2015
TRANSURBAN
ANNUAL REPORT
2
0
1
5
T
r
a
n
s
u
r
b
a
n
A
n
n
u
a
l
R
e
p
o
r
t
Contents
Transurban Group financial statements
Security holder information
1
125
Corporate Governance Statement
Transurban’s 2015 Corporate Governance Statement is located
at transurban.com/corporate_governance.htm
Transurban Holdings Limited
and Controlled Entities
ABN 86 098 143 429
(Including Transurban International Limited and Transurban Holding Trust)
Annual report
for the year ended 30 June 2015
1
2015 Transurban Annual Report Contents
Directors’ report
Section A: Group financial statements
Section B: Notes to the Group
financial statements
Section C: Transurban Holding Trust (‘THT’)
and Transurban International Limited (‘TIL’)
financial statements
Section D: Notes to the THT and TIL
financial statements
Section E: Signed reports
3
51
58
105
110
122
2
2015 Transurban Annual Report Directors’ report
The Directors of Transurban Holdings Limited (‘the Company’, ‘the Parent’ or ‘THL’) and its controlled entities
(‘Transurban Group’ or ‘the Group’), Transurban International Limited and its controlled entities (‘TIL’), and
Transurban Infrastructure Management Limited (‘TIML’), as responsible entity of Transurban Holding Trust and
its controlled entities (‘THT’), present their report on the Transurban Group for the financial year ended 30 June
2015 (‘FY15’). The controlled entities of THL include the other members of the stapled group being TIL and THT.
Directors
The following persons were Directors of THL, TIML and TIL during the whole of the financial year and up to the
date of this report, unless otherwise stated:
Lindsay Maxsted
Dip Bus, FCA, FAICD
Chair and independent Non-executive Director
Director since 1 March 2008. Chair since 12 August 2010.
Chair of the Nomination Committee and a member of the Audit and Risk Committee.
Lindsay is currently Chair and a Non-executive Director of Westpac Banking Corporation,
and a Non-executive Director of BHP Billiton Limited and BHP Billiton plc. He is the
Managing Director of Align Capital Pty Ltd and the Honorary Treasurer of Baker IDI Heart
and Diabetes Institute.
Lindsay was formerly a partner of KPMG Australia and was the CEO of that firm from 2001
to 2007. His principal area of practice prior to this was in the corporate recovery field
managing a number of Australia’s largest insolvency / workout / turnaround engagements.
As at the date of this report, Lindsay holds interests in 66,559 stapled securities.
Scott Charlton
BSci, MBA
Chief Executive Officer and Executive Director
Director since 16 July 2012. CEO since 16 July 2012.
Scott joined Transurban from Lend Lease, where he was Group COO and Group Director
of Operations.
Prior to this, Scott held several senior appointments across a range of infrastructure entities
and financial institutions, including as CFO of Leighton Holdings Limited and as Managing
Director of Deutsche Bank in Australia and Hong Kong.
Scott is currently Deputy Chair of Infrastructure Partnerships Australia and is a member of
the Monash Industry Council of Advisors, the Business Council of Australia, and of Roads
Australia.
As at the date of this report, Scott holds interests in 400,612 stapled securities, 1,175,827
performance awards (unlisted) and 137,209 STI deferred awards (unlisted).
3
3
2015 Transurban Annual Report Directors (continued)
Neil Chatfield
M.Bus, FCPA, FAICD
Independent Non-executive Director
Director since 18 February 2009.
Chair of the Audit and Risk Committee and a member of the Nomination Committee and
the Remuneration and Human Resources Committee.
Neil is an established Executive and Non-executive Director with extensive experience
across all facets of company management, and with specific expertise in financial
management, capital markets, mergers and acquisitions, and risk management.
Neil is currently the Chair of Seek Limited and the Chair of Costa Group Holdings Ltd and a
Non-executive Director of Recall Holdings Limited, all ASX listed companies. Neil is also
Chair of the not-for-profit organisation Launch Housing. He was previously Chair and a
Non-executive Director of Virgin Australia Holdings Limited (to May 2015) and a Non-
executive Director of Grange Resources Limited (to April 2014) and of Whitehaven Coal
Limited (to May 2012).
Neil previously served as Executive Director and the CFO of Toll Holdings (from 1997
to 2008).
As at the date of this report, Neil holds interests in 55,424 stapled securities.
Robert Edgar
BEc (Hons), PhD, FAICD
Independent Non-executive Director
Director since 21 July 2009.
Chair of the Remuneration and Human Resources Committee and a member
of the Audit and Risk Committee and the Nomination Committee.
Bob has over 30 years’ experience as a senior executive, with 25 years at ANZ Banking
Group in various senior roles, including Deputy CEO, Senior Managing Director, COO,
and Chief Economist.
Bob is currently a Non-executive Director of Asciano Group, Linfox Armaguard Pty Ltd and
Djerriwarhh Investments. He is Chair of the Prince Henry’s Institute of Medical Research.
Bob was previously Chair and a Non-executive Director of Federation Centres (to June
2015) and a Non-executive Director of Nufarm Limited (to March 2012).
As at the date of this report, Bob holds interests in 30,324 stapled securities.
4
4
2015 Transurban Annual Report Directors (continued)
Samantha Mostyn
BA, LLB
Independent Non-executive Director
Director since 8 December 2010.
Member of the Remuneration and Human Resources Committee and the Nomination
Committee.
Sam has significant experience in the Australian corporate sector both in Executive and
Non-executive capacities, in particular in the areas of human resources, corporate and
government affairs, sustainability management, and diversity.
Sam is currently a Non-executive Director of Virgin Australia Holdings Limited, Citigroup
Pty Ltd, Cover-More Group Limited and the Mirvac Group. She is President of the
Australian Council for International Development. She is also a Non-executive Director of
Australian Volunteers International, Australia Council for the Arts, and Carriageworks.
Sam is currently Deputy Chair of the Diversity Council Australia, and is a member of the
NSW Climate Change Council, the advisory boards of ClimateWorks Australia and the
Crawford School of Government and Economics, ANU. She is also a Commissioner of the
Australian Football League.
As at the date of this report, Sam holds interests in 17,256 stapled securities.
Christine O'Reilly
BBus
Independent Non-executive Director
Director since 12 April 2012.
Member of the Audit and Risk Committee and the Nomination Committee.
Christine has over 30 years’ experience in the finance and infrastructure sectors in various
roles including as Co-Head of Unlisted Infrastructure at Colonial First State Global Asset
Management and as CEO of the GasNet Australia Group.
Christine is currently a Non-executive Director of CSL Limited, Energy Australia Holdings
Ltd, and Medibank Private Limited. She is also a Non-executive Director of Baker IDI Heart
and Diabetes Institute and is the Deputy Chair of CARE Australia.
As at the date of this report, Christine holds interests in 19,332 stapled securities.
5
5
2015 Transurban Annual Report Directors (continued)
Rodney Slater
J.D., BS
Independent Non-executive Director
Director since 22 June 2009
Member of the Nomination Committee.
Rodney is a partner in the Government Relations and Lobbying, Transportation,
Infrastructure and Local Government, and Construction Projects groups of Washington DC
firm Squire Patton Boggs (US) LLP. He is Global Co-Chair of the Transportation Shipping
and Logistics Industry Group. He served as US Secretary of Transportation from 1997 until
the end of the Clinton Administration in January 2001 and was the Administrator of the
Federal Highway Administration from 1993 to 1996.
In the US, Rodney’s current Non-executive Directorships include Kansas City Southern
(railroads), Verizon Communications Inc and Southern Development Bancorporation. He
was previously a Director of Parsons Brinckerhoff, Delta Airlines, Northwest Airlines, Atkins
Global and ICx Technologies Inc. Rodney is a Non-executive Director of the Congressional
Awards Foundation and United Way Worldwide.
As at the date of this report, Rodney does not hold interests in any stapled securities.
Ian Smith
BE Mining (Hons), BFin Admin
Independent Non-executive Director
Director from 1 January 2012 to 10 August 2015
Ian was previously the Managing Director and CEO of Orica Limited (to March 2015),
Managing Director and CEO of Newcrest Mining, the Global Head of Operational and
Technical Excellence at Rio Tinto, based in London, and Managing Director of Comalco
Aluminium Smelting within the Rio Tinto Group. Prior to this, Ian held senior operational
and project management roles with WMC Resources, Pasminco Limited and CRA Limited.
Ian was previously the President of The Australian Mines and Metals Association,
Chairman of the Minerals Council of Australia, and a Director of the Australian Chamber of
Commerce and Industry.
Ian is a Fellow of both the Institute of Engineers Australia and the Australasian Institute of
Mining and Metallurgy - from which he was awarded its highest honour, the Institute Medal,
in June 2012.
As at the date of his resignation, Ian held interests in 94,785 stapled securities.
6
6
2015 Transurban Annual Report Result
Statutory results
Revenue from ordinary activities increased 61.7 per cent to $1,860 million;
Profit from ordinary activities after tax decreased 248.0 per cent to a $373 million loss;
Profit from ordinary activities after tax excluding significant items decreased 82.1 per cent to $45 million;
Earnings before depreciation and amortisation, net finance costs, equity accounted investments and
income taxes (‘EBITDA’) increased 3.0 per cent to $782 million;
EBITDA excluding significant items increased 59.6 per cent to $1,211 million;
Statutory net profit attributable to security holders of the stapled group decreased 164.5 per cent to a
$182 million loss;
Statutory net profit before significant items attributable to security holders of the stapled group
decreased 70.6 per cent to $83 million; and
The Group incurred a statutory loss, arising from significant transaction and integration costs (including stamp
duty) related to the acquisition of Transurban Queensland. Excluding these significant items, a lower statutory
profit was influenced by higher depreciation and amortisation charges associated with the consolidation of
Transurban Queensland, the US assets and Cross City Tunnel.
Proportional results
Toll revenue increased 39.6 per cent to $1,559 million;
EBITDA increased by 8.9 per cent to $1,017 million;
EBITDA before significant items increased by 38.0 per cent to $1,289 million; and
Free cash increased 34.3 per cent to $768 million.
Distributions
Final distribution (declared prior to reporting date)
Final dividend (declared prior to reporting date)
Interim distribution for the current year
Interim dividend for the current year
Final distribution (prior year)
Final dividend (prior year)
Amount per
security
Cents
Franked amount
per security
%
17.0
3.5
20.5
16.0
3.5
19.5
17.0
1.0
18.0
–
100
–
100
14.7
100
Record date for determining entitlements to distribution and dividend
Date of payment of final distribution and dividend
30 June 2015
14 August 2015
Principal activities
The principal activities of the Group during the financial year were the development, operation and maintenance
of toll roads.
7
7
2015 Transurban Annual Report
Operating and financial review
Our business
Transurban manages and develops urban toll road networks in Australia and the United States of America.
Transurban is listed on the Australian securities exchange (‘ASX’) and has been in business since 1996.
Strategy
Transurban's target markets are the eastern seaboard of Australia and North America.
At the heart of our business strategy is our desire to be a ‘partner of choice’ for our government clients and an
organisation that meets the needs of our customers. To achieve this, we provide effective transportation solutions
to support the growth and development of the cities in which we operate.
At Transurban we do this through intensive management of our existing road networks, through our active
involvement in the transport policy debate, and by applying our unique skills to the infrastructure challenges in
our markets.
In delivering on this objective our business has fostered core capabilities in the following areas:
Network planning and forecasting
Community engagement
Development and delivery
Technology
Operations and customer management
Value proposition
Transurban has a market leading position with an interest in 14 assets across four markets. The investment
proposition for high quality toll road assets lies in providing investors with access to long dated, predictable,
growing cash flows generated over the life of the concession.
Organic growth is derived from traffic growth and inflation protected toll escalation. It is supported by
Transurban’s ability to provide efficient corporate and operational services at scale across its portfolio.
Transurban has a track record of leveraging its core competencies to drive cost efficiencies and margin uplift.
In addition, value is unlocked through the ongoing development of the portfolio through investment in the
underlying assets.
8
8
2015 Transurban Annual Report Operating and financial review (continued)
Segments
VIC
NSW
QLD
USA
CityLink
(100%)
Lane Cove
Tunnel
(100%)
Hills M2
Motorway
(100%)
Roam /
TollAust
(100%)
Cross City
Tunnel
(100%)
M1 Eastern
Distributor
(75.1%)
Logan
Motorway
(62.5%)
Gateway
Motorway
(62.5%)
95 Express
Lanes
(77.5%)1
495 Express
Lanes
(94%)1
Go Between
Bridge
(62.5%)
CLEM7
(62.5%)
Legacy
Way
(62.5%)
Westlink
M7
(50%)
Interlink
M5
(50%)
North
Connex
(50%)
D
E
N
W
O
Y
L
L
O
H
W
D
E
N
W
O
%
0
0
1
-
N
O
N
D
E
T
A
D
I
L
O
S
N
O
C
D
N
A
D
N
A
D
E
N
W
O
%
0
0
1
-
N
O
N
D
E
T
N
U
O
C
C
A
Y
T
U
Q
E
I
1. The acquisition of the non-controlling interest in the USA assets on 29 June 2015 does not impact the segment disclosures
which continue to be shown on a proportional basis in the current financial year. The proportional ownership of the USA assets
will be reported at 100% from 1 July 2015.
Concession assets timeline
Melbourne
CityLink
Sydney
Hills M2
Lane Cove Tunnel
Eastern Distributor
M5 South West Motorway
Westlink M7
Cross City Tunnel
Brisbane
Logan Motorway
Gateway Motorway
Clem7
Go Between Bridge
Legacy Way
Virginia
495 Express Lanes
95 Express Lanes
2048
2048
2048
2048
2051
2051
2051
2063
2065
2035
2026
2035
9
2087
2087
9
2015 Transurban Annual Report
Operating and financial review (continued)
Accounting for assets – changes during the year
During the year ended 30 June 2015, the following changes in accounting for our assets have taken place:
Transurban
Queensland
(‘TQ’)
In April 2014, a Transurban-led consortium (62.5% Transurban, 25% AustralianSuper and 12.5%
Tawreed, a wholly-owned subsidiary of the Abu Dhabi Investment Authority) reached agreement
to acquire Queensland Motorways for $6,673 million, plus stamp duty and transaction costs of
$438 million. Financial close was achieved on 2 July 2014. Transurban operates the network on
behalf of the owners.
Queensland Motorways changed its name to Transurban Queensland on 30 January 2015.
Legacy Way
Legacy Way tunnel opened to traffic on 25 June 2015 and Transurban Queensland achieved
financial close on 29 June 2015, with a payment of $118 million (including stamp duty).
Acquisition
of remaining
non-
controlling
interest in
USA
NorthWestern
Roads Group
On 29 June 2015 Transurban acquired the remaining interest in the co-investment vehicle
DRIVe, which holds investments in the 95 Express Lanes and 495 Express Lanes. Transurban
acquired the remaining 25% shareholding in DRIVe that it did not previously own from funds
managed by CP2 for US$145 million. This acquisition increases Transurban’s equity interest to
100% in both 95 Express Lanes and 495 Express Lanes from 77.5% and 94% respectively.
On 31 October 2014, the NorthWestern Roads Group (‘NWRG’) was created with the other
members of the consortium that hold the equity interests in Westlink M7. As part of this
transaction, the Group contributed a number of entities (‘the CARS Group’) and in return for
contributing these entities the Group received an equity interest equal to 50% of the fair value of
NWRG (including Westlink M7) on the date of the transaction. This transaction resulted in the
Term Loan Notes (‘TLNs’) owed by Westlink M7 to the CARS Group being derecognised by the
Group and instead the Group has recognised an equity accounted investment in NWRG for an
amount equal to the value of the TLNs on the date of the transaction. NWRG also holds the
Group’s interest in the NorthConnex Project in the NSW network that reached financial close on
31 January 2015.
Group financial performance
Financial performance indicators
The Transurban Board and management assess the performance of the networks in which we operate based on
a measure of proportional earnings before interest, tax, depreciation and amortisation expenses (‘Proportional
EBITDA’) excluding the impact of significant items (‘Underlying proportional EBITBA’). This reflects the
contribution of each network in the Group in the proportion of Transurban's equity ownership.
To arrive at the proportional result, minority interests in Transurban’s controlled roads are backed out and
Transurban interests in non-controlled assets are included, in proportion to Transurban’s ownership.
