, share in the success of the
business and for employees to become equity holders and thus increase alignment with securityholders. All corporate employees,
other than members of the Executive Team who participate in the LTI Scheme, are eligible to participate in the plan. Awards to the
value of $5,000 were made in the form of share rights with vesting subject to a 3 year service condition. The total value of the equity
awarded in 2021 was in the order of $140,000.
5.8 Employment contracts
The remuneration and other terms of employment for the executive KMP are formalised in executive contracts. Key contractual
terms in place for 2021 are outlined below.
Contract type
Termination notice
by either party
Termination notice
with cause
Termination notice by KMP
for fundamental change in role
MD & CEO
Ongoing
12 months
CFO and COO
Ongoing
6 months
Immediate without
notice period
Immediate without
notice period
30 days within 21 days
of fundamental change
30 days within 21 days
of fundamental change
6. 2021 Remuneration outcomes
6.1 Fixed pay
A freeze on fixed remuneration applied for the MD & CEO and CFO in 2021. The COO received a market based increase
on 1 July 2021, his first increase, other than local statutory CPI adjustments, since appointment in 2018.
It is important to retain our key people. We consider the best retention mechanism is to provide challenging work, to reward
achievement against challenging goals and to ensure our people are remunerated competitively against market.
To support the retention and attraction of a high performing executive team, a remuneration benchmarking review for executive
KMP has commenced. This review is expected to be completed in first half of 2022. The effective date of any adjustments
is yet to be decided and will be no earlier than 1 January 2022. Details of the outcomes of the review will be included in the
2022 Remuneration Report.
6.2 Short term Incentive Plan
STI performance in respect of 2021 was assessed based on a combination of financial and non-financial measures.
Details of the 2021 STI Awards for executive KMP are set out below.
The annual performance assessment includes consideration of both what is achieved and how it is achieved by reference
to each executive’s behaviours during the year. The actual STI awarded can be adjusted where these expectations are not met.
No such adjustments were made for executive KMP for 2021.
42 | ATLAS ARTERIA ANNUAL REPORT 2021
6.2.1 MD & CEO
Performance area
Weighting Target
Result
Commentary
Proportional adjusted EBITDA
(reflecting proportional
performance of each business
at constant exchange rates)
Free Cashflow Received
from Operations (at constant
exchange rates)
Distributions of $0.26
per Security
Corporate operational
expenditure (excluding costs of
STIs and LTIs, special projects
and at constant exchange rates)
Total financials
Strategic STI objectives were
set for the following areas
of activity
− Corporate development
and M&A activity
− Restructuring the capital
structure of businesses
− Cultural change, leadership
and employee engagement
20%
A$870m A$1,015m
Weighted average traffic performance for the year was up 18.6%
compared with the prior year. As a result, proportionate EBITDA
on a constant currency basis was above stretch
20%
A$260m A$283m
20%
$0.26
$0.285
10%
A$31m A$26.2m
The strong financial performances of APRR and the restructure
of the balance sheet at Warnow Tunnel resulted in higher than
expected cash flows to Atlas Arteria. As a result, cash flow
performance for the year was above stretch
Target for the year was exceeded with a total distributions paid
to securityholders in the year amounting to $0.285 per security
Corporate costs were managed effectively with an above stretch
outcome achieved
70%
30%
95%
31%
Significant achievements against the strategic objectives included:
− Capital restructure at Warnow Tunnel in March 2021 which
diversifies Atlas Arteria’s sources of cash flow, and substantially
increases the value of the business through reduced leverage and
the expectation of cash flows earlier in the life of the concession.
Two distributions have been received reflecting the performance
of Warnow Tunnel throughout 2021
− Achieved an increase in off-peak tolls at the Dulles Greenway
of 5.3% in 2021 and 5.0% in 2022
− Construction of RCEA on track and ownership is expected to
transfer to APRR by end of the first half 2022, which will lengthen
Atlas Arteria’s average concession term
− Implemented programs to improve ways of working across the
business including capability investment with demonstrated
improvements in leadership and team effectiveness. Launched
new global flexible work policy as part of the ongoing initiatives
introduced to foster greater inclusion. Developed foundational
employee engagement and inclusion metrics to identify and execute
strategies to address critical people priorities for 2022 and beyond
Total non-financials
Total awarded
30%
100%
31%
126%
6.2.2 Other executive KMP
The MD & CEO’s STI objectives, both financial and non-financial, for 2021 were cascaded to the other executive KMP being the
CFO and COO and were included within their specific personal and team objectives for the year. Their STI outcomes were assessed
on a consistent basis with that of the MD & CEO.
6.2.3 Executive KMP STI outcomes
Based on the performance achievement assessments described above, the following STI Awards were made in respect
of achievements relating to 2021.
Name
Graeme Bevans
Nadine Lennie1
Vincent Portal-Barrault
% of maximum
achieved
Value – cash
$
Value – equity
$
STI forfeited
$
84%
84%
92%
819,000
536,760
249,892
819,000
–
249,892
312,000
102,240
45,435
1. Under the terms of her separation, 100% of Ms Lennie’s 2021 STI is payable in cash.
6.3 Long term Incentive Plan
The probability of existing LTI awards vesting has continued to be unlikely in 2021. This is because the peer group includes
a number of listed utilities that have not been as severely affected by the downturn as toll road companies, which have been
adversely impacted by traffic movement restrictions due to COVID-19.
The relative TSR hurdle for the 2019 LTI Award was tested following the end of the performance period on 31 December 2021.
The result (an absolute TSR of 22.62%) was at the 7th percentile of the comparator group which was below threshold and hence
the vesting outcome was nil.
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7. Non-executive Director fees
7.1 Determination of Non-executive Director fees
Non-executive Directors receive fees to recognise their contributions to the Boards and Committees on which they serve.
No performance related remuneration is payable to Non-executive Directors.
The fees paid during 2021 are set out below:
Fees
Board
Audit and Risk Committee
Remuneration Committee
Nominations and Governance Committee
Travel fee 3
Additional ad hoc committee fee
ATLAX
ATLIX
Chair (AUD) Member (AUD)
Chair (USD) Member (USD) Member (AUD)1
$280,0002
$140,000
$160,0002
$80,000
$30,000
$30,000
Nil
$15,000
$15,000
Nil
$10,000
$2,500 per day
$18,000
$18,000
Nil
$10,000
$9,000
$9,000
Nil
$80,000
$9,000
$9,000
Nil
N/A
$1,750 per day
$1,750 per day
1. For Australian based director.
2. Committee fees are not payable to the Chairs of the ATLAX or ATLIX Boards.
3. Non-executive Directors are also entitled to receive a travel fee of AUD$10,000 for each occasion where they are required to travel over 8 hours to attend
a Board meeting or strategy session. Due to COVID-19 travel restrictions no travel fees were paid in 2021.
ATLAX and ATLIX directors are not entitled to Atlas Arteria options or securities or to retirement benefits as part of their
remuneration package.
7.2 2022 Non-executive Director fees
Non-executive Director fees were last reviewed with effect from 1 January 2019, prior to internalisation of management. Given
there have been no increases to NED fees in 3 years, the Boards decided to undertake a review of NED fees in 2021. The review
was conducted by comparing Atlas Arteria’s NED fee levels with those of a group of comparable ASX listed companies selected
on the basis of similar businesses, scale of operation and skill requirements. The review highlighted that the ATLAX NED fees
were below the median level for companies of similar size and complexity.
In addition, the review highlighted that the significant disparity between ATLIX and ATLAX director fees is not reasonable given
that the responsibilities and workload of ATLIX Directors are comparable to ATLAX Directors. As a result, it was decided to
adjust ATLAX director fees to be closer to, but just below the median for the comparator group and to set ATLIX Director fees
closer to parity with ATLAX.
The composition of the ATLAX Chair’s remuneration as between ATLIX and ATLAX Board memberships will change, but her
aggregate remuneration will only change marginally. Also, no material changes to Committee fees have been made with ATLAX
Committee fees remaining the same and rounding adjustments being made to the ATLIX Committee fees. As referred to on
page 3 of our Corporate Governance Statement, once the current ATLIX Board succession process is complete, it is intended
that the ATLIX Board will reduce from five to four directors, resulting in a reduction in total fees, offsetting these increases.
The following fees apply with effect from 1 January 2022:
Fees
Board
Audit and Risk Committee
Remuneration Committee
Nominations and Governance Committee
ATLAX
ATLIX
Chair (AUD) Member (AUD)
Chair (USD) Member (USD) Member (USD)1
$310,000 2
$155,000
$220,000 2
$110,000
$55,000
$30,000
$30,000
Nil
$15,000
$15,000
Nil
$20,000
$20,000
Nil
$10,000
$10,000
Nil
Nil
Nil
Nil
1. For Australian based director
2. Committee fees are not payable to the Chairs of the ATLAX or ATLIX Boards.
7.3 Aggregate fee pool
As approved by securityholders at the 2020 AGM, the aggregate ATLAX Non-executive Director fee pool is capped at AUD$1,100,000
and the ATLIX Non-executive Director fee pool is capped at US$700,000. The increase in fees outlined above will be accommodated
within the existing fee pool and no changes are proposed for 2022.
44 | ATLAS ARTERIA ANNUAL REPORT 2021
8. Remuneration governance
8.1 Roles and responsibilities
The table below outlines the roles and responsibilities of the Boards, PRCs, management and external advisors in relation to the
remuneration arrangements of Non-executive Directors and executive KMP.
The Boards
People & Remuneration Committees Management
External advisors
Approve remuneration strategy
and approves recommendations
from the PRCs
The PRCs consist entirely of
independent Non-executive
Directors
The Boards approve the
quantum of remuneration for
Non-executive Directors and
the MD & CEO
Make recommendations
to the Boards regarding the
remuneration framework,
policies and practices
for Atlas Arteria
The PRCs approve the quantum
of remuneration for other
executive KMP
Makes recommendations to
the PRCs on Atlas Arteria’s
remuneration framework,
policies and practices
Provide independent advice to
the PRCs and/or Management on
remuneration market data, market
practice and other remuneration
related matters
8.2 PRCs activities during 2021
The PRCs are actively engaged in ensuring our remuneration and people programmes are contemporary and working as intended.
The activities of the PRCs during 2021 included:
− Recommending the STI outcomes for 2020 to the Boards.
− Recommending the STI objectives for 2021, including recommending approval of the financial targets to the Boards.
− Monitoring progress against the 2021 STI targets, including mid-year confirmation that financial targets set at the start
of the year continued to be appropriate for the full year.
− Reviewing the fixed pay level of the COO, an executive KMP.
− Engagement with investors and proxy advisers in relation to the remuneration framework and report.
− Considering and recommending to the Boards amendments to the remuneration framework.
− Recommendations regarding NED fees to the Boards for approval.
− Review and approval of the offer terms, plan rules and basis of participation for the Groups’ equity plans.
− Consideration of market and regulatory related developments impacting the Groups’ remuneration arrangements.
− Consideration of the necessity to exercise of discretion over variable pay decisions.
− Periodic review of the Security Holding Policy.
− Review progress against the Atlas Arteria People Plan and Priorities.
− Review of the Atlas Arteria Flexible Working Policy.
− Consideration of the Diversity and Inclusion objectives.
− Review of the Talent Management Framework and undertaking the annual Talent and Succession Review.
− Review and approval of the Atlas Arteria People Strategy (2021 – 2023).
− Executive Talent & Succession Reviews.
8.3 External Advisers
The requirement for external remuneration advisor services is assessed in the context of matters the PRCs need to address.
Remuneration advisers are engaged by and report directly to the PRCs. Potential conflicts of interest are considered when advisers
are appointed, including the level of access to management. External advice is used as a guide but does not serve as a substitute
for directors’ consideration of the relevant matters. Therefore, no remuneration recommendations, as defined by the Corporations
Act 2001 (Cth), were made by external remuneration advisors during 2021.
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8.4 Board discretion over remuneration decisions
The PRCs and the Boards consider it important to have the ability to exercise discretion as required over remuneration decisions
to ensure that remuneration outcomes reflect the performance of the Groups and the individual executives and are consistent
with securityholder expectations. Examples of the circumstances where discretion can be exercised include:
Provision
STI
LTI
Variable pay outcomes
The Boards have adopted a policy to consider if there are any circumstances that may require the exercise
of discretion at the time of approval of variable pay outcomes such as approval for STI awards and LTI vesting
outcomes. This includes consideration on an ongoing basis as situations that may require discretion arise
and at the time decisions in relation to the actual variable pay outcomes are being made.
Clawback/Malus
In the event of:
− Material non-compliance with any financial reporting requirement or other policies and operating
procedures of the Groups;
− Fraudulent or dishonest behaviour; or
− Misconduct,
Cessation
of employment
the Boards have discretion to determine that some or all deferred STI restricted security awards and unvested
LTIP awards are forfeited.
If a participant resigns or is terminated for cause
(including gross misconduct), any deferred securities
are forfeited, and the participant is not entitled to
any further payment of cash STI. If a participant
leaves for any other reason, the Boards may exercise
discretion such that the participant is entitled to a pro
rata payment of cash STI subject to performance and
deferred securities will normally stay ‘on foot’ until
the end of the deferred period.
If a participant resigns or is terminated for cause
(including gross misconduct), unvested performance
rights will automatically lapse. If a participant leaves
for any other reason a pro-rata number of unvested
performance rights (reflecting the portion of
performance period served) stay ‘on-foot’ to be tested
against the performance condition at the end of the
original performance period, subject to the discretion
of the Board to determine a different treatment.
Change of control
Upon a change of control:
− The Boards will determine in their absolute
discretion the treatment for STI opportunity.
− Subject to the Boards determining otherwise,
cash based STI will be assessed on a pro rata
basis and paid at that time based on performance,
and deferred STI will vest in full.
Where a change of control occurs or is likely to occur,
the Boards have discretion to determine the treatment
of unvested equity awards and the timing of such
treatment. In the event the Boards do not exercise
its discretion, the LTIP will vest pro rata for time
and performance.
8.5 Minimum security holding requirements
Minimum security holding requirements apply to support the alignment between the interests of the Directors, executive KMP and
securityholders through significant exposure to the movements in securities price and distributions. Details of individual security
holdings and progress against the expected holding requirements are included at section 9.3.
Role
Minimum shareholding
Timing to meet requirement
Non-executive Directors
100% of annual director base fees
3 years from the date of their appointment
MD & CEO
100% of fixed remuneration
Other executive KMP
50% of fixed remuneration
5 years from appointment
5 years from appointment
8.6 Atlas Arteria Securities Trading Policy
The Atlas Arteria Securities Trading (Windows) Policy applies to Directors, including directors appointed by Atlas Arteria to investee
entities and to all Atlas Arteria staff. The windows trading policy means that trading in securities can only occur at the discretion
of the ATLAX and ATLIX Boards during prescribed trading windows and with appropriate approvals. All other periods are ‘closed
periods’ for the purposes of the ASX Listing Rules. ATLAX and ATLIX Directors and staff must not enter into margin loans or other
financing arrangements over their Atlas Arteria securities.
46 | ATLAS ARTERIA ANNUAL REPORT 2021
9. Statutory disclosures
9.1 Executive statutory remuneration disclosures for 2021
The following table shows the total remuneration for the MD & CEO and executive KMP for 2021.
Name
year Cash salary
Financial
Annual
leave
accrual
movement
Cash STI 1
Superannuation
contributions
Value of
share based
payments
LTI 2,3
Value of
share based
payments
STI 1
Total
remuneration
Performance
based pay %
Graeme Bevans4
2021 $1,277,369
-$38,944
$819,000
$22,631
$548,066
$624,000
$3,252,122
2020 $1,145,318
$109,093
$0
$21,348
$455,062
$637,535
$2,368,356
Nadine Lennie4,5
Vincent
Portal-Barrault6
2021
2020
2021
2020
$687,369
$13,168
$536,760
$22,631
$243,073
$81,000
$1,584,001
$665,318
$91,456
$0
$21,348
$214,807
$212,624
$1,205,553
$632,210
$24,687
$249,892
$16,756
$235,495
$205,585
$1,364,625
$617,826
$154
$0
$16,980
$227,666
$203,570
$1,066,196
Total
Total
2021 $2,596,948
($1,089) $1,605,652
$62,018 $1,026,634
$910,585 $6,200,748
2020 $2,428,462 $200,703
$0
$59,676
$897,535 $1,053,729 $4,640,105
61.2%
46.1%
54.3%
35.5%
50.6%
40.4%
57.1%
42.1%
1. No STI was awarded in cash for 2020 with 100% of the STI awarded in deferred equity. STI for 2021 was awarded in a combination of cash (50%) and deferred equity
(50%). The deferred equity award for the MD & CEO is subject to securityholder approval at the 2022 Annual General Meeting
2. The amounts for LTI share based expenses are included based on the fair value of equity awards. External valuation advice has been used to determine the value of
performance rights awarded in the year ended 31 December 2021. The valuation has been made using a Stochastic Model which includes a Monte Carlo simulation
model. Details of the fair values of equity awards granted during the year are contained in the foot notes to the table titled ‘Performance Rights held during the year’
at 9.3 below
3. The number of performance rights allocated to each participant is determined based on face value
4. There were no increases in fixed pay during 2021 for the MD & CEO and the CFO. The last increase in fixed pay was effective 1 September 2020, part way through
2020. Thus, 2021 is the first full year of the increase which is reflected in the movement in fixed pay between 2020 and 2021 in the table above.
5. Under the terms of her separation, 100% of Ms Lennie’s 2021 STI is payable in cash.
6. The 2021 remuneration for the COO who is based in Luxembourg was reviewed with effect from 1 July 2021 his first increase since appointment other than statutory
CPI adjustments and was converted to AUD at a rate of AUD $1 – Euro 0.6347 (2020 0.6055)
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REMUNERATION REPORT
9.2 Non-executive Director statutory remuneration disclosures for 2021
The following table shows the fees paid to Non-executive Directors of ATLAX and ATLIX for 2021.
Name
Financial year
and fees Superannuation
Total
and fees Superannuation
Total
ATLAX fees (AUD)
ATLIX fees
Cash salary
Cash salary
Debbie Goodin1
Ariane Barker2
David Bartholomew
Jean-Georges Malcor
Nora Scheinkestel3
Jeffrey Conyers
Fiona Beck
Andrew Cook4
Caroline Foulger5
Derek Stapley6
James Keyes7
Total – AUD
Total – AUD
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
$257,369
$183,842
$140,408
–
$157,234
$157,534
$160,115
$168,983
–
$22,631
$17,461
$13,759
–
$15,324
$14,966
$0
$1,017
–
$280,000
89,294 (AUD)
8,706(AUD)
98,000(AUD)
$201,303
14,916(AUD)
1,417 (AUD)
16,333(AUD)
$154,167
–
$172,558
$172,500
$160,115
$170,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
$216,594
$18,064
$234,658
74,926(AUD)
7,118 (AUD)
82,044 (AUD)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
$715,126
$726,953
$51,714
$51,508
$766,840
$778,461
160,000 (USD)
160,000 (USD)
107,000(USD)
103,563 (USD)
89,000(USD)
8,948 (USD)
98,000(USD)
57,508 (USD)
–
87,043 (USD)
–
37,692 (USD)
$694,305
$744,259
– 160,000 (USD)
– 160,000 (USD)
–
107,000(USD)
– 103,563 (USD)
–
–
–
–
–
–
–
–
89,000(USD)
8,948 (USD)
98,000(USD)
57,508 (USD)
–
87,043 (USD)
–
37,692 (USD)
$8,706
$8,535
$703,011
$752,794
1. Appointed Chair of ATLAX and Non-executive Director of ATLIX on 1 November 2020
2. Commenced as a Non-executive Director, effective 1 March 2021
3. Ceased to be a Non-executive Director, effective 1 November 2020
4. Commenced as a Non-executive Director, effective 25 November 2020
5. Commenced as Non-executive Director, effective 19 May 2020
6. Ceased to be a Non-executive Director on 25 November 2020
7. Ceased to be a Non-executive Director on 19 May 2020
48 | ATLAS ARTERIA ANNUAL REPORT 2021
9.3 Equity instrument disclosures relating to KMP
Security holdings
The table below outlines the number of ordinary securities held by each KMP including their personally related parties,
as at 31 December 2021, and the minimum security holding requirements.
Non-executive Directors have acquired their security holdings from their personal resources on market and in accordance with
Atlas Arteria’s trading policy. Executive KMP acquire their security holdings from awards that vest under the Groups’ equity plans
and from purchases on market. All Directors and Executives are tracking to meet their security holding requirement
on a timely basis.
Non-executive Directors
Name
Debbie Goodin
Ariane Barker3
David Bartholomew
Jean-Georges Malcor
Jeffrey Conyers
Fiona Beck
Andrew Cook4
Caroline Fougler
Balance at
1 January 2021
32,904
25,214
30,076
59,838
18,853
–
8,500
Changes
17,774
13,600
–
–
–
7,000
20,000
12,500
Balance at
31 December
2021
Value at
31 December
2021 1
Minimum
security
holding
requirement 2
Date security
holding to be
attained
50,678
13,600
25,214
30,076
59,838
25,853
20,000
21,000
$350,692
$94,112
$174,481
$208,126
$414,079
$178,903
$138,400
$145,320
$220,000
$140,000
$140,000
$140,000
$110,223
$110,223
$110,223
$110,223
Nov-23
Mar-24
Oct-21
Nov-21
Jul-20
Sep-22
Nov-23
May-23
1. Based on the closing price of Atlas Arteria securities on 31 December 2021 of $6.92. The requirement is assessed at the higher of the purchase price or market value
of the securities
2. The minimum security holding requirement for ATLIX Board members has been converted to AUD at the 31 December 2021 exchange rate of AUD$1 = USD$0.7258
3. Commenced as a Non-executive Director on 1 March 2021
4. Commenced as Non-executive Director on 26 November 2020
Executive KMP
Name
Graeme Bevans
Nadine Lennie
Vincent Portal-Barrault2
Balance at
1 January 2021
153,730
36,592
39,324
Changes
75,929
28,673
26,763
Balance at
31 December
2021
Value at
31 December
2021 1
Minimum
security
holding
requirement 2
Date security
holding to be
attained
229,659
$1,589,240
$1,300,000
65,265
66,087
$451,634
$457,322
$355,000
$347,105
May-23
Jul-23
Dec-23
1. Based on the closing price of Atlas Arteria securities on 31 December 2021 of $6.92. The requirement is assessed at the higher of the purchase price or market value
of the securities
2. The minimum security holding requirement for Luxembourg executives has been converted to AUD at the 31 December 2021 exchange rate of AUD$1 = Euro 0.6408
Options
No options over unissued ordinary securities of Atlas Arteria existed or were granted to KMP during 2021.
