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ATLAS ARTERIA
CONNECTING COMMUNITIES
Contents
Key Business Highlights
The Atlas Arteria Business
Chairpersons’ Review
CEO and Managing Director’s Review
Executive Team
Business Leaders
History of Atlas Arteria
Business Strategy
Stakeholder Engagement
Business Performance
Sustainability
Risk Management
Corporate Governance
Financial Overview
Directors’ Reports
Remuneration Report
Financial Report
Securityholder Information
Glossary
Corporate Directory
1
2
4
6
8
9
10
12
13
14
27
36
38
43
51
56
85
138
139
140
Acknowledgement of Country
Atlas Arteria acknowledges the Traditional Custodians of country throughout Australia, and their connections to land, sea and community.
We pay our respects to their Elders past, present and emerging and extend that respect to all Aboriginal and Torres Strait Islander peoples today.
As a global owner, operator and developer of toll roads, we extend our respect to the First Nations custodians in every location where we live and work
and to their past, present and ongoing contributions, which enrich our lives and communities. Keeping communities connected is at the heart of what we do;
and we do so guided by our values, which encourage respect for all people in every interaction.
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 North, 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.
ATLAS ARTERIA
CONNECTING COMMUNITIES
KEY BUSINESS HIGHLIGHTS
CEO and Managing Director’s Review
Contents
Key Business Highlights
The Atlas Arteria Business
Chairpersons’ Review
Executive Team
Business Leaders
History of Atlas Arteria
Business Strategy
Stakeholder Engagement
Business Performance
Sustainability
Risk Management
Corporate Governance
Financial Overview
Directors’ Reports
Remuneration Report
Financial Report
Securityholder Information
Glossary
Corporate Directory
1
2
4
6
8
9
10
12
13
14
27
36
38
43
51
56
85
138
139
140
Chicago Skyway transition
plan complete
– Advanced the transition
to a whole-of-life asset
management culture
– Optimised the capital
structure
– Completed
operational review
– Aligned with Atlas
Arteria’s safety
approach and emissions
reporting process
– Chicago Skyway
outperformed business
acquisition case
Submitted Dulles Greenway rate case application
for increased tolls
Hosted the 3rd Run the Greenway
event raising over
US$268,000
for local charities
Achieved target of
19
wildlife crossings along
the APRR and AREA
networks by the end
of 2023
On track to achieve 25% reduction in scope 1 and 2
emissions by 2025 compared to 2019 baseline
Maintained
40%
gender balance 1
Weighted average traffic
performance in 2023:
3.3%
higher than 2022 and 2.9%
above 2019 2
Weighted average toll revenue
performance in 2023:
6.9%
higher than 2022 and 11.9%
above 2019 3
Securityholder distribution
per security:
40.0 cps4
2023
40.0cps
2022
40.0cps
2021
36.0cps
2020
24.0cps
APRR net profit after tax 5:
€1,116m
2023
€1,116m
2022
€1,056m
2021
€933m
2020
€628m
Acknowledgement of Country
Atlas Arteria acknowledges the Traditional Custodians of country throughout Australia, and their connections to land, sea and community.
We pay our respects to their Elders past, present and emerging and extend that respect to all Aboriginal and Torres Strait Islander peoples today.
As a global owner, operator and developer of toll roads, we extend our respect to the First Nations custodians in every location where we live and work
and to their past, present and ongoing contributions, which enrich our lives and communities. Keeping communities connected is at the heart of what we do;
and we do so guided by our values, which encourage respect for all people in every interaction.
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 office is
4th Floor North, Cedar House, 41 Cedar Avenue, Hamilton, HM12, Bermuda. ATLAX is a company limited by shares incorporated and domiciled
in Australia and the registered office is Level 1, 180 Flinders Street, Melbourne, VIC 3000, Australia.
1. Across Boards, within senior executive roles and across all Atlas Arteria employees. Senior executives is defined as Atlas Arteria Executive Team members, their direct
reports in senior roles and CEOs of the wholly and majority owned businesses.
2. Reflects weighted average traffic growth based on portfolio revenue allocations from Atlas Arteria’s current beneficial interests in its businesses, in AUD using the
foreign currency exchange rates in the period.
3. Toll revenue growth is calculated using the respective businesses’ local currencies, converted to AUD.
4. Includes H2 2023 distribution guidance of 20.0 cps which is subject to continued business performance, movements in foreign exchange rates, and other future events.
5. Prepared on a consolidated basis under IFRS.
ATLAS ARTERIA ANNUAL REPORT 2023 | 1
FINANCIAL REPORTREMUNERATION REPORTDIRECTORS’ REPORTSFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS
THE ATLAS ARTERIA BUSINESS
We work to create long-term value for our stakeholders through considered
and disciplined management and sustainable business practices.
Our key stakeholders:
– Customers
– Communities
– Employees
– Securityholders
– Co-investors
– Governments and regulatory authorities
– Partners and suppliers
OUR VISION
Our vision is to benefit the communities in which we operate through reduced travel time, greater time certainty,
reduced fuel consumption and carbon emissions and to provide an enjoyable travel experience.
OUR VALUES
Our values guide the decisions we make and the way we behave as we work together towards our vision. In living
and breathing our values, we can create strong growth for securityholders and better outcomes for our customers,
our communities and our people. To us, great performance is as much about how we get there and not just the end
result. That’s why our people’s success is evaluated against our five values, along with their role responsibilities.
OUR GUIDING VALUES
When we are guided 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
Environmentally and
socially responsible
Respect in
every interaction
We care about our
people, partners and
customers and believe
that their health, safety
and wellbeing come
first. We are proud to
promote a culture of
awareness and action
where our people
take accountability to
identify opportunities
for change. We want
our workplaces to
be safe places for
all people.
We are open, honest
and straightforward
in the way we
communicate. Our
people feel connected
to what is happening
across our businesses
in the way we share
information. We
take a ‘no surprises’
approach to keeping
people informed and
trust each other to
do the right thing.
We understand
the importance of
cultivating a safe
environment where
people know they can
speak up at any time.
We are committed
to making meaningful
connections that
improve the way we
work. We are open,
curious and challenge
constructively. We
work hard to ensure
that everyone feels
heard and that
feedback is welcome.
We are connected
to our purpose and
strategy and are
committed to working
together to deliver.
We understand the
responsibility we have
to the environment,
the community and
each other, and we
take our commitments
seriously. We
encourage our people
to be curious and look
for innovative ways
to minimise adverse
impacts, no matter
how big or small.
We expect respect
in every interaction.
We value the time,
perspective, and
experience of others
and demonstrate that
in the way we treat
them. We work hard to
ensure a truly inclusive
workplace where
all people feel seen,
heard and valued. We
know how important
it is to do the right
thing and ensure we
act ethically, lawfully
and responsibly at
all times.
2 | ATLAS ARTERIA ANNUAL REPORT 2023
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Today the Atlas Arteria Group consists of five toll road businesses 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.
Rostock, Germany
Warnow Tunnel
Virginia, United States
Dulles Greenway
United States HQ
France
APRR/A79/ADELAC
Chicago, United States
Chicago Skyway
Luxembourg
European HQ
Australia
Global Corporate HQ
ATLAX Board
Bermuda
ATLIX Board
APRR
Ownership: 31.14% | 2,316km motorway network in Eastern France | 2035 concession expiry 1
A79
Ownership: 31.14% | 88km east-west transversal link | 2068 concession expiry
ADELAC
Ownership: 31.17% | 20km commuter road connecting Annecy to Geneva | 2060 concession expiry
WARNOW TUNNEL
Ownership: 100% | 2.1km road and tunnel in Rostock, Germany | 2053 concession expiry
CHICAGO SKYWAY
Ownership: 66.67% | 12.5km toll road connecting Chicago and Northwest Indiana | 2104 concession expiry
DULLES GREENWAY
Ownership: 100% 2 | 22km commuter route into the greater Washington DC area | 2056 concession expiry
P14
P14
P14
P18
P21
P24
1. APRR concession expires in November 2035, AREA concession expires in September 2036.
2. 100% economic ownership.
ATLAS ARTERIA ANNUAL REPORT 2023 | 3
CHAIRPERSONS’ REVIEW
Dear Securityholder,
2023 was in many ways a challenging year for Atlas Arteria.
The Company faced several headwinds, including rising bond
yields and the introduction of a new French tax on companies
operating long-distance transport infrastructure. This new tax
is expected to apply to both APRR and AREA, and its introduction
in December 2023 adversely impacted our share price. We
are committed to using all appropriate means and avenues to
assert APRR’s legal and contractual rights to ensure that the
concession contracts are respected and their rights are protected.
Despite these challenges, 2023 marked a period of consolidation
for the Company. We successfully integrated Chicago Skyway
into our operations. We submitted a rate case to the Virginia State
Corporation Commission requesting an increase in the maximum
level of tolls at Dulles Greenway and we achieved credible
financial results at APRR, Warnow Tunnel and Chicago Skyway.
We started 2024 on a positive note, with APRR and Eiffage
appointed for exclusive negotiations for the A412 Thonon-Machilly
project in France, laying the foundations for further expansion
of the network.
Strong financial performance
Overall, Atlas Arteria is well positioned to outperform in the
current economic environment. We have a diversified portfolio
of businesses, are positively correlated to inflation and have
a strong balance sheet with a high proportion of long-term
fixed interest rate debt.
The impacts of inflation linked toll increases can be seen in
weighted average toll revenue for 2023, which rose by 6.9%,
while weighted average EBITDA increased by 7.1% compared
to 2022. These numbers also reflect record traffic performance
at APRR.
The performance of the business enabled distributions
of 20 cents per security for H1 2023 and we are guiding
to a further 20 cents per security for H2 2023, bringing the
total for 2023 to 40 cents per security.
Pleasingly, Chicago Skyway is outperforming our business
acquisition case, achieving c. 21% growth in tolls for 2023 and
2024, above our acquisition assumption of c.18%. Traffic also
exceeded expectations as the Indiana Toll Road roadworks were
suspended over the summer holiday period. These roadworks
are now complete. The planned regearing at the Skyway was
also completed, consistent with our communication at the time
of acquisition, resulting in US$116m of capital releases at the
Atlas Arteria level. These funds will be used to smooth distributions.
Creating long-term value for securityholders
Continuing to grow long-term securityholder value remains
our unwavering focus; and this was the driving force behind our
acquisition of Chicago Skyway in 2022. This was an exceptional
opportunity and met our three stated investment criteria.
We acknowledge the acquisition came as a surprise to some
investors, but we believe the Chicago Skyway is a truly
transformational opportunity for the Company and your Board
and Executive Team recognise the responsibility we now have
to ensure the investment case is fully delivered.
Our determination to create future value from APRR is ongoing.
We are pleased with the progress on the Investment Plan,
approved by the French State in January last year, and our
focus remains on the government’s concession review process,
of which APRR are active participants. As noted earlier, we will
actively defend our rights in relation to the new French tax and
we aim to mitigate the impact of the tax on distributions as the
process unfolds.
Unlocking value from Dulles Greenway is a primary focus,
and we are positioning the business for the optimal chance
of success. We are strengthening our team in the US, with
a process underway to appoint a North American Group
Executive to the Atlas Arteria team.
Our strategic areas of focus for 2024 and beyond
Throughout the year, we have dedicated ourselves to actively
engaging with, and listening to, our securityholders and key
stakeholders. These conversations have played an important
role in shaping our strategic priorities for 2024 and beyond,
and we intend to continue this constructive dialogue in the
coming year. These strategic priorities are:
Business optimisation
We will pursue initiatives to create value for our securityholders
within our existing businesses. These will aim to enhance operating
efficiencies, reduce costs and uphold exemplary stewardship.
Associated growth opportunities
We intend to pursue opportunities that are directly related to,
or in proximity to, our existing businesses, similar to what we
have achieved with the A79 in France, which is now owned and
operated by APRR. We have an attractive pipeline of growth
projects and our focus is squarely on realising accretive value
from these opportunities.
Other than in the context of these opportunities, acquisitions
are not being considered. We will provide appropriate notice
to securityholders if this position were to change.
4 | ATLAS ARTERIA ANNUAL REPORT 2023
we guided to distributions of 40 cents per security for 2023.
We are on track to meet this guidance for 2023 and are pleased
to guide to 40 cents per security for 2024, despite the introduction
of the new French tax described earlier.
Board renewal
We continuously strive to ensure that our Boards comprise a
diverse mix of skills, experience, backgrounds and perspectives.
On 1 March 2023, Fiona Beck became the Chair of ATLIX, following
the retirement of Jeff Conyers, and the ATLIX Board membership
reduced from five to four members. Kiernan Bell joined the
ATLIX Board as an Independent Non-executive Director on
1 September 2023, following the retirement of Caroline Foulger.
The ATLAX Board increased to seven members, welcoming
IFM Global Infrastructure Fund nominee Ken Daley as a Non-
executive Director on 30 May 2023, and John Wigglesworth
and Laura Hendricks as Independent Non-executive Directors
on 1 January 2023 and 16 October 2023 respectively.
These new appointments to the ATLAX and ATLIX Boards add
extensive operational and leadership experience from across
the infrastructure sector, within the geographies in which we
operate and in the area of corporate governance.
I can speak on behalf of all Directors when I say we are
passionately committed to delivering against Atlas Arteria’s
business strategy and priorities in 2024.
Outlook
The outlook for the business in 2024 and beyond is positive.
Our businesses continue to perform strongly, and we are well
positioned to benefit from the current inflationary environment.
On behalf of the Boards, thank you to our securityholders,
customers and stakeholders for your continued support.
We would also like to thank our Executive Team and our
people for their ongoing contribution to the business.
Debbie Goodin
Chair
Atlas Arteria Limited
Fiona Beck
Chair
Atlas Arteria International Limited
Capital management
We will look to optimise the capital structure at each of our
businesses backed by an investment grade credit rating. We will
also explore capital management options. We will be seeking
securityholder approval at the 2024 AGM for changes to the
ATLIX constitution to enable share buybacks.
Achieving safety targets
Safety for us is not a set and forget exercise. We are more
committed than ever to making sure that everyone, including
our customers, employees and contractors, go home safely after
working at one of our businesses or using one of our roads.
While we showed a slight improvement on our safety performance
targets on the previous year, there is still work to be done to
ensure that we are consistently meeting all of our safety targets.
At APRR, we did not meet our large business safety target with a
lost-time injury frequency rate of 3.4. Pleasingly, we met our target
of one or less lost-time injuries at our small businesses with
one lost-time injury at Chicago Skyway and no lost-time injuries
recorded at Warnow Tunnel, Dulles Greenway or at Corporate level.
A culture that celebrates diversity
We are committed to fostering a culture of diversity and
inclusion. We have continued to achieve our gender balance
commitment of 40/40/20 across Boards, within senior executive
roles and across all Atlas Arteria employees. We also have
female CEOs leading three of our businesses, at Chicago Skyway,
Dulles Greenway and Warnow Tunnel.
Climate and environmental stewardship
We continued to make good progress on our emissions profile,
reducing our total scope 1 and 2 emissions through the
purchase of renewable energy at most of our businesses and
in our corporate offices.
During the year, we completed the important work of aligning
Chicago Skyway with Atlas Arteria’s emissions reporting
process. We are pleased to report that the Skyway’s greenhouse
gas emissions (GHG), with regard to scope 1, 2 and 3, will be
included in Atlas Arteria’s 2023 emissions figures, and we have
recalculated our 2019 baseline figures to include the Skyway.
Our Sustainability Working Group (SWG) continues to progress
our approach to climate-related risks and opportunities
and alignment with Taskforce on Climate-related Financial
Disclosures (TCFD) reporting, particularly the identification,
assessment and mitigation of climate-related risks. This SWG
has also begun to prepare the business for the requirements
of mandatory climate reporting, which are expected to be
introduced in Australia in 2024.
All these achievements put us on track to achieve our interim
target of 25% reduction in scope 1 and 2 emissions by 2025 as
we continue to work toward our 46% reduction by 2030 target.
We were also pleased to see our achievements recognised
by GRESB, receiving an A rating and ranked 2 out of 33 in the
Asia-Pacific transport sector.
To strengthen our reporting, we have engaged PwC to provide
limited assurance over specific sustainability metrics, including
GHG emissions, to be reported in our Sustainability Report,
which will be released in April 2024.
Distributions for securityholders
We remain committed to providing our securityholders with
distributions funded from operating business cash flows and
cash on hand. At the time of the Chicago Skyway acquisition,
ATLAS ARTERIA ANNUAL REPORT 2023 | 5
FINANCIAL REPORTREMUNERATION REPORTDIRECTORS’ REPORTSFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS CEO AND MANAGING DIRECTOR’S REVIEW
Dear Securityholder,
Over the past year, in the face of some real challenges, the
resilience of our businesses shone through in a strong financial
performance, which facilitated another strong distribution.
We also continued to work hard on setting the business up
for sustainable growth and performance.
Key highlights
Overall traffic numbers were up 3.3% on 2022, driven mainly
by record traffic performance at APRR. We also witnessed the
positive impact of the advantageous toll formula at Chicago
Skyway, with tolls up 11.9% and toll revenue increasing by
2.7%, above our acquisition business case. Dulles Greenway
is gradually recovering post COVID-19 and Warnow Tunnel
had a robust year, also benefiting from toll increases and
strong traffic.
Another highlight was the successful completion of the
integration of Chicago Skyway, with a number of initiatives
implemented to ensure that we deliver on the potential of this
transformational acquisition.
In February important progress was made in the Virginia
legislature. The Virginia House of Delegates passed a budget
that included language authorising the Department of
Transportation to negotiate and execute a new concession
agreement with Dulles Greenway. The budget passed by the
Virginia Senate did not include the same language related to the
Dulles Greenway, which was just one of the many differences
between the budgets passed by the House and Senate.
The House and Senate are now working on a compromise
budget which is anticipated to be voted on in early March.
We are optimistic that the Dulles Greenway language will be
included in that budget. If passed and signed by the Governor,
it would authorise the Department of Transportation to negotiate
and execute a new concession agreement with the Greenway
under the Public-Private Transportation Act. This would facilitate
the introduction of distance-based tolling and provide lower tolls
for customers. In parallel, we continue to progress our rate case
application, which requests a material increase in the maximum
level of tolls on the Greenway.
Business performance
APRR and ADELAC
In France, continued high demand for the APRR network led to
another year of strong results. Traffic was robust, up 3.9% and the
positive impact of inflation linked tolls resulted in a 7.0% increase
in toll revenue and 7.5% increase in EBITDA versus 2022.
In December 2023, the French Government imposed a new tax
on companies operating long-distance transport infrastructure.
The tax will represent 4.6% of revenues exceeding €120 million
per legal entity and is expected to apply to both APRR and AREA
based on historical earnings. Atlas Arteria and our partners at
APRR are committed to using all appropriate means and avenues
to assert APRR’s legal and contractual rights to ensure that the
concession contracts are respected and their rights are protected.
In February 2024, APRR and Eiffage were appointed for exclusive
negotiations for the A412 Thonon-Machilly project in France.
The A412 is a new 16.5km motorway from Thonon-les-Bains to
Machilly to the south of Lake Geneva. The project will consist
of a two-lane dual carriageway with free-flow tolling that is
expected to reduce congestion and travel times.
Warnow Tunnel
At Warnow, traffic rose 3.1% as customers took advantage
of the time savings and reliability offered by Warnow Tunnel,
given roadworks on the competing route along Am Strande.
Inflationary tailwinds on tolls resulted in toll revenue and
EBITDA increasing 9.9% and 9.5% versus 2022 respectively.
The business took positive steps to improve safety and the
customer experience, achieving zero lost-time injuries (LTIs)
during the calendar year. Examples of these improvements
include new safety initiatives involving the local community and
authorities, and transitioning to 100% LED lighting outside the
Warnow Tunnel. More credit card terminals are now available
at the toll plaza and the installation of an advanced licence plate
recognition system provides a backup vehicle identification
measure for tolling purposes and violations.
Chicago Skyway
Pleasingly, at Chicago Skyway, traffic outperformed our
acquisition business case predominantly due to the planned
roadworks on the Indiana Toll Road being paused over the
summer holiday period, one of the busiest traffic periods for the
Skyway. Overall, toll revenue and EBITDA were up 2.7% and 0.8%
respectively due to toll increases combined with better than
expected traffic.
6 | ATLAS ARTERIA ANNUAL REPORT 2023
By the end of 2023, the Chicago Skyway integration was
complete – a notable achievement within 12 months of closing
the acquisition. As part of the transition plan for the business,
we have initiated the change to a proactive, whole-of-life approach
to asset management. It will improve safety, use early detection
and intervention to better manage assets, minimise risk and
reduce overall capital expenditure. We also worked to optimise
the capital structure of the business, through the refinancing
of maturing debt, along with a regearing to release capital. Our
operational review focused on championing expertise, efficiency
and automation to optimise performance.
Importantly, during the year, we also successfully aligned the
business with Atlas Arteria’s approach to safety, sustainability,
and emissions reporting.
Dulles Greenway
Traffic has continued to gradually improve at the Dulles Greenway,
with higher weekday traffic showing promising signs of people
continuing to return to office-based work. Despite traffic being
lower than in 2019, I am pleased to report that in 2023, traffic, toll
revenue and EBITDA outperformed 2022 (at 6.4%, 8.5% and 6.3%
respectively). Fundamentals for the region also remain positive,
with high population growth and robust household earnings.
We remain steadfastly committed to achieving legislative change
to facilitate the implementation of distance-based tolling at
the Greenway. We will continue to engage with the Virginian
Administration and legislators on the opportunity, as a move to
distance-based tolling is in the best interests of our customers
and would put the business on a more sustainable financial path.
While our preference is for the implementation of distance-based
tolling – which is mutually beneficial for our customers and our
business – we will continue to also pursue toll increases under
the existing framework until this can be achieved. As such, our
rate case application was submitted in July 2023.
Organisational review
Since internalisation in 2019, Atlas Arteria has undergone
significant growth and transformation, with the increased
ownership and governance rights at APRR and the acquisition
of Chicago Skyway. In 2023, the Board and Management
conducted a review of our operating model with improvements
made to position the business for long-term success.
A new operating model, launched in November, focuses on
delivering on a well-defined strategic plan and operational
objectives which includes the addition of a North American Group
Executive, for which the recruitment process is underway. This
new way of working marks a crucial milestone in the business’s
maturation, delivery of strategy and succession planning.
Looking forward
The outlook for Atlas Arteria is bright. We are positively
leveraged to inflation and have benefitted strongly from
considerable toll increases for 2023 and 2024 at APRR,
Chicago Skyway and Warnow Tunnel.
We have good momentum and a clear focus for 2024. We remain
focused on further improving each of our businesses and
enhancing value across the board. Our immediate priorities
are listed below.
– Mitigating the impacts of the new French tax, while pursing
all appropriate means and avenues to assert APRR’s rights
to ensure that the concession contracts are respected.
– Continuing to engage with the French government on the
future of the toll road concession model in France.
– Achieving a positive legislative outcome to enable distance-
based tolling at Dulles Greenway.
– Pursuing our requested rate case outcome for Dulles Greenway.
– Further strengthening our North American team including
the addition of a Group Executive.
I am proud of the strong progress we have made this year.
Of course, none of it would be possible without our talented
and capable team, and I thank each and every one of them for
their passion and dedication. As we all work together every
day, connecting people and keeping economies moving, we are
connected by a shared purpose to generate long-term value for
our securityholders.
Thank you to our securityholders and customers for your
continued support.
Graeme Bevans
CEO and Managing Director
Atlas Arteria
ATLAS ARTERIA ANNUAL REPORT 2023 | 7
FINANCIAL REPORTREMUNERATION REPORTDIRECTORS’ REPORTSFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS EXECUTIVE TEAM
David Collins
Chief Financial Officer
David has over 20 years’ experience in
finance and commercial roles covering
businesses in Australia, New Zealand,
the UK, Germany and the Middle East.
Prior to joining Atlas Arteria, David was the
Chief Financial Officer at Chorus, a role that
he held since 2018. Prior to Chorus, David
held a number of senior finance roles with
Aurizon and Brookfield Asset Management.
David has an undergraduate degree
in Commerce from the University of
Melbourne and an MBA from the University
of Wollongong. He is also a qualified
Chartered Accountant.
Graeme Bevans
CEO and Managing Director
Graeme 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.
Vincent Portal-Barrault
Chief Operating Officer
Vincent has spent most of his
career in infrastructure asset
management, investment and M&A
advisory, having worked across all major
infrastructure sub-sectors including
roads, airports, ports, power and
utilities and telecommunications.
He spent 12 years working with the
Macquarie Group, most recently in the
Infrastructure and Real Assets team
based in France where he has been
actively involved in the management
of several portfolio companies,
including APRR.
Vincent has deep experience and a
proven track record in the origination
of infrastructure investments, and
the successful operational monitoring
and improvement of infrastructure
businesses. He also brings strong
knowledge of the APRR business.
Clayton McCormack
General Counsel and Company Secretary
Clayton has more than 20 years’ experience
at leading law firms and in legal and
company secretarial leadership positions
at ASX100 companies.
Clayton is an experienced legal governance
and risk advisor to complex multinational
businesses, with deep expertise in cross-
border M&A, capital markets, directors’
duties and legal risk management.
Clayton has undergraduate degrees in
Law and Commerce (University of Western
Australia) and postgraduate qualifications
in Professional Ethics (University of
Melbourne) and Applied Finance and
Investment (Securities Institute of Australia).
Catherine Brain
Group Executive, People and Culture
Catherine is a respected executive with
more than 20 years’ experience working
across industry sectors in senior roles
dedicated to people, culture and
transformation. She brings extensive
experience leading strategic change
programs and people strategies for
ASX100 companies.
Catherine has undergraduate degrees in
Arts and Public Policy from the University
of Melbourne and an MBA from Melbourne
Business School.
8 | ATLAS ARTERIA ANNUAL REPORT 2023
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BUSINESS LEADERS
Guillaume Hérent
CEO of APRR and AREA and Chairman
of ADELAC and ALIAE (A79)
Guillaume was appointed CEO of APRR
and AREA in July 2022, where he also
took on the role of Chairman of ADELAC.
He was appointed Chairman of ALIAE (A79)
in November 2022.
Guillaume joined APRR in 1999, where he
has held various senior operational positions
including Head of District, Deputy Regional
Director and Head of Client Relationship
and Tolling for AREA. In 2013, he became
Regional Director for APRR, and in 2015
Deputy COO of AREA. In 2016, he assumed
leadership of the AREA network and Client
Relationship for APRR. He was appointed
Deputy CEO in August 2019, having led the
Group’s operations since July 2018.
Guillaume has a degree in Engineering from
Ecole des Mines de Douai.
Kristi Lafleur
CEO of Skyway Concession
Company LLC (SCC)
Kristi became CEO of SCC in January
2021, where she also serves on the
Board of Directors.
Kristi has over 20 years’ experience in the
toll road and transportation sectors. Prior
to joining SCC, Kristi served as a Senior
Vice President of HNTB Corporation as
well as Executive Director of the Illinois
State Toll Highway Authority, overseeing
one of the largest toll road systems
in North America. Kristi has served
on various mayoral and gubernatorial
transition committees and is active with
civic and community groups. She has also
served on the boards of the International
Bridge, Tunnel and Turnpike Association
and the E-Z Pass Group.
Kristi received a degree from DePaul
University in Chicago, Illinois.
Renée N. Hamilton
CEO of Toll Road Investors
Partnership (TRIP II)
Renée was appointed CEO of TRIP II
in July 2020, covering the Dulles
Greenway business.
Renée has over 35 years’ experience
in senior roles in the transportation
sector. Prior to her role at TRIP II, Renée
worked at the Virginia Department of
Transportation for over three decades,
the last seven years of which she served
as the Northern Virginia Deputy District
Administrator. During her tenure, she led
the transportation team that was pivotal
to bringing Amazon’s new headquarters
to Northern Virginia and was the executive
manager for the Transform I-66 projects.
Renée studied Civil Engineering at South
Carolina State University and holds a
Master’s in Civil Engineering Management
from Old Dominion University.
Yvonne Osterkamp
Co-Managing Director
of Warnow Tunnel
Yvonne was appointed Co-Managing
Director of Warnow Tunnel in December
2014, where she co-leads the business
with Torsten Raths. She started at
Warnow Tunnel in April 2000 as an
assistant to the Managing Director,
before taking on the role of Human
Resources and Accounting Manager
in 2003.
Yvonne is a respected executive with
more than 25 years’ experience working
across industry sectors in finance
and commercial roles. Prior to joining
Warnow Tunnel, Yvonne worked as a
foreign trade economist in Berlin and as
a manager for an import-export business
in Rostock.
Yvonne has a Master of Commerce
degree from the University of Berlin.
Torsten Raths
Co-Managing Director of Warnow Tunnel
Torsten was appointed Co-Managing
Director of Warnow Tunnel in April 2022,
where he co-leads the business with Yvonne
Osterkamp. He returned to Warnow Tunnel
in the position of Head of Operations in
February 2021.
Torsten has over 35 years’ experience in
technical and commercial roles covering
businesses across Europe, including
in the shipping industry. Torsten was a
Construction and Technical Manager at
Bouygues Construction, which designed
and constructed the Warnow Tunnel.
After construction, he joined the Warnow
Tunnel team as Operational Manager.
Between 2009 and 2020, Torsten worked
as a manager in technical building services
and facility management in the private sector,
before returning to Warnow Tunnel in 2021.
Torsten has a degree in Mechanical
Engineering from the University of Rostock.
ATLAS ARTERIA ANNUAL REPORT 2023 | 9
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Atlas Arteria (ALX), previously known as Macquarie
Atlas Roads (MQA), was created out of the reorganisation
of Macquarie Infrastructure Group into two separate
ASX listed toll road groups in 2010.
Since separation from Macquarie, Atlas Arteria has demonstrated its capability
to deliver growth and create value for securityholders.
2019
JUNE Eiffage and APRR consortium selected
as preferred bidder for the A79 (also known
as RCEA) project.
NOVEMBER Announced the APRR transaction
to increase Atlas Arteria’s ownership of APRR
and ADELAC by 6.14% to 31.14% and 31.17%
respectively, secure governance rights in
respect of its total indirect interest in APRR
and ADELAC and terminate all remaining
management agreements with the Macquarie
Group. An equity raising for $1.35bn was
undertaken to fund the transaction.
2017
MARCH Macquarie Atlas Roads (ASX:MQA)
admitted entry to the S&P/ASX 100 Index.
MAY Completion of the acquisition of the
remaining 50% estimated economic interest
in Dulles Greenway, increasing Atlas Arteria’s
economic interest to 100% 1.
SEPTEMBER Announced the acquisition of an
additional 4.86% interest in APRR, increasing
ownership to 25%.
NOVEMBER Announcement
that Macquarie Atlas Roads
would internalise.
2018
APRIL Agreement reached with Macquarie Bank
for the internalisation of management for Macquarie
Atlas Roads.
MAY AGM held to approve internalisation of
management for Macquarie Atlas Roads. Name
changed from Macquarie Atlas Roads to Atlas Arteria
(ASX:ALX).
SEPTEMBER Completion of the acquisition of the
remaining 30% equity interest in Warnow Tunnel,
increasing Atlas Arteria’s interest to 100%.
NOVEMBER APRR and AREA awarded a €187m capital
investment plan (the 2018 Motorway Investment Plan)
by the French Government, compensated through
supplemental toll increases.
2010
JANUARY Macquarie Atlas Roads (ASX:MQA)
commences trading on the ASX.
1. Economic interest held through ~86.6% subordinated loans secured against the equity held by other limited partners. Remaining 13.4% interest held through equity.
10 | ATLAS ARTERIA ANNUAL REPORT 2023
2021
MARCH Completion of the Warnow
Tunnel capital restructure diversifying
Atlas Arteria’s sources of cash flow.
2023
JANUARY APRR and AREA awarded a €410m capital
investment plan (Investment Plan) by the French
Government, compensated through a number of
measures including supplemental toll increases.
OCTOBER Optimised capital structure at Chicago
Skyway through refinancing of maturing debt along
with a regearing to enable capital releases.
DECEMBER Chicago Skyway transition plan complete:
– Advanced the transition to whole-of-life
asset management
– Concluded the operational review, championing
inhouse expertise and modernisation
– Aligned with Atlas Arteria’s safety standards
and process for emissions reporting
– Chicago Skyway outperformed business
acquisition case.
2024
FEBRUARY Eiffage and APRR
consortium appointed for
exclusive negotiations for the
A412 motorway.
2022
JUNE APRR network expanded
with ownership of A79 finalised.
SEPTEMBER Acquisition of a 66.67%
majority interest in Chicago Skyway
announced, doubling Atlas Arteria’s
weighted average concession life,
and providing for long-term
sustainable distributions. An equity
raising for $3.1bn was undertaken
to fund the transaction.
NOVEMBER Tolling commenced
on the A79 in France.
2020
MARCH APRR took over the operations of the
A79 in preparation for the construction of the
A79 project.
JUNE/JULY Completed an equity raising
for $495m. Proceeds from the equity raising,
together with the cancelled H2 2019 dividend,
were applied to the repayment of the €350m
corporate debt facility, strengthening the Atlas
Arteria balance sheet to support future growth.
SEPTEMBER Opened up the US market
as a future source of institutional capital with
completion of a Security Sale Facility, which
removed all US based retail investors from
the Atlas Arteria security register.
CORPORATE
APRR
CHICAGO SKYWAY
WARNOW TUNNEL
DULLES GREENWAY
ATLAS ARTERIA ANNUAL REPORT 2023 | 11
FINANCIAL REPORTREMUNERATION REPORTDIRECTORS’ REPORTSFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS BUSINESS STRATEGY
Delivering long-term value for securityholders
Acquiring Chicago Skyway in 2022 achieved several of our key strategic objectives, reshaping the business to put us on a
stronger footing to deliver long-term sustainable distributions to securityholders. The Skyway increases and diversifies our
cash flows and more than doubles the weighted average concession life of the business from 18 years to 37 years. Having completed
this transformational acquisition, we are now looking to focus on three key areas to drive future value for securityholders.
A S S O C I ATED GROWTH
O P P ORTUNITIES
O P P ORTUNITIES
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Business optimisation
We plan to drive value by optimising the way we work across operations, maintenance, toll management, revenue
recovery and innovation. We aim to enhance efficiency and reduce costs while maintaining our overarching commitments
to the highest safety standards, making a positive impact on the community and reducing our environmental footprint
and delivering superior service to our customers.
Associated growth opportunities
We have a robust pipeline of growth opportunities that are directly related to, or in proximity to, our existing
businesses. We plan to pursue these value accretive opportunities as a priority, making the most of the competitive
advantages we hold in the form of our existing operations and highly experienced team.
Other than in the context of these opportunities, acquisitions are not being considered. We will provide appropriate
notice to securityholders if this position were to change.
Capital management
We will target an optimal capital structure at each of our businesses backed by investment grade credit ratings.
We will seize market opportunities to lower our cost of debt, regear our businesses, or repay debt to achieve and
maintain an optimal capital structure for each business over time. We will also explore capital management options
such as share buybacks and special dividends to maximise value for securityholders.
12 | ATLAS ARTERIA ANNUAL REPORT 2023
A S S O C I ATED GROWTH
O P P ORTUNITIES
O P P ORTUNITIES
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STAKEHOLDER ENGAGEMENT
At Atlas Arteria, we value creating meaningful connections with our stakeholders and
build relationships based on trust and respect. We engage in open and transparent dialogue
with our stakeholder groups, listening to their unique needs. This ensures we can be
responsive to what matters to them. It allows us to best understand stakeholder expectations
and concerns, enabling us to engage in a way that demonstrates the value of our stakeholders’
contributions, while strengthening our own business.
Stakeholder group
What matters most
How we create value
CUSTOMERS
Customers
Safe, fast, reliable, convenient,
comfortable and affordable
travel options 24/7; giving
more time to focus on the
things in life that matter most.
Responsible business
practices and a commitment
to positive impacts on local
communities, the economy
and the environment.
COMMUNITIES
Communities
– Providing safe, well-maintained roadways that offer reliable, fast and cost-effective
travel options, connecting people and keeping economies moving.
– Making travel easier with real-time information across multiple touchpoints, allowing
customers to plan their trip.
– Enhancing the travel experience with services such as rest areas, carpool carparks
and high-occupancy vehicle lanes, electric vehicle charging stations, automated
technology and driver safety educational campaigns.
– Consistent and transparent engagement to understand and respond
to community needs.
– Connecting people with employment, via job creation and the use of our motorways.
– Supporting community services and local community groups, by way of donations,
educational opportunities and free use of our motorways for fundraising events
and critical community services.
– Minimising our environmental impact and carbon footprint and protecting our local
flora and fauna.
Employees
EMPLOYEES
A safe and inclusive work
environment that prioritises
safety and wellbeing.
Meaningful employment and
competitive remuneration,
benefits and working
conditions. A sustainable
and values-driven employer
that cares.
– A safety-first, inclusive culture, in which our STEER values guide us.
– Actively listening to, and acting on, formal and informal employee feedback.
– Honest, open and regular two-way communication via various channels.
– Opportunities for connection with one another via offsites, events and celebrations
of success.
– Formal development opportunities and wellbeing support programs, so people
can be at their best.
– Attractive remuneration, rewards and benefits.
– Flexible working conditions, supporting people to find the right balance.
Solid financial performance and
management. Good returns on
their investment. Sustainable
and ethical business practices.
– Transparent, open and timely communication and financial disclosures.
– Listening and responding to feedback.
– A well-articulated business strategy focused on Business Optimisation,
Capital Management and Associated Growth Opportunities.
SECURITY
Securityholders
HOLDERS
– Healthy distributions and balance sheet.
– Strong governance and risk management procedures.
– Delivery against our Sustainability Priorities.
Co-investors
COINVESTORS
GOVERNMENTS/
Governments
REGULATORY
AUTHORITIES
and regulatory
authorities
PARTNERS
Partners and
AND SUPPLIERS
suppliers
A mutually beneficial
partnership, grounded in
respect for one another’s
complementary skills,
a spirit of collaboration,
transparency and an aligned
vision of success.
Operating ethically, responsibly
and transparently. Aligning
with broader societal interests
and positively contributing
to the economy.
– Providing expert operating and technical capabilities.
– Consistently collaborating and contributing ideas, insights and learnings for ongoing
prioritisation of safety, commitment to sustainability, business optimisation and
shared success.
– Promoting the shared businesses’ short and long-term interests.
– Transparent, timely and regular communication and meetings.
– Strong, constructive relationships with governments, local authorities and
regulatory bodies, focusing on providing solutions to support government needs.
– Exceptional ongoing management of motorway infrastructure and strong focus
on ensuring the safety of customers and employees.
– Helping governments to develop and deploy public policy outcomes that benefit society.
– Strong community engagement and a commitment to sustainability.
Fair and transparent business
practices, including ethical
behaviour and integrity. A
collaborative and mutually
successful partnership.
– Building long-term, mutually beneficial relationships with partners and suppliers
based on respect and transparency.
– Promoting responsibility and upholding important supply chain standards by
embedding compliance through our Supplier Code of Conduct.
– Offering on-the-ground training and shared learnings.
– Fair and timely payments.
ATLAS ARTERIA ANNUAL REPORT 2023 | 13
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APRR is a 2,424 kilometre motorway network located 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.
31.17%
in ADELAC
Atlas Arteria interest
31.14%
in APRR Group
CONCESSION TERM
APRR: 2035
AREA: 2036
ADELAC: 2060
A79: 2068
APRR (including AREA & A79)
Traffic: up 3.9% on pcp
Toll revenue: up 7.0% on pcp
EBITDA: up 7.5% on pcp
ADELAC
Traffic: up 5.0% on pcp
Toll revenue: up 11.5% on pcp
EBITDA: up 15.8% on pcp
France
CONNECTING COMMUNITIES
Paris
Orléans
Troyes
Toul
Stuttgart
Germany
Mulhouse
Cosne-Cours-sur-Loire
Dijon
Bourges
France
Besançon
Zurich
Switzerland
Vichy
Geneva
Clermont-Ferrand
Lyon
Bordeaux
Valence
APRR
AREA/ADELAC
A79
Chambéry
Grenoble
Milan
Italy
14 | ATLAS ARTERIA ANNUAL REPORT 2023
APRR consists of four separate concessions: APRR,
the A79 and AREA, referred to together as the APRR
Group, and the ADELAC Concession. Together, these
represent a vital motorway network that is part of
multiple transportation corridors for major Western
European and intra-France trade and tourism. It
provides essential connectivity between Paris and
Lyon, France’s two largest metropolitan areas.
Year in review
The business delivered another year of strong results, driven
by record traffic performance and the positive revenue impact
of inflation-linked tolls, which increased in February 2023 on
the APRR and AREA motorway networks by 4.68% and 4.69%
respectively. This continued high demand for the network,
coupled with the impact of decade-high inflation levels in
France on tolls, resulted in an 7.5% increase in EBITDA on 2022.
Toll increases for 2024 were implemented at APRR and AREA
on 1 February 2024 of 3.08% and 3.12% respectively.
APRR continued to invest in the network, improving safety and
the customer experience, with around €330 million spent on
capital projects during the year, including those agreed with
the French Government under its fourth Investment Plan signed
in January 2023.
In February 2024, APRR and Eiffage were appointed for exclusive
negotiations for the A412 Thonon-Machilly project, laying the
foundations for future expansion of the network. The project has
a long concession of 55 years which will commence once the
concession is signed. The project, if transferred to APRR, would
further extend Atlas Arteria’s weighted average concession life,
creating additional securityholder value.