Free cash is the primary measure used to assess Transurban’s cash generation. Free cash is used as the guide
to determine distributions to security holders.
10
10
2015 Transurban Annual Report Operating and financial review (continued)
Year ended 30 June 2015 highlights
Statutory results
Toll revenue
EBITDA
Net (loss)/profit
EBITDA excluding significant items
Net profit after tax excluding significant items
Proportional EBITDA
FY15
$M
1,514
782
(373)
1,211
45
FY14
$M
906
759
252
759
252
Segment information in note B4 to the financial statements presents the proportional result for Transurban
Group, including reconciliations to the statutory result. Management considers proportional EBITDA to be
the best indicator of asset performance. The table below also provides FY15 results adjusted to exclude
certain acquisitions so as to assess the performance of the existing business to the prior year result.
Toll revenue
Fee and other revenue
Total costs
EBITDA excluding significant
items
Significant items
EBITDA
FY15
$M
1,559
167
(437)
1,289
(272)
1,017
FY14
$M
1,117
115
(298)
934
–
934
FY15
Adjusted1
$M
FY14
Adjusted2
$M
% Change3
1,223
141
(316)
1,048
–
1,048
1,105
1,105
115
(293)
927
–
927
10.7%
10.7%
22.6%
7.8%
13.1%
–
13.1%
1. Excludes significant items relating to the Queensland Motorway acquisition, contributions associated with the 95 Express Lanes, Cross City
Tunnel, Transurban Queensland and changes in ownership interest in the US business.
2. Excludes contribution from Pocahontas 895.
3. Percentage change between adjusted FY14 and adjusted FY15.
Financial position
Market capitalisation
Shares on issue – 30 June
Cash and cash equivalents
FY15
M
FY14
M
$17,800
$14,011
1,914
$1,249
1,896
$2,879
Transurban’s operating assets are primarily long-life intangible assets (concession assets), representing the
provision by Government entities for the right to toll customers for the use of the assets. Concession assets
represent 79 per cent of the total assets of the Group. The duration of the concessions typically range from
approximately 30 to 80 years, and for accounting purposes the carrying values are amortised on a straight line
basis over the duration of the concession.
11
11
2015 Transurban Annual Report Operating and financial review (continued)
Free cash and cash flows from operations
Free cash
Weighted average securities eligible for distribution
Free cash per security (cents)
FY15
$768M
1,910M
40.2
FY14
% Change
$572M
1,690M
33.9
34.3%
13.0%
18.6%
Movements in free cash during the period have been influenced by:
à Growth in EBITDA from the from 100 per cent owned assets
à Increase in distribution from Eastern Distributor, M5 and M7.
à Distributions from Transurban Queensland
The weighted average securities eligible for distribution have increased due to the full year impact of the equity
issued in May 2014 to support the acquisition of Transurban Queensland.
Note B10 to the statutory accounts provides a detailed calculation of free cash.
Network performance
Network
Highlights
Sydney1
Traffic growth continuing to benefit
from additional capacity delivered
through widening and ramp
projects
Truck toll multipliers increased on
Lane Cove Tunnel, M5 South West
Motorway and Westlink M7
Prop. Toll
revenue
contribution
Traffic
growth
(ADT)
Toll
revenue
growth
EBITDA
growth
EBITDA
margin
42.8%
7.7%
21.2%
20.2%
83.8%
Melbourne Average weekend/public holiday
traffic growth increased by 5.5%
37.0%
3.0%
7.8%
11.3%
93.2%
Reduction in operating expenses
from in-housing management of
road operations and incident
response
Brisbane2 Integration is on track and
15.9%
2.7%
6.8%
12.2%
74.7%
delivering benefits
Improvement in traffic growth for
Logan Motorway in H2 FY15
following completion of Stage 1
rectification works
Northern
Virginia3
95 Express Lanes opened well
relative to expectations
There have been operating cost
benefits following the integration of
495 and 95 Express Lanes
4.3% 139.7% 206.5%
N.M.4
48.2%
1. Transurban acquired Cross City Tunnel (‘CCT’) on 26 June 2014, and as such the previous corresponding period only includes traffic and
revenue data from this date until 30 June 2014. Excluding CCT from FY14 and FY15, Sydney ADT increased by 7.5%, toll revenue grew by
11.5%, EBITDA grew by 13.5% and the EBITDA margin is 86.1%.
2. Brisbane ADT growth, toll revenue growth and EBITDA growth are calculated using the FY14 pro forma as the previous corresponding period.
EBITDA Growth and EBITDA margin are calculated before significant items.
3. Excludes Pocahontas 895 in the previous corresponding period and the impact of change in ownership percentage of 95 and 495 Express
Lanes, which occurred on 29 June 2015. Toll revenue and EBITDA growth are calculated in USD, EBITDA margin is calculated in AUD.
4. Not meaningful.
12
12
2015 Transurban Annual Report Operating and financial review (continued)
New South Wales
Operations
Consolidation of O&M
Roll-out of GLIDe
Concession life extensions
Previous Eastern
Distributor evergreen
operating and
maintenance contract
renegotiated
Transurban will be
undertaking Eastern
Distributor and Cross
City Tunnel operations
A contractor providing
maintenance services
for 12 years
Transurban has continued
to roll out the GLIDe
tolling system to NSW
assets in FY15. Eastern
Distributor, M2, Lane
Cove Tunnel and M7
assets are now all
operating on the GLIDe
platform
GLIDe retail services also
replaced Roam Tolling’s
existing system in June
2015
As a result of the financial
close of NorthConnex, the
concession length of the
M2, Lane Cove Tunnel and
the M7 have all been
extended and they now
expire in 2048. Following
financial close of
NorthConnex, an increase in
the truck tolls on Lane Cove
Tunnel and M7 commenced
and will increase to three-
times the car tolls
progressively over two years
Development
NorthConnex
Other projects completed
Construction environmental management
M2 – Lane Cove Road on-ramp opened to
plan approved in June 2015
traffic on 25 July 2014
Shaft excavation is scheduled to commence
Completion of the M5 West widening project
in September 2015
on 15 December 2014
Victoria
Operations
CityLink operations
FY15 was the first full year of direct management of road operations and incident response
7.6% reduction in operating expenses due to savings from customer contact initiatives and the direct
management of road operations
Development
CityLink Tulla widening
Western Distributor
The CityLink Tulla widening project is a
The Western Distributor is a proposed tunnel
major freeway upgrade that is designed to
increase capacity, ease congestion and
improve safety along the Tullamarine
Freeway, CityLink and the West Gate
Freeway – from Bulla Road in Essendon
North through to Power Street in
Southbank. The works are scheduled to
commence in October 2015 and be
completed by early 2018
Contract renegotiation reached financial
close on 30 April 2015
and elevated motorway that connects the West
Gate Freeway with the Port of Melbourne,
CityLink and the central business district,
providing an alternate river crossing and easing
pressure on the West Gate Bridge. The
Victorian Government commenced its
assessment of Transurban’s proposal
Transurban is working collaboratively with the
Victorian Government to progress Stage 3 of
the market-led proposal process
13
13
2015 Transurban Annual Report Operating and financial review (continued)
Queensland
Operations
Transurban Queensland integration
Legacy Way
Transurban has worked throughout FY15 to
Opened 25 June 2015
Initial traffic data performing well relative to
expectations
Legacy Way delivers a critical connection
between the inner northern suburbs and the
western suburbs of Brisbane considerably
reducing travel times and relieving congestion.
integrate Transurban Queensland into the
wider Transurban Group. The integration
program is on track
Integration is realising significant operational
and financial benefits, including improving
EBITDA margin
Further benefits are expected from
technology and operations and maintenance
integration in FY16/17
Development
Gateway Upgrade North
Transurban Queensland is managing the project on behalf of the Queensland Government
A design and construct contractor has been appointed
Northern Virginia, United States of America
Operations
95 Express Lanes
Tolling of the 95 Express Lanes commenced on 29 December 2014
Opened well relative to expectations
Continued ramp up with increasing toll pricing and traffic volumes
14
14
2015 Transurban Annual Report Operating and financial review (continued)
Financing activities
During the reporting period Transurban executed a number of financing activities including:
July 2014
Transurban drew $2,900 million in term bank debt to fund the acquisition of Queensland
Motorways.
August 2014
Westlink M7 refinanced $1,270 million of debt facilities.
September 2014
Transurban issued €600 million of secured fixed rate 10 year notes under the Euro
Medium Term Note programme.
December 2014
Transurban Queensland issued $250 million of secured fixed rate 7 year notes.
December 2014
Transurban Queensland issued $200 million of secured floating rate 10 year notes.
March 2015
Hills M2 refinanced $755 million of senior secured debt facilities.
April 2015
May 2015
Transurban Queensland placed $200 million in 15 year secured senior debt to REST
(Retail Employees Superannuation Trust).
Transurban issued €500 million of secured fixed rate 10 year notes under the Euro
Medium Term Note programme.
June 2015
Transurban refinanced $300 million of working capital facilities.
In April 2015 Transurban confirmed that Standard and Poor’s Financial Services LLC rating service had
downgraded Transurban Finance Company Pty Limited’s senior secured debt credit rating from A-
(negative outlook) to BBB+ (stable outlook).
The senior secured credit rating of Transurban Queensland was also downgraded by Standard and Poor’s
Financial Services LLC rating service from BBB+ to BBB.
There were no changes to the ratings provided by Moody’s Investors Services Inc. or Fitch Ratings Inc. during
the period.
The following diagram shows the non-recourse and corporate debt balances of the Group.
Non Recourse
Transurban
Queensland
AMTN
A$0.5B
Private
Placement
A$0.2B
Term Debt
A$2.3B
Clem 7
A$0.3B
Transurban
Corporate Debt
US
Capital Markets
Bank Debt
495 Express Lanes
95 Express Lanes
PABs
US$0.2B
TIFIA
US$0.7B
PABs
US$0.2B
TIFIA
US$0.3B
Term Debt
A$0.1B
US$0.1B
Working
Capital
A$0.9B
AMTN
A$0.8B
EMTN
€1.6B
Maple
C$0.3B
USPP
US$1.0B
A$0.1B
Bank Debt
Capital Markets Debt
Government Debt
CCT
A$0.3B
LCT
A$0.3B
M5
A$0.7B
M7
A$1.3B
M1
NSW
M2
A$0.8B
AMTN
A$0.3B
Term Debt
A$0.2B
Debt maturity profiles
The following charts show the Group’s current debt maturity profile based on the total facilities available.
The charts show the debt in the financial year it matures and in the case of the non-recourse debt, the full value
of the debt facilities has been shown as this is the value of debt for refinancing purposes.
The debt values are shown at 30 June 2015 and Canadian dollar and US dollar debt has been converted at the
hedged rate where cross currency swaps are in place. Unhedged US dollar debt has been converted to
Australian dollars at spot exchange rate ($0.77 at 30 June 2015).
15
15
2015 Transurban Annual Report
Operating and financial review (continued)
Corporate debt maturity profile
N
O
I
L
L
I
M
$
A
2,200
2,000
1,800
1,600
1,400
1,200
1,000
800
600
400
200
Working Capital Facilities
USPP
EMTN
Term Bank Debt
A$ notes
Letters of Credit
60
133
121
575
500
129
300
165
125
300
233
254
796
240
219
206
211
833
706
94
Non-recourse debt maturity profile
N
O
I
L
L
I
M
$
A
2,200
2,000
1,800
1,600
1,400
1,200
1,000
800
600
400
200
520
405
1150
277
260
288
625
293
447
525
350
750
225
300
Transurban Queensland incl (Clem7)
Hills M2
Westlink M7
495 Express Lanes
95 Express Lanes
Eastern Distributor
M5 South West
Lane Cove Tunnel
Cross City Tunnel
403
1226
225
250
200
200
315
Financial risk management
Transurban’s exposure to financial risk management and its policies for managing that risk can be found in
the Financial Risk Management notes in the financial statements – note B15. This section discusses
Transurban’s hedging policies, credit risk, interest rate risk and liquidity and funding policies.
Corporate activities
Executive Committee changes
On 14 July 2014, Samantha Hogg, Chief Financial Officer, left Transurban. Samantha was replaced by Adam
Watson, who commenced in December 2014.
Michele Huey was appointed to the role of Group General Manager, Strategy after it was vacated by Wesley
Ballantine who was appointed to Group General Manager, Queensland.
On 14 July 2014, Tony Adams was promoted to Group General Manager, Project Delivery and Operational
Excellence.
Tony replaced Tim Steinhilber, who transferred back to the USA to support delivery of the 95 Express Lanes
project and is no longer a KMP.
16
16
2015 Transurban Annual Report
Operating and financial review (continued)
People
At Transurban we aim to create an environment where our people are encouraged to reach their full potential,
and are recognised and rewarded for their achievements. We strive to maintain an open culture where diversity is
welcomed and accepted. We want everyone in our workplace to be treated fairly and to feel their contribution is
valued. The safety and wellbeing of our employees are central to everything we do as a business. We recognise
that, ultimately, our future successes are a direct result of the people who work with us and the contribution they
make every day.
We have ~1000 employees located in our four regions, Melbourne, Sydney, Brisbane and Washington, DC.
This year, our internal employee opinion survey showed that 80% of employees are proud to work for
Transurban. The way we work together and engage with our customers is guided by our values of Integrity,
Collaboration, Accountability, Ingenuity and Respect and our survey told us that 89% of our employees believe
in the values of the Group.
Leadership
We support our employees’ career aspirations by offering personal and professional development opportunities.
We offer a range of career planning and support programs to suit the many different needs and learning styles of
our workforce. We support and encourage eligible employees to pursue further education related to their specific
discipline or future career path at Transurban. Through our learning and development policy, eligible employees
have access to both study/exam leave and financial assistance.
We are dedicated to the ongoing development of our existing and future leaders. This year, 42 senior leaders
attended the annual Senior Leadership Program. The key theme of the program was driving for continued high
performance. There has also been a focus on building greater leadership capability through the middle
management group. Activities to support this include the implementation of a Group Coaching program;
cascading of activities from the Senior Leadership Program; and the continuation of the Coaching and Mentoring
program for female managers.
Transurban conducts a bi-annual talent review with the Executive and Senior Leadership teams. This review
helps identify high potential individuals who may have the ability to move into a Senior Leadership or Executive
roles, or those who may be able to move laterally outside of their area of technical expertise.
Capability
We continue to identify ways to build capability at all layers within the organisation. A key activity throughout
FY15 has been a spans and layers review, which provides guiding principles for future organisational design
activity which support leadership and professional/technical career pathways. In line with our commitment to
building talent internally, the Transurban Graduate Program will commence in January 2016. The aim of the
program is to attract the next generation of Transurban leaders and professional/technical experts.
We have developed relationships with key universities enabling the establishment of summer internships for
engineering and business graduates. We have also partnered with Career Trackers to support indigenous
university students with work placement opportunities.
Performance
There has been a significant focus on developing a high performance culture through differentiating performance.
The Short Term Incentive program and the introduction of formal performance comparisons against peers, has
strengthened the link between individual and Group performance. We offer a range of employee benefits
including an employee share scheme and group insurance including salary continuance, death and permanent
disablement insurance cover.
17
17
2015 Transurban Annual Report Operating and financial review (continued)
Wellbeing
At Transurban, we believe that healthy employees contribute to a high performing company. We are committed to
keeping our employees safe, and promoting their health and wellbeing so they can enjoy fit and healthy lives,
both at work and at home. Our Wellbeing program has five essential elements: health; work; financial; values and
staying connected. The employee volunteer program has continued, which includes the ability for all employees
to take one day of paid volunteer leave each year. The inaugural Transurban Annual Awards were held in
October 2014 which recognises achievements of employees in the categories of customer service, diversity,
ingenuity, safety, sustainability and overall business excellence.
Sustainability
Transurban's vision “to strengthen communities through transport” is closely supported by our Sustainability
Strategy. We are committed to making sure that our roads help make our cities great places to live and work —
both now and in the future.
Transurban’s Sustainability Strategy has three key pillars:
Be good neighbours: We will work with communities to create shared value with our business by
anticipating, listening and responding to community needs;
Use less: We will minimise natural resource use and create resource efficiencies during development,
operations and maintenance to reduce the impacts of our operations on the community and
environment; and
Think long term: We will look for innovative transport solutions that will create efficient, safe transport
networks and thriving cities
During the period Transurban continued with a range of sustainability initiatives including community partnerships
and grants programs, energy efficiency studies for our roads and tunnels, road corridor regeneration projects,
and continued public reporting of our sustainability performance.