Performance rights held during the year
The terms and conditions of each grant of options affecting remuneration in the current or a future reporting period are as follows:
Grant date1
Performance
period
start date
Vesting and
exercise date
Exercise
price
$
Value per
option at
grant date
$
Expiry date
28 April 2021
1 January 2021 31 December 2023
0.00
28 February 2024
2.95
19 May 2020
1 January 2020 31 December 2022
0.00
28 February 2023
3.43
3 March 2020
1 January 2020 31 December 2022
0.00
28 February 2023
5.02
21 June 20192
1 January 2019 31 December 2021
0.00
28 February 2022
3.63
Performance
achieved
#
To be
determined
To be
determined
To be
determined
Below
threshold
% Vested
%
N/A
N/A
N/A
Nil
1. The performance period for each award commences on 1 January of the relevant award year. Thus the effective commencement dates are 1 January 2019 in respect
of the award granted on 21 June 2019, 1 January 2020 for awards granted on 3 March 2020 and 19 May 2020 and 1 January 2021 for awards granted on 28 April 2021.
2. The 2019 LTI Award was tested following the end of the performance period on 31 December 2021. The result was below threshold and hence the vesting
outcome was nil.
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The numbers of performance rights over ordinary securities in the Groups held during the financial year by each executive KMP
as well as the value of performance rights granted or exercised are set out in the table below. Vesting is subject to achieving
challenging performance hurdles over the performance period.
Name
Graeme Bevans
Nadine Lennie
Vincent Portal-Barrault
Balance at
31 December
2020
#
Granted in the
year ended
31 December
20211
#
Exercised in the
year ended
31 December
2021
#
Lapsed in the
year ended
31 December
2021
#
Balance at
31 December
2021
#
Unvested at
31 December
2021
#
Value of share
rights granted
during year2
$
423,192
164,168
165,790
230,088
87,965
73,741
0
0
0
119,339
43,667
44,381
533,941
208,466
195,150
533,941
208,466
195,150
678,760
259,497
217,536
1. The number of share rights granted during the year under the 2021 Long Term Incentive Awards which are subject to performance hurdles
2. External valuation advice from Aon has been used to determine the value of the share rights awarded during year ended 31 December 2021. The valuation was made
using a Stochastic Model which includes a Monte Carlo simulation model. The value per instrument of the Share Rights granted during the year was $2.95.
3. There were 1,358,192 unvested Share Rights on issue at the time of this Report
Unvested STI Equity Awards during 2021
During 2021, awards of restricted securities equal to 100% of their Awards under the Groups 2020 STI Plan were granted to the
executive KMP. The securities were restricted for 12 months from the end of the 2020 performance period. Following the end
of the restriction period on 31 December 2021, the PRCs confirmed that all executive KMP complied with the terms of the awards
and accordingly, the awards have vested in full.
Details of the Awards are as follows:
Balance at
31 December
2020
#
Granted in the
year ended
31 December
20211
#
Vested in the
year ended
31 December
20212
#
Lapsed in the
year ended
31 December
2021
#
Balance at
31 December
2021
#
Unvested at
31 December
2021
#
Value of
restricted
securities
granted during
year
$
82,369
25,834
28,850
75,929
28,673
26,763
82,369
25,834
28,850
0
0
0
75,929
28,673
26,763
75,929
28,673
26,763
429,000
162,000
151,212
Name
Graeme Bevans
Nadine Lennie
Vincent Portal-Barrault
1. Restricted Securities granted in respect of the 2020 STI Plan. These securities vested in full in January 2022
2. Restricted Securities granted in respect of the 2019 Post Internalisation STI Plan. These securities vested in full in January 2021
9.4 Loans to Directors or related parties
There were no loans to Directors or related parties during 2021.
9.5 Other transactions with KMP
There were no other transactions with KMP.
50 | ATLAS ARTERIA ANNUAL REPORT 2021
DIRECTORS’ REPORTS
The Directors of Atlas Arteria International Limited (‘ATLIX’) and the Directors of Atlas Arteria Limited (‘ATLAX’) submit the
following reports, together with the Financial Report for Atlas Arteria and the Financial Report for ATLAX and its controlled
entities (‘ATLAX Group’), for the year ended 31 December 2021. The information below also forms part of these Directors’ Reports:
− Strategic Framework on page 8 to 9
− Portfolio and Performance review on pages 10 to 17
− Financial Overview on pages 27 to 31
− Information on the Directors, Company Secretaries and Directors’ meetings on pages 23 to 26
− Risk management on pages 20 to 21
− Remuneration report on pages 32 to 50
An Atlas Arteria stapled security comprises one ATLIX share ‘stapled’ to one ATLAX share to create a single listed security traded
on the Australian Securities Exchange. The stapled securities cannot be traded or dealt with separately.
AASB 3 Business Combinations and AASB 10 Consolidated Financial Statements require one of the stapled entities of a stapled
structure to be identified as the parent entity for the purpose of preparing a consolidated Financial Report. In accordance with this
requirement, and consistent with previous reporting periods, ATLIX has been identified as the parent entity of the consolidated
group comprising ATLIX and its controlled entities (‘ATLIX Group’) and ATLAX Group, together comprising ‘Atlas Arteria’, ‘ALX’
or ‘the Groups’.
All values are in Australian Dollars unless otherwise indicated.
Principal activities
The principal activities of Atlas Arteria are to own, operate and develop toll roads globally, creating value for investors over the
long term through considered and disciplined management and sustainable business practices. The roads developed, operated
or managed by Atlas Arteria benefit communities through reduced travel times, greater time certainty, reduced fuel consumption
and carbon emissions.
As of the date of this report, Atlas Arteria owned four businesses. The ATLIX Group has a 31.14% interest in the APRR toll road
group in France and 31.17% interest in Autoroute des deux lacs (‘ADELAC’). Together APRR and ADELAC comprise a 2,318km
motorway network located in the East and South East of France. In the US, Atlas Arteria has 100% of the economic interest in the
Dulles Greenway, a 22km toll road in the Commonwealth of Virginia. In Germany, the ATLIX Group owns 100% of Warnowquerung
GmbH & Co. KG and its general partner (collectively ‘Warnow Tunnel’) in the north-east city of Rostock.
Distributions
Distributions paid to securityholders were as follows:
Dividend of 15.5 cents per stapled security (‘cps’) paid on 5 October 2021 (a)
Dividend of 13.0 cps paid on 9 April 2021 (b)
Dividend of 11.0 cps paid on 5 October 2020 (c)
Total distributions paid
(a) The dividend paid on 5 October 2021 comprised of an ordinary dividend of 15.5 cps. The dividend was paid in full by ATLIX.
(b) The dividend paid on 9 April 2021 comprised of an ordinary dividend of 13.0 cps. The dividend was paid in full by ATLIX.
(c) The dividend paid on 5 October 2020 comprised of an ordinary dividend of 11.0 cps. The dividend was paid in full by ATLIX.
Year ended
31 Dec 2021
$’000
Year ended
31 Dec 2020
$’000
148,648
124,672
–
273,320
–
–
105,492
105,492
ATLAS ARTERIA ANNUAL REPORT 2021 | 51
FINANCIAL REPORTDIRECTORS’ REPORTSREMUNERATION REPORTFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS DIRECTORS’ REPORTS
Review and results of operations
Atlas Arteria has demonstrated resilience this year following the responses to manage COVID-19 throughout 2021, and this led
to a strong statutory net profit of $163.7 million as compared to a loss of $99.2 million in 2020 (as revised, refer to note 3.2.2 of
the Financial Statements). The result reflects the impacts of easing movement restrictions on traffic at APRR over the European
summer in particular, lower finance costs as a result of repayments of holding company debt facility and refinancing the Warnow
Tunnel legacy debt facility, and the higher average value of the Australian dollar over 2021. The prior year results reflect the
decision by the Boards of ATLIX and ATLAX to impair their respective interests in the Dulles Greenway and the negative revenue
impact of COVID-19 on the business.
Further details regarding the financial results of operations can be found in the Financial Overview section on pages 27 to 31.
Strategic Outlook
Atlas Arteria management remains focused on driving long-term value and returns to securityholders. Since internalisation we
have completely transformed the Groups and are well placed to continue to grow and transform. Our strategy remains to reduce
legacy complexity and optimise the value of what we own, undertake active operational management to improve earnings and
value, provide disciplined capital management to underpin strong and sustainable distributions to securityholders, lengthen the
average concession life and to diversify and manage risk.
Further details regarding Atlas Arteria’s operations and the results of those operations including likely developments in future
years can be found in the Our Business section on pages 2 to 17.
Sustainability and Risk Framework
At Atlas Arteria, we are committed to playing a positive role in society and creating long-term value for our stakeholders. We take
our responsibilities seriously, embedding sustainable business practices to support our growth.
Our strategy is informed by our four priority areas: safety; customers and community; our people; and environmental stewardship.
These four priorities are underpinned by business fundamentals that enable us to fulfil our future growth potential. These are good
governance; an ethical culture; an emphasis on sustainable growth and keeping abreast of technology and other innovations.
Further details regarding Atlas Arteria’s approach to risk management can be found on pages 20 to 21.
Significant changes in state of affairs
Capital restructure at Warnow Tunnel
On 18 March 2021 Atlas Arteria executed agreements to restructure the capital arrangements at Warnow Tunnel. A new
€ 115.0 million ($176.1 million) debt facility (which includes fixed and variable tranches), together with a cash injection of
€ 42.0 million ($64.3 million) from Atlas Arteria was used to repay the legacy debt, current hedging arrangements, transaction
costs and reserve funding requirements. The cash injection was funded from cash on the Atlas Arteria balance sheet.
Events occurring after balance sheet date
The Directors of ATLIX and ATLAX are not aware of any matters or circumstances not otherwise dealt with in the Directors’ Reports
that has significantly affected or may significantly affect the operations of the Groups, the results of those operations
or the state of affairs of the Groups in years subsequent to the year ended 31 December 2021.
Indemnification and insurance of officers and auditors
During the year, ATLIX and ATLAX each paid a premium in respect of a contract insuring the Directors and Officers of the Groups
against liabilities incurred in their capacity as Directors and Officers of the ATLAX Group and the ATLIX Group. This does not
include such liabilities that arise from conduct involving a wilful breach of duty by the Directors and Officers. The terms of the
policies prohibit disclosures of the details of the insurance cover and the premiums paid.
The auditors of the Groups are in no way indemnified out of the assets of the Groups.
52 | ATLAS ARTERIA ANNUAL REPORT 2021
Environmental regulation
The operations of the underlying businesses in which the Groups invest are subject to environmental regulations particular
to the countries in which they are located.
Each of our businesses are responsible for adopting and maintaining their own environmental and social risk management
framework that complies with the relevant regulations and standards for environmental and social responsibility matters in the
country and industry in which the business operates.
Our ability to control or influence the ongoing management of these issues will differ for each business based on the extent
of our control/governance rights at each business through the level of ownership influence, board representation and regulatory
environment. The Boards are not aware of any material breaches during the reporting period.
Rounding of amounts in the Directors’ Reports and the Financial Reports
The Groups are of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191 issued
by the Australian Securities and Investments Commission relating to the ‘rounding off’ of amounts in the Directors’ Reports and
Financial Reports. Amounts in the Directors’ Reports and Financial Reports have been rounded to the nearest thousand dollars
in accordance with that instrument, unless otherwise indicated.
Application of class order
The Directors’ Reports and Financial Reports for Atlas Arteria and the ATLAX Group have been presented in the one report,
as permitted by ASIC Class Order 13/1050 and ASIC Corporations (Stapled Group Reports) instrument 2015/838.
Non-audit services
Atlas Arteria has an auditor independence policy which precludes the auditors from performing certain services. This ensures
that the audit firm does not review or audit their own work, act in a management or a decision-making capacity for Atlas Arteria,
act as advocate for Atlas Arteria or jointly share economic risks and rewards. When permissible by this policy, Atlas Arteria may
decide to employ the auditor on assignments additional to their statutory audit duties where the auditor’s specific expertise and
experience with Atlas Arteria are important.
Details of the amounts paid or payable to Atlas Arteria’s auditor (PricewaterhouseCoopers) as well as other audit firms for
services provided during the year are set out in note 7.3 to the Financial Statements on page 95.
The Boards have considered the position and, in accordance with the advice received from their respective Audit and Risk
Committee, are satisfied that the provision of the non-audit services is compatible with the general standard of independence for
auditors imposed by the Corporations Act 2001. The Directors are satisfied that the provision of non-audit services by the auditor,
as set out below, did not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons:
− All non-audit services have been reviewed by the Audit and Risk Committees to ensure they do not impact the impartiality
and objectivity of the auditor; and
− None of the services undermine the general principles relating to auditor independence as set out in APES 110: Code of Ethics
for Professional Accountants, including reviewing or auditing the auditor’s own work, acting in a management or a decision-making
capacity for the company, acting as advocate for the company or jointly sharing economic risk and rewards.
ATLAS ARTERIA ANNUAL REPORT 2021 | 53
FINANCIAL REPORTDIRECTORS’ REPORTSREMUNERATION REPORTFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS DIRECTORS’ REPORTS
Auditor’s Independence Declaration
A copy of the auditor’s independence declaration for ATLAX and its controlled entities during the period, as required under section
307C of the Corporations Act 2001 and an independence declaration for ATLIX and its controlled entities during the period, is set
out on page 55.
Signed in accordance with a resolution of the Directors of Atlas Arteria International Limited:
Jeffrey Conyers
Chair
Atlas Arteria International Limited
Hamilton, Bermuda
23 February 2022
Caroline Foulger
Director
Atlas Arteria International Limited
Hamilton, Bermuda
23 February 2022
Signed in accordance with a resolution of the Directors of Atlas Arteria Limited:
Debbie Goodin
Chair
Atlas Arteria Limited
Melbourne, Australia
24 February 2022
Ariane Barker
Director
Atlas Arteria Limited
Melbourne, Australia
24 February 2022
54 | ATLAS ARTERIA ANNUAL REPORT 2021
Auditor’s Independence Declaration
As lead auditor for the audits of Atlas Arteria International Limited and Atlas Arteria Limited for the year
ended 31 December 2021, I declare that to the best of my knowledge and belief, there have been:
(a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audits; and
(b) no contraventions of any applicable code of professional conduct in relation to the audits.
This declaration is in respect of Atlas Arteria International Limited and the entities it controlled during
the period and Atlas Arteria Limited and the entities it controlled during the period.
Ben Gargett
Partner
PricewaterhouseCoopers
Melbourne
24 February 2022
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PricewaterhouseCoopers, ABN 52 780 433 757
2 Riverside Quay, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001
T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
ATLAS ARTERIA ANNUAL REPORT 2021 | 55
FINANCIAL REPORT
for the year ended 31 December 2021
This report comprises:
Atlas Arteria International Limited and its controlled entities
Atlas Arteria Limited and its controlled entities
CONTENTS
Consolidated Financial Statements
Consolidated Statements of Comprehensive Income
Consolidated Statements of Financial Position
Consolidated Statements of Changes in Equity
Consolidated Statements of Cash Flows
Notes to the Financial Reports
1 Introduction
2 Financial performance
2.1 Profit/(loss) for the year
2.2 Distributions
2.3 Earnings per stapled security
2.4 Income Tax
2.5 Segment information
3 Cash and investments
3.1 Cash, cash equivalents and restricted cash
3.2 Investments accounted for using the equity method
4 Other balance sheet assets and liabilities
4.1 Intangible assets – Tolling concessions
4.2 Goodwill
4.3 Other assets
4.4 Other liabilities
5 Capital and risk management
5.1 Debt at amortised cost
5.2 Contributed equity
56 | ATLAS ARTERIA ANNUAL REPORT 2021
57
58
59
61
62
63
63
65
66
66
68
70
70
71
74
74
76
77
78
79
79
80
5.3 Reserves
5.4 Financial risk and capital management
6 Group disclosures
6.1 Parent entity financial information
6.2 Acquisition of subsidiaries
6.3 Subsidiaries
6.4 Related party disclosures
7 Other disclosures
7.1 Cash flow information
7.2 Contingent liabilities and capital commitments
7.3 Remuneration of auditors
7.4 Share based payments
7.5 Other accounting policies
7.6 Events occurring after balance sheet date
81
83
88
88
89
89
91
93
93
94
95
95
96
97
Directors’ Declaration – Atlas Arteria International Limited 98
Directors’ Declaration – Atlas Arteria Limited
Independent Auditor’s Report
98
99
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Revenue and other income from operations
Total revenue and other income from operations
Operating expenses
Finance costs
Share of net profits/(losses) in associates*
Profit/(loss) from operations before income tax
Income tax benefit/(expense)
Profit/(loss) for the year
Profit/(loss) attributable to:
Equity holders of the parent entity – ATLIX
Equity holders of other stapled entity – ATLAX
(as non-controlling interest/parent entity)
Stapled securityholders
Other comprehensive (loss)/income
Items that may be reclassified to profit or loss:
Exchange differences on translation of consolidated
foreign operations*
Items that will not be reclassified to profit or loss:
Gain/(loss) on cash flow hedges
Other comprehensive (loss)/income
Total comprehensive income/(loss)
Total comprehensive income/(loss) attributable to:
Equity holders of the parent entity – ATLIX
Equity holders of other stapled entity – ATLAX
(as non-controlling interest/parent entity)
Stapled securityholders
Profit/(loss) per share attributable to ATLIX/ATLAX
shareholders
Basic profit/(loss) per share attributable to:
ATLIX (as parent entity)*
ATLAX (as non-controlling interest)
Basic profit/(loss) per ALX stapled security
Diluted profit/(loss) per share attributable to:
ATLIX (as parent entity)*
ATLAX (as non-controlling interest)
Diluted profit/(loss) per ALX stapled security
Note
2.1.1
2.1.2
2.1.3
3.2.2
2.4.1
ALX
ATLAX Group
Year ended
31 Dec 2021
$’000
Year ended
31 Dec 2020
$’000
Year ended
31 Dec 2021
$’000
Year ended
31 Dec 2020
$’000
100,655
(125,430)
(131,346)
284,051
127,930
35,767
163,697
106,650
(279,145)
(87,085)
152,681
(106,899)
7,689
(99,210)
16,415
(25,830)
106
(10,203)
(19,512)
–
13,349
(20,891)
(1,811)
(30,338)
(39,691)
–
(19,512)
(39,691)
183,209
(19,512)
(59,519)
(39,691)
–
–
(19,512)
(39,691)
163,697
(99,210)
(19,512)
(39,691)
(27,851)
(109,704)
5,486
(9,545)
5.3
–
(27,851)
135,846
25,287
(84,417)
(183,627)
–
5,486
(14,026)
–
(9,545)
(49,236)
149,872
(134,391)
–
–
(14,026)
135,846
(49,236)
(183,627)
(14,026)
(14,026)
(49,236)
(49,236)
Cents
Cents
Cents
Cents
2.3
2.3
2.3
2.3
19.1
(2.0)
17.1
19.1
(2.0)
17.1
(6.5)
(4.3)
(10.8)
(6.4)
(4.3)
(10.7)
–
(2.0)
(2.0)
–
(2.0)
(2.0)
–
(4.3)
(4.3)
–
(4.3)
(4.3)
* The ATLIX Group has revised the previous year financial statements. Refer to note 3.2.2 for further details.
The above Consolidated Statements of Comprehensive Income should be read in conjunction with the accompanying notes.