Traffic
APRR Group traffic performance reached record levels,
outperforming 2022 by 3.9%. Traffic performance was driven
by low unemployment levels in France, the addition of the A79
concession and the integration of the 17.5km stretch of the
existing A6 North roadway.
Light vehicle traffic was robust, achieving incremental growth
each quarter versus the prior corresponding period. This
was largely a result of leisure and holiday traffic, along with
high employment levels in France which positively impacted
household earnings, leading to higher demand for the network.
Heavy vehicle traffic growth was marginal, being closely
correlated with Spanish and French trade with the rest of
Europe which was constrained by the relatively flat performance
of the European economies and reduced agricultural production
associated with the summer drought in Western Europe.
These overall record traffic results were achieved despite higher
retail fuel prices in France and union action and strikes at
refineries during the first quarter. This was against a backdrop
of pension reform strikes which saw reduced capacity on the
French rail network. There were also several disruptive weather
events in August, including a record heatwave and a landslide in
the Maurienne Valley, which resulted in the temporary closure
of a stretch of the A43, an SFTRF concession, near the Italian
border and adjacent to our AREA network.
Investing for improved customer outcomes and value creation
Under the €410m Investment Plan signed in 2023, APRR and
AREA committed to a series of capital projects to invest in the
network and assist the French Government with delivering on
its ambitious environmental agenda. These include projects to
improve safety and traffic flow and the provision of additional
carpool facilities across the network. As part of the agreement,
the government has approved supplemental toll increases,
up to 2026, along with other compensatory measures.
ATLAS ARTERIA ANNUAL REPORT 2023 | 15
FINANCIAL REPORTREMUNERATION REPORTDIRECTORS’ REPORTSFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS APRR AND ADELAC
As such, APRR’s investment in the network continued during
the year, with around €330 million spent on capital projects.
The majority of spend was on road improvements, as well as
the c.€14 million A6 Chalon Nord on/off ramp upgrade, which
commenced construction in March 2023. The upgrade is
expected to be completed in the second half of 2024 and will
improve traffic flow and safety by reducing truck traffic on local
roads. The A43-A41 Chambery junction was the largest capital
project completed during the year. This €95 million capital
project improves traffic flow and safety.
The Eiffage and APRR consortium were appointed for exclusive
negotiations for a new concession for the A412 Thonon-Machilly
project. The A412 is a new 16.5km motorway from Thonon-les-
Bains to Machilly to the south of Lake Geneva that is expected
to reduce congestion and travel times. The project will consist
of a two-lane dual carriageway with free-flow tolling.
Construction is expected to commence after all necessary
permits have been obtained.
Investing for a more sustainable future
The business remains committed to improving outcomes
for a more sustainable future. This means empowering
motorists to reduce their carbon footprint, which includes
providing them with more options to power their electric
vehicles over long distances. APRR and AREA’s charging
deployment plan achieved its 2022 target to have 100% of
service areas equipped with charging stations. Throughout
2023, the offer has been further reinforced with the network
now offering 794 charging points.
Electric vehicle usage and charging stations have also increased
for the APRR Group’s internal fleet during the year. This takes
the total number of charging stations for internal operations
to 190 and the total number of electric light vehicles to 332,
equating to 31% (2022: 23%) of APRR’s light vehicle fleet.
The aim is to electrify 75% of APRR’s light vehicle fleet by 2025.
APRR Group traffic (VKTm)*
24,581
20,695
3,886
19,413
15,856
3,557
23,195
19,284
25,105
26,096
21,100
21,952
3,911
4,004
4,144
2019
2020
2021
2022
2023
Light vehicles
Heavy vehicles
Total traffic
APRR Group toll revenue ( m)
8
6
8
6
6
6
1
,
5
8
8
3
8
5
1
,
2
1
8
8
8
2
1
,
1
2
9
5
6
7
1
,
0
8
9
4
9
8
1
,
2019
2020
2021
2022
2023
Light vehicles
Heavy vehicles
* APRR Group includes APRR, AREA and A79 concessions. The A79 concession
began tolling on 4 November 2022. APRR traffic from 1 February 2023 includes
A6 North traffic. This relates to the integration of the 17.5km stretch of the existing
A6 as part of the Investment Plan announced in February 2023.
16 | ATLAS ARTERIA ANNUAL REPORT 2023
Carpooling is another way motorists can proactively minimise
their carbon footprint. In 2023, a further 14 carpooling carparks
were built, encouraging motorists to park their vehicles in a
safe and secure location and then travel to their destination in
a carpool arrangement. The total number of carpooling carparks
available on the network now sits at 128.
Renewable energy plays a critical role in the transition to a
cleaner energy future. APRR met its target to transition to 100%
renewable electricity by 2023. In addition, a total of five solar
projects are in operation on the network. One additional project
(Varennes-Changy) was commissioned and 18 additional solar
projects are currently under analysis.
As part of its commitment to protecting wildlife on its network,
APRR has completed its construction of wildlife crossings. The
crossings are 25-metre wide, vegetated, tree-lined eco-bridges,
offering safe passage for fauna. Five crossings were constructed
during the year, which saw APRR meet its target to complete
19 crossings by the end of 2023.
The business’s initiatives in the environmental, social and
governance space were recognised again with a Global Real
Estate Sustainability Benchmark (GRESB) score of 92.
Significant balance sheet capacity to support growth
The APRR Group remains in a strong financial position to fund
planned and future capital expenditure projects on the network.
It has €3.4 billion of liquidity comprising a €2.0 billion undrawn
revolving credit facility and €1.4 billion cash at the end of
December 2023.
Additionally, market support for APRR remains strong. In May
2023, APRR successfully priced €700 million of bonds under
its Euro Medium Term Note Programme, providing additional
liquidity and extending its weighted average debt maturity.
The APRR Group is rated ‘A’ by Fitch Ratings and ‘A-’ by S&P
and its ratings outlook is ‘Stable’.
Transport tax
In December 2023, the French Government’s 2024 Budget Bill
was approved, which includes a new tax on companies operating
long-distance transport infrastructure. The tax, effective from
1 January 2024, applies to companies with annual revenues
above €120 million and historical profit margins above 10%. The
new tax will represent 4.6% of revenues exceeding €120 million
per legal entity and is expected to apply to both APRR and AREA
based on historical earnings. APRR, along with its shareholders,
will continue to use all appropriate means and avenues to
assert APRR’s legal and contractual rights to ensure that the
concession contracts are respected and its rights are protected.
Concession review process
The future of the toll road concession system in France is a
key consideration for the current government. The SANEF
concession will be first to expire in 2031, well ahead of the
APRR and AREA in November 2035 and September 2036
respectively. The APRR Group remains proactively engaged
in the government’s concession review process.
Case Study
A French first in decarbonising
the transport sector
Heavy vehicles currently account for around 27% of
transport-related CO2 emissions, despite only representing
1.3% of vehicles in France. That’s why APRR is partnering
with ENGIE, a leader in the energy transition, to install
five high-power (400-500 kW per terminal) electric vehicle
charging stations for heavy vehicles and long-distance
coaches. This initiative is the first of its kind in France and
is an important step towards decarbonising the French
transport sector. All six of the charging stations will be
deployed in 2024 along the A6, as part of the APRR Group’s
charging point deployment plan.
ATLAS ARTERIA ANNUAL REPORT 2023 | 17
FINANCIAL REPORTREMUNERATION REPORTDIRECTORS’ REPORTSFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS 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.
Atlas Arteria interest
100%
CONCESSION EXPIRY: 2053
Traffic: up 3.1% on pcp
Toll revenue: up 9.9% on pcp
EBITDA: 9.5% on pcp
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Rostock, Germany
CONNECTING COMMUNITIES
Warnemünde
Warnow Tunnel
Rostock
Hamburg
Berlin
18 | ATLAS ARTERIA ANNUAL REPORT 2023
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 travelling along 19 kilometres of
untolled roads through the city centre of Rostock.
This alternate route often suffers from congestion
during peak periods.
Year in review
Warnow Tunnel had a strong year, driven by average toll
increases of 6.4% implemented in November 2022 and robust
traffic performance. During the year, traffic was positively
impacted by roadworks on the competing route along Am
Strande, which increased travel time savings for commuters
using the Warnow Tunnel. This, combined with the positive
impact of inflationary tailwinds on tolls, resulted in an EBITDA
increase of 9.5% versus 2022. Additional toll increases were
introduced at Warnow Tunnel in November 2023 of 8.38%.
Warnow Tunnel celebrated its 20th anniversary in
September 2023 and continued to implement a range of
initiatives to improve safety and the customer experience.
Traffic
Traffic at Warnow Tunnel increased by 3.1% compared to 2022.
Traffic performance was predominantly driven by roadworks
on the competing route along Am Strande, which increased
time savings for commuters using the Warnow Tunnel. In
addition, traffic levels in 2022 were negatively impacted by
COVID-19 restrictions associated with the Omicron variant and
the introduction of the German Government’s temporary public
transport card during summer.
As an attractive Hanseatic city, which needs to improve its
infrastructure to keep up with the existing and upcoming
demands of its citizens, restorative roadworks and upgrades
in Rostock are a frequent part of commuter life. Roadworks
around Rostock have historically positively impacted Warnow
traffic, as they typically lead to higher congestion and travel
times on competing routes. Customers value the reliable and
predictable travel times offered by the Warnow Tunnel.
Investing in safety and the customer experience
In January 2023, Warnow Tunnel conducted a pilot safety
program with local police and traffic authorities to address
safety risks associated with wrong-way drivers. A short section
of the central barrier at the toll plaza was opened, creating a
‘loophole’ to allow drivers to safely cross onto the correct side
of the road. The pilot was successful, and the loophole has
remained on the western side of the toll plaza, improving safety
conditions with no wrong-way drivers through the tunnel since
the opening of the loophole. Additionally, new road markings
were also added on the approach to the tunnel and LED lane
signage in all 11 lanes was upgraded during the year. New
signage marking the last exit points was also added on both
sides of the tunnel.
The transition to 100% LED lighting outside the tunnel was
completed in August 2023. The brighter lighting allows drivers
to safely adapt to lighting conditions when entering the tunnel,
which results in less braking and reduced accident risks.
All lanes are now equipped with credit card terminals (excluding
lane 6, which is bidirectional). This has improved the customer
experience, particular for non-German customers, who typically
use credit cards for payment. It also improves safety by reducing
the need for customers to change lanes at the last minute.
The rollout of advanced cameras for licence plate recognition
continued during the first half. All lanes (excluding lane 6) are
now equipped with the Optical Character Recognition (OCR)
cameras, providing an additional method of identification
to improve the correct reading rate of Radio Frequency
Identification (RFID) strips.
ATLAS ARTERIA ANNUAL REPORT 2023 | 19
FINANCIAL REPORTREMUNERATION REPORTDIRECTORS’ REPORTSFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS WARNOW TUNNEL
Customers also continued to download the Warnow Tunnel
app, which provides the convenience of an alternative option
for account changes, top-ups and for access to trip reports
and traffic information.
Traffic (trips m)
4.9
Tunnel maintenance and certification
In recognition of its best practice approach to health and safety,
Warnow Tunnel is certified to ISO 45001 for health and safety
and ISO 9001 for quality management system. In addition, the
standardised use of safety reporting software – Asset Vision –
which was introduced across Atlas Arteria’s businesses in 2022,
has helped improve performance monitoring at Warnow Tunnel.
Annual routine tunnel maintenance confirmed that all safety
components and systems are functioning well, and all technical
equipment is in good condition. In October 2023, tunnel jet fans
in the south tube were upgraded.
Giving back to the community
For the 21st time, the Hella Rostock marathon took place
and Warnow Tunnel took centre stage as part of the running
course, with the toll plaza used as the starting line of the half
marathon. The marathon was held in August 2023 with a total
of 1,913 marathon runners getting to view the tunnel from
a different perspective.
Warnow Tunnel continued to build strong links with Rostock Zoo
during the year. As a long-term animal sponsor of the otters at
Rostock Zoo, the Warnow Tunnel was invited to celebrate World
Otter Day on 31 May 2023. The celebrations included animal
feeding activities and were attended by Warnow Tunnel mascot,
Oskar the otter. Cooperation and the protection of wildlife were
key themes of the day.
4.6
4.5
4.4
4.7
2019
2020
2021
2022
2023
Toll revenue ( m)
.
6
3
1
.
7
2
1
.
4
2
1
.
1
3
1
4
.
4
1
2019
2020
2021
2022
2023
Case Study
Twenty years of operation
for Warnow Tunnel
Warnow Tunnel celebrated its 20th anniversary on
16 September 2023. This milestone was commemorated
with a birthday party the whole community could participate
in. The festivities included live music, sports, a raffle and
guided tours of the site. Safety was a key theme of the
day. There were a range of educational activities on offer,
including a driving simulator that gave drivers first-hand
experience of the dangers of slower driving reaction times
caused by drugs and alcohol.
20 | ATLAS ARTERIA ANNUAL REPORT 2023
The Chicago Skyway is a 12.5 kilometre elevated
toll road providing congestion relief in an essential
transportation corridor between Chicago, Illinois
and Northwest Indiana.
Atlas Arteria interest
66.67%
CONCESSION EXPIRY: 2104
Traffic: down 7.2% on pcp
Toll revenue: up 2.7% on pcp
EBITDA: up 0.8% on pcp
Chicago, USA
CONNECTING COMMUNITIES
O’Hare
International
Chicago
Chicago Midway
International
Lake Michigan
Dan Ryan
Expressway
Chicago Skyway
Port of Chicago
Illinois
Bishop Ford
Expressway
West Point Toll Plaza
Gary/Chicago
International
Kingery
Expressway
Indiana Toll Road
Borman
Expressway
Indiana
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ATLAS ARTERIA ANNUAL REPORT 2023 | 21
CHICAGO SKYWAY
Chicago Skyway is a 12.5 kilometre elevated toll road
that provides congestion relief in the third-largest
metropolitan area of the United States. It serves as
a key infrastructure hub in the Midwest in one of the
region’s densest urban areas and is the most direct
route between Northwest Indiana and Chicago. The
road offers customers reliable and substantial time
savings of up to 30 minutes and distance savings
of around nine kilometres.
Year in review
Chicago Skyway delivered a solid result in its first full year
under Atlas Arteria’s majority ownership and governance. Toll
revenue increased 2.7%, driven by toll increases implemented
in January 2023 of 10.9% on average for heavy vehicles and
11.9% for light vehicles, combined with better than expected
traffic. Traffic fell by 7.2% compared to 2022 but was above the
acquisition business case, which allowed for the negative impact
of the planned Indiana Toll Road (ITR) roadworks. This resulted
in an EBITDA increase of 0.8% versus 2022.
Further toll increases were introduced at Chicago Skyway
in January 2024 of 10.0% for heavy vehicles on average and
9.1% for light vehicles. Each year, Chicago Skyway’s tolls
escalate at the greater of (i) US CPI growth, (ii) US nominal
GDP per capita growth or (iii) 2.0%. The CPI and GDP indicators
are based on a two year ‘look back’ mechanism, providing a high
degree of predictability over future toll escalation. Moreover,
being set at ‘the higher of’ the three indicators, the mechanism
provides Atlas Arteria with downside protection during economic
downturns and upside from periods of growth.
During 2023, Atlas Arteria championed a series of initiatives
as part of its Chicago Skyway transition plan, with the asset
management program, key refinancing activities and operational
review all substantially complete by the end of the year. These
changes are focused on delivering capital efficiency and long-
term sustainable value, including lifecycle cost savings and
enhancements to capability and asset quality.
Traffic
As expected, traffic at Chicago Skyway fell versus 2022 due to
major roadworks on the ITR, which saw capacity reduced to one
lane in each direction for six months of the year. Roadworks were
also undertaken on the Chicago Skyway in Q3 to the north of the
toll plaza, which were rescheduled to align with the ITR works
downstream to minimise the total disruption to customers.
In addition, traffic levels in the prior period were positively
impacted by roadworks on the Frank Borman Expressway (I-94),
which resulted in elevated traffic on the Skyway.
While traffic decreased 7.2%, it remained above Atlas Arteria’s
business acquisition case. This was primarily because the planned
roadworks on the ITR were paused over the summer holiday
period, one of the busiest traffic periods for the Skyway.
Transition plan complete
Since assuming majority ownership of the Skyway, Atlas Arteria –
alongside its partner Ontario Teachers’ – has championed
a transition plan aimed at optimising the Skyway’s capital
structure and enhancing the business’s internal capabilities.
Under the plan, value-add work increases via new systems
and automation and operations and maintenance are optimised
as a result of in-depth reviews and improvement initiatives.
This comprised launching a new asset management program,
which is allowing Chicago Skyway’s management to transition
to a proactive, whole-of-life approach to maintenance. This
will enable the Skyway to better monitor and manage its assets,
by detecting the required maintenance early and selecting
the right intervention cycle to improve safety. This will
minimise risk and reduce the overall capex requirements of
the business over its life cycle. Maintenance planning will
also be able to be scheduled to optimise traffic and revenue.
As part of the program, a high-resolution ‘digital twin’ of the
Skyway’s main bridge is being created using drone footage.
It was commissioned in late 2023 and will leverage artificial
intelligence to identify and analyse any structural deterioration.
This will allow the business to conduct virtual assessments,
perform enhanced analysis, prioritise maintenance work, and
help optimise maintenance requirements across structures.
Once operational it will enable the scheduling of repairs on the
Calumet River Bridge at lower overall lifecycle risk and cost.
Kristi Lafleur – CEO
Kara Lawrence – CFO
Chad Elliott – COO
“The Chicago Skyway is
critical to the transportation
network in Chicagoland. We are
uniquely positioned to serve our
customers – we have a simple
goal, to deliver them safely to
their destinations and add time
back in their day.”
“The Chicago Skyway
provides a transportation
link which brings value
to commercial customers,
consumers and our
surrounding communities.
I look forward to continuing
to fi nd ways to bring value
to these constituents.”
“The Chicago Skyway is an iconic
asset with a rich history involving
people across the entire region,
and I want to ensure that both the
community and our customers
continue to see it as a vital link
that adds value to their daily
lives. I look forward to enhancing
and managing our operations
into the future.”
22 | ATLAS ARTERIA ANNUAL REPORT 2023
Traffic (trips m)
12.9
11.9
1.1
2019
13.8
12.4
14.1
12.6
13.1
11.7
1.4
1.5
1.4
10.4
9.2
1.2
2020
2021
2022
2023
Light vehicles
Heavy vehicles
Total traffic
Toll revenue (US$m)
.
8
1
9
.
9
4
8
.
2
4
1
1
.
1
0
2
1
.
3
3
2
1
2019
2020
2021
2022
2023
Another key focus during the year was the refinancing of
maturing debt at Chicago Skyway, along with a regearing
to enable capital releases which will be used to smooth
distributions in the short term. In October 2023, a note issuance
for US$155 million was undertaken, enabling capital releases
of around US$116 million from the business to Atlas Arteria.
The new and existing notes were rated BBB (stable) by S&P.
In addition, the US$160 million term facility and US$32 million
capex facility were refinanced with a new three-year drawn
term loan of US$180 million, an undrawn capex facility of
US$66 million and an undrawn revolving credit facility of
US$50 million. Consequently, total drawn debt at Chicago
Skyway increased from US$1.39 billion to US$1.54 billion,
representing US$149 million of incremental drawn debt.
The successful refinancing showcases the strong partnership
with Ontario Teachers’, as well as continued support for the
business from lenders and credit rating agencies.
15
12
9
6
3
0
During 2023, Atlas Arteria also undertook an operational review
focused on championing expertise, efficiency and automation to
optimise operations. As part of this workstream, the Skyway’s
Executive Team was further developed, with Kara Lawrence
joining as Chief Financial Officer and Chad Elliot joining as Chief
Operating Officer. Combined, they bring more than 45 years’
experience in people leadership, corporate finance, and road
operations and maintenance. Together with Kristi Lafleur’s
leadership as CEO, the Skyway is well positioned to continue
building out capabilities within the wider teams and executing
on its business optimisation initiatives. In addition, the tolling
back-office system, which collects the data from the roadside
cash, credit card and transponder transactions, and processes
it so that tolls can be accurately and timely tracked and
collected, is being upgraded in 2024. The new system will
support enhanced security, functionality and automation.
Strong focus on safety and achieving our climate goals
Good progress was made in 2023 in aligning Chicago Skyway
with Atlas Arteria’s safety approach and emissions reporting
process. We are pleased to report that the Skyway’s greenhouse
gas emissions, with regards to scope 1, 2 and 3, will be included
in Atlas Arteria’s 2023 emissions figures, and we have
recalculated our 2019 baseline figures to include the Skyway.
We support a strong safety culture and in 2023, Chicago Skyway
conducted over 772 hours of safety training to keep our
employees and customers safe.
On the community front, over US$23,000 was spent in support
of local schools, veterans’ organisations and community events.
The business also contributes regularly to local causes in
Chicago and provides several impactful community grants.
Investing in Chicago Skyway
While no major rehabilitation work will be required until around
2050, there will be continued investment in maintenance
including decks for viaducts and overpass bridges, pavement
and joint repairs, steel rehabilitation and/or replacement and
painting, along with other activities.
Total capital spend during 2023 was US$16 million, slightly
below guidance. This included unspent carryovers from 2022
and investments in automation and modernisation as part of
the transition plan that will not be recurring in the short term.
It also included planned deck and structural rehabilitation work
and other investments in technology.
ATLAS ARTERIA ANNUAL REPORT 2023 | 23
FINANCIAL REPORTREMUNERATION REPORTDIRECTORS’ REPORTSFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS
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The Dulles Greenway is a 22 kilometre toll road in
Northern Virginia in the USA. It offers customers a
cost-effective way to travel between Northern Virginia
and the greater Washington area.
Atlas Arteria interest
100%
CERTIFICATE OF AUTHORITY
EXPIRY: 2056
Traffic: up 6.4% on pcp
Toll revenue: up 8.5% on pcp
EBITDA: 6.3% on pcp
Virginia, USA
CONNECTING COMMUNITIES
Leesburg
Dulles
Greenway
Loudoun
County
Dulles
International
Airport
Tysons Corner
Rockville
Bethesda
Falls
Church
Maryland
Silver
Spring
Washington DC
Arlington
Reagan
National
Airport
Fairfax
Virginia
24 | ATLAS ARTERIA ANNUAL REPORT 2023
Situated in one of the fastest growing counties in the
United States, the Dulles Greenway provides customers
with a reliable and safe connection from Leesburg,
Virginia to the west, through Loudoun County to
Dulles International Airport and connector roads
to Washington DC. For over 25 years, the Greenway
has connected people to their jobs, communities,
recreational venues and to their families. It provides
a safe, reliable and faster transport option.
Year in review
Dulles Greenway continued to see a gradual traffic improvement
post COVID-19, predominantly driven by higher weekday traffic
reflecting the steady return to office-based work. While traffic
remains below 2019 levels, traffic and toll revenue were both
up by 6.4% and 8.5% respectively versus 2022, which translated
to 6.3% increase in EBITDA. The business continues to proactively
engage with the Virginian Administration to achieve positive
outcomes for all stakeholders.
Pathway to implement distance-based tolling
Dulles Greenway continues to pursue a two-pronged strategy
to unlock value and develop a more sustainable long-term
pathway for the business.
In February important progress was made in the Virginia
legislature. The Virginia House of Delegates passed a budget
that included language authorising the Department of
Transportation to negotiate and execute a new concession
agreement with Dulles Greenway. The budget passed by the
Virginia Senate did not include the same language related to the
Dulles Greenway, which was just one of the many differences
between the budgets passed by the House and Senate. The
House and Senate are now working on a compromise budget
which is anticipated to be voted on in early March.
Simultaneously, we continue to progress our rate case
application for increased tolls at the Greenway. Submissions
were taken by the Virginia State Corporation Commission from
stakeholders as part of the determination process, and the
hearings commenced on 28 February 2024 (USA). Based on
past rate case decisions, we expect an outcome in H2 2024.
Traffic
Traffic at the Greenway continued to improve during 2023 with
growth in traffic largely as a result of higher weekday traffic.
The key driver of traffic at the Greenway continues to be the
gradual return to office-based work in Northern Virginia. Overall,
return to office trends in the Washington DC area are broadly in
line with the US average, showing gradual growth. Pre-COVID,
traditional weekday commuters accounted for a large proportion
of traffic on the Greenway.
Traffic during weekday off-peak also increased 4.3% versus the
prior period, reflecting the value proposition of the Greenway,
which offers reliable and predictable travel times for customers.
ATLAS ARTERIA ANNUAL REPORT 2023 | 25
FINANCIAL REPORTREMUNERATION REPORTDIRECTORS’ REPORTSFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS Traffic (trips m)
17.8
10.2
11.6
12.3
13.1
2019
2020
2021
2022
2023
Toll revenue (US$m)
.
3
9
8
.
6
1
5
.
9
9
5
.
1
7
6
.
8
2
7
2019
2020
2021
2022
2023
DULLES GREENWAY
25
20
15
10
5
0
Strong engagement with the local community
Dulles Greenway continued to foster strong community links
through engagement with local stakeholders during the year.
The third Run the Greenway event was held in May 2023
in Northern Virginia with around 2,000 people taking part;
a significant increase versus 2022. Overall, the event was highly
successful with around US$268,000 raised for local non-profit
organisations, bringing the total raised over the three-year
period to approximately US$644,000 – a fantastic achievement.
In 2023, the Dulles Greenway’s Eagle Cam celebrated its second
year of operation, with our volunteers logging over 5,310
hours on the project over the past two years. This reflects our
commitment to protecting local wildlife and strengthening ties
with the local community through engagement. During the
spring, the camera captured the birth of three eaglets, which
were named Pi, Pat and Flora through a public naming contest.
The camera also captured the unfortunate collapse of the eagles’
nest in June, which was situated in a 90-foot high pignut hickory
tree. Importantly, the capture of the collapse by the camera
allowed Dulles Greenway and Loudoun Wildlife to respond
quickly, working successfully in partnership to re-build the nest
prior to the eagles’ return and to re-home the fallen eaglets.
Financial stability
Dulles Greenway had US$204 million of cash available across
restricted and unrestricted reserve accounts at 31 December 2023.
These reserves include locked cash due to Dulles Greenway not
passing its one and three-year lock-up tests.
Adding future value
During 2024, the focus will remain on pursuing the two-pronged
strategy at Dulles Greenway: the rate case application for
increased tolls; and the preferred outcome of a change in
legislation to implement distanced-based tolling and lower
tolls for customers.
Case Study
Enhancing connections with
customers and the community
Since 2020, Dulles Greenway CEO Renee Hamilton has
led her team in prioritising an enhanced community
engagement program that embodies a commitment to social
responsibility and collaboration. Drawing on her 32-year
career with the Virginia Department of Transportation,
Renee manages an annual program fostering external
partnerships and enhancing connections with customers
and the community.
The cornerstone event launched in 2021, the inaugural
"Run the Greenway" race, brought together thousands of
runners and families, raising over US$600,000 over three
years to support 60 local non-profits. These successful
events and newly launched engagement activities have
enabled the Dulles Greenway team to strengthen vital
connections in the region and demonstrate a robust
commitment to proactive community support.
26 | ATLAS ARTERIA ANNUAL REPORT 2023
Safety
Sustainability Priorities
I
I
Safety is our priority as we keep communities connected. We pursue
a zero-harm culture. Nothing is more important than keeping our
people and our customers safe.
This is what we do every day. We take this responsibility seriously, but we
also care deeply about how we do it. To us, success is defined by creating
strong growth for securityholders and better outcomes for our customers,
our communities and our people. That’s why sustainability is integrated
into our decision making at all levels across all our businesses. This
approach strengthens our business and our communities; so we can
leave a legacy that makes us proud.
Y At Atlas Arteria we keep communities connected and economies moving.
T
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CUSTOMERS
We provide positive customer experiences and create better
outcomes for our communities. Our roads provide safer,
faster transport options, providing vital connections for
people to their loved ones, work and their communities.
We actively manage our environmental impacts to protect our natural
resources. We empower our customers with solutions to minimise
their own footprint, so we can all contribute to a low-carbon future.
We foster diverse and inclusive work environments. We cultivate
EMPLOYEES
a culture of connection, engagement and collaboration as we work
together creating business success and better outcomes.
Climate and environmental stewardship
I
Customers and community
Our people
ATLAS ARTERIA ANNUAL REPORT 2023 | 27
FINANCIAL REPORTREMUNERATION REPORTDIRECTORS’ REPORTSFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS SUSTAINABILITY
SUSTAINABILITY
Our Sustainability Targets
Progress against our
Sustainability Targets in 2023
LTIFR < = 3
at large businesses 1
LTI < = 1
at small businesses 1
Maintain our
40/40/20
commitment to gender balance
and evolve representation across
and within specific teams
25%
reduction in scope 1 and 2
emissions by 2025, and
46%
by 2030 from a 2019 baseline
LTIFR = 3.36
at APRR
LTI = 1
at Chicago Skyway
LTI = 0
at Dulles Greenway, Warnow Tunnel and Corporate
Maintained
40%
gender balance at Atlas Arteria
On track
to achieve interim 2025 scope 1 and 2 emissions
reduction target from a 2019 baseline, restated
to include Chicago Skyway emissions
1. APRR is considered a large business and Warnow Tunnel, Chicago Skyway and Dulles Greenway small businesses.
28 | ATLAS ARTERIA ANNUAL REPORT 2023
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Safety
New Safety
Implementation Plan
introduced at APRR
Climate and environmental stewardship
Total scope 1 and 2 emissions
reduced through renewable
electricity purchases and fleet
electrification initiatives
Our people
98%
of our employees agree
that they are proud to
work for Atlas Arteria
Customers and community
Expansion of the successful APRR ‘Panorama’ art program,
including a new season of the Panorama podcast
Community donations
by Chicago Skyway,
Dulles Greenway
and Warnow Tunnel:
over
$135,000
ATLAS ARTERIA ANNUAL REPORT 2023 | 29
FINANCIAL REPORTREMUNERATION REPORTDIRECTORS’ REPORTSFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS
SUSTAINABILITY
Sustainability is embedded in our business practices, so we can generate positive long-term impacts as we work
every day connecting communities responsibly.
Our Sustainability Framework helps guide and focus our approach to sustainability. Our Sustainability Priorities focus on the
environmental, social and governance (ESG) topics that matter most to our stakeholders and our business. Our Sustainability Targets
hold us to account for making consistent progress and keep us focused on success.
We are also driven by our values-led culture, living our STEER values of: Safety; Transparency; Engagement; Environmental and
social responsibility; and Respect. When we are steered by these values, we’re acting in the best interests of one another, our
securityholders, our customers and our communities.
Working in this way, together, ensures we can create better outcomes and deliver against our Sustainability Priorities.
This section provides a summary of our achievements from 2023 across our four priority areas, including progress against our
Sustainability Targets. More detailed information will be provided in the Sustainability Report, to be released in April 2024.
Safety
Safety is our top priority. We have a safety-first culture,
empowering our people with the right equipment and the right
training to do their job safely, and maintain safe roads across
our networks. Nothing is more important than our people and
customers returning home safely at the end of each day.
1
employee LTI
0
contractor LTIs across
Corporate and all small
businesses
We are pleased to report two consecutive years of no lost-time
injuries at Dulles Greenway, Warnow Tunnel, or in the Corporate
team. We continue to strive towards our target to keep LTIFR
≤ 3 at APRR, where the result was 3.36 in 2023. This year we
have also been monitoring the safety performance of Chicago
Skyway, where one LTI was recorded. This incident, was
thoroughly investigated by the Skyway team and an action
plan has been developed to help prevent a similar recurrence.
LTIFR (large businesses) 1
4.99
2.66
2.85
3.66
3.36
2019
2020
2021
2022
2023
Employee LTIs (small businesses) 1
2
6
5
4
3
2
1
0
We continued to strengthen our safety systems, undertaking
regular safety audits across all businesses and implementing
ongoing improvements. A priority during the year was rolling
out our safety reporting software, Asset Vision, to the newly
acquired Chicago Skyway business. Asset Vision continues to
provide valuable safety performance monitoring for all incident
types, including near-miss incidents. Insights to such incidents
are invaluable, as they allow us to put steps in place to prevent
future incidents occurring.
At APRR, they launched their new Safety Plan during the year.
The plan is built on nine core areas and has been rolled out
across the APRR business, setting behaviour expectations for
all employees to help protect them and our customers.
An integral part of keeping our customers safe is empowering
them with information so they can also reduce their own safety
risks. All Atlas Arteria businesses delivered educational safety
campaigns to customers throughout 2023. All our businesses
provide digital targeted safety messaging to customers
through websites or social media. APRR also provides an
outreach campaign, visiting schools and community groups to
educate communities on safe driving. At Warnow Tunnel, a new
infrastructure project was completed to open a median break,
enabling drivers to turn around if necessary without needing to
reverse or drive against traffic in the tunnel. At Chicago Skyway,
they ran a series of community reminders about safe driving,
including campaigns targeted at both young and older drivers.
Maintaining the structural integrity of our infrastructure is an
important component of keeping our customers safe. Chicago
Skyway is partnering with an artificial intelligence (AI) drone
company, Aren, utilising a combination of drone imaging and
cutting-edge AI to monitor and maintain bridges through
digital twin 3D modelling. This is revolutionising the way the
Skyway team works to ensure bridges are optimally maintained
and continue to provide customers with a safe and reliable
connection to Chicago.
1
2019
0
2020
2021
0
2022
1
2023
Employee LTIs
1. APRR is considered a large business and Warnow Tunnel, Chicago Skyway
and Dulles Greenway small businesses. Chicago Skyway has been included
from 2023 only.
APRR
30 | ATLAS ARTERIA ANNUAL REPORT 2023
Climate
We are committed to operating responsibly to achieve our
climate targets. We are actively working toward achieving our
scope 1 and 2 greenhouse gas (GHG) emissions targets and are
empowering our customers with solutions to help them reduce
their own footprint. We are equipping our networks with the
green technology needed to ensure our customers can move
freely, while contributing to a greener future.
Scope 1 & 2 GHG emissions (tCO2e) 1
9000
7500
6000
2019
2020
2021
2022
2023
1. Indicative only. Details to be provided in the 2023 Sustainability Report to be
published in April 2024.
Our emissions reduction targets (of 25% by 2025 and 46% by
2030) were set prior to the acquisition of Chicago Skyway and
align to the Science Based Targets initiative (SBTi) net zero
pathway. Over the course of 2023, we have worked with the
Chicago Skyway team to establish their baseline 2019 emissions
and ensure they are incorporated into the Atlas Arteria baseline
and targets. Further details will be provided in the 2023
Sustainability Report, to be published in April 2024.
For most of our businesses, the majority of scope 1 and 2
emissions were generated through electricity use (scope 2) and,
accordingly, this has been the primary focus of our emissions
reduction strategy to date. By reducing our scope 2 emissions,
through the purchase of renewable energy and renewable
energy certificates, we have made significant progress towards
achieving our interim target of 25% reduction in scope 1 and 2
emissions by 2025 (from a 2019 baseline).
We are also investigating options to reduce our scope 1
emissions, which are primarily generated through fuel use in
fleet vehicles at APRR, Chicago Skyway and Dulles Greenway.
These vehicles include large machinery such as snow ploughs,
which can be difficult to transition to low emission vehicles.
However, significant inroads have already been made into
the electrification of light vehicles at APRR, with 190 fleet
vehicles being replaced with electric vehicles during 2023.
This represents more than 30% of the fleet, with a target
of 75% by 2025.
APRR
APRR
ATLAS ARTERIA ANNUAL REPORT 2023 | 31
FINANCIAL REPORTREMUNERATION REPORTDIRECTORS’ REPORTSFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS SUSTAINABILITY
Our people
Our people are essential to our success. We are committed to
building a team of diverse, passionate, driven and innovative
people. We provide them with the right resources, environment
and learning opportunities to thrive and feel valued for the work
they do. Inspiring and empowering our people helps them feel
engaged and connected to successfully deliver on our strategy.
We are pleased to report that we maintained our 40/40/20
gender balance across Boards (40%), senior executive (45%)
and all Atlas Arteria employees (47%) again in 2023. Information
regarding gender and age diversity within our businesses
will be reported in our Sustainability Report, to be published
in April 2024.
93%
participation in Atlas Arteria’s
employee engagement survey
95%
would recommend Atlas
Arteria as a great place to work
40/40/20
gender balance achieved at senior executive level
and across all Atlas Arteria permanent employees
for fourth consecutive year 1
Each year we seek feedback and ideas from our people through
an employee engagement survey. In 2023, 93% of employees
chose to participate in the survey (up from 87% in 2022).
Pleasingly, 92% felt that their manager genuinely cared about
their wellbeing, reflecting our commitment to providing a safe
and positive working environment. We recognise that this
environment relies on respectful and inclusive relationships and
this was a focus for us in 2023 as we introduced the Building
Trust program. The program involved our people working
within functional teams, with external facilitators, in a series
of workshops to develop team action plans for building trust
and respectful relationships.
1. Senior executives is defined as Atlas Arteria Executive Team members, their direct
reports in senior roles and CEOs of the wholly and majority owned businesses.
Our third Modern Slavery Statement (2022) was published
in June 2023 and reflected the work we are doing to try and
prevent any instance of modern slavery in our business and
supply chain. Pleasingly, our Statement received an A rating
for the first time in the Monash University Modern Slavery
Statement Disclosure Quality Rating Report. Our 2022 Statement
is available via our website. Our 2023 Modern Slavery Statement
will be published in mid-2024.
32 | ATLAS ARTERIA ANNUAL REPORT 2023
Customers and community
Connecting customers and communities is what we do.
Improving safety, reducing travel times and enhancing comfort
and mobility at a reasonable cost are core to our offerings.
We are committed to building strong, respectful connections
with the communities in which we operate and creating
a legacy of positive impact and engagement.
>$135,000
in donations and sponsorships across Dulles Greenway,
Warnow Tunnel and Chicago Skyway
We are fully committed to providing our customers with a safe
and reliable service. Our roadways play a vital role in keeping
people moving and staying connected; to one another and to
essential goods and services. From commuters and holiday
makers, through to emergency services and essential goods
transport, everyone needs to be confident they can arrive on
time, without incident.
Our businesses seek opportunities to engage with our
customers and communities across multiple touchpoints to
ensure they are well informed and have a safe and enjoyable
journey. All our businesses provide customers with real-time
travel information to assist with trip planning, ranging from
a dedicated radio channel at APRR, to a travel app at Warnow
Tunnel and informative websites at Chicago Skyway and
Dulles Greenway.
Our businesses also run a series of safety campaigns to
empower customers with key safety actions. During the
European summer break, APRR organised activities at rest
areas along the A6 to encourage customers to stop regularly
and prevent driver fatigue. Activities ranged from carnival rides
and face painting to archery and even CPR training. At Warnow,
as part of their 20-year anniversary celebrations, a driving
simulator gave drivers first-hand experience of the dangers
of slower driving reaction times caused by drugs and alcohol.
As part of our commitment to strengthening ties with our
local communities, we again provided our roadways in
support of much needed fundraising opportunities through
both the Run the Greenway event at Dulles Greenway and
the Hella Rostock Marathon at Warnow Tunnel. Each of our
businesses also continued to contribute to local communities
through sponsorships and donations. At Chicago Skyway this
included donating backpacks and school supplies to around
500 recipients in three local neighbouring wards as part
of a summer return to school program.
WARNOW TUNNEL
To mark the 20th anniversary of Warnow Tunnel, they also
hosted a community festival to celebrate the milestone
with customers. The tunnel has now recorded more than
80 million trips trips since opening in 2003.
Environmental stewardship
Protecting our environments and natural resources
is a responsibility that belongs to all of us. The impacts
of a disrupted climate and ecosystem affect businesses
and communities alike. We strive to proactively reduce our
environmental footprint, support the health of our ecosystems,
and deliver better outcomes for all our stakeholders.
3,000m2
to be planted in
Plant’Adapt pilot project
>90%
of waste sorted
at APRR
In November 2023, APRR planted the first seed of its Plant’Adapt
project at the Taponas service area (69) on the A6 motorway
between Lyon and Mâcon. The aim of Plant’Adapt is to encourage
the natural development of climate-compatible vegetation, using
species present in the area, through cuttings, grafting, sowing
and assisted natural regeneration. Initially, some 3,000m2 will be
planted on the APRR pilot site at Taponas, where four areas have
been set aside for this purpose. By the end of 2025, 60% of APRR
and AREA’s green areas will be Plant’Adapt.
Water is a precious resource and, as such, we are mindful
of and careful with our water use at Atlas Arteria. The majority
of our water use is at APRR, which is aiming for a 2% reduction
each year. To date, the focus has been on accurate measuring
to identify and rectify leaks.
Waste minimisation is also a priority. At APRR, which generates
the majority of waste for our business, various waste reduction
initiatives are underway. These range from working to increase
the proportion of asphalt recycled in operations, through to
optimising waste sorting and maximising general recycling
efforts. In 2023 APRR began testing a new intuitive waste sorting
system at rest areas with promising results. This project will
continue into 2024.
APRR AREA
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FINANCIAL REPORTREMUNERATION REPORTDIRECTORS’ REPORTSFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS MANAGING CLIMATE RISKS AND
MAXIMISING OPPORTUNITIES
We understand that the ongoing success of our business
depends on our ability to proactively manage our climate-related
risks and opportunities. That’s why climate-related decision
making is being embedded across all our businesses and in
all our business practices. Climate change poses risks and
opportunities right across our business. From infrastructure
vulnerability, changing travel patterns and supply chain costs,
to embracing opportunities for low carbon technologies that
can continue to connect people in a decarbonised world.
During the year, as well as continuing to address our emissions
profile, we worked to better understand the connection between
managing potential climate-related impacts and delivering
successful business outcomes.