Transurban provides regular progress reports to the Board on the focus areas. The annual Sustainability Report
summarises the year’s activities and outlines commitments for the coming years.
The 2015 Sustainability Report will be published in October 2015 and available via the Transurban website.
Safety
Safety is a key focus of our business. We measure our safety performance in our workplace and on our road
networks. In FY15, Transurban achieved zero recordable injuries and zero lost time injuries in our workplace.
The safety performance on our road networks is favourable to network averages for Australia and the United
States. The chart below compares the number of incidents resulting in an injury on Transurban’s road networks,
with the broader network averages.
Road Injury Crash Index (‘RICI’)1 Comparison
25
20
10
5
0
BROADER USA NETWORK RICI
– INDICATIVE
BROADER AUSTRALIAN NETWORK RICI
– INDICATIVE
TRANSURBAN NETWORK RICI
4.2
5.0
4.8
6.3
1H14
2H14
1H15
2H15
1. Serious road injury (an individual transported from or receives medical treatment, at scene) crashes per 100 million vehicle kilometres travelled
18
18
2015 Transurban Annual Report Operating and financial review (continued)
Business risks and opportunities
The following are key opportunities that may impact Transurban’s financial and operating result in future periods:
Ability to leverage capabilities to enhance motorway networks;
Greater than forecast traffic volumes;
Integration of consistent technology and systems to enhance network footprint;
Ability to harness knowledge and experience to drive operations and maintenance;
Identification of new business opportunities in Transurban’s target markets; and
Application of sustainability initiatives to enhance road user and local community experiences.
The following are key risks that may impact Transurban’s financial and operating result in future periods:
Reduced traffic volumes or an inability to grow traffic volumes;
Change in government policies;
Competitor growth or behaviour;
Access to suitable financing arrangements;
Safety incidents through operations or driver behaviour;
Dependency on the services of key contractors and counterparties;
Unfavourable changes to market or operating conditions;
Cyber and information protection; and
Failure of technical infrastructure.
Risk management
Managing risk is an essential part of our business. Key risks are regularly reviewed by the Board, the Audit and
Risk Committee and our Executive Committee.
Transurban has a business-wide risk framework in place to help create a consistent and rigorous approach to
identifying, analysing and evaluating risks. This framework has various policies, standards and guidelines
attached to it, including the Risk Management Policy which can be found in the Corporate Governance section of
our website (transurban.com).
The framework is overseen by the Audit and Risk Committee and is actively managed by the Executive
Committee. It is consistent with AS/NZ31000:2009 and is subject to regular review by internal audit. Our Audit
and Risk Committee Charter is also available in the Corporate Governance section of our website.
Company secretaries
Amanda Street LLB (Hons), BComm
Amanda joined Transurban in September 2008 and was appointed as Company Secretary in February 2011.
Before joining Transurban, Amanda was Assistant Company Secretary at SP AusNet, and Senior Corporate
Counsel at National Australia Bank. She has over 15 years of legal, company secretariat and other relevant
experience. Prior to her in-house work, Amanda was a solicitor specialising in M&A work with Australian law firm
King & Wood Mallesons.
Julie Galligan LLB, BA
Julie joined Transurban in November 2008 and was appointed as General Counsel in February 2012. Julie has
over 15 years' legal experience in private practice and in-house roles in both Australia and the United Kingdom.
Prior to joining Transurban, Julie worked in-house at Associated British Ports and at law firms, SJ Berwin LLP
and MinterEllison.
19
19
2015 Transurban Annual Report Operating and financial review (continued)
Meetings of directors
The number of meetings of the Boards of Directors of THL, TIML and TIL and each Board Committee held
during the year ended 30 June 2015, and the number of meetings attended by each Director are set out in the
following tables.
Meetings of the Boards of Directors of THL, TIML and TIL were held jointly.
Board of Directors
Audit & Risk
Committee1
Remuneration &
HR Committee2
Nomination
Committee3
Attended Held
Attended Held
Attended Held Attended Held
8
8
7
8
8
8
8
8
8
8
8
8
8
8
8
8
7
7
5
7
7
6
*
7
*
*
*
7
7
*
7
*
*
5
5
5
4
3
1
1
*
*
5
5
5
*
*
*
3
2
2
3
3
3
3
3
3
*
3
3
3
3
3
*
Lindsay Maxsted
Scott Charlton
Neil Chatfield
Robert Edgar
Samantha Mostyn
Christine O'Reilly
Rodney Slater
Ian Smith4
* = Not a member of the relevant Committee
1. Scott Charlton is not a member of the Audit and Risk Committee but attended meetings during the year.
2. Lindsay Maxsted, Scott Charlton, Christine O'Reilly, Rodney Slater and Ian Smith were not members of the Remuneration and Human Resources
Committee but attended meetings during the year. Scott Charlton was excluded from discussions involving his remuneration during meetings which
he attended.
3. Scott Charlton and Ian Smith were not members of the Nomination Committee but attended meetings during the year.
4. Ian Smith resigned as a Non-executive Director effective 10 August 2015.
20
20
2015 Transurban Annual Report 2015 Remuneration report (audited)
Introduction
The Board is pleased to present the Remuneration Report for the Transurban Group (‘Group’) for the year ended
30 June 2015 (‘FY15’). This report, prepared in accordance with the Corporations Act 2001, contains detailed
information regarding the remuneration arrangements for the directors and senior executives who were the 'key
management personnel' (‘KMP’) of the Group during FY15.
The KMP are listed in the table below:
Non-executive Directors
Lindsay Maxsted, Chair
Neil Chatfield
Robert Edgar
Samantha Mostyn
Christine O'Reilly
Rodney Slater
Ian Smith1
Current senior executives2
Scott Charlton, Executive Director and Chief Executive Officer (‘CEO’)
Tony Adams, Group General Manager, Project Delivery and Operational Excellence (from 14 July 2014)3
Jennifer Aument, Group General Manager, North America
Wesley Ballantine, Group General Manager, Queensland
Andrew Head, Group General Manager, New South Wales
Michele Huey, Group General Manager, Strategy (from 19 January 2015)
Sue Johnson, Group General Manager, Customer Operations and Human Resources
Lisa Tobin, Group General Manager, Technology
Vin Vassallo, Group General Manager, Victoria
Adam Watson, Chief Financial Officer (from 1 December 2014)
Former senior executives
Samantha Hogg, Chief Financial Officer (departed 14 July 2014)
Tim Steinhilber, Group General Manager, Delivery and Operational Excellence (transferred back to the USA 14 July 2014)4
1. Ian Smith resigned as a Non-executive Director effective 10 August 2015.
2. The dates on which senior executives who were appointed or promoted during the year ended 30 June 2015 represent the period of time that
those senior executives were members of KMP. Their remuneration for the period which they were members of KMP is disclosed in this report.
3. Formerly Vice President, Infrastructure (in the USA).
4. Tim Steinhilber transferred back to the USA to support the delivery of the 95 Express Lanes project and is no longer a KMP.
21
21
2015 Transurban Annual Report Remuneration report (continued)
1. Remuneration snapshot
The Transurban board is committed to an executive remuneration framework that is focused on driving a
performance culture and linking pay to the achievement of the Group’s strategy and business objectives and,
ultimately, generating security holder value.
Transurban’s remuneration framework is reviewed annually taking into consideration security holder and other
stakeholder feedback, market expectations and regulatory developments.
At the 2014 annual general meeting (‘AGM’), the remuneration framework received strong support from security
holders, with a 98.83 per cent vote in favour of the resolution to adopt the 2014 Remuneration report.
The Group considers its current remuneration framework to be the culmination of a thorough and considered
review process over the last four years. Since 2011, the Group has:
maintained rigour in the determination and ongoing management of the total remuneration packages for
the CEO and senior executives;
introduced short term incentive (‘STI’) deferral (FY12). Initially this was 30 per cent of any STI awarded
to senior executives and was deferred into Transurban securities vesting two years after the
performance year. The percentage of STI deferred was increased to 50 per cent for all new senior
executives effective from FY13 and for all senior executives from FY14;
introduced clawback provisions on all unvested STI deferred awards (FY12) to provide a mechanism to
reclaim awards in the event of misconduct or the material misstatement of financial results;
introduced a bespoke comparator group for the TSR component of long term incentive (‘LTI’) awards
(FY12) to refine the comparison group to those companies who the Group potentially competes with for
capital and executive talent;
replaced proportional EBITDA with free cash flow (‘FCF’) as the second performance measure for LTI
awards (FY12). This change supported the continued focus on the maximisation of free cash and in turn
greater distributions to security holders;
been transitioning since FY13 from a fair value allocation valuation methodology for the FCF component
of LTI awards to a face value (discounted for distributions) approach. This transition will be completed
for grants made in FY16; and
revised the STI program to enhance this variable pay element through increased performance
differentiation, the introduction of formal performance comparisons against peers, and strengthening the
link between individual and Group performance.
The board considers that the current remuneration framework offers a range of mechanisms to balance sensible
risk management and motivate executives to deliver outstanding results.
A core strategy of the Group is continued distribution growth and value creation for security holders. Consistent
with this strategy, the Group has significantly expanded its portfolio with acquisitions and development projects in
Australia and the USA, leveraging its urban networks and partnering with Governments to develop transport
solutions in our core markets of the east coast of Australia and North America.
Since FY11, as shown in the graphs below, distributions paid to security holders have grown by 48.1 per cent
(27.0 cents in FY11 to 40.0 cents in FY15) and underlying proportional EBITDA (refer to note B4 for further
details) has increased by 79.3 per cent.
Distribution paid per security
(cents)
Proportional1 EBITDA
($ millions)
40.0
35.0
29.5
31.0
27.0
45.0
40.0
35.0
30.0
25.0
20.0
2011
2012
2013
2014
2015
1. Proportional EBITDA excluding significant items.
22
1400
1200
1000
800
600
22
1,289
934
784
828
719
2011
2012
2013
2014
2015
2015 Transurban Annual Report Remuneration report (continued)
A key component of the Group’s remuneration strategy includes a pay for performance policy, which is aimed at
rewarding and retaining those senior executives who are instrumental in driving sustainable performance.
A. Transurban’s remuneration framework
The key elements of the remuneration framework for the CEO and other senior executives for FY15 were as
follows:
Remuneration mix
The remuneration of the CEO and other senior executives was structured as a mix of fixed remuneration and
variable ('at risk') remuneration through short term and long term incentive components. The relative weightings
of the three components were as follows:
Total remuneration % (annualised at target)
Fixed TEC
Variable (performance based)
CEO
Senior executives
40
45
Fixed total employment cost (‘TEC’)
STI
30 (50% deferred)
30 (50% deferred)
LTI
30
25
Fixed TEC was set with reference to the market median, using the ASX 10-40 as the primary reference.
Remuneration packages (including TEC levels) are reviewed annually by the Remuneration and Human
Resources Committee taking into consideration an individual's role, experience and performance, as well as
relevant comparative market data provided by an independent remuneration consultant. TEC levels are also
reviewed on a change in role.
Short term incentive (‘STI’)
For FY15, STI performance measures were as follows:
Group performance measures (50 per cent of the award) were linked to growth in proportional EBITDA,
cost management based on proportional net costs, and safety. See section 4D for further details; and
Individual key performance indicators (‘KPIs’) (50 per cent of the award).
Each individual’s assessment is used in determining a rating relative to peers. The overall rating is used to
calculate an individual’s STI using a payment schedule as determined by the board, which is designed to
encourage high performance.
STIs awarded to senior executives include a mandatory deferral component of 50 per cent, deferred for two years
following the performance year.
For Australian senior executives, STI deferral is into Transurban securities. Due to legal restrictions on the issue
of securities to USA residents, the USA resident senior executives receive deferred cash awards. The deferred
component of remuneration may, at the discretion of the Board, be subject to forfeiture or clawback (e.g. in the
event of misconduct or material misstatement of financial results).
Long term incentive (‘LTI’)
For FY15, LTI performance measures were as follows:
50 per cent relative Total shareholder return (‘TSR’) measured against a bespoke comparator group
comprising companies in the transport, utilities, real estate, telecommunications and construction Global
industry classification standards (‘GICS’) sectors of the ASX 150; and
50 per cent free cash flow (‘FCF’) per security, reflecting the Group's focus on maximising free cash flow
to drive security holder return. The definition of FCF per security is set out in note B10. The FCF
calculation is included in note B10 of the audited financial statements.
23
23
2015 Transurban Annual Report Remuneration report (continued)
B. Changes to KMP
Incoming Chief Financial Officer – Adam Watson
On 1 December 2014, Adam Watson commenced with the Group as Chief Financial Officer. His remuneration on
an annualised basis consists of:
Total fixed remuneration (‘TEC’) of $650,000; and
Variable elements comprising a STI target opportunity of 30 per cent of his total remuneration package
($435,500); and LTI target opportunity of 25 per cent of his total remuneration package ($364,000).
Adam Watson was eligible to participate in the LTI plan and STI program in FY15, pro-rated from his
commencement date.
In recognition of giving up certain equity awards with his former employer to join the Group, he received a one-off
grant of Transurban equity, subject to his continued employment with the Group. The grant consists of 15,188
performance awards (valued at $125,000 at grant date), which will vest in two equal tranches of 7,594 on the first
and second anniversaries of his commencement with the Group. Each performance award is an entitlement to
receive one fully paid Transurban security on vesting.
Incoming Group General Manager, Strategy – Michele Huey
On 19 January 2015, Michele Huey commenced with the Group as Group General Manager, Strategy.
Her remuneration on an annualised basis consists of:
Total fixed remuneration (‘TEC’) of $480,000; and
Variable elements comprising a STI target opportunity of 30 per cent of her total remuneration package
($321,600); and LTI target opportunity of 25 per cent of her total remuneration package ($268,800).
Michele Huey was eligible to participate in the LTI plan and STI program in FY15, pro-rated from her
commencement date.
In recognition of giving up certain equity awards with her former employer to join the Group, she received a one-
off grant of Transurban equity, subject to her continued employment with the Group. The grant consists of 25,788
performance awards (valued at $225,131 at grant date), which will vest in two equal tranches of 12,894 on the
first and second anniversaries of her commencement with the Group. Each performance award is an entitlement
to receive one fully paid Transurban security on vesting.
Incoming Group General Manager, Project Delivery and Operational Excellence – Tony Adams
On 14 July 2014, Tony Adams was promoted to Group General Manager, Project Delivery and Operational
Excellence. Tony has been with the Group since June 2003, his former role was Vice President, Infrastructure
located in the USA. His remuneration on an annualised basis consists of:
Total fixed remuneration (‘TEC’) of $520,000; and
Variable elements comprising a STI target opportunity of 30 per cent of his total remuneration package
($348,400); and LTI target opportunity of 25 per cent of his total remuneration package ($291,200).
Outgoing Chief Financial Officer – Samantha Hogg
On ceasing employment as Chief Financial Officer on 14 July 2014, Samantha Hogg received a sum equivalent
to six months TEC as a payment in lieu of notice ($347,272) and her unvested equity awards lapsed in
accordance of their original terms (231,329 LTI awards and 17,944 deferred STI awards).
Outgoing Group General Manager, Project Delivery and Operational Excellence – Tim Steinhilber
Tim Steinhilber, former Group General Manager, Project Delivery and Operational Excellence transferred back to
the USA to support the delivery of the 95 Express Lanes project and was no longer a KMP.
24
24
2015 Transurban Annual Report Remuneration report (continued)
2. Remuneration governance
A. Board and remuneration and human resources committee responsibility
The Remuneration and Human Resources Committee assists the Board in fulfilling its responsibilities relating to
the remuneration of Non-executive Directors, the remuneration of, and incentives for, the CEO and other senior
executives, and remuneration practices, strategies and disclosures generally.
It is critical that the Remuneration and Human Resources Committee is independent of management when
making decisions affecting employee remuneration. Accordingly, the Committee comprises Non-executive
Directors, all of whom are independent. Where appropriate, the CEO and the Group General Manager, Customer
Operations and Human Resources attend committee meetings, however they do not participate in formal
decision making.