ATLAS ARTERIA ANNUAL REPORT 2021 | 57
FINANCIAL REPORTDIRECTORS’ REPORTSREMUNERATION REPORTFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
Current assets
Cash and cash equivalents
Other assets
Total current assets
Non-current assets
Restricted cash
Intangible assets – Tolling Concessions
Investments in associates*
Goodwill
Deferred tax asset
Property plant and equipment
Derivative financial instruments
Other assets
Total non-current assets
Total assets
Current liabilities
Other liabilities
Debt at amortised cost
Derivative financial instruments
Total current liabilities
Non-current liabilities
Debt at amortised cost
Deferred tax liabilities
Other liabilities
Derivative financial instruments
Total non-current liabilities
Total liabilities
Net assets
Equity
Equity attributable to securityholders of the parent –ATLIX
Contributed equity
Reserves*
Accumulated losses*
ATLIX securityholders’ interest
Equity attributable to other stapled securityholders – ATLAX
Contributed equity
Reserves
Accumulated losses
Other stapled securityholders’ interest
Total equity
ALX
ATLAX Group
As at
31 Dec 2021
$’000
As at
31 Dec 2020
$’000
As at
31 Dec 2021
$’000
As at
31 Dec 2020
$’000
Note
3.1
4.3
3.1
4.1
3.2
4.2
2.4
5.4
4.3
4.4
5.1
5.4
5.1
2.4
4.4
5.4
5.2
5.3
5.2
5.3
229,389
15,796
245,185
260,341
7,301
267,642
226,325
224,089
2,101,414
2,064,339
42,758
6,135
48,893
–
–
52,130
5,598
57,728
–
–
2,591,821
2,685,357
99,986
104,685
13,719
23,536
16,919
188
76
14,091
–
–
–
–
–
13,267
5,541
2,508
–
136
–
6
–
22
4,973,998
5,001,279
5,219,183
5,268,921
105,533
154,426
107,215
164,943
(16,661)
(92,300)
–
(108,961)
(16,300)
(53,212)
(2,515)
(72,027)
(7,396)
(5,494)
–
–
–
–
(7,396)
(5,494)
(1,532,061)
(1,470,960)
(29,704)
(50,463)
–
(40,395)
(38,871)
(12,332)
(1,612,228)
(1,562,558)
(1,721,189)
(1,634,585)
3,497,994
3,634,336
–
–
–
–
(3,596)
(1,600)
–
(3,596)
(10,992)
143,434
–
(1,600)
(7,094)
157,849
3,747,750
3,747,750
(40,049)
(8,233)
(353,141)
(263,030)
3,354,560
3,476,487
–
–
–
–
–
–
–
202,075
27,361
(86,002)
143,434
202,075
21,834
(66,060)
157,849
3,497,994
3,634,336
202,075
27,361
(86,002)
143,434
143,434
202,075
21,834
(66,060)
157,849
157,849
* The ATLIX Group has revised the previous year financial statements. Refer to note 3.2.2 for further details.
The above Consolidated Statements of Financial Position should be read in conjunction with the accompanying notes.
The financial information was approved by the ATLIX Board of Directors on 23 February 2022 and as required by Bermuda
regulations was signed on its behalf by:
Jeffrey Conyers
Atlas Arteria International Limited
Hamilton, Bermuda
58 | ATLAS ARTERIA ANNUAL REPORT 2021
Caroline Foulger
Atlas Arteria International Limited
Hamilton, Bermuda
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
ALX
Attributable to ATLIX securityholders
Contributed
equity
$’000
Reserves
$’000
Accumulated
Losses
$’000
Attributable to
ATLAX
securityholders
$’000
Total
$’000
Total ALX
equity
$’000
Total equity at 31 December 2020
3,747,750
(8,233)
(263,030)
3,476,487
157,849
3,634,336
Adjustment due to change
in accounting standard
–
–
–
–
(430)
(430)
Total equity at 1 January 2021 (restated)
3,747,750
(8,233)
(263,030)
3,476,487
157,419
3,633,906
Profit/(loss) for the year
Exchange differences on translation
of consolidated foreign operations
Total comprehensive income/(expense)
Transactions with equity holders in their
capacity as equity holders:
Employee Performance rights
(refer to note 5.3)
Dividends paid (refer to note 2.2)
–
–
–
–
–
–
–
183,209
183,209
(19,512)
163,697
(33,337)
(33,337)
–
183,209
(33,337)
149,872
5,486
(14,026)
(27,851)
135,846
1,521
–
1,521
–
(273,320)
(273,320)
1,521
(273,320)
(271,799)
41
–
41
1,562
(273,320)
(271,758)
Total equity at 31 December 2021
3,747,750
(40,049)
(353,141)
3,354,560
143,434
3,497,994
ALX
Total equity at 1 January 2020
(as reported)
Adjustment to prior period*
Attributable to ATLIX securityholders
Contributed
equity
$’000
Reserves
$’000
Accumulated
Losses
$’000
Attributable
to ATLAX
securityholders
$’000
Total
$’000
Total ALX
equity
$’000
3,275,591
154,283
(278,815)
3,151,059
192,536
3,343,595
–
4,102
87,916
92,018
–
92,018
Total equity at 1 January 2020 (restated)
3,275,591
158,385
(190,899)
3,243,077
192,536
3,435,613
–
–
–
–
–
–
(59,519)
(59,519)
(39,691)
(99,210)
(100,159)
24,716
571
(74,872)
–
–
–
(100,159)
(9,545)
(109,704)
24,716
571
–
–
24,716
571
(59,519)
(134,391)
(49,236)
(183,627)
Profit/(loss) for the year*
Exchange differences on translation
of consolidated foreign operations*
Change in fair value of the cash flow hedges
Settlement of the hedging instrument
Total comprehensive income/(expense)
Transactions with equity holders in their
capacity as equity holders:
Issue of securities during the period
(refer to note 5.2)
Transaction costs associated with issue
of securities (refer to note 5.2)
Employee Performance rights (refer
to notes 5.2 and 5.3)
Dividends paid (refer to note 2.2)
Total equity at 31 December 2020
(restated)
Other equity transactions (refer to note 5.3)
–
(92,880)
92,880
481,036
(9,738)
–
–
–
–
(9,738)
–
481,036
13,964
495,000
861
–
1,134
–
1,995
–
(105,492)
(105,492)
472,159
(91,746)
(12,612)
367,801
14,549
3,747,750
(8,233)
(263,030)
3,476,487
157,849
3,634,336
516
17
52
–
(9,222)
17
2,047
(105,492)
382,350
* The ATLIX Group has revised the previous year financial statements. Refer to note 3.2.2 for further details.
The above Consolidated Statements of Changes in Equity should be read in conjunction with the accompanying notes.
ATLAS ARTERIA ANNUAL REPORT 2021 | 59
FINANCIAL REPORTDIRECTORS’ REPORTSREMUNERATION REPORTFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
ATLAX Group
Total equity at 31 December 2020
Adjustment due to change in accounting standard
Total equity at 1 January 2021 (restated)
Loss for the year
Exchange differences on translation of consolidated foreign operations
Total comprehensive income/expense
Transactions with equity holders in their capacity as equity holders:
Employee performance rights (refer to note 5.3)
Attributable to ATLAX securityholders
Contributed
equity
$’000
Reserves
$’000
Accumulated
Losses
$’000
Total
$’000
202,075
21,834
(66,060)
157,849
–
–
202,075
21,834
–
–
–
–
–
–
5,486
5,486
41
41
(430)
(66,490)
(19,512)
–
(19,512)
(430)
157,419
(19,512)
5,486
(14,026)
–
–
41
41
Total equity at 31 December 2021
202,075
27,361
(86,002)
143,434
ATLAX Group
Total equity at 1 January 2020
Loss for the year
Exchange differences on translation of consolidated foreign operations
Total comprehensive income/(expense)
Transactions with equity holders in their capacity as equity holders:
Employee performance rights (refer to notes 5.2 and 5.3)
Other equity transactions (refer to note 5.3)
Issue of securities during the year
Transaction costs associated with issue of securities
Total equity at 31 December 2020
Attributable to ATLAX securityholders
Contributed
equity
$’000
Reserves
$’000
Accumulated
Losses
$’000
187,571
(6,642)
–
–
–
24
–
13,964
516
14,504
202,075
–
(9,545)
(9,545)
11,607
(39,691)
–
(39,691)
28
–
37,993
(37,976)
–
–
–
–
38,021
21,834
(37,976)
(66,060)
Total
$’000
192,536
(39,691)
(9,545)
(49,236)
52
17
13,964
516
14,549
157,849
The above Consolidated Statements of Changes in Equity should be read in conjunction with the accompanying notes.
60 | ATLAS ARTERIA ANNUAL REPORT 2021
CONSOLIDATED STATEMENTS OF CASH FLOWS
ALX
ATLAX Group
Year ended
31 Dec 2021
$’000
Year ended
31 Dec 2020
$’000
Year ended
31 Dec 2021
$’000
Year ended
31 Dec 2020
$’000
Cash flows from operating activities
Toll revenue received (net of transaction processing fees)
99,739
93,368
Interest received
Interest paid
Other income received
Property taxes paid
Manager’s and adviser’s base fees paid
142
(386)
3,645
(2,360)
(457)
3,914
(728)
1,760
(5,249)
(6,829)
–
86
(5)
–
192
–
11,261
8,680
–
–
–
(94)
Payments to suppliers and employees (inclusive of GST/VAT)
(53,203)
(46,903)
(17,816)
(15,439)
Net income taxes (paid)/received
Net cash flows from operating activities
Cash flows from investing activities
Distributions from associates
Payment for purchase of investments
Payments to suppliers associated with the purchase of investments
Other investments
Additions to tolling concessions
Purchase of property, plant and equipment
Net cash flows from investing activities
Cash flows from financing activities
–
(4)
–
47,120
39,329
(6,474)
307,842
310,866
–
–
(2,121)
(207)
(1,466)
(1,272,692)
(2,712)
(1,593)
(9,104)
(1,438)
304,048
(976,673)
Repayment of debt (including transaction costs)
(285,788)
(618,857)
Interest paid on debt
Proceeds from borrowings (net of transaction costs)
Proceeds from issue of securities (net of transaction costs)
Transfer (to)/from restricted cash
Dividends paid
Lease principal payments
Net cash flows from financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Effects of exchange rate movements on cash and cash equivalents
Cash and cash equivalents at the end of the year
(7,089)
176,137
–
9,800
(13,891)
–
483,936
8,744
(273,320)
(105,492)
(1,541)
(1,061)
(381,801)
(246,621)
(30,633)
(1,183,965)
260,341
1,450,221
(319)
229,389
(5,915)
260,341
(4)
(6,665)
–
–
–
(266)
–
(887)
(1,153)
–
–
–
12,732
–
–
(197)
12,535
4,717
48,612
(1,199)
52,130
–
–
–
(640)
–
(1,004)
(1,644)
–
–
–
–
–
–
(530)
(530)
(8,648)
52,130
(724)
42,758
The above Consolidated Statements of Cash Flows should be read in conjunction with the accompanying notes.
ATLAS ARTERIA ANNUAL REPORT 2021 | 61
FINANCIAL REPORTDIRECTORS’ REPORTSREMUNERATION REPORTFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS NOTES TO THE FINANCIAL REPORTS
Introduction
1
Atlas Arteria – Stapled security
An Atlas Arteria (‘ALX’) stapled security comprises one Atlas Arteria International Limited (‘ATLIX’) share ‘stapled’ to one Atlas
Arteria Limited (‘ATLAX’) share to create a single listed security traded on the Australian Securities Exchange. The stapled
securities cannot be traded or dealt with separately.
AASB 3 Business Combinations and AASB 10 Consolidated Financial Statements require one of the stapled entities of a stapled
structure to be identified as the parent entity for the purpose of preparing a consolidated Financial Report. In accordance with this
requirement, ATLIX has been identified as the parent entity of the consolidated group comprising ATLIX and its controlled entities
(‘ATLIX Group’) and ATLAX and its controlled entities (‘ATLAX Group’), together comprising ‘Atlas Arteria’, ‘ALX’ or ‘the Groups’.
As permitted by ASIC Class Order 13/1050 and ASIC Corporations (Stapled Group Reports) Instrument 2015/838, these reports
consist of the Financial Report of ATLIX Group at the end of and during the year and separately the Financial Report of the ATLAX
Group at the end of and during the year.
The Financial Report of Atlas Arteria should be read in conjunction with the separate Financial Report of the ATLAX Group
presented in these reports for the year ended 31 December 2021.
Basis of preparation
Both ATLIX and ATLAX are for-profit entities for the purpose of preparing the Financial Reports.
The Financial Reports were authorised for issue by the Directors of the ATLIX Board and the ATLAX Board (together, the ‘Boards’)
on 23 February 2022 and 24 February 2022 respectively. The Boards have the power to amend and reissue the Financial Reports.
The Financial Reports are general purpose financial reports that:
− have been prepared in accordance with Australian Accounting Standards and Interpretations issued by the Australian Accounting
Standards Board (‘AASB’) and the Corporations Act 2001 (where applicable)
− have also been prepared in accordance with and comply with International Financial Reporting Standards (’IFRS’) as issued
by the International Accounting Standards Board (‘IASB’)
− include the assets and liabilities of all subsidiaries as at 31 December 2021 and the results of the subsidiaries for the year then
ended. Inter-entity transactions with, or between, subsidiaries are eliminated in full on consolidation
− have been prepared under the historical cost conventions except for certain assets and liabilities, which have been measured
at fair value
− are presented in Australian dollars with all values rounded to the nearest thousand dollars unless otherwise stated,
in accordance with ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191.
Significant accounting policies and key judgements and estimates are contained in shaded text and included in the relevant note.
These policies have been consistently applied to all periods presented, unless otherwise stated. Refer to note 7.5 for other
accounting policies which have not been presented along with their respective notes.
New and amended standards adopted by the Groups
During the year ended 31 December 2021 the Groups adopted IFRIC Interpretations Committee Agenda item 5 – Cloud computing
arrangement costs, and an adjustment has been taken through opening retained earnings accordingly. The impact is not material
to the Groups (refer to Statement of Changes in Equity).
Critical accounting estimates and judgements
The preparation of the Financial Reports in accordance with Australian Accounting Standards requires the use of certain critical
accounting estimates. It also requires the Directors to exercise judgement in the process of applying the accounting policies.
Estimates and judgements are continually evaluated and are based on historic experience and other factors, including reasonable
expectations of future events. The Directors believe the estimates used in the preparation of the Financial Reports are reasonable.
Actual results in the future may differ from those reported.
Significant judgements made in applying accounting policies, estimates and assumptions that have a risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next year are discussed in the following notes:
− Deferred tax assets (Note 2.4)
− Control assessment (Note 3.2 and 6.2)
− Impairment of assets and associates (Note 3.2)
− Intangible assets – Tolling concessions (Note 4.1)
− Provision for toll road maintenance (Note 4.4)
62 | ATLAS ARTERIA ANNUAL REPORT 2021
2 Financial performance
2.1 Profit/(loss) for the year
Revenue recognition
Revenue and other income is recognised as follows:
Toll revenue
Toll revenue from customers is earned as performance obligations are satisfied. A singular performance obligation has been
assessed as the use of the road, and the transaction price, which is calculated based on passing through toll points, is fully
allocated to this performance obligation. Toll revenue is recognised at the time the customers use the road.
Other income
Other income from customers consists of revenue earned in respect to rental income from cell towers and income from
advertising hoardings on the toll road. Other income is recognised over the period of the contract in accordance with the
contracts governing these services as performance obligations are satisfied. Other income for the ATLAX Group comprises
advisory service fees.
Interest income
Interest income is brought to account on an accruals basis.
Construction revenue
Revenue for the construction of service concession infrastructure assets is recognised in line with the progress of construction
services provided over time. Progress is measured by reference to costs incurred to date.
The profit/(loss) from operations before income tax includes the following specific items of income and expense:
2.1.1 Revenue and other income from operations
Revenue from operations:
Toll revenue
Other income
Construction revenue from road development activities
Interest income
ALX
ATLAX Group
Year ended
31 Dec 2021
$’000
Year ended
31 Dec 2020
$’000
Year ended
31 Dec 2021
$’000
Year ended
31 Dec 2020
$’000
99,530
95,253
–
–
985
–
140
1,030
8,273
2,094
16,329
13,153
–
86
–
196
Total revenue and other income from operations
100,655
106,650
16,415
13,349
ATLAS ARTERIA ANNUAL REPORT 2021 | 63
NOTES TO THE FINANCIAL REPORTSFINANCIAL REPORTDIRECTORS’ REPORTSREMUNERATION REPORTFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS 2.1.2 Operating expenses
Operating expenses
Amortisation of tolling concession
Cost of operations:
Toll road maintenance expenses
Other operating expenses
Employment costs
Total cost of operations
Consulting and administration fees
Manager’s and adviser’s base fees
Impairment loss on tolling concession (refer to note 4.1)
Construction costs from road development activities
Other expenses
Depreciation and amortisation
Total operating expenses
2.1.3 Finance costs
Interest on debt
Mark to market (gain)/loss on derivatives
Fee on early repayment of borrowings
Warnow Tunnel removal of fair value adjustment with legacy
debt repayment (refer to note 5.1)
Net (gain)/loss on cash flow hedge ineffectiveness
Amortisation of issue cost on borrowings from financial institutions
Net foreign exchange (gains)/losses
Other interest
Total finance costs
ALX
ATLAX Group
Year ended
31 Dec 2021
$’000
Year ended
31 Dec 2020
$’000
Year ended
31 Dec 2021
$’000
Year ended
31 Dec 2020
$’000
60,039
66,439
14,604
6,875
26,604
48,083
4,748
–
–
–
11,119
1,441
12,020
8,711
21,660
42,391
5,461
2,051
143,896
8,273
9,634
1,000
125,430
279,145
–
–
65
15,463
15,528
–
–
89
10,883
10,972
3,204
3,093
–
–
–
6,525
573
25,830
–
–
–
6,507
319
20,891
ALX
ATLAX Group
Year ended
31 Dec 2021
$’000
Year ended
31 Dec 2020
$’000
Year ended
31 Dec 2021
$’000
Year ended
31 Dec 2020
$’000
80,211
(632)
762
50,332
–
76
(1,042)
1,639
131,346
96,239
(1,212)
–
–
(420)
802
(9,745)
1,421
87,085
–
–
–
–
–
–
–
–
–
–
–
–
(115)
9
(106)
1,777
34
1,811
64 | ATLAS ARTERIA ANNUAL REPORT 2021
NOTES TO THE FINANCIAL REPORTS 2.2 Distributions
A distribution payable is recognised for the amount of any distribution declared, or publicly recommended by the Directors
on or before the end of the year but not distributed at balance date.
Distributions paid
Dividend paid on 5 October 2021 (a)
Dividend paid on 9 April 2021 (b)
Dividend paid on 5 October 2020 (c)
Total distributions paid
Distributions paid
Dividend per stapled security paid on 5 October 2021 (a)
Dividend per stapled security paid on 9 April 2021 (b)
Dividend per stapled security paid on 5 October 2020 (c)
Total distributions paid
(a) The dividend paid on 5 October 2021 comprised of an ordinary dividend of 15.5 cps.
(b) The dividend paid on 9 April 2021 comprised of an ordinary dividend of 13.0 cps.
(c) The dividend paid on 5 October 2020 comprised of an ordinary dividend of 11.0 cps.
ALX
ATLAX Group
Year ended
31 Dec 2021
$’000
Year ended
31 Dec 2020
$’000
Year ended
31 Dec 2021
$’000
Year ended
31 Dec 2020
$’000
148,648
124,672
–
273,320
–
–
105,492
105,492
–
–
–
–
–
–
–
–
Cents per
stapled
security
Cents per
stapled
security
Cents per
stapled
security
Cents per
stapled
security
15.5
13.0
–
28.5
–
–
11.0
11.0
–
–
–
–
–
–
–
–
ATLAS ARTERIA ANNUAL REPORT 2021 | 65
NOTES TO THE FINANCIAL REPORTSFINANCIAL REPORTDIRECTORS’ REPORTSREMUNERATION REPORTFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS 2.3 Earnings per stapled security
Basic earnings per stapled security
Basic earnings per stapled security is determined by dividing the profit attributable to securityholders by the weighted average
number of securities on issue during the year.
Diluted earnings per stapled security
Diluted earnings per stapled security is calculated by adjusting basic earnings per stapled security for the effects of all dilutive
potential ordinary stapled securities.
Basic earnings/(loss) per ATLIX/ATLAX share*
Diluted earnings/(loss) per ATLIX/ATLAX share*
Earnings/(loss) used in the calculation of basic and diluted
profit/(loss) per ATLIX/ATLAX share *
Attributable to ATLIX
equity holders
Attributable to ATLAX
equity holders
Year ended
31 Dec 2021
$’000
Year ended
31 Dec 2020
$’000
Year ended
31 Dec 2021
$’000
Year ended
31 Dec 2020
$’000
19.1
19.1
(6.5)
(6.4)
(2.0)
(2.0)
(4.3)
(4.3)
183,209
(59,519)
(19,512)
(39,691)
Number
Number
Number
Number
Weighted average number of shares used in calculation of basic
earnings/(loss) per ATLIX/ATLAX share
959,018,226
922,912,181
959,018,226
922,912,181
Adjustment for employee performance rights (a)
1,172,299
1,028,860
1,172,299
1,028,860
Weighted average number of shares used in calculation of diluted
earnings/(loss) per ATLIX/ATLAX share
960,190,525
923,941,041
960,190,525
923,941,041
* The ATLIX Group has revised the previous year financial statements. Refer to note 3.2.2 for further details.
(a) Diluted earnings per ALX stapled security is adjusted for employee performance rights. Refer to note 7.4 for details.
The basic profit/(loss) per ALX stapled security for the year ended 31 December 2021 was 19.1 cps (2020: (6.5) cps) and the diluted
profit/(loss) per ALX stapled security for the year ended 31 December 2021 was 19.1 cps (2020: (6.4) cps), using ALX profit/(loss)
attributable to ALX stapled securityholders of $163.7 million (2020: ($99.2) million).
2.4 Income Tax
The income tax expense or benefit for the year is the tax payable on the current year’s taxable income based on the national
income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary
differences between the tax bases of assets and liabilities and their carrying amounts in the Financial Reports, and to unused
tax losses.
Deferred income tax is determined using the balance sheet method, being the temporary differences arising between the
tax bases of assets and liabilities and their carrying amounts in the Financial Reports. Deferred tax assets are recognised
for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available
to utilise those temporary differences and losses. However, the deferred income tax is not accounted for if it arises from initial
recognition of an asset or liability in a transaction other than a business combination that at the time of transaction affects
neither accounting nor taxable profit nor loss. Deferred income tax is determined using tax rates (and laws) that have been
enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax
asset is realised or the deferred income tax liability is settled. Deferred tax assets and liabilities are offset when there is a
legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same
taxation authority.