We are committed to playing our part to reduce our emissions
in-line with the Paris Agreement. Our scope 1 and 2 emission
reduction targets are aligned with a 1.5ºC warming scenario.
We have also worked this year to further define our 2019
(baseline) scope 3 upstream emissions across all businesses
as we look to set an appropriate course of action for our value
chain emissions.
We are utilising the TCFD recommendations to guide our
approach to identifying, assessing and disclosing climate-related
impacts on the business, ensuring we are also well placed to
comply with future sustainability reporting standards.
During 2023, our Sustainability Working Group updated our
previously identified climate-related risks and opportunities
to include an analysis of Chicago Skyway, aligned with the
approach for our other businesses. This section summarises our
progress in our approach to climate issues. A full description of
the potential risks and opportunities identified will be provided
in our 2023 Sustainability Report, to be released in April 2024.
Governance
The Boards have oversight of sustainability-related matters
including climate-related issues supported by the Audit and Risk
Committee and the People and Remuneration Committee. The
People and Remuneration Committee ensures sustainability
risks are considered when defining the key performance
indicators linked to executive remuneration.
In 2023, we provided timely updates to the Boards on climate-
related issues, as we progressed our identification and analysis
of risks and opportunities for Chicago Skyway and reviewed
those previously identified for our other businesses. We have
established a regular cadence for reporting climate-related
issues to the Boards and its Committees.
Within the Executive Team, the CEO has ultimate responsibility
for delivering on our climate change approach and reporting
to the Boards. The CFO directs our sustainability and climate
change agenda.
A Sustainability Working Group was established in 2022 to
inform the identification and analysis of climate-related issues.
Guided by Atlas Arteria’s Sustainability and Risk functions,
the group includes management representatives from key
business areas including operations, finance, legal, strategy
and forecasting. The group provides a forum for analysing
climate-related issues, exchanging insights, and communicating
throughout the business, including reporting to the Executive
Committee and Boards. In 2023, the Sustainability Working
Group reviewed our potential climate-related risks and
opportunities and considered how these may be incorporated
into the day-to-day management and strategic decision making
of our businesses. The group will continue to build on this work
through 2024 as we aim to quantify the potential risk impacts.
Our 2023 Sustainability Report will provide further detail on the
roles and responsibilities of the Boards and management in
relation to the governance of climate-related issues.
APRR AREA
Chicago Skyway
34 | ATLAS ARTERIA ANNUAL REPORT 2023
Strategy
During 2023, we continued work to identify potential physical
and transition risks and opportunities across all of our
businesses. We conducted climate-scenario analysis to help
assess the strategic implications of climate change over the
short, medium and long term. For the purposes of this climate
analysis, we define each as short (2030), medium (2040) and
long-term (2050).
Corporate and asset-based subject matter experts were engaged
in desktop analysis and research, one-on-one interviews and
workshops. Their expertise was utilised in identifying and
prioritising relevant climate-related risks, supported by our risk
management framework and scenario analysis. The process,
ongoing since 2022, has included climate modelling, providing
insight into potential physical climate-related changes (e.g.
temperature, precipitation, flooding) in each of our asset locations.
Two scenarios were applied: one aligned with a Net Zero
(1.5°C) future and one with a Current Policies (3°C+) future. The
analysis provided an initial assessment of the potential impacts
of climate-related risks and opportunities on our business and
operations, enabling the identification of key risks for further
consideration.
Climate change scenarios used in Atlas Arteria
climate-related risk and opportunity assessments
Net zero/orderly
transition – 1.5°C
Current Policies/
hothouse – 3°C+
Early, ambitious action to
support the transition to
a net zero CO2 emissions
economy. This includes
a net zero 2050 scenario,
reflecting a policy ambition
to limit global temperature
increase to 1.5°C.
Limited action resulting in
continued global warming
and significant increases
in exposure to physical
risks. This includes a
current policies scenario,
resulting in potential global
temperature increases
of 3°C+.
This work provided the basis for a qualitative assessment of
the potential business impacts of the risks and opportunities
identified and how these impacts need consideration in our
strategic decision making. In 2023, this led to the initiation of a
project aimed at establishing a quantitative assessment of the
potential financial impacts of climate-related risks. An important
part of the process is a modelling project to commence in 2024,
seeking to establish a measurable relationship between weather
and traffic volumes to assist in assessing future impacts on
revenue under different climate scenarios. Further details of the
risks and opportunities identified, their potential impacts and
how these may be incorporated into our business strategy, will
be provided in our 2023 Sustainability Report.
Risk management
Sustainability-related risks, including those associated with
climate change, are identified, assessed, monitored and
integrated in accordance with our Group Risk Management
Framework. See page 36.
In 2023, our work to improve our climate disclosures and
alignment to TCFD has enhanced our understanding of climate-
related risks. Potential climate change impacts, both positive
and negative, include those associated with infrastructure
resilience, the health and wellbeing of employees, customer
travel behaviour and the potential technology changes that could
reduce emissions on our road networks. Further information
on key risks and opportunities identified will be included in our
2023 Sustainability Report.
In 2024 and beyond, our focus is on appropriately embedding
identification, assessment and review processes into our
business practices and to continue to work toward quantitative
risk response disclosures.
Metrics and targets
In addition to managing the impacts of climate change on our
business, we are vigilant about managing the impacts of our
business on the climate. Atlas Arteria is committed to reducing
emissions and we have set reduction targets for our scope 1 and 2
emissions consistent with a 1.5ºC decarbonisation pathway
defined by the Science Based Targets initiative (SBTi).
Scope 1 and 2 emissions
25% by 2025
From a 2019 baseline
46% by 2030
In 2023, we recalculated our baseline (2019) emissions
assessment to include Chicago Skyway. Our work in reducing
our scope 1 and 2 emissions in 2023 has focused on renewable
electricity and renewable energy certificate purchases and the
ongoing electrification of the light vehicle fleet at APRR. This
has ensured we are on track to achieve our first interim target
of a 25% reduction by 2025.
Further disclosure of our performance against our targets will
be included in our 2023 Sustainability Report, due for release
in April 2024.
ATLAS ARTERIA ANNUAL REPORT 2023 | 35
FINANCIAL REPORTREMUNERATION REPORTDIRECTORS’ REPORTSFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS RISK MANAGEMENT
Risk Management Framework
Atlas Arteria’s Risk Management Framework sets out our 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 the business is willing to take in achieving
its strategic objectives.
The Framework is reviewed annually by management and the Boards to ensure our 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.
Boards & Committees
Executive Management
Business Management
First line
Day-to-day
risk management
decision making
Risk & Compliance
Management
Second line
Monitoring and
oversight of the level
of risk and appetite
Independent Assurance
Third line
Includes Internal Audit,
External Audit and
third-party specialist audits
and reviews
Role of the Boards in risk management
While ultimate responsibility for Atlas Arteria’s risk management
framework rests with the Atlas Arteria Boards, they have
established an Audit and Risk Committee (ARC) to oversee
the Risk Management Framework and ensure its ongoing
effectiveness. The charter for the ARC is available on the Atlas
Arteria website. As set out in the Charter, the ARC is 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 Atlas Arteria Boards and the ARC receive periodic reports on
the key financial and non-financial risks facing the organisation,
including the measures undertaken to manage the risk, and
consider whether the risk is within appetite. The internal and
external audit functions also have direct lines of reporting
to the ARC.
Risk management in practice
Uncertainty and volatility remain the key themes in the
external environment in 2023. Such external factors include:
the continued and increasing threat from geopolitical unrest;
ongoing inflation effects on the cost of living for many; the fast
emerging disruption and opportunity presented by AI; and the
growing urgency around understanding and mitigating the
impacts of climate change. Within Atlas Arteria there has been
significant focus on the integration of Chicago Skyway to ensure
identified benefits of the acquisition are realised, as well as
maintaining strong relationships with government stakeholders
at each of our businesses as they continue to manage their own
priorities and challenges.
Atlas Arteria’s integrated Risk Management Framework delivers
an agile approach, with a focus on providing accurate and
timely risk information and insights to support management
oversight and decision making. Risk management activities
undertaken in 2023 focused on further embedding risk culture
and capability to maintain a resilient business ready to respond
to external threats and opportunities, and a strong internal
control environment to facilitate the achievement of business
and strategic objectives.
36 | ATLAS ARTERIA ANNUAL REPORT 2023
Key risks
Nature of risk
Inherent risk Key management actions
2023 Insights
Economic and market conditions
With economic growth forecast
to remain moderate in 2024,
economic conditions, particularly
in the US, present a stable risk
exposure for Atlas Arteria.
Atlas Arteria is positively
leveraged to inflation with
CPI-linked tolls at the majority
of our businesses and with most
debt fixed. Potential FX impacts
remain, along with the risk of
increasing cost of capital from
a tighter credit market.
Government and
regulatory policies
A change in government or
government policy can impact
Atlas Arteria’s ability to
achieve its long-term strategic
objectives. The announcement
of a new tax by the French
Government, to be introduced in
2024, presents an increased risk
to Atlas Arteria.
Environmental, social and
governance (ESG) practices
Atlas Arteria recognises the
importance of minimising
adverse impacts on the
environment and supporting
the communities in which we
operate. We also appreciate
the need for transparency in
reporting on these matters,
particularly in relation to
climate-related impacts for
our businesses.
Information technology/
cybersecurity
With cyber attacks continuing
to increase globally, it is
important that Atlas Arteria
and its underlying businesses
have effective, secure and
reliable technology systems in
place to protect and maintain
information and operations.
Organisational capability
It is important that within
Atlas Arteria’s Corporate
headquarters, and at each
business, there is sufficient
depth, understanding and
expertise to effectively deliver
on the company’s strategy.
Operational risk management
It is important that each
business and their operations
have effective controls in
place to: ensure the long-term
integrity and safety of our
assets; and sustainability of
returns through a balance
of investment and cash flow
management.
Stable
– Ongoing monitoring and assessment of economic
variables and understanding how these impact
traffic volumes and mix as well as improvement
opportunities at each business.
– Assessment of traffic scenarios under various
economic and market conditions enables forward-
based planning.
– Ongoing assessment of local and global
economic threats and opportunities, their impact
on financial results, access to capital and liquidity
across the business.
– Our businesses continued to experience traffic
growth in 2023, demonstrating their resilience
despite economic uncertainty. See individual
business sections for detailed traffic information.
– Following the acquisition of Chicago Skyway
in 2022, focus in 2023 moved to the transition
and optimisation of the business to deliver the
projected benefits of the Skyway’s addition to
Atlas Arteria’s portfolio.
– Successful refinancing of debt for Chicago Skyway
and APRR in 2023 demonstrates the financial
resilience of these businesses.
Risk
increasing
– Regular engagement across various levels
of government and regulatory authorities
in relevant jurisdictions.
– Participation in policy discussions and education
as to how our roads form effective parts of the
relevant transport networks.
Risk
increasing
– Our annual Sustainability Report outlines key
safety, environmental and social risks, how Atlas
Arteria intends to manage those risks and key
priorities in responding to those risks.
– Targets and metrics have been established to track
performance across material ESG matters.
– We will continue to actively engage with elected
officials in France to educate them on the concession
model, our contracts and the consequences of
the new tax. We will be using all appropriate means
and avenues to ensure APRR’s legal and contractual
rights under the concession contracts are protected.
We are also looking at cost management options
to mitigate the financial impact.
– Positive stakeholder relationships have been further
embedded with the Virginian Administration and
legislature in 2023, along with the strengthening
of connections with community stakeholders
remaining a key focus for our US team.
– We continue to align our ESG practices with
the recommendations of the TCFD, with
further work undertaken in 2023 to build a
deeper understanding of our climate risks and
opportunities and ensure readiness for upcoming
regulations in Europe and Australia. See page 27
for more detail.
– We released our third annual Modern Slavery
Statement in 2023, which can be found on the
Atlas Arteria website.
– Atlas Arteria and its underlying businesses
– We continue to review and improve our
Risk
increasing
undertake regular reviews across key technology
platforms to ensure they are fit-for-purpose and
maintain effective security controls.
– Atlas Arteria maintains effective data and cyber
risk management practices to protect its businesses
and customers from exposure to data breaches.
– Cyber risk ‘deep dives’ and information sessions
undertaken with the Executive Team and Boards and
awareness training sessions have been undertaken
across Corporate and the businesses.
monitoring and response readiness in recognition
of the persistent external threat landscape,
providing improved visibility of IT and OT security
management practices to our Boards, with
continual review and uplift of our cyber resilience
practices an ongoing focus.
Stable
Stable
– Atlas Arteria has created a compelling employee
– Our team consists of a highly skilled and
experience designed to attract, retain and develop
the right people in the right roles.
– People processes are supported by a clear vision
and values statement, remuneration framework
and learning and development programme,
along with a contemporary approach to flexibility,
diversity and inclusion.
– There is an active feedback approach in place
including an annual employee engagement survey
which provides critical insight to management
and Board.
geographically dispersed workforce with depth
across key capability areas. The small size and
specialised nature of the workforce means it is
important to continually monitor and proactively
manage resourcing requirements.
– Global ‘Town Hall’ meetings and local ‘All In the
Office’ days are key mechanisms for building and
maintaining connections across our workforce,
and in 2023, the Corporate team had the
opportunity to connect in person for the first
time at our Team Off-site.
– Following transaction close in December 2022,
a significant body of work was undertaken at
Chicago Skyway in 2023 to build management
understanding of processes and controls in place
at the Skyway to support the identification and
management of operational risks. Information
has been included in Atlas Arteria’s risk reporting
to support oversight of key business processes.
– The management teams of each business
employ a disciplined approach to operations and
maintenance to optimise business performance
and customer experience.
– The asset integrity of all businesses is tracked
through an asset management inspection and
evaluation cycle to ensure continual assessment
and oversight.
– Operational risk management arrangements,
including contractual and legal frameworks, are
regularly reviewed to ensure that 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 2023 | 37
FINANCIAL REPORTREMUNERATION REPORTDIRECTORS’ REPORTSFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS CORPORATE GOVERNANCE
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 documents listed below
on the governance section of the Atlas Arteria website.
– Overview of Legal Framework.
– ATLIX Bye-Laws.
– ATLAX Constitution.
– Atlas Arteria Cooperation Deed.
– 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 their 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.
During 2023 the ATLAX and ATLIX Boards reviewed the structure
and processes of the Board committees, with a particular focus
on streamlining decision making and improving the overall
efficiency of the Boards. A key outcome of this review was
the implementation of a new joint committee structure, which
resulted in the ATLAX and ATLIX Boards agreeing to consolidate
their respective standing Board Committees. Further details
regarding the Atlas Arteria’s Board Committees is included in
Atlas Arteria’s 2023 Corporate Governance Statement.
Atlas Arteria’s 2023 Corporate Governance Statement has
been approved by the Boards and outlines our main corporate
governance practices for the year ended 31 December 2023.
Included in the statement are details relating to the items
listed below.
– 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.
– Risk management and corporate reporting.
Our 2023 Corporate Governance Statement, as well
as other governance documents referred to within the
Statement, can be viewed on Atlas Arteria’s website at
https://www.atlasarteria.com/aboutus. These governance
documents are regularly reviewed and updated to ensure
they reflect emerging governance issues and regulatory
developments relevant to Atlas Arteria and remain consistent
with the objectives of the Boards.
For more information go to atlasarteria.com
38 | ATLAS ARTERIA ANNUAL REPORT 2023
BOARD OF DIRECTORS – ATLAX BOARD
Debbie Goodin
BEc (U of Adelaide), FCA
Independent
Non-executive Director
Appointed: ATLAX –
1 September 2017, Chair
effective 1 November 2020
ATLIX – 1 November 2020
Chair of the Atlas
Arteria Nomination and
Governance Committee.
Nationality – Australian
Country of residence – Australia
Debbie Goodin has extensive
director experience as well
as over 20 years’ senior
management experience with
professional services firms,
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 and Acting CFO
and Head of Mergers and
Acquisitions and Global
Head of Operations at Coffey
International Limited.
Other listed company
directorships (past three years):
Non-executive Director (since
September 2015) of APA Group
(ASX:APA). Non-executive
Director (since December 2022)
of Ansell Limited (ASX:ANN).
Other directorships and
appointments: Nil
Graeme Bevans
Managing Director and
Chief Executive Officer
Appointed – 1 April 2019
Nationality – Australian
Country of residence – Australia
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.
Ken Daley
MEngSc (Transport) (MON)
Non-executive Director
Appointed – 30 May 2023
Nationality – Australian
Country of residence – Australia
Ken Daley is a globally
recognised infrastructure
leader with several decades
of operational and board-level
toll road experience.
Ken’s previous executive
experience in toll roads has
included being the CEO of
Aleatica, the CEO of Indiana
Toll Road and President
International Development
at Transurban. Ken is also
a former Director of the
International Bridge, Tunnel
and Turnpike Association
(IBTTA), which is the worldwide
association of toll road operators.
Ken is currently a special
adviser to the IFM Global
Infrastructure Fund (IFM GIF)
and is also a Director on IFM GIF
investee companies.
Other listed company
directorships (past three years):
Nil
Other directorships and
appointments: Special Adviser,
IFM Global Infrastructure
Fund. Chair, Aleatica Group.
Director, Indiana Toll Road.
Director, M6toll.
David Bartholomew
BEc (Hons) (U of Adelaide),
MBA (AGSM)
Independent
Non-executive Director
Appointed – 1 October 2018
Chair of the Atlas Arteria People
and Remuneration Committee.
Nationality – Australian
Country of residence – Australia
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 Hastings
Funds Management and
is a former Director of the
Power and Water Corporation
(Northern Territory).
Other listed company
directorships (past three years):
Chair (since March 2021) of Iris
Energy Limited (NASDAQ:IREN)
Other directorships and
appointments: Director,
Endeavour Energy. Director,
Keolis Downer. Director, GHD
Group Limited. Non-executive
and independent Chair of
Atmos Renewables. External
Independent Chair of the
Executive Price Review Steering
Committee of AusNet Services.
ATLAS ARTERIA ANNUAL REPORT 2023 | 39
FINANCIAL REPORTREMUNERATION REPORTDIRECTORS’ REPORTSFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS CORPORATE GOVERNANCE
Jean-Georges Malcor
Ecole Centrale de Paris (Eng),
MSc (Stanford)
Independent
Non-executive Director
Appointed – 1 November 2018
Nationality – French/Australian
John Wigglesworth
BEc (MACQ), FCA
Independent
Non-executive Director
Appointed – 1 January 2023
Chair of the Atlas Arteria Audit
and Risk Committee.
Country of residence – France
Nationality – Australian
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 Managing Director of ADI
(Australian Defence Industry).
Jean-Georges has demonstrated
expertise in corporate
governance, risk mitigation,
strategy, technology, financing
and restructuring. He is also
an officer of the French Légion
d’Honneur Order and National
Order of Merit.
Other listed company
directorships (past three years):
Nil
Other directorships and
appointments: Director, ORTEC.
Director, Fives’ Group. Chair,
ENSTA Bretagne School of
Engineering (July 2020 to
December 2023).
Country of residence – Australia
John Wigglesworth is a
Chartered Accountant with 37
years, professional experience,
including nearly 25 years as
a Partner at KPMG both in
Australia and internationally.
During this time, he held several
leadership positions across
operations, industry sectors and
business development.
John has extensive experience
working with ASX listed and
leading global companies, with
specific expertise in external
and internal audit, financial
reporting, accounting systems
and controls, governance and
risk management.
Other listed company
directorships (past three years):
Non-executive Director (since
February 2024) of Cyclopharm
Limited (ASX:CYC).
Other directorships and
appointments: Non-executive
Director, The Sydney Children’s
Hospital Network. Non-executive
Director, Independent Reserve
Pty Ltd. Non-executive Director,
Grid Share Holding Group Pty Ltd.
Laura Hendricks
B.L.A (XU)
Independent
Non-executive Director
Appointed – 16 October 2023
Nationality – American
Country of residence –
United States
Laura Hendricks is currently
Chief Executive Officer of
Transdev U.S., the largest
operator and integrator of
multiple modes of transportation
in the United States. Laura has
worked in several roles in the
transportation industry across
the US for more than 20 years
and has international experience
working with shareholders in
Europe, specifically in France
and Germany. Laura is also
currently Chair of the North
American Transit Alliance, an
organisation that advocates for
the essential role that private
contractors play in public transit.
Prior to joining Transdev U.S.,
Laura was President and/
or CEO of several companies
including Paint Drop by Valspar,
Coach America and Merry
Maids. Laura also spent several
years in executive leadership
roles at Cintas and Fed Ex.
Laura is an accomplished senior
executive with broad leadership
experience in operations,
including full P&L responsibility,
business development, supply
chain management, financial
oversight, M&A, culture-building
and change management, and
has significant government
relations experience in the United
States, including working with
public authorities and regulators.
Other listed company
directorships (past three years):
Nil
Other directorships and
appointments: Chief Executive
Officer, Transdev North America,
Inc. Chair, North American
Transit Alliance.
40 | ATLAS ARTERIA ANNUAL REPORT 2023
BOARD OF DIRECTORS – ATLIX BOARD
Fiona Beck
BMS (Hons) Waikato (NZ) CA
Independent
Non-executive Director
Appointed – 13 September 2019,
Chair effective 1 March 2023.
Nationality – New Zealander
Country of residence – Bermuda
Fiona Beck has over 20 years’
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 fiberoptic
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 (since
July 2020) of IBEX Limited
(NASDAQ:IBEX). Non-executive
Director (since October 2020)
of Oakley Capital Investments
Limited (LSE:OCI). Non-executive
Director (since April 2020) of
Ocean Wilsons Holdings Limited
(LSE/BSX:OCN).
Other directorships and
appointments: Nil.
Kiernan Bell
BA (U of T), LLB (Bham)
Independent
Non-executive Director
Appointed – 1 September 2023
Andrew Cook
BA (UWO), CPA (Ontario)
Independent
Non-executive Director
Appointed – 26 November 2020
Nationality – British/Bermudian
Nationality – Bermudian
Country of residence – Bermuda
Country of residence – Bermuda
Debbie Goodin
See page 39 for full details.
Andrew Cook has extensive
executive, financial, operational
and capital market experience
having been the founding CFO
of several organisations and
overseeing the development
and growth of accounting,
finance, treasury and investor
relations departments.
He brings significant 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 IPOs at
LaSalle Re, Axis Capital and
Global Partner Acquisition Corp.
Andrew was formerly the Chief
Executive Officer 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 of Global
Partner Acquisition Corp II
(NASDAQ:GPACU) (January 2021
to January 2023).
Other directorships and
appointments: Chair, OmegaCat
Reinsurance Ltd. Director,
Aspida Holdings Ltd. Director,
Ferian Holdings Ltd
Kiernan Bell is a retired lawyer,
with over 20 years, professional
experience practicing as a
commercial litigator at leading
international law firm Appleby,
serving in a leadership capacity
as Head of Dispute Resolution
and as the Managing Partner
of the Bermuda office.
Kiernan is a former President
of the Bermuda Bar Council
and has also served in a variety
of judicial and quasi-judicial
roles including as Chair of the
Bermuda Immigration Appeals
Tribunal and as an Assistant
Justice of the Supreme Court
of Bermuda.
Kiernan has over 25 years’
corporate governance
experience, advising or serving
on the Board of Directors of
commercial and non-profit
entities, including banking
and re-insurance entities,
the Bermuda Chamber of
Commerce and the Bermuda
Business Development Agency.
In addition to serving as an
Independent Non-executive
Director on several Boards
in Bermuda, Kiernan also
serves as an Independent
Senator and Vice President
of the Senate of Bermuda.
Other listed company
directorships (past three years):
Nil
Other directorships and
appointments: Director, Wilton
Reinsurance Bermuda Limited.
Director, Liberty Group Limited.
Director, HSBC Insurance
SAC 1 (Bermuda) Limited
and HSBC Insurance SAC 2
(Bermuda) Limited.
ATLAS ARTERIA ANNUAL REPORT 2023 | 41
FINANCIAL REPORTREMUNERATION REPORTDIRECTORS’ REPORTSFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS 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. From time to time the Board establishes ad hoc committees to assist the Board with carrying out its responsibilities.
Details of those ad hoc committees are not included in the tables.
ATLIX Directors
Fiona Beck
Kiernan Bell 2
Jeffrey Conyers 3
Andrew Cook 4
Caroline Foulger 5
Debra Goodin
Board
Audit and Risk
Committee
Nomination
and Governance
Committee
People and
Remuneration
Committee
Meetings
held 1
Meetings
attended
Meetings
held 1
Meetings
attended
Meetings
held 1
Meetings
attended
Meetings
held 1
Meetings
attended
12
3
2
12
8
12
12
3
1
11
8
12
n.a.
n.a.
2
5
3
5
n.a.
n.a.
1
5
3
5
4
n.a.
1
2
2
4
4
n.a.
0
2
2
4
4
3
2
3
n.a.
7
4
3
0
3
n.a.
7
1. The number of meetings held during the time the Director was a member of the Board or of the relevant Committee.
2. Kiernan Bell was appointed as a Director on 1 September 2023.
3. Jeffrey Conyers was unable to attend a Board meeting due to a pre-existing commitment.
4. Andrew Cook was unable to attend an unscheduled Board meeting convened at short notice due to a pre-existing commitment.
5. Caroline Foulger retired as a Director on 1 July 2023.
ATLAX Directors
Debra Goodin
David Bartholomew
Graeme Bevans
Ken Daley 2
Laura Hendricks 3
Jean-Georges Malcor
John Wigglesworth
Board
Audit and Risk
Committee
Nomination
and Governance
Committee
People and
Remuneration
Committee
Meetings
held 1
Meetings
attended
Meetings
held 1
Meetings
attended
Meetings
held 1
Meetings
attended
Meetings
held 1
Meetings
attended
13
13
13
6
2
13
13
13
13
13
6
2
13
13
5
n.a.
n.a.
n.a.
1
5
5
5
n.a.
n.a.
n.a.
1
5
5
4
4
4
4
n.a.
n.a.
1
1
4
4
1
1
4
4
7
7
n.a.
n.a.
2
7
7
7
n.a.
n.a.
2
7
n.a.
n.a.
1. The number of meetings held during the time the Director was a member of the Board or of the relevant Committee.
2. Ken Daley was appointed as a Director on 30 May 2023.
3. Laura Hendricks was appointed as a Director on 16 October 2023.
Where a Director is unable to attend a meeting, they are provided with a briefing on the key matters and are given an opportunity
to provide input prior to the meeting.
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 legal and governance roles in the ASX listed environment.
42 | ATLAS ARTERIA ANNUAL REPORT 2023
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,
ADELAC and Chicago Skyway. Accordingly, the results for APRR, ADELAC and Chicago Skyway are disclosed in Atlas Arteria’s
income statement under the ‘share of profit/(loss) from equity accounted investments’ and ‘share of other comprehensive income
from equity accounted investments’ line items, and in the ‘equity accounted investments’ line item in Atlas Arteria’s balance sheet.
Combined with the corporate level expense, these make up Atlas Arteria’s statutory results for the period.
Financial results have been presented in this report to show the performance of Atlas Arteria. Underlying results is a non-IFRS
measure that is used by ALX management and the Boards as a measure to assess financial performance and represents statutory
profit excluding the impact of items not related to underlying operational performance such as impairments of investments,
acquisition and disposal costs, and debt and equity issuance costs. There were no such items in the year ended 31 December 2023,
and therefore the statutory results reflect the underlying operational performance of the business (‘Underlying Results’). The impact
of these items on the statutory results is presented below:
Statutory Results
Adjustments
Underlying Results
Atlas Arteria A$m
Toll revenue
Other revenue
Total revenue and other income
Business operations
Corporate costs
IFM engagement costs (a)
Acquisition transaction costs (a)
Depreciation and amortisation
Share of profit/(loss) of equity
accounted investments
Net Finance costs:
Interest on shareholder loans with CCPI
Other finance income
Interest on funds held (b)
Finance costs
Hedge ineffectiveness (c)
FX impacts of significant transactions (c)
Income tax expense
Net profit after tax
Year ended
31 Dec
2023
$m
Year ended
31 Dec
2022
$m
133.2
0.8
134.0
(33.9)
(36.0)
–
–
(69.2)
116.7
1.5
118.2
(38.0)
(32.5)
(2.3)
(2.5)
(66.2)
%
change
14%
(47%)
13%
11%
(11%)
100%
100%
(5%)
325.6
336.4
(3%)
18.1
17.9
–
(96.5)
–
–
(3.7)
256.3
1.7
5.1
965%
251%
15.3
(100%)
(82.8)
(10.9)
2.7
(3.2)
241.0
(17%)
100%
(100%)
(16%)
6%
Year ended
31 Dec
2023
$m
Year ended
31 Dec
2022
$m
Year ended
31 Dec
2023
$m
Year ended
31 Dec
2022
$m
133.2
0.8
134.0
(33.9)
(36.0)
–
–
116.7
1.5
118.2
(38.0)
(32.5)
–
–
%
change
14%
(47%)
13%
11%
(11%)
–
–
(69.2)
(66.2)
(5%)
325.6
336.4
(3%)
18.1
17.9
–
1.7
5.1
–
965%
251%
–
(96.5)
(82.8)
(17%)
–
–
–
–
(3.7)
256.3
(3.2)
238.7
–
–
(16%)
7%
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2.3
2.5
–
–
–
–
(15.3)
–
10.9
(2.7)
–
(2.3)
(a) Reported in ‘Consulting and administration expenses’ in the Statutory Results. Acquisition transaction costs relate to costs associated with the Chicago Skyway acquisition.
(b) Reported in ‘Other finance income’ in the Statutory Results and relates to the equity raise completed for the Chicago Skyway acquisition.
(c) Reported in ‘Finance costs’ in the Statutory Results. Hedge ineffectiveness arose from the deal contingent premium on the swap for the Chicago Skyway acquisition.
The statutory results for the year ended 31 December 2023 for Atlas Arteria show a profit after tax of $256.3 million (2022: $241.0 million).
Net profit after tax on Underlying Results increased by $17.6 million to $256.3 million. The net profit for 2023 predominantly reflects the
continued strong traffic performance and inflation linked toll increases at APRR, improved traffic performance at the Dulles Greenway,
offset by the loss from Chicago Skyway for the full year reflected in the ‘Share of profit/(loss) of equity accounted investments’.
The Atlas Arteria equity accounted profit includes the equity accounted profit of APRR of $370.2 million (2022: profit of $340.5 million)
and the equity accounted loss for Chicago Skyway of $44.6 million (2022: loss of $4.1 million).
On 1 December 2022, Atlas Arteria acquired 66.67% of Calumet Concession Partners Inc (‘CCPI’) which indirectly owns the Chicago
Skyway Toll Bridge concession (‘Chicago Skyway’ or ‘Skyway’). The year ended 31 December 2023 is the first full year that Atlas
Arteria has equity accounted for the results of Chicago Skyway. The Groups’ equity accounted loss for Chicago Skyway of $44.6 million
was partially offset by the interest income on the Calumet Concession Partners Inc (CCPI) shareholder loans of $18.1 million
(2022: $1.7 million). The loss also reflects the non-cash amortisation of the tolling concession and fair value adjustments on the
debt, consistent with our acquisition business case.
ATLAS ARTERIA ANNUAL REPORT 2023 | 43
FINANCIAL REPORTREMUNERATION REPORTDIRECTORS’ REPORTSFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS FINANCIAL OVERVIEW
Cashflows
Atlas Arteria received two main distributions from APRR during 2023, being $220.5 million (€137.9 million) in March based on the
second half performance for 2022, and $224.4 million (€134.4 million) in September, reflecting the first half performance for 2023.
Whilst distributions from APRR continue to be the primary source of cash for Atlas Arteria, in 2023 Atlas Arteria Atlas Arteria also
began receiving distributions from Chicago Skyway with distributions of $174.7 million (US$111.1 million) received during 2023 as
well as interest income on the Calumet Concession Partners Inc (CCPI) shareholder loans of $18.4 million (US$12.1 million).
The second half distribution for 2022 consisting of an ordinary dividend of 20.0 cents per share (cps) was paid in full on 6 April 2023.
The first half distribution for 2023 consisting of an ordinary dividend of 20.0 cps was paid in full on 5 October 2023.
After payment of distributions and operational activities for the year, the corporate balance sheet held $196.4 million in cash as at
31 December 2023.
Business Operations
A summary of the underlying results for each business is shown in the table below.
Business
APRR Group 1
ADELAC
Warnow Tunnel
Chicago Skyway 2
Dulles Greenway
Weighted Average 3
2023 Traffic
2023 Toll Revenue 4, 5
2023 EBITDA 4, 5
vs 2022
vs 2019
vs 2022
vs 2019
vs 2022
vs 2019
3.9%
5.0%
3.1%
(7.2%)
6.4%
3.3%
6.2%
4.9%
(5.8%)
1.3%
(26.4%)
2.9%
7.0%
11.5%
9.9%
2.7%
8.5%
6.9%
13.4%
20.2%
6.1%
34.3%
(18.5%)
11.9%
7.5%
15.8%
9.5%
0.8%
6.3%
7.1%
15.4%
22.5%
(2.9%)
34.1%
(21.8%)
13.1%
1. APRR Group includes APRR, AREA and A79 concessions.
2. Atlas Arteria completed the acquisition of a 66.67% majority interest in the Chicago Skyway on 1 December 2022, however data for the full period has been provided to
allow comparisons with prior periods.
3. Refer to slide 8 of the Investor Presentation lodged with the ASX on 29 February 2024 for weighted average calculation methodology.
4. Revenues and operating costs are presented under IFRS in local currency, excluding impacts of IFRIC 12.
5. Toll revenue % and EBITDA % change is calculated using the respective businesses local currencies.
The weighted average results, aggregate the financial results of each of Atlas Arteria’s businesses according to its economic interests
from ongoing operations.
44 | ATLAS ARTERIA ANNUAL REPORT 2023
APRR Group
APRR Group 1 100%
Toll revenue
Other revenue
Construction services revenue
Total revenue
Purchases and external charges
Personnel costs
Taxes
Construction services costs
Other
Total expenses
Total EBITDA
Provisions
Net interest expense
Other financial income (expenses)
Depreciation and amortisation
APRR corporate income tax
Share of profit/(loss) of associates (incl ADELAC)
Other
Consolidated NPAT
Total EBITDA (proportional)
1. APRR Group includes APRR, AREA and A79 concessions.
€m
A$m
2023
2022
% change
2023
2022
% change
2,873.8
2,686.0
144.9
230.5
132.5
335.4
3,249.2
3,153.8
(199.7)
(226.6)
(362.3)
(230.5)
11.0
(174.9)
(216.8)
(347.0)
(335.4)
4.9
(1,008.1)
2,241.2
(1,069.2)
2,084.6
(30.0)
(98.3)
(19.4)
(564.0)
(384.3)
3.2
(32.5)
(31.8)
(99.1)
(33.6)
(504.3)
(362.5)
2.9
–
1,115.8
1,056.3
7.0%
9.4%
(31.3%)
3.0%
(14.2%)
(4.5%)
(4.4%)
31.3%
126.2%
5.7%
7.5%
5.7%
0.8%
42.3%
(11.8%)
(6.0%)
10.0%
–
5.6%
698.0
649.1
7.5%
4,681.9
4,075.4
235.9
375.5
201.0
508.9
5,293.3
4,785.3
(325.3)
(369.2)
(590.3)
(375.5)
17.9
(265.4)
(329.0)
(526.5)
(508.9)
7.4
(1,642.4)
3,650.9
(1,622.4)
3,163.0
(48.9)
(160.1)
(31.6)
(918.9)
(626.1)
5.2
(52.9)
(48.3)
(150.4)
(51.0)
(765.2)
(550.0)
4.4
–
1,817.6
1,137.1
1,602.4
985.0
14.9%
17.4%
(26.2%)
10.6%
(22.6%)
(12.2%)
(12.1%)
26.2%
141.9%
(1.2%)
15.4%
(1.2%)
(6.4%)
38.0%
(20.1%)
(13.8%)
18.2%
–
13.4%
15.4%
Traffic performance at APRR reached record levels, outperforming 2022 by 3.9%. Traffic performance was driven by continued strong
operating conditions, low unemployment levels in France, the addition of the A79 concession and integration of the 17.5km stretch
of the existing A6 North roadway.
Light vehicle traffic was robust, showing incremental growth each quarter versus the prior corresponding period. This was largely
attributable to strong leisure and holiday traffic, along with high employment levels in France, which positively impacted household
earnings, leading to higher demand for the network. Heavy vehicle traffic showed marginal growth during the year, being closely
correlated to Spanish GDP and manufacturing which was constrained by the relatively flat performance of the European economies
and reduced agricultural production associated with the summer drought in Western Europe.
These overall record traffic results were achieved despite higher retail fuel prices in France and union action and strikes at
refineries during the first quarter. This was against a backdrop of pension reform strikes which saw reduced capacity on the French
rail network. There were also several disruptive weather events in August, including a record heatwave (which saw hot weather
protection measures introduced across France) and a landslide in the Maurienne Valley, which resulted in the temporary closure
of a stretch of the A43, an SFTRF concession, near the Italian border and adjacent to our AREA network.
The A79 commenced tolling on 4 November 2022. During its first year of tolling, the A79 recorded around 420 million VKT, with light
vehicles comprising around 67% of traffic. Toll revenue for the 12 months ending 31 December 2023 was around €34 million, with
heavy vehicles making up around 69% of revenue. The A79 concession extends to 2068 and the road currently supports significant
heavy vehicle traffic. For more detail, see APRR on pages 14 to 17.
Total toll revenue for 2023 was €2.9 billion (2022: €2.7 billion) driven by the strong traffic growth and toll price increases at APRR
and AREA of c.4.7% from 1 February 2023.
APRR Light Vehicle/Heavy Vehicle traffic and toll revenue split
t
i
l
p
s
c
fi
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
(
2023
2022
2021
2023
2022
2021
84%
84%
83%
66%
66%
64%
0%
20%
40%
60%
Light vehicle
Heavy vehicle
16%
16%
17%
34%
34%
36%
80%
100%
ATLAS ARTERIA ANNUAL REPORT 2023 | 45
FINANCIAL REPORTREMUNERATION REPORTDIRECTORS’ REPORTSFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS
FINANCIAL OVERVIEW
Other revenue increased during the year primarily as a result of the full year contribution of the A79.
Application of AASB Interpretation 12 Service Concession Agreements (‘IFRIC 12’) relating to capital spend during the year saw
revenue of €230.5 million (2022: €335.4 million) offset by a corresponding expense.
Operating costs (ex IFRIC 12 adjustments) increased by 5.9% as a result of the full year impact of A79 operation expenses of €17m
(2022: €3m), higher operating taxes due to higher traffic and earnings in the period, and general cost escalation impacting personnel
expenses and other external charges.
2023 Operating costs
2022 Operating costs
46%
25%
29%
47%
24%
29%
Purchases and external charges
Personnel costs
Taxes
EBITDA margins progressively improved from 2015 but were impacted in 2020 and 2021 due to the COVID-19 movement restrictions
on traffic. In addition, from 2021 the commencement of the Fulli business has marginally diluted the EBITDA margins. EBITDA
margins in 2023 remained relatively flat relative to 2022.
APRR EBITDA margins (excluding construction services revenue and costs)
90%
85%
80%
75%
70%
87.5%
87.9%
85.7%
86.0%
86.3%
86.2%
73.8%
74.4%
71.4%
73.7%
74.0%
74.2%
2018
2019
2020
2021
2022
2023
Excluding operating taxes
Including operating taxes
Net interest expense at APRR decreased by 0.8% driven by a €28.9m increase in interest costs due to higher interest rates on new
debt issuances in the year which was more than offset by a €29.7m increase in interest income on cash balances. Given APRR’s
primarily fixed rate debt profile, rates on existing debt were largely unimpacted for higher rates during the year. During the year
APRR issued €700.0 million of bonds under its Euro Medium Term Note Program at 98.761% of par with a coupon of 3.125%, the
proceeds of which were used for general corporate purposes. At the Financère Eiffarie level, an increase in the average cost of debt
to 4.0% (2022: 0.7%) reflects the variable nature of the loan in a rising interest rate environment.
During the year, Fitch Ratings reaffirmed its credit rating for APRR from an ‘A’ long-term issuer default rating and S&P also re-affirmed
their ‘A-‘ long term issuer ratings for APRR, and both maintained their outlook as ‘stable’.
As at year end, APRR had $2,242.5 million (€1,382.8 million) in cash on the balance sheet with a €2.0 billion undrawn revolving credit
facility. For more detail see APRR on pages 14 to 17.
46 | ATLAS ARTERIA ANNUAL REPORT 2023
ADELAC
ADELAC 100%
Toll revenue
Other revenue
Total operating revenue
Operating expenses
Total EBITDA
Total EBITDA (proportional)
2023
68.1
0.4
68.5
(10.8)
57.7
18.0
€m
2022
% change
61.0
0.2
61.2
(11.4)
49.8
15.5
11.5%
130.4%
11.8%
5.3%
15.8%
15.8%
2023
110.9
0.7
111.6
(17.6)
94.0
29.3
A$m
2022
% change
92.6
0.3
92.9
(17.3)
75.6
23.6
19.8%
133.3%
20.1%
(1.7%)
24.3%
24.3%
At ADELAC, traffic in 2023 experienced strong growth on the prior corresponding period which was impacted early in 2022 by lower
cross-border travel as the Swiss Government continued to recommend working from home. Traffic at ADELAC was 5.0% higher than
2022. Toll revenue for the year was 11.5% higher than 2022.
Costs at ADELAC decreased marginally by €0.6 million (5.3%).