The membership of the Remuneration and Human Resources Committee was unchanged in FY15. The
members of the Committee continue to be Robert Edgar (Chair), Samantha Mostyn and Neil Chatfield. Further
details regarding the Committee are set out in the Directors’ report.
The Remuneration and Human Resources Committee reviews gender pay equity annually. The Group’s focus is
on achieving gender pay equity at all employee levels in the organisation. The Group is proud of its achievements
and continues to focus on gender diversity and is pleased that the FY15 review indicated no significant
differences between male and female pay.
B. Engagement of remuneration consultants
To ensure that the Remuneration and Human Resources Committee has all relevant information when making
remuneration decisions, it may seek and consider advice from independent remuneration consultants where
appropriate. Any advice from consultants is used to guide the Committee and the Board, but does not serve as a
substitute for thorough consideration by Non-executive Directors.
During FY15, no consultants provided the Remuneration and Human Resources Committee with a remuneration
recommendation relating to KMP. Ernst & Young provided the Committee with benchmark data only.
The Group has a protocol in place governing the appointment of remuneration consultants and the manner in
which any recommendations made by those consultants concerning the remuneration of KMP are to be provided
to the Group, and in particular the circumstances in which management may be given access to those
recommendations. The purpose of the protocol is to ensure that any remuneration recommendations provided by
consultants are provided without undue influence by KMP.
In accordance with the protocol, all remuneration recommendations and advice must be sent directly to the
Remuneration and Human Resources Committee through the Chair of the Committee. The provision of such
material or other information directly to management is prohibited. The protocol also requires a consultant to
provide, with their recommendations, both a declaration of their independence from KMP to whom their
recommendations relate, and also confirmation that the Committee’s conditions for contact and dialogue with
management have been observed.
25
25
2015 Transurban Annual Report Remuneration report (continued)
3. Remuneration in context
Transurban is a top 20 organisation listed on the Australian Securities Exchange and is the largest transport
infrastructure entity in Australia, and one of the largest toll road entities in the world. Transurban is focused on
being the ‘partner of choice’ for its Government clients and an organisation that meets the needs of our
customers through effective and innovative urban transport solutions in road infrastructure.
The effective management of our toll road concessions involves leveraging a network footprint in our markets,
taking a leading role in shaping policy, and utilising our core capabilities in the following areas:
Network planning and forecasting;
Community engagement;
Development and delivery;
Technology; and
Operations and customer management.
The investment proposition for high quality toll road assets lies in providing investors with access to long dated,
predictable, growing cash flows generated over the life of the concessions through effective management and
development of the road corridors they govern.
The Board and management are focused on enhancing security holder value through the strong performance of
the Group’s asset portfolio. Development activities provide opportunities to expand the portfolio and unlock
further value in the concessions. The Group is focused on the long term management of toll road assets at
various stages of maturity to achieve the best outcomes for investors, Government partners and the community.
In Australia, the Group’s interests include 100 per cent ownership of CityLink in Melbourne, and the Hills M2,
Lane Cove Tunnel and Cross City Tunnel in Sydney. The Group has partial interests in a further three roads on
the Sydney orbital network, being the M1 Eastern Distributor (75.1 per cent), the M5 (50 per cent), and the
Westlink M7 (50 per cent). The Group also has an interest in five assets in Brisbane (Gateway Motorway, Logan
Motorway, CLEM 7, Go Between Bridge and Legacy Way) through its 62.5 per cent investment in Transurban
Queensland (formerly known as Queensland Motorways).
On 29 June, the Group’s interests in the USA increased to 100 per cent ownership of the 495 Express Lanes and
the 95 Express Lanes. The acquisition of the non-controlling interest in these USA assets does not impact the
proportional disclosures throughout this report. The prior ownership interest of 94.0 per cent and 77.5 per cent
respectively, have been used for the entire reporting period with the proportional ownership interest being shown
at 100 per cent from 1 July 2015.
26
26
2015 Transurban Annual Report Remuneration report (continued)
4. CEO / senior executive remuneration for FY15
A. Remuneration strategy and policy
The Group's executive remuneration strategy is designed to attract, retain and motivate a highly qualified and
experienced management team with the necessary skills and attributes to lead the Group in achieving its
business objectives. The strategy also aims to encourage management to strive for superior performance by
rewarding the achievement of targets that are challenging, clearly understood, and within the control of
individuals to achieve through their own actions.
The Group's remuneration strategy and policy as set by the Board is summarised below:
Creating security holder value
Remuneration strategy
Attract, retain, motivate and reward executives critical to the Group's growth and success by:
– Offering competitive remuneration that is benchmarked against the external market
– Providing a balance of fixed and variable (or 'at risk') remuneration
Align executive reward with individual and Group performance by:
– Making short and long term components of remuneration 'at risk' based on performance
– Assessing rewards against appropriate financial and non-financial performance measures
– Encouraging executive security holdings
Remuneration structure
Fixed remuneration
Total employment cost (‘TEC’):
– Comprises cash salary, superannuation and other prescribed benefits
– Provides a base level of reward for effective completion of Group and specific accountabilities
– Appropriately benchmarked and set with reference to role, responsibilities, skills and experience
Variable ('at risk') remuneration
Short term incentive (‘STI’):
– Annual rewards tied to pre-determined individual and Group performance measures, and includes a deferred
element (into securities or cash equivalent)
– Individual performance against targets and comparable performance against peers are used to determine an
outcome
– Individual targets reflect individual specific accountabilities and key drivers for growth and success
– Group performance targets linked to earnings, cost management and safety
– Individual performance outcome provides a multiplier for the Group performance element (linking the two
elements)
– Maximum potential STI is capped at 150 per cent
Long term incentive (‘LTI’):
– Equity rewards to align executive and security holder interests (using indeterminate rights)
– Vest after three years, subject to achievement of pre-determined internal and external performance measures
– Encourages sustainable performance in the medium to longer term, and provides a retention element
– LTI vesting is capped at 100 per cent of awards granted
27
27
2015 Transurban Annual Report Remuneration report (continued)
B.
Remuneration mix
For FY15, the remuneration of the CEO and other senior executives was structured as a mix of fixed
remuneration and variable (or 'at risk') remuneration through short term and long term incentive components.
The relative weightings of the three components were determined by the Board (on the recommendation of the
Remuneration and Human Resources Committee) and are set out in the table below:
Total remuneration % (annualised at target) 1
Fixed TEC
Variable (performance based)
CEO
Senior executives
40
45
STI
30 (50% deferred)
30 (50% deferred)
LTI
30
25
1. These figures may not necessarily reflect the relative value derived from each of the components, which depends on actual performance
against targets for the variable components. The STI percentages are based on achieving the relevant performance targets. The LTI
percentages are based on the maximum LTI available at the time of grant to each Senior executive.
C. Fixed remuneration – total employment cost (‘TEC’)
What is TEC?
Fixed remuneration is represented by total employment cost comprising base salary and superannuation
contributions (or pension plans in the case of USA based employees).
Fixed remuneration is not 'at risk' but is set by reference to appropriate benchmark information for an individual’s
responsibilities, performance, qualifications and experience. There are no guaranteed TEC increases in the
service agreement of the CEO or any senior executive.
How is TEC determined?
Senior executive remuneration packages (including TEC levels) are reviewed annually by the Remuneration and
Human Resources Committee taking into consideration an individual’s role, experience and performance, as well
as relevant comparative market data. Independent remuneration consultants and surveys, internal relativities and
market conditions also provide guidance. TEC levels are also reviewed on a change in role. Any changes to TEC
levels recommended by the Committee must be approved by the Board.
The TEC of the CEO and other senior executives is determined with reference to the market median. The primary
reference for determining the market median is the ASX 10-40. A range around the median provides flexibility to
recognise exceptional capabilities.
D. Short term incentive (‘STI’)
How does the STI plan operate?
Eligible permanent Group employees, including the CEO and other senior executives, participate in the annual
STI plan. The STI plan puts a proportion of remuneration 'at risk' subject to meeting specific pre-determined
Group, team and individual performance measures linked to corporate objectives. This aligns employee interests
with the Group's financial performance, as well as the Group’s organisational values.
For FY15, the CEO and other senior executives had a target STI opportunity of 30 per cent of their total
remuneration package. Mandatory STI deferral of 50 per cent of the overall STI award applies for all grants to the
CEO and other senior executives.
The deferral period is two years. For Australian senior executives, deferral is into Transurban securities. Due to
legal restrictions on the issue of securities to USA residents, the USA resident senior executives receive deferred
cash awards. STI deferral grants are made in the form of awards. Each award is an entitlement to receive a fully
paid security, or an equivalent cash payment, on terms and conditions determined by the Board. This deferred
component of remuneration may, at the discretion of the Board, be subject to forfeiture or clawback (e.g. in the
event of misconduct or the material misstatement of financial results).
28
28
2015 Transurban Annual Report Remuneration report (continued)
What were the Group STI performance measures for FY15?
The STI performance measures for the CEO and other senior executives (excluding Wesley Ballantine, see page
30 for further details) for FY15 were chosen to provide a balance between corporate, individual, operational,
strategic, financial and non-financial aspects of performance and are described below:
Measure
Group
performance
target
1. Growth in proportional EBITDA (20% weighting)
The proportional EBITDA targets were set against the Group's FY15 budget. The EBITDA
target excluded the 95 Express Lanes, Legacy Way and Transurban Queensland
transaction and integration costs.
Proportional EBITDA result
More than $20.8 million decrease on FY15 Target
$20.8 million decrease on FY15 Target
Target for FY15 ($1,239.4 million)
$22.8 million increase on FY15 Target
% STI that vests1
zero
50
100
150
2. Cost management based on proportional net costs (20% weighting)
The proportional net costs targets were set against the Group’s FY15 budget. The
proportional net costs target excluded the 95 Express Lanes, Legacy Way and
Transurban Queensland transaction and integration costs.
Proportional net costs result
More than $267.5 million
FY15 Target plus $9.1 million
FY15 Target ($258.4 million)
FY15 Target less $9.1 million
3. Safety targets (10% weighting)
% STI that vests1
zero
50
100
150
The safety target was a combination of a lead indicator in the form of an employee
leadership component through KPIs and three lag indicators. The target is split with a
weighting of 70% lead and 30% lag indicators. The lag indicators focus on improving the
Group’s safety culture and reducing workplace injuries for employees and contractors as
well as customer safety.
zero
50
100
% STI that vests1
Maintain FY14 rate
25% reduction
on FY14 rate
150
Zero RIFR
Safety Lag
Indicators
Recordable
injury frequency
rate (‘RIFR’)
Serious injury
collisions
frequency rate
More than
FY14 rate
More than
FY14 rate
High potential
events and near
misses
Failure to
meet 50%
target
Maintain FY14 rate
3% reduction
on FY14 rate
5% reduction
on FY14 rate
Where Transurban
has control, all
incidents are
reported,
investigated, with
lessons learnt and
shared across the
Group
50% target
and zero
overdue
actions
resulting from
investigations
and lessons
learnt
50% target,
100% target,
and actions
verified post 3
months after
lesson learned
distribution
Individual key
performance
indicators
(‘KPIs’)
Individual KPIs (50% weighting), were unique to the individual's area of accountability, and
in FY15 related to critical business sustainability measures, including: operational excellence,
strategy, people and leadership, financial discipline, customer satisfaction, project outcomes,
succession planning, employee capability and diversity. Individuals have a clear line of sight
to KPIs and are able to directly affect outcomes through their own actions. Detail of the KPIs
for the CEO and other senior executives is not disclosed due to the commercially sensitive
nature of these targets.
1. Straight line vesting applies between 50-100% and 100-150%.
29
29
2015 Transurban Annual Report Remuneration report (continued)
What were the Transurban Queensland STI performance measures for FY15?
The STI targets for Wesley Ballantine, Group General Manager, Queensland differed from those of the other
Group senior executives as they related to the Transurban Queensland business only. The segregation was
agreed with the Group’s equity partners in Transurban Queensland. The STI targets for FY16 will be the same for
all senior executives including Wesley Ballantine. The STI performance measures for Wesley Ballantine for FY15
were chosen to provide a balance between corporate, individual, operational, strategic, financial and non-
financial aspects of performance and are described below.
Measure
Transurban
Queensland
performance target
1. Growth in EBITDA (20% weighting)
The EBITDA targets were set against the FY15 budget. The EBITDA target excluded
Legacy Way and Transurban Queensland transaction and integration costs.
EBITDA result
% STI that vests1
More than $4.5 million decrease on FY15 Target
$4.5 million decrease on FY15 Target
Target for FY15 ($275.0 million)
$4.5 million increase on FY15 Target
zero
50
100
150
2. Cost management based on net costs (20% weighting)
The net costs targets were set against the Group’s FY15 budget. The net costs
target excluded Legacy Way and Transurban Queensland transaction and
integration costs.
Net costs result
More than $116.0 million
$2.5 million higher than FY15 Target
Target for FY15 ($113.5 million)
$2.5 million decrease on FY15 Target
3. Safety targets (10% weighting)
% STI that vests1
zero
50
100
150
The safety target was a combination of a lead indicator in the form of an employee
leadership component through KPIs and one lag indicator. The target is split with a
weighting of 70% lead and 30% on the lag indicator. The lag indicator (Recordable
injury frequency rate) focuses on improving the Group’s safety culture and reducing
workplace injuries for employees and contractors.
Recordable Injury Frequency Rate
More than FY14 rate
Maintain FY14 rate
25% reduction on FY14 rate
Zero rate
% STI that vests1
zero
50
100
150
Individual key
performance
indicators (‘KPIs’)
Individual KPIs (50% weighting), were unique to Wesley Ballantine’s area of
accountability, and related to critical business sustainability measures, including:
strategy, people and leadership, financial discipline, succession planning, stakeholder
management and project outcomes.
Further detail is not disclosed due to the commercially sensitive nature of these targets.
1. Straight line vesting applies between 50-100% and 100-150%.
30
30
2015 Transurban Annual Report Remuneration report (continued)
Who sets the STI performance measures?
STI performance measures are set at the beginning of the financial year. The CEO's individual KPIs are set by
the Board. All other senior executives’ individual KPIs are set by the CEO and approved by the Board. The Board
sets the Group performance targets.
What is proportional EBITDA and why is it used as an STI performance measure?
EBITDA (earnings before interest, taxes, depreciation and amortisation) is a common operational performance
measure used by many companies.
Proportional EBITDA is one of the primary measures that the Board uses to assess the operating performance of
the Group, with an aim to maintain a focus on the Group’s operating results and associated cash generation. It
reflects the contribution from individual assets to the Group's operating performance and focuses on elements of
the result that management can influence to drive improvements in short term earnings. Proportional EBITDA is
the aggregation of EBITDA from each asset multiplied by the Group's percentage ownership, as well as any
contribution from Group functions. The Board believes proportional EBITDA provides a better reflection of the
underlying performance of the Group’s assets than statutory EBITDA. The EBITDA calculation from the statutory
accounts for FY15 does not include the EBITDA contribution for those assets which are equity accounted (M5
and M7). Proportional EBITDA figures used to assess performance are included in note B4 of the audited
financial statements.
The Board can decide to exclude specific items from proportional EBITDA to provide an underlying result when
determining performance incentives. For FY15, the Board resolved to exclude the 95 Express Lanes and Legacy
Way from the proportional EBITDA measure as these assets opened to traffic during FY15 and were considered
to be in a period of ramp-up. The Board also resolved to exclude the Transurban Queensland transaction and
integration costs. The integration is budgeted over a number of financial years and should be evaluated as an
overall project rather than each financial year and transaction costs relate to one-off costs associated with the
acquisition of Transurban Queensland.
Proportional EBITDA has been used by the Group as an STI performance measure since 2009.
What are proportional net costs and why is this used as a performance measure?
Proportional net costs are calculated as fee and other revenues less total costs of the Group. Costs after fee and
other revenues encourage and allow management to incur additional costs where these are justified by increased
revenue results.
The use of a cost related STI performance measure reflects management’s ability to influence the expenditure of
the business. Strong cost management throughout the business drives an increase in proportional EBITDA and
free cash flow and ultimately security holder value.
Proportional net costs have been used by the Group as an STI performance measure since 2010.
The proportional net costs measure for FY15 excludes the 95 Express Lanes and Legacy Way as these assets
opened to traffic during FY15 and were considered to be in a period of ramp-up. The Board also resolved to
exclude the Transurban Queensland transaction and integration costs. The integration is budgeted over a
number of financial years and should be evaluated as an overall project rather than each financial year and
transaction costs relate to one-off costs associated with the acquisition of Transurban Queensland.