Under current Bermudian law, ATLIX will not be subject to any income, withholding or capital gains taxes in Bermuda.
Controlled entities of ATLIX that are subject to taxes in their jurisdictions recognise income tax using the balance sheet
approach of tax effect accounting.
66 | ATLAS ARTERIA ANNUAL REPORT 2021
NOTES TO THE FINANCIAL REPORTS 2.4.1 Income tax (benefit)/expense
This note provides an analysis of the Groups’ income tax expense, shows what amounts are recognised directly in equity and how
the tax expense is affected by non-assessable and non-deductible items. It also explains significant estimates made in relation
to the Groups’ tax position.
(a) Income tax (benefit)/expense
Income Tax expense
Current tax
Deferred tax
Total income tax (benefit)/expense
(b) Reconciliation of income tax (benefit)/expense to prima facie tax payable
Profit/(loss) from operations before income tax*
Prima facie income tax on profit/(loss) at the Australian tax rate of 30%*
Impact of different tax rates of operations in jurisdictions other
than Australia
Tax effect of amounts that are not deductible/(taxable) in calculating
taxable income:
Non-deductible expenditure
Share of net (profits)/losses in associates*
Temporary differences not brought to account
Deferred tax assets on taxable losses not brought to account
Temporary differences not previously recognised
Initial recognition of prior period unused tax losses
Unused tax losses recouped to reduce current tax expense
Aggregate income tax (benefit)/expense
ALX
ATLAX Group
Year ended
31 Dec 2021
$’000
Year ended
31 Dec 2020
$’000
Year ended
31 Dec 2021
$’000
Year ended
31 Dec 2020
$’000
6,864
(42,631)
(35,767)
14
(7,703)
(7,689)
–
–
–
–
–
–
127,930
38,379
(106,899)
(32,070)
(19,512)
(5,854)
(39,691)
(11,907)
9,764
6,071
1
1,766
32,280
(85,215)
(1,299)
6,658
(465)
(29,016)
(6,853)
(35,767)
63,794
(45,803)
(8,107)
8,426
–
–
–
(7,689)
561
3,061
716
1,515
–
–
–
–
695
9,101
423
(78)
–
–
–
–
* The ATLIX Group has revised the previous year financial statements. Refer to note 3.2.2 for further details.
(c) Tax losses
Unused tax losses for which no deferred tax asset has been recognised
Potential tax benefit of unused tax losses
386,728
91,271
377,510
97,972
337,417
79,583
298,010
78,658
Neither Atlas Arteria nor the ATLAX Group recognised any current or deferred tax that was debited or credited directly to equity.
Tax losses that arose in the U.S. on or before 31 December 2017 of US$158.6 million expire after 20 years and tax losses that arose
in Luxembourg from 1 January 2017 of € 25.0 million expire after 17 years.
ATLAS ARTERIA ANNUAL REPORT 2021 | 67
NOTES TO THE FINANCIAL REPORTSFINANCIAL REPORTDIRECTORS’ REPORTSREMUNERATION REPORTFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS 2.4.2 Deferred tax assets and liabilities
A deferred tax asset of $35.7 million (€ 22.9 million) and an income tax benefit have been recognised primarily as a result of carry
forward tax losses associated with holdings in Warnow Tunnel. These have been recognised following the capital restructure which
closed in March 2021, which strengthened the probability of future taxable profits being available to utilise the losses.
The movement in the balance of deferred tax assets (‘DTA’) and deferred tax liabilities (‘DTL’) is as follows:
ALX
ATLAX Group
Current and
prior year
losses
$’000
Fixed assets/
intangibles
$’000
Provisions
$’000
Other
$’000
Total
$’000
Total
$’000
Deferred tax relates to the following:
Opening balance at 1 January 2020
(Charged)/ credited to income
Foreign exchange movement
Impairment impact
Closing balance at 31 December 2020
(Charged)/ credited to income
Foreign exchange movement
Losses recognised
–
–
–
–
–
(6,853)
(338)
42,861
(50,541)
1,060
3,332
5,754
(40,395)
4,944
(1,300)
–
–
–
–
–
–
–
–
–
–
–
573
20
–
(5,747)
67
–
Closing balance at 31 December 2021
35,670
(36,751)
593
(5,680)
(50,541)
1,060
3,332
5,754
(40,395)
(7,083)
(1,551)
42,861
(6,168)
–
–
–
–
–
–
–
–
–
Deferred tax asset
The balance comprises temporary differences attributable to:
– Current and prior year losses
– Provisions
– Other
Total deferred tax asset
Set-off of deferred tax liabilities pursuant to set-off provisions
Net deferred tax assets
Deferred tax liability
The balance comprises temporary differences attributable to:
– Fixed assets/intangibles
– Other
Total deferred tax liability
Set-off of deferred tax liabilities pursuant to set-off provisions
Net deferred tax liabilities
2.5 Segment information
ALX
ATLAX Group
Year ended
31 Dec 2021
$’000
Year ended
31 Dec 2020
$’000
Year ended
31 Dec 2021
$’000
Year ended
31 Dec 2020
$’000
35,670
593
309
36,572
(13,036)
23,536
(36,751)
(5,989)
(42,740)
13,036
(29,704)
–
–
–
–
–
–
(40,395)
–
(40,395)
–
(40,395)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Operating segments are reported in a manner consistent with the internal reporting based on a proportionately consolidated
basis with a focus on revenue down to EBITDA and EBITDA margin provided to the chief operating decision makers. The chief
operating decision makers are responsible for allocating resources and assessing performance of the operating segments.
2.5.1 Description of segments
Management has determined the operating segments based on the reports reviewed by the Boards. The Boards do not manage
the day-to-day activities of the business. The Directors have appointed a management team to run and manage the ongoing
operations of the business.
Management considers the business from the aspect of each of the businesses and have identified four operating segments
for Atlas Arteria and one operating segment for the ATLAX Group. The segments of Atlas Arteria are the investments in APRR,
ADELAC, Dulles Greenway and Warnow Tunnel. The only segment for the ATLAX Group is the investment in Dulles Greenway.
68 | ATLAS ARTERIA ANNUAL REPORT 2021
NOTES TO THE FINANCIAL REPORTS 2.5.2 Segment information
The proportionally consolidated segment information for the reportable segments for the year ended 31 December 2021, based
on Atlas Arteria’s economic ownership interest is as follows:
ALX
Year ended
APRR
$’000
ADELAC
$’000
Segment revenue
31-Dec-21
1,260,656
Segment expenses
Segment EBITDA
EBITDA margin
31-Dec-20
1,115,693
31-Dec-21
31-Dec-20
31-Dec-21
31-Dec-20
31-Dec-21
31-Dec-20
(331,928)
(320,709)
928,728
794,984
74%
71%
23,513
21,351
(3,944)
(3,928)
19,569
17,423
83%
82%
Warnow
Tunnel
$’000
19,995
21,197
(6,342)
(6,126)
13,653
15,071
68%
71%
Dulles
Greenway
$’000
80,460
74,814
(18,915)
(21,367)
61,545
53,447
76%
71%
Total ALX
$’000
Total ATLAX
$’000
1,384,624
1,233,055
(361,129)
(352,130)
1,023,495
880,925
74%
71%
10,808
10,050
(2,541)
(2,870)
8,267
7,180
76%
71%
The segment revenue disclosed in the table above primarily relates to toll revenue generated by businesses from external customers.
The segment expenses disclosed in the table above relate directly to costs associated with the operation of that segment. The
segment assets and liabilities are disclosed in note 3.2.3 with the exception of Warnow Tunnel whose are $254.8 million (2020:
$230.8 million) and liabilities are $227.3 million (2020: $220.4 million) and Dulles Greenway whose assets are $2,224.7 million
(2020: $2,152.1 million) and liabilities are $1,517.2 million (2020: $1,407.5 million).
A reconciliation of the Groups’ segment revenue and EBITDA to its total revenue and profit from operations before income tax
is provided as follows:
Reconciliation of segment revenue to revenue
Segment revenue
Revenue attributable to non-consolidated investments
Construction revenue from road development activities
Unallocated revenue and other income
Total revenue and other income from operations
Reconciliation of segment EBITDA to profit/(loss) before income tax
Segment EBITDA
EBITDA attributable to non-consolidated investments
Construction expense from road development activities
Impairment of Dulles Greenway
Unallocated revenue
Corporate costs
Amortisation and depreciation
Unallocated expenses
Finance costs
Share of net profits/(losses) in associates*
Profit/(loss) from operations before income tax
ALX
ATLAX Group
As at
31 Dec 2021
$’000
As at
31 Dec 2020
$’000
As at
31 Dec 2021
$’000
As at
31 Dec 2020
$’000
1,384,624
1,233,055
(1,284,169)
(1,137,044)
–
200
8,273
2,366
100,655
106,650
1,023,495
(948,297)
–
–
200
(29,068)
(61,480)
(9,625)
(131,346)
284,051
127,930
880,925
(812,407)
(8,273)
(143,896)
2,366
(22,339)
(67,439)
(1,432)
(87,085)
152,681
(106,899)
10,808
(10,808)
–
16,415
16,415
8,267
(8,267)
–
–
16,415
(25,257)
(573)
–
106
(10,203)
(19,512)
10,050
(10,050)
–
13,349
13,349
7,180
(7,180)
–
–
13,349
(20,572)
(319)
–
(1,811)
(30,338)
(39,691)
* The ATLIX Group has revised the previous year financial statements. Refer to note 3.2.2 for further details.
ATLAS ARTERIA ANNUAL REPORT 2021 | 69
NOTES TO THE FINANCIAL REPORTSFINANCIAL REPORTDIRECTORS’ REPORTSREMUNERATION REPORTFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS 3 Cash and investments
3.1 Cash, cash equivalents and restricted cash
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions and other short term and
highly liquid investments (maturity of less than 3 months) that are readily convertible to cash with insignificant risk of changes
in value. Restricted cash includes funds held in escrow or amounts otherwise not available to meet short term commitments
of the Groups and is classified as a non-current asset.
Current
Cash and cash equivalents
Non-current
Restricted cash
ALX
ATLAX Group
As at
31 Dec 2021
$’000
As at
31 Dec 2020
$’000
As at
31 Dec 2021
$’000
As at
31 Dec 2020
$’000
229,389
229,389
260,341
260,341
42,758
42,758
52,130
52,130
226,325
226,325
224,089
224,089
–
–
–
–
3.1.1 Cash and cash equivalents
During the year cash on hand was held in bank accounts earning money market rates of interest between -2.28% and 0.20%
(2020: -2.71% and 1.66%) per annum.
Cash equivalents include TRIP II’s money market deposits which mature within 30 days and paid interest between 0.01% and
0.04% (2020: 0.1% and 1.64%) per annum.
3.1.2 Restricted cash
This comprises funds held in escrow pursuant to the TRIP II bond indenture agreements and Warnow Tunnel loan agreements.
Discussion of the Groups’ policies concerning the management of credit risk can be found in note 5.4.4.
70 | ATLAS ARTERIA ANNUAL REPORT 2021
NOTES TO THE FINANCIAL REPORTS 3.2 Investments accounted for using the equity method
Associates
Associates are entities over which the Groups have significant influence but not control. Investments in associates are
accounted for using the equity method of accounting, after initially being recognised at cost. The Groups’ investment
in associates includes the fair value of goodwill (net of any accumulated impairment loss) identified on acquisition.
The Groups’ share of their associates’ post-acquisition profits or losses is recognised in profit or loss. The cumulative
post-acquisition movements are adjusted against the carrying amount of the investment. Dividends receivable from
associates reduce the carrying amount of the investment.
When the Groups’ share of losses in an associate equals or exceeds its interest in the associate, including any long term
interests that, in substance, form part of the Groups’ net investment in the associate, the Groups do not recognise further
losses, unless they have incurred obligations or made payments on behalf of the associate.
Unrealised gains on transactions between the Groups and their associates are eliminated to the extent of the Groups’ interest
in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the
asset transferred. Accounting policies of associates have been changed where necessary to ensure consistency with the
policies adopted by the Groups.
Impairment of assets and reversal of impairment
An investment accounted for using the equity method is assessed for impairment whenever there are indications that the
carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying
amount exceeds its recoverable amount.
The recoverable amount of the asset is determined as the higher of the fair value less costs of disposal and the value in use.
If it is not possible to determine a recoverable amount for the individual assets, the assets are assessed together in the smallest
group of assets which generate cash inflows that are largely independent of those from other assets or groups of assets.
Discounted cash flow analysis is the methodology applied in determining recoverable amount. Discounted cash flow analysis
is the process of estimating future cash flows that are expected to be generated by an asset and discounting these to their
present value by applying an appropriate discount rate. The discount rate applied to the cash flows of a particular asset is
reflective of the uncertainty associated with the future cash flows. Periodically, independent traffic forecasting experts provide
a view on the most likely level of traffic to use the toll road having regard to a wide range of factors including development
of the surrounding road network and economic growth in the traffic corridor.
Assets (other than goodwill) that have suffered an impairment are reviewed for possible reversal of the impairment at the end
of each reporting period. AASB 136 Impairment of Assets states that impairment losses shall be reversed if, and only if, there
has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was
recognised and the estimated service potential of the asset has increased. The impairment loss is not reversed just because
of the passage of time, even if the recoverable amount of the asset becomes higher than its carrying value.
Investment in associates and joint venture – equity method *
ALX
ATLAX Group
As at
31 Dec 2021
$’000
2,591,821
2,591,821
As at
31 Dec 2020
$’000
As at
31 Dec 2021
$’000
As at
31 Dec 2020
$’000
2,685,357
2,685,357
99,986
99,986
104,685
104,685
* The ATLIX Group has revised the previous year financial statements. Refer to note 3.2.2 for further details.
ATLAS ARTERIA ANNUAL REPORT 2021 | 71
NOTES TO THE FINANCIAL REPORTSFINANCIAL REPORTDIRECTORS’ REPORTSREMUNERATION REPORTFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS Information relating to material associates and joint arrangements is set out below:
3.2.1 Carrying amounts
Country of
Incorporation/
Principal Place
of Business
Name of Entity (a)
MAF2 (b)*
Luxembourg
TRIP II (c), (d)
USA
Principal Activity
Investment in
toll road network
located in the
east of France
(APRR and
ADELAC)
Investment in the
Dulles Greenway
toll road located
in northern
Virginia, USA
ALX Economic
interest
As at
31 Dec 2021
and
31 Dec 2020
%
ALX
As at
31 Dec 2021
$’000
As at
31 Dec 2020
$’000
ATLAX
Economic
Interest
As at
31 Dec 2021
and
31 Dec 2020
%
ATLAX Group
As at
31 Dec 2021
$’000
As at
31 Dec 2020
$’000
62.3/62.3
2,591,821
2,685,357
-/-
–
–
-/-
–
–
13.4/13.4
99,986
104,685
* The ATLIX Group has revised the previous year financial statements. Refer to note 3.2.2 for further details.
(a) All associates and joint arrangements have 31 December year end reporting requirements except for MAF2 which has a 31 March year end.
(b) Atlas Arteria’s investment in MAF2 is classified as an associate as any decision made with regard to the relevant activities requires 85% of the voting members
to proceed.
(c) The ATLAX Group has a 13.4% interest in TRIP II, the concessionaire for Dulles Greenway is accounted for as an equity accounted associate. Atlas Arteria has
a 100% estimated economic interest in TRIP II after combining ATLAX Group’s 13.4% equity interest with ATLIX Group’s 86.6% economic interest. Accordingly,
TRIP II is accounted for as a subsidiary of Atlas Arteria.
(d) TRIP II is in ‘lockup’ under its debt documents, meaning that it is currently unable to make distributions to Atlas Arteria or the ATLAX Group.
3.2.2 Movement in carrying amounts
ALX Group
ATLAX Group
Year ended
31 Dec 2021
$’000
Year ended
31 Dec 2020
$’000
Year ended
31 Dec 2021
$’000
Year ended
31 Dec 2020
$’000
Carrying amount at the beginning of the year*
Share of profits/(losses) after income tax*
Distributions received/receivable
Liquidation of CSP and ITRP
Additional investment in MAF2
Transaction costs
Foreign exchange movement*
Impairment of asset (a)
2,685,357
1,455,847
284,051
(314,750)
–
–
–
(62,837)
–
152,681
(137,592)
(17)
1,066,253
206,235
(58,050)
–
104,685
(10,203)
144,589
(12,037)
–
–
–
–
5,504
–
–
(17)
–
–
(11,250)
(16,600)
104,685
Carrying amount at the end of the period
2,591,821
2,685,357
99,986
* During the year Atlas Arteria reviewed the historical equity accounting for its interests in MAF2, dating back to the time when MAF2 became an associate of the
Groups. As a result of this review, a number of adjustments were identified as being required in prior years’ financial statements. None of these adjustments impact
the underlying results of the associate. The adjustments are as follows:
– Share of net profits/(losses) of associates decrease by $43.4 million
– Exchange differences on translation of foreign operations increase by $1.3 million
– Opening accumulated losses decrease of $87.9 million
– Opening reserves increase of $4.1 million
– Investments in associates increase of $49.9 million
– Basic and diluted earnings per share decrease of 4.7 cps
(a) Impairment of asset in the prior year includes an impairment on Dulles Greenway of $22.4 million (refer to note 4.1) offset by the impact of the deferred
tax liability $5.8 million.
72 | ATLAS ARTERIA ANNUAL REPORT 2021
NOTES TO THE FINANCIAL REPORTS 3.2.3 Summarised financial information for material associates
The following tables summarise financial information for those associates that are material to Atlas Arteria and ATLAX Group.
The information disclosed reflects the amounts presented in the Financial Reports of those relevant entities and not Atlas Arteria’s
or ATLAX Group’s share of those amounts. Additional disclosures at the end of the tables reflect the adjustments required for
relevant disclosure in the Atlas Arteria or ATLAX Group accounts.
Summarised Statement of Financial Position
Total current assets
Total non-current assets (unimpaired)*
Total current liabilities
Total non-current liabilities*
Net assets
Reconciliation to carrying amounts:
Opening net assets*
Profit/(loss) for the period*
Distributions paid
Additional investment*
MAF2 (a)
TRIP II
As at
31 Dec 2021
$’000
As at
31 Dec 2020
$’000
As at
31 Dec 2021
$’000
As at
31 Dec 2020
$’000
1,324,917
1,250,831
84,748
73,143
12,596,913
13,367,512
2,435,969
2,359,625
(1,354,879)
(1,670,035)
(94,855)
(79,567)
(8,179,770)
(8,423,132)
(1,433,346)
(1,338,848)
4,387,181
4,525,176
992,516
1,014,353
4,525,176
3,160,775
1,014,353
1,198,144
456,060
(494,287)
261,643
(220,924)
–
1,702,252
(75,952)
(89,606)
–
–
–
–
Foreign exchange and other equity movements*
(99,768)
(378,570)
54,115
(94,185)
Closing net assets
ATLIX Group's share in %
ATLIX Group's share of net assets in $*
ATLAX Group’s share in %
ATLAX Group’s share of net assets in $
Atlas Arteria's carrying amount*
Accumulated impairment of non-current assets
Impairment of asset(b)
ATLAX Group’s carrying amount
4,387,181
4,525,176
992,516
1,014,353
62.3%
62.3%
2,733,214
2,819,185
–
–
–
–
–
–
–
–
13.4%
13.4%
133,325
136,258
2,591,821
2,685,357
–
–
–
–
–
–
–
(33,339)
–
99,986
–
(14,973)
(16,600)
104,685
* The ATLIX Group has revised the previous year financial statements. Refer to note 3.2.2 for further details.
(a) MAF2 proportionately consolidates the results of APRR and ADELAC.
(b) Impairment of asset in the prior year includes an impairment on Dulles Greenway of $22.4 million (refer to note 4.1) offset by the impact of the deferred tax
liability $5.8 million.
Summarised Statement of Comprehensive Income
Revenue
Profit/(loss) for the year*
Atlas Arteria's share*
ATLAX Group’s share
Atlas Arteria’s distributions received
ATLAX Group’s distributions received
MAF2 (a)
TRIP II
Year ended
31 Dec 2021
$’000
Year ended
31 Dec 2020
$’000
Year ended
31 Dec 2021
$’000
Year ended
31 Dec 2020
$’000
2,282,097
2,093,178
456,060
284,051
–
261,643
152,681
80,460
(75,952)
–
83,087
(89,606)
–
–
(10,203)
(12,037)
314,750
137,592
–
–
–
–
–
–
* The ATLIX Group has revised the previous year financial statements. Refer to note 3.2.2 for further details.
(a) MAF2 proportionately consolidates the results of APRR and ADELAC.
ATLAS ARTERIA ANNUAL REPORT 2021 | 73
NOTES TO THE FINANCIAL REPORTSFINANCIAL REPORTDIRECTORS’ REPORTSREMUNERATION REPORTFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS 4 Other balance sheet assets and liabilities
4.1 Intangible assets – Tolling concessions
Intangible assets – Tolling concessions
Tolling concessions are intangible assets and represent the right to levy tolls in respect of controlled motorways. Tolling
concessions relating to the non-controlled investments are recognised as a component of the investments accounted
for using the equity method.
Tolling concessions have a finite useful life by the terms of the concession arrangement and are carried at cost which
represents the fair value of the consideration paid on acquisition less accumulated amortisation and impairment charges.