Other than during the COVID-19 period in 2020 and in 2022, EBITDA margins have progressively improved since 2018. The increase
in 2023 reflects strong revenue growth in the period and a reduction in operating expenses.
ADELAC EBITDA margins (excluding construction services revenue and costs)
82.5%
83.0%
81.9%
83.2%
81.4%
84.3%
90%
85%
80%
75%
2018
2019
2020
2021
2022
2023
ADELAC had $56.9 million (€35.1 million) cash as at 31 December 2023. For more detail see ADELAC on pages 14 to 17.
ATLAS ARTERIA ANNUAL REPORT 2023 | 47
FINANCIAL REPORTREMUNERATION REPORTDIRECTORS’ REPORTSFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS FINANCIAL OVERVIEW
Warnow Tunnel
Warnow Tunnel 100%
Toll revenue
Other revenue
Total operating revenue
Operating expenses
Total EBITDA
2023
14.4
0.1
14.6
(4.6)
10.0
€m
2022
13.1
0.1
13.3
(4.1)
9.2
% change
9.9%
–
9.8%
(12.2%)
9.5%
2023
23.5
0.2
23.7
(7.4)
16.3
A$m
2022
% change
19.9
0.2
20.1
(6.2)
13.9
18.1%
–
17.9%
(19.4%)
17.3%
Traffic at Warnow Tunnel increased by 3.1% compared to 2022. Traffic performance was predominantly driven by roadworks on the
competing route along Am Strande which increased time savings for commuters using the Warnow Tunnel. In addition, traffic levels
in 2022 were negatively impacted by COVID-19 restrictions associated with the Omicron variant and the introduction of the German
Government’s temporary public transport card during summer. Toll revenue for the year was 9.9% higher than 2022, outperforming
traffic growth as a result of an increase to average tolls of 6.4% on 1 November 2022.
Costs at Warnow Tunnel increased by €0.5 million (12.2%).
EBITDA margins progressively improved from 2016 to 2018 in line with the strong increase in traffic and revenues. Warnow’s EBITDA
margins were impacted by COVID-19 movement restrictions in 2020 and 2021.
Warnow Tunnel EBITDA (excluding construction services revenue and costs)
76.8%
75.3%
80%
75%
70%
65%
71.1%
68.3%
69.0%
68.9%
2018
2019
2020
2021
2022
2023
Warnow Tunnel had $14.8 million (€9.1 million) cash as at 31 December 2023. For more detail see Warnow Tunnel on pages 18 to 20.
Chicago Skyway
The Chicago Skyway interest was acquired on 1 December 2022 and has been equity accounted in the Atlas Arteria and ATLAX Group
accounts from that date. The table below sets out an analysis of the full calendar year financial results of Chicago Skyway to provide
more complete information on underlying operational performance.
Chicago Skyway 100%
Toll revenue
Other revenue
Total revenue
Overhead expenses
Operating and maintenance expenses
Toll collection expenses
Total operating expenses
Total EBITDA
Total EBITDA (proportional)
2023
123.3
–
123.3
(5.9)
(8.1)
(4.4)
(18.4)
104.9
70.0
US$m
2022
% change
120.1
–
120.1
(5.0)
(6.8)
(4.2)
(16.0)
104.1
69.4
2.7%
–
2.7%
(18.0%)
(19.1%)
(4.8%)
(15.3%)
0.8%
0.8%
2023
185.8
–
185.8
(8.9)
(12.1)
(6.6)
(27.6)
158.1
105.4
A$m
2022
% change
173.3
–
173.3
(7.2)
(9.9)
(6.0)
(23.1)
150.2
100.2
7.2%
–
7.2%
(23.5%)
(22.3%)
(10.5%)
(19.6%)
5.3%
5.3%
48 | ATLAS ARTERIA ANNUAL REPORT 2023
As expected, traffic at Chicago Skyway fell versus 2022 due to major roadworks on the Indiana Toll Road (ITR), which saw capacity
reduced to one lane in each direction for several months of the year. In addition, traffic levels in the prior period were positively
impacted by roadworks on the Frank Borman Expressway (I-94), which resulted in elevated traffic on the Skyway.
While traffic decreased 7.2%, it remained above Atlas Arteria’s business acquisition case. This was due to strong traffic in January
and February before the start of the eastbound ITR roadworks and because the roadworks were conservatively assumed to continue
throughout summer whilst they stopped in May. Roadworks on the ITR westbound overpass ran from early September to the end
of November.
As a result of toll increases implemented in January 2023, total revenue increased 2.7%, despite the fall in traffic numbers.
Chicago Skyway Light Vehicle/Heavy Vehicle traffic and toll revenue split
t
i
l
p
s
c
i
f
f
a
r
T
t
i
l
p
s
e
u
n
e
v
e
R
)
y
c
n
e
r
r
u
c
l
a
c
o
l
(
2023
2022
2021
2023
2022
2021
89%
89%
90%
62%
62%
63%
0%
20%
40%
60%
Light vehicle
Heavy vehicle
11%
11%
10%
38%
38%
37%
80%
100%
Operating costs increased by 15.3% compared to 2022 predominantly driven by increased spending on tolling systems, additional
O&M expenditure and higher insurance premiums.
2023 Operating costs
(based on US$ costs)
2022 Operating costs
(based on US$ costs)
24%
32%
26%
31%
44%
43%
Overhead expenses
O&M
Toll collection expenses
EBITDA margins were stable from 2016 to 2019, then in 2020 were impacted by the COVID-19 movement restrictions on traffic.
The reduction in margins during 2023 reflect the impact on traffic of the ITR roadworks during the period as well as rising
operating expenses.
Chicago Skyway EBITDA margins (excluding construction services revenue and costs)
87.7%
86.9%
86.7%
85.2%
84.3%
85.1%
90%
85%
80%
2018
2019
2020
2021
2022
2023
Chicago Skyway had $26.2 million (US$17.8 million) cash at 31 December 2023 which excludes an additional $29.1 million (US$19.8 million)
held at the Calumet Concession Partners Inc (CCPI) entity level. For more detail see Chicago Skyway on pages 21 to 23.
ATLAS ARTERIA ANNUAL REPORT 2023 | 49
FINANCIAL REPORTREMUNERATION REPORTDIRECTORS’ REPORTSFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS
FINANCIAL OVERVIEW
Dulles Greenway
Dulles Greenway 100%
Toll revenue
Other revenue
Total revenue
Transaction fees
Operating and maintenance expenses
Other operating expenses
Total operating expenses
Total EBITDA 1
US$m
A$m
2023
72.8
0.5
73.3
(2.3)
(4.8)
(8.5)
(15.6)
57.7
2022
67.1
0.9
68.0
(2.2)
(4.5)
(7.0)
(13.7)
54.3
% change
8.5%
(47.8%)
7.8%
(4.8%)
(6.9%)
(21.4%)
(14.0%)
6.3%
2023
109.7
0.7
110.4
(3.5)
(7.2)
(12.8)
(23.5)
86.9
2022
97.1
1.0
98.1
(3.2)
(6.6)
(10.3)
(20.2)
77.9
% change
13.0%
(30.8%)
12.6%
(7.2%)
(9.4%)
(24.2%)
(16.6%)
11.5%
1. Total EBITDA as presented at note 4 Segment information within the financial statements is $57.6 million (2022: $54.0 million) with the difference attributed to
administrative costs associated with the Groups’ holding structure in Dulles Greenway.
Traffic at the Greenway continued to improve during 2023 with growth in traffic largely as a result of higher weekday traffic.
Overall, return to office trends in the Washington DC area are broadly in line with the US average, showing gradual growth. Growth in
traffic was largely driven by higher weekday traffic which increased by 7.7%, reflecting the gradual return to office-based work, and
consistent with the value proposition of the Greenway which offers reliable and predictable travel times for customers. Overall, traffic
at Dulles Greenway was up by 6.4% compared to 2022 and toll revenue and EBITDA were up 8.5% and 6.3% respectively. The business
continues to proactively engage with the Virginian Administration to achieve positive outcomes for all stakeholders.
Operating costs increased by 14.1% compared to 2022 as a result of costs associated with a new violation enforcement system and
costs incurred in connection with the Virginia State Corporation Commission (SCC) rate case application.
2023 Operating costs
(based on US$ costs)
2022 Operating costs
(based on US$ costs)
14%
24%
15%
16%
21%
11%
30%
36%
14%
Transaction fees
O&M
19%
Property taxes
Administrative expenses
Other
EBITDA margins were stable from 2016 to 2019, then in 2020 were impacted by the COVID-19 movement restrictions on traffic but are
slowly increasing towards pre-pandemic levels.
Dulles Greenway EBITDA (excluding construction services revenue and costs)
81.3%
82.2%
85%
80%
75%
70%
79.8%
78.7%
77.1%
73.8%
2018
2019
2020
2021
2022
2023
Dulles Greenway had $299.0 million (US$203.5 million) of cash available across restricted and unrestricted reserve accounts as
at 31 December 2023. These reserves include locked cash due to Dulles Greenway not passing its one and three-year lock-up tests.
For more detail see Dulles Greenway on pages 24 to 26.
50 | ATLAS ARTERIA ANNUAL REPORT 2023
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 2023. The information below also forms part of these Directors’ Reports:
– Strategic Framework on pages 12 to 13
– Portfolio and Performance on pages 14 to 26
– Sustainability on pages 27 to 35
– Risk Management Framework on pages 36 to 37
– Information on the Directors, Company Secretaries and Directors’ meetings on pages 38 to 42
– Financial Overview on pages 43 to 50
– Remuneration Report on pages 56 to 84
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.
Operating and financial review
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 time, greater time certainty, reduced fuel consumption and
carbon emissions.
As of the date of this report, Atlas Arteria has ownership interests in five businesses. The ATLIX Group currently has a 31.14% interest
in the APRR toll road group in France and a 31.17% interest in ADELAC. Together APRR and ADELAC comprise a 2,424km motorway
network located in the East and South East of France. In the US, the ATLAX Group owns a 66.67% interest in the Chicago Skyway,
a 12km toll road located south of Chicago and Atlas Arteria has 100% of the economic interest in the Dulles Greenway, a 22km toll
road in the Commonwealth of Virginia, of which the ATLAX Group owns a 13.43% interest. 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 20.0 cents per stapled security (cps) paid on 5 October 2023 (a)
Dividend of 20.0 paid on 6 April 2023 (b)
Dividend of 20.0 cps paid on 3 October 2022 (c)
Dividend of 20.5 cps paid on 31 March 2022 (d)
Total distributions paid
(a) The dividend paid on 5 October 2023 comprised of an ordinary dividend of 20.0 cps. The dividend was paid in full by ATLIX.
(b) The dividend paid on 6 April 2023 comprised of an ordinary dividend of 20.0 cps. The dividend was paid in full by ATLIX.
(c) The dividend paid on 3 October 2022 comprised of an ordinary dividend of 20.0 cps. The dividend was paid in full by ATLIX.
(d) The dividend paid on 31 March 2022 comprised of an ordinary dividend of 20.5 cps. The dividend was paid in full by ATLIX.
Year ended
31 Dec 2023
$m
Year ended
31 Dec 2022
$m
290.2
290.2
–
–
580.4
–
–
191.8
196.6
388.4
ATLAS ARTERIA ANNUAL REPORT 2023 | 51
FINANCIAL REPORTREMUNERATION REPORTDIRECTORS’ REPORTSFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS DIRECTORS’ REPORTS
Financial Results
Commentary and details of the financial results of Atlas Arteria can be found in the Financial Overview on pages 43 to 44.
Review and results of operations
Key operational and strategic updates by business can be found in the Financial Overview on pages 45 to 50.
Strategic outlook
Atlas Arteria has strong growth opportunities within the current portfolio. Extending the concession life of APRR, as well as creating
a clear pathway to sustainable cash flows from the Dulles Greenway remain key priorities. At Chicago Skyway, the business is
focused on the smooth transition of ownership and implementation of our key strategies outlined at acquisition. Importantly, the
Chicago Skyway acquisition provides Atlas Arteria with the scale and additional balance sheet capacity to participate in any potential
re-tender of the APRR and AREA concessions.
Further details regarding Atlas Arteria’s strategic framework can be found on pages 12 to 13.
Sustainability
At Atlas Arteria, we are committed to playing a positive role in society and creating long-term value for our stakeholders. From the strong
and sustainable outcomes we create for investors and customers, through to our employees and communities, we take our responsibilities
seriously. Embedding sustainable business practices is core to our growth and plays a crucial part in how we define success.
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: good governance;
an ethical culture; an emphasis on sustainable growth; and keeping abreast of technology and other innovations.
We continue to make progress in support of our priority areas and safety, diversity and greenhouse gas emissions targets. This
includes testing of safety innovations at APRR, working to address employee feedback raised through recent surveys, and pursuing
renewable electricity options at our businesses and corporate headquarters. We also continue our work to better understand scope 3
emissions and to integrate climate change considerations into business-as-usual processes.
Our work with the team at Chicago Skyway to mature their approach to sustainability has also commenced, with an initial focus
on improving insight into, and management over, greenhouse gas emissions.
In April 2023, Atlas Arteria delivered its second standalone Sustainability Report which is available on our website at:
https://www.atlasarteria.com/stores/_sharedfiles/Sustainability/ALX_Sustainability_Report_2022_web.pdf. In April 2024,
Atlas Arteria will release its Sustainability Report in respect of the 2023 year.
Further details regarding Atlas Arteria’s approach to sustainability can be found on pages 27 to 35.
Risk Framework
Proactive and disciplined management of risk is critical to Atlas Arteria’s business strategy and organisational culture.
Identifying and prioritising risk is critical to the development and implementation of an effective strategy and, together with effective
risk management is essential to delivering value for our stakeholders. Atlas Arteria considers risk in conjunction with strategy,
and this approach is supported by a positive and proactive risk culture. A robust risk management framework is supported by clear
risk appetite statements that enable Atlas Arteria to capture opportunities and effectively manage and escalate risk as required.
Our Risk Management Policy is available on our website at:
https://www.atlasarteria.com/stores/_sharedfiles/Corporate_governance/2023/Risk_Management_Policy_-_March_2023.pdf
Further details regarding Atlas Arteria’s approach to risk management can be found on pages 36 to 37.
Significant changes in state of affairs
The Directors of ATLIX and ATLAX are not aware of any significant changes in the state of affairs for the year ended 31 December 2023.
Events occurring after balance sheet date
The Directors of ATLIX and ATLAX are not aware of any other matters or circumstances not otherwise dealt with in the Financial
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 subsequent to the year ended 31 December 2023.
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 2023
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 is responsible for adopting and maintaining its own environmental and social risk management framework
that complies with the relevant regulation 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 Corporations (Financial Reporting by Stapled entities) Instrument 2023/673 and ASIC Corporations
(Stapled Group Reports) Instrument 2015/838.
Auditor 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 23 to the Financial Reports on page 124.
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 2023 | 53
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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:
Fiona Beck
Chair
Atlas Arteria International Limited
Hamilton, Bermuda
28 February 2024
Andrew Cook
Director
Atlas Arteria International Limited
Hamilton, Bermuda
28 February 2024
Signed in accordance with a resolution of the Directors of Atlas Arteria Limited:
Debra Goodin
Chair
Atlas Arteria Limited
Melbourne, Australia
29 February 2024
John Wigglesworth
Director
Atlas Arteria Limited
Melbourne, Australia
29 February 2024
54 | ATLAS ARTERIA ANNUAL REPORT 2023
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 2023, 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
29 February 2024
PricewaterhouseCoopers, ABN 52 780 433 757
2 Riverside Quay, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001
T: +61 2 9659 2476, F: +61 2 8266 9999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation
ATLAS ARTERIA ANNUAL REPORT 2023 | 55
FINANCIAL REPORTREMUNERATION REPORTDIRECTORS’ REPORTSFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS REMUNERATION REPORT
Message from the People and Remuneration Committee Chair
On behalf of the Atlas Arteria People and Remuneration Committee
and Boards, I am pleased to present the Remuneration Report
for the 2023 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.
In 2023, Atlas Arteria faced several challenges including rising
bond yields and the introduction of a new French tax, both of
which had an impact on security price performance. However,
management demonstrated steadfast dedication to extracting
value from our businesses, navigating a period of consolidation
for Atlas Arteria.
Despite these challenges, Atlas Arteria delivered a strong
financial performance with both weighted average traffic and toll
revenue exceeding 2022 levels, up 3.3% and 6.9% respectively.
This predominantly reflects the robust traffic performance of
APRR and the addition of the A79, as well as the positive impact
of inflation linked tolls which drove strong revenue outcomes.
As a result of our overall financial performance for 2023, the
Boards are expecting to pay a distribution of 40.0 cents per
security to our securityholders for the 2023 year.
Key strategic milestones were achieved during the year
including the following:
− Completion of the Chicago Skyway 12-month transition
plan including:
− Successful regearing at Chicago Skyway to release capital
for securityholders;
− Advanced the transition to a whole-of-life asset
management culture;
− Optimised operations including commencing design
of a new back-office system;
− Enhanced the leadership team including appointment
of a new CFO and COO; and
− Incorporated Chicago Skyway into Atlas Arteria’s emission
reduction targets.
− Appointed as part of the Eiffage and APRR consortium for
exclusive negotiation on the A412 in France.
− Submission of a rate case to the SCC requesting an increase
in the maximum level of tolls at Dulles Greenway;
− Completion of operating model review for Atlas Arteria to
optimize capability and capacity across the group which is
being implemented;
− Redefined our strategy, positioning the business for
long-term success.
1. STEER principles – Safety, Transparency, Engage, Environmental and Respect.
56 | ATLAS ARTERIA ANNUAL REPORT 2023
Across 2023 we have continued to progress our commitment
on each of our sustainability priorities – safety, our people,
customers, community and environmental stewardship.
We continue to make good progress on our emissions profile,
reducing our total scope 1 and 2 emissions through the
purchase of renewable energy at most of our businesses and
in our corporate offices. We have launched a new program
targeted at strengthening connections with our communities
and customers which we will see evolve further in 2024. We
again achieved an A rating on the GRESB Infrastructure Public
Disclosure Report increasing our score from 80 to 87 and were
ranked second in the Asia-Pacific Transport sector. Further
details on our progress will be shared in our Sustainability
Report to be published in April 2024.
Addressing stakeholder feedback
Atlas Arteria received a strike against its Remuneration Report
at the 2023 AGM. Our subsequent discussions with securityholders
confirmed their primary concern was with the use of positive
discretion in 2022 on the MD & CEO’s remuneration outcome,
as well as highlighting some aspects of the Remuneration
Framework that they considered to be misaligned with
industry peers.
The Boards have spent considerable time during the year
reflecting on the feedback and reviewing all of Atlas Arteria’s
remuneration processes and practices. The review process
has taken into account the need to balance the interests
of our securityholders, while maintaining competitive and
contemporary remuneration practices. As a result of the review,
we are proposing a number of changes to the Atlas Arteria
Remuneration Framework including enhancements to
governance processes that are outlined in this report.
2023 remuneration outcomes
Atlas Arteria’s Remuneration Framework seeks to align executive
remuneration outcomes with the performance of the business
and the interests of securityholders.
Our people are at the core of everything we do and we continue
to invest in their growth and development. We are proud of our
ability to continue to attract and retain top talent across our
diverse global workforce. We recognise the importance of
responding to critical matters that impact the safety, wellbeing
and engagement of our people and have focused our energy in
2023 on matters related to psychosocial risk. We pride ourselves
on being a truly inclusive organisation and focused our efforts
in 2023 on looking at ways to bring our STEER 1 Principles to life.
We continue to cultivate a high-performance culture where our
people feel engaged and connected to the work we do, the
communities in which we operate, and to each other.
The decisions made to align remuneration with securityholder
expectations more effectively during 2023 included:
As part of the 2023 review process, the following changes to
the Remuneration Framework have been introduced for 2024:
Remuneration outcomes
− Executive Remuneration Level and Structure: A full
remuneration benchmarking exercise was completed in
2023. In the context of securityholder experience in the last
12 months, the Boards have determined to retain MD & CEO
remuneration at current levels for 2024, noting that this level
is below the benchmarked market median. Details of the
outcome of the review are included in section 7.1.
− 2023 STI outcomes: The STI outcomes for the 2023 performance
year have been assessed as, on-average, at target for non-financial
KPIs and above target for financial KPIs.
− 2021 LTI outcome: The 2021 Long-Term Incentive (LTI)
Award was tested at the end of the performance period
on 31 December 2023. The result was a partial vesting
with 50.73% of the award vesting.
− NED fees: A full review of NED fees, including an external
benchmarking exercise, was completed during the year.
The Boards have decided to cease the use of travel allowances
with existing base fees being adjusted to include an amount
equivalent to one international trip per year, noting that
aggregate NED fees remain below market median levels.
Remuneration governance: As part of the changes introduced
during 2023, there is now a single PRC responsible for the
oversight of people and remuneration. This change has helped
to drive clarity and improve effectiveness in the way we oversee
remuneration matters, while at the same time maintaining the
high level of engagement of ATLAX and ATLIX Directors on these
critical matters.
Enhancements to Remuneration Structure
and Disclosures
The Boards have conducted a thorough review in 2023 on all
aspects of executive remuneration at Atlas Arteria in response
to securityholder feedback. The Boards aim to ensure that the
remuneration practices continue to be appropriate for the
business, aligned to securityholder interests and consistent
with contemporary practices. We take securityholder feedback
seriously, and the changes we are introducing in 2024 underscore
our commitment to addressing these concerns. We will continue
to engage with securityholders in relation to remuneration
at Atlas Arteria.
− Use of Board discretion: Update the guidelines used to govern
the use of discretion for executive remuneration decisions
to limit the exercise of positive discretion to exceptional
circumstances and where financial performance materially
exceeds securityholders’ expectations. Details are included
in section 3.3.1.
− STI Weighting to Financial Measures: Revise the weightings
of the STI plan to emphasise the importance of achieving our
financial targets and meeting our Health and Safety and ESG
obligations. The 2024 STI will include financial measures with
a 70% weighting, ESG and safety measures with a 15% weighting
and specific business priorities with a weighting of 15%.
− LTI Performance Period: Amend the performance period for
the LTI plan to a 4-year period for executive KMP.
− LTI KPI Targets: Introduce a new second measure to the
LTI plan. The 2024 plan will retain relative TSR with a 70%
weighting and introduce a new measure based on Free Cash
Flow per security with a 30% weighting. This combination
of measures provides clear alignment to long-term strategic
priorities, are clear and quantifiable and designed to meet
the expectations of securityholders.
− Dividend Equivalent Payments: Remove Dividend Equivalent
Payments (DEPS) from future equity award grants.
− Adjustments to Financial KPI’s: Include additional disclosures
regarding the adjustments made to reported EBITDA and other
measures when assessing financial performance for STI
purposes. Further details are included in section 3.3.2.
Securityholders will be asked to approve the equity based STI
and LTI awards for the MD & CEO at the 2024 AGM.
I have confidence that you, our securityholders, will find the 2023
Remuneration Report to be clear in outlining our remuneration
practices. I trust that the adjustments made by the Boards
in response to feedback will instil confidence in our approach,
and I hope you recognise the value of the implemented changes
and improved clarity they will provide.
David Bartholomew
Atlas Arteria
People & Remuneration Committee Chair
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FINANCIAL REPORTREMUNERATION REPORTDIRECTORS’ REPORTSFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS REMUNERATION REPORT
This Remuneration Report contains the following sections:
1 Introduction
2 Who is covered by this report?
3 Remuneration Framework review
4 Our Remuneration Framework at a glance
5 Executive Remuneration Framework
6 2023 business performance highlights
7 2023 Remuneration outcomes
8 Non-executive Director fees
9 Remuneration governance
10 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 2023. 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 securityholding structure, the Boards of both ATLAX and ATLIX and the Atlas Arteria PRC
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
David Collins
Managing Director & Chief Executive Officer
Chief Financial Officer
Vincent Portal–Barrault
Chief Operating Officer
1 April 2019
30 August 2022
1 April 2019
Non-executive Directors
Debra Goodin *
Independent Non-executive Chair (ATLAX) and
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)
David Bartholomew
Independent Non-executive Director (ATLAX)
People and Remuneration Committee (PRC) Chair
Jean-Georges Malcor
Independent Non-executive Director (ATLAX)
John Wigglesworth
Independent Non-executive Director (ATLAX)
Audit and Risk Committee (ARC) Chair
Ken Daley
Independent Non-executive Director (ATLAX)
Laura Hendricks
Independent Non-executive Director (ATLAX)
Fiona Beck
Independent Non-executive Chair (ATLIX)
1 October 2018
1 November 2018
1 January 2023
30 May 2023
16 October 2023
1 March 2023 as Chair of ATLIX
(Director of ATLIX from 13 September 2019)
Andrew Cook
Kiernan Bell
Independent Non-executive Director (ATLIX)
Independent Non-executive Director (ATLIX)
25 November 2020
1 September 2023
Former Non-executive Directors
Jeffrey Conyers
Independent Non-executive Chair (ATLIX)
Caroline Foulger
Independent Non-executive Director (ATLIX)
Audit and Risk Committee (ARC) Chair
16 December 2009 (Retired 1 March 2023)
Chair of ATLIX until 1 March 2023
19 May 2020 (Retired 1 July 2023)
* As contemplated by the Co-operation Deed in place between ATLAX and ATLIX, the ATLIX Board includes a Director of ATLAX (Debra Goodin) to facilitate and promote
co-operation and consultation between the two Boards.
58 | ATLAS ARTERIA ANNUAL REPORT 2023
3. Remuneration Framework review
3.1 Our response to the 2022 strike
At Atlas Arteria’s 2023 AGM securityholders voiced their concerns with our 2022 remuneration outcomes, in particular executive
remuneration read together with the business’ 2023 financial performance and securityholder outcomes. This resulted in Atlas Arteria
receiving a first strike against our Remuneration Report (2022 strike). In response to these concerns, the Boards have actively
engaged with securityholders to understand the issues raised and are taking appropriate steps to ensure our remuneration practices
align with expectations, and at the same time retaining our skilled and engaged workforce.
A structured review process was undertaken during 2023 to ensure a full and comprehensive review of our Remuneration Framework.
This encompassed the areas highlighted by securityholders, along with an assessment of all related policies, processes, and
procedures. In summary, the review process involved:
− Consolidating feedback from securityholders to have a clear view of the issues that motivated the 2022 strike;
− Developing a comprehensive project plan to ensure a considered and timely approach to address the feedback received;
− Reviewing market data and obtaining external advice in relation to comparator and ASX listed company practices from our advisers
to understand and assess potential alternatives;
− Reviewing proposed changes against the Atlas Arteria business strategy and remuneration principles to enable any changes
to consider both internal and external factors appropriately; and
− Engaging with securityholders to capture feedback on the proposed changes.
The Boards are focussed on implementing a Remuneration Strategy that best fits Atlas Arteria to incentivise management
to maximise securityholder outcomes.
The following table summarises the concerns raised at the 2023 AGM and the response from the Atlas Arteria Boards.
Topic
Board response
Exercising positive
discretion over the
MD & CEO’s 2022
STI outcome
− As part of the 2022 STI evaluation for the MD & CEO, the Boards exercised positive discretion to increase
the overall outcome from 105% of target to 120% of target – a discretionary award of 15%. While the Boards
believed there was a clear rationale for this decision at the time given the MD & CEO’s strong performance
in 2022, this view received adverse commentary from securityholders.
− As part of the 2023 Remuneration Framework review, the guidelines that govern the use of discretion for
executive remuneration were reviewed against market practice and securityholder expectations. We have put
in place guidelines that the Boards will use when they look to exercise discretion – both positive and negative.
Based on these guidelines, the Boards will only exercise positive discretion where financial performance
materially exceeds securityholder expectations. The Discretion Guidelines are published in the Remuneration
Report, refer section 3.3.1.
− The Boards believe these changes will enable greater transparency and ensure any future use of discretion,
both positive and negative, is aligned with the expectations of securityholders.
Weighting of financial
targets for the STI plan
for KMP executives
− In 2022, to accommodate the inclusion of a 10% ESG measure in the KMP and executive STI plan, the weighting
for the financial component was reduced to 60% (from 70%) with the weighting for the strategic component
retained at 30%.
− The introduction of an ESG measure was well received by securityholders as it recognised the importance
of linking executive remuneration outcomes to the achievement of ESG priorities. However, there were
concerns raised about the adjusted weighting assigned to the financial component, suggesting it was too low
in comparison to peers.
− A detailed review of market practice by companies in the ASX100 identified a range of approaches and confirmed
that the typical weighting of the financial component ranges from 50%-70% of the total STI scorecard.
− The Boards have considered the market data and securityholder feedback and have concluded it is appropriate
to increase the STI weighting for the financial component back up to 70% for 2024. Other changes to the
weightings include increasing the weighting of the ESG/safety component to 15% and a key business priorities
component of 15% with stretch targets set that are tailored to individual KMP accountabilities focussed on
increasing securityholder value.
− The Boards believe the revised weightings will provide an appropriate and balanced incentive to management
to achieve the annual financial targets, meet our investors’ expectations in relation to ESG (including health
and safety) and to drive our key business priorities.
− Further details of the STI plan weightings are included in section 5.4.
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Topic
Number of LTI
performance
measures
Appropriateness of LTI
performance period
Distribution Equivalent
Payments (DEPs)
Travel allowance
for Non-executive
Directors (NEDs)
Board response
− Securityholders raised concerns that the 2023 LTI plan, with only one performance measure, is too narrow
and inconsistent with market practice and that it is common to include a second quantifiable measure in LTI
plans to ensure a balanced approach.
− As part of the 2023 review, the Boards have decided to introduce a Free Cash Flow per security measure
as being the most appropriate second LTI measure given that cash flow is critical to meeting securityholder
expectations of our dividend profile and critical in underpinning our valuation and security price. The Boards
have previously considered the introduction of a Free Cash Flow per security as a second measure but
decided not to proceed for a number of reasons at the time such as during COVID or at the time of the
Chicago Skyway acquisition.
− The proposed 2024 LTI plan will retain relative TSR and reduce it from 100% to 70% and include Free Cash Flow
per security at 30%. This combination provides alignment to long-term strategic priorities, is clear and
quantifiable and is designed, on balance, to meet the expectations of securityholders. This approach also aligns
more closely with market practice. Details of the proposed change are included in section 3.2.
− Some securityholders questioned the duration of the LTI performance period at three years and whether it was
in line with relevant peers.
− A detailed review of market practice confirmed that while the 3-year performance period is still the dominant
approach adopted by companies in the ASX100, there is a movement in some sectors to a 4-year performance
period for LTI plans.
− Given the practice of our closest peers is to use a 4-year performance period and the longer-term nature of the
Atlas Arteria investment proposition for investors, the Boards have determined a 4-year performance period
will enhance the alignment of executive KMP with investors and will apply to the 2024 LTI grants.
− The Atlas Arteria LTI plans have historically provided for an award of DEPs (either by way of an additional grant
of securities or by a cash payment) on performance rights that have vested. The Boards considered that the
inclusion of distribution equivalents improved the alignment between management and securityholders where
the investment proposition was based on both yield and security price growth.
− Some securityholders provided feedback indicating that the continued use of DEPs is uncommon and deemed
inappropriate as a feature of the Atlas Arteria LTI Plan. The 2023 review of remuneration practices confirmed
the use of DEPs is limited within the ASX100.
− On reviewing feedback from investors and market practice of peer companies, the Boards have decided
to cease the use of DEPs as part of the Remuneration Framework for equity awards made from 2024.
− Reflecting the international nature of the Atlas Arteria business, NEDs have historically received a travel
allowance of $10,000 for each time they are required to travel more than eight hours to attend Board meetings.
Concerns were raised about the ongoing use of travel fees for NEDs and whether this was consistent with
market practice.
− A full review of NED fees was completed in 2023 to ensure that fees remained appropriate and competitive
to attract high performing Directors. The review included consideration of the use of travel allowances by
comparable companies, specifically global companies where regular international travel by NEDs is expected.
Pending the outcome of a review of NED fees, no travel allowance fees were paid in 2023 even though NEDs
were required to travel internationally during the year.
− The review also identified that while travel allowances were used by some similar companies, other companies
adopted a simpler approach and included fees for travel time in their overall base fees.
− The Boards have decided to adopt an approach that incorporates travel time in the base fees. Accordingly,
the payment of travel fees to NEDs will cease and the existing base fees will be adjusted to include an amount
in respect of one international trip per year. It is noted that with the inclusion of this increase in base fees,
Directors will continue to be paid below the benchmarked median.
Additional detail needed
on adjustments to STI
financial measures
− Consistent with other companies, the Boards, when assessing financial performance for STI purposes, make
adjustments to the reported financial results. This is done to ensure that STI awards accurately reflect the
performance of the underlying operations of the business and the contribution of MD & CEO and other
executive KMP on managing the controllable factors to achieve annual earnings targets.
− Some securityholders have requested that we provide more information in the Remuneration Report to explain
the rationale for the various adjustments to STI financial measures.
− The Boards acknowledge this feedback and are committed to enhancing the level of disclosure provided to
securityholders regarding the adjustments to reported EBITDA and other financial measures used in assessing
financial performance.
− The enhanced disclosures have been included in section 3.3.2.
60 | ATLAS ARTERIA ANNUAL REPORT 2023
3.2 Changes to the Atlas Arteria Remuneration Framework
During 2023, the People and Remuneration Committee completed a comprehensive review of Atlas Arteria’s Remuneration Framework.
The table below provides a summary of changes that have been made and are being put in place for 2024.
Remuneration component
Feature
2022
2023
Remuneration
benchmarking
Peer group
ASX 25-100
Short-term incentive
Weighting
Target setting
Long-term incentive
Performance period
Performance
measures
Use of Dividend
Equivalent
Payments (DEPs)
Travel fee
Non-executive
Director fees
Selected industry
comparator ASX 200
companies
No change
No change
No change
Use of single measure
for LTI plan:
− 100% relative TSR with
a requirement for a
positive TSR gateway
STI weighting made
up of the following:
− 60% Financial
− 30% Strategic
− 10% Safety and ESG
Targets for KMP are
set relative to role for
strategic goals/priorities.
Targets for financial,
safety and ESG shared
for all KMP
3-year performance
period
Use of two measures
for LTI plan:
− Relative TSR with
a positive TSR
gateway (50%)
− Strategic
measures (50%)
DEPs payable on vested
LTI awards
No change
2024
No change
STI weighting made
up of the following:
− 70% Financial
− 15% Safety and ESG
− 15% Business Priorities
Board to endorse targets
related to Financial,
Safety and ESG and
Business Priorities
All targets will have
quantifiable measures
4-year performance
period
Use of two measures
for LTI plan:
− Relative TSR with
a positive TSR
gateway (70%)
− Free Cash Flow
per security (30%)
DEPs not payable
Travel fee of $10,000
for ATLAX Directors/
US$7,500 for ATLIX
Directors
− Fee payable per trip
over 8 hours
No change
No travel fees payable
Directors voluntarily
waived the travel
allowance for 2023
Base fees for 2024
increased by an
amount equivalent
to one travel fee
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3.3 Improving transparency
3.3.1 Guidelines for the use of discretion
The existing guidelines on the use of discretion at Atlas Arteria have been reviewed based on the feedback received from
securityholders. These guidelines operate to allow consideration of the need to exercise discretion on:
− An ongoing basis in response to situations that may require discretion to be considered; and
− At the time decisions in relation to reasonableness and fairness of the actual variable pay outcomes are being made.
The 2023 review has focused on strengthening the language used in the guidelines and providing further clarification on the
circumstances that would justify the use of positive discretion in any future variable pay decisions by the Board. To embed these
guidelines, the Board will continue to ensure the following:
The adoption of a formal process at the time any of the following events are reviewed to consider the exercise of discretion to adjust
variable pay outcomes accordingly. These events include:
− A significant safety, environmental or governance event;
− A material financial event or outcome or major corporate activity or change in the portfolio;
− A significant behavioural concern or reported breach of the STEER 2 Principles;
− The approval of STI outcomes;
− The approval of the release of deferred STI equity awards;
− The LTI grants;
− Performance reviews; and
− Where clawback provisions have been triggered.
Circumstances where the exercise of discretion will be considered include situations where there have been:
− Misalignment between STI scorecard outcomes and business financial performance;
− Unintended windfall gains or losses; and
− Changes to business plans that are not adequately addressed in the original STI or LTI targets.
It is important to address how the use of positive discretion will be managed going forward. The positive exercise of discretion will
only be considered in the following exceptional circumstances:
− Above expected returns delivered for securityholders during the year – for example higher than forecast distributions, top quartile
TSR performance and/or security price growth;
− Financial performance that materially exceeds securityholder expectations;
− Where STI or LTI targets become obsolete as a result of a material financial event, corporate activity or change in the portfolio; and
− Where appropriate disclosures are included in the Remuneration Report that outline the evidence and rationale for the use
of the discretion.
The exercise of negative discretion will be considered in circumstances such as the following:
− Significant safety incident/s at one of our wholly or majority-owned businesses;
− Significant safety incident/s at one of our minority-owned businesses (with discretion limited to the ESG component of the STI);
− Adverse risk findings during the year;
− Individual behaviours that are inconsistent with the STEER Principles; and
− Adverse financial outcomes that are materially below securityholder expectations.
3.3.2 STI adjustments for financial measures
When assessing financial performance for STI purposes, the Boards make adjustments to the reported financial results. This ensures
STI awards accurately reflect the performance of the underlying operations of the business, emphasising the contribution of the
MD & CEO and other executive KMP on managing the controllable factors effectively to achieve annual earnings targets. Details
of these adjustments are included in section 7.2.
The Board has considered the following in relation to the adjustments:
− A consistent approach is adopted when setting targets and assessing performance from year to year;
− Targets are set and performance is measured on a consistent basis each year by ensuring annual STI financial targets are set
excluding the costs of STI and LTI awards and without any allowance for Board approved projects;
− A reconciliation between the reported earnings and the earnings for STI purposes is provided below;
− No adjustments are made to the targets or to assessment of the target for distributions payable to securityholders; and
− The ALX security price will reflect the actual position of the business which in turn impacts the TSR calculation for LTI purposes.
2. STEER principles – Safety, Transparency, Engage, Environmental and Respect.
62 | ATLAS ARTERIA ANNUAL REPORT 2023
4. Our Remuneration Framework at a glance
Included below is a summary of the 2023 Remuneration Framework for the management team. Further details regarding our
remuneration arrangements are provided in the remainder of this Remuneration Report. A number of important changes to this
Remuneration Framework are proposed for 2024 and are set out in section 3.2.
OUR VISION
Our vision is to benefit the communities in which we operate through reduced travel time, greater time certainty, reduced fuel
consumption and carbon emissions and to provide an enjoyable travel experience.
OUR VALUES
Our values guide the decisions we make and the way we behave as we work together towards our vision. In living and breathing
our values, we can create strong growth for securityholders and better outcomes for our customers, our communities and our
people. To us, great performance is as much about how we get there and not just the end result. That’s why our people’s success
is evaluated against our five values, along with their role responsibilities.
OUR GUIDING VALUES
When we are guided 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
Environmentally and
socially responsible
Respect in
every interaction
ATLAS ARTERIA ANNUAL REPORT 2023 | 63
FINANCIAL REPORTREMUNERATION REPORTDIRECTORS’ REPORTSFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS REMUNERATION REPORT
Executive remuneration framework overview
Remuneration
principles
Simple
Balance short and
long-term needs
Remuneration
elements
Fixed remuneration
Salary and superannuation
Purpose
How aligned to
performance
Performance
measures
Reviewed annually against
comparator benchmarks
Executive remuneration
levels should be competitive
with companies of similar
size and complexity
Recognises the market value of
an individual’s skills, experience,
accountability and their
contribution in delivering the
requirements of their roles
An individual’s skills, experience,
accountability and contribution
in delivering the requirements
of their roles
Maintain contemporary and
competitive practices
Specific and differentiated
performance outcomes
Reflect our values and behaviours
Securityholder alignment
Short-Term Incentive
Annual incentive delivered
50% in cash and 50% in
restricted securities
Long-Term Incentive
Annual award of performance rights
with a 3 year performance period in 2023
and 4 year performance period in 2024
To align the interests of
securityholders, executives and
other participants as determined
by the Boards
A combination of financial
measures and non-financial
measures relating to specific
business outcomes and taking
account of behaviours and conduct
Assessment of performance
against a balanced scorecard
of financial measures (weighted
60%), ESG (10%) and non-financial
strategic measures (30%) with
challenging targets set by the
Boards based on the business
priorities for the year.
Rewards long-term value creation
for securityholders
Vesting based on achieving challenging
performance targets
Relative total securityholder return (TSR)
compared to a comparator group of local
and international infrastructure companies
For 2022 only, a strategic measure
was introduced with vesting based
on demonstrated delivery of
securityholder returns
A positive TSR gateway applies before
vesting occurs
In 2024, a second LTI measure based
on achieving cash flow target has been
introduced with a 30% weighting
Measures performance against local and
international infrastructure companies
Performance
targets
Measures are set to reward
delivery of returns and value
creation for securityholders
Alignment to
securityholders
Minimum securityholding
requirements to be accumulated
within five years
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.