31
31
2015 Transurban Annual Report Remuneration report (continued)
How is performance assessed?
Performance against the Group performance targets is assessed by the Board. The results of key elements are
independently validated.
The CEO's performance against his individual KPIs is assessed by the Remuneration and Human Resources
Committee, which then makes recommendations to the Board. The performance of other senior executives
against their individual KPIs is assessed by the CEO, who confers with the Committee and then the Board
regarding his assessment.
Once KPIs have been assessed, the Board considers the appropriate rating for each senior executive, taking into
account their comparable performance and behaviours against the Group’s values. The Board then approves STI
awards. STI cash awards for FY15 will be paid in August 2015. The STI deferred component for FY15 will be
awarded in August 2015 and will vest, subject to continuity of employment (unless otherwise determined by the
Board) and clawback provisions, on 1 July 2017.
The Board believes the method of assessment is rigorous and provides a balanced evaluation of the
performance of the CEO and each senior executive.
What if a senior executive ceases employment before the STI targets are assessed?
Under the service agreements for the CEO and other senior executives, if the CEO or other senior executive
ceases employment with the Group before performance against STI targets is assessed, they are generally not
entitled to receive any STI award, unless otherwise determined by the Board.
How is the annual STI pool determined?
The Board approves a pool to be distributed for the annual STI program (cash and deferred securities/cash).
The pool is the sum of all eligible employees possible STI outcomes at 100 per cent target (TEC multiplied by
their STI opportunity). This value is divided by two and each half is treated as follows: one half represents the
individual component of the STI and is capped at 100 per cent, the second half is multiplied by the Group’s
performance outcome to represent the Group’s performance component and is capped at 150 per cent. The
overall pool is capped at 125 per cent.
The Board has discretion as to the proportion of the pool that will be distributed in any given year.
What is the maximum and minimum payment an individual can receive under the STI plan?
The minimum STI an individual can receive is zero per cent (if targets are not met) and the maximum is 150 per
cent of their STI opportunity (awarded for exceptional outperformance).
What were the Group STI performance outcomes for FY15?
Group performance in respect of the proportional EBITDA, proportional net costs and safety STI performance
measures for FY15 was assessed by the Board as 123.7 per cent of the possible STI opportunity.
Measure
Proportional EBITDA1
Proportional net costs1
Safety
Performance
Outcome
$1,278 million
$257 million
–
150.0%
106.8%
104.8%
123.7%
Overall Group Performance
–
1. For FY15 the 95 Express Lanes, Legacy Way and the Transurban Queensland
transaction and integration costs were excluded from the Proportional EBITDA
and Proportional net costs measures.
32
32
2015 Transurban Annual Report Remuneration report (continued)
What were the Transurban Queensland STI performance outcomes for FY15?
The performance of Transurban Queensland in respect of EBITDA, net costs and safety STI performance
measures for FY15 was assessed by the Board as 143.5 per cent of the possible STI opportunity.
Measure
EBITDA1
Net costs1
Safety
Overall performance
Performance
Outcome
$295 million
$100 million
–
–
150.0%
150.0%
117.5%
143.5%
1. For FY15 Legacy Way and the Transurban Queensland transaction and integration costs were excluded from the EBITDA and net costs
measures.
What were the individual STI performance outcomes and awards for the CEO and senior
executives for FY15?
STI outcome (%)
Actual STI awarded3 ($) STI forfeited (%)
Current senior
executives
Individual
KPIs
Group
component4
Total
Cash5 Deferred into
securities5
S Charlton
T Adams
J Aument1
W Ballantine
A Head
M Huey
S Johnson
L Tobin
V Vassallo
A Watson
140.0
105.0
115.0
115.0
125.0
88.0
115.0
115.0
125.0
88.0
173.2
129.9
142.3
165.0
154.6
108.9
142.3
142.3
154.6
108.9
156.62 1,160,975
200,500
117.4
266,525
128.6
239,450
140.0
300,400
139.8
72,825
98.4
191,375
128.6
233,250
128.6
262,300
139.8
126,475
98.4
1,160,975
200,500
266,525
239,450
300,400
72,825
191,375
233,250
262,300
126,475
–
–
–
–
–
1.6
–
–
–
1.6
1. Jennifer Aument is remunerated in USA Dollars. Her awarded STI has been translated to Australian Dollars using the average exchange rate
over the reporting period.
2.
In accordance with the STI plan, the maximum STI an individual can receive is 150 per cent of their STI opportunity and as a result Scott
Charlton’s STI outcome has been capped at 150 per cent of his STI opportunity. The amounts paid in cash and deferred into securities shown
in the table above is in accordance with this cap.
3. On-target performance must be achieved before any STI is awarded. Therefore, the minimum potential value of the STI in respect of FY15
was zero.
4. The Group performance outcome is determined by multiplying the individual percentage outcome by the Group’s percentage outcome of
123.7% for the Transurban Group and 143.5% for Transurban Queensland.
5. The cash STI payments will be paid in August 2015. The STI deferred component (50 per cent of the STI awarded) will vest, subject to
continuity of employment (unless otherwise determined by the Board) and clawback provisions, on 1 July 2017.
33
33
2015 Transurban Annual Report Remuneration report (continued)
What was the grant and movement in the number of STI deferred awards?
Current senior executives
S Charlton
T Adams1
J Aument
W Ballantine
A Head
M Huey2
S Johnson
L Tobin
V Vassallo
A Watson2
Former senior executives
S Hogg3
T Steinhilber4
Balance
at start
of year
Granted
during year as
remuneration
Matured
and paid
during year
Forfeited
during
the year
Balance
at the end
of year
108,486
137,209
37,759
29,071
32,540
37,651
–
37,828
6,612
6,612
–
36,917
40,548
22,224
21,440
27,359
38,816
–
18,061
23,062
30,139
–
–
19,236
–
(19,004)
(14,789)
(15,212)
(22,449)
–
(16,540)
–
–
–
(18,973)
(19,356)
–
–
–
–
–
–
–
–
–
–
(17,944)
245,695
40,979
35,722
44,687
54,018
–
39,349
29,674
36,751
–
–
–
40,428
1. Tony Adams’ opening balance represents those awards granted while in his former role as Vice President, Infrastructure.
2. Michele Huey and Adam Watson had a zero opening balance at the beginning of FY15, as they joined the Group after the FY14 STI
performance period and therefore were not entitled to receive an STI deferred award in respect of that period.
3. Samantha Hogg forfeited her unvested awards on departure from the Group.
4. Tim Steinhilber retained his STI deferred awards on his return to the USA as Advisor, Major Projects.
E. Long term incentive (‘LTI’)
How does the LTI plan operate?
The LTI plan aligns reward with security holder value by tying this component of executive remuneration to the
achievement of performance measures that underpin sustainable long term growth.
Participation in the LTI plan is offered to the CEO and other senior executives, and certain other employees
nominated by the CEO and approved by the Board. For FY15, the CEO was offered an LTI grant equivalent to
30 per cent of his total target remuneration package. Other eligible senior executives were offered grants
equivalent to 25 per cent of their total target remuneration package.
LTI grants are made in the form of performance awards under the Group’s performance awards plan (‘PAP’) at
no cost to the recipient. Each performance award is an entitlement to receive a fully paid Transurban security, or
an equivalent cash payment, on terms and conditions determined by the Board, subject to the achievement of
certain vesting conditions linked to performance over a three year period.
LTI grants are generally made twice per annum – once in August following the annual performance review for
senior executives excluding the CEO, and at a later date in November for the CEO. This is to allow the CEO’s
grant of performance awards to be put to a security holder vote at the AGM.
Two performance measures are used to determine the number of performance awards that will vest at the end of
the performance period. Total shareholder return (‘TSR’) provides a comparison for Transurban’s performance
against those companies with which the Group competes for capital. Additionally, growth in free cash flow (‘FCF’)
per security helps to retain a focus on maximisation of free cash. The maximum vesting following these tests is
capped at 100 per cent of awards issued.
34
34
2015 Transurban Annual Report Remuneration report (continued)
How does the LTI plan operate? (continued)
The performance awards will, subject to achievement of the two performance measures against the vesting
schedules, vest and be automatically exercised at the vesting date with no exercise price payable by the
recipient. The Board will determine in its absolute discretion whether the performance awards will be settled in
Transurban securities or a cash payment of equivalent value. Due to legal restrictions on the issue of securities to
USA residents, the USA senior executive receives a cash payment upon vesting.
Performance awards that do not vest after testing of the performance measures lapse without retesting.
Performance awards are not transferable and do not carry voting or distribution rights. However securities
allocated upon vesting of performance awards carry the same rights as other Transurban securities.
What is the Group’s LTI allocation valuation methodology?
A fair value approach is applied for the TSR allocation. The Group is currently transitioning to a face value
approach (discounted for distributions) for the FCF component. The transition is over 3 years and all things being
equal there will be a decrease in the number of awards recipients receive until the new methodology is achieved.
This transition will be completed for grants made during FY16.
What were the LTI performance measures for FY15?
Performance awards granted during FY15 are subject to a three year performance period and the following dual
performance measures over that period:
Measure
Description of measure
Relative TSR
(50% weighting)
Relative TSR is measured against a bespoke comparator group comprising companies in
the transport, utilities, real estate, construction and infrastructure Global industry
classification standards (‘GICS’) sectors of the ASX 150. The 37 companies in this group are:
Abacus Property Group, AGL Energy Limited, Asciano Limited, Australand Property Group,
APA Group, Aurizon Holdings Limited, BWP Trust, CFS Retail Property Trust Group, Charter
Hall Group, Cromwell Group, Charter Hall Retail REIT, DUET Group, Dexus Property Group,
Envestra Limited, Federation Centres Limited, Goodman Group, GPT Group, iiNet Limited,
Investa Office Fund, Leighton Holdings Limited, Lend Lease Group, Mirvac Group,
Monadelphous Group Limited, Macquarie Atlas Roads Limited, Qantas Airways Limited,
Qube Logistics Holdings Limited, Scentre Group Limited, Stockland, Spark Infrastructure
Group, SP AusNet, Sydney Airport, Transurban Group, Telecom Corporation of
New Zealand Limited, Telstra Corporation Limited, Toll Holdings Limited, TPG Telecom
Limited, Westfield Corporation.
TSR measures total return on investment of a security, taking into account both capital
appreciation and distributed income which was reinvested on a pre-tax basis.
For performance awards granted during the year ended 30 June 2015, the relative TSR
component will vest on a straight line basis if the Group’s relative TSR performance is above
the median of the bespoke comparator group at the end of the performance period, in
accordance with the following table:
TSR vesting schedule:
The Group’s relative TSR ranking in the
comparator group
% of performance awards that vest
At or below the 50% percentile
Zero
Above the 50th percentile but below
the 75th percentile
Straight line vesting between 50 and
100
At or above the 75th percentile
100
35
35
2015 Transurban Annual Report Remuneration report (continued)
Measure
Description of measure
Growth in FCF per
security
(50% weighting)
Within Transurban, free cash flow (‘FCF’) per security is defined as:
The Group’s cash flow from operating activities;
less: cash flows from operating activities from consolidated non 100% owned assets;
less: allowance for maintenance of intangible assets for 100% owned assets;
add back: payments for maintenance of intangible assets;
less: actual tag expenditure in 100% owned assets;
add: dividends received from non 100% owned assets;
divided by: weighted average number of securities issued.
The FCF calculation is included in note B4 of the audited financial statements.
For performance awards granted during the year ended 30 June 2015, the FCF per security
component will vest based on the Group's compound annual growth targets translated into
annual FCF per security over the three year performance period, as set out below:
Growth in FCF per security vesting schedule:
% annual growth in FCF per security
% of performance awards that vest
Less than 10%
Zero
Between 10% and 13%
Straight line vesting between 50 and 100
13% or more
100
For performance awards granted during FY16, the performance target range for growth in
FCF per security is between 8 per cent and 11 per cent per annum.
Why were these LTI performance measures selected?
The TSR target is a relative, external, market-based performance measure against those companies with which
the Group competes for capital. It provides a direct link between executive reward and security holder return.
The vesting schedule applied is in line with market practice, with straight line vesting between 50 per cent and
100 per cent for performance above the 50th percentile up to the 75th percentile for performance against the
comparator group.
Growth in FCF per security reflects the Group’s continuing focus on the maximisation of free cash, and has been
used as an LTI performance measure since FY13.
Why is a three year performance period used for LTIs?
The three year performance period for LTI has been set in line with market practice. The Board continues to
monitor market practice in this regard.
How will the LTI performance targets be measured?
Relative TSR
The Group will receive an independent report that sets out the Group's TSR growth and that of each company in
the bespoke comparator group. A volume weighted average price of securities for the 20 trading days up to and
including the testing date is used in the calculation of TSR.
The level of TSR growth achieved by the Group will be given a percentile ranking having regard to the Group’s
performance compared to the performance of other companies in the comparator group (the highest ranking
company being ranked at the 100th percentile). This ranking will determine the extent to which performance
awards subject to this target will vest.
FCF per security
The Group's FCF per security percentage growth rate will be calculated based on the FCF per security over the
three year performance period.
The Board considers these methods of measurement to be rigorous and transparent.
36
36
2015 Transurban Annual Report Remuneration report (continued)
What if a senior executive ceases employment?
Under the terms of the service agreements for the CEO and other senior executives, if the CEO or other senior
executive ceases employment with the Group before the performance measures are tested, their unvested
performance awards will generally lapse, unless otherwise determined by the Board.
What will happen in the event of a change in control?
In the event of a takeover or change of control of the Group, the treatment of any unvested performance awards
granted in FY15 will be subject to the incumbent Board's discretion.
What was the grant, and movement in the number and value, of performance awards during
FY15?
Eligible senior executives (excluding the CEO) received performance awards with a grant date of 15 August
2014. Following the receipt of security holder approval at the 2014 AGM, the CEO received performance awards
with a grant date of 1 November 2014. Senior executives new to the Group received performance awards with a
grant date of 25 January 2015. All performance awards granted in FY15 vest subject to a performance period
from 1 July 2014 through to 30 June 2017.
The relevant values of the grants are as follows:
Recipient
Grant date
Value of awards
at grant date ($)
Closing security
price at grant date
Eligible senior executives
CEO
Eligible senior executives new to the Group
15 August 2014
1 November 2014
25 January 2015
1. Fair value in accordance with AASB 2 treatment of market conditions.
Performance awards granted in FY15
Relative
TSR1
$3.89
$4.11
$5.47
FCF per
security
$6.87
$7.22
$8.32
$7.90
$8.13
$9.24
Current senior executives
S Charlton1
T Adams
J Aument
W Ballantine
A Head
M Huey2
S Johnson
L Tobin
V Vassallo
A Watson3
Number of
performance
awards granted4
Value at
grant date
($)
Potential value of
grant yet to vest5
($)
345,135
64,928
62,735
63,679
80,080
48,888
60,933
67,588
69,922
69,830
1,851,582
330,186
319,034
323,836
407,238
323,466
309,869
343,713
355,583
462,030
1,851,582
330,186
319,034
323,836
407,238
323,466
309,869
343,713
355,583
462,030
1. The grant made to the CEO constituted his LTI entitlement for FY15 and was made following security holder approval at the 2014 AGM on the
terms summarised above. Performance awards vest subject to performance over the period from 1 July 2014 through to 30 June 2017.
2. The grant made to Michele Huey includes a one-off equity grant of 25,788 awards recognising the equity awards forfeited when she ceased
employment with her former employer. Refer to section 1B of the Report for details. The remaining balance of 19,687 awards has been pro-
rated to recognise her joining the Group on 19 January 2015.
3. The grant made to Adam Watson includes his one-off equity grant of 15,188 awards recognising the equity awards forfeited when he ceased
employment with his former employer. Refer to section 1B of the Report for details. The remaining balance of 41,711 awards has been
prorated to recognise him joining the Group on 1 December 2014.
4. The grants made to senior executives assume full vesting of their full LTI entitlement for FY15 and were made on the terms summarised
above. Performance awards vest subject to performance testing over the period from 1 July 2014 through to 30 June 2017.
5. The maximum value of the grant has been estimated based on the award valuations at grant date (a fair value approach for the TSR
component and a face value approach discounted for distribution for the FCF component). The minimum total value of the grant, if the
applicable performance measures are not met, is zero.