Amortisation is calculated using the straight line method to allocate the cost of tolling concessions over their estimated
useful lives which are as follows:
Dulles Greenway
Warnow Tunnel
APRR
ADELAC
Estimated useful life
Amortisation basis
Period to February 2056
Period to September 2053
Period to November 2035
Period to December 2060
Straight line basis
Straight line basis
Straight line basis
Straight line basis
There has been no change to the estimated useful life during the year.
In relation to APRR and ADELAC, the tolling concessions in relation to these non-controlled investments are not recognised
on separate line items in the statement of financial position but instead form part of investments accounted for using the
equity method. The amortisation of tolling concessions in relation to these non-controlled investments is included in the share
of net profit of investments accounted for using the equity method.
Impairment
Tolling concessions with a finite useful life are assessed for impairment whenever there are indications that the carrying
amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount
exceeds its recoverable amount. Refer to note 3.2 for additional detail on the accounting policy for impairment of assets
and reversal of impairment.
Balance at the beginning of the year
Acquisition cost (a)
Amortisation of tolling concession
Impairment of tolling concession (b)
Foreign exchange movement
Balance at the end of the year
ALX
ATLAX Group
As at
31 Dec 2021
$’000
As at
31 Dec 2020
$’000
As at
31 Dec 2021
$’000
As at
31 Dec 2020
$’000
2,064,339
2,438,598
–
(60,039)
–
97,114
8,273
(66,439)
(143,896)
(172,197)
2,101,414
2,064,339
–
–
–
–
–
–
–
–
–
–
–
–
(a) In the prior year, $5.6 million was recognised on DTR Connector project and $2.7 million was recognised on the West End Project 1 (refer also to note 2.1 for the
construction revenue policy).
(b) In the prior year an impairment charge of $143.9 million was taken on the Dulles Greenway concession.
74 | ATLAS ARTERIA ANNUAL REPORT 2021
NOTES TO THE FINANCIAL REPORTS Key assumptions used for fair value less costs of disposal calculations at 31 December 2020 and 31 December 2021–
Dulles Greenway.
Assumption
Approach used to determine values in 2020
Approach used to determine values in 2021
Traffic volume
Based on historic trends and the Groups’ internal
long-term traffic forecasting models.
Based on historic trends and the Groups’ internal
long-term traffic forecasting models.
Traffic forecasts for Dulles Greenway are based
on assumptions of traffic growth broadly in line
with economic development, population growth
and employment within its catchment area.
Traffic forecasts for Dulles Greenway are based
on assumptions of traffic growth broadly in line
with economic development, population growth
and employment within its catchment area.
Traffic during 2020 was impacted by the COVID-19
pandemic. Forecasts assume that traffic largely,
but not fully, recovers during 2021, however,
macroeconomic assumptions and inputs include
the impact of COVID-19, for example, employment
is assumed to fall as a result of the impact of
COVID-19 and not return to pre-COVID forecast
levels until 2025.
Assumptions around the impact of announced
changes to the transport network in the catchment
area around the Greenway have also been made
in forecasting traffic over the medium term, based
on historical impacts of similar changes.
Based on the Groups’ long-term internal forecasts
and independent third-party projections, long term
CPI rates are forecast to be between 2.2% and 2.3%
per annum.
Traffic during 2021 continued to be impacted by the
COVID-19 pandemic and movement restrictions.
Forecasts assume that traffic recovers over the
medium term, and macroeconomic assumptions
include the impact of changing social preferences
and economic responses to COVID-19.
Based on the Groups’ long-term internal forecasts
and independent third-party projections, long term
CPI rates are forecast to be around 2.3% per annum,
with medium term forecasts up to 2.4% – 2.8% per
annum based on median consensus forecasts.
Long term CPI
(% annual growth)
Average toll
(% annual growth)
Based on current regulation and the Groups’
long-term internal forecasts.
Based on current regulation and the Groups’ long-term
internal forecasts.
Toll rates for Dulles Greenway will be determined
by decisions of the State Corporations Commission
(‘SCC’). A rate case was submitted to the SCC on
19 December 2019 for tolls over the period from
1 January 2021 to 31 December 2025 and a decision
regarding the submission is expected early 2021.
Toll rates for Dulles Greenway will be determined by
decisions of the SCC. The toll path for 2021-22 was
determined by the SCC in April this year. In February,
new legislation was adopted and a new rate case
will need to be submitted in 2022, and each year
thereafter to establish the annual toll rate increases.
The Groups’ long-term assumption forecasts toll
rates to escalate in a range within the historical
experience from inception to 1 January 2020.
However, historical results provide no guarantee
as new legislation or regulatory decisions could
impact future outcomes.
The Groups’ long-term assumption forecasts toll
rates to escalate in a range within the historical
experience from inception to 1 January 2020.
However, historical results provide no guarantee
as new legislation or regulatory decisions could
impact future outcomes.
Detailed cash flows were discounted using a discount
rate of 9.25%. The discount rate is based on a number
of factors including, but not limited to, the business
nature of operations, regulatory environment,
macroeconomic conditions, risk profile, observed
market prices for similar transactions and reflects
the uncertainty around traffic forecasts in particular
post the recent policy positions taken to manage the
COVID-19 pandemic.
The discount rate of 9.25% is based on a number
of factors including, but not limited to, the business
nature of operations, regulatory environment,
macroeconomic conditions, risk profile, observed
market prices for similar transactions and reflects
the uncertainty around traffic forecasts and the new
regulatory framework.
Post-tax discount rate
ATLAS ARTERIA ANNUAL REPORT 2021 | 75
NOTES TO THE FINANCIAL REPORTSFINANCIAL REPORTDIRECTORS’ REPORTSREMUNERATION REPORTFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS Impact of possible changes in key assumptions
The assets and liabilities associated with the CGU were initially recognised in Atlas Arteria’s balance sheet at their fair values
on the dates on which Atlas Arteria achieved control of the CGU.
A significant adverse change in any of the key assumptions could result in the recoverable amount of the CGU falling below
its carrying amount.
The table below shows the impact on the valuation in prior year of reasonably possible changes in key assumptions on the
recoverable amount of CGU.
Sensitivities
Discount Rate +0.5%
Discount Rate -0.5%
Toll growth rate +0.1%
Toll growth rate -0.1%
Traffic growth rate +0.1%
Traffic growth rate -0.1%
Valuation
Impact US$
million
(51.6)
57.8
19.4
(19.1)
18.2
(17.9)
There is a complex interplay between the key assumptions, however, which means that any change in one assumption could
impact the outcomes of another. Equally, as some assumptions change, there may be a compensating reduction in risk
or resolution of uncertainty, premiums for which are carried within the post tax discount rate.
The assumptions used in the fair value less costs of disposal calculation are measured at Level 3 in the fair value hierarchy
(refer to note 5.4.6 for additional detail on the fair value hierarchy).
4.2 Goodwill
Goodwill
Goodwill represents the excess of the consideration paid over the fair value of the identifiable net assets of the acquired entity
at the date of acquisition. Goodwill arising from business combinations is included on the face of the statement of financial
position. Goodwill arising from acquisitions of associates is included in the carrying amount of investments in associates.
Impairment
Goodwill is not subject to amortisation but is tested annually for impairment, or more frequently if events or changes
in circumstances indicate that the carrying amount may not be recoverable. The recoverable amount of a cash generating
unit (‘CGU’) is determined based on fair value less costs of disposal calculations which require the use of assumptions.
The calculations use detailed cash flow projections covering the remaining concession life of the CGU.
Refer to notes 3.2 and 4.1 for additional detail on the accounting policy for impairment.
Balance at the beginning of the year
Foreign exchange movement
Balance at the end of the year
ALX
ATLAX Group
As at
31 Dec 2021
$’000
As at
31 Dec 2020
$’000
As at
31 Dec 2021
$’000
As at
31 Dec 2020
$’000
14,091
(372)
13,719
14,054
37
14,091
–
–
–
–
–
–
76 | ATLAS ARTERIA ANNUAL REPORT 2021
NOTES TO THE FINANCIAL REPORTS 4.3 Other assets
Receivables
Receivables are initially recognised at fair value and subsequently measured at amortised cost because their cash flows represent
solely payments of principal and interest. Interest income from loans and receivables is recognised on an accruals basis.
Receivables are generally received within 30 days of becoming due and receivable. A provision is raised for any doubtful debts
based on a review of all outstanding amounts at year end. Bad debts are written off in the year in which they are identified.
Impairment
Atlas Arteria and the ATLAX Group assess, on a forward-looking basis, the expected credit losses associated with their loan
assets carried at amortised cost. The impairment methodology applied depends on whether there has been a significant
increase in credit risk.
The loss allowances for financial assets are based on assumptions about risk of default and expected loss rates. Atlas
Arteria and the ATLAX Group use judgement in making these assumptions and selecting the inputs to the impairment
calculation, based on the Groups’ past history, existing market conditions as well as forward looking estimates at the end
of each reporting period.
Current
Receivables from related parties
Less: Loss allowance
Prepayments
Tax receivable
Trade receivables and other assets
Total current other assets
Non-current
Other assets
Total non-current other assets
ALX
ATLAX Group
As at
31 Dec 2021
$’000
As at
31 Dec 2020
$’000
As at
31 Dec 2021
$’000
As at
31 Dec 2020
$’000
7,416
–
2,549
225
5,606
15,796
76
76
886
–
1,618
67
4,730
7,301
136
136
3,420
3,202
(11)
906
230
1,590
6,135
6
6
(18)
486
67
1,861
5,598
22
22
The Groups’ maximum credit exposure for receivables is the carrying value. Discussion of the Groups’ policies concerning the
management of credit risk can be found in note 5.4. The fair value of receivables approximates their carrying values.
ATLAS ARTERIA ANNUAL REPORT 2021 | 77
NOTES TO THE FINANCIAL REPORTSFINANCIAL REPORTDIRECTORS’ REPORTSREMUNERATION REPORTFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS 4.4 Other liabilities
Payables and other liabilities
Liabilities are recognised when an obligation exists to make future payments as a result of a purchase of assets or services,
whether or not billed. Trade creditors are generally settled within 30 days.
Provisions
Provisions are recognised when the Groups have a present legal or constructive obligation as a result of past events; it is probable
that an outflow of resources will be required to settle the obligations; and the amount can be reliably estimated. Provisions are not
recognised for future operating losses.
The Groups record a provision for toll road maintenance required under their obligations within the service concession
arrangements for the maintenance and repair of the publicly owned roads they operate. The Groups at each period assess the
estimates of their present obligations, including assessment of the condition of the road determined from routine inspections.
These assessments inform the timing and extent of future maintenance activities.
Provisions included in the financial statements are measured at the present value of the best estimate of expenditure required to
settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax
rate that reflects current market assessments of the time value of money and the risks specific to the liability.
Employee benefits
Liabilities for salaries, including non-monetary benefits and leaves that are expected to be settled wholly within 12 months after
the end of the period in which the employees render the related service are recognised in respect of employees’ services up to the
end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled.
Current
Provision for toll road maintenance
Sundry creditors and accruals
Tax payables
Employee entitlements
Lease liability (a)
Total current other liabilities
Non-current
Provision for toll road maintenance
Lease liability (a)
Total non-current other liabilities
ALX
ATLAX Group
As at
31 Dec 2021
$’000
As at
31 Dec 2020
$’000
As at
31 Dec 2021
$’000
As at
31 Dec 2020
$’000
2,674
8,083
357
5,100
447
3,476
9,774
172
1,623
1,255
16,661
16,300
25,977
24,486
50,463
18,950
19,921
38,871
–
2,756
–
3,922
718
7,396
–
3,596
3,596
–
4,020
–
1,287
187
5,494
–
1,600
1,600
(a) The corresponding right of use asset has been included in the property, plant and equipment balance.
The movement in the balance of provision for toll road maintenance is as follows:
ALX
ATLAX Group
As at
31 Dec 2021
$’000
As at
31 Dec 2020
$’000
As at
31 Dec 2021
$’000
As at
31 Dec 2020
$’000
22,426
8,591
(2,817)
451
28,651
17,295
7,251
(1,328)
(792)
22,426
–
–
–
–
–
–
–
–
–
–
Provision for toll road maintenance
Balance at the beginning of the year
Additional provision recognised
Provision utilised
Foreign exchange movement
Balance at the end of the year
78 | ATLAS ARTERIA ANNUAL REPORT 2021
NOTES TO THE FINANCIAL REPORTS 5 Capital and risk management
5.1 Debt at amortised cost
Financial liabilities
Financial liabilities are initially recorded at fair value plus directly attributable transaction costs and thereafter at amortised
cost using the effective interest method.
ALX
ATLAX Group
As at
31 Dec 2021
$’000
As at
31 Dec 2020
$’000
As at
31 Dec 2021
$’000
As at
31 Dec 2020
$’000
Current
Non-recourse TRIP II bonds and interest accrued thereon (a)
Non-recourse Warnow Tunnel borrowings and interest accrued thereon (b)
Total current debt at amortised cost
Non-current
92,300
–
92,300
48,426
4,786
53,212
Non-recourse TRIP II bonds and interest accrued thereon (a)
1,357,123
1,299,928
Non-recourse Warnow Tunnel borrowings and interest accrued thereon (b)
174,938
171,032
Total non-current debt at amortised cost
1,532,061
1,470,960
–
–
–
–
–
–
–
–
–
–
–
–
(a) Non-recourse TRIP II bonds
The Atlas Arteria consolidated financial statements incorporate bonds raised by TRIP II to finance the construction of
infrastructure assets. These bonds are non-recourse beyond the TRIP II assets and Atlas Arteria has no commitments to provide
further debt or equity funding to TRIP II in order to meet these liabilities.
All of these bonds are in the form of fixed interest rate senior bonds, with US$35.0 million (2020: US$35.0 million) of current
interest bonds and US$1,085.5 million (2020: US$1,055.1 million) of zero coupon bonds with maturities extending to 2056.
(b) Non-recourse Warnow Tunnel borrowings
The Atlas Arteria consolidated financial statements incorporate borrowings raised by Warnow Tunnel to finance the construction
of infrastructure assets. These borrowings are non-recourse beyond the Warnow Tunnel assets and Atlas Arteria has no
commitments to provide further debt or equity funding to Warnow Tunnel in order to meet these liabilities.
On 18 March 2021, Warnow Tunnel completed a capital restructure. The capital restructure repaid the legacy Warnow Tunnel debt
facility of $217.9 million (€ 142.3 million) and entered into a new $176.1 million (€ 115.0 million) debt facility (fixed and variable
tranches) maturing in December 2049.
As a result of extinguishing the legacy debt facility at Warnow Tunnel a $50.3 million (€ 31.9 million) non-cash finance expense
has been recognised in the period.
Atlas Arteria has complied with all externally imposed capital requirements that it was subject to during 2021.
ATLAS ARTERIA ANNUAL REPORT 2021 | 79
NOTES TO THE FINANCIAL REPORTSFINANCIAL REPORTDIRECTORS’ REPORTSREMUNERATION REPORTFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS 5.2 Contributed equity
Ordinary shares
Contributed equity
On issue at the beginning of the year
Issue of short term incentive ('STI') securities
Issue of securities
Transaction costs associated with issue of securities
Attributable to ATLIX
equity holders
Attributable to ATLAX
equity holders
As at
31 Dec 2021
$’000
As at
31 Dec 2020
$’000
As at
31 Dec 2021
$’000
As at
31 Dec 2020
$’000
3,747,750
3,747,750
3,747,750
3,747,750
202,075
202,075
202,075
202,075
3,747,750
3,275,591
202,075
187,571
–
–
–
861
481,036
(9,738)
–
–
–
24
13,964
516
On issue at the end of the year
3,747,750
3,747,750
202,075
202,075
During the year ended 31 December 2020, the Groups undertook a $420.0 million Institutional Placement (‘the placement’)
and a $75.0 million security purchase plan (‘SPP’) allocated to ATLIX and ATLAX based on their proportional net asset value.
The Placement resulted in the issuance of 67.7 million new ordinary stapled securities. The new stapled securities were issued
at a price of $6.20 per security and the Placement was fully subscribed. The SPP resulted in the issuance of 12.1 million new
ordinary stapled securities on 2 July 2020, issued at a price of $6.20 per security.
On 15 April 2020, 155,024 stapled securities were issued to fulfil short term incentive (‘STI’) requirements. These were valued
at $5.71 per security, however they have been issued at zero cost and have now vested.
On issue at the beginning of the year
Issue of securities
Issue of STI securities
On issue at the end of the year
Attributable to ATLIX
equity holders
Attributable to ATLAX
equity holders
As at
31 Dec 2021
As at
31 Dec 2020
As at
31 Dec 2021
As at
31 Dec 2020
Number of
shares
’000
959,018
–
–
Number of
shares
’000
879,025
79,838
155
Number of
shares
’000
959,018
–
–
Number of
shares
’000
879,025
79,838
155
959,018
959,018
959,018
959,018
Ordinary shares in ATLIX and in ATLAX
Each fully paid stapled security confers the right to vote at meetings of securityholders, subject to any voting restrictions imposed
on a securityholder under the Corporations Act 2001 in Australia, Companies Act in Bermuda and the ASX Listing Rules. On a show
of hands, every securityholder present in person or by proxy has one vote.
On a poll, every securityholder who is present in person or by proxy has one vote for each fully paid share in respect of ATLIX and
one vote for each fully paid share in respect of ATLAX.
The Directors of ATLIX and ATLAX may declare distributions which are appropriate given the financial position of ATLIX and ATLAX.
If ATLIX and ATLAX are wound up, the liquidator may, with the sanction of an extraordinary resolution and any other requirement
of law, divide among the securityholders in specie or in kind the whole or any part of the assets of ATLIX and ATLAX.
80 | ATLAS ARTERIA ANNUAL REPORT 2021
NOTES TO THE FINANCIAL REPORTS 5.3 Reserves
Share-based payments
Share-based compensation benefits are provided to employees via the STI Plan, the employee equity (‘EE’) Plan and the
long-term incentive plan (‘LTIP’). Securities (equal to 50% (2020: 100%) of the value awarded) are only issued under the STI
Plan if performance conditions are met. Securities issued under the STI Plan are time contingent and are issued in restricted
securities on terms determined by the Boards. The share based STI Plan is recognised as an employee expense with a
corresponding increase in equity. The total amount to be expensed is determined based on the probability of the vesting being
met. Securities issued under the EE Plan are subject to service conditions and are issued in non-restricted securities. The EE
Plan is recognised as an employee expense with a corresponding increase in equity. The total amount expensed is determined
based on the probability of the vesting being met. The fair value of performance rights granted under the LTIP is recognised
as an employee benefits expense with a corresponding increase in equity. The total amount to be expensed is determined
by reference to the fair value of the performance rights granted including the market performance conditions and the number
of equity instruments expected to vest.
The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions
are to be satisfied. At the end of each period, Atlas Arteria and the ATLAX Group revise their estimates of the number of
performance rights that are expected to vest based on service conditions. It recognises the impact of the revision to original
estimates, if any, in profit or loss, with a corresponding adjustment to equity.
Hedging
The hedging reserve includes the cash flow hedge reserve. The cash flow hedge reserve is used to recognise the effective
portion of gains or losses on derivatives that are designated and qualify as cash flow hedges. Amounts are subsequently
transferred to the initial cost of the investment.
Foreign currency translation reserve
Refer to note 7.5.3 for the policy regarding foreign currency translation.
Balance of reserves
Foreign currency translation reserve*
Other reserve
Balance at the end of the year
Attributable to ATLIX
equity holders
Attributable to ATLAX
equity holders
As at
31 Dec 2021
$’000
As at
31 Dec 2020
$’000
As at
31 Dec 2021
$’000
As at
31 Dec 2020
$’000
(44,043)
3,994
(40,049)
(10,706)
2,473
(8,233)
27,246
115
27,361
21,760
74
21,834
* The ATLIX Group has revised the previous year financial statements. Refer to note 3.2.2 for further details.
ATLAS ARTERIA ANNUAL REPORT 2021 | 81
NOTES TO THE FINANCIAL REPORTSFINANCIAL REPORTDIRECTORS’ REPORTSREMUNERATION REPORTFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS Movements of reserves
Foreign currency translation reserve
Balance at the beginning of the year*
Exchange differences on translation of consolidated foreign operations*
Transfer to accumulated losses (a)
Balance at the end of the year
Hedging Reserve
Balance at the beginning of the year
Change in fair value of the cash flow hedges
Settlement of cash flow hedges
Balance at the end of the year
Other reserve
Balance at the beginning of the year
Employee equity based awards (b)
Balance at the end of the year
Attributable to ATLIX
equity holders
Attributable to ATLAX
equity holders
As at
31 Dec 2021
$’000
As at
31 Dec 2020
$’000
As at
31 Dec 2021
$’000
As at
31 Dec 2020
$’000
(10,706)
(33,337)
–
(44,043)
–
–
–
–
2,473
1,521
3,994
182,333
(100,159)
(92,880)
(10,706)
(25,287)
24,716
571
–
1,339
1,134
2,473
21,760
5,486
–
27,246
(6,688)
(9,545)
37,993
21,760
–
–
–
–
74
41
115
–
–
–
–
46
28
74
* The ATLIX Group has revised the previous year financial statements. Refer to note 3.2.2 for further details.
(a) In the prior year, foreign exchange translation gains in ATLIX Group of $92.9 million and foreign exchange translation losses in ATLAX Group of $38.0 million were
transferred to accumulated losses from the foreign currency translation reserve following the disposal of foreign operations all prior to 2016.
(b) Expenses arising from share-based compensation benefits relating to STIs and LTIs attributable to ATLIX equity holders as at 31 December 2021: $1.5 million
(31 December 2020: $1.1 million). Expenses arising from share based compensation benefits relating to STIs and LTIs attributable to ATLAX equity holders
as at 31 December 2021: $0.0 million (31 December 2020: $0.0 million).