64 | ATLAS ARTERIA ANNUAL REPORT 2023
5. Executive Remuneration Framework
5.1 Remuneration principles
The following six principles underpin the management of the Remuneration Framework at Atlas Arteria. The principles which were
reviewed by the PRC during the year 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
Maintain contemporary and
competitive practices
Reflect our values and behaviours
Specific and differentiated
performance outcomes
Securityholder alignment
Align the interests of our people and our company by ensuring a clear link between
remuneration and both short and long-term business performance
Use market competitive and contemporary practices to ensure we can attract, retain,
and motivate the right talent
Align reward with demonstrated behaviours and actions consistent with our STEER
principles, business priorities and stakeholder expectations
Support a high-performance culture with specific performance measures for individual
employees they can influence
Encourage equity ownership so that employees have ‘skin in the game,’ aligning individuals
to securityholder returns
5.2 Positioning and mix of executive remuneration
The Remuneration Framework for the Executive Team aims to achieve balance between:
− Fixed and performance-based remuneration;
− Short and long-term performance incentives;
− Financial, non-financial and strategic outcomes; and
− Remuneration delivered in cash and equity.
To ensure our remuneration quantum and structure is market competitive, reference is made to the median of a group of ASX listed
comparator companies of similar size and complexity to Atlas Arteria. The remuneration arrangements of selected industry
comparators are also considered for each role.
The target and maximum remuneration for 2023, together with the timeframe over which the different elements of the framework
are delivered for the MD & CEO and the executive KMP, are represented in the graphs below. 3
Remuneration mix
O
E
C
&
D
M
s
e
v
i
t
u
c
e
x
e
P
M
K
At target
Fixed 34%
Short-term incentive 33%
Cash 16.5%
Equity 16.5%
Long-term incentive 33%
At maximum
Fixed 29%
Short-term incentive 42%
Cash 21%
Equity 21%
Long-term incentive 29%
At target
Fixed 44%
Short-term incentive 26%
Cash 13% Equity 13%
Long-term incentive 30%
At maximum
Fixed 39%
Short-term incentive 34%
Cash 17%
Equity 17%
Long-term incentive 27%
Remuneration delivery
Fixed pay
Payable monthly in cash
Short-term incentive
50% payable in cash after 12 months
50% payable in deferred equity after 24 months
Long-term incentive
Performance rights subject to 3 year performance period
Year 1
Year 2
Year 3
Subject to minimum securityholding requirement
3. Timing of payment of STI components from commencement of performance period.
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REMUNERATION REPORT
5.3 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.
The PRC has selected (and reviews periodically) a peer group of ASX listed companies for the purposes of benchmarking both fixed
and variable remuneration for the Australian based executives. The peer group reflects the size and complexity of Atlas Arteria and
includes companies with significant international operations, similar scale and scope of business and market capitalisation. The peer
group is not solely based on market capitalisation, as the PRC believes this would lead to inappropriate remuneration outcomes and
distortions in remuneration levels that are not reflective of the scale and complexity of our business. A similar approach is adopted
based on European and US companies for executives in those locations.
Securityholders were advised in the 2022 Report, that the Boards would undertake a review of fixed pay during 2023 to ensure our
remuneration levels are competitive with companies of similar size and complexity. This review was concluded during the year and
further information on the outcomes of the review is included at section 7.1.
5.4 Short-Term Incentive Plan
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 deferred into restricted securities for a one year period following the conclusion of
the performance period, with vesting subject to ongoing service and the discretion of the Boards.
STI targets set for 2023 comprised a combination of financial measures, ESG, including Health and Safety,
measures and non-financial measures relating to specific strategic outcomes and taking account of culture
and behaviours.
STI weighting – financial
and non-financial
measures
The Boards believe delivering strong financial performance for our securityholders continues to be a priority.
Accordingly, for 2023 the financial component of the STI scorecard has a 60% weighting with the remaining 40%
applying to strategic (30%) and ESG (10%) measures.
As noted in section 3.2 above, the STI weighting for the financial component has been adjusted to 70% for 2024,
the weightings for the ESG/Safety component to 15% and a Key Business Priorities component to 15%.
ESG measures
An ESG measure with a 10% weighting was introduced to the STI Plan in 2022. Inclusion of an ESG measure
reflects our commitment to safety, the environment, our people, and our focus on customers and communities.
For 2023, targets have been set based on achieving our safety goals, renewable electricity transition (GHG
Reduction) and achieving direct renewable supply or carbon credits of at least 90% of electricity usage across
our business by end 2023.
Target setting
Targets for financial measures have been determined on the basis that ‘target’ is equal to budget with
‘threshold’ at 95% of target and ‘stretch’ at 105% of target.
66 | ATLAS ARTERIA ANNUAL REPORT 2023
5.5 Long-Term Incentive Plan
To align with the interests of securityholders, executives and other participants as determined by the Boards are eligible to
participate in an LTIP. Details of the LTIP 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 LTIP award made at the end of the
vesting period is a function of:
− Atlas Arteria’s performance against the relevant performance measures over the performance period. The performance period
for 2023 was three years. As noted in section 3.2, this performance period will be 4 years in 2024. These measures include TSR
performance relative to a group of Australian and international peer companies and other measures if selected by the Board
to address specific strategic priorities from time to time (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
− For awards made in the years to 2023, the value of distributions that would have been made during the vesting period to the
number of securities that vest (distribution equivalents). As noted above in section 3.1, distribution equivalent payments are
no longer included as a feature of the Atlas Arteria equity awards.
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.
Element
Description
Opportunity
The maximum grant value of LTIP 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.
Vehicle
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 measures.
Performance measure
Historically, LTIP performance has been assessed solely against relative TSR. Relative TSR has been selected
as a performance measure as it measures securityholding value creation objectively, can be used for
comparing performance across different jurisdictions and is widely understood and accepted by stakeholders.
As a one-off intervention, for the 2022 grant, a second LTI performance hurdle (equal to 50% of the LTI award value)
was introduced with vesting based on quantifiable improvements in securityholder value from the successful
delivery of key strategic objectives (refer to section 7.3 for information on progress against the strategic objectives).
− Creating a clear pathway to distributions from Dulles Greenway.
− Improving the average concession life of the Atlas Arteria portfolio.
Vesting of the remaining 50% of the 2022 LTI award is subject to the same relative TSR measure as applied for
previous years.
Relative TSR with a positive TSR gateway as a sole performance hurdle was reintroduced for awards under the
2023 LTI Plan. Relative TSR has been selected as the sole performance measure as it measures securityholder
value creation objectively, can be used for comparing performance across different jurisdictions and is widely
understood and accepted by stakeholders.
From with Since 2020, Atlas Arteria’s TSR performance has been assessed against a group of approximately
125 OECD-domiciled companies that are included in the Global Listed Infrastructure Organisation (GLIO) index
at the start of the performance period.
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 prior to the start of a
performance period and a 40 business day period to the end of the respective performance period is used for
the calculation of TSR performance for the 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.
Relative TSR performance is assessed on a sliding scale, with vesting determined as follows:
Atlas Arteria’s TSR performance
% vesting
Below the 51st percentile
At the 51st percentile
0%
50%
Between the 51st percentile & 75th percentile
Pro-rata between 50% & 100%
At the 75th percentile
100%
Awards which have strategic LTI measures will vest based on actual performance with 50% of the award
vesting for the minimum acceptable performance and 100% of the award only vesting where challenging
performance outcomes are achieved. Details of the quantifiable outcomes will be disclosed in the Remuneration
Report for the year of vesting.
ATLAS ARTERIA ANNUAL REPORT 2023 | 67
Target setting and
Vesting schedule
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Element
Description
Positive TSR Hurdle
Performance period
Vesting and allocation
of securities
Distribution equivalents
payments (DEP)
A positive TSR hurdle was introduced for the 2021 and subsequent LTI awards which applies in addition to the
actual performance hurdles – relative TSR or strategic. For 2024 plans, the positive TSR hurdle will only apply
to the relative TSR component. It will not apply to the Free Cash Flow measure being introduced.
Performance is measured over a performance period, from 1 January to 31 December. The performance for
the 2023 grant will be assessed at the start of 2026 and measured from 1 January 2023 to 31 December 2025.
Up to and including the 2023 grants, the performance period has been 3 years.
As noted in section 5.5 above, given the practice of our closer peers is to use a 4 year performance period, the longer
term nature of the Atlas Arteria investment proposition for investors, and to enhance the alignment of executive
KMP with investors the Boards have determined a 4-year performance period will apply to the 2024 LTI grants.
If and when the Boards determine that the performance measures have been achieved, the performance rights
will automatically be exercised provided absolute TSR has been positive (where appropriate), and the relevant
number of securities will be allocated.
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.
On reviewing feedback from investors, market practice of peer companies and given the relatively small value
attached to DEPs, the Boards have decided to cease the use of DEPs as part of the Remuneration Framework
for equity awards made from 2024.
Introduction of free cash flow per security measure to LTI in 2024
A free cash flow (FCF) per security 4 compound annual growth rate (CAGR) measure will be introduced as the second measure for
the FY24 LTI plan. The new measure will represent 30% of the LTI, with Total Shareholder Return (TSR) representing the remaining
70%. Cash flow expectations will be used to determine appropriately challenging target and threshold levels. The target for the
FY24 FCF measure will be a CAGR of 5.5% over the 4-year performance period, with the threshold for vesting beginning at 4.2%.
Vesting of awards is subject to continued service and demonstration of the STEER principles throughout the performance period.
Full details of targets and other terms for the FY24 LTI plan will be disclosed in the Notice of Meeting Explanatory Memorandum
for the resolution seeking approval of the proposed FY24 LTI grant to the MD & CEO.
5.6 Employee Equity Incentive Plan
The Groups operate 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 LTIP 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 2023 was $99,147.
5.7 Employment contracts
The remuneration and other terms of employment for the executive KMP are formalised in executive contracts. Key contractual terms
in place for 2023 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
CFO and COO
Ongoing
12 months
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
Securityholders were advised in the 2022 Remuneration Report, that the Boards provided confirmation to the CFO and COO that in
the event of a change in control, they would receive a payment equal to 6 months fixed pay (as Atlas Arteria’s executive employment
contracts do not provide for payments on termination of employment other than for notice), a pro-rata payment under the short-term
incentive plan for the period of employment paid out at maximum, and awards made under the long-term incentive plan would vest
in accordance with plan rules and would be paid in cash. Entitlement to a payment is conditional on ongoing employment and no
payment will arise where either party provides the other party with notice of termination prior to the payment date. These
arrangements have been extended for a further 12 months until 31 December 2024.
These arrangements do not apply to the MD & CEO and the normal terms of the various plans will apply in the event of a change
of control. Accordingly, in the event of a change of control the following will apply:
− Mr Bevans will be provided with 12 months’ notice of termination of employment or a payment of fixed pay in lieu of notice for
any period of time not worked where there is a fundamental change to his role.
− The Boards have absolute discretion to determine the treatment of STI awards where there is a change of control and in the
event that they do not exercise discretion, 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.
− The Boards have discretion to determine the treatment of LTI 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 at date of change of control.
4. Free cash flow per security is calculated by dividing the free cash flow determined consistent with Table 2 of the Investor Reference Pack (adjusted to remove the impact
of capital releases, future FX movements and board approved special project costs), by the weighted average number of securities on issue during the period.
68 | ATLAS ARTERIA ANNUAL REPORT 2023
6. 2023 business performance highlights
6.1 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 12 to 13.
6.2 Atlas Arteria’s performance
The following table outlines the key financial metrics over the past five financial years up to and including 2023 that underpin the STI
and LTI plans.
Dividend Payments per Security (cents) 1
Cash flow per security ($) 2
EBITDA proportionate ($m) 3
Security price (@year end) ($) 4
Total Security Return
STI awarded as a % of maximum – CEO 5
LTI vested as a % of max – CEO 6
2023
40.0
0.42
2022
40.5
0.42
2021
28.5
0.30
1,375.0
1,100.8
1,024.4
5.78
-6.7%
65%
50.7%
6.61
8.7%
80%
6.47
11.5%
84%
Nil vesting
Nil vesting
2020
11.0
0.31
884.0
6.07
-15.5%
26%
n.a.
2019
30.0
0.27
923.0
7.32
32.2%
100%
n.a.
1. Distributions paid to securityholders during the year.
2. Cash flow per security calculated by reference to the securities on issue at the time the cash flows were received by the business.
3. Proportionate EBITDA from each business as reported for each financial year on a constant currency basis, prior years excluding Chicago Skyway.
4. Atlas Arteria TERP adjusted security price as at year end.
5. Relates to the year for which the STI was awarded.
6. Relates to the final year of the LTI performance period, that is the year the LTI may have vested.
ALX security price (2010-2024)
$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
2022
2023
2024
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REMUNERATION REPORT
7. 2023 remuneration outcomes
7.1 Fixed pay
Securityholders were advised in the 2022 Remuneration Report a pay freeze would apply to the MD & CEO and the executive KMP
for 2023 with the next increases (other than any Luxembourg government mandated increases that may apply for the COO) to occur
no earlier than 1 January 2024.
During the 2023 year as indicated in the 2022 Remuneration Report, the Boards reviewed executive remuneration to ensure our
remuneration levels are competitive with companies of similar size and complexity.
As a result of the review, taking into account the scope of each role, the experience and capability of each executive relative to peers,
the following fixed remuneration levels will apply from 1 January 2024:
− MD & CEO – The MD & CEO’s fixed pay is $1,400,000 and was last reviewed with effect from 1 January 2022. While this is below the
market median level, the Boards have decided that there should be no fixed pay increase for the MD & CEO in 2024. We will review
fixed pay during 2024 with any increase to occur no earlier than 1 January 2025.
− CFO – Reflecting the CFO’s relative position to market at the time of appointment, annual fixed remuneration will increase to
$745,000 with effect from 1 January 2024.
− COO – As a result of a Luxembourg government compulsory CPI review during the year, the COO’s fixed pay was adjusted to €491,098.
The Boards have agreed that no further increases above the Luxembourg government compulsory CPI reviews will occur in 2024.
7.2 Short-term Incentive Plan
STI performance in respect of 2023 was assessed based on a combination of financial, ESG and non-financial measures. These
measures were determined at the start of the 2023 financial year based on the structure of the Atlas Arteria business at that time.
In assessing performance, the Board considers both what has been achieved and how it was achieved. Each Executive’s behaviour
is considered against our STEER principles, which are the guiding principles for our conduct and how we work. The actual STI
awarded can be adjusted where these expectations are deemed not to have been met.
Discretion
The Boards also considers the application of discretion against the pre-determined principles set out in section 3.3. These include
consideration of the securityholder experience, the broader employee experience and overall safety performance considering factors
both within and outside of managements control. In 2023, the Boards considered that there were no factors requiring the exercise
of discretion, either to increase or to reduce, STI outcomes.
Adjustments to reported financial results
Consistent with other ASX listed companies, when assessing financial performance for STI purposes, the Boards make adjustments
to the reported financial results. These adjustments are made to ensure STI awards accurately reflect the performance of the
underlying operations of the business, emphasising the contribution of the MD & CEO and other executive KMP on managing the
controllable factors effectively to achieve annual earnings targets.
The adjustments made to reported financial results when assessing performance for STI purposes are as follows:
Adjustment
Reasons
To exclude the costs of
awards under the short-term
and long-term incentive plans
Given the relative costs of STI and LTI to other corporate costs and in order to avoid circularity in the
calculation, these costs are excluded.
Board approved project
costs and capital projects
The costs are excluded so decisions on whether to proceed with a project are not influenced by potential
impact on STI outcomes.
To exclude the impact of
exchange rate movements
during the year
If such costs were included and budgeted, the financial KPI’s would no longer be appropriate performance
targets if the projects did not proceed given the size of many of these projects relative to the company’s
business-as-usual cost base.
The adjustments for exchange rate movements are made to enable management to be rewarded on the
aspects of the business that they are in a position to control and influence directly.
These adjustments result in both positive and negative adjustments being made to the reported results
from year to year and for different currencies.
70 | ATLAS ARTERIA ANNUAL REPORT 2023
Reconciliation of reported financial results to financial results for STI purposes
The following table reconciles the reported results with the financials for STI purposes for 2023.
Proportional adjusted EBITDA
Performance area
Reported Proportional EBITDA 5
Adjustments
Add back: DG Holdco costs included in the DG segment of the Segment note to the Financial Statements
Proportional EBITDA
Adjustments
Add/(deduct) the impact of exchange rate movements during the year (budgeted AUD/EUR of 0.66 versus
actual average FX rate across the year of 0.6138, budgeted AUD/USD of 0.71 versus average actual of 0.6638)
Add/(deduct) AIFRS accounting related adjustments applied to business’ EBITDA
Target
$
Actual
performance
$
1,374.8
0.2
1,375.0
(95.3)
(1.1)
Proportional adjusted EBITDA for STI purposes
1,265.0
1,278.6
Free cash flow 6
Performance area
Free cash flow received from Operations
Adjustments
Add back: Interest and fees paid
Add back: payments for capital projects
Add back: STI payments reflected in payments to suppliers and employees
Add back: Board approved special project costs reflected in payments to suppliers and employees
Add back: Exchange rate movements
Deduct: capital distributions received
Add/(deduct) the impact of exchange rate movements during the year (budgeted AUD/EUR of 0.66 versus
actual FX rate at date of distribution conversions of 0.612, budgeted AUD/USD of 0.71 versus actual of 0.657)
Free cash flow for STI purposes
Corporate costs
Performance area
Corporate operational expenditure 7
Adjustments
Add back: AASB16 lease accounting (considered as a financing cost, not a corporate cost in statutory accounts)
Add back: DG Hold Co costs (considered a business operation cost, not a corporate cost in statutory accounts)
Add back: GST refund (removed for STI purposes, but included as a reduction to corporate costs for
statutory purposes)
Add back: the impact of exchange rate movements during the year
Add back: MAF/MAF2/Warnow recharges
Deduct: Board approved special project costs
Deduct: the cost of STIs and LTIs
Corporate operational expenditure
Details of the 2023 STI awards for executive KMP are set out below.
Target
$
Actual
performance
$
609.9
0.4
0.2
5.3
1.9
4.9
(155.6)
(35.6)
400.0
431.4
Target
$
Actual
performance
$
36.0
1.2
0.2
0.3
0.1
2.9
(1.7)
(8.0)
31.0
33.0
5. Refer note 4 Segment Information in financial reports.
6. Refer Investor Reference Pack, table 2.
7. Refer note 4 Segment Information in financial reports.
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7.2.1 MD & CEO
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 Boards may exercise discretion to adjust the actual STI awarded upwards where these expectations have been exceeded or
adjusted downwards where the expectations are not met. The 2023 STI outcomes were assessed based on the actual performance
against target and the Boards did not exercise any discretion this year, either positive or negative, over the STI outcomes.
Performance area
and description
Weighting
Threshold
Target
Stretch
Result
Reason chosen
Performance assessment
Proportional adjusted EBITDA
20%
A$1,200m
A$1,265m A$1,330m
A$1,278.6m
(~95% of
target)
(~105% of
target)
22.1%
(reflecting
proportional
performance of
each business
at constant
exchange rates
and excludes
corporate costs
and special items)
Free cash flow received from Operations
(at constant
exchange rates
and excludes
corporate costs
and special items)
15%
A$380m
A$400m A$420m
A$431.4m
(~95%
of target)
(~105%
of target)
22.5%
Distributions
of $0.40 per
security
15%
$0.40
$0.40
$0.40
15%
Corporate operational expenditure
(excluding costs
of STIs and LTIs,
special projects
and at constant
exchange rates)
10%
A$35m
A$33m
A$31m
A$31.0m
(~105%
of target)
(~95%
of target)
15%
Total financials
60%
74.6%
Higher traffic relative to
expectations (up 3.3% on 2022);
Increases in toll revenue
(up 6.9% compared to 2022,
adjusted for Skyway)
Proportional adjusted
EBITDA from:
− Businesses excluding Skyway
increased by 7.6% compared
with 2022
− The Chicago Skyway EBITDA
increased 0.8% compared
to the 2022 Skyway full year
performance and exceeded
our 2023 projections at the
time of the acquisition.
The strong financial
performance and, in-turn,
distributions received from
APRR, combined with higher-
than-expected distributions
from Chicago Skyway relative
to our 2023 projections at the
time of the acquisition resulted
in a cash flows during 2023 that
exceeded stretch.
Distributions for the year
were at target of 40 cents per
security compared to 40.5 cents
per security for 2022. This
result was in line with guidance
provided to securityholders at
the time of the 2022 equity raise.
Corporate costs were
effectively managed with
a stretch outcome.
Proportional
adjusted EBITDA
reflects the
performance of
the underlying
operations of the
business and has
been adopted to
focus the MD &
CEO and the other
executive KMP on
the delivery of the
annual earnings
targets.
Free Cash Flow
from Operations
recognises the
importance in
the generation of
continuous cash
flow to support
distribution growth.
Growth in
distributions is
closely aligned with
investor expectations
and encourages
management to
deliver increasing
returns to
securityholders.
Focuses
management on
the importance of
making operational
improvements and
delivery of cost
savings.
72 | ATLAS ARTERIA ANNUAL REPORT 2023
Performance area
and description
Weighting
Target
ESG targets – safety
Result
Reason chosen
Performance assessment
− Meet Corporate
Safety targets
and
− Continue to
professionalise
safety processes
within controlled
businesses
5%
Target Safety metrics:
0%
Minority owned business:
LTIFR <=3
Majority/wholly owned: LTI <=1
Implementation of safety
processes leading to an
improvement in safety outcomes.
Safety is our primary
focus, and we
pursue a zero-harm
culture for our
people, partners
and customers.
ESG targets – environment
5%
Achieve direct renewable supply
or carbon credits of at least 90%
of electricity usage across our
business by end 2023.
5%
Maintain an ‘A’ rating in the
GRESB Public Disclosure
Assessment.
− Renewable
electricity
transition
(GHG Reduction)
− GRESB Public
Disclosure
Assessment
− Agree an ESG
approach and
plan with
Chicago Skyway
and Ontario
Teachers to
allow ALX to
meet its ESG
objectives
Operational Review
10%
− Lead and
agree the
development
and
implementation
plan for the
business
The Review is undertaken to the
satisfaction of the Boards with
demonstrated progress on the
Implementation Plan.
5%
There is increasing
expectation amongst
regulators and
investors that
organisations align
their actions and
disclosures to TCFD
recommendations.
Alignment requires
input and action
from across the
businesses, to
effectively integrate
consideration of
climate-related
issues into business
processes, including
risk, strategy and
financial planning.
Operational Review
to ensure a rigorous
informed debate
can be undertaken
leading to a clear
Operational Plan for
the business that is
aligned to delivery
of strategy.
LTIFR for APRR of 3.36.
LTI for Skyway of 1 with no LTI
for Warnow, Dulles Greenway
or Corporate.
Result below the level required
for threshold performance,
hence the outcome is 0%.
Solid progress was made to
professionalise safety processes
throughout the business.
A direct renewable supply or
carbon credits of 91.8% was
achieved compared to a target
of at least 90% of electricity
usage across our business
by end 2023.
An ‘A’ rating with a score of 87
up from 80 in ’22 was achieved
which was ranked 2nd of 33 in
the Asia Pacific transport sector.
Skyway’s ESG Plan was
developed during the year
and approved at the final
Skyway board meeting of 2023.
Implementation has commenced.
Redesign of operating model
endorsed by Boards. Key
changes focused on optimising
existing capability and focus
investment in North America
to support delivery of business
priorities.
Implementation plan is well
underway with Group Executive
North America recruitment role
proceeding and plan for FY24
on target.
The new processes and
accountabilities being
introduced are designed to
provide clarity of roles and
responsibilities at all levels
of the organisation.
Efficiencies and consequent
cost savings are expected
as fully implemented in 2025
following offsetting costs of
implementation in 2024.
Issues with project leadership
with cost and duration of the
review exceeded expectations
resulted in the score at threshold.
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Performance area
and description
Weighting
Target
Corporate development and M&A activity
Result
Reason chosen
Performance assessment
To deliver projects
that achieve
accretive long
term value for
securityholders
− Pursue and
10%
achieve clear
progress on
opportunities
for growth
that meet
our strategic
objectives
Agreement and alignment of
an updated corporate strategy.
5%
Successful refinance of Chicago
Skyway to allow AUD132m of
funding for 2023 distribution.
Ensure the successful
integration and implementation
of Chicago Skyway as outlined
in the investment plan and
implementation plan.
Position the company for
achieving concession extensions
at APRR, along with bidding
for other French opportunities
including the A412 through
the APRR bid with Eiffage.
Dulles Greenway
− Negotiate a PPTA concession
arrangement on mutually
agreeable terms
− Lodgement of a strong rate case
with the SCC consistent with
business plan to be agreed
by Board.
A Refined strategy has been
agreed with the Board and
announced with year-end results.
Refinancing achieved with
approximately AUD177m available.
Integration completed with
key outcomes being:
− Implementation of a state
of the art asset management
system to drive efficiency
in operations.
− Recruitment of highly
experienced CFO and COO
to enhance implementation
of strategy moving forward.
− Creation of a digital twin
utilising artificial intelligence
to identify and project future
maintenance cycles which
will lead to a proactive asset
management system that
achieves a higher level of
rating of the Skyway’s roads
and bridges. And reduce capital
maintenance costs over time.
The A412 bid has resulted in
achievement of preferred bidder
status in February 2024.
Legislative changes were
delayed in the 2023 session and
we will continue to seek changes
in the current 2024 legislative
sessions with appropriate drafts
under consideration in the
Senate and House.
A strong rate case was agreed
with the Board and submitted.
The rate case is working
through the SCC process
with hearings set for end of
February.
Individual Strategic
5%
Team Development
Achieve an improved relationship
with investors and the market
more broadly.
0%
Focusing on
leadership
capability,
and employee
engagement
5%
Improve the staff engagement
index from the current
engagement at 66%; and
7.5%
Increase the score to 65% on
the management question ‘My
manager role models the STEER
principles in the way they work’
(currently 60% favourable).
To focus on driving
more effective
engagement with the
market to respond to
feedback from 2022
While there was some
improvement in feedback from
existing investors and the buy
side analysts it was not to a
level sufficient to justify an
award for this KPI.
Focuses on
the continued
development of
people capability,
leadership and
engagement
to support the
implementation of
strategy and growth
of the business
Increase in employee
engagement index from FY22,
up to 83% overall from 66%.
Increase in the way managers
role-model the ALX STEER
principles, up to 85% overall
from 60%.
40%
Total non-
financials
Total award as
a % of Target
74 | ATLAS ARTERIA ANNUAL REPORT 2023
23.5%
98%
Overall outcome for FY23 is at 98% of target,
and 65% of stretch.
7.2.2 Other executive KMP
The MD & CEO’s STI objectives, both financial and non-financial, for 2023 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.
7.2.3 Executive KMP STI outcomes
Based on the performance achievement assessments described above, the following STI awards were made in respect of
achievements relating to 2023.
Name
Graeme Bevans
David Collins
Vincent Portal–Barrault
7.3 Long-term Incentive Plan
% of maximum
achieved
% of maximum
forfeited
Value – cash
$
Value – equity
$
STI forfeited
$
65%
72%
72%
35%
28%
28%
686,000
208,980
258,030
686,000
208,980
258,030
728,000
162,540
204,020
The relative TSR hurdle for the 2021 LTI award was tested following the end of the performance period on 31 December 2023.
The result (an absolute TSR of 11.35% and is ranked 55 out of 112 companies), a percentile ranking of 51.35% of the comparator
group, which is above the level required for threshold vesting, resulting in a vesting outcome of 50.73%.
This return compares favourably with the TSR returns delivered over the same period by the other Australian listed companies
included in the GLIO international infrastructure comparator group – Aurizon a TSR of 11.353%, Auckland Airport a TSR of 5.14%,
Transurban a TSR of 2.19% and APA a negative TSR of 4.86%.
The ALX TSR return was delivered in an environment of rising bond yields during the latter part of the vesting period, which have
adversely impacted TSR performances of the infrastructure comparator group, including Atlas Arteria.
The following table summarises the relative TSR performance of the various grants of LTI awards since the time of appointment
of the internal management team in 2018:
2023
2022
2021
2020
2019
2018
Vesting outcome
Will be tested
on 31.12.2025
Will be tested
on 31.12.2024
31.12.2023
31.12.2022
31.12.2021
31.12.2020
Vesting outcome/projected vesting
outcome based on performance to date 8
Nil
52%
50.73%
Nil
Nil
Nil
Strategic LTI measures
As a one-off intervention, a second LTI performance hurdle (equal to 50% of the LTI award value) was introduced for the 2022 LTI
grant. The strategic measures were selected by the Boards based on delivery of initiatives that are fundamental to creating long-term
value for Atlas Arteria securityholders. These initiatives are important value levers for Atlas Arteria and the Boards believe it is
important for management incentives to be aligned with those of securityholders.
Vesting will be based on Board assessment of achieving quantifiable outcomes that improve securityholder value and a positive
TSR over the performance period from the successful delivery of two key strategic objectives, being:
− Creating a clear pathway to distributions from Dulles Greenway.
− Improving the average concession life of the Atlas Arteria portfolio.
Vesting of the remaining 50% of the 2022 LTI award is based on relative TSR performance with a positive absolute TSR hurdle.
We are providing an update below on progress achieved to 31 December 2023 on the outcomes required for the awards to vest
at the end of the performance period in the interests of transparency.
No decision has been made as to whether the awards will vest at the end of the three-year performance period noting that awards
for the FY22 plan will only vest where:
− Quantifiable returns to securityholders from delivery of the strategic measures including the business case for the acquisition
of the Chicago Skyway is demonstrated; and
− Absolute TSR over the performance period has been positive.
Where this cannot be demonstrated, the awards will not vest.
8. Projected vesting outcome based on TSR component only. Projected date as at 26/2/2024.
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Notwithstanding the significant progress that has been made to date in improving the average concession life of the Atlas Arteria
portfolio from the acquisition of the Chicago Skyway, we continue to be focused on improving the concession life of the existing
portfolio by securing concession extensions at APRR and Dulles Greenway (as part of an overall restructure of that concession).
Our focus has not changed as a result of acquiring Skyway. We have had and continue to have a dual focus, to extend our concession
life through our existing businesses, as well as through new projects that meet our investment criteria.
The following summarises the progress in achieving the requirements for vesting of each of the two strategic priorities:
Strategic measure
Description
Key achievements
Dulles Greenway
Average portfolio
concession length
Creating a clear
pathway to
distributions from
Dulles Greenway
Improving the
average concession
life of the Atlas
Arteria portfolio
− Political and stakeholder engagement continued during the period, particularly following
the November 2023 elections, with the objective of delivering a more effective regulation
at Dulles Greenway.
− We continue to pursue legislative change at Dulles Greenway to enable a more effective
tolling regime to meet consumer needs and deliver value to securityholders.
− Atlas Arteria’s weighted average concession life (based on relative EBITDA contribution to
ALX) has improved since the commencement of the performance period on 1 January 2022
from 18.7 to 39.1 with the addition of two roads.
1. The A79 was added to the APRR Group during the period with the ownership finalised
in June 2022 and tolling commencing in November 2022. The A79 is an 88km road in
France with a 48-year concession (45 years remaining).
2. A majority interest was acquired in the Chicago Skyway with the acquisition completing
in December 2022. The Chicago Skyway is a 12.5km toll road in Chicago with a 99-year
concession (81 years remaining). The acquisition doubled the average concession life
of Atlas Arteria from 18 years to 37 years. Performance to date since the acquisition
has been higher than the acquisition business case. The ongoing performance of this
investment against the acquisition business case and securityholder experience will
be fundamental to the assessment of the final vesting outcome by the Boards.
− The consortium formed by Eiffage and APRR is currently in exclusive negotiation with the
French State regarding the A412, a 16km road in France with a concession life of 55 years.
The Boards will retain full discretion over vesting on being satisfied that the strategic objectives have been met based on clearly
identifiable quantifiable outcomes that improve securityholder value. Factors the Boards will consider when determining the vesting
outcomes will include progress against approved business plans and investment projections, cash flows, security price performance
and returns delivered to securityholders. Full disclosure of the basis on which the vesting decisions were made will be provided to
securityholders at the time of potential vesting.
76 | ATLAS ARTERIA ANNUAL REPORT 2023
8. Non-executive Director fees
8.1 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.
Non-executive Director fees were reviewed during 2023 to ensure that fees remained appropriate and competitive to attract high
performing directors. 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.
While the review identified that the Atlas Arteria NED base and Committee fees were below market median the Board considered it
was inappropriate to consider changes to those fees for 2024, taking into account securityholder experience and outcomes in 2023.
The review also included consideration of the use of travel fees by comparable companies, specifically global companies where
regular international travel by NEDs is expected. Pending the outcome of a review of NED fees, no travel fees were paid in 2023
even though NEDs were required to travel internationally during the year.
The review also identified that while travel fees were used by some similar companies, other companies adopted a simpler approach
and included fees for travel time in their overall base fees. The Boards decided to adopt an approach to fees that incorporates travel
time in the base fees, Accordingly, the payment of travel fees to NEDs will cease and the existing base fees will be adjusted to include
an amount in respect of one fee per year. The resulting base fee remains below the benchmarked market median level.
The fees paid during 2023 are set out below:
Fees
Board
Audit and Risk Committee
People and Remuneration Committee
Nominations and Governance Committee
Travel fee
ATLAX
ATLIX
Chair (AUD) Member (AUD)
Chair (US $) Member (US $) Member (US $) 1
$310,000 2
$155,000
$220,000 2
$110,000 3
$55,000
$30,000
$30,000
Nil
Nil
$15,000
$15,000
Nil
Nil
$20,000
$20,000
Nil
Nil
$10,000
$10,000
Nil
Nil
Nil
Nil
Nil
Nil
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 allowance of A$10,000 for each occasion where they are required to travel over 8 hours to attend a Board
meeting or strategy session (as discussed above, this was not paid in 2023).
ATLAX and ATLIX Directors are not entitled to Atlas Arteria performance rights or securities or to retirement benefits as part of their
remuneration package.
8.2 2024 Non-executive Director fees
The following fees will be payable for 2024:
Fees
Board
Audit and Risk Committee
People and Remuneration Committee
Nominations and Governance Committee
Travel fee
ATLAX
ATLIX
Chair (AUD) Member (AUD)
Chair (US $) Member (US $) Member (US $) 1
$320,000 2
$165,000
$227,500 2
$30,000
$30,000
Nil
Nil
$15,000
$15,000
Nil
Nil
$20,000
$20,000
Nil
Nil
$117,500
$10,000
$10,000
Nil
Nil
$58,750
Nil
Nil
Nil
Nil
1. For Australian-based Director.
2. Committee fees are not payable to the Chairs of the ATLAX or ATLIX Boards.
NED fee arrangements will be reviewed during 2024 with any adjustments to occur no earlier than 1 January 2025.
8.3 Aggregate fee pool
As approved by securityholders at the 2023 AGM, the aggregate ATLAX Non-executive Director fee pool is capped at AU$1,500,000 and
the ATLIX Non-executive Director fee pool is capped at US$600,000.
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9. Remuneration governance
9.1 Roles and responsibilities
The table below outlines the roles and responsibilities of the Boards, PRC, management and external advisers in relation to the
remuneration arrangements of Non-executive Directors and executive KMP.
The Boards
People & Remuneration Committees Management
External advisers
Approve remuneration strategy
and approve recommendations
from the PRC.
Approve the quantum of
remuneration for Non-executive
Directors and the MD & CEO.
The PRC consists
entirely of independent
Non-executive Directors.
The PRC makes
recommendations to the
Boards regarding the
Remuneration Framework,
policies and practices for
Atlas Arteria.
The PRC approves the quantum
of remuneration for other
executive KMP.
Makes recommendations
to the PRC on Atlas Arteria’s
Remuneration Framework,
policies and practices.
Provide independent advice
to the PRC and/or management
on remuneration market data,
market practice and other
remuneration related matters.
9.2 PRC activities during 2023
The PRC is actively engaged in ensuring our remuneration and people programmes are contemporary and working as intended.
The activities of the PRC during 2023 included:
− Recommending the STI outcomes for 2022 to the Boards.
− Recommending the STI objectives for 2023, including recommending approval of the financial targets to the Boards.
− Monitoring progress against the 2023 STI targets.
− Response to the strike against the 2022 Remuneration Report, including understanding investor concerns and issues raised and
taking appropriate actions to ensure our remuneration practices align with the expectations of our securityholders in future.
− Reviewing the remuneration of the CEO, and remuneration arrangements for KMP and other executives as required.
− Engaging remuneration consultants to provide market remuneration data to assist with the review of executive remuneration.
− 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 for 2024 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 discretion over variable pay decisions.
− Review progress against the Atlas Arteria People Plan and Priorities.
− 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.
− Executive Talent and Succession Reviews.
9.3 External Advisers
The requirement for external remuneration advisor services is assessed in the context of matters the PRC needs to address.
Remuneration advisers are engaged by and report directly to the PRC. 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. No remuneration recommendations, as defined by the Corporations Act 2001 (Cth),
were made by external remuneration advisers during 2023.
78 | ATLAS ARTERIA ANNUAL REPORT 2023
9.4 Board discretion over remuneration decisions
The PRC 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
As part of the 2023 Remuneration Framework review, the guidelines that govern the use of discretion for
executive remuneration were reviewed against market practice and securityholder expectations. As a result,
changes were made to strengthen the guidelines. The revised guidelines provide that positive discretion will
only be exercised where returns exceed securityholder expectations. The guidelines are published in the
report, specifically in section 3.3.1
Clawback/Malus
In the event of:
− Material non-compliance with any financial reporting requirements 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. 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. The Boards may
exercise discretion such that 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.
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.
9.5 Minimum securityholding requirements
Minimum securityholding 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
securityholdings and progress against the expected holding requirements are included at section 10.2.
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
9.6 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.
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10 Statutory disclosures
10.1 Executive statutory remuneration disclosures for 2023
The following table shows the total remuneration for the MD & CEO and executive KMP for 2023.
Short-term employee benefits
Post employment
benefits
Share based payments
Name
year Cash salary
Financial
Annual leave
accrual
movement
Cash STI 1
Superannuation
contributions
LTI Awards 1,2 STI Awards 3
Total
remuneration
Performance
based pay
%
Graeme Bevans
2023 $1,373,654
($38,806)
$686,000
2022
$1,375,570
($20,288)
$840,000
David Collins 4
Vincent
Portal-Barrault 5
Nadine Lennie 6
2023
2022
2023
2022
2023
2022
$618,654
$208,060
$780,655
$687,687
$8,781
$208,980
($5,741)
$70,950
($9,250)
$258,030
$9,242
$269,847
–
–
–
$26,346
$24,430
$26,346
$11,902
$19,620
$16,747
–
$713,697
$747,976
$3,508,867
$615,642
$902,852
$3,738,206
$169,958
$142,504
$1,175,223
$30,866
$35,475
$351,512
$259,580
$284,796
$1,593,431
$250,412
$259,869
$1,493,804
–
–
–
–
$338,596
$171,608
($8,469)
$95,424
$5,892
$74,141
Total
Total
2023 $2,772,963
($39,275) $1,153,010
$72,312 $1,143,235
$1,175,276
$6,277,521
2022 $2,442,925
($25,256) $1,276,221
$58,971
$971,061
$1,198,196
$5,922,118
61.2%
63.1%
44.4%
39.1%
50.4%
52.2%
–
50.1%
55.3%
58.2%
1. 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 2023. 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'.
2. The number of performance rights allocated to each participant is determined based on face value.
3. The deferred equity award for 2023 for the MD & CEO is subject to securityholder approval at the 2024 Annual General Meeting. The fair value of the 2022 STI award
is based on the security price at the date of grant, 30 May 2023, and includes an amount in respect of the distribution paid on 29 March 2023.
4. Commenced 30 August 2022.
5. Converted to AUD at a rate of AUD $1 – Euro 0.6138 (2022: 0.6590).
6. N Lennie ceased to be a KMP upon termination of employment on 31 March 2022. Under the terms of her separation, Ms Lennie did not receive a severance payment,
her 2021 and 2022 STI awards were payable in cash and Ms Lennie retained a pro rata number of unvested LTI awards all of which are subject to the original
performance hurdles applicable to the awards.
80 | ATLAS ARTERIA ANNUAL REPORT 2023
10.2 Non-executive Director statutory remuneration disclosures for 2023
The following table shows the fees paid to Non-executive Directors of ATLAX and ATLIX for 2023.
ATLAX fees
Post
employment
benefits
Short-term
benefits
Cash salary
ATLIX fees
Post
employment
benefits
Short-term
benefits
Cash salary
Name
Financial year
and fees Superannuation
Total
and fees 1 Superannuation 1
Total 1
Debra Goodin
David Bartholomew 2
Jean-Georges Malcor
John Wigglesworth 3
Ken Daley 4
Laura Hendricks 5
Ariane Barker 6
Fiona Beck 7
Andrew Cook 2
Kiernan Bell 8
Jeffrey Conyers 9
Caroline Foulger 10
Total – A$
Total – A$
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
$283,654
$305,570
$167,044
$203,979
$185,000
$202,500
$167,044
–
$26,346
$24,430
$17,956
$13,521
–
–
$17,956
–
$310,000
$330,000
$185,000
$217,500
$185,000
$202,500
$185,000
–
$82,588
$9,021
$91,609
–
$39,372
–
–
–
–
–
–
–
$39,372
–
–
$179,155
$18,345
$197,500
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
$924,702
$891,204
$71,279
$56,296
$995,981
$947,500
US$49,718
US$50,000
US$5,282
US$55,000
US$5,000
US$55,000
–
–
–
–
–
–
–
–
–
–
–
–
US$205,000
US$137,018
US$128,333
US$142,268
US$40,000
–
US$37,258
US$220,000
US$65,000
US$137,018
$791,405
$989,909
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
$7,958
$7,212
–
–
–
–
–
–
–
–
–
–
–
–
US$205,000
US$137,018
US$128,333
US$142,268
US$40,000
–
US$37,258
US$220,000
US$65,000
US$137,018
$799,363
$997,121
1. Fees payable to ATLIX Non-executive Directors converted to AUD at the average 2023 exchange rate of A$1 = US$0.6638. (2022 A$1 = US$0.6933).