37
37
2015 Transurban Annual Report Remuneration report (continued)
F. Legacy LTI plans
The Group has a number of LTI plans that were offered in previous years, as detailed below:
Plan
Grant date
Performance period
External performance
measure (50% of grant)
Comparator group
Vesting schedule
Internal performance
measure (50% of grant)
Vesting schedule
FY14 PAP
FY13 PAP
15 Aug 2013
1 Nov 2013 (CEO only)
1 Jul 2013 – 30 Jun 2016
15 Aug 2012
19 Oct 2012 (CEO only)
1 Jul 2012 – 30 Jun 2015
Relative TSR
Relative TSR
42 companies within a bespoke
comparator group within the ASX150
37 companies within a bespoke
comparator group within the ASX150
Relative TSR
Above 50th percentile to 75th
percentile
At or above the 75th percentile
% of performance awards that vest
Straight line vesting between
50%-100%
100% vests
Growth in free cash flow (‘FCF’) per
security
From 12% - 15%
Growth in free cash flow (‘FCF’) per
security
From 6% - 9%
Compound growth
At target
From target % to stretch %
At or above stretch %
% of performance awards that vest
50% vests
Straight line vesting between
50%- 100%
100% vests
Current status
Awards on issue
Vesting to occur after announcing
FY16 results
959,977
Vesting to occur after announcing
FY15 results
682,313
Value of performance awards vested and lapsed in FY15
Due to changes in the timing of performance periods and vesting dates there were no LTI plans which vested
during FY15. The next plan to vest is the FY13 plan which has a performance period of 1 July 2012 to 30 June
2015. The vesting date will be within 30 days after the release of the Group’s results for FY15 on 11 August 2015
and the vesting outcome will appear in the FY16 Report.
Initial vesting calculations indicate that 100 per cent of awards on issue for the FY13 plan will vest for all
remaining participants.
38
38
2015 Transurban Annual Report Remuneration report (continued)
Number of performance awards on issue as at 30 June 2015
The number of performance awards held by members of KMP as at 30 June 2015 is provided below.
Comparative data is shown for those senior executives who were members of KMP during both FY15 and FY14.
Balance at
start of year
Granted
during year as
remuneration
Matured
and paid
during year
Lapsed
or forfeited
during year
Balance at
the end
of year
Current senior executives
S Charlton
2015
2014
T Adams2
2015
J Aument
2015
2014
W Ballantine
2015
2014
A Head
2015
2014
M Huey
2015
S Johnson
2015
2014
L Tobin
2015
2014
V Vassallo
2015
2014
A Watson
2015
Former senior executives
S Hogg
2015
2014
T Steinhilber
2015
2014
988,196
684,656
–
74,494
21,597
62,630
24,441
207,521
311,043
345,135
382,292
(78,752)1
(78,752)1
–
–
(18,684)
–
(21,144)
64,928
62,735
74,494
63,679
62,630
80,080
94,767
–
–
–
–
(2,913)
–
(3,297)
1,254,579
988,196
64,928
137,229
74,494
126,309
62,630
287,601
207,521
–
(155,462)
–
(42,827)
–
48,8883
–
–
48,888
62,630
29,626
79,980
–
79,980
–
60,933
62,630
67,588
79,980
69,922
79,980
–
69,8304
–
(25,630)
–
(3,996)
–
–
–
–
–
–
–
–
–
–
231,329
292,851
78,267
28,755
–
105,633
–
(129,489)
(231,329)
(37,666)
–
78,267
–
(24,876)
(78,267)5
(3,879)
123,563
62,630
147,568
79,980
149,902
79,980
69,830
–
231,329
–
78,267
1. Scott Charlton’s number of performance awards granted during FY13 includes 236,256 performance awards granted in September 2012 as a
sign-on award, to vest, subject to his continued employment, in three equal tranches on the first, second and third anniversaries of his
commencement with the Group. The first tranche (78,752) awards vested on 16 July 2013, the second tranche (78,752) awards vested on 16
July 2014 and the third and final tranche (78,752) awards vested on 16 July 2015.
2. Tony Adams was promoted as Group General Manager, Operational Excellence and Project Delivery in July 2014 and did not hold any
performance awards prior to his appointment.
3. Michele Huey received a pro-rated grant of performance awards in FY15 due to her commencement date of 19 January 2015. She also
received a one-off equity grant of 25,788 awards recognising the equity awards forfeited when she ceased employment with her former
employer. The one-off equity grant will vest, subject to continued employment, in two equal tranches on the first and second anniversaries of
her commencement with the Group. Refer to section 1B for details.
4. Adam Watson received a pro-rated grant of performance awards in FY15 due to his commencement date of 1 December 2014. He also
received a one-off equity grant of 15,188 awards recognising the equity awards forfeited when he ceased employment with his former
employer. The one-off equity grant will vest, subject to continued employment, in two equal tranches on the first and second anniversaries of
his commencement with the Group. Refer to section 1B for details.
5. On 14 July Tim Steinhilber transferred back to the USA as Advisor, Major Projects. As of this time he was no longer considered a KMP.
All performance awards granted or matured in FY15 (where applicable) in the table above were issued by
Transurban and resulted or will result in one ordinary Transurban stapled security (or cash equivalent, as
determined by the Board) per performance award granted or matured.
39
39
2015 Transurban Annual Report Remuneration report (continued)
G. Remuneration paid to the CEO and other senior executives
Short-term employee benefits
Cash salary
and fees
Cash
STI3
Non-
monetary
benefits4
Deferred
STI5
Post-
employment
benefits
Superannuation
Current CEO
S Charlton
2015
2014
2,045,112
1,858,493
1,160,975
1,039,250
5,814
7,042
592,517
492,200
18,783
17,774
Current other senior executives
T Adams1
2015
200,500
552,978
136,789
129,188
18,783
J Aument2
2015
2014
656,643
516,456
266,525
244,487
1,608
1,250
134,454
126,054
W Ballantine
2015
2014
491,711
393,737
239,450
207,225
123,974
1,462
108,383
107,433
A Head
2015
2014
M Huey
2015
622,524
604,875
300,400
294,000
2,444
2,418
132,485
111,497
208,293
72,825
770
–
S Johnson
2015
2014
L Tobin
2015
2014
V Vassallo
2015
2014
A Watson
2015
458,525
423,737
522,517
507,741
191,375
136,800
233,250
174,675
541,217
507,741
262,300
228,275
1,685
1,496
1,724
1,753
1,724
1,753
93,892
127,917
73,225
30,000
91,092
30,000
Former senior executives
S Hogg
2015
2014
61,234
676,275
–
131,100
76
2,018
(81,410)
117,353
M Kulper
2015
2014
–
583,403
T Steinhilber
2015
2014
64,501
572,856
–
–
–
2,912
–
300,6297
–
309,886
94
30,165
5,570
177,462
Termination
benefits
Long-term
benefits
Share based
benefits6
Total
Long
service
leave
Equity
awards
Cash
awards
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1,939,196
1,484,748
– 5,762,397
– 4,899,507
8,929
100,314
– 1,147,481
–
–
–
–
458,905 1,530,683
192,748 1,092,269
9,033
21,430
195,951
96,404
11,437
13,053
419,998
474,344
–
159,956
8,620
8,661
191,708
98,710
229,019
109,235
232,625
109,235
–
–
–
–
–
– 1,187,285
845,465
–
– 1,508,071
– 1,517,961
–
–
–
451,236
964,588
815,095
– 1,078,518
841,178
–
– 1,147,741
894,778
–
347,272
–
(121,997)
21,368
(455,252)
485,938
– (245,381)
– 1,451,826
–
333,356
–
–
–
–
–
8,531
–
–
–
–
–
–
385,1687 1,608,259
4,509
79,370
208,931 1,325,605
12,548
11,274
18,783
17,774
18,783
17,774
9,392
18,783
17,774
18,783
17,774
18,783
17,774
10,957
4,696
17,774
–
2,791
4,696
17,774
368,210
126,475
1,001
–
154,762
–
661,405
1. Tony Adams was promoted as Group General Manager, Operational Excellence and Project Delivery in July 2014. His remuneration for the
period during which he was a member of KMP is disclosed in the table only. Amounts disclosed as ‘cash salary and fees’ includes $58,824 in
relocation costs from USA to Australia.
2. Jennifer Aument is remunerated in USA Dollars. The amounts shown in the table above have been converted to Australian Dollars using the
average exchange rate over the reporting period. Amounts disclosed as ‘cash salary and fees’ includes $67,506 of annual leave cashed out.
3. The amount represents the cash STI payment to the senior executive for FY15, which will be paid in August 2015.
4. Non-monetary benefits include Group insurance, relocation and expatriate allowances (where relevant).
5. A component of STI award is deferred into securities. In accordance with accounting standards, the deferred component will be recognised
over the three year service period. The amount recognised in this table is the FY15 accounting charge for unvested grants.
6.
In accordance with the requirements of the accounting standards, remuneration includes a proportion of the fair value of equity compensation
granted or outstanding during the year (i.e. performance awards under the LTI plan). The fair value of equity instruments is determined as at
the grant date and is progressively allocated over the vesting period. The amount included as remuneration may be different to the benefit (if
any) that senior executives may ultimately realise should the equity instruments vest. The fair value of performance awards at the date of their
grant has been independently determined in accordance with accounting standards. The fair value of the performance awards has been valued
applying a Monte Carlo simulation (using a Black-Scholes framework) to model Transurban’s security price and where applicable, the TSR
performance against the comparator group performance.
7. The value for deferred STI and share based benefits for Michael Kulper includes all unvested awards. In accordance with accounting standard
AASB 2, these have been accounted as an acceleration of vesting. The amount that would have been recognised for services received from M
Kulper as President, North America of the Group over the remainder of the vesting period has been included in the table above. These awards
will continue on foot in accordance with the original terms. The LTI awards may or may not vest.
40
40
2015 Transurban Annual Report Remuneration report (continued)
H. Service agreements
The remuneration and other terms of employment for the CEO and other senior executives are formalised in
service agreements which have no specified term. Under these agreements, the CEO and other senior
executives are eligible to participate in STI and LTI plans. Some other key aspects of the agreements in place for
FY15 are outlined below:
CEO
Other senior executives
Period of notice
to terminate (executive)
Period of notice to
terminate (the Group1)
6 months
3 months
12 months
6 months
1. Payment in lieu of the notice period may be provided (based on the executive's fixed remuneration). The Group may also terminate at any time
without notice for serious misconduct.
I. Additional remuneration information
Employee security plans
The Group operated the following broad employee based security plans in FY15.
ShareLink Incentive Plan
Under the ShareLink Incentive Plan, subject to Board approval, an allocation of Transurban securities may be
made to eligible employees (excluding the CEO and other senior executives) in recognition of the Group’s prior
year performance. Eligible employees received a grant of 100 securities at no cost to them on 24 February 2015.
Due to legal restrictions on the issue of securities to USA residents, eligible employees in the USA received a
cash payment of equivalent value in lieu of securities.
Given that the plan is designed to reward employees for the Group's prior year performance and is not intended
to serve as a future incentive, there are no performance measures attached to grants of securities or cash
payments under the plan.
Securities granted under the plan carry a three year holding lock from the grant date and can only be traded once
the holding lock expires or when employment with the Group ceases, whichever is earlier.
ShareLink Investment Tax Exempt Plan
The ShareLink Investment Tax Exempt Plan provides eligible employees (excluding the CEO and other senior
executives) the opportunity to invest up to $1,000 per year in Transurban securities on a tax exempt basis.
Participants contribute up to $500 by way of salary sacrifice which is matched by the Group dollar for dollar.
Security acquisitions are made quarterly in September, December, March and June each year.
The plan is designed to encourage employee security holdings and to align the interests of employees with those
of the Group and is therefore not subject to performance measures.
Dealing in securities
In accordance with the Group’s Dealing in Securities Policy, employees who have awards under a Group equity
plan may not hedge against those awards. In addition, KMP may not hedge against entitlements that have vested
but remain subject to a holding lock. Employees and Directors are not permitted to obtain margin loans using
Transurban securities (either solely or as part of a portfolio) as security for loans.
41
41
2015 Transurban Annual Report Remuneration report (continued)
Securities held by senior executives as at 30 June 2015
The number of securities held by members of KMP as at 30 June 2015 is provided below. Comparative data is
shown for those senior executives who were members of KMP during both FY15 and FY14.
Changes
during
year
78,752
124,622
–
–
–
1,109
697
(12,099)
84,719
–
(13,664)
14,167
–
–
509
510
–
(141,042)2
129,489
–
(80,000)2
–
–
Balance at
end of year
213,374
134,622
5,090
–
–
5,794
4,685
75,661
87,760
–
30,099
43,763
–
–
11,557
11,048
–
–
141,042
–
–
–
–
Current senior executives
Balance at
start of year
S Charlton
2015
2014
T Adams
2015
J Aument
2015
2014
W Ballantine
2015
2014
A Head
2015
2014
M Huey
2015
S Johnson
2015
2014
L Tobin
2015
2014
V Vassallo
2015
2014
A Watson
2015
Former senior executives
S Hogg
2015
2014
M Kulper
2015
2014
T Steinhilber
2015
2014
134,622
10,000
5,0901
–
–
4,685
3,988
87,760
3,041
–
43,763
29,596
–
–
11,048
10,538
–
141,042
11,553
–
80,000
–
–
1. Opening balance held prior to the senior executive becoming a member of KMP.
2. Balance removed on departure from the Group.
42
42
2015 Transurban Annual Report Remuneration report (continued)
5. Link between Group performance, security holder wealth and remuneration
The variable (or 'at risk') remuneration of the CEO and other senior executives is linked to the Group’s
performance through the use of measures based on the operating performance of the business.
A. Group performance and STI
For the year ended 30 June 2015, 20 per cent of the STI award was determined with reference to proportional
EBITDA, 20 per cent with reference to proportional net costs, and 10 per cent with reference to safety, as
discussed on page 30.
STI is an ‘at risk’ component of remuneration; payments are determined based on the following three measures,
and could result in zero payout if targets are not met. The maximum payment available to any senior executive is
150.0 per cent of their STI opportunity.
Proportional EBITDA
Proportional EBITDA excluding significant items2, was $1,289 million. Excluding the effect of 95 Express Lanes
and Legacy Way, this resulted in a payment of 150.0 per cent of STIs attributable to proportional EBITDA.
EBITDA performance was driven by the contribution of Transurban Queensland to the portfolio of assets and the
integration progressing faster than planned, leading to earlier recognition of cost efficiencies. Total traffic across
our Australian assets increased 5.1 per cent and toll prices increased 4.5 per cent, further enhancing the growth
in EBITDA.
Proportional net costs
Proportional net costs excluding significant items2, was $270 million. Excluding the effect of 95 Express Lanes
and Legacy Way, this resulted in the payment of 106.8 per cent of STIs attributable to proportional net costs.
The movement in net costs is largely related to Transurban Queensland. Additional business development and
project activity have been offset by operational efficiencies including the in-housing of CityLink operations and
Group customer initiatives.
Safety
For the year ended 30 June 2015, the safety performance measure resulted in 104.8 per cent STI outcome. The
target was a combination of a lead indicator in the form of an employee leadership component through KPIs and
three lag indicators (Recordable Injury Frequency Rate, Serious Injury Collisions Frequency Rate and High
Potential Events and Near Misses). The target was split with a weighting of 70 per cent for the lead indicator and
30 per cent for the lag indicators. The Group achieved the following outcomes:
Measure
Leadership
Recordable Injury Frequency Rate
Score
3.14
0.0
Serious Injury Collisions Frequency Rate
High Potential Events and Near Misses
5.59
34 of 34 closed1
Overall Safety Outcome
Outcome %
STI Outcome %
107.0
150.0
0.0
148.5
74.9
15.0
0.0
14.9
104.8
1. 33 of 34 corrective actions were completed on time. One incident was closed but the corrective action was not completed by the due date.
2. Items relating to the acquisition for Transurban Queensland (formerly, Queensland Motorways) including stamp duty, transaction and
integration costs.
43
43
2015 Transurban Annual Report Remuneration report (continued)
B. Group performance and LTI
For the year ended 30 June 2015, LTIs were linked to relative TSR and FCF per security.