82 | ATLAS ARTERIA ANNUAL REPORT 2021
NOTES TO THE FINANCIAL REPORTS 5.4 Financial risk and capital management
5.4.1 Financial risk management
The Groups’ activities expose them to a variety of financial risks: market risk (including foreign exchange risk and fair value
interest rate risk), credit risk, liquidity risk and cash flow interest rate risk. The Groups’ overall risk management programme
focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on financial performance of
the Groups. The Groups use derivative financial instruments such as foreign exchange contracts to hedge certain risk exposures.
The Risk Management Policy and Framework is implemented by management under policies approved by the Boards. Management
identifies, quantifies and qualifies financial risks and provides written principles for overall risk management, as well as written
policies covering specific areas, such as mitigating foreign exchange, interest rate and credit risks, use of derivative financial
instruments and investing excess liquidity.
5.4.2 Derivatives
The Groups have the following derivative financial instruments in the balance sheet:
Non-current assets
Interest rate cap
Current liabilities
Interest rate swaps
Non-current liabilities
Interest rate swaps
Total derivative financial assets/(liabilities)
ALX
ATLAX Group
As at
31 Dec 2021
$’000
As at
31 Dec 2020
$’000
As at
31 Dec 2021
$’000
As at
31 Dec 2020
$’000
188
–
–
–
188
(2,515)
(12,332)
(14,847)
–
–
–
–
–
–
–
–
Classification of derivatives
Derivatives are only used for economic hedging purposes and not as speculative investments. However, where derivatives do not
meet the hedge accounting criteria, they are accounted for at fair value through profit or loss. They are presented as current assets
or liabilities to the extent they are expected to be settled within 12 months after the end of the reporting period.
Further information about the derivatives used by the Groups is provided in note 5.4.3 below.
Fair value measurement
From time to time, the Groups enter into forward exchange contracts.
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured
to their fair value at each reporting date.
The accounting for subsequent changes in fair value depends on whether or not derivatives are designated as hedge accounting
relationships. If hedge accounting is not designated, any changes in their fair value are recognised immediately in the Consolidated
Statement of Comprehensive Income.
ATLAS ARTERIA ANNUAL REPORT 2021 | 83
NOTES TO THE FINANCIAL REPORTSFINANCIAL REPORTDIRECTORS’ REPORTSREMUNERATION REPORTFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS 5.4.3 Market risk
Foreign exchange risk
Foreign exchange risk arises when recognised assets and liabilities and future commercial transactions are denominated in
a currency that is not the entity’s functional currency. The risk is measured using sensitivity analysis and cash flow forecasting.
The Groups operate internationally and are exposed to foreign exchange risk mainly arising from currency exposures to the
Euro (‘EUR’) and United States Dollar (‘USD’).
The Groups do not hedge the foreign exchange exposure on overseas investments.
Financial instruments are converted to Australian Dollars (‘AUD’) at the rate of exchange ruling at the financial reporting date.
Derivative instruments are valued with reference to forward exchange rates from the year end to settlement date, as provided
by independent financial institutions.
In assessing foreign exchange risk, management has assumed the following possible movements in the AUD:
− AUD/EUR exchange rate increased/decreased by 5 Euro cents (2020: 5 Euro cents)
− AUD/USD exchange rate increased/decreased by 7 US cents (2020: 7 US cents)
− AUD/GBP exchange rate increased/decreased by 4 UK pence (2020: 6 UK pence)
The tables below show the amounts for financial instruments that would be recognised in profit or loss or directly in equity
if the movements in foreign exchange rates as outlined above occurred. The Groups’ management have determined the above
movements in the AUD to be a reasonably possible shift following analysis of foreign exchange volatility for relevant currencies
over the last five years.
Foreign exchange risk
ALX
Appreciation in Australian Dollar
Depreciation in Australian Dollar
P&L
2021
$’000
P&L
2020
$’000
Equity
2021
$’000
Equity
2020
$’000
P&L
2021
$’000
P&L
2020
$’000
Equity
2021
$’000
Equity
2020
$’000
Total financial assets (a)
(1,167)
(2,105)
Total financial
liabilities (b)
Total
381
(786)
290
(1,815)
–
–
–
–
–
–
1,382
2,497
(460)
922
(345)
2,152
–
–
–
–
–
–
Appreciation in Australian Dollar
Depreciation in Australian Dollar
Foreign exchange risk
ATLAX Group
P&L
2021
$’000
P&L
2020
$’000
Equity
2021
$’000
Equity
2020
$’000
Total financial assets (a)
(610)
(470)
Total financial
liabilities (b)
Total
369
(241)
280
(190)
–
–
–
–
–
–
P&L
2021
$’000
731
(444)
287
P&L
2020
$’000
560
(333)
227
Equity
2021
$’000
Equity
2020
$’000
–
–
–
–
–
–
(a) Financial assets include cash, cash equivalents, restricted cash, receivables and derivative financial instruments.
(b) Financial liabilities include payables, debt at amortised cost and derivative financial instruments.
Interest rate risk
The Groups have no significant interest bearing assets and liabilities whose fair value is significantly impacted by changes
in market interest rates.
In assessing interest rate risk, management has assumed the following movements in the identified interest rates:
− Bank bill swap reference rate (AUD BBSW 90 days) increased/decreased by 59 bps (2020: 69 bps)
− Bank bill swap reference rate (EURIBOR 90 days) increased/decreased by 12 bps (2020: 14 bps)
− Bank bill swap reference rate (USD SOFR 90 days) increased/decreased by 92 bps (2020: USD LIBOR 89 bps)
− Bank bill swap reference rate (EURIBOR 6 months) increased/decreased by 15 bps (2020: 17 bps)
− Bank bill swap reference rate (AUD BBSW 6 months) increased/decreased by 59 bps (2020: 68 bps)
84 | ATLAS ARTERIA ANNUAL REPORT 2021
NOTES TO THE FINANCIAL REPORTS The tables below show the amounts for financial instruments that would be recognised in profit or loss or directly in equity
if the above interest rate movements occurred. The Groups’ management have determined the above movements in interest rates
to be a reasonably possible shift following analysis of the interest spreads of comparable debt instruments over the past five years.
Interest rate risk
ALX
Increase in interest rates
Decrease in interest rates
P&L
2021
$'000
P&L
2020
$'000
Equity
2021
$'000
Equity
2020
$'000
P&L
2021
$'000
P&L
2020
$'000
Equity
2021
$'000
Equity
2020
$'000
Total financial assets
3,478
3,032
Total financial
liabilities
Total
(69)
3,409
(306)
2,726
–
–
–
–
–
–
(3,478)
(3,032)
69
(3,409)
306
(2,726)
–
–
–
–
–
–
Increase in interest rates
Decrease in interest rates
Interest rate risk
P&L
2021
$'000
232
–
232
P&L
2020
$'000
328
–
328
Equity
2021
$'000
Equity
2020
$'000
P&L
2021
$'000
P&L
2020
$'000
Equity
2021
$'000
Equity
2020
$'000
–
–
–
–
–
–
(232)
(328)
–
(232)
–
(328)
–
–
–
–
–
–
ATLAX Group
Total financial assets
Total financial
liabilities
Total
5.4.4 Credit risk
Potential areas of credit risk consist of deposits with banks and financial institutions as well as receivables from associates
and governments. The Groups limit their exposure in relation to cash balances by only dealing with well-established financial
institutions or high-quality credit standing. With the exception of the transactions between ATLIX and ATLAX, the Groups transact
with independently rated parties with appropriate minimum short-term credit ratings. The Boards set exposure limits to financial
institutions and these are monitored on an ongoing basis.
Sound credit risk management involves prudently managing the risk and reward relationship and controlling and minimising
credit risks across a variety of dimensions, such as quality, concentration, maturity and security.
The tables below show the balances within the Groups and the ATLAX Group that may be subject to credit risk.
2021
Cash and cash equivalents
Restricted cash
Receivables – current
Tax receivables
Total
2020
Cash and cash equivalents
Restricted cash
Receivables – current
Tax receivables
Total
Financial
institutions
$’000
229,389
226,325
ALX
Corporates
and others
$’000
Total
$’000
Financial
institutions
$’000
ATLAX Group
Corporates
and others
$’000
–
–
229,389
226,325
13,022
225
42,758
–
–
–
–
–
13,022
225
455,714
13,247
468,961
42,758
–
–
5,010
230
5,240
Financial
institutions
$’000
ALX
Corporates
and others
$’000
Total
$’000
Financial
institutions
$’000
ATLAX Group
Corporates
and others
$’000
260,341
224,089
–
–
484,430
–
–
5,616
67
5,683
260,341
224,089
5,616
67
52,130
–
–
–
490,113
52,130
–
–
5,063
67
5,130
Total
$’000
42,758
–
5,010
230
47,998
Total
$’000
52,130
–
5,063
67
57,260
ATLAS ARTERIA ANNUAL REPORT 2021 | 85
NOTES TO THE FINANCIAL REPORTSFINANCIAL REPORTDIRECTORS’ REPORTSREMUNERATION REPORTFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS Financial institutions
The credit risk to financial institutions relates to cash held by and term deposits due from Australian and OECD banks. In line with
the credit risk policies of the Groups these counterparties must meet a minimum Standard and Poor’s short-term credit rating
of A-1 unless an exception is approved by the Boards.
Corporates and others
The Groups’ credit risk relates primarily to receivables from related parties and governments. These counterparties have a range
of credit ratings.
5.4.5 Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash, the availability of funding through an adequate amount
of committed credit facilities and the ability to close out market positions. The Groups have a liquidity management policy which
manages liquidity risk by monitoring the stability of funding, surplus cash or highly liquid cash assets, anticipated cash in and
outflows and exposure to connected parties.
The tables below show the forecast contractual undiscounted future cash outflows of the liabilities at balance date for the Groups.
ALX
1-2 years
$’000
2-3 years
$’000
3-5 years
$’000
Greater
than
5 years
$’000
Total
contractual
cash flows
$’000
Carrying
Value
$’000
Fair
Value (a)
$’000
99,465
100,948
206,211
3,332,397
3,831,321
1,624,361
1,771,532
3,987
3,478
5,723
103,387
134,567
67,124
67,124
–
–
–
–
–
–
–
Less than
1 year
$’000
92,300
17,992
–
110,292
103,452
104,426
211,934
3,435,784
3,965,888
1,691,485
1,838,656
Financial Liabilities
2021
Contracted debt repayments (b)
Payables
Derivatives
Total
2020
Contracted debt repayments (b)
Payables
Derivatives
Total
53,212
16,301
2,515
100,589
101,448
210,513
3,312,613
3,778,375
1,524,172
1,773,395
3,146
2,056
3,299
1,850
6,512
5,942
95,486
124,744
2,485
14,848
54,284
14,847
54,284
14,847
72,028
105,791
106,597
222,967
3,410,584
3,917,967
1,593,303
1,842,526
Financial Liabilities
2021
Payables
Total
2020
Payables
Total
Less than
1 year
$’000
7,458
7,458
5,494
5,494
ATLAX Group
1-2 years
$’000
2-3 years
$’000
3-5 years
$’000
Greater
than
5 years
$’000
Total
contractual
cash flows
$’000
Carrying
Value
$’000
Fair
Value (a)
$’000
766
766
194
194
613
613
201
201
1,286
1,286
1,073
1,073
11,196
11,196
10,992
10,992
10,992
10,992
427
427
925
925
7,241
7,241
7,094
7,094
7,094
7,094
(a) Fair value approximates carrying value for Payables and Derivatives.
(b) Includes consolidated debt held by TRIP II and Warnow Tunnel that is non-recourse to the Groups.
86 | ATLAS ARTERIA ANNUAL REPORT 2021
NOTES TO THE FINANCIAL REPORTS 5.4.6 Fair value measurement of financial instruments
The fair value measurements of financial assets and liabilities are assessed in accordance with the following hierarchy.
(i) Level 1: Quoted prices (unadjusted) in active markets for identical assets and liabilities.
(ii) Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly
(as prices) or indirectly (derived from prices); and
(iii) Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable valuation input).
The Groups have derivative financial instruments that are measured at fair value on a recurring basis. These instruments are
entered to minimize potential variations in cash flows resulting from fluctuations in interest rates and foreign currency and their
impact on its variable-rate debt and cash payments and receipts. The Groups do not enter into derivative instruments for any
purpose other than economic interest rate and foreign currency hedging. That is, the Groups do not speculate using derivative
instruments. They are presented as current assets or liabilities to the extent they are expected to be settled within 12 months after
the end of the reporting period. These instruments are measured at Level 2 hierarchy and are revalued using externally provided
dealer quotes.
The Groups’ policy is to recognise transfers into and transfers out of fair value hierarchy levels as at the end of the reporting
period. The interest rate swaps at Warnow Tunnel were repaid during the year as a result of the capital restructure and repayment
of the Warnow Tunnel legacy debt facility.
The Groups do not measure any financial assets or financial liabilities at fair value on a non-recurring basis.
Fair values of other financial instruments (unrecognised)
The Groups also have a number of financial instruments which are not measured at fair value in the balance sheet. With the
exception to those listed below, the fair values are not materially different to their carrying amounts as: the interest receivable/
payable is either close to current market rates; the instruments are short-term in nature, or the instruments have recently been
brought onto the balance sheet and therefore the carrying amount approximated the fair value. The fair value of these financial
instruments is determined using discounted cash flow analysis. The fair value of all financial assets (excluding Investments
accounted for using the equity method) and financial liabilities approximated their carrying amounts at 31 December 2021. There
is no debt at amortised cost in the ATLAX Group.
Debt at amortised cost
Non-recourse TRIP II bonds and accrued interest thereon
5.4.7 Capital management
The Groups capital management objectives are to:
Carrying amount
$’000
Fair value
$’000
1,449,423
1,578,588
− Ensure sufficient capital resources to support the Groups’ business, operational and growth requirements
− Safeguard the Groups’ ability to continue as a going concern
− Balance distribution growth with long term sustainability
Annual reviews of the Groups’ capital requirements are performed to ensure the Groups are meeting their objectives.
Capital is defined as contributed equity plus reserves. The Groups do not have any externally imposed capital requirements
at 31 December 2021 or 31 December 2020.
ATLAS ARTERIA ANNUAL REPORT 2021 | 87
NOTES TO THE FINANCIAL REPORTSFINANCIAL REPORTDIRECTORS’ REPORTSREMUNERATION REPORTFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS
6 Group disclosures
6.1 Parent entity financial information
Parent entity financial information
The financial information for ATLIX and ATLAX for this disclosure has been prepared on the same basis as the Financial
Reports, except as set out below:
Investments in subsidiaries, associates and joint venture entities
Investments in subsidiaries, associates and joint venture entities are accounted for at cost in the separate financial
information of ATLIX and ATLAX.
Tax consolidation legislation
ATLAX and its wholly owned Australian controlled entities have implemented the tax consolidation legislation as of 2 February 2010.
The head entity, ATLAX and the controlled entities in the tax consolidated group account for their own current and deferred
tax amounts.
These tax amounts are measured as if each entity in the tax consolidated group continues to be a standalone taxpayer in its
own right. In addition to its own current and deferred tax amounts, ATLAX also recognises the current tax liabilities (or assets)
and the deferred tax assets arising from unused tax losses and unused tax credits assumed from controlled entities in the tax
consolidated group.
The entities have also entered into a tax funding agreement under which the wholly owned entities fully compensate ATLAX
for any current tax payable assumed and are compensated by ATLAX for any current tax receivable and deferred tax assets
relating to unused tax losses or unused tax credits that are transferred to ATLAX under the tax consolidation legislation.
The funding amounts are determined by reference to the amounts recognised in the wholly owned entities’ Financial Reports.
The amounts receivable/payable under the tax funding agreement are due upon receipt of the funding advice from the head
entity, which is issued as soon as practicable after the end of each financial year.
The head entity may also require payment of interim funding amounts to assist with its obligations to pay tax instalments.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as current
amounts receivable from or payable to other entities in the ATLAX Group. Any difference between the amounts assumed
and amounts receivable or payable under the tax funding agreement are recognised as a contribution to (or distribution
from) wholly owned tax consolidated entities.
Financial guarantees
Where the parent entities have provided financial guarantees in relation to loans and payables of subsidiaries for no consideration,
the fair values of these guarantees are accounted for as contributions and recognised as part of the cost of the investment.
6.1.1 Summary financial information
In accordance with the Corporations Act 2001, the individual Financial Reports for ATLIX and ATLAX are shown in aggregate
amounts below:
Statement of Financial Position
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Shareholder's equity
Issued capital
Reserves
Retained earnings
Total equity
Profit/(loss) for the year
Total comprehensive income/(loss)
88 | ATLAS ARTERIA ANNUAL REPORT 2021
ATLIX
ATLAX
As at
31 Dec 2021
$’000
As at
31 Dec 2020
$’000
As at
31 Dec 2021
$’000
As at
31 Dec 2020
$’000
83,644
48,724
2,117,431
2,420,588
42,839
76,557
52,415
75,167
2,201,075
2,469,312
119,396
127,582
(5,401)
(4,174)
(3,504)
–
–
–
(5,401)
(4,174)
(3,504)
(688)
–
(688)
3,747,750
3,747,839
202,075
202,075
3,990
2,472
(1,556,066)
(1,285,173)
2,195,674
2,465,138
111
(86,293)
115,893
74
(75,255)
126,894
2,427
2,427
(154,339)
(154,339)
(11,038)
(11,038)
(9,984)
(9,984)
NOTES TO THE FINANCIAL REPORTS 6.1.2 Guarantees entered into by the parent entities
ATLIX and ATLAX had not provided any financial guarantees in respect of bank overdrafts and loans of subsidiaries as at
31 December 2021 and 31 December 2020. ATLIX and ATLAX had not given any unsecured guarantees at 31 December 2021
or 31 December 2020.
Guarantees have been made by subsidiaries of ATLIX and ATLAX in respect of office lease contracts.
6.1.3 Contingent liabilities of the parent entities
Refer to note 7.2 for ATLIX and ATLAX’s contingent liabilities as at 31 December 2021 and 31 December 2020.
6.2 Acquisition of subsidiaries
Business combinations
The acquisition method of accounting is used to account for all business combinations other than those under common
control, regardless of whether equity instruments or other assets are acquired. The consideration transferred for the
acquisition of a subsidiary comprises the fair values of the assets transferred, the liabilities incurred and the equity interests
issued by the Groups. The consideration transferred also includes the fair value of any contingent consideration arrangement
and the fair value of any pre-existing equity interest in the subsidiary. Acquisition-related costs for consolidated entities are
expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination
are, with limited exceptions, measured initially at their fair values at the acquisition date. Contingent consideration is
subsequently remeasured to its fair value with changes recognised in the profit or loss.
The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-
date fair value of any previous equity interest in the acquiree over the fair value of the Groups share of the net identifiable
assets acquired is recorded as goodwill.
6.3 Subsidiaries
Subsidiaries
Subsidiaries, other than those that ATLIX has been deemed to have directly acquired through stapling arrangements, are
those entities over which the Groups are exposed to, or have the right to, variable returns from their involvement with the
entity and have the ability to affect those returns through their power over the entity. Subsidiaries are fully consolidated from
the date on which control is transferred to the Group. The acquisition method of accounting is used to account for the
acquisition of subsidiaries by the Group. Where control of an entity is obtained during a financial year, its results are included
in the Statement of Comprehensive Income from the date on which control commences. Where control of an entity ceases
during a financial year, its results are included for that part of the year during which control existed and the subsidiary is
deconsolidated from the date that control ceases.
ATLAS ARTERIA ANNUAL REPORT 2021 | 89
NOTES TO THE FINANCIAL REPORTSFINANCIAL REPORTDIRECTORS’ REPORTSREMUNERATION REPORTFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS 6.3.1 ALX
Name of controlled entity
Atlas Arteria Limited
ALX Infrastructure Australia Pty Limited
ALX Investments (Australia) Pty Limited
Atlas Arteria Service Co Pty Limited
Green Bermudian Holdings Limited
ALX Investments Limited
MIBL Finance (Luxembourg) Sarl
Atlas Arteria Luxembourg 1 Sarl
Tollway Holdings Limited (a)
European Transport Investments (UK) Limited
Tipperhurst Limited (b)
Greenfinch Motorways Limited (c)
ALX Indiana Holdings LLC
ALX Holdings (US) LLC
Dulles Greenway Partnership
Dulles Greenway Investments 3 (US) LLC
Shenandoah Greenway Corporation
Toll Road Investors Partnership II, L.P. (d)
Warnowquerung GmbH & Co. KG
Warnowquerung Verwaltungsgesellschaft mbH
Country of establishment
2021 voting
%
2020 voting
%
Australia
Australia
Australia
Australia
Bermuda
Bermuda
Luxembourg
Luxembourg
UK
UK
UK
UK
USA
USA
USA
USA
USA
USA
Germany
Germany
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
(a) In liquidation
(b) In liquidation
(c) Liquidated on 11 January 2022
(d) Atlas Arteria owns 100% of the general partner of Toll Road Investors Partnership II, L.P. (TRIP II) giving Atlas Arteria control over the operations and management
of TRIP II, the entity that manages the Dulles Greenway concession. In 2005 Dulles Greenway Partnership L.P entered call options with the other (non Atlas Arteria)
limited partners of TRIP II, under which these limited partners agreed to vote their interests for certain Major Decisions in line with those recommended by the
general partner, and Atlas Arteria could purchase the outstanding interests in TRIP II to 2056. These call options lapsed on 30 December 2020. An assessment
of control was considered at that time which concluded that control remains and these events did not impact the accounting for TRIP II. Since that time Atlas Arteria
extended the governance rights with one of the limited partners such that Atlas Arteria has governance rights over 56.67% of votes for Major Decisions, and these
decisions require 75% of votes to proceed.