2. Additional fees for duties performed during 2022 as a member of the due diligence committee in respect of the Skyway Transaction and the Equity Raise –
D Bartholomew $12,500 and A Cook US$5,250. No additional fees were paid during year ended 31 December 2023.
3. Appointed as a Non-executive Director 1 January 2023.
4. Appointed as a Non-executive Director 30 May 2023.
5. Appointed as a Non-executive Director 16 October 2023.
6. Retired as a Non-executive Director 31 December 2022.
7. Appointed Chair 1 March 2023.
8. Appointed as a Non-executive Director 1 September 2023.
9. Retired as a Non-executive Director 1 March 2023.
10. Retired as a Non-executive Director 1 July 2023.
ATLAS ARTERIA ANNUAL REPORT 2023 | 81
FINANCIAL REPORTREMUNERATION REPORTDIRECTORS’ REPORTSFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS REMUNERATION REPORT
Equity instrument disclosures relating to KMP
Securityholdings
The table below outlines the number of ordinary securities held by each KMP including their personally related parties,
as at 31 December 2023, and the minimum securityholding requirements.
Non-executive Directors have acquired their securityholdings from their personal resources on market and in accordance with
Atlas Arteria’s trading policy. Executive KMP acquire their securityholdings from awards that vest under the Groups’ equity plans
and from purchases on market. All Directors and executives are tracking to meet their securityholding requirement in accordance
with the Groups’ policy.
Non-executive Directors
Name
Debra Goodin 3
David Bartholomew
Jean-Georges Malcor
John Wigglesworth 4
Ken Daley 5
Laura Hendricks 6
Fiona Beck
Andrew Cook
Kiernan Bell 7
Jeffrey Conyers 8
Caroline Foulger 9
Balance at
1 January 2023
76,667
31,679
45,499
7,500
n.a.
n.a.
53,029
33,000
n.a.
90,524
41,602
Balance at
31 December
2023
Value at
31 December
2023 1
Minimum
securityholding
requirement 2
Date
securityholding
to be attained
Changes
1,804
–
–
–
–
–
78,471
31,679
45,499
7,500
–
–
$453,562
$183,105
$262,984
$43,350
–
–
7,000
5,000
60,029
38,000
$346,968
$219,640
–
–
–
–
n.a.
n.a.
–
n.a.
n.a.
$235,823
$155,000
$155,000
$155,000
$155,000
$155,000
$161,646
$161,646
$161,646
$161,646
$161,646
Nov-23
Oct-21
Nov-21
Jan-26
May-26
Oct-26
Sep-22
Nov-23
Sep-26
n.a.
n.a.
1. Based on the closing price of Atlas Arteria securities on 31 December 2023 of $5.78. The requirement is assessed at the higher of the purchase price or market
value of the securities.
2. The minimum securityholding requirement for ATLIX Board members has been converted to AUD at the 31 December 2023 exchange rate of A$1 = US$0.6805.
3. Appointed as a Non-executive Director of ATLAX 1 september 2017, Chair of ATLAX 1 November 2020 and a Non-executive Director ATLIX 1 November 2020.
4. Appointed as a Non-executive Director 1 January 2023.
5. Appointed as a Non-executive Director 30 May 2023.
6. Appointed as a Non-executive Director 16 October 2023.
7. Appointed as a Non-executive Director 1 September 2023.
8. Retired as a Non-executive Director 1 March 2023.
9. Retired as a Non-executive Director 1 July 2023.
Executive KMP
Name
Graeme Bevans
David Collins 2
Balance at
1 January
2023
Changes
during
the year
443,258
18,000
–
–
Vincent Portal-Barrault 3
90,942
(17,650)
Granted
during
the year as
compensation
Received
during the
year exercise
of a right
Balance at
31 December
2023
Value at
31 December
2023 1
Minimum
security
holding
requirement
Date
security
holding to
be attained
125,186
10,574
41,828
–
–
–
586,444 $3,389,646
$1,400,000
10,574
$61,118
115,120
$665,394
$322,500
$398,231
May-23
Sep-27
Dec-23
1. Based on the closing price of Atlas Arteria securities on 31 December 2023 of $5.78. The requirement is assessed at the higher of the purchase price or market value
of the securities.
2. Commenced as an executive KMP on 30 August 2022.
3. The minimum securityholding requirement for the Luxembourg based executive has been converted to A$ at the 31 December 2023 exchange rate of A$1 = Euro 0.6166.
82 | ATLAS ARTERIA ANNUAL REPORT 2023
Performance rights held during the year
The terms and conditions of each grant of share rights affecting remuneration in the current or a future reporting period are as follows:
Graeme
Bevans
David
Collins
Vincent
Portal-
Barrault
Grant date
30 May 2023
30 May 2023
Number
granted
#
7,788
7,788
30 May 2023
208,644
10 May 2022
10 May 2022
101,246
101,246
28 April 2021
230,088
19 May 2020
146,434
23 March 2023
8 November 2022
8 November 2022
23 March 2023
6 April 2022
6 April 2022
28 April 2021
3 March 2020
67,288
35,164
35,164
75,075
36,768
36,768
73,741
61,332
Number
vested
during the
year
#
Number
lapsed
during the
year
#
Number
outstanding
at the end of
the year
#
Financial
year in
which
grant may
vest
Value at
grant date
(if granted
this year)
$
Maximum
value of
grant to be
expensed
$
Vested
%
Forfeited
/lapsed
%
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
146,434
–
–
–
–
–
–
–
61,332
7,788
7,788
FY2025
FY2025
31,230
32,087
13,729
7,045
208,644
FY2026
730,254
486,836
101,246
101,246
230,088
–
67,288
35,164
35,164
75,075
36,768
36,768
73,741
–
FY2025
FY2025
FY2024
FY2023
–
–
–
–
155,488
91,246
34,733
FY2026
237,527
158,423
FY2025
FY2025
–
–
69,655
36,135
FY2026
265,015
176,757
FY2025
FY2025
FY2024
FY2023
–
–
–
–
48,570
45,077
11,122
–
0%
100%
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
0%
100%
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 1
David Collins
Vincent Portal-Barrault
Balance at
31 December
2022
#
Granted in the
year ended
31 December
2023 1
#
Exercised in
the year ended
31 December
2023
#
Lapsed in the
year ended
31 December
2023 2
#
Balance at
31 December
2023
#
Unvested at
31 December
2023
#
Value of
performance
rights granted
during year 3
$
579,014
70,328
208,609
224,220
67,288
75,075
–
–
–
(146,434)
–
(61,332)
656,800
137,616
222,352
656,800
137,616
222,352
793,570
237,527
265,015
1. The total number of performance rights granted to the MD & CEO during the year under the 2023 Long Term Incentive Award and the number of additional awards
granted under the 2022 Long Term Incentive Award which are subject to performance hurdles.
2. The number of performance rights lapsed during the year under the 2020 Long Term Incentive Award.
3. External valuation advice from Aon has been used to determine the value of the performance rights awarded during year ended 31 December 2023. The valuation was
made using a Stochastic Model which includes a Monte Carlo simulation model. The value per instrument of the performance rights granted during the year in respect
of the 2023 Long Term Incentive Award with relative and positive absolute TSR hurdles was $3.53 (23 March 2023) and $3.50 (30 May 2023). The value per instrument
of the performance rights granted during the year in respect of the 2022 Long Term Incentive Award with relative and positive absolute TSR hurdles was $4.01 (30 May 2023)
and with strategic and positive absolute TSR hurdles was $4.12 (30 May 2023).
ATLAS ARTERIA ANNUAL REPORT 2023 | 83
FINANCIAL REPORTREMUNERATION REPORTDIRECTORS’ REPORTSFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS REMUNERATION REPORT
Unvested STI Equity Awards during 2023
During 2023, awards of restricted securities equal to 50% of their awards under the Groups 2022 STI Plan were granted to the
executive KMP. The securities were restricted for 12 months from the end of the 2022 STI performance period (31 December 2022).
Following the end of the restriction period on 31 December 2023, the PRC has confirmed 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
2022
#
Granted in the
year ended
31 December
2023 1
#
Vested in the
year ended
31 December
2023 2
#
Lapsed in the
year ended
31 December
2023
#
Balance at
31 December
2023
#
Unvested at
31 December
2023
#
Value of
restricted
securities
granted during
year
$
127,570
n.a.
37,455
125,186
10,574
41,828
127,570
n.a.
37,455
–
n.a.
–
125,186
10,574
41,828
125,186
10,574
41,828
799,940
71,376
282,340
Name
Graeme Bevans
David Collins 3
Vincent Portal-Barrault
1. Restricted Securities granted in respect of the 2022 STI Plan. These securities vested in full in February 2024.
2. Restricted Securities granted in respect of the 2021 STI Plan. These securities vested in full in January 2023.
3. Commenced on 30 August 2022.
10.3 Loans to Directors or related parties
There were no loans to Directors or related parties during 2023.
10.4 Other transactions with KMP
There were no other transactions with KMP.
84 | ATLAS ARTERIA ANNUAL REPORT 2023
FINANCIAL REPORT
for the year ended 31 December 2023
This report comprises:
Atlas Arteria International Limited and its controlled entities
Atlas Arteria Limited and its controlled entities
ATLAS ARTERIA ANNUAL REPORT 2023 | 85
Financial position – other information
17 Other assets
18 Provisions and other liabilities
19 Cash flow information
20 Contingent liabilities and capital commitments
Group structure
21 Parent entity financial information
22 Subsidiaries
Other disclosures
23 Remuneration of auditors
24 Share-based payments
25 Related party disclosures
26 Other material accounting policies
27 Events occurring after balance sheet date
DIRECTORS’ DECLARATION –
ATLAS ARTERIA INTERNATIONAL LIMITED
DIRECTORS’ DECLARATION –
ATLAS ARTERIA LIMITED
INDEPENDENT AUDITOR’S REPORT
118
118
119
120
121
122
122
123
124
124
124
126
128
129
130
130
131
CONTENTS
CONSOLIDATED STATEMENTS
OF PROFIT AND LOSS
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
Information about the groups
1 Corporate information
2 Basis of preparation
3 Critical accounting estimates and judgements
Financial performance
4 Segment information
5 Distributions
6 Earnings per stapled security
7 Finance costs
8
Income tax
Toll road businesses
9
Investments accounted for using the equity method
10 Intangible assets – Tolling concessions
11 Goodwill
Capital and borrowings
12 Cash, cash equivalents and restricted cash
13 Debt at amortised cost
14 Contributed equity
15 Reserves
16 Financial risk and capital management
87
88
89
90
92
93
93
93
93
94
95
95
98
99
99
100
102
102
106
107
108
108
109
110
111
113
86 | ATLAS ARTERIA ANNUAL REPORT 2023
CONSOLIDATED STATEMENTS OF PROFIT AND LOSS
Toll revenue
Other revenue **
Total revenue **
Toll road maintenance expenses
Other operating expenses
Employment costs
Consulting and administration expenses
Other expenses
Amortisation of tolling concession
Depreciation and amortisation
Share of profit/(loss) of equity accounted investments
Interest income on shareholder loans **
Other finance income **
Finance costs
Profit/(loss) before income tax
Income tax expense
Profit/(loss) from continuing operations
Profit/(loss) attributable to:
Securityholders of the parent entity – ATLIX
Securityholders of other stapled entity – ATLAX
(as non-controlling interest/parent entity)
Stapled securityholders
Profit/(loss) per share attributable to ATLIX/ATLAX
securityholders
Basic profit/(loss) per share attributable to:
ATLIX (as parent entity)
ATLAX (as non-controlling interest/parent entity)
Basic profit/(loss) per ALX stapled security
Diluted profit/(loss) per share attributable to:
ATLIX (as parent entity)
ATLAX (as non-controlling interest/parent entity)
Diluted profit/(loss) per ALX stapled security
ALX
ATLAX Group
Year ended
31 Dec 2023
$m
Year ended
31 Dec 2022*
$m
Year ended
31 Dec 2023
$m
Year ended
31 Dec 2022*
$m
Note
133.2
0.8
134.0
(10.3)
(4.9)
(33.2)
(8.1)
(13.4)
(67.4)
(1.8)
325.6
18.1
17.9
(96.5)
260.0
(3.7)
256.3
116.7
1.5
118.2
(17.1)
(5.2)
(29.5)
(9.8)
(13.7)
(64.3)
(1.9)
336.4
1.7
20.4
(91.0)
244.2
(3.2)
241.0
323.5
266.9
(67.2)
256.3
(25.9)
241.0
–
16.0
16.0
–
(0.1)
(20.0)
(4.1)
(7.2)
–
(0.9)
(51.5)
–
2.6
(2.0)
(67.2)
–
(67.2)
–
(67.2)
(67.2)
–
16.1
16.1
–
–
(17.4)
(5.1)
(8.1)
–
(1.1)
(13.6)
–
14.2
(10.8)
(25.8)
(0.1)
(25.9)
–
(25.9)
(25.9)
Cents
Cents
Cents
Cents
22.3
(4.6)
17.7
22.3
(4.6)
17.7
24.6
(2.4)
22.2
24.6
(2.4)
22.2
–
(4.6)
(4.6)
–
(4.6)
(4.6)
–
(2.4)
(2.4)
–
(2.4)
(2.4)
9
7
8
6
6
6
6
* The Groups have revised the presentation of the Consolidated Statements of Comprehensive Income from the prior period. Refer to note 2 for further details.
** The Groups have revised the classification of interest income from the prior period. Interest income on shareholder loans relates to loans with Calumet Concession
Partners Inc. (’CCPI‘), the owner of the concessionaire of the Chicago Skyway. Refer to note 2 for further details.
The above Consolidated Statements of Profit and Loss should be read in conjunction with the accompanying notes.
ATLAS ARTERIA ANNUAL REPORT 2023 | 87
FINANCIAL REPORTREMUNERATION REPORTDIRECTORS’ REPORTSFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Profit/(loss) for the year
Other comprehensive income/(loss)
Items that may be reclassified to profit or loss:
Exchange differences on translation of foreign operations
Loss on net investment hedge
Share of other comprehensive (loss)/income of equity
accounted investments, net of tax
Items that will not be reclassified to profit or loss:
Gain on cash flow hedges
Share of other comprehensive (loss)/income of equity
accounted investments, net of tax
Other comprehensive income
Total comprehensive income/(loss)
Total comprehensive income/(loss) attributable to:
Securityholders of the parent entity – ATLIX
Securityholders of other stapled entity – ATLAX
(as non-controlling interest/parent entity)
Stapled securityholders
ALX
ATLAX Group
Note
Year ended
31 Dec 2023
$m
256.3
Year ended
31 Dec 2022 *
$m
241.0
Year ended
31 Dec 2023
$m
(67.2)
Year ended
31 Dec 2022 *
$m
(25.9)
15
15
9
15
9
84.2
(4.8)
(12.2)
–
(0.4)
66.8
323.1
381.8
(58.7)
323.1
60.1
–
44.4
25.0
(1.7)
127.8
368.8
356.3
12.5
368.8
8.5
13.4
–
–
–
–
8.5
(58.7)
–
(58.7)
(58.7)
–
–
25.0
–
38.4
12.5
–
12.5
12.5
* The Groups have revised the presentation of the Consolidated Statements of Comprehensive Income from the prior period. Refer to note 2 for further details.
The above Consolidated Statements of Comprehensive Income should be read in conjunction with the accompanying notes.
88 | ATLAS ARTERIA ANNUAL REPORT 2023
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
Current assets
Cash and cash equivalents
Financial assets at amortised cost
Other assets
Total current assets
Non-current assets
Restricted cash
Financial assets at amortised cost
Intangible assets – Tolling concessions
Investments accounted for using the equity method
Goodwill
Deferred tax assets
Property, plant and equipment
Other assets
Total non-current assets
Total assets
Current liabilities
Debt at amortised cost
Provisions and other liabilities
Total current liabilities
Non-current liabilities
Debt at amortised cost
Deferred tax liabilities
Provisions and other liabilities
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 2023
$m
As at
31 Dec 2022
$m
As at
31 Dec 2023
$m
As at
31 Dec 2022
$m
Note
12
16
17
12
16
10
9
11
8
17
13
18
13
8
18
14
15
14
15
305.3
–
39.8
345.1
204.9
244.4
2,103.5
5,097.2
14.3
20.4
14.8
0.1
7,699.6
8,044.7
(101.4)
(17.4)
(118.8)
275.9
245.8
11.8
533.5
215.6
–
2,167.9
5,350.1
13.8
21.8
15.7
0.1
7,785.0
8,318.5
(100.1)
(23.6)
(123.7)
(1,593.6)
(1,609.4)
(34.2)
(62.5)
(1,690.3)
(1,809.1)
6,235.6
3,994.0
107.9
(731.5)
3,370.4
2,991.0
53.3
(179.1)
2,865.2
6,235.6
(33.0)
(61.9)
(1,704.3)
(1,828.0)
6,490.5
3,994.0
49.2
(474.6)
3,568.6
2,991.0
42.8
(111.9)
2,921.9
6,490.5
182.9
–
73.5
256.4
–
–
–
62.0
–
8.9
70.9
–
–
–
2,614.7
2,863.6
–
–
3.4
–
–
–
4.3
–
2,618.1
2,874.5
2,867.9
2,938.8
–
(7.0)
(7.0)
–
–
(2.3)
(2.3)
(9.3)
–
(14.0)
(14.0)
–
–
(2.9)
(2.9)
(16.9)
2,865.2
2,921.9
–
–
–
–
2,991.0
53.3
(179.1)
2,865.2
2,865.2
–
–
–
–
2,991.0
42.8
(111.9)
2,921.9
2,921.9
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 28 February 2024 and as required by Bermuda regulations
was signed on its behalf by:
Fiona Beck
Atlas Arteria International Limited
Hamilton, Bermuda
Andrew Cook
Atlas Arteria International Limited
Hamilton, Bermuda
ATLAS ARTERIA ANNUAL REPORT 2023 | 89
FINANCIAL REPORTREMUNERATION REPORTDIRECTORS’ REPORTSFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
ALX
Attributable to ATLIX securityholders
Contributed
equity
$m
Reserves
$m
(Accumulated
losses)/
Retained
earnings
$m
Total equity at 31 December 2022
3,994.0
Profit/(loss) for the period
Exchange differences on translation
of foreign operations
Loss on net investment hedge
Share of other comprehensive (loss)
of equity accounted investments
Total comprehensive income/(expense)
Transactions with securityholders in their
capacity as equity holders:
Employee performance rights
(refer to note 15)
Dividends paid (refer to note 5)
–
–
–
–
–
–
–
–
Total equity at 31 December 2023
3,994.0
49.2
–
75.7
(4.8)
(12.6)
58.3
0.4
–
0.4
107.9
(474.6)
323.5
–
–
–
323.5
–
(580.4)
(580.4)
(731.5)
ALX
Attributable to ATLIX securityholders
Contributed
equity
$m
Reserves
$m
(Accumulated
losses)/
Retained
earnings
$m
Total equity at 31 December 2021
3,747.8
Profit/(loss) for the period
Exchange differences on translation
of foreign operations
Change in fair value of the cash flow hedges
Share of other comprehensive income
of equity accounted investments
Total comprehensive income/(expense)
Transfer of hedging gains to carrying
value of equity accounted investment
(refer to note 15)
Transactions with securityholders in their
capacity as equity holders:
Issue of securities (refer to note 14)
Transaction costs associated with the
issue of securities (refer to note 14)
Employee performance rights
(refer to note 15)
Dividends paid (refer to note 5)
Total equity at 31 December 2022
–
–
–
–
–
–
251.3
(5.1)
–
–
246.2
3,994.0
(40.1)
–
46.7
–
42.7
89.4
–
–
–
(0.1)
–
(0.1)
49.2
(353.1)
266.9
–
–
–
266.9
–
–
–
–
(388.4)
(388.4)
(474.6)
Attributable
to ATLAX
securityholders
$m
2,921.9
(67.2)
8.5
–
–
(58.7)
2.0
–
2.0
Total ALX
equity
$m
6,490.5
256.3
84.2
(4.8)
(12.6)
323.1
2.4
(580.4)
(578.0)
2,865.2
6,235.6
Attributable
to ATLAX
securityholders
$m
143.4
(25.9)
13.4
25.0
–
12.5
Total ALX
equity
$m
3,498.0
241.0
60.1
25.0
42.7
368.8
Total
$m
3,568.6
323.5
75.7
(4.8)
(12.6)
381.8
0.4
(580.4)
(580.0)
3,370.4
Total
$m
3,354.6
266.9
46.7
–
42.7
356.3
–
(25.0)
(25.0)
251.3
2,847.1
3,098.4
(5.1)
(58.1)
(63.2)
(0.1)
(388.4)
(142.3)
3,568.6
2.0
–
2,766.0
2,921.9
1.9
(388.4)
2,623.7
6,490.5
The above Consolidated Statements of Changes in Equity should be read in conjunction with the accompanying notes.
90 | ATLAS ARTERIA ANNUAL REPORT 2023
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (CONTINUED)
Attributable to ATLAX securityholders
Reserves
$m
Accumulated
losses
$m
ATLAX Group
Total equity at 31 December 2022
Loss for the period
Exchange differences on translation of foreign operations
Total comprehensive income/(expense)
Transactions with securityholders in their capacity as equity holders:
Employee performance rights (refer to note 15)
Total equity at 31 December 2023
Contributed
equity
$m
2,991.0
–
–
–
–
2,991.0
ATLAX Group
Total equity at 31 December 2021
Loss for the period
Exchange differences on translation of foreign operations
Gain/(loss) on cash flow hedges
Total comprehensive income/(expense)
Transfer of hedging gains to carrying value of equity accounted investment
(refer to note 15)
Transactions with securityholders in their capacity as equity holders:
Issue of securities (refer to note 14)
Transaction costs associated with the issue of securities (refer to note 14)
Employee performance rights (refer to note 15)
Total equity at 31 December 2022
Contributed
equity
$m
202.0
–
–
–
–
–
2,847.1
(58.1)
–
2,991.0
–
2.0
(179.1)
2,865.2
Attributable to ATLAX securityholders
Reserves
$m
Accumulated
losses
$m
Total
$m
2,921.9
(67.2)
8.5
(58.7)
Total
$m
143.4
(25.9)
13.4
25.0
12.5
(25.0)
2,847.1
(58.1)
2.0
(111.9)
(67.2)
–
(67.2)
(86.0)
(25.9)
–
–
(25.9)
–
–
–
–
(111.9)
2,921.9
42.8
–
8.5
8.5
2.0
53.3
27.4
–
13.4
25.0
38.4
(25.0)
–
–
2.0
42.8
The above Consolidated Statements of Changes in Equity should be read in conjunction with the accompanying notes.
ATLAS ARTERIA ANNUAL REPORT 2023 | 91
FINANCIAL REPORTREMUNERATION REPORTDIRECTORS’ REPORTSFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS CONSOLIDATED STATEMENTS OF CASH FLOWS
ALX
ATLAX Group
Year ended
31 Dec 2023
$m
Year ended
31 Dec 2022
$m
Year ended
31 Dec 2023
$m
Year ended
31 Dec 2022
$m
Note
Cash flows from operating activities
Toll revenue (received net of transaction processing fees)
Other interest received
Other income received
Property taxes paid
Payments to suppliers and employees (inclusive of GST/VAT)
Net income taxes (paid)/received
Net cash inflow/(outflow) from operating activities
19
Cash flows from investing activities
Distributions received from equity accounted investments
Interest received on shareholder loans with CCPI
Payment for purchase of the CCPI investment
Payments to suppliers associated with purchase of the
CCPI investment
Proceeds from financial instruments held for investments
Payment for purchase of financial assets
Proceeds from financial instruments held for financial assets
Payments for capital projects
Purchase of fixed assets
Net cash inflow/(outflow) from investing activities
Cash flows from financing activities
Repayment of debt (including transaction costs)
Interest paid
Proceeds from borrowings (net of transaction costs)
Proceeds from issue of securities (net of transaction costs)
Payments to suppliers associated with the issue of securities
Transfer from restricted cash
Loans advanced to related parties
Dividends paid
Lease principal payments
Proceeds from derivative financial instrument
Net cash (outflow)/inflow from financing activities
Net 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
12
135.1
17.5
0.7
(2.8)
(65.8)
–
84.7
619.6
18.4
(4.0)
(1.3)
–
–
–
(0.2)
(0.8)
631.7
(101.0)
(9.1)
(0.4)
–
(0.2)
10.7
–
117.9
19.4
1.3
(2.7)
(62.0)
(0.1)
73.8
406.9
–
(2,757.8)
(25.2)
14.1
(245.8)
2.9
(0.3)
(0.4)
–
2.6
18.1
–
(28.2)
–
(7.5)
174.7
–
(4.0)
(1.3)
–
–
–
–
–
–
14.2
12.7
–
(27.3)
(0.1)
(0.5)
–
–
(2,757.8)
(25.2)
14.1
–
–
(0.1)
(0.1)
(2,605.6)
169.4
(2,769.1)
(95.3)
(7.1)
–
3,043.4
(7.8)
25.6
–
(580.4)
(388.4)
(1.7)
–
(682.1)
34.3
275.9
(4.9)
305.3
(1.8)
4.8
2,573.4
41.6
229.4
4.9
275.9
–
–
–
–
(0.2)
–
(40.0)
–
(0.7)
–
(40.9)
121.0
62.0
(0.1)
182.9
–
–
–
2,796.5
(7.3)
–
–
–
(0.8)
–
2,788.4
18.8
42.8
0.4
62.0
The above Consolidated Statements of Cash Flows should be read in conjunction with the accompanying notes.
92 | ATLAS ARTERIA ANNUAL REPORT 2023
NOTES TO THE FINANCIAL REPORTS
Information about the groups
1 Corporate information
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 Corporations (Financial Reporting by Stapled entities) Instrument 2023/673 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 as required under the Corporations Act
2001 (where applicable).
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 2023.
2 Basis of preparation
Both ATLIX and ATLAX are for-profit entities for the purpose of preparing the Financial Reports. ATLIX is an exempted mutual fund
company incorporated and domiciled in Bermuda. ATLAX is a company limited by shares incorporated and domiciled in Australia.
ATLAX is therefore subject to the Corporations Act 2001 and associated reporting requirements, requiring the separate Financial
Report of the ATLAX Group to be also presented within this report.
The Financial Reports were authorised for issue by the Directors of the ATLIX Board and the ATLAX Board (together, the ‘Boards’)
on 28 February 2024 and 29 February 2024. 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).
− 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 2023 and the results of the subsidiaries for the year then
ended. Inter-entity transactions with, or between, subsidiaries are eliminated in full on consolidation.
− include the application of equity accounting for associates and joint ventures.
− 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 hundred thousand dollars unless otherwise stated,
in accordance with ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191.
Material accounting policies and significant 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 26 for other material
accounting policies which have not been presented along with their respective notes.
Income statement presentation
The Groups have revised the presentation of the Consolidated Statements of Comprehensive Income from the prior period where the
Consolidated Statements of Comprehensive Income were presented by function with details included in the disclosure notes. In the
current period, the Groups have presented Consolidated Statements of Profit and Loss by nature and separate Consolidated
Statements of Comprehensive Income. The presentational change will enhance the use of the statements compared with the previous
presentation as more detailed information is now presented on the face of the income statement, where previously users relied on
note disclosures to understand financial performance. The change in presentation has no impact on the Profit/(loss) from continuing
operations or the opening Consolidated Statements of Financial Position.
ATLAS ARTERIA ANNUAL REPORT 2023 | 93
FINANCIAL REPORTREMUNERATION REPORTDIRECTORS’ REPORTSFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS Reclassification of interest income
The Groups have revised the classification of interest income from the prior period where interest income was included within
‘revenue and other income arising from continuing operations’ on the Consolidated Statements of Comprehensive Income. In the
current period, interest income has been reclassified from revenue and shown separately on the face of the income statement.
Interest on cash held and interest on shareholder loans to CCPI are separated out from revenue. This enhances the users’
understanding of the income statement as revenue will now reflect income from toll revenue and other revenue generated from
operations. Prior period comparatives have been adjusted with interest income of $22.1 million for Atlas Arteria and $14.2 million
for the ATLAX Group reclassified from total revenue to other finance income. Interest income on shareholders loans to CCPI of
$1.7 million for Atlas Arteria has also been reclassified from total revenue to interest income on shareholder loans with CCPI for
the year ended 31 December 2022. The reclassification has no impact on the opening Consolidated Statements of Financial Position.
New and amended standards adopted by the Groups
The Groups have applied AASB 2021-2 Amendments to Australian Accounting Standards – Disclosure of Accounting Policies Definition
of Accounting Estimates (AASB 101) for the first time for its annual reporting period commencing 1 January 2023. The amendment
did not have any impact on the amounts recognised in prior periods and is not expected to significantly affect the current or future
periods. There have been no other new accounting standards adopted by the Groups during the year ended 31 December 2023.
3 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 are discussed in the following notes:
− Deferred tax assets (note 8)
− Control assessment (note 9)
− Impairment of assets and equity accounted investments (note 9 and 10)
− Provisions for toll road maintenance (note 18)
94 | ATLAS ARTERIA ANNUAL REPORT 2023
NOTES TO THE FINANCIAL REPORTS Financial performance
4 Segment information
Operating segments are reported in a manner consistent with the internal reporting 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.
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 five operating segments for Atlas
Arteria and two operating segments for the ATLAX Group. The segments of Atlas Arteria are the investments in APRR, ADELAC,
Warnow Tunnel, Chicago Skyway and Dulles Greenway. The segments for the ATLAX Group are the investments in Chicago Skyway
and Dulles Greenway.
Segment information provided to the Boards
The proportionately consolidated segment information for the reportable segments for the year ended 31 December 2023, in local
currency as well as Australian Dollars, based on Atlas Arteria’s economic ownership interest is as follows:
ALX
Year ended
31 Dec 2023
Toll revenue and other revenue
Construction services revenue
Segment revenue
Operating and other expenses
Construction services costs
Segment expenses
Segment EBITDA
EBITDA margin
Segment revenue
Segment expenses
Segment EBITDA
APRR
€m
940.1
71.8
1,011.9
(242.1)
(71.8)
(313.9)
698.0
74.2%
$m
1,648.6
(511.5)
1,137.1
Corporate costs
Other segment expenses (b)
Amortisation and depreciation
Interest on shareholder loans with CCPI
Other finance income
Finance costs
Share of profit from equity accounted investments
Profit before income tax
Proportional
ADELAC
€m
Warnow
Tunnel
€m
Chicago
Skyway
US$m
Dulles
Greenway
US$m
Total ALX
Proportional
Non-
consolidated
investments (a)
Total ALX
21.3
–
21.3
(3.3)
–
(3.3)
14.6
–
14.6
(4.6)
–
(4.6)
82.2
–
82.2
(12.2)
–
(12.2)
73.3
–
73.3
(15.7)
–
(15.7)
18.0
84.3%
10.0
68.9%
70.0
85.1%
57.6
78.5%
$m
34.8
(5.5)
29.3
$m
23.7
(7.4)
16.3
$m
$m
$m
$m
$m
123.9
(18.5)
105.4
110.3
(23.6)
86.7
1,941.3
(566.5)
1,374.8
(1,807.3)
535.5
(1,271.8)
134.0
(31.0)
103.0
(36.0)
(2.9)
(69.2)
18.1
17.9
(96.5)
325.6
260.0
(a) Non-consolidated investments refers to the results of APRR, ADELAC and Chicago Skyway which are accounted for using the equity method.
(b) Other segment expenses include maintenance provisions for consolidated businesses.
ATLAS ARTERIA ANNUAL REPORT 2023 | 95
NOTES TO THE FINANCIAL REPORTSFINANCIAL REPORTREMUNERATION REPORTDIRECTORS’ REPORTSFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS ALX
Year ended
31 Dec 2022
Toll revenue and other revenue
Construction services revenue
Segment revenue
Operating and other expenses
Construction services costs
Segment expenses
Segment EBITDA
EBITDA margin
Segment revenue
Segment expenses
Segment EBITDA
APRR
€m
877.7
104.4
982.1
(228.6)
(104.4)
(333.0)
649.1
74.0%
$m
1,490.3
(505.3)
985.0
Corporate costs
Other segment expenses (b)
Amortisation and depreciation
Interest on shareholder loans with CCPI
Other finance income
Finance costs
Share of profit from equity accounted investments
Profit before income tax
Proportional
ADELAC
€m
Warnow
Tunnel
€m
Chicago
Skyway
US$m
Dulles
Greenway
US$m
Total ALX
Proportional
Non-
consolidated
investments (a)
Total ALX
19.1
–
19.1
(3.6)
–
(3.6)
13.3
–
13.3
(4.1)
–
(4.1)
6.1
–
6.1
(1.1)
–
(1.1)
15.5
81.4%
9.2
69.0%
5.0
82.1%
$m
29.0
(5.4)
23.6
$m
20.1
(6.2)
13.9
$m
8.8
(1.6)
7.2
68.0
–
68.0
(14.0)
–
(14.0)
54.0
79.4%
$m
98.1
(20.2)
77.9
$m
$m
$m
1,646.3
(538.7)
1,107.6
(1,528.1)
512.3
(1,015.8)
118.2
(26.4)
91.8
(37.3)
(11.6)
(66.2)
1.7
20.4
(91.0)
336.4
244.2
(a) Non-consolidated investments refers to the results of APRR, ADELAC and Chicago Skyway which are accounted for using the equity method.
(b) Other segment expenses include maintenance provisions for consolidated businesses.
ATLAX Group
Year ended
31 Dec 2023
Segment revenue
Segment expenses
Segment EBITDA
EBITDA margin
Segment revenue
Segment expenses
Segment EBITDA
Corporate costs
Proportional
Chicago
Skyway
US$m
Dulles
Greenway
US$m
Total ATLAX
Proportional
Non-
consolidated
investments (a)
Total ATLAX
82.2
(12.2)
70.0
85.1%
$m
123.9
(18.5)
105.4
9.8
(2.1)
7.7
78.5%
$m
14.8
(3.2)
11.6
$m
138.7
(21.7)
117.0
$m
(138.7)
21.7
(117.0)
$m
–
–
–
(31.4)
16.0
(0.9)
2.6
(2.0)
(51.5)
(67.2)
Advisory and administrative service fees and other reimbursements from the ATLIX Group
Amortisation and depreciation
Other finance income
Finance costs
Share of profit/(loss) from equity accounted investments
Profit/(loss) before income tax
(a) Non-consolidated investments refers to the results of Chicago Skyway and Dulles Greenway which are accounted for using the equity method.
96 | ATLAS ARTERIA ANNUAL REPORT 2023
NOTES TO THE FINANCIAL REPORTS ATLAX Group
Year ended
31 Dec 2022
Segment revenue
Segment expenses
Segment EBITDA
EBITDA margin
Segment revenue
Segment expenses
Segment EBITDA
Corporate costs
Proportional
Chicago
Skyway
US$m
Dulles
Greenway
US$m
Total ATLAX
Proportional
Non-
consolidated
investments (a)
Total ATLAX
6.1
(1.1)
5.0
9.1
(1.9)
7.2
82.1%
78.3%
$m
8.8
(1.6)
7.2
$m
13.2
(2.7)
10.5
$m
22.0
(4.3)
17.7
$m
(22.0)
4.3
(17.7)
$m
–
–
–
(30.6)
16.1
(1.1)
14.2
(10.8)
(13.6)
(25.8)
Advisory and administrative service fees and other reimbursements from the ATLIX Group
Amortisation and depreciation
Other finance income
Finance costs
Share of profit/(loss) from equity accounted investments
Profit/(loss) before income tax
(a) Non-consolidated investments refers to the results of Chicago Skyway and Dulles Greenway which are accounted for using the equity method.
The segment revenue disclosed in the tables above primarily relates to toll revenue generated by businesses from external customers.
The segment expenses disclosed in the tables above relate directly to costs associated with the operation of that segment.
The Groups have revised the presentation of segment revenue in the current period to include construction services revenue under
AASB Interpretation 12 Service Concession Arrangements (IFRIC 12), which represents revenue recognised for the construction of
upgrades to the service concession infrastructure assets in line with the progress of construction services provided over time. This
presentation change is a result of changes made to reports reviewed by the Boards. Prior period comparatives have been adjusted
with the APRR segment revenue increased for construction services revenue by $158.5 million (€104.4 million) for the year ended
31 December 2022. The adjustment has no impact on the opening Consolidated Statements of Financial Position or the Consolidated
Statements of Profit and Loss.
The Groups have revised the presentation of segment expenses in the current period to include construction services costs under
IFRIC 12, which represents costs recognised for the construction of upgrades to the service concession infrastructure assets in line
with the progress of construction services provided over time. This presentation change is a result of changes made to reports
reviewed by the Boards. Prior period comparatives have been adjusted with the APRR segment expenses increased for construction
services costs of $158.5 million (€104.4 million) for the year ended 31 December 2022. The adjustment has no impact on the opening
Consolidated Statements of Financial Position or the Consolidated Statements of Profit and Loss.
During the year, the Groups determined that underlying result adjustments would be reported to the Boards in monthly reporting
separately from special project costs considered for executive remuneration purposes. Underlying results is a non-IFRS measure that
is used by ALX management and the Boards as a measure to assess financial performance and represents statutory profit excluding
the impact of items not related to underlying operational performance such as impairments of investments, acquisition and disposal
costs, and debt and equity issuance costs. There were no underlying results adjustments in the current year. The net impact of
underlying results adjustments in the prior year was to reduce statutory profit of $241.0 million by $2.3 million to $238.7 million.
Information on underlying results adjustments is disclosed in the Directors' Report.
The EBITDA margin disclosed in the tables above is calculated based on toll revenue and other revenue generated by the business
from external customers which excludes construction services revenue accounted for under IFRIC 12.
Warnow Tunnel’s assets are $242.4 million (2022: $241.5 million) and liabilities are $220.1 million (2022: $218.8 million). Dulles
Greenway’s assets are $2,226.6 million (2022: $2,297.9 million) and liabilities are $1,596.5 million (2022: $1,615.0 million).
ATLAS ARTERIA ANNUAL REPORT 2023 | 97
NOTES TO THE FINANCIAL REPORTSFINANCIAL REPORTREMUNERATION REPORTDIRECTORS’ REPORTSFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS 5 Distributions
Distributions paid
Dividend paid on 5 October 2023 (a)
Dividend paid on 6 April 2023 (b)
Dividend paid on 3 October 2022 (c)
Dividend paid on 31 March 2022 (d)
Total distributions paid
Distributions paid
Dividend per stapled security paid on 5 October 2023 (a)
Dividend per stapled security paid on 6 April 2023 (b)
Dividend per stapled security paid on 3 October 2022 (c)
Dividend per stapled security paid on 31 March 2022 (d)
Total distributions paid
ALX
ATLAX Group
Year ended
31 Dec 2023
$m
Year ended
31 Dec 2022
$m
Year ended
31 Dec 2023
$m
Year ended
31 Dec 2022
$m
290.2
290.2
–
–
580.4
–
–
191.8
196.6
388.4
–
–
–
–
–
–
–
–
–
–
Cents per
stapled
security
Cents per
stapled
security
Cents per
stapled
security
Cents per
stapled
security
20.0
20.0
–
–
40.0
–
–
20.0
20.5
40.5
–
–
–
–
–
–
–
–
–
–
(a) The dividend paid on 5 October 2023 comprised an ordinary dividend of 20.0 cents per stapled security (‘cps’). The dividend was paid in full by ATLIX.
(b) The dividend paid on 6 April 2023 comprised an ordinary dividend of 20.0 cps. The dividend was paid in full by ATLIX.
(c) The dividend paid on 3 October 2022 comprised an ordinary dividend of 20.0 cps. The dividend was paid in full by ATLIX.
(d) The dividend paid on 31 March 2022 comprised an ordinary dividend of 20.5 cps. The dividend was paid in full by ATLIX.
98 | ATLAS ARTERIA ANNUAL REPORT 2023
NOTES TO THE FINANCIAL REPORTS 6 Earnings per stapled security
Basic earnings per stapled security
Basic earnings per stapled security is determined by dividing the profit or loss 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
Attributable to ATLIX
securityholders
Attributable to ATLAX
securityholders
Year ended
31 Dec 2023
Cents
Year ended
31 Dec 2022
Cents
Year ended
31 Dec 2023
Cents
Year ended
31 Dec 2022
Cents
22.3
22.3
$m
24.6
24.6
$m
(4.6)
(4.6)
$m
(2.4)
(2.4)
$m
Earnings/(loss) used in the calculation of basic and diluted profit/(loss)
per ATLIX/ATLAX share
323.5
266.9
(67.2)
(25.9)
Number
Number
Number
Number
Weighted average number of shares used in calculation of basic
earnings/(loss) per ATLIX/ATLAX share
1,450,833,707 1,084,244,598
1,450,833,707 1,084,244,598
Adjustment for employee performance rights (a)
1,776,578
1,508,641
1,776,578
1,508,641
Weighted average number of shares used in calculation of diluted
earnings/(loss) per ATLIX/ATLAX share
1,452,610,285
1,085,753,239
1,452,610,285
1,085,753,239
(a) Diluted earnings per ALX stapled security are adjusted for employee performance rights. Refer to note 24 for details.
During the year ended 31 December 2022, the Groups undertook a $3,098.4 million Equity Raise comprising a fully underwritten 1 for 1.95
pro-rata accelerated non-renounceable entitlement offer to fund the Chicago Skyway acquisition. The Equity Raise resulted in the issuance
of 491.8 million new fully paid ordinary stapled securities. The new stapled securities were issued at a price of $6.30 per security.