Relative TSR
Relative TSR for the year ended 30 June 2015 is measured against a bespoke comparator group comprising
companies in the transport, utilities, real estate, construction and infrastructure Global industry classification
standards (‘GICS’) sectors of the ASX150.
FCF per security
The performance target for performance awards granted during FY15 was a range for compound growth in FCF
per security of between 10.0 per cent and 13.0 per cent per annum over three years. It was considered an
appropriate target that reflects the Group’s focus on the maximisation of free cash to drive security holder return.
For performance awards granted during the year ending 30 June 2016, the performance target range for
compound growth in FCF per security per annum will be between 8.0 per cent and 11.0 per cent.
The table below summarises the Group’s five year results for the relevant performance measures. These results
show that since the year ended 30 June 2010, Transurban’s distribution policy has been to align distributions with
FCF per security. Since that time, Transurban has delivered consistent growth on this measure based on
consistent revenue and EBITDA growth. Based on investor feedback, this remains Transurban’s financial focus.
Group performance
Measure
Security price at year end
Distribution paid per security (cents)
Proportional EBITDA, excluding
significant items – $m1
TSR performance2
TSR rank position3
2015
$9.30
2014
$7.39
2013
$6.76
2012
2011
$5.69
$5.23
40.0
35.0
31.0
29.5
27.0
1,289
934
828
784
719
32%
17%
25%
15%
32%
n/a
33 / 934
14 / 315
12 / 896
6 / 86
19 / 867
35 / 86
6 / 86
19 / 867
n/a
FCF per security performance (cents)
40.2
33.9
30.1
29.8
27.5
1. In the current and prior year, LTIs were linked to relative TSR and FCF per security. In earlier years, LTIs were linked to relative TSR and
proportional EBITDA.
2. The TSR performance is the total security holder return for that financial year.
3. This is the TSR ranking position for the LTI that vests during the financial year. There weren’t any vestings during this reporting period.
4. FY11 PAP that vested 1 November 2013.
5. FY12 PAP that vested 30 June 2014.
6. FY10 PAP that vested November 2012 (testing as at 30 June 2012).
7. FY09 PAP tested in three tranches.
44
44
2015 Transurban Annual Report Remuneration report (continued)
6. Non-executive Director remuneration
A. Remuneration policy
The diagram below sets out the key objectives of the Group’s Non-executive Director remuneration policy and
how they are achieved through the Group’s remuneration framework:
Securing and retaining
talented, qualified Directors
Preserving independence
and impartiality
Aligning Director and
security holder interests
Director fee levels are set with
regards to: the responsibilities
and risks attached to the role,
the time commitment and
workload expected, the
Director’s experience and
expertise, and market
benchmark data.
Director remuneration consists of
base (Director) fees and
Committee fees. No element of
Director remuneration is 'at risk'
(i.e. fees are not based on the
performance of the Group or
individual directors from year to
year).
Directors are encouraged to
hold Transurban securities.
B. Remuneration arrangements
Maximum aggregate remuneration
The Remuneration and Human Resources Committee regularly reviews Non-executive Director remuneration
arrangements, which includes periodic benchmarking against other publicly listed entities of similar size and
complexity to Transurban.
The amount of aggregate remuneration that may be paid to Non-executive Directors in any year is capped at a
level approved by security holders. The current aggregate fee pool of $2,400,000 per year (inclusive of
superannuation contributions) was approved by security holders at the 2010 annual general meeting. In FY15,
Transurban utilised 70.3 per cent of the aggregate fee pool. No change to the aggregate fee pool is proposed for
FY16.
Non-executive Director fees for FY15
A review of Non-executive Director fees was undertaken during FY15 having regards to both the remuneration
policy described above and market benchmark data. Following the review, the fees for the Chair of the Board,
the Chairs of the Audit and Risk and Remuneration and Human Resources Committees, and the members of
the Audit and Risk Committee were increased (effective 1 January 2015) in line with market benchmarks.
The fee increases were also considered appropriate in light of the increasing demands placed on Directors in
recent years given the increased scale and complexity of the business. The increase in total fees payable to
Non-executive Directors was 4.3 per cent. Non-executive Director fees were last increased in 2010.
Current base fees and Committee fees per year are set out below:
Board
Audit and Risk Committee
Remuneration and Human Resources Committee
Nomination Committee
Chair fee $
505,0001
48,0001
35,0001
10,000
Member fee $
170,000
25,0001
20,000
10,000
1. Effective 1 January 2015, the annual fee for the Chair of the Board increased from $455,000 to $505,000, the annual fee for the Chair of the
Audit and Risk Committee increased from $40,000 to $48,000, the annual fee for members of the Audit and Risk Committee increased from
$20,000 to $25,000, and the annual fee for the Chair of the Remuneration and Human Resources Committee increased from $30,000 to
$35,000.
45
45
2015 Transurban Annual Report Remuneration report (continued)
Non-executive Director fees for FY15 (continued)
The Chair of the Board does not receive any additional fees for Committee responsibilities. The Chair of each
Committee only receives the Chair fee (and not a member fee).
Non-executive Directors are permitted to be paid additional fees for special duties or exertions. No such fees
were paid during FY15. Non-executive Directors are also entitled to be reimbursed for all business related
expenses, including travel, as may be incurred in the discharge of their duties.
Retirement benefits
Non-executive Directors are not entitled to any retirement benefits.
C. Remuneration paid to Non-executive Directors
Non-executive Director remuneration for FY15 and FY14 is set out below:
Short-term benefits
Fees
Post-employment benefits
Superannuation1
Current Non-executive Directors
L Maxsted
2015
2014
N Chatfield
2015
2014
R Edgar
2015
2014
S Mostyn
2015
2014
C O'Reilly
2015
2014
R Slater2
2015
2014
I Smith3
2015
2014
Total
2015
2014
462,071
437,925
226,321
222,825
217,321
212,825
183,570
183,570
185,643
183,570
217,181
197,023
155,973
155,973
1,648,080
1,593,711
18,783
17,774
18,783
17,774
18,783
17,774
17,439
16,980
17,636
16,980
–
–
14,817
14,427
106,241
101,709
Total
480,854
455,699
245,104
240,599
236,104
230,599
201,009
200,550
203,279
200,550
217,181
197,023
170,790
170,400
1,754,321
1,695,420
1. Superannuation contributions made on behalf of Non-executive Directors to satisfy the Group’s obligations under applicable superannuation
guarantee legislation.
2. Rodney Slater is remunerated in USA Dollars. The amounts shown in the table above have been converted to Australian Dollars using the
average exchange rate over the reporting period.
3. Ian Smith resigned as a Non-executive Director effective 10 August 2015.
46
46
2015 Transurban Annual Report Remuneration report (continued)
D. Securities held by Non-executive Directors as at 30 June 2015
Current Non-executive Directors
Balance at
start of year
Changes
during year
Balance at
end of year
L Maxsted
2015
2014
N Chatfield
2015
2014
R Edgar
2015
2014
S Mostyn
2015
2014
C O'Reilly
2015
2014
R Slater
2015
2014
I Smith1
2015
2014
66,559
30,000
50,424
30,910
30,324
24,590
17,256
14,000
13,972
4,363
–
–
92,742
71,772
–
36,559
5,000
19,514
–
5,734
–
3,256
5,360
9,609
–
–
2,043
20,970
66,559
66,559
55,424
50,424
30,324
30,324
17,256
17,256
19,332
13,972
–
–
94,785
92,742
1. Ian Smith resigned as a Non-executive Director effective 10 August 2015.
E. Non-executive Director related party information
Rodney Slater is a partner in the public policy practice group of Squire Patton Boggs (US) LLP. Transurban used
Squire Patton Boggs (US) LLP during FY15 for various lobbying activities in the USA. This relationship is based
on normal commercial terms. US$150,208 was paid to Squire Patton Boggs (US) LLP during FY15.
Lindsay Maxsted is Chairman and a Non-executive Director of Westpac Banking Corporation. Westpac provides
transactional banking and loan facilities to Transurban. This relationship is based on normal commercial terms.
During FY15 Westpac also participated in the Transurban Queensland financing, M7 and M2 refinancings,
provided a Letter of Credit facility associated with the NorthConnex project and acted as an arranger on the
Transurban Queensland AMTN, all on normal commercial terms.
Neil Chatfield is Chairman and a Non-executive Director of Seek Limited. Seek provides employment advisory
services to Transurban. This relationship is based on normal commercial terms.
Neil Chatfield was Chairman of Virgin Australia Holdings Limited until May 2015. Samantha Mostyn is a
Non-executive Director of Virgin Australia Holdings Limited. Transurban uses air travel services provided by
Virgin Australia. This relationship is based on normal commercial terms.
Samantha Mostyn is a Non-executive Director of Citigroup Pty Limited. During FY15 Citibank participated in the
M2 refinancing, provided a bilateral working capital facility and acted as an arranger on the May 2015 Transurban
EMTN, all on normal commercial terms.
Christine O’Reilly is a Non-executive Director of Energy Australia. Energy Australia is one of Transurban’s
electricity providers in NSW and Queensland. This relationship is based on normal commercial terms.
None of Rodney Slater, Lindsay Maxsted, Neil Chatfield, Samantha Mostyn nor Christine O’Reilly were, or
are, involved in any procurement or other Board decision making regarding the companies or firms with which
they have an association (as described above).
47
47
2015 Transurban Annual Report Auditor
PricewaterhouseCoopers continues in office in accordance with section 327 of the Corporations Act 2001.
Non-audit services
The Company has an "External Auditor Independence" policy which is intended to support the independence of
the external auditor by regulating the provision of services by the external auditor. The external auditor will not be
engaged to perform any service that may impair or be perceived to impair the external auditor's judgment or
independence.
The external auditor will only provide a permissible non-audit service where there is a compelling reason for it to
do so.
All non-audit services must be pre-approved by the CFO (services less than $5,000) or the Chair of the Audit and
Risk Committee (in all other cases).
The Board has considered the position and, in accordance with advice received from the Audit and Risk
Committee, is satisfied that the provision of the non-audit services during the period 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:
the Audit and Risk Committee reviews the non-audit services 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 Group, acting as advocate for
the Group or jointly sharing economic risk and rewards.
During the year the following fees were paid or payable for audit and non-audit services provided by the auditor
of THL, its related practices and non-related audit firms:
Amounts received or due and receivable by PricewaterhouseCoopers
Audit and other assurance services:
Audit and review of financial reports
Other assurance services
Other consulting services
Total remuneration for PricewaterhouseCoopers
Total auditors’ remuneration
Indemnification and insurance
2015
$
2014
$
2,293,000
173,600
2,466,600
243,915
2,710,515
2,710,515
1,337,000
594,000
1,931,000
–
1,931,000
1,931,000
Each officer (including each director) of the Group is indemnified, to the maximum extent permitted by law,
against any liabilities incurred as an officer of the Group pursuant to agreements with the Group. Each officer is
also indemnified against reasonable costs (whether legal or otherwise) incurred in relation to relevant
proceedings in which the officer is involved because the officer is or was an officer.
The Group has arranged to pay a premium for a Directors and officers liability insurance policy to indemnify
Directors and officers in accordance with the terms and conditions of the policy.
This policy is subject to a confidentiality clause which prohibits disclosure of the nature of the liability covered,
the name of the insurer, the limit of liability and the premium paid for this policy.
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001
is set out on page 50.
48
48
2015 Transurban Annual Report Rounding of amounts
The Group is of a kind referred to in Class Order 98/100, issued by the Australian Securities and Investments
Commission, relating to the 'rounding off' of amounts in the Directors' report. Amounts in the Directors' report
have been rounded off in accordance with that Class Order to the nearest million, or in certain cases, to the
nearest dollar.
This report is made in accordance with a resolution of Directors.
Lindsay Maxsted
Director
Scott Charlton
Director
Melbourne
11 August 2015
49
49
2015 Transurban Annual Report
Auditor’s Independence Declaration
As lead auditor for the audit of the Transurban Group, THT and TIL for the year ended 30 June 2015, 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 audit; and
b) no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of the Transurban Group and the entities it controlled during the period,
THT and the entities it controlled during the period and TIL and the entities it controlled during the
period.
Chris Dodd
Partner
PricewaterhouseCoopers
Melbourne
11 August 2015
PricewaterhouseCoopers, ABN 52 780 433 757
Freshwater Place, 2 Southbank Boulevard, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001
T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
50
50
2015 Transurban Annual Report Transurban Holdings Limited ABN 86 098 429
Contents
Section A: Group financial statements
Consolidated statement of comprehensive income
Consolidated balance sheet
Consolidated statement of changes in equity
Consolidated statement of cash flows
Section B: Notes to the Group financial statements
Basis of
preparation and
significant
changes
B1
Corporate
information
Operating
performance
B4
Segment
information
B2
Summary of
significant
changes in the
current period
B5
Revenue
Security holder
outcomes
B9
Earnings per
stapled security
B10
Dividends/
distributions and
free cash
B3
Basis of
preparation
B6
Significant items
B7
Income tax
B8
Working capital
Capital and
borrowings
B11
Contributed equity
B12
Reserves
B13
Net finance costs
B14
Borrowings
B15
Derivatives and
financial risk
management
Network summary B16
Intangible assets
B17
Maintenance
provision
B18
Other liabilities –
concession and
promissory notes
Group structure
B19
Principles of
consolidation
B20
Material
subsidiaries
B21
Business
combinations
B22
Equity accounted
investments
B23
Non-controlling
interests – other
B24
Deed of cross and
intragroup
guarantees
Items not
recognised
B25
Contingencies
B26
Commitments
B27
Subsequent
events
Other
B28
Related party
transactions
B29
Key management
personnel
compensation
B30
Remuneration of
auditors
B31
Parent entity
disclosures
Section C: Transurban Holdings Trust (‘THT’) and Transurban International Limited (‘TIL’) financial statements
Consolidated statement of comprehensive income
Consolidated balance sheet
Consolidated statement of changes in equity
Consolidated statement of cash flows
Section D: Notes to the THT and TIL financial statements
Section E: Signed reports
Directors’ declaration
Independent auditor’s report to the stapled security holders
Streamlined financial statements
This year, the Group’s financial statements have been presented in a more streamlined manner by changing the format and layout to simplify
the information disclosed and make it more relevant to users. The notes have been grouped into similar sections and key accounting policies,
along with key estimates and judgements, have been moved into the notes to which they relate.
The structure of the financial report has also changed as a result of the Group applying the option under ASIC Class Order 05/642 Combining
financial reports of stapled security issuers to present the consolidated financial statements in one section, and all other reporting group
members in adjacent columns in a separate section.
51
51
2015 Transurban Annual Report Section A: Group financial statements
Transurban Holdings Limited
for the year ended 30 June 2015
Transurban Holdings Limited
for the year ended 30 June 2015
52
52
2015 Transurban Annual Report Revenue
Expenses
Employee benefits expense
Road operating costs
Construction costs
Transaction and integration costs
Corporate and other expenses
Total expenses
Earnings before depreciation, amortisation, net finance costs,
equity accounted investments and income taxes
Amortisation
Depreciation
Total depreciation and amortisation
Net finance costs
Share of net profits of equity accounted investments
(Loss)/profit before income tax
Income tax (expense)/benefit
(Loss)/profit from continuing operations
Discontinued operation
Profit from discontinued operations, net of tax
(Loss)/profit for the year
(Loss)/profit attributable to:
Ordinary security holders of the stapled group
- Attributable to THL
- Attributable to THT/TIL
Non-controlling interests - other
Other comprehensive income
Items that may be reclassified to profit or loss in the future
Changes in the fair value of cash flow hedges, net of tax
Exchange differences on translation of US operations, net of tax
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Total comprehensive income for the year is attributable to:
Ordinary security holders of the stapled group
- Attributable to THL
- Attributable to THT/TIL
Non-controlling interests - other
Transurban Holdings Limited
Consolidated statement of comprehensive income
Transurban Holdings Limited
for the year ended 30 June 2015
Consolidated statement of comprehensive income
for the year ended 30 June 2015
Note
B5
B16
B13
B22
B7
B23
2015
$M
1,860
(116)
(243)
(185)
(429)
(105)
(1,078)
782
(513)
(38)
(551)
(611)
17
(363)
(10)
(373)
–
(373)
(57)
(125)
(182)
(191)
(373)
(50)
(10)
(60)
(433)
(81)
(176)
(176)
(433)
2014
$M
1,150
(82)
(135)
(105)
(9)
(60)
(391)
759
(301)
(29)
(330)
(345)
115
199
45
244
8
252
(83)
365
282
(30)
252
26
(3)
23
275
(86)
389
(28)
275
Earnings per security attributable to ordinary security holders of the stapled group:
Basic and diluted (loss)/earnings per stapled security
B9
(9.5)
18.3
Cents
Cents
The above consolidated statement of comprehensive income should be read in conjunction with the
accompanying notes.