6.3.2 ATLAX Group
Name of controlled entity
Country of establishment
2021 voting
%
2020 voting
%
ALX Infrastructure Australia Pty Limited
ALX Investments (Australia) Pty Limited
Atlas Arteria Service Co Pty Limited
ALX Indiana Holdings LLC
ALX Holdings (US) LLC
Dulles Greenway Partnership
Dulles Greenway Investments 3 (US) LLC
Shenandoah Greenway Corporation
Australia
Australia
Australia
USA
USA
USA
USA
USA
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
90 | ATLAS ARTERIA ANNUAL REPORT 2021
NOTES TO THE FINANCIAL REPORTS 6.4 Related party disclosures
6.4.1 Directors
The following persons were Directors of ATLIX during the whole of the year and up to the date of this report:
(Chair)
− Jeffrey Conyers
− Fiona Beck
− Andrew Cook
− Caroline Foulger
− Debbie Goodin
The following persons were Directors of ATLAX during the whole of the year and up to the date of this report (unless otherwise stated):
(Chair)
(Appointed 1 March 2021)
− Debbie Goodin
− Ariane Barker
− David Bartholomew
− Graeme Bevans
− Jean-Georges Malcor
6.4.2 Key Management Personnel
Key Management Personnel (‘KMP’) are defined in AASB 124 Related Party Disclosures as those having authority and responsibility
for planning, directing and controlling the activities of the entity. Across the Groups, the Directors of ATLIX and ATLAX, the Managing
Director and Chief Executive Officer (‘MD & CEO’), Chief Financial Officer (‘CFO’) and Chief Operating Officer (‘COO’) meet the
definition of KMP.
The compensation paid to non-executive Directors of ATLIX and ATLAX, is determined by reference to remuneration of similar roles
at similar entities. The level of compensation is not related to the performance of the Groups. The remuneration of the MD & CEO,
CFO and COO include STI and LTI components which include targets related to the performance of the group.
The total remuneration for the MD & CEO, CFO and COO is shown in the table below.
Short term employee
benefits
Share based payments
Long term benefits
Financial
year
Cash salary
$
Cash STI
$
Value of LTI
$
Value of STI
$
Superannuation
$
Long service
leave accrual
movement
$
Termination
benefit
$
Total
remuneration
$
Total
2021
2020
2,596,948
1,605,652
1,026,634
910,585
2,428,462
–
897,535
1,053,729
62,018
59,676
–
–
– 6,201,837
–
4,439,402
Compensation in the form of directors’ fees that were paid to the ATLIX and ATLAX Directors is as follows:
Year ended 31 Dec 2021
Year ended 31 Dec 2020
Short term
benefit
Cash salary
and fees
$
694,305
715,126
Long term
benefit
Superannuation
$
Total
directors’ fees
$
8,706
51,714
703,011
766,840
Short term
benefit
Cash salary
and fees
$
744,259
726,953
Long term
benefit
Superannuation
$
Total
directors’ fees
$
8,535
51,508
752,794
778,461
ATLIX
ATLAX
ATLAS ARTERIA ANNUAL REPORT 2021 | 91
NOTES TO THE FINANCIAL REPORTSFINANCIAL REPORTDIRECTORS’ REPORTSREMUNERATION REPORTFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS
The number of ALX stapled securities held directly, indirectly or beneficially by the KMP across the Groups at 31 December
is set out below:
Jeffrey Conyers
Ariane Barker (a)
David Bartholomew
Fiona Beck
Graeme Bevans
Andrew Cook (b)
Caroline Foulger
Debbie Goodin
Nadine Lennie
Jean-Georges Malcor
Vincent Portal-Barrault
Total
(a) Appointed 1 March 2021
(b) Appointed 25 November 2020
KMP interests
in ALX stapled
securities
At 31 Dec 2021
KMP interests
in ALX stapled
securities
At 31 Dec 2020
59,838
13,600
25,214
25,853
229,659
20,000
21,000
50,678
65,265
30,076
66,087
59,838
–
25,214
18,853
153,730
–
8,500
32,904
36,592
30,076
39,324
607,270
405,031
6.4.3 Other balances and transactions
At 31 December 2021, entities within the Groups had the following balances with related parties:
Other intercompany receivables from/(payables) to related parties
7,415,729
885,769
3,419,895
3,202,436
During the year, entities within the Groups had the following transactions with related parties excluding associates:
ALX
ATLAX Group
Year ended
31 Dec 2021
$
Year ended
31 Dec 2020
$
Year ended
31 Dec 2021
$
Year ended
31 Dec 2020
$
ALX
ATLAX Group
Year ended
31 Dec 2021
$
Year ended
31 Dec 2020
$
Year ended
31 Dec 2021
$
Year ended
31 Dec 2020
$
Reimbursement of ATLIX's portion of expenses paid by ATLAX Group
Advisory service fees
–
–
–
–
147,837
73,500
16,119,039
12,997,299
During the year, entities within the Groups received/(paid) the following from/(to) associates:
ALX
ATLAX Group
Year ended
31 Dec 2021
$
Year ended
31 Dec 2020
$
Year ended
31 Dec 2021
$
Year ended
31 Dec 2020
$
Principal and interest received from preferred equity certificates
and shares issued by MAF2
Cash payments from/(to) associates (a)
307,841,820
310,866,064
–
–
2,847,010
588,252
(1,195,606)
253,984
(a) For the ATLIX Group the cash payments reflect fees and reimbursements from MAF and MAF2 and for the ATLAX Group the cash payments reflect reimbursements
to TRIP II.
All of the amounts represent payments on normal commercial terms made in relation to the provision of goods and services.
92 | ATLAS ARTERIA ANNUAL REPORT 2021
NOTES TO THE FINANCIAL REPORTS 7 Other disclosures
7.1 Cash flow information
Reconciliation of profit after income tax to the net cash
flows from operating activities
Profit/(loss) from activities after income tax*
163,697
(99,210)
(19,512)
(39,691)
ALX
ATLAX Group
Year ended
31 Dec 2021
$’000
Year ended
31 Dec 2020
$’000
Year ended
31 Dec 2021
$’000
Year ended
31 Dec 2020
$’000
(Gain)/loss on equity accounted investments*
(284,051)
(152,681)
10,203
Finance costs
Depreciation and amortisation
Amortisation of tolling concession
Impairment impact on deferred tax liabilities
Impairment of investment
Issue of securities to employees
Changes in operating assets and liabilities
Increase/(decrease) in DTA/(DTL)
(Increase)/decrease in receivables
Increase/(decrease) in payables
Net cash inflow from operating activities
131,346
1,441
60,039
–
–
–
(35,767)
(698)
11,113
47,120
87,085
1,000
66,439
(6,343)
143,896
2,150
(1,154)
166
(2,019)
39,329
(106)
573
–
–
–
–
–
30,338
1,811
319
–
–
–
57
–
(1,063)
3,431
(6,474)
(1,930)
2,431
(6,665)
* The ATLIX Group has revised the previous year financial statements. Refer to note 3.2.2 for further details.
7.1.1 Net (debt)/cash reconciliation
This section sets out an analysis of net debt and the movements in net debt for each of the periods presented.
Net (debt)/cash
Cash and cash equivalents
Lease liabilities – current
Lease liabilities – non-current
Borrowings – current
Borrowings – non-current
Net (debt)/cash
Cash
Gross debt – fixed interest rates
Gross debt – variable interest rates
Net (debt)/cash
ALX
ATLAX Group
Year ended
31 Dec 2021
$’000
Year ended
31 Dec 2020
$’000
Year ended
31 Dec 2021
$’000
Year ended
31 Dec 2020
$’000
229,389
260,341
(447)
(24,486)
(92,300)
(1,255)
(19,921)
(53,212)
(1,532,061)
(1,470,960)
42,758
(718)
(3,596)
–
–
52,130
(187)
(1,600)
–
–
(1,419,905)
(1,285,007)
38,444
50,343
229,389
260,341
(1,604,421)
(1,369,530)
(44,873)
(175,818)
42,758
(4,314)
–
52,130
(1,787)
–
(1,419,905)
(1,285,007)
38,444
50,343
ATLAS ARTERIA ANNUAL REPORT 2021 | 93
NOTES TO THE FINANCIAL REPORTSFINANCIAL REPORTDIRECTORS’ REPORTSREMUNERATION REPORTFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS ALX
Net debt at 1 January 2020
Cash flows
Loan facilities
Lease principal payments
Other non-cash adjustments (a)
Foreign exchange adjustments
Net debt at 31 December 2020
Cash flows
Loan facilities
Lease principal payments
Other non-cash adjustments (a)
Foreign exchange adjustments
Net debt at 31 December 2021
Assets
Liabilities from financing
activities
Cash and cash
equivalents
$’000
Borrowings –
current
$’000
Borrowings –
non-current
$’000
Total
$’000
1,450,221
(1,183,965)
–
–
–
(5,915)
260,341
(30,633)
–
–
–
(319)
(45,181)
(2,129,328)
(724,288)
–
56,605
(1,061)
(76,327)
11,497
–
(1,183,965)
576,143
632,748
–
(40,635)
102,939
(1,061)
(116,962)
108,521
(54,467)
(1,490,881)
(1,285,007)
–
75,476
(1,541)
(101,269)
(10,946)
–
41,264
–
(30,913)
(76,017)
(30,633)
116,740
(1,541)
(132,182)
(87,282)
229,389
(92,747)
(1,556,547)
(1,419,905)
(a) The current year relates to unpaid interest that has accrued during the period and the $50.3 million (€ 31.9 million) non-cash finance expense incurred as a result
of extinguishing the legacy debt facility at Warnow Tunnel. The prior year relates to unpaid interest that accrued during the period.
ATLAX Group
Net cash at 1 January 2020
Cash flows
Foreign exchange adjustments
Net cash at 31 December 2020
Cash flows
Foreign exchange adjustments
Net cash at 31 December 2021
Cash and cash
equivalents
$’000
48,612
4,717
(1,199)
52,130
(8,648)
(724)
42,758
Total
$’000
48,612
4,717
(1,199)
52,130
(8,648)
(724)
42,758
7.2 Contingent liabilities and capital commitments
European Transport Investments (UK) Limited (ETI UK), a subsidiary of ATLIX, was released from its bank guarantees
on 18 March 2021 and has not made any guarantees as of 31 December 2021 (31 December 2020: € 2 million ($3.2 million)).
The Groups have not made any other material guarantees as of 31 December 2021.
94 | ATLAS ARTERIA ANNUAL REPORT 2021
NOTES TO THE FINANCIAL REPORTS 7.3 Remuneration of auditors
Amounts paid or payable to PricewaterhouseCoopers
Australia for:
Audit services
Other assurance services (a)
Other services (b)
Amounts paid or payable to Network firms
of PricewaterhouseCoopers for:
Audit services
Taxation services (c)
Amounts paid or payable to PricewaterhouseCoopers for:
Audit and other assurance services
Taxation and other services
Amounts paid or payable to non PricewaterhouseCoopers
audit firms for:
Audit services provided by CERTIS GmbH
Wirtschaftsprüfungsgesellschaft ('CERTIS')
Audit services provided by Baker Tilly
GmbH Wirtschaftsprüfungsgesellschaft
Steuerberatungsgesellschaft ('Baker Tilly') (d)
Other non-audit services
ALX
ATLAX Group
Year ended
31 Dec 2021
$
Year ended
31 Dec 2020
$
Year ended
31 Dec 2021
$
Year ended
31 Dec 2020
$
810,000
–
25,000
835,000
755,094
134,000
49,500
938,594
408,750
377,547
–
25,000
433,750
13,215
49,500
440,262
420,967
97,545
518,512
506,761
120,642
627,403
48,387
46,233
–
–
48,387
46,233
1,230,967
1,395,855
122,545
170,142
1,353,512
1,565,997
457,137
25,000
482,137
436,995
49,500
486,495
–
111,132
78,040
9,053
87,093
–
16,031
127,163
–
–
–
–
–
–
–
–
(a) In the prior year, other assurance services relates to Equity Raise due diligence and TRIP II accounting considerations.
(b) Other services include foreign exchange workshop and training sessions.
(c) Taxation services provided by network firms of the auditor relates to the filing of corporate income tax returns for the Groups’ entities domiciled outside of Australia.
(d) During 2021, the audit firm of Warnow Tunnel was changed from CERTIS GmbH to Baker Tilly.
7.4 Share based payments
STI Plan
The STI Plan applies to all Atlas Arteria staff based on a balance of financial and non-financial performance measures aligned with
Atlas Arteria’s short term goals. For the executive team, following determination of the STI amount, 50% (2020: 0%) is paid in cash
and 50% (2020: 100%) is deferred for one year and vests in unrestricted securities on terms determined by Atlas Arteria.
LTIP
The LTIP is designed to provide long-term incentives to key employees to deliver long-term securityholder returns. Under the plan,
participants are granted performance rights which only vest if certain performance standards are met.
The amount of performance rights that will vest depends on Atlas Arteria’s relative Total Securityholder Return (TSR) against
the TSR performance of a peer group of companies approved by the Boards and in respect of awards granted after 1 January 2021
there is an additional performance condition that requires Atlas Arteria’s absolute TSR to be positive for the performance period.
Performance rights are granted under the plan for no consideration. These performance rights are exercisable at no consideration
upon satisfaction of performance hurdles.
EE Plan
The EE Plan was established in 2020 and provides all employees (excluding the executive team) with an allocation of performance
rights granted for no consideration. These performance rights are exercisable at no consideration upon satisfaction of the 3 year
service condition.
ATLAS ARTERIA ANNUAL REPORT 2021 | 95
NOTES TO THE FINANCIAL REPORTSFINANCIAL REPORTDIRECTORS’ REPORTSREMUNERATION REPORTFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS Set out below are summaries of performance rights granted under the plans:
As at 1 January
Rights granted during the year under the LTIP
Securities granted during the year under the STI Plan
Rights granted during the year under the EE plan
Rights exercised during the year under the LTIP
ATLIX Group
ATLAX Group
Year ended
31 Dec 2021
Number
of equity
instruments
1,155,757
608,178
162,978
24,780
–
Year ended
31 Dec 2020
Number
of equity
instruments
717,632
378,688
155,024
11,988
–
Year ended
31 Dec 2021
Number
of equity
instruments
1,155,757
608,178
162,978
24,780
–
Year ended
31 Dec 2020
Number
of equity
instruments
717,632
378,688
155,024
11,988
–
Securities exercised during the year under the STI Plan
(155,024)
(107,575)
(155,024)
(107,575)
Rights exercised during the year under the EE plan
Rights forfeited during the year under the LTIP
Securities forfeited during the year under the STI Plan
Rights forfeited during the year under the EE plan
–
(270,846)
–
(4,653)
–
–
–
–
–
(270,846)
–
(4,653)
–
–
–
–
As at 31 December
1,521,170
1,155,757
1,521,170
1,155,757
The performance conditions of the 2019 LTI performance rights were tested in January 2022. The performance conditions were not
satisfied at which time the rights were forfeited. LTI performance rights issued in 2020 that are outstanding at the end of the year
will vest after the end of the performance period which ends on 31 December 2022 only if performance conditions are met. LTI
performance rights issued in 2021 that are outstanding at the end of the year will vest after the end of the performance period
which ends on 31 December 2023 only if performance conditions are met. STI restricted securities issued in 2020 vested in
January 2021. STI restricted securities issued in 2021 vested in December 2021 as the service conditions were met, however
remain in a holding lock until the next trading window in 2022.
7.4.1 Fair value of performance rights granted
The assessed fair value at grant date of performance rights granted during the year ended 31 December 2021 was $2.95 per
performance right (2020: $1.85 to $5.02). The fair value at grant date is independently determined using an adjusted form of the
Stochastic Model which includes a Monte Carlo simulation model that takes into account the exercise price, the term of the
performance right, the impact of dilution (where material), the share price at grant date and expected price volatility of the
underlying share, the expected dividend yield, the risk free interest rate for the term of the performance right and the correlations
and volatilities of the peer group companies.
The expected price volatility is based on the historic volatility (based on the remaining life of the performance rights), adjusted for
any expected changes to future volatility due to publicly available information.
7.4.2 Expenses arising from share-based payment transactions
Employee performance rights – LTIP
Employee securities – STI
7.5 Other accounting policies
ATLIX Group
ATLAX Group
Year ended
31 Dec 2021
$’000
Year ended
31 Dec 2020
$’000
Year ended
31 Dec 2021
$’000
Year ended
31 Dec 2020
$’000
1,363
1,055
2,418
1,199
951
2,150
33
26
59
32
25
57
This note provides a list of the significant accounting policies adopted in preparation of these Financial Reports to the extent they
have not already been disclosed in the other notes above.
7.5.1 Transaction costs
Transaction costs related to an investment in an associate are capitalised into the investment cost. Transaction costs arising on the
issue of equity instruments are recognised directly in equity and those arising on borrowings are netted with the liability and
included in interest expense using the effective interest method.
96 | ATLAS ARTERIA ANNUAL REPORT 2021
NOTES TO THE FINANCIAL REPORTS 7.5.2 GST
The amount of GST incurred by the Groups that is not recoverable from the Australian Taxation Office (‘ATO’) is recognised as an
expense or as part of the cost of acquisition of an asset or adjusted from the proceeds of securities issued. These expenses have
been recognised in profit or loss net of the amount of GST recoverable from the ATO. Receivables and payables are stated at amounts
exclusive of GST. The net amount of GST recoverable from the ATO is included in receivables in the Consolidated Statement of
Financial Position. Cash flows relating to GST are included in the Consolidated Statements of Cash Flows on a net basis.
7.5.3 Foreign currency translation
Functional and presentation currency
Items included in the Financial Reports of each of the Groups’ entities are measured using the currency of the primary economic
environment in which the entity operates (the functional currency). The Financial Reports are presented in Australian Dollars,
which is the functional and presentation currency of ATLIX and ATLAX.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at
period end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.
Group companies
The results and financial position of the Groups’ entities that have a functional currency different from the presentation currency
are translated into the presentation currency as follows:
− Assets and liabilities for each Statement of Financial Position presented are translated at the closing rate at the date of that
Statement of Financial Position
− Income and expenses for each Statement of Comprehensive Income are translated at exchange rates at the dates of transactions
or at an average rate as appropriate
− All resulting exchange differences are recognised as a separate component of equity
On consolidation, exchange differences arising from the translation of any net investment in foreign entities are taken to
securityholders’ equity. When a foreign operation is disposed of or borrowings that form part of the net investment are repaid, a
proportionate share of such exchange differences are recognised in profit or loss as part of the gain or loss on disposal. Goodwill
and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and
translated at the closing rate.
7.5.4 Offsetting financial instruments
Financial assets and financial liabilities may be offset and the net amount reported on the Statement of Financial Position when
there is a legally enforceable right to offset the amounts and either there is an intention to settle on a net basis, or realise the
financial asset and settle the financial liability simultaneously.
7.6 Events occurring after balance sheet date
The Directors of ATLIX and ATLAX are not aware of any matters or circumstances not otherwise dealt with in the Financial Reports
that has significantly affected or may significantly affect the operations of the Groups or the results of those operations or the state
of affairs of the Groups in the years subsequent to the year ended 31 December 2021.
ATLAS ARTERIA ANNUAL REPORT 2021 | 97
NOTES TO THE FINANCIAL REPORTSFINANCIAL REPORTDIRECTORS’ REPORTSREMUNERATION REPORTFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS DIRECTORS’ DECLARATION – ATLAS ARTERIA
INTERNATIONAL LIMITED
The Directors of Atlas Arteria International Limited (‘ATLIX’) declare that:
a) the Financial Report of ATLIX and its controlled entities (‘Atlas Arteria’) and notes set out on pages 57 to 97:
i) comply with Australian Accounting Standards and other mandatory professional reporting requirements; and
ii)
give a true and fair view of the financial position of Atlas Arteria as at 31 December 2021 and of its performance
for the year ended on that date; and
b) there are reasonable grounds to believe that ATLIX will be able to pay its debts as and when they become due and payable.
The Directors confirm that the Financial Report also complies with International Financial Reporting Standards as issued
by the International Accounting Standards Board.
This declaration is made in accordance with a resolution of the Directors.
Jeffrey Conyers
Chair
Atlas Arteria International Limited
Hamilton, Bermuda
23 February 2022
Caroline Foulger
Director
Atlas Arteria International Limited
Hamilton, Bermuda
23 February 2022
DIRECTORS’ DECLARATION – ATLAS ARTERIA LIMITED
The Directors of Atlas Arteria Limited (‘ATLAX’) declare that:
a) the Financial Report of ATLAX and its controlled entities (‘ATLAX Group’) and notes set out on pages 57 to 97:
are in accordance with the constitution of ATLAX and the Corporations Act 2001, including:
i)
ii)
complying with Australian Accounting Standards, the Corporations Regulations 2001 and other mandatory professional
reporting requirements, and
giving a true and fair view of the financial position of the ATLAX Group as at 31 December 2021 and of its performance
for the year ended as on that date; and
b) there are reasonable grounds to believe that ATLAX will be able to pay its debts as and when they become due and payable.
The Directors confirm that the Financial Report also complies with International Financial Reporting Standards as issued by the
International Accounting Standards Board.
The Directors have been given the declaration by the Chief Executive Officer and Chief Financial Officer required by section 295A
of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the Directors.