7 Finance costs
Interest on debt
Mark to market gain on derivatives
Hedge ineffectiveness arising from the deal contingent premium
on the swap for the Chicago Skyway acquisition
Amortisation of issue cost on borrowings from financial institutions
Mark to market gain on the Chicago Skyway short-dated outright
foreign exchange forward contracts
FX impact of significant transactions during period (a)
Net foreign exchange (gains)/losses
Other interest costs
Finance costs
ALX
ATLAX Group
Year ended
31 Dec 2023
$m
Year ended
31 Dec 2022
$m
Year ended
31 Dec 2023
$m
Year ended
31 Dec 2022
$m
92.7
–
–
0.2
–
–
1.5
2.1
96.5
87.1
(4.5)
10.9
0.2
(24.0)
21.2
(1.6)
1.7
91.0
–
–
–
–
–
–
2.0
–
2.0
–
–
10.9
–
–
–
(0.3)
0.2
10.8
(a) On 1 December 2022, ATLAX Group acquired a 66.7% interest in CCPI which indirectly owns 100% of the concessionaire of the Chicago Skyway. The FX impacts of the
foreign currency held as part of the transaction are disclosed within finance costs. For further information on the acquisition, refer to Note 9.
ATLAS ARTERIA ANNUAL REPORT 2023 | 99
NOTES TO THE FINANCIAL REPORTSFINANCIAL REPORTREMUNERATION REPORTDIRECTORS’ REPORTSFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS 8 Income tax
The income tax expense or benefit for the year is the amount of income taxes payable or recoverable on the current year’s
taxable income or loss based on the national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and
liabilities attributable to temporary differences 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, deferred income tax is not accounted for if it arises from the initial
recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects
neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been
enacted or substantively enacted by the balance sheet date and are expected to apply when the related deferred tax asset is
realised or the deferred 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.
Income tax 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 expense
Income tax expense
Current tax
Deferred tax
Total income tax expense
(b) Reconciliation of income tax 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
Non-deductible cost of hedging
Share of (profit)/loss of equity accounted investments
Temporary differences not brought to account
Deferred tax assets on taxable losses not brought to account
Temporary differences not previously recognised
Unused tax losses recouped to reduce current tax expense
Other items
Aggregate income tax expense
(c) Tax losses
ALX
ATLAX Group
Year ended
31 Dec 2023
$m
Year ended
31 Dec 2022
$m
Year ended
31 Dec 2023
$m
Year ended
31 Dec 2022
$m
0.2
3.5
3.7
260.0
78.0
13.5
3.7
–
(97.7)
(0.7)
6.4
–
(0.2)
0.7
3.7
0.2
3.0
3.2
244.2
73.3
21.5
5.2
3.3
(100.9)
–
5.2
0.7
(4.2)
(0.9)
3.2
–
–
–
(67.2)
(20.2)
–
2.5
–
15.4
(0.7)
3.3
–
–
(0.3)
–
0.1
–
0.1
(25.8)
(7.7)
–
3.6
3.3
4.1
0.1
1.7
–
(4.1)
(0.9)
0.1
Unused tax losses for which no deferred tax asset has been recognised
Potential tax benefit of unused tax losses
434.0
104.4
408.0
96.5
384.8
91.4
359.8
84.1
There was no current or deferred tax recognised directly to equity.
Unrecognised tax losses include tax losses that arose in the U.S. between 1 January 2013 and 31 December 2017 of US$158.6 million
which expire after 20 years and tax losses that arose in Luxembourg between 1 January 2017 and 31 December 2018 of €23.9 million
which expire after 17 years.
100 | ATLAS ARTERIA ANNUAL REPORT 2023
NOTES TO THE FINANCIAL REPORTS Deferred tax assets and liabilities
The Groups exercise judgement in assessing carried forward tax losses that are highly probably to be utilised.
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
$m
Fixed assets/
intangibles
$m
Provisions
$m
Other
$m
Total
$m
Current and
prior year
losses
$m
Deferred tax relates
to the following:
Opening balance at
1 January 2022
(Charged)/credited
to profit/(loss)
Foreign exchange
movement
Losses recognised
Closing balance at
31 December 2022
(Charged)/credited
to profit/(loss)
Foreign exchange
movement
Losses recognised
Closing balance at
31 December 2023
35.7
(4.9)
0.3
4.2
35.3
(2.4)
1.1
0.2
(36.8)
(1.4)
(2.1)
–
(40.3)
(1.2)
(0.1)
–
34.2
(41.6)
0.6
0.2
–
–
0.8
–
0.1
–
0.9
(5.7)
(1.2)
(0.1)
–
(7.0)
(0.1)
(0.2)
–
(7.3)
(6.2)
(7.3)
(1.9)
4.2
(11.2)
(3.7)
0.9
0.2
(13.8)
–
(4.1)
–
4.1
–
–
–
–
–
Total
$m
–
(4.1)
–
4.1
–
–
–
–
–
Deferred tax asset
The balance comprises temporary differences attributable to:
– Current and prior year losses
– Provisions
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
ALX
ATLAX Group
Year ended
31 Dec 2023
$m
Year ended
31 Dec 2022
$m
Year ended
31 Dec 2023
$m
Year ended
31 Dec 2022
$m
34.2
0.9
35.1
(14.7)
20.4
(41.6)
(7.3)
(48.9)
14.7
(34.2)
35.3
0.8
36.1
(14.3)
21.8
(40.3)
(7.0)
(47.3)
14.3
(33.0)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
ATLAS ARTERIA ANNUAL REPORT 2023 | 101
NOTES TO THE FINANCIAL REPORTSFINANCIAL REPORTREMUNERATION REPORTDIRECTORS’ REPORTSFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS Toll road businesses
9 Investments accounted for using the equity method
Associates and joint ventures
Associates are entities over which the Groups have significant influence but not control or joint control. Joint ventures are joint
arrangements in which the Groups have joint control and rights to the net assets of the arrangement. The Groups’ investments
in associates and joint ventures are accounted for using the equity method.
The equity accounted investments are initially recognised at cost, including transaction costs. The Groups’ investment in associates
and joint ventures includes the fair value of goodwill (net of any accumulated impairment loss) identified on acquisition.
Subsequent to initial recognition, the Groups’ share of investees’ post-acquisition profit or loss and other comprehensive income
is recognised in profit or loss and other comprehensive income respectively. The post-acquisition results are adjusted against the
carrying amount of the investment. Distributions received/receivable from investees reduce the carrying amount of the investment.
When the Groups’ cumulative share of losses in an associate or joint venture equals or exceeds their interest in the investee,
including any long-term interests that, in substance, form part of the Groups’ net investment in the associate or joint venture, the
Groups do not recognise their share of further losses unless they have incurred obligations or made payments on behalf of the
associate or joint venture.
Unrealised gains on transactions between the Groups and their associates or joint ventures are eliminated to the extent of the
Groups’ interest in the associate or joint venture. Unrealised losses are also eliminated unless the transaction provides evidence
of an impairment of the asset transferred. Accounting policies of associates and joint ventures 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 the recoverable amount of the net investment in the
associate or joint venture. 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.
The net Investments in an associate or joint venture that have suffered an impairment are reviewed for possible reversal of the
impairment at the end of each reporting period. Impairment losses are 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 amount.
Investments in associates
Investments in joint ventures
Investments accounted for using the equity method
ALX
ATLAX Group
As at
31 Dec 2023
$m
As at
31 Dec 2022
$m
As at
31 Dec 2023
$m
As at
31 Dec 2022
$m
2,572.7
2,524.5
5,097.2
2,583.6
2,766.5
5,350.1
90.2
2,524.5
2,614.7
97.1
2,766.5
2,863.6
The shareholder loans with CCPI are held by ATLIX Group and do not form part of the equity accounted investment. The shareholder
loans are presented in the Statements of Financial Position as financial assets at amortised cost.
102 | ATLAS ARTERIA ANNUAL REPORT 2023
NOTES TO THE FINANCIAL REPORTS Information relating to material associates and joint ventures is set out below:
Carrying amounts
Country of
Incorporation/
Principal Place
of Business
Name of
Entity
MAF2
Luxembourg
CCPI
USA
TRIP II
USA
Principal Activity
Investment in
toll road network
located in the east
of France (APRR
and ADELAC)
Investment in
the Chicago
Skyway toll road
located south of
Chicago, USA
Investment in the
Dulles Greenway
toll road located
in northern
Virginia, USA
ALX Economic
interest
As at
31 Dec 2023
and
31 Dec 2022
ALX
As at
31 Dec 2023
$m
As at
31 Dec 2022
$m
ATLAX Group
Economic
Interest
As at
31 Dec 2023
and
31 Dec 2022
ATLAX Group
As at
31 Dec 2023
$m
As at
31 Dec 2022
$m
62.3%
2,572.7
2,583.6
–
–
–
66.7%
2,524.5
2,766.5
66.7%
2,524.5
2,766.5
–
–
–
13.4%
90.2
97.1
All associates and joint ventures have 31 December year end reporting requirements except for MAF2 which has a 31 March year end.
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.
On 1 December 2022, ATLAX Group acquired a 66.7% interest in CCPI which indirectly owns 100% of the concessionaire of the Chicago
Skyway. ATLAX Group’s investment in CCPI is classified as a joint venture as any decision made with regard to relevant activities
requires an affirmative vote of the other party to the arrangement.
The ATLAX Group has a 13.4% interest in TRIP II, the concessionaire for Dulles Greenway, which 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.
Movement in carrying amounts
Carrying amount at the beginning of the year
Share of profit/(loss) after income tax
Share of other comprehensive (loss)/income after income tax
Distributions received/receivable
Investment in CCPI
Transaction costs
Foreign exchange movement
Carrying amount at the end of the year
ALX
ATLAX Group
Year ended
31 Dec 2023
$m
Year ended
31 Dec 2022
$m
Year ended
31 Dec 2023
$m
Year ended
31 Dec 2022
$m
5,350.1
325.6
(12.6)
(650.4)
–
–
84.5
5,097.2
2,591.8
336.4
42.7
(400.0)
2,736.9
26.6
15.7
2,863.6
(51.5)
–
(205.5)
–
–
8.1
100.0
(13.6)
–
–
2,736.9
26.6
13.7
5,350.1
2,614.7
2,863.6
ATLAS ARTERIA ANNUAL REPORT 2023 | 103
NOTES TO THE FINANCIAL REPORTSFINANCIAL REPORTREMUNERATION REPORTDIRECTORS’ REPORTSFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS Summarised financial information for material associates and joint ventures
The following tables summarise financial information for those associates and joint ventures that are material to Atlas Arteria and
ATLAX Group. The information disclosed represents the underlying financial position and comprehensive income of the investee. They
have been amended to reflect adjustments made by Atlas Arteria and the ATLAX Group when using the equity method, including fair
value adjustments and modifications for differences in accounting policy. MAF2 is prepared on a proportionate consolidated basis
reflecting MAF2 proportionate ownership of their underlying investments. The financial information has been prepared including fair
value adjustments on a gross basis.
The presentation of financial information for the year ended 31 December 2022 has been amended from the net approach to fair value
adjustments to the gross approach to enhance the usefulness of the information for users. Adjustments include items recognised
directly in equity of underlying businesses, impacts incurred by the Atlas Arteria and ATLAX Groups for hedges at acquisition and
other adjustments including foreign exchange.
Summarised Statement
of Financial Position
Current assets
Cash and cash equivalents
Other current assets
Total current assets
Total non-current assets
Current liabilities
Financial liabilities
Other current liabilities
Total current liabilities
Non current liabilities
Financial liabilities
Other non current liabilities
Total non current liabilities
Net assets
Reconciliation to carrying amounts:
Opening net assets 1 January
Profit/(loss) for the year
Other comprehensive (loss)/income
for the year
Distributions paid/payable
Foreign exchange and other reserves
Closing net assets
ATLIX Group’s share in %
ATLIX Group’s share of net assets
ATLAX Group’s share in %
ATLAX Group’s share of net assets
Adjustments
Atlas Arteria’s carrying amount
ATLAX Group’s carrying amount
MAF2 (a)
CCPI
TRIP II
As at
31 Dec 2023
$m
As at
31 Dec 2022
$m
As at
31 Dec 2023
$m
As at
31 Dec 2022
$m
As at
31 Dec 2023
$m
As at
31 Dec 2022
$m
1,506.8
12,059.2
1,567.1
12,271.2
55.3
14.5
69.8
31.1
14.7
45.8
7,253.8
7,393.8
99.5
2,134.3
95.7
2,209.6
(1,445.0)
(1,955.4)
(8,225.2)
3,895.8
(7,975.8)
3,907.1
3,907.1
598.4
(20.2)
(714.3)
124.8
3,895.8
62.3%
2,426.5
–
–
146.2
2,572.7
–
3,943.7
528.1
79.2
(653.0)
9.1
3,907.1
62.3%
2,433.5
–
–
150.1
2,583.6
–
(858.8)
(43.3)
(902.1)
(1,636.5)
(960.8)
(2,597.3)
3,824.2
4,187.2
(66.9)
–
(308.2)
12.1
3,824.2
–
–
66.7%
2,549.5
(25.0)
2,524.5
2,524.5
(603.5)
(43.6)
(647.1)
(1,623.3)
(982.0)
(2,605.3)
4,187.2
4,182.8
(6.2)
–
–
10.6
4,187.2
–
–
66.7%
2,791.5
(25.0)
2,766.5
2,766.5
(103.7)
(101.9)
(1,458.7)
671.4
(1,480.2)
723.2
723.2
(51.5)
–
–
(0.3)
671.4
–
–
13.4%
90.2
–
–
90.2
744.3
(70.6)
–
–
49.5
723.2
–
–
13.4%
97.1
–
–
97.1
(a) MAF2 proportionately consolidates its share of the results of APRR and ADELAC.
104 | ATLAS ARTERIA ANNUAL REPORT 2023
NOTES TO THE FINANCIAL REPORTS Summarised Statement of
Comprehensive Income
Revenue
Depreciation and amortisation
Interest income
Interest expense
Income tax expense
Profit/(loss) for the year
Other comprehensive (loss)/income
for the year
ATLIX Group’s share of profit
ATLAX Group’s share of loss
Adjustments
Atlas Arteria’s share of profit/(loss)
ATLAX Group’s share of loss
Atlas Arteria's distributions
received/receivable
ATLAX Group's distributions
received/receivable
MAF2 (a)
CCPI
TRIP II
Year ended
31 Dec 2023
$m
Year ended
31 Dec 2022
$m
Year ended
31 Dec 2023
$m
Year ended
31 Dec 2022
$m
Year ended
31 Dec 2023
$m
Year ended
31 Dec 2022
$m
2,677.0
2,416.7
598.4
(20.2)
372.7
–
(2.5)
370.2
–
444.9
–
528.1
79.2
328.9
–
11.6
340.5
–
400.0
–
185.8
(96.1)
3.7
(144.0)
(11.9)
(66.9)
–
–
(44.6)
–
(44.6)
(44.6)
205.5
205.5
13.2
(6.3)
0.3
(11.5)
(0.8)
(6.2)
–
–
(4.1)
–
(4.1)
(4.1)
–
–
110.4
98.1
(51.5)
(70.6)
–
–
(6.9)
–
–
(6.9)
–
–
–
–
(9.5)
–
–
(9.5)
–
–
(a) MAF2 proportionately consolidates its share of the results of APRR and ADELAC.
ATLAS ARTERIA ANNUAL REPORT 2023 | 105
NOTES TO THE FINANCIAL REPORTSFINANCIAL REPORTREMUNERATION REPORTDIRECTORS’ REPORTSFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS 10 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 operated by
subsidiaries. Tolling concessions relating to non-controlled equity accounted investments are recognised as a component of the
investments accounted for using the equity method.
Tolling concessions have a finite useful life as defined by the terms of the concession arrangements and are carried at cost which
represents the fair value of the consideration paid on acquisition less accumulated amortisation and any impairment losses.
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 Group
ADELAC
Chicago Skyway
Estimated useful life
Period to February 2056
Period to September 2053
Period to November 2035 (APRR)
Period to September 2036 (AREA)
Period to February 2068 (A79)
Period to December 2060
Period to January 2104
There has been no change to the estimated useful lives during the year.
In relation to APRR, ADELAC and Chicago Skyway, the tolling concessions are not recognised as intangible assets in the statement
of financial position of Atlas Arteria but instead form part of the investments accounted for using the equity method. For the ATLAX
Group the tolling concessions for Dulles Greenway and Chicago Skyway are not recognised as intangible assets in the statement
of financial position but instead form part of the investments accounted for using the equity method. The amortisation of tolling
concessions in relation to these non-controlled investments is included in the Groups’ share of the investee’s profit or loss.
Impairment
Tolling concessions recognised as intangible assets with finite useful lives, including tolling concessions recognised as a
component of equity accounted investments, 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 9 for additional detail on the accounting policy for the impairment of non-financial assets.
Balance at the beginning of the year
Amortisation of tolling concession
Foreign exchange movement
Balance at the end of the year
ALX
ATLAX Group
As at
31 Dec 2023
$m
As at
31 Dec 2022
$m
As at
31 Dec 2023
$m
As at
31 Dec 2022
$m
2,167.9
(67.4)
3.0
2,103.5
2,101.4
(64.3)
130.8
2,167.9
–
–
–
–
–
–
–
–
106 | ATLAS ARTERIA ANNUAL REPORT 2023
NOTES TO THE FINANCIAL REPORTS 11 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 and joint ventures is included in the carrying amount of the equity
accounted investments.
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 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.
Goodwill relates to the Group’s interest in the Warnow Tunnel. Refer to notes 9 and 10 for additional details 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 2023
$m
As at
31 Dec 2022
$m
As at
31 Dec 2023
$m
As at
31 Dec 2022
$m
13.8
0.5
14.3
13.7
0.1
13.8
–
–
–
–
–
–
ATLAS ARTERIA ANNUAL REPORT 2023 | 107
NOTES TO THE FINANCIAL REPORTSFINANCIAL REPORTREMUNERATION REPORTDIRECTORS’ REPORTSFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS Capital and borrowings
12 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 on hand
Cash and cash equivalents
Non-current
Restricted cash
Restricted cash
ALX
ATLAX Group
As at
31 Dec 2023
$m
As at
31 Dec 2022
$m
As at
31 Dec 2023
$m
As at
31 Dec 2022
$m
305.3
305.3
204.9
204.9
275.9
275.9
215.6
215.6
182.9
182.9
–
–
62.0
62.0
–
–
Cash and cash equivalents
During the year cash on hand was held in bank accounts earning money market rates of interest between 0.00% and 5.45%
(2022: -1.26% and 4.02%) per annum.
Cash equivalents include TRIP II’s money market deposits paying interest between 5.21% and 5.25% (2022: 0.01% and 4.20%) per annum.
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 16.
108 | ATLAS ARTERIA ANNUAL REPORT 2023
NOTES TO THE FINANCIAL REPORTS 13 Debt at amortised cost
Financial liabilities
Financial liabilities are initially recorded at fair value less directly attributable transaction costs and subsequently measured at
amortised cost using the effective interest method.
Current
Non-recourse TRIP II bonds and accrued interest thereon
Total current debt at amortised cost
Non-current
Non-recourse TRIP II bonds and accrued interest thereon
Non-recourse Warnow Tunnel borrowings
Total non-current debt at amortised cost
ALX
ATLAX Group
As at
31 Dec 2023
$m
As at
31 Dec 2022
$m
As at
31 Dec 2023
$m
As at
31 Dec 2022
$m
101.4
101.4
1,411.5
182.1
1,593.6
100.1
100.1
1,433.0
176.4
1,609.4
–
–
–
–
–
–
–
–
–
–
Atlas Arteria has complied with all externally imposed capital requirements that it was subject to during the year ended
31 December 2023.
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.
In May 2023 the Groups executed a $50.0 million working capital facility. The facility has a term of three years and is unsecured.
The borrowers under the facility are Atlas Arteria Holdings Australia Pty Ltd, Green Bermudian Holdings Limited and MIBL
Finance (Luxembourg) Sarl. Both ATLIX and ATLAX are jointly and severally liable for the facility. At 31 December 2023 the facility
remained undrawn.
(a) Non-recourse TRIP II bonds
The Atlas Arteria consolidated financial statements include 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 to settle these liabilities.
All of these bonds are in the form of fixed interest rate senior bonds, with US$35.0 million (2022: US$35.0 million) of interest bonds
and US$1,085.3 million (2022: US$1,086.1 million) of zero coupon bonds. Tranches of the bonds have a maturity dates ranging from
2024 to 2056.
(b) Non-recourse Warnow Tunnel borrowings
The Atlas Arteria consolidated financial statements include 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 to settle these liabilities.
Warnow Tunnel has a debt facility of €115.0 million (fixed and variable tranches of, €86.2 million and €28.8 million, respectively)
maturing in December 2049.
ATLAS ARTERIA ANNUAL REPORT 2023 | 109
NOTES TO THE FINANCIAL REPORTSFINANCIAL REPORTREMUNERATION REPORTDIRECTORS’ REPORTSFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS 14 Contributed equity
Ordinary shares
Contributed equity
On issue at the beginning of the year
Issue of securities
Transaction costs associated with issue of securities
On issue at the end of the year
Attributable to ATLIX
securityholders
Attributable to ATLAX
securityholders
As at
31 Dec 2023
$m
As at
31 Dec 2022
$m
As at
31 Dec 2023
$m
As at
31 Dec 2022
$m
3,994.0
3,994.0
3,994.0
–
–
3,994.0
3,994.0
3,994.0
3,747.8
251.3
(5.1)
3,994.0
2,991.0
2,991.0
2,991.0
–
–
2,991.0
2,991.0
2,991.0
202.0
2,847.1
(58.1)
2,991.0
During the year ended 31 December 2022, the Groups undertook a $3,098.4 million Equity Raise comprising a fully underwritten 1 for
1.95 pro-rata accelerated non-renounceable entitlement offer to fund the Chicago Skyway acquisition. The Equity Raise resulted in the
issuance of 491.8 million new fully paid ordinary stapled securities. The new stapled securities were issued at a price of
$6.30 per security.
On issue at the beginning of the year
Issue of securities
On issue at the end of the year
Attributable to ATLIX
securityholders
Attributable to ATLAX
securityholders
As at
31 Dec 2023
Number of
shares
As at
31 Dec 2022
Number of
shares
As at
31 Dec 2023
Number of
shares
As at
31 Dec 2022
Number of
shares
1,450,833,707
959,018,226
1,450,833,707
959,018,226
–
491,815,481
–
491,815,481
1,450,833,707 1,450,833,707
1,450,833,707 1,450,833,707
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.
110 | ATLAS ARTERIA ANNUAL REPORT 2023
NOTES TO THE FINANCIAL REPORTS 15 Reserves
Share-based payments
Share-based compensation benefits are provided to employees via the short-term incentive (STI) Plan, the employee equity
(’EE’) Plan and the long-term incentive (LTI) Plan.
Securities (equal to 50% of the total value of STI awarded to Executives) 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 benefits expense with a corresponding
increase in equity. The total amount expensed is determined based on the probability of the vesting conditions 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 benefits expense with a corresponding increase in equity. The total amount expensed is
determined based on the probability of the vesting conditions being met.
The fair value of performance rights granted under the LTI Plan is recognised as an employee benefits expense with a
corresponding increase in equity. The total amount 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, based
on the probability of the vesting conditions being met.
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 and non-market performance conditions. It recognises the
impact of the revision to original estimates, if any, in profit or loss, with a corresponding adjustment to equity.
Associates
The associates reserve includes the share of the associates’ cash flow hedge and post-employment benefit obligations reserves.
The cash flow hedge reserve is used to recognise the associates’ effective portion of gains or losses on derivatives that are
designated and qualify as cash flow hedges. Amounts are subsequently recognised by the associates as a component of
borrowing costs when the hedged items affect the income statement.
The post-employment benefit obligations reserve is used to recognise the associates’ actuarial gains and losses resulting from
the effect of changes in actuarial assumptions and from experience adjustments. Amounts are not reclassified by the associates
to profit or loss in subsequent periods.
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 or reclassified to profit or loss when the hedged transaction affects profit or loss.
Foreign currency translation reserve
Refer to note 26 for the policy regarding foreign currency translation.
ATLAS ARTERIA ANNUAL REPORT 2023 | 111
NOTES TO THE FINANCIAL REPORTSFINANCIAL REPORTREMUNERATION REPORTDIRECTORS’ REPORTSFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS Balance of reserves
Foreign currency translation reserve
Associates reserve
Share-based payments reserve
Balance at the end of the year
Movements of reserves
Foreign currency translation reserve
Balance at the beginning of the year
Exchange differences on translation of foreign operations
Loss on net investment hedge
Balance at the end of the year
Associates reserve
Balance at the beginning of the year
Share of other comprehensive (loss)/income of equity
accounted investments
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
Transfer of hedging gains to carrying value of equity
accounted investment
Balance at the end of the year
Share-based payments reserve
Balance at the beginning of the year
Employee equity based awards (a)
Balance at the end of the year
Attributable to ATLIX
securityholders
Attributable to ATLAX
securityholders
As at
31 Dec 2023
$m
As at
31 Dec 2022
$m
As at
31 Dec 2023
$m
As at
31 Dec 2022
$m
73.5
30.1
4.3
107.9
2.6
42.7
3.9
49.2
49.3
–
4.0
53.3
40.8
–
2.0
42.8
Attributable to ATLIX
securityholders
Attributable to ATLAX
securityholders
As at
31 Dec 2023
$m
As at
31 Dec 2022
$m
As at
31 Dec 2023
$m
As at
31 Dec 2022
$m
2.6
75.7
(4.8)
73.5
42.7
(12.6)
30.1
–
–
–
–
3.9
0.4
4.3
(44.1)
46.7
–
2.6
–
42.7
42.7
–
–
–
–
4.0
(0.1)
3.9
40.8
8.5
–
49.3
–
–
–
–
–
–
–
2.0
2.0
4.0
27.4
13.4
–
40.8
–
–
–
–
25.0
(25.0)
–
–
2.0
2.0
(a) Expenses arising from share-based benefits relating to STIs and LTIs attributable to ATLIX securityholders as at 31 December 2023: $0.4 million (2022: $(0.1) million).
Expenses arising from share-based benefits relating to STIs and LTIs attributable to ATLAX securityholders as at 31 December 2023: $2.0 million (2022: $2.0 million).
112 | ATLAS ARTERIA ANNUAL REPORT 2023
NOTES TO THE FINANCIAL REPORTS 16 Financial risk and capital management
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.
Derivatives
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 under the Market Risk section 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 hedging instruments. If
derivatives are not part of a designated hedging relationship, any changes in their fair value are recognised immediately in the
Consolidated Statement of Comprehensive Income.
Hedge effectiveness
Hedge effectiveness is assessed at the inception of the hedging relationship, and on an ongoing basis, to ensure that the qualifying
criteria for hedge accounting are met.
For hedges of foreign currency transactions, the Groups enter into hedging relationships where the critical terms of the hedging
instrument and the hedged item match or are closely aligned. The Groups therefore perform a qualitative assessment of hedge
effectiveness. In calculating the change in the value of the hedged item for the purpose of measuring hedge ineffectiveness, the
Groups use the hypothetical derivative method, which matches the critical terms of the derivative and the hedged item.
In hedges of foreign currency transactions, ineffectiveness may arise if the timing of the forecast transaction changes from what was
originally estimated, or if there are changes in the credit risk of the Groups or the derivative counterparties.
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 from time to time may 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 9 Euro cents (2022: 6 Euro cents)
− AUD/USD exchange rate increased/decreased by 14 US cents (2022: 10 US cents)
− AUD/GBP exchange rate increased/decreased by 9 UK pence (2022: 5 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.
ATLAS ARTERIA ANNUAL REPORT 2023 | 113
NOTES TO THE FINANCIAL REPORTSFINANCIAL REPORTREMUNERATION REPORTDIRECTORS’ REPORTSFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS Foreign exchange risk
Appreciation in Australian Dollar
Depreciation in Australian Dollar
P&L
2023
$m
(5.5)
0.1
(5.4)
P&L
2022
$m
(3.5)
1.0
(2.5)
Equity
2023
$m
Equity
2022
$m
–
–
–
–
–
–
P&L
2023
$m
8.3
(0.1)
8.2
P&L
2022
$m
4.4
(1.3)
3.1
Equity
2023
$m
Equity
2022
$m
–
–
–
–
–
–
Foreign exchange risk
Appreciation in Australian Dollar
Depreciation in Australian Dollar
P&L
2023
$m
(5.0)
0.1
(4.9)
P&L
2022
$m
(1.2)
1.0
(0.2)
Equity
2023
$m
Equity
2022
$m
–
–
–
–
–
–
P&L
2023
$m
7.6
(0.1)
7.5
P&L
2022
$m
1.6
(1.3)
0.3
Equity
2023
$m
Equity
2022
$m
–
–
–
–
–
–
ALX
Total financial assets (a)
Total financial liabilities (b)
Total
ATLAX Group
Total financial assets (a)
Total financial liabilities (b)
Total
(a) Financial assets include cash, cash equivalents, restricted cash, receivables, financial assets at amortised cost 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 financial instruments 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 143 bps (2022: 126 bps)
− Bank bill swap reference rate (EURIBOR 90 days) increased/decreased by 83 bps (2022: 52 bps)
− Bank bill swap reference rate (USD SOFR 90 days) increased/decreased by 227 bps (2022: 158 bps)
− Bank bill swap reference rate (EURIBOR 6 months) increased/decreased by 94 bps (2022: 70 bps)
− Bank bill swap reference rate (AUD BBSW 6 months) increased/decreased by 145 bps (2022: 128 bps)
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.
Increase in interest rates
Decrease in interest rates
Interest rate risk
P&L
2023
$m
9.7
(0.4)
9.3
P&L
2023
$m
2.6
–
2.6
P&L
2022
$m
6.8
(0.3)
6.5
Equity
2023
$m
Equity
2022
$m
–
–
–
–
–
–
Increase in interest rates
Interest rate risk
P&L
2022
$m
0.7
–
0.7
Equity
2023
$m
Equity
2022
$m
–
–
–
–
–
–
P&L
2023
$m
(9.7)
0.4
(9.3)
P&L
2023
$m
(2.6)
–
(2.6)
P&L
2022
$m
(6.8)
0.3
(6.5)
Equity
2023
$m
Equity
2022
$m
–
–
–
–
–
–
Decrease in interest rates
P&L
2022
$m
(0.7)
–
(0.7)
Equity
2023
$m
Equity
2022
$m
–
–
–
–
–
–
ALX
Total financial assets
Total financial liabilities
Total
ATLAX Group
Total financial assets
Total financial liabilities
Total
114 | ATLAS ARTERIA ANNUAL REPORT 2023
NOTES TO THE FINANCIAL REPORTS Credit risk
The Groups’ exposure to credit risk arises from deposits with banks and financial institutions as well as receivables from associates,
joint ventures and governments. The Groups limit their exposure relating to cash balances by only dealing with well-established
financial institutions of high-quality credit standing. With the exception of the transactions in the normal course of business between
the ATLIX and ATLAX Groups, the Groups transact with independent 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 that may be subject to credit risk.
2023
Cash and cash equivalents
Restricted cash
Receivables – current
Financial assets at amortised cost
Tax receivables
Total
2022
Cash and cash equivalents
Restricted cash
Receivables – current
Financial assets at amortised cost
Tax receivables
Total
Financial
institutions
$m
ALX
Corporates
and others
$m
305.3
204.9
–
–
–
510.2
–
–
36.4
244.4
0.3
281.1
Financial
institutions
$m
ALX
Corporates
and others
$m
275.9
215.6
–
–
–
491.5
–
–
7.5
245.8
1.7
255.0
Financial
institutions
$m
ATLAX Group
Corporates
and others
$m
182.9
–
–
–
–
182.9
–
–
72.0
–
0.3
72.3
Financial
institutions
$m
ATLAX Group
Corporates
and others
$m
62.0
–
–
–
–
62.0
–
–
6.3
–
1.7
8.0
Total
$m
305.3
204.9
36.4
244.4
0.3
791.3
Total
$m
275.9
215.6
7.5
245.8
1.7
746.5
Total
$m
182.9
–
72.0
–
0.3
255.2
Total
$m
62.0
–
6.3
–
1.7
70.0
Financial institutions
The credit risk with 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.
ATLAS ARTERIA ANNUAL REPORT 2023 | 115
NOTES TO THE FINANCIAL REPORTSFINANCIAL REPORTREMUNERATION REPORTDIRECTORS’ REPORTSFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS 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 cash outflows for financial liabilities at the balance sheet date.
Financial Liabilities
2023
Debt at amortised cost (b)
Payables
Total
2022
Debt at amortised cost (b)
Payables
Total
Financial Liabilities
2023
Payables
Total
2022
Payables
Total
Less than
1 year
$m
1-2 years
$m
2-3 years
$m
3-5 years
$m
Greater
than
5 years
$m
Total
contractual
cash flows
$m
Carrying
amount
$m
Fair Value (a)
$m
ALX
101.4
18.8
120.2
100.1
25.0
125.1
101.5
4.6
106.1
100.2
3.5
103.7
103.0
2.5
105.5
101.7
6.0
107.7
214.3
7.0
221.3
208.1
14.3
222.4
3,491.7
98.1
3,589.8
3,598.1
107.7
3,705.8
ATLAX Group
4,011.9
131.0
4,142.9
4,108.2
156.5
4,264.7
1,695.0
1,585.1
79.9
79.9
1,774.9
1,665.0
1,709.5
85.5
1,795.0
1,569.0
85.5
1,654.5
Less than
1 year
$m
1-2 years
$m
2-3 years
$m
3-5 years
$m
Greater
than
5 years
$m
Total
contractual
cash flows
$m
Carrying
amount
$m
Fair Value (a)
$m
7.0
7.0
14.0
14.0
0.6
0.6
0.6
0.6
0.7
0.7
0.7
0.7
1.1
1.1
1.3
1.3
–
–
0.4
0.4
9.4
9.4
17.0
17.0
9.3
9.3
17.0
17.0
9.3
9.3
17.0
17.0
(a) Fair value approximates carrying amount for Payables.
(b) Includes consolidated debt held by TRIP II and Warnow Tunnel that is non-recourse to the Groups.
Fair value measurement of financial instruments
The fair value measurements of financial assets and liabilities are categorised within the following fair value hierarchy:
(i) Level 1: Quoted prices (unadjusted) in active markets for identical assets or 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 may have derivative financial instruments that are measured at fair value on a recurring basis. These instruments are
entered into to minimise potential variations in cash flows resulting from fluctuations in interest rates and foreign currency and their
impact on 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 using Level 2 inputs and are revalued using externally provided dealer quotes.
The Groups’ policy is to recognise transfers between levels of the fair value hierarchy as at the end of the reporting period.
116 | ATLAS ARTERIA ANNUAL REPORT 2023
NOTES TO THE FINANCIAL REPORTS 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 either: the interest receivable/
payable is 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 and financial liabilities approximated their
carrying amounts at 31 December 2023. There are no financial assets or debt at amortised cost in the ATLAX Group where the
carrying value differs materially from their carrying value.
Financial assets at amortised cost
Shareholder loan with CCPI
Debt at amortised cost
Non-recourse TRIP II bonds
Non-recourse Warnow Tunnel borrowings
Capital management
The Groups’ capital management objectives are to:
Carrying
amount
$m
Fair value
$m
244.4
238.4
Carrying
amount
$m
1,512.9
182.1
Fair value
$m
1,455.6
129.5
− Ensure sufficient capital resources to support the Groups’ business, operational and growth requirements;
− Safeguard the Groups’ ability to continue as a going concern; and
− 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
as at 31 December 2023 or 31 December 2022.
ATLAS ARTERIA ANNUAL REPORT 2023 | 117
NOTES TO THE FINANCIAL REPORTSFINANCIAL REPORTREMUNERATION REPORTDIRECTORS’ REPORTSFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS Financial position – other information
17 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 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 on their financial 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
Prepayments
Tax receivable
Trade receivables and other assets
Distributions receivable
Total current other assets
Non-current
Other assets
Total non-current other assets
ALX
ATLAX Group
As at
31 Dec 2023
$m
As at
31 Dec 2022
$m
As at
31 Dec 2023
$m
As at
31 Dec 2022
$m
2.3
3.1
0.3
5.3
28.8
39.8
0.1
0.1
2.5
2.5
1.7
5.1
–
11.8
0.1
0.1
42.5
1.1
0.3
0.8
28.8
73.5
–
–
5.4
0.9
1.7
0.9
–
8.9
–
–
The Groups’ maximum credit exposure for receivables is the carrying amount. Discussion of the Groups’ policies concerning the
management of credit risk can be found in note 16. The fair value of receivables approximates their carrying amounts.
118 | ATLAS ARTERIA ANNUAL REPORT 2023
NOTES TO THE FINANCIAL REPORTS 18 Provisions and 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
Trade creditors and accruals
Tax payables
Employee benefits
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 2023
$m
As at
31 Dec 2022
$m
As at
31 Dec 2023
$m
As at
31 Dec 2022
$m
3.3
7.8
0.5
5.5
0.3
17.4
37.3
25.2
62.5
3.1
14.5
0.4
5.3
0.3
23.6
36.4
25.5
61.9
–
2.3
–
4.0
0.7
7.0
–
2.3
2.3
–
9.3
–
4.1
0.6
14.0
–
2.9
2.9
(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:
Provision for toll road maintenance
Balance at the beginning of the year
Additional provision recognised
Provision utilised
Unwind of discount
Foreign exchange movement
Balance at the end of the year
ALX
ATLAX Group
As at
31 Dec 2023
$m
As at
31 Dec 2022
$m
As at
31 Dec 2023
$m
As at
31 Dec 2022
$m
39.5
1.1
(1.8)
1.4
0.4
40.6
28.7
10.2
(1.9)
1.3
1.2
39.5
–
–
–
–
–
–
–
–
–
–
–
–
ATLAS ARTERIA ANNUAL REPORT 2023 | 119
NOTES TO THE FINANCIAL REPORTSFINANCIAL REPORTREMUNERATION REPORTDIRECTORS’ REPORTSFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS 19 Cash flow information
ALX
ATLAX Group
Year ended
31 Dec 2023
$m
Year ended
31 Dec 2022
$m
Year ended
31 Dec 2023
$m
Year ended
31 Dec 2022
$m
Reconciliation of profit after income tax to the net cash flows from
operating activities
Profit/(loss) after income tax
Share of (profit)/loss of equity accounted investments
256.3
(325.6)
241.0
(336.4)
Net finance costs
Depreciation and amortisation
Amortisation of tolling concession
Interest income on shareholder loans
Changes in operating assets and liabilities:
Increase/(decrease) in deferred tax asset/(liability)
Decrease/(increase) in receivables
(Decrease)/increase in payables and other liabilities
Increase/(decrease) in maintenance provisions
Net cash inflow from operating activities
96.5
1.8
67.4
(18.1)
3.7
2.0
(0.4)
1.1
84.7
91.0
1.9
64.3
(1.7)
3.1
(1.6)
2.2
10.0
73.8
(67.2)
51.5
2.0
0.9
–
–
–
4.1
1.2
–
(7.5)
(25.9)
13.6
10.8
1.1
–
–
–
(2.4)
2.3
–
(0.5)
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
Restricted cash
Lease liabilities – current
Lease liabilities – non-current
Debt at amortised cost – current
Debt at amortised cost – non-current
Net (debt)/cash
ALX
ATLAX Group
Year ended
31 Dec 2023
$m
Year ended
31 Dec 2022
$m
Year ended
31 Dec 2023
$m
Year ended
31 Dec 2022
$m
305.3
204.9
(0.3)
(25.2)
(101.4)
(1,593.6)
(1,210.3)
275.9
215.6
(0.3)
(25.5)
(100.1)
(1,609.4)
(1,243.8)
182.9
–
(0.7)
(2.3)
–
–
179.9
62.0
–
(0.6)
(2.9)
–
–
58.5
Gross debt at 31 December 2023 consisted of $1,673.9 million (2022: $1,690.1 million) at fixed interest rates and $46.6 million
(2022: $45.2 million) at variable interest rates for Atlas Arteria. Gross debt at 31 December 2023 consisted of $3.0 million
(2022: $3.5 million) at fixed interest rates for ATLAX Group.
120 | ATLAS ARTERIA ANNUAL REPORT 2023
NOTES TO THE FINANCIAL REPORTS ALX
Net debt at 1 January 2022
Cash flows
Loan facilities
Lease principal payments
Other non-cash adjustments (a)
Foreign exchange adjustments
Net debt at 31 December 2022
Cash flows
Loan facilities
Lease principal payments
Other non-cash adjustments (a)
Foreign exchange adjustments
Net debt at 31 December 2023
Assets
Liabilities from
financing activities
Cash and cash
equivalents
$m
Restricted
Cash
$m
Borrowings –
current
$m
Borrowings –
non-current
$m
Total
$m
229.4
41.6
–
–
–
4.9
275.9
226.3
(25.6)
–
–
–
14.9
215.6
34.3
(10.7)
–
–
–
(4.9)
305.3
–
–
–
–
(92.7)
(1,556.5)
(1,193.5)
–
97.2
(1.8)
(101.8)
(1.3)
(100.4)
–
101.0
(1.7)
(99.3)
(1.3)
–
–
–
13.0
(91.4)
16.0
97.2
(1.8)
(88.8)
(72.9)
(1,634.9)
(1,243.8)
–
–
–
101.4
(85.3)
23.6
101.0
(1.7)
2.1
(91.5)
204.9
(101.7)
(1,618.8)
(1,210.3)
(a) Relates to transfer of debt from non-current to current and unpaid interest that accrued during the year.