The above consolidated statement of comprehensive income should be read in conjunction with the
accompanying notes.
53
53
2015 Transurban Annual Report ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Derivative financial instruments
Total current assets
Non-current assets
Equity accounted investments
Held-to-maturity investments
Derivative financial instruments
Property, plant and equipment
Deferred tax assets
Intangible assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Borrowings
Derivative financial instruments
Maintenance provision
Distribution provision
Other provisions
Other liabilities
Total current liabilities
Non-current liabilities
Borrowings
Deferred tax liabilities
Maintenance provision
Other provisions
Derivative financial instruments
Other liabilities
Total non-current liabilities
Total liabilities
Net assets
EQUITY1
Contributed equity
Reserves
Accumulated losses
Non-controlling interests – THT and TIL
Equity attributable to security holders of the stapled group
Non-controlling interests – other
Total equity
Transurban Holdings Limited
Consolidated balance sheet
Transurban Holdings Limited
for the year ended 30 June 2015
Consolidated balance sheet
for the year ended 30 June 2015
Note
B8
B8
B15
B22
B15
B7
B16
B8
B14
B15
B17
B10
B14
B7
B17
B15
B11
B12
B23
2015
$M
1,249
117
4
1,370
1,092
165
82
249
961
17,320
19,869
21,239
340
628
4
82
438
27
116
1,635
11,471
969
733
61
325
49
13,608
15,243
5,996
1,237
(70)
(3,034)
6,636
4,769
1,227
5,996
2014
$M
2,879
84
–
2,963
268
945
16
226
64
10,386
11,905
14,868
181
721
35
77
380
23
76
1,493
6,077
664
211
6
398
57
7,413
8,906
5,962
1,208
(44)
(2,843)
7,383
5,704
258
5,962
1. The 30 June 2014 equity balances have been restated due to the change in accounting policy to adopt AASB 10 Consolidated financial
statements as described in note B2.
The above consolidated balance sheet should be read in conjunction with the accompanying notes.
54
The above consolidated balance sheet should be read in conjunction with the accompanying notes.
54
2015 Transurban Annual Report Transurban Holdings Limited
Consolidated statement of changes in equity
Transurban Holdings Limited
for the year ended 30 June 2015
Consolidated statement of changes in equity
for the year ended 30 June 2015
Attributable to security holders of the stapled group
No. of
securities
M
Contributed
equity
$M
Reserves
$M
Accumulated
losses
$M
Non–controlling
interests–
THT & TIL
$M
Non–
controlling
interests–other
$M
Total
$M
Total
equity
$M
Balance at 1 July 2014
1,896
1,208
(44)
(2,843)
7,383
5,704
258
5,962
Comprehensive income
Profit/(loss) for the year
Other comprehensive
income/(loss)
Total comprehensive
income/(loss)
Transactions with
owners in their
capacity as owners:
Contributions of equity,
net of transaction
costs1
Employee performance
awards issued2
Distributions provided
for or paid3
Distribution reinvestment
plan4
Distributions to non-
controlling interests5
Transactions with non-
controlling interests6
–
–
–
–
1
–
17
–
–
18
–
–
–
–
–
–
29
–
–
29
Balance at 30 June 2015
1,914
1,237
(24)
(24)
–
(2)
–
–
–
–
(2)
(70)
–
(57)
–
–
–
–
–
(134)
(3,034)
–
(57)
(125)
(182)
(191)
(373)
(51)
(75)
15
(60)
(176)
(257)
(176)
(433)
(134)
(630)
(764)
–
1
–
(1)
114
143
–
–
(56)
(571)
(56)
(678)
1,342
1,342
–
–
–
(64)
(133)
1,145
(1)
(764)
143
(64)
(189)
467
6,636
4,769
1,227
5,996
1. In July 2014, the non-controlling partners in Transurban Queensland (Australian Super and Tawreed) contributed $1,331 million as their equity
contribution for the acquisition of Transurban Queensland. The Group’s equity contribution into Transurban Queensland is eliminated upon
consolidation. The remaining $11 million is due to an equity contribution into DRIVe from the non-controlling partner prior to Transurban’s
purchase of this non-controlling interest on 29 June 2015.
2. From 2012 it is mandatory that a portion of all Short Term Incentives issued to the CEO and other senior executives are deferred for a period of
2 years as detailed in the Remuneration Report. In addition to the Short Term Incentives, Stapled Securities (including units in the Trust) were
issued to executives under the Group’s Long Term Incentive share-based payment plans as detailed in the Remuneration Report. These
securities are held by the executive but will only vest in accordance with the terms of the plans.
3. Refer to note B10 for further details of distributions provided for or paid.
4. Under the distribution reinvestment plan, holders of stapled securities may elect to have all or part of their distribution entitlements satisfied by
the issue of new stapled securities rather than by cash.
5. Distributions were paid during the period to the non-controlling interest partners in Airport Motorway Trust (Eastern Distributor) and Transurban
Queensland Invest Trust (Transurban Queensland).
6. Refer to note B23 for further details of transactions with non-controlling interests.
The above consolidated statement of changes in equity should be read in conjunction
with the accompanying notes.
The above consolidated statement of changes in equity should be read in conjunction with the accompanying
notes.
55
55
2015 Transurban Annual Report No. of
securities
M
No. of
securities
M
Contributed
Contributed
equity
equity
$M
$M
Reserves
$M
Reserves
$M
Accumulated
Accumulated
losses
losses
$M
$M
Balance at 30 June 2013
Balance at 30 June 2013
1,482
1,482
7,976
7,976
(104)
(104)
(4,469)
(4,469)
–
–
(7,336)
(7,336)
1,482
1,482
640
640
52
52
(52)
(52)
1,779
1,779
(2,690)
(2,690)
Transurban Holdings Limited
Consolidated statement of changes in equity
Transurban Holdings Limited
Transurban Holdings Limited
for the year ended 30 June 2015
Consolidated statement of changes in equity
Consolidated statement of changes in equity
for the year ended 30 June 2015
for the year ended 30 June 2015
Attributable to security holders of the stapled group
Attributable to security holders of the stapled group
Non–controlling
interests–
THT & TIL
$M
Non–controlling
interests–
THT & TIL
$M
(183)
(183)
5,504
5,504
Total
Total
$M
$M
3,220
3,220
–
–
Non–
Non–
controlling
controlling
interests–other
interests–other
$M
$M
146
146
–
–
Total
Total
equity
equity
$M
$M
3,366
3,366
–
–
5,322
5,322
3,220
3,220
146
146
3,366
3,366
365
365
24
24
389
389
282
282
21
21
303
303
(30)
(30)
2
2
(28)
(28)
252
252
23
23
275
275
2,152
2,152
2,696
2,696
161
161
2,857
2,857
2
2
8
8
(71)
(71)
(523)
(523)
(594)
(594)
42
42
64
64
–
–
–
–
–
–
7
7
1,673
1,673
7,383
7,383
2,181
2,181
5,704
5,704
–
–
–
–
–
–
8
8
(594)
(594)
64
64
(14)
(14)
(14)
(14)
(7)
(7)
140
140
258
258
–
–
2,321
2,321
5,962
5,962
–
–
–
–
–
–
–
–
–
–
–
–
405
405
544
544
–
–
–
–
9
9
–
–
–
–
2
2
–
–
22
22
–
–
–
–
–
–
(3)
(3)
(3)
(3)
–
–
4
4
–
–
–
–
–
–
7
7
(83)
(83)
–
–
(83)
(83)
–
–
–
–
–
–
–
–
–
–
414
414
1,896
1,896
568
568
1,208
1,208
11
11
(44)
(44)
(71)
(71)
(2,843)
(2,843)
Restated for change in
Restated for change in
accounting policy1
accounting policy1
Restated balance at
Restated balance at
1 July 2013
1 July 2013
Comprehensive income
Comprehensive income
Profit/(loss) for the year
Profit/(loss) for the year
Other comprehensive
Other comprehensive
income/(loss)
income/(loss)
Total comprehensive
Total comprehensive
income/(loss)
income/(loss)
Transactions with owners
in their capacity as
owners:
Transactions with owners
in their capacity as
owners:
Contributions of equity,
Contributions of equity,
net of transaction
net of transaction
costs2
costs2
Employee performance
awards issued3
Employee performance
awards issued3
Distributions provided for
Distributions provided for
or paid4
or paid4
Distribution reinvestment
Distribution reinvestment
plan5
plan5
Distributions to non-
Distributions to non-
controlling interests6
controlling interests6
Transactions with non-
Transactions with non-
controlling interests
controlling interests
Balance at 30 June 2014
Balance at 30 June 2014
1. The 30 June 2013 equity balances have been restated due to the change in accounting policy to adopt AASB 10 Consolidated financial
1. The 30 June 2013 equity balances have been restated due to the change in accounting policy to adopt AASB 10 Consolidated financial
statements as described in note B2.
statements as described in note B2.
2. During May 2014 the Group successfully completed the fully underwritten institutional and retail components of its renounceable 10 for 43 pro
2. During May 2014 the Group successfully completed the fully underwritten institutional and retail components of its renounceable 10 for 43 pro
rata entitlement offer. The institutional component raised $1.8 billion at an issue price of $6.75 per security and the retail component raised
rata entitlement offer. The institutional component raised $1.8 billion at an issue price of $6.75 per security and the retail component raised
$0.6 billion. As part of the entitlement offer, the Group also completed a placement of securities to its Queensland Motorways Group consortium
$0.6 billion. As part of the entitlement offer, the Group also completed a placement of securities to its Queensland Motorways Group consortium
bid partners AustralianSuper and Tawreed raising an additional $0.4 billion. The total proceeds from the entitlement offer and placement were
bid partners AustralianSuper and Tawreed raising an additional $0.4 billion. The total proceeds from the entitlement offer and placement were
approximately $2.7 billion and were used to fund the Group’s equity contribution for the Queensland Motorways Group acquisition which
approximately $2.7 billion and were used to fund the Group’s equity contribution for the Queensland Motorways Group acquisition which
completed on 2 July 2014.
completed on 2 July 2014.
3. From 2012 it is mandatory that a portion of all Short Term Incentives issued to the CEO and other senior executives are deferred for a period of
3. From 2012 it is mandatory that a portion of all Short Term Incentives issued to the CEO and other senior executives are deferred for a period of
2 years as detailed in the Remuneration Report. In addition to the short term incentives, stapled securities (including units in the Trust) were
issued to executives under the Group’s long term incentive share-based payment plans as detailed in the Remuneration Report.
These securities are held by the executive but will only vest in accordance with the terms of the plans.
2 years as detailed in the Remuneration Report. In addition to the short term incentives, stapled securities (including units in the Trust) were
issued to executives under the Group’s long term incentive share-based payment plans as detailed in the Remuneration Report.
These securities are held by the executive but will only vest in accordance with the terms of the plans.
4. Refer to note B10 for further details of distributions provided for or paid.
4. Refer to note B10 for further details of distributions provided for or paid.
5. Under the distribution reinvestment plan, holders of stapled securities may elect to have all or part of their distribution entitlements satisfied by
5. Under the distribution reinvestment plan, holders of stapled securities may elect to have all or part of their distribution entitlements satisfied by
the issue of new stapled securities rather than by cash.
the issue of new stapled securities rather than by cash.
6. Distributions were paid during the period to the non-controlling interest partners in Airport Motorway Trust (Eastern Distributor).
6. Distributions were paid during the period to the non-controlling interest partners in Airport Motorway Trust (Eastern Distributor).
The above consolidated satement of changes in equity should be read in conjunction with the accompanying notes.
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
56
56
56
2015 Transurban Annual Report Transurban Holdings Limited
Consolidated statement of cash flows
Transurban Holdings Limited
for the year ended 30 June 2015
Consolidated statement of cash flows
for the year ended 30 June 2015
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Payments for maintenance of intangible assets
Transaction and integration costs related to acquisitions
Other revenue
Interest received
Interest paid
Income taxes paid
Net cash inflow from operating activities
Cash flows from investing activities
Payments for held-to-maturity investments, net of fees
Payments for equity accounted investments
Payments for intangible assets
Payments for property, plant and equipment
Distributions received from equity accounted investments
Payments for acquisition of subsidiaries, net of cash acquired
Net cash outflow from investing activities
Cash flows from financing activities
Proceeds from equity issued to non-controlling interests
Proceeds from issues of stapled securities
Proceeds from borrowings (net of costs)
Payment for acquisition of non-controlling interest
Repayment of borrowings
Dividends and distributions paid to the Group's security holders
Distributions paid to non-controlling interests
Net cash inflow from financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at end of the year
Note
(a)
B21
B23
B10
B10
B8
2015
$M
1,797
(574)
(91)
(429)
31
79
(506)
(3)
304
(108)
(2)
(203)
(77)
95
(6,397)
(6,692)
1,342
–
6,562
(189)
(2,361)
(570)
(57)
4,727
(1,661)
2,879
31
1,249
(a) Reconciliation of (loss)/profit after income tax to net cash flow from operating activities
(Loss)/profit for the year
Depreciation and amortisation
Non-cash share-based payments expense
Net construction revenue
Non-cash net finance costs
Share of profits of equity accounted investments
Change in operating assets and liabilities:
Decrease in trade and other receivables
Decrease in concession and promissory note liability
Increase in operating creditors and accruals
Decrease in other operating provisions
Increase in provision for income taxes payable
Movement in deferred taxes
Increase in maintenance provision
Net cash inflow from operating activities
B22
2015
$M
(373)
551
7
(5)
52
(17)
1
(10)
52
(1)
3
16
28
304
2014
$M
1,116
(379)
(36)
–
99
68
(344)
(3)
521
(27)
(39)
(112)
(73)
57
(709)
(903)
–
2,696
2,465
–
(1,729)
(419)
(9)
3,004
2,622
259
(2)
2,879
2014
$M
252
330
7
–
(45)
(115)
6
(2)
14
(1)
8
34
33
521
The above consolidated satement of cash flows should be read in conjunction with the accompanying notes.
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
57
57
2015 Transurban Annual Report Section B: Notes to the Group financial statements
Transurban Holdings Limited
Transurban Holdings Limited
for the year ended 30 June 2015
for the year ended 30 June 2015
for the year ended 30 June 2015
58
58
2015 Transurban Annual Report Transurban Holdings Limited
Transurban Holdings Limited
Notes to the consolidated financial statements
Notes to the consolidated financial statements
for the year ended 30 June 2015
for the year ended 30 June 2015
Basis of preparation and significant changes
B1 Corporate information
Transurban Holdings Limited (‘the company’, ‘the parent’ or ‘THL’) is a company incorporated in Australia and
limited by shares that are publicly traded on the Australian Securities Exchange. These financial statements have
been prepared as a consolidation of the financial statements of Transurban Holdings Limited and its controlled
entities (‘Transurban Group’ or ‘the Group’). The controlled entities of THL include the other members of the
stapled group being Transurban International Limited and its controlled entities (‘TIL’) and Transurban Holding
Trust and its controlled entities (‘THT’). The equity securities THL, THT and TIL are stapled and cannot be traded
separately. Entities within the Group are domiciled and incorporated in Australia and the United States of
America.
The consolidated financial statements of Transurban Group for the year ended 30 June 2015 were authorised for
issue in accordance with a resolution of the Directors on 11 August 2015. Directors have the power to amend and
reissue the financial report.
B2 Summary of significant changes in the current reporting period
The financial position and performance of the Group was particularly affected by the following events and
transactions during the reporting period:
Acquisition of Queensland Motorways Group (Transurban Queensland)
The Group completed the acquisition of Queensland Motorways Group on 2 July 2014. This acquisition resulted
in the Group acquiring a 62.5% controlling interest in the Queensland Motorways Group, which included four
operating assets (Logan Motorway, Gateway Motorway, CLEM7 and Go Between Bridge). The right to purchase
the Legacy Way asset was exercised once construction was completed in June 2015 (post acquisition).