Debbie Goodin
Chair
Atlas Arteria Limited
Melbourne, Australia
24 February 2022
Ariane Barker
Director
Atlas Arteria Limited
Melbourne, Australia
24 February 2022
98 | ATLAS ARTERIA ANNUAL REPORT 2021
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Independent auditor’s report
To the stapled security holders of Atlas Arteria International Limited and Atlas Arteria Limited
Report on the audits of the financial reports
Our opinion
In our opinion:
The accompanying financial reports of:
• Atlas Arteria International Limited (ATLIX) and its controlled entities and Atlas Arteria Limited
(ATLAX) and its controlled entities, together Atlas Arteria or ALX; and
• Atlas Arteria Limited (ATLAX) and its controlled entities, together the ATLAX Group
are in accordance with the Corporations Act 2001, including:
(a) giving a true and fair view of the financial positions of Atlas Arteria and the ATLAX Group as at
31 December 2021 and of their financial performance for the year then ended
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
What we have audited
The financial reports of Atlas Arteria and the ATLAX Group comprise:
•
•
•
•
•
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the consolidated statements of financial position as at 31 December 2021
the consolidated statements of comprehensive income for the year then ended
the consolidated statements of changes in equity for the year then ended
the consolidated statements of cash flows for the year then ended
the notes to the financial reports, which include significant accounting policies and other
explanatory information
the directors’ declarations.
Basis for opinion
We conducted our audits in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
reports section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Independence
We are independent of Atlas Arteria and the ATLAX Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional & Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) (the Code) that are relevant to our audits of the
financial reports in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.
PricewaterhouseCoopers, ABN 52 780 433 757
2 Riverside Quay, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001
T: 61 3 8603 1000, F: 61 3 8603 1999
Liability limited by a scheme approved under Professional Standards Legislation.
ATLAS ARTERIA ANNUAL REPORT 2021 | 99
Our audit approach
An audit is designed to provide reasonable assurance about whether the financial reports are free
from material misstatement. Misstatements may arise due to fraud or error. They are considered
material if individually or in aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial reports.
We tailored the scope of our audits to ensure that we performed enough work to be able to give an
opinion on the financial reports as a whole, taking into account the geographic and management
structure of Atlas Arteria and the ATLAX Group, their accounting processes and controls and the
industry in which they operate.
Atlas Arteria invests in an international portfolio of toll roads, the most significant of which are:
• APRR in France;
• Dulles Greenway in the USA. Toll Road Investors Partnership II, L.P. ("Trip II") is the
concessionaire for Dulles Greenway; and
• Warnowquerung GmbH & Co (“Warnow Tunnel”) in Germany.
We engaged with the auditors of APRR, Trip II and Warnow Tunnel to report to us in respect of their
audit procedures performed on the relevant toll road businesses.
Materiality
• Atlas Arteria materiality was $25.6 million, which represents approximately 2.5% of segment
EBITDA (earnings before interest, tax, depreciation and amortisation). The ATLAX Group
materiality was $1.5 million, which represents approximately 1% of its total assets.
• We applied this threshold, together with qualitative considerations, to determine the scope of
our audits and the nature, timing and extent of our audit procedures and to evaluate the effect of
misstatements on the financial reports as a whole.
• We used segment EBITDA as the materiality benchmark for Atlas Arteria as this reflects the
performance of the underlying businesses and the proportion of their results attributable to Atlas
Arteria. We applied a 2.5% threshold based on our professional judgement, noting that this is in
the range of commonly acceptable thresholds.
• We used total assets as the materiality benchmark for the ATLAX Group because, in our view, it
is the primary metric against which its performance is most commonly measured. The ATLAX
Group’s interest in Dulles Greenway is recorded on its Statement of Financial Position as an
equity accounted investment. We applied a 1% threshold based on our professional judgement,
noting that this is within a range of commonly acceptable thresholds.
100 | ATLAS ARTERIA ANNUAL REPORT 2021
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Audit Scope
• Our audits focused on where Atlas Arteria and the ATLAX Group made subjective judgements;
for example, significant accounting estimates involving assumptions and inherently uncertain
future events.
• We decided the nature, timing and extent of work that needed to be performed by other auditors
operating under our instructions (component auditors). For APRR, Dulles Greenway and
Warnow Tunnel, we determined the level of involvement we needed to have in the audit work
performed by the component auditors to enable us to conclude whether sufficient appropriate
audit evidence had been obtained. Our involvement included discussions, written instructions
and reviewing a selection of component auditor workpapers.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audits of the financial reports for the current period. The key audit matters were addressed in the
context of our audits of the financial reports as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters. Further, any commentary on the outcomes of a
particular audit procedure is made in that context. We communicated the key audit matters to the Audit
and Risk Committees.
Key audit matter
How our audit addressed the key audit matter
Carrying value of Atlas Arteria’s tolling
concession asset and the ATLAX Group’s
investment in associates in respect of Dulles
Greenway
(Refer to notes 4.1 and 3.2)
Atlas Arteria has 100% economic interest in the
Dulles Greenway tolling concession, which is a Cash
Generating Unit (CGU). The tolling concession
intangible asset in respect of Dulles Greenway is
included in Atlas Arteria’s total tolling concession
intangible assets of $2.1 billion.
The ATLAX Group has an equity accounted
investment in the Dulles Greenway CGU of $100.0
million.
During the year Atlas Arteria and the ATLAX Group
performed an impairment assessment on the carrying
value of the CGU. The assessment of the recoverable
amounts of the assets were made on a fair value less
costs of disposal (FVLCD) basis, using discounted
cash flow models. No impairment expense was
recorded.
We performed the following procedures, amongst
others:
•
•
•
•
Assessed whether the composition of the
CGU was consistent with our knowledge of
Atlas Arteria and the ATLAX Group’s
operations.
Assessed whether the CGU appropriately
included all directly attributable assets and
liabilities.
Assessed that there were indicators of
impairment during the year, taking into
consideration the requirements of Australian
Accounting Standards.
Assessed whether the valuation
methodology, which utilised a discounted
cash flow model to estimate the recoverable
amount of the Dulles Greenway, was
consistent with the requirements of
Australian Accounting Standards.
ATLAS ARTERIA ANNUAL REPORT 2021 | 101
Key audit matter
How our audit addressed the key audit matter
These assessments involved significant judgements,
such as:
•
•
•
•
•
Forecasting future traffic volumes
Forecasting long-term inflation rates
Estimating toll price growth rates
Determining appropriate discount rate for the
CGU
The assessments of the carrying values of the tolling
concession asset for Atlas Arteria and the investment
in associates for the ATLAX Group relating to Dulles
Greenway were a key audit matter due to the
significant carrying value of these assets and the
judgements involved in developing assumptions used
in the discounted cashflow model which determine the
recoverable amount of the CGU.
Assessed whether the forecast cash flows in
the impairment assessment were
appropriate by performing the following
procedures, amongst others:
o Comparing traffic volume growth
assumptions to third party
economic projections.
o Considered the ability of Atlas
Arteria and the ATLAX Group to
forecast accurately by comparing
previous traffic forecasts to actual
traffic volumes achieved.
o Comparing long-term inflation rate
assumptions to third party
projections.
o Comparing average toll price
growth rate assumptions to the
latest correspondence with the
relevant authority, contractual
arrangements and historical rate
agreements where relevant.
o With assistance from PwC valuation
experts, we evaluated the
appropriateness of the discount rate
used for Dulles Greenway. This
assessment was performed with
reference to externally derived data
where possible, including market
expectations of investment return,
projected economic growth, interest
rates, valuations of comparable
businesses and asset specific
characteristics.
•
•
•
Performed sensitivity analysis on the key
assumptions used in the impairment model.
Tested the mathematical accuracy of the
impairment model on a sample basis, and
Evaluated the adequacy of the disclosures
made in notes 4.1 and 3.2, in light of the
requirements of Australian Accounting
Standards.
102 | ATLAS ARTERIA ANNUAL REPORT 2021
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Key audit matter
How our audit addressed the key audit matter
Consolidation of subsidiaries and equity
accounting of associates
(Refer to notes 3.2 and 5.3)
Atlas Arteria applies equity accounting to its
investment in APRR and consolidates its investments
in Dulles Greenway and Warnow Tunnel. The ATLAX
Group applies equity accounting to its investment in
Dulles Greenway. Both Atlas Arteria and the ATLAX
Group exercise judgement in the application of
Australian Accounting Standards in determining the
basis of accounting for their investments in these
businesses.
In the application of equity and consolidation
accounting, management is required to make a
number of adjustments to the underlying financial
information of each business to ensure alignment to
Australian Accounting Standards and to Atlas Arteria
and the ATLAX Group’s accounting policies.
This was a key audit matter because certain of the
adjustments involved in the application of equity and
consolidation accounting are material and complex in
nature. There was a restatement of the prior period in
respect of the historic accounting applied.
Such adjustments include:
•
•
adjusting the results of international
subsidiaries and investments in associates
prepared using local accounting policies to
reflect Australian Accounting Standards as
applied through the Atlas Arteria and the
ATLAX Group accounting policies
adjusting the results of equity investees to
reflect equity accounting adjustments
required to arrive at Atlas Arteria and the
ATLAX Group’s share of profits from
associates.
We considered the appropriateness of Atlas Arteria
and the ATLAX Group’s conclusions on the
application of equity accounting and consolidation of
investments in light of the requirements of Australian
Accounting Standards. In doing so, we read and
developed an understanding of the contractual
arrangements for each investment.
We developed an understanding of operational
developments and local accounting policies of the
subsidiaries and associates and the nature and extent
of any accounting standard or accounting policy
adjustments required to align with those of Atlas
Arteria or the ATLAX Group.
On a sample basis, we reperformed the calculation of
the adjustments to assess consistency with this
understanding and to check for mathematical
accuracy.
Upon receipt of audited financial information for
Dulles Greenway and Warnow Tunnel, we tested
management’s calculations of adjustments on a
sample basis, checking for mathematical accuracy
and consistency with the Atlas Arteria and ATLAX
Group accounting policies. These adjustments
impact:
•
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Atlas Arteria’s consolidated statement of
comprehensive income and consolidated
statement of financial position; and
the ATLAX Group’s share of associates net
profits or losses and carrying value of Dulles
Greenway.
Upon receipt of audited financial information for
APRR, we tested management’s calculation of
adjustments, checking for mathematical accuracy and
consistency with Atlas Arteria accounting policies.
These adjustments impact Atlas Arteria’s share of net
profits from equity accounted investments and the
carrying value of the equity accounted investment in
APRR.
We evaluated the adequacy of the disclosures made
in notes 3.2 and 5.3, in light of the requirements of
Australian Accounting Standards.
ATLAS ARTERIA ANNUAL REPORT 2021 | 103
Key audit matter
How our audit addressed the key audit matter
Provision for toll road maintenance
(Refer to note 3.2 and 4.4)
Atlas Arteria and the ATLAX Group have investments
in toll roads. These businesses hold a contractual
right under a concession agreement to toll users of
the roads in return for the capital and expertise
required to build, maintain and operate the road.
Atlas Arteria and the ATLAX Group are subject to a
number of contractual obligations under the
concession agreements. The concession agreements
contain clauses that require the concession holders of
the Dulles Greenway, APRR and Warnow Tunnel to
maintain the toll roads to a specified standard and to
return the asset in a certain condition at the
completion of the concession period. This results in
the recognition of provisions for these contractual
maintenance obligations.
The obligations for the Dulles Greenway and Warnow
Tunnel are included in the provision for toll road
maintenance of $28.7 million per note 4.4. The
obligations in respect of APRR form part of the
carrying value of Atlas Arteria’s equity accounted
investment.
Estimating maintenance provisions requires
significant judgement and assumptions, including the
following:
•
•
•
•
The nature and extent of future maintenance
activities required
Forecast cash flows associated with these
future maintenance activities and timing of
when they will be required
The time period over which a maintenance
life cycle of each asset category is deemed
to be required
Discount rate and inflation rate applied to
future cash flows to bring them to their
present value.
We obtained Atlas Arteria and the ATLAX Group’s
assessments of maintenance obligations under each
of the concession agreements. These assessments
include an estimate of the cost of the required
maintenance activities, which forms the basis of the
models used to calculate the provision. We evaluated
these assessments in light of the requirements of
Australian Accounting Standards.
We evaluated and tested key assumptions utilised in
the models by performing the following procedures,
amongst others:
•
•
•
•
•
•
•
Evaluated the process by which the models,
including maintenance cost forecasts, were
developed.
Considered whether the relevant obligations
in the concession agreements were
appropriately reflected in the provision.
Compared forecast maintenance
expenditure to other information produced by
the Atlas Arteria and the ATLAX Group.
Compared previous cost forecasts to actual
expenditure incurred.
Assessed the appropriateness of the
estimated timing of the cash outflows and
asset life cycles with reference to third party
reports and Atlas Arteria’s maintenance
policy.
Considered the appropriateness of the
discount rates and inflation rates utilised in
the models by comparing them to current
market consensus rates, including long term
government bond yields and long term target
inflation.
Checked the mathematical accuracy of the
models by reperforming a selection of
calculations therein.
We considered this to be a key audit matter due to the
judgement needed to assess the quantum of the
provision for toll road maintenance.
We evaluated the adequacy of the disclosure made in
note 4.4, in light of the requirements of Australian
Accounting Standards.
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Key audit matter
How our audit addressed the key audit matter
Recognition of deferred tax assets in respect of
carry forward losses
(Refer to note 2.4)
We evaluated the competency, capability and
objectivity of Atlas Arteria’s expert who reviewed the
losses and their ability to be used in light of local tax
rules.
During the year, Atlas Arteria recognised a deferred
tax asset of $35.7 million relating to carried forward
tax losses at Warnow Tunnel. Changes in
circumstances arising from a debt and equity
restructure of the Warnow Tunnel holding entity
resulted in Atlas Arteria assessing that carried forward
tax losses were now probable of utilisation and as
such a deferred tax asset was recorded. Atlas Arteria
has also determined that the tax losses are available
to be utilised against those future taxable profits.
Judgement is required in assessing the assumptions
utilised to determine that the carried forward tax
losses are probable of utilisation, including forecasts
of future cash flows and future taxable profits
generated by the Warnow Tunnel.
We considered this to be a key audit matter for Atlas
Arteria due to the judgmental nature of the key
assumptions used to estimate the deferred tax asset
recognised on the Statement of Financial Position.
We assessed the key assumptions utilised to support
the recognition of carried forward tax losses in respect
of Warnow Tunnel. We specifically considered the
ability for Atlas Arteria to access the tax losses and
focused on the Group’s assessment of the forecast
taxable profits, which forms the basis for the model
used to calculate the deferred tax asset.
We evaluated and tested key assumptions utilised in
the model by performing the following procedures,
amongst others:
•
Assessed whether the forecast cash flows
used to assess future taxable profits were
appropriate by performing the following
procedures, amongst others:
o Comparing traffic volume growth
assumptions to third party economic
projections.
o Comparing cost assumptions to
approved budgets and historic actual
costs.
o Considered the ability of Atlas Arteria
and the ATLAX Group to forecast
accurately by comparing previous
traffic forecasts to actual traffic
volumes achieved.
o Comparing long-term inflation rate
assumptions to independent third party
projections.
o Comparing average toll price growth
rate assumptions to the latest
correspondence with the relevant
authority, contractual arrangements
and historical rate agreements.
•
Evaluated the adequacy of the disclosure
made in note 2.4, in light of the requirements
of Australian Accounting Standards.
ATLAS ARTERIA ANNUAL REPORT 2021 | 105
Other information
The directors are responsible for the other information. The other information comprises the
information included in the Annual Report for the year ended 31 December 2021, but does not include
the financial reports and our auditor’s reports thereon.
Our opinion on the financial reports does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audits of the financial reports, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
reports or our knowledge obtained in the audits, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of
this auditor’s reports, we conclude that there is a material misstatement of this other information, we
are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial reports
The directors of ATLIX and ATLAX are responsible for the preparation of the financial reports that give
a true and fair view in accordance with Australian Accounting Standards and the Corporations Act
2001 and for such internal control as the directors determine is necessary to enable the preparation of
the financial reports that give a true and fair view and are free from material misstatement, whether
due to fraud or error.
In preparing the financial reports, the directors are responsible for assessing the ability of Atlas Arteria
and the ATLAX Group to continue as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting unless the directors either intend to
liquidate Atlas Arteria or the ATLAX Group or to cease operations, or have no realistic alternative but
to do so.
Auditor’s responsibilities for the audits of the financial reports
Our objectives are to obtain reasonable assurance about whether the financial reports as a whole are
free from material misstatement, whether due to fraud or error, and to issue auditor’s reports that
include our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial reports.
A further description of our responsibilities for the audits of the financial reports is located at the
Auditing and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our
auditor's report.
106 | ATLAS ARTERIA ANNUAL REPORT 2021
Report on the remuneration report
Our opinion on the remuneration report
We have audited the remuneration report included in pages 32 to 50 of the directors’ report for the
year ended 31 December 2021.
In our opinion, the remuneration report of ATLIX and ATLAX for the year ended 31 December 2021
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of ATLIX and ATLAX are responsible for the preparation and presentation of the
remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the remuneration report, based on our audit conducted in accordance with
Australian Auditing Standards.
PricewaterhouseCoopers
Ben Gargett
Partner
Melbourne
24 February 2022
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ATLAS ARTERIA ANNUAL REPORT 2021 | 107
SECURITYHOLDER INFORMATION
As at 31 January 2022
Distribution of securities
Investor ranges
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 Over
Total
Investors with less than the minimum marketable parcel 1
1. Minimum marketable parcel is $500.00 equating to 77 shares at $6.51 per security
Twenty largest investors
Investor
Holders
Total securities
% of issued
securities
11,073
9,457
2,681
2,260
105
25,576
2,235
4,253,483
23,529,955
19,142,545
51,945,262
860,146,981
959,018,226
51,940
0.44
2.45
2.00
5.42
89.69
100.00
0.01
Number of
securities
% of issued
securities
1 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
2
3 CITICORP NOMINEES PTY LIMITED
4 NATIONAL NOMINEES LIMITED
5 BNP PARIBAS NOMINEES PTY LTD
6 BNP PARIBAS NOMS PTY LTD
7 MUTUAL TRUST PTY LTD
8 NETWEALTH INVESTMENTS LIMITED
9 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
10 BNP PARIBAS NOMINEES PTY LTD SIX SIS LTD
11 BNP PARIBAS NOMS PTY LTD
12 CITICORP NOMINEES PTY LIMITED
13 BNP PARIBAS NOMS (NZ) LTD
14 BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD
15 SANDHURST TRUSTEES LTD
16 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED – A/C 2
17 DJERRIWARRH INVESTMENTS LIMITED
18 INVIA CUSTODIAN PTY LIMITED
19 CUSTODIAL SERVICES LIMITED
20 BOND STREET CUSTODIANS LIMITED
Total
Details of substantial stapled securityholders
Holder
Date of most recent substantial holder notice
Lazard Asset Management
State Street Corporation
Franklin Resources Inc
Blackrock Group
Vanguard Group
Mitsubishi UFJ Financial Group, Inc.
12 March 2021
28 October 2021
12 November 2021
29 November 2021
6 December 2021
25 January 2022
456,321,022
167,821,702
80,451,197
39,482,707
26,513,184
17,731,183
10,093,785
9,457,892
5,561,286
5,128,157
4,185,217
2,969,737
2,912,250
2,244,789
1,839,155
1,615,055
1,563,696
1,373,325
1,214,772
1,025,000
47.58
17.50
8.39
4.12
2.76
1.85
1.05
0.99
0.58
0.53
0.44
0.31
0.30
0.23
0.19
0.17
0.16
0.14
0.13
0.11
839,505,111
87.54
Number of
securities
% of issued
securities
108,296,118
11.29%
47,980,793
50,090,149
60,068,737
48,036,591
48,167,763
5.00%
5.22%
6.26%
5.01%
5.02%
108 | ATLAS ARTERIA ANNUAL REPORT 2021
REGISTRY
Computershare Investor Services Pty Ltd
GPO Box 2975
Melbourne VIC 3001
Australia
Telephone:
(Australia) 1800 267 108
(Overseas) +61 3 9415 4053
Mon-Fri 8.30am – 7pm AEST
Website: www.computershare.com/au
Facsimile: +61 (0) 3 9473 2500
CORPORATE DIRECTORY
ATLAS ARTERIA LIMITED
Level 1, 180 Flinders Street
Melbourne VIC 3000
Australia
Telephone (Australia): 1800 621 694
Telephone (International): +61 (0) 438 493 692
Email: investors@atlasarteria.com
Website: www.atlasarteria.com
Directors
Debbie Goodin, Independent Non-executive Chair
Graeme Bevans, Executive Director
David Bartholomew, Independent Non-executive Director
Jean-Georges Malcor, Independent Non-executive Director
Ariane Barker, Independent Non-executive Director
Secretaries
Clayton McCormack, General Counsel and Company Secretary
Paul Lynch, Joint Company Secretary
ATLAS ARTERIA INTERNATIONAL LIMITED
4th Floor, Cedar House
41 Cedar Avenue
Hamilton HM12 Bermuda
Directors
Jeffrey Conyers, Independent Non-executive Chair
Debbie Goodin, Independent Non-executive Director
Fiona Beck, Independent Non-executive Director
Caroline Foulger, Independent Non-executive Director
Andrew Cook, Independent Non-executive Director
Secretary
Sheena Dottin
Photography Credits:
Page 5 – Dulles Greenway: David Madison Photography
Page 10 – APRR/Photec
Page 13 – APRR/Photec
Page 14 – Warnow Tunnel: Trent Perrett Photography
Page 16 – Dulles Greenway: David Madison Photography
Page 20 – Dulles Greenway: David Madison Photography
Page 22 – APRR/La France vue du ciel
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