ATLAX Group
Net cash at 1 January 2022
Cash flows
Foreign exchange adjustments
Net cash at 31 December 2022
Cash flows
Foreign exchange adjustments
Net cash at 31 December 2023
Cash and cash
equivalents
$m
42.8
18.8
0.4
62.0
121.0
(0.1)
182.9
Total
$m
42.8
18.8
0.4
62.0
121.0
(0.1)
182.9
20 Contingent liabilities and capital commitments
At 31 December 2023 the Groups had no material contingent liabilities or capital commitments. Other than the guarantees referred to
at note 13 under the working capital facility, the Groups have not made any other material guarantees as of 31 December 2023.
ATLAS ARTERIA ANNUAL REPORT 2023 | 121
NOTES TO THE FINANCIAL REPORTSFINANCIAL REPORTREMUNERATION REPORTDIRECTORS’ REPORTSFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS Group structure
21 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 ventures
Investments in subsidiaries, associates and joint ventures are accounted for at cost in the separate financial statements
of ATLIX and ATLAX.
Tax consolidation legislation
ATLAX and its Australian-resident wholly-owned 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
stand-alone taxpayer in its own right. In addition to its own current and deferred tax amounts, ATLAX also recognises current
tax liabilities (or assets) and deferred tax assets arising from unused tax losses and unused tax credits assumed from its
controlled entities in the tax-consolidated group.
The entities have also entered into a tax funding agreement under which the wholly owned controlled 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
controlled 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 the tax funding agreements 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.
Summary financial information
In accordance with the Corporations Regulations 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
Accumulated losses
Accumulated profits – 2023 reserve
Total equity
Profit for the year
Total comprehensive income
ATLIX
ATLAX
As at
31 Dec 2023
$m
As at
31 Dec 2022
$m
As at
31 Dec 2023
$m
As at
31 Dec 2022
$m
12.5
2,268.1
2,280.6
(45.1)
–
(45.1)
3,994.0
3.4
103.7
2,229.4
2,333.1
(6.8)
(211.1)
(217.9)
3,994.0
3.4
(1,882.2)
(1,882.2)
120.3
2,235.5
700.6
700.6
–
2,115.2
62.3
62.3
222.3
2,860.1
3,082.4
(7.3)
–
(7.3)
65.6
2,860.7
2,926.3
(7.5)
–
(7.5)
2,991.0
2,991.0
0.1
(72.3)
156.3
0.1
(72.3)
–
3,075.1
2,918.8
156.3
156.3
14.0
14.0
Guarantees entered into by the parent entities
In May 2023 the Groups executed a $50.0 million working capital facility. The facility has a term of three years and is unsecured.
The borrowers under the facility are Atlas Arteria Holdings Australia Pty Ltd, Green Bermudian Holdings Limited and MIBL Finance
(Luxembourg) Sarl. Both ATLIX and ATLAX are jointly and severally liable for the facility. At 31 December 2023 the facility remained undrawn.
Contingent liabilities of the parent entities
ATLIX and ATLAX do not have any contingent liabilities as at 31 December 2023 or 31 December 2022.
122 | ATLAS ARTERIA ANNUAL REPORT 2023
NOTES TO THE FINANCIAL REPORTS 22 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.
ALX
Name of controlled entity
Atlas Arteria Limited
ALX Infrastructure Australia Pty Limited
ALX Investments (Australia) Pty Limited
Atlas Arteria Holdings Australia Pty Ltd (a)
Atlas Arteria Service Co Pty Limited
ALX Investments Limited
Green Bermudian Holdings Limited
Atlas Arteria Luxembourg 1 Sarl (b)
MIBL Finance (Luxembourg) Sarl
European Transport Investments (UK) Limited
Greenfinch Motorways Limited (c)
Tipperhurst Limited (d)
Tollway Holdings Limited (e)
ALX Indiana Holdings LLC
ALX Holdings (US) LLC
Dulles Greenway Investments 3 (US) LLC
Dulles Greenway Partnership
Shenandoah Greenway Corporation
Toll Road Investors Partnership II, L.P. (f)
Warnowquerung GmbH & Co. KG (g)
Warnowquerung Verwaltungsgesellschaft mbH (g)
Country of establishment
Australia
Australia
Australia
Australia
Australia
Bermuda
Bermuda
Luxembourg
Luxembourg
UK
UK
UK
UK
USA
USA
USA
USA
USA
USA
Germany
Germany
Voting %
2023
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
2022
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) Incorporated on 19 August 2022.
(b) Liquidated and deregistered on 22 December 2023.
(c) Liquidated on 11 January 2022 and deregistered on 14 April 2022.
(d) Liquidated on 2 June 2023 and deregistered on 12 September 2023.
(e) Liquidated on 7 August 2023 and deregistered on 16 November 2023.
(f) 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.
(g) Warnowquerung GmbH & Co. KG and its general partner, Warnowquerung Verwaltungsgesellschaft mbH, (collectively ‘Warnow Tunnel’) manage the Warnow
Tunnel concession.
ATLAX Group
Name of controlled entity
Country of establishment
ALX Infrastructure Australia Pty Limited
ALX Investments (Australia) Pty Limited
Atlas Arteria Holdings Australia Pty Ltd (a)
Atlas Arteria Service Co Pty Limited
ALX Holdings (US) LLC
ALX Indiana Holdings LLC
Dulles Greenway Investments 3 (US) LLC
Dulles Greenway Partnership
Shenandoah Greenway Corporation
(a) Incorporated on 19 August 2022.
Australia
Australia
Australia
Australia
USA
USA
USA
USA
USA
Voting %
2023
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
2022
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
ATLAS ARTERIA ANNUAL REPORT 2023 | 123
NOTES TO THE FINANCIAL REPORTSFINANCIAL REPORTREMUNERATION REPORTDIRECTORS’ REPORTSFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS Other disclosures
23 Remuneration of auditors
Amounts paid or payable to PricewaterhouseCoopers Australia for:
Audit and review services
Other assurance services (a)
Amounts paid or payable to Network firms of PricewaterhouseCoopers for:
Audit and review services
Taxation services (b)
ALX
Year ended
31 Dec 2023
$
Year ended
31 Dec 2022
$
ATLAX Group
Year ended
31 Dec 2023
$
Year ended
31 Dec 2022
$
841,650
100,600
942,250
740,212
714,017
1,454,229
420,825
50,300
471,125
403,220
668,276
1,071,496
600,397
66,123
666,520
438,808
95,450
534,258
48,961
–
48,961
44,335
–
44,335
Total amounts paid or payable to PricewaterhouseCoopers
1,608,770
1,988,487
520,086
1,115,831
Amounts paid or payable to non PricewaterhouseCoopers audit firms for:
Audit services provided by Baker Tilly GmbH
Wirtschaftsprüfungsgesellschaft Steuerberatungsgesellschaft (’Baker Tilly‘)
Audit services provided by Deloitte
Other non-audit services (c)
Total amounts paid or payable to non PricewaterhouseCoopers firms
22,108
73,470
223,908
319,486
86,482
44,178
39,658
170,318
–
73,470
204,772
278,242
–
44,178
19,037
63,215
Total amounts paid or payable to auditors
1,928,256
2,158,805
798,328
1,179,046
(a) In the current year, other assurance services relate to sustainability reporting reviews. In the prior period, other assurance services related to Equity Raise due diligence
and sustainability reporting reviews.
(b) 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.
(c) In the current year, other non-audit services relate to consulting, compliance and tax services. In the prior year, other non-audit services related to compliance and
tax services.
24 Share-based payments
Each instrument below represents one performance right to an ALX stapled security which comprises one Atlas Arteria International
Limited (‘ATLIX’) share ‘stapled’ to one Atlas Arteria Limited (‘ATLAX’) share. Set out below are summaries of performance rights
granted under the plans:
ALX
LTI Plan
STI Plan
EE Plan
Total
ALX
LTI Plan
STI Plan
EE Plan
Total
Performance rights
at 31 Dec 2022
Granted during
the year
Vested and exercised
during the year
Forfeited/lapsed
during the year
Performance rights
at 31 Dec 2023
1,457,519
188,737
43,623
1,689,879
639,070
240,144
14,155
893,369
–
(188,737)
(8,658)
(197,395)
(480,039)
–
(7,405)
(487,444)
1,616,550
240,144
41,715
1,898,409
Performance rights
at 31 Dec 2021
Granted during
the year
Vested and exercised
during the year
Forfeited/lapsed
during the year
Performance rights
at 31 Dec 2022
1,326,077
162,978
32,115
1,521,170
615,724
188,737
17,160
821,621
–
(484,282)
(162,978)
–
(162,978)
–
(5,652)
(489,934)
1,457,519
188,737
43,623
1,689,879
124 | ATLAS ARTERIA ANNUAL REPORT 2023
NOTES TO THE FINANCIAL REPORTS Short Term Incentive Plan (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% is paid in cash and 50%
is deferred for one year and vests in unrestricted securities on terms determined by Atlas Arteria.
STI restricted securities issued in 2022 vested in December 2022. STI restricted securities issued in 2023 vested in December 2023
as the service conditions were met, however remain in a holding lock until the next trading window in 2024.
Long Term Incentive Plan (LTI Plan)
The LTI Plan 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.
For the LTI Plan subject to the relative Total Securityholder Return (TSR) performance condition, the amount of performance rights
that will vest depends on Atlas Arteria’s relative 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.
For the LTI Plan introduced in 2022 subject to the achievement of Atlas Arteria’s strategic objectives, the amount of performance
rights that will vest depends on clearly quantifiable improvements in securityholder value from the implementation of two strategic
metrics; creating a clear pathway to sustainable cash flows from Dulles Greenway and improving the average concession life of the
Atlas Arteria portfolio. For the executive team, this requires Atlas Arteria’s absolute TSR to be positive for the performance period
and the business case for the acquisition of the Chicago Skyway to be achieved.
Performance rights are granted under the plans for no consideration. These performance rights are exercisable at no consideration
upon satisfaction of performance hurdles.
The performance conditions of the 2021 LTI performance rights were tested in January 2024. The performance conditions were
partially satisfied resulting in a partial vesting outcome. LTI performance rights issued in 2022 that are outstanding at the end of the
year will vest after the end of the performance period which ends on 31 December 2024 only if performance conditions are met.
LTI performance rights issued in 2023 that are outstanding at the end of the year will vest after the end of the performance period
which ends on 31 December 2025 only if performance conditions are met.
Employee Equity Incentive Plan (EE Plan)
The EE Plan provides eligible employees (excludes 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.
Fair value of performance rights granted
The assessed fair value at grant date of performance rights granted during the year ended 31 December 2023 range between
$3.50 and $6.42 per performance right (2022: $3.59 to $6.90). 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.
Expenses arising from share-based payment transactions
Employee performance rights – LTI Plan
Employee performance rights – EE Plan
Employee securities – STI Plan
ATLIX Group
ATLAX Group
Year ended
31 Dec 2023
$m
Year ended
31 Dec 2022
$m
Year ended
31 Dec 2023
$m
Year ended
31 Dec 2022
$m
0.4
–
0.3
0.7
0.3
–
0.3
0.6
1.6
0.1
1.3
3.0
1.3
0.1
1.1
2.5
ATLAS ARTERIA ANNUAL REPORT 2023 | 125
NOTES TO THE FINANCIAL REPORTSFINANCIAL REPORTREMUNERATION REPORTDIRECTORS’ REPORTSFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS 25 Related party disclosures
Directors
The following persons were Directors of ATLIX during the whole of the year and up to the date of this report:
− Jeffrey Conyers
− Fiona Beck
− Kiernan Bell
− Andrew Cook
− Caroline Foulger
− Debra Goodin
(Retired as Chair and Director on 1 March 2023)
(Appointed Chair on 1 March 2023)
(Appointed Director on 1 September 2023)
(Retired as Director on 1 July 2023)
The following persons were Directors of ATLAX during the whole of the year and up to the date of this report (unless otherwise stated):
− Debra Goodin
− David Bartholomew
− Graeme Bevans
− Ken Daley
− Laura Hendricks
− Jean-Georges Malcor
− John Wigglesworth
(Chair)
(Appointed Director on 30 May 2023)
(Appointed Director on 16 October 2023)
(Appointed Director on 1 January 2023)
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 includes STI and LTI components which include targets related to the performance of Atlas Arteria.
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
2023
2022
Cash salary
$
2,772,963
2,442,925
Cash STI
$
Value of LTI
$
Value of STI
$
Superannuation
$
Total
remuneration
$
1,153,010
1,276,221
1,143,235
971,061
1,175,276
1,198,196
72,312
58,971
6,316,796
5,947,374
Total
Compensation in the form of directors’ fees that were paid to the ATLIX and ATLAX Non-Executive Directors is as follows:
Year ended 31 Dec 2023
Year ended 31 Dec 2022
Short term
benefit
Cash salary
and fees
$
791,405
924,702
Long term
benefit
Superannuation
$
Total director
fees
$
7,958
71,279
799,363
995,981
Short term
benefit
Cash salary
and fees
$
989,909
891,204
Long term
benefit
Superannuation
$
Total director
fees
$
7,212
56,296
997,121
947,500
ATLIX
ATLAX
126 | ATLAS ARTERIA ANNUAL REPORT 2023
NOTES TO THE FINANCIAL REPORTS The number of ALX stapled securities held directly, indirectly or beneficially by the KMP across the Groups at 31 December 2023 is
set out below:
Jeffrey Conyers (a)
Ariane Barker (b)
David Bartholomew
Fiona Beck
Graeme Bevans
David Collins (c)
Andrew Cook
Caroline Foulger (d)
Debra Goodin
Jean-Georges Malcor
Vincent Portal-Barrault
Kiernan Bell (e)
Laura Hendricks (f)
John Wigglesworth (g)
Ken Daley (h)
Total
(a) Retired 1 March 2023.
(b) Retired 31 December 2022.
(c) Appointed 1 September 2022.
(d) Retired 1 July 2023.
(e) Appointed 1 September 2023.
(f) Appointed 16 October 2023.
(g) Appointed 1 January 2023.
(h) Appointed 30 May 2023.
KMP interests
in ALX stapled
securities
At 31 Dec 2023
KMP interests
in ALX stapled
securities
At 31 Dec 2022
N/A
N/A
31,679
60,029
586,444
10,574
38,000
N/A
78,471
45,499
115,120
–
–
7,500
–
90,524
38,124
31,679
53,029
443,258
–
33,000
41,602
76,667
45,499
90,942
N/A
N/A
N/A
N/A
973,316
944,324
Other balances and transactions
At 31 December 2023, entities within the Groups had the following balances with related parties:
ALX
ATLAX Group
Year ended
31 Dec 2023
$
Year ended
31 Dec 2022
$
Year ended
31 Dec 2023
$
Year ended
31 Dec 2022
$
Shareholder loan with CCPI
Interest on Shareholder loans with CCPI
Distributions receivable from CCPI
Interest bearing loan receivable from ATLIX (a)
244,900,000
245,766,181
1,719,714
–
–
1,737,624
28,811,208
–
–
–
28,811,208
40,682,080
–
–
–
–
Other intercompany receivables from/(payables) to related parties
606,258
747,114
1,830,300
5,419,345
(a) In September 2023 ATLAX advanced ATLIX $40.0 million for a 12 month period with interest payable at a fixed rate of 5.99%. The principal and interest are payable
at maturity in September 2024.
ATLAS ARTERIA ANNUAL REPORT 2023 | 127
NOTES TO THE FINANCIAL REPORTSFINANCIAL REPORTREMUNERATION REPORTDIRECTORS’ REPORTSFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS During the year, entities within the Groups had the following transactions with related parties excluding associates and joint ventures:
ALX
ATLAX Group
Year ended
31 Dec 2023
$
Year ended
31 Dec 2022
$
Year ended
31 Dec 2023
$
Year ended
31 Dec 2022
$
Reimbursement of ATLIX’s portion of expenses paid by ATLAX Group
Advisory service fees
Loan advanced from ATLAX to ATLIX
Interest charged on loan between ATLAX and ATLIX
Transfer of shareholder loans issued by CCPI
–
–
–
–
–
–
–
–
–
–
82,239
1,572,662
14,152,382
14,300,330
40,000,000
682,080
–
–
–
245,131,989
During the year, entities within the Groups received/(paid) the following from/(to) associates and joint ventures:
Distributions received from MAF2
Distributions received from CCPI
Interest received on Shareholder loans with CCPI
ALX
ATLAX Group
Year ended
31 Dec 2023
$
Year ended
31 Dec 2022
$
Year ended
31 Dec 2023
$
Year ended
31 Dec 2022
$
444,903,705
406,888,038
–
174,680,214
18,395,750
–
–
174,680,214
–
–
–
–
Cash payments from/(to) associates and joint ventures (a)
2,810,294
8,767,562
(3,199,898)
(2,259,007)
(a) For Atlas Arteria the cash payments reflect fees and reimbursements from MAF and MAF2 offset by reimbursement to Skyway Concession Company LLC and for the
ATLAX Group the cash payments reflect reimbursements to TRIP II and Skyway Concession Company LLC.
All of the amounts represent payments on normal commercial terms made in relation to the provision of goods and services,
with the exception of the short term loan advanced from ATLAX to ATLIX repayable in less than one year with interest charged
at commercial rates.
26 Other material accounting policies
This note provides a list of the material accounting policies adopted in preparation of these Financial Reports to the extent they have
not already been disclosed in the other notes above.
Revenue recognition
Revenue and other income is recognised as follows:
Toll revenue
A single 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 of 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 and administrative
service fees to related parties.
Transaction costs
Transaction costs related to an equity accounted investment are capitalised into the cost of the investment. 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.
Goods and Services Tax (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 Statements of
Financial Position. Cash flows relating to GST are included in the Consolidated Statements of Cash Flows on a net basis.
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.
128 | ATLAS ARTERIA ANNUAL REPORT 2023
NOTES TO THE FINANCIAL REPORTS 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, 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.
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.
Interest income
Interest income on cash and cash equivalents and financial assets at amortised costs are brought to account on an accruals basis
in accordance with the effective interest method.
Acquisition of subsidiaries
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 value of the assets transferred, the liabilities incurred and the equity interests issued by the Groups.
The consideration transferred also includes the estimated 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 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.
27 Events occurring after balance sheet date
The Directors of ATLIX and ATLAX are not aware of any matter or circumstance not otherwise dealt with in the Financial 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 subsequent to the year ended 31 December 2023.
ATLAS ARTERIA ANNUAL REPORT 2023 | 129
NOTES TO THE FINANCIAL REPORTSFINANCIAL REPORTREMUNERATION REPORTDIRECTORS’ REPORTSFINANCIAL 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 85 to 129:
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 2023 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.
Fiona Beck
Chair
Atlas Arteria International Limited
Hamilton, Bermuda
28 February 2024
Andrew Cook
Director
Atlas Arteria International Limited
Hamilton, Bermuda
28 February 2024
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 85 to 129 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 2023 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.
Debra Goodin
Chair
Atlas Arteria Limited
Melbourne, Australia
29 February 2024
John Wigglesworth
Director
Atlas Arteria Limited
Melbourne, Australia
29 February 2024
130 | ATLAS ARTERIA ANNUAL REPORT 2023
Independent auditor’s report
To the stapled security holders of Atlas Arteria International Limited and Atlas Arteria Limited
Report on the audit 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 2023 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:
•
•
•
•
•
•
•
the consolidated statements of financial position as at 31 December 2023
the consolidated statements of profit and loss for the year then ended
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, including material accounting policy information 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
report 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 2023 | 131
FINANCIAL REPORTREMUNERATION REPORTDIRECTORS’ REPORTSFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS Our audit approach
An audit is designed to provide reasonable assurance about whether the financial report is 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, which are:
• 31.14% interest in the APRR toll road group and a 31.17% interest in the ADELAC toll road
network in France (together “APRR”), an equity accounted investment;
• 66.7% interest in the Chicago Skyway toll road bridge (“Chicago Skyway”) in the USA, an
equity accounted investment;
• 100% economic interest in the Dulles Greenway in the USA (“Dulles Greenway”), which is
consolidated; and
• 100% interest in Warnowquerung GmbH & Co (“Warnow Tunnel”) in Germany which is
consolidated.
The ATLAX Group holds the following investments, both of which are equity accounted:
• 66.7% interest in Chicago Skyway; and
• 13.4% interest in Dulles Greenway.
We engaged with the auditors of APRR, Dulles Greenway, Chicago Skyway and Warnow Tunnel to
report to us in respect of their audit procedures performed on the relevant toll road businesses.
Audit Scope
•
Our audit focused on where the 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, Chicago
Skyway 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 visiting the operations,
meeting with the component audit teams, 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 Committee.
132 | ATLAS ARTERIA ANNUAL REPORT 2023
Key audit matter
How our audit addressed the key audit matter
Carrying value of Dulles Greenway and Chicago
Skyway Cash Generating Units (CGUs)
(Refer to notes 9 and 10)
We performed the following procedures, amongst
others:
Atlas Arteria has 100% economic interest in the Dulles
Greenway tolling concession, which is a 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 $90.2 million.
Both Atlas Arteria and the ATLAX Group have an
equity accounted investment of $2.5 billion in the
Chicago Skyway CGU.
During the year Atlas Arteria and the ATLAX Group
performed an impairment indicator assessment on the
Dulles Greenway and Chicago Skyway CGUs. No
indicators of impairment existed.
The assessments of impairment indicators for the
Dulles Greenway and Chicago Skyway CGUs were a
key audit matter due to the significant carrying value of
these assets and the judgements involved in
performing those assessments.
• Assessed whether the composition of the
CGUs was consistent with our knowledge of
Atlas Arteria and the ATLAX Group’s
operations.
• Evaluated management’s impairment indicator
assessment against the requirements of
Australian Accounting Standards by
performing the following procedures, amongst
others:
• Assessed the ability of Atlas Arteria and
the ATLAX Group to accurately forecast
traffic volumes by comparing previous
traffic forecasts to actual traffic volumes
achieved by each CGU.
• Considered any significant changes in the
market or economic environment in which
each CGU operates, including third party
long-term inflation projections and the
latest correspondence with the relevant
authorities.
ATLAS ARTERIA ANNUAL REPORT 2023 | 133
FINANCIAL REPORTREMUNERATION REPORTDIRECTORS’ REPORTSFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS
Key audit matter
How our audit addressed the key audit matter
Consolidation of subsidiaries and equity
accounting of associates and joint ventures
(Refer to note 9)
Atlas Arteria applies equity accounting to its
investments in APRR and Chicago Skyway and
consolidates its investments in Dulles Greenway and
Warnow Tunnel. The ATLAX Group applies equity
accounting to its investments in Dulles Greenway and
Chicago Skyway. 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
assets.
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 is a key audit matter because certain of the
adjustments involved in the application of equity and
consolidation accounting are material and complex in
nature.
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 gained 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 APRR,
Chicago Skyway, Dulles Greenway and Warnow
Tunnel, we tested management’s calculations of the
adjustments on a sample basis, checking for
mathematical accuracy and consistency with the Atlas
Arteria and ATLAX Group accounting policies. These
adjustments impact:
Such adjustments include:
• Atlas Arteria’s consolidated statement of profit
•
•
adjusting the results of international
subsidiaries and investments in associates
and joint ventures prepared using local
accounting standards and policies to reflect
Australian Accounting Standards as applied
through the Atlas Arteria and the ATLAX
Group accounting policies; and
adjusting the results of equity accounted
investees to reflect equity accounting
adjustments required to arrive at Atlas Arteria
and the ATLAX Group’s share of profits from
associates.
and loss, consolidated statement of
comprehensive income and consolidated
statement of financial position;
• Atlas Arteria’s share of net profits from equity
accounted investments and the carrying value
of the equity accounted investments in APRR
and Chicago Skyway; and
•
the ATLAX Group’s share of associates and
joint ventures net profits or losses and the
carrying values of Dulles Greenway and
Chicago Skyway.
We evaluated the adequacy of the disclosures made in
note 9, in light of the requirements of Australian
Accounting Standards.
134 | ATLAS ARTERIA ANNUAL REPORT 2023
Key audit matter
How our audit addressed the key audit matter
Provision for toll road maintenance
(Refer to note 9 and 18)
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 roads.
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 and timing 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.
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 Dulles
Greenway, APRR, Chicago Skyway and Warnow
Tunnel to maintain the toll roads to a specified standard
and to return the asset to the relevant authority in a
certain condition at the completion of the concession
period. This results in the recognition of provisions for
these contractual maintenance obligations.
For Atlas Arteria the obligations for Dulles Greenway
and Warnow Tunnel are included in the provision for
toll road maintenance of $40.6 million per note 18. The
obligations in respect of APRR and Chicago Skyway
form part of the carrying value of equity accounted
investments.
We evaluated and tested key assumptions utilised in
the models by performing the following procedures,
amongst others:
• Considered whether the relevant obligations in
the concession agreements were
appropriately reflected in the provision.
• Compared forecast maintenance expenditure
to other information produced by Atlas Arteria
and the ATLAX Group.
• Assessed the ability of Atlas Arteria and the
ATLAX Group to accurately forecast
maintenance expenditure by comparing
previous cost forecasts to actual expenditure
incurred.
For the ATLAX Group the obligations in respect of
Chicago Skyway and Dulles Greenway form part of the
carrying value of equity accounted investments.
Estimating maintenance provisions requires significant
judgement and assumptions, including the following:
• Assessed the appropriateness of the
estimated timing of the cash outflows and
asset maintenance life cycles with reference
to third party reports and Atlas Arteria’s
maintenance policy.
•
•
•
•
The nature and extent of required future
maintenance activities;
Forecast cash flows associated with these
future maintenance activities and timing of
when they will occur;
The period over which a maintenance life
cycle of each asset category is deemed to be
required; and
The discount rate and inflation rate applied to
future cash flows to bring them to their present
value.
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.
• Considered the appropriateness of the
discount rates and inflation rates utilised by
comparing them to current market consensus
rates, including long term government bond
yields and long-term target inflation by
governments in each location.
• Checked the mathematical accuracy of the
models by reperforming a selection of
calculations therein.
We evaluated the adequacy of the disclosures made in
notes 9 and 18, in light of the requirements of
Australian Accounting Standards.
ATLAS ARTERIA ANNUAL REPORT 2023 | 135
FINANCIAL REPORTREMUNERATION REPORTDIRECTORS’ REPORTSFINANCIAL OVERVIEWRISK AND GOVERNANCESUSTAINABILITYOUR BUSINESS
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 2023, but does not include
the financial reports and our auditor’s report 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 through our opinion on the financial reports. We
have issued a separate opinion on the remuneration report.
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 audit, 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 report, 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 report
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 audit of the financial report
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 an auditor’s report that
includes 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 report.
A further description of our responsibilities for the audit of the financial report 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.
136 | ATLAS ARTERIA ANNUAL REPORT 2023
Report on the remuneration report
Our opinion on the remuneration report
We have audited the remuneration report included in pages 58 to 84 of the directors’ report for the
year ended 31 December 2023.
In our opinion, the remuneration report of ATLIX and ATLAX for the year ended 31 December 2023
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
29 February 2024
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ATLAS ARTERIA ANNUAL REPORT 2023 | 137
SECURITYHOLDER INFORMATION
As at 31 January 2024
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 93 shares at $5.42 per security.
Twenty largest investors
Investor
1 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
2 DIAMOND INFRACO 1 PTY LTD C/- THE TRUST COMPANY LTD
3
4
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
CITICORP NOMINEES PTY LIMITED
5 NATIONAL NOMINEES LIMITED
6 BNP PARIBAS NOMS PTY LTD
7 DIAMOND INFRACO 1 PTY LTD
8 BNP PARIBAS NOMINEES PTY LTD
9 NETWEALTH INVESTMENTS LIMITED
10 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
11 CITICORP NOMINEES PTY LIMITED
12 BNPP NOMS PTY LTD HUB24 CUSTODIAL SERV LTD
13 BNP PARIBAS NOMS (NZ) LTD
14 MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED
15 NEWECONOMY COM AU NOMINEES PTY LIMITED <900 ACCOUNT>
16 CITICORP NOMINEES PTY LIMITED <143212 NMMT LTD A/C>
17 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED – A/C 2
18 ECAPITAL NOMINEES PTY LIMITED
19 INVIA CUSTODIAN PTY LIMITED
20 BOND STREET CUSTODIANS LIMITED
Holders
Total securities
% of issued
securities
9,848
7,790
2,395
1,982
98
22,113
2,496
3,554,332
19,868,529
17,169,450
45,012,160
1,365,229,236
1,450,833,707
75,461
0.24
1.37
1.18
3.10
94.10
100.00
Number of
securities
% of issued
securities
552,287,990
333,971,599
219,198,980
130,427,338
28,965,333
22,577,149
9,760,404
9,643,572
9,328,021
8,395,339
3,690,983
3,551,966
3,107,580
2,506,005
2,426,654
2,263,219
1,550,825
1,456,204
1,159,925
850,000
38.07
23.02
15.11
8.99
2.00
1.56
0.67
0.66
0.64
0.58
0.25
0.24
0.21
0.17
0.17
0.16
0.11
0.10
0.08
0.06
Total
1,347,119,086
92.85
Details of substantial stapled securityholders
Holder
Date of most recent substantial holder notice
Diamond Infrac 1 Pty Ltd (IFM Group)
Lazard Asset Management
Mitsubishi UFJ Financial Group 1
State Street Corporation
9 November 2023
6 October 2022
22 December 2022
11 January 2024
Number of
securities
% of issued
securities
356,055,310
133,882,579
91,238,237
80,401,345
24.54%
9.83%
6.29%
5.54%
1. A substantial shareholder notice was also received by First Sentier Investors Holdings Pty Ltd (First Sentier) on 20 December 2022. Mitsubishi UFJ Financial Group
(Mitsubishi) owns 100% of First Sentier (indirectly) and the Mitsubishi notice reflects First Sentier’s holding.
138 | ATLAS ARTERIA ANNUAL REPORT 2023
GLOSSARY
TERM
DEFINITION
A79
AASB
ABN
ACN
ADELAC
ADT
AGM
ALIAE
ALX
APRR Group
ARC
ASX
ATLAX
ATLIX
ATO
AUD
BN
Boards
CAGR
Capital
releases
CCPI
CEO
CET
CFO
CO2
COO
CPI
CPS
D&A
DSCR
EBITDA
Eiffarie
E&P
ESG
EUR
EV
Executive
Committee/
Senior
Executives
FE
FX
GDP
GHG
GRESB
H1
H2
HQ
HV
IFRS
Also known as the RCEA
Australian Accounting Standards Board
Australian Business Number
Australian Company Number
The concessionaire of the A41 north motorway
Average daily traffic. ADT is calculated by dividing
the total number of trips on each asset by the
number of days in the period. For new assets, the
count begins at the commencement of tolling
Annual General Meeting
The concessionaire of the A79 motorway
Atlas Arteria
Includes APRR, AREA and A79 concessions
Audit and Risk Committee
Australian Securities Exchange
Atlas Arteria Limited
Atlas Arteria International Limited
Australian Taxation Office
Australian Dollars
Billions
Comprises Atlas Arteria Limited (ATLAX) and Atlas
Arteria International Limited (ATLIX)
Compounded annual growth rate
Capital releases refer to the injection of debt into
Atlas Arteria assets, thereby releasing equity
Calumet Concession Partners Inc.
Chief Executive Officer
Contribution Economique Territoriale
Chief Financial Officer
Carbon dioxide
Chief Operating Officer
Consumer Price Index
Cents per security
Depreciation and amortisation
Debt service coverage ratio
Earnings before interest, tax, depreciation
and amortisation
Eiffarie SAS
Earnings and Profit
Environmental, Social and Governance
Euros
Electric Vehicle
Members of the senior management team who
together comprise the Executive Committee. The
Executive Committee advises and prioritises issues
for the Board’s consideration
Financière Eiffarie SAS
Foreign Exchange
Gross Domestic Product
Greenhouse Gas
Global Real Estate Sustainability Benchmark
First half
Second half
Head quarters
Heavy Vehicles
International Financial Reporting Standards
TERM
ITR
KMP
KPI
LTI
LTIFR
LV
M
MIBL
N.A.
NPAT and
NPBT
O&M
OTPP
PPTA
RCF
RFID
SANEF
Senior
executives
S&P
SBTi
SCC
SFTRF
STI
SWG
TAT
TCFD
TEILD
TRIP II
TSR
Underlying
NPAT
Underlying
results
US
USD
VDOT
VHCA
VKT
Warnow
Tunnel
Weighted
average
traffic
DEFINITION
Indiana Toll Road
Key Management Personnel
Key Performance Indicator
Long-Term Incentive
Lost-time Injury Frequency Rate. The number of
work-related lost-time injuries within a 12-month
period, relative to the total number of hours worked
in that period. This is calculated as: Number of
work-related lost time injuries in the report period,
multiplied by one million and then divided by the
total hours worked in the reporting period
Light Vehicles
Millions
MIBL Finance (Luxembourg) S.à r.l.
Not applicable
Net Profit after Tax and Net Profit Before Tax
Operations and Maintenance
Ontario Teachers’ Pension Plan
Public-Private Transportation Act
Revolving Credit Facility
Radio Frequency Identification
Société des Autoroutes du Nord et de l’Est de la France
Defined as Atlas Arteria executive team members,
their direct reports in senior roles and CEOs of the
wholly and majority owned businesses
Standard & Poor’s
Science Based Targets initiative
Skyway Concession Company LLC
Société Française du Tunnel Routier du Fréjus
Short Term Incentive
Sustainability Working Group
Taxe d’Aménagement du Territoire
Task Force on Climate-related Financial Disclosures
Long-distance Transport Infrastructure Tax
Toll Road Investors Partnership
Total Shareholder Return
Excludes items that are not related to underlying
operational performance
A non-IFRS measure that is used by ALX
management and the Boards as a measure to
assess financial performance and represents
statutory profit excluding the impact of items not
related to underlying operational performance such
as impairments of investments, acquisition and
disposal costs, and debt and equity issuance costs.
United States of America
US Dollars
Virginia Department of Transportation
Virginia Highway Corporation Act
Vehicle kilometres travelled
Warnowquerung GmbH & Co., KG
Reflects weighted average traffic growth based on
portfolio revenue allocations from Atlas Arteria’s
current beneficial interests in its businesses, in
AUD using the average foreign currency exchange
rates in the period
ATLAS ARTERIA ANNUAL REPORT 2023 | 139
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
Debra Goodin, Independent Non-executive Chair
Graeme Bevans, Executive Director
David Bartholomew, Independent Non-executive Director
Jean-Georges Malcor, Independent Non-executive Director
John Wigglesworth, Independent Non-executive Director
Ken Daley, Non-executive Director
Laura Hendricks, Independent Non-executive Director
Secretaries
Clayton McCormack, General Counsel and Company Secretary
Paul Lynch, Joint Company Secretary
ATLAS ARTERIA INTERNATIONAL LIMITED
4th Floor North, Cedar House
41 Cedar Avenue
Hamilton HM12 Bermuda
Directors
Fiona Beck, Independent Non-executive Director
Andrew Cook, Independent Non-executive Director
Kiernan Bell, Independent Non-executive Director
Debra Goodin, Independent Non-executive Director
Secretary
Sheena Dottin
REGISTRY
Computershare Investor Services Pty Ltd
GPO Box 2975
Melbourne VIC 3001
Australia
Telephone: (Australia) 1800 267 108
Telephone: (Overseas) +61 3 9415 4053
Mon-Fri 8.30am – 7pm AEST
Website: www.computershare.com/au
Facsimile: +61 (0) 3 9473 2500
140 | ATLAS ARTERIA ANNUAL REPORT 2023
Forward-looking statements
This report may contain forward-looking statements including statements with respect to Atlas Arteria’s future performance. Such forward-looking
statements are not guarantees of future performance. Due care and attention has been exercised in the preparation of forward-looking statements,
however actual results may vary as a result of various factors beyond the control of Atlas Arteria, its related bodies corporate or affi liates and their
respective offi cers, employees, agents and advisors. The words, ‘plan’, ‘will’, ‘expect’, ‘may’, ’should’, and similar expressions are intended to identify
forward looking statements.
Investors or prospective investors should not place undue reliance on forward-looking statements. Before making an investment in Atlas Arteria, the
investor or prospective investor should consider whether such an investment is appropriate to their particular investment needs, objectives and fi nancial
circumstances and consult an investment adviser if appropriate.
The forward-looking statements made in this report are given in good faith and derived from sources believed to be accurate as at the date of this report.
However, to the maximum extent permitted by law, Atlas Arteria, its related bodies corporate and affi liates, and their respective directors, offi cers,
employees and agents give no representation, warranty or other assurance (express or implied) as to the likelihood of any forward-looking statement being
fulfi lled; and accept no responsibility or liability for or in connection with the accuracy, currency, completeness or reliability of such statements (including,
without limitation, any liability arising from fault or negligence). Atlas Arteria accepts no obligation to correct or update any forward-looking statement and,
to the maximum extent permitted by law, disclaims any such obligation to correct or update any forward-looking statement.
Notice to investors
Investors should note that neither of the Atlas Arteria entities has been, or will be, registered under the US Investment Company Act of 1940, as amended
(the ‘US Investment Company Act’), in reliance on the exception in Section 3(c)(7) from the defi nition of ‘investment company’. Accordingly, Atlas Arteria
securities cannot be held at any time by, or for the account or benefi t of, any ‘US person’ (as defi ned in Rule 902(k) under the US Securities Act of 1933
(the ‘Securities Act’)) (‘US Person’) that is not a ‘qualifi ed purchaser’ (as defi ned in section 2(a)(51) of the US Investment Company Act and the rules and
regulations thereunder) (‘Qualifi ed Purchaser’ or ‘QP’) at the time of their acquisition. Any US Person that is not a Qualifi ed Purchaser, or any investor
acting for the account or benefi t of any US Person that is not a Qualifi ed Purchaser, is an ‘Excluded US Person’ and may not hold Atlas Arteria securities.
Each investor in Atlas Arteria securities (I) represents and agrees that it (i) is a QP; (ii) is not a broker dealer that owns and invests on a discretionary basis
less than $25,000,000 in securities of unaffi liated issuers; (iii) is not a participant directed employee plan, such as a 401(k) plan; (iv) is acting for its own
account, or the account of another QP; (v) in the case of a US Person, the purchaser is not formed for the purpose of investing in Atlas Arteria securities
(except where each benefi cial owner of the purchaser is a QP); (vi) it and each account for which it is purchasing, must hold a minimum denomination of
US$250,000 in Atlas Arteria securities per account; (vii) understands that Atlas Arteria may receive a list of all securityholders positions in Atlas Arteria
securities from time to time Atlas Arteria may refuse to register a transfer of securities to any Excluded US Person (as defi ned below) and the Excluded
US Person may be requested to sell such person’s securities and, if the Excluded US Person fails to do so within 30 Business Days, to be divested of such
securities and to receive the proceeds of sale (net of transaction costs including any applicable brokerage, taxes and charges) as soon as practicable after
the sale; and (viii) (A) notify the executing broker (and any other agent of the transferor involved in selling the Atlas Arteria securities) of the restrictions
that are applicable to the securities being sold, including the foreign ownership restrictions and procedures implemented by Atlas Arteria and notifi ed
to ASX participants in the ASX Participants Bulletin FOR Notice dated July 30, 2019, and will require the broker (and such other agent) to abide by such
restrictions, and (B) provide a resale letter to Atlas Arteria stating that the securities were sold in the manner required by this paragraph and substantially
in the form provided by Atlas Arteria on its website (see link below) and (II) acknowledges that neither of the Atlas Arteria entities has been registered
under the Investment Company Act and the offer and sale of the securities have not been, and will not be, registered under the Securities Act or the
securities laws of any state or other jurisdiction of the United States and represents to and agrees with Atlas Arteria that the securities can only be resold
if such securities are reoffered and resold by the holder in regular brokered transactions on the ASX where neither the holder nor any person acting on
its behalf knows, or has reason to know, that the sale has been pre-arranged with, or that the purchaser is, a person in the United States or a person that
is a US Person or acting for the account or benefi t of a US Person, in each case in compliance with Regulation S under the Securities Act. For further details
of ownership restrictions that apply to residents of the United States and other US Persons that are not Qualifi ed Purchasers, please see our website.
https://www.atlasarteria.com/stores/_sharedfi les/US_Ownership/AtlasArteria-USownershiprestrictions.pdf
Photography Credits:
Page 1 – Run the Greenway: Swim Bike Run Photo
Page 1 – A48: Romain Courtaud
Page 1 – Corporate Head Offi ce: Andrew Craig Photography
Page 3 – A79: H.Piraud
Page 10 – APRR: Chabert Xavier
Page 11 – A79: Semaphore and Co
Page 11 – A79: H.Piraud
Page 11 – APRR: Leimdorfer Gilles
Page 11 – APRR: La France vue du ciel
Page 14 – APRR: Phototec
Page 17 – APRR: Christophe Huret
Page 25 – Dulles Greenway: David Madison Photography
Page 26 – Run the Greenway: Swim Bike Run Photo
Page 29 – APRR: Nicolas Robin
Page 29 – APRR: Erolf Productions
Page 30 – AREA: Chabert Xavier
Page 31 – APRR: Erolf Productions
Page 32 – APRR: Erolf Productions
Page 32 – Corporate Head Offi ce: Andrew Craig Photography
Page 32 – Corporate Head Offi ce: Andrew Craig Photography
Page 32 – Corporate Head Offi ce: Andrew Craig Photography
Page 33 – AREA: William Chareyre
Page 33 – APRR: Plant A’dapt project
Page 34 – AREA: Chabert Xavier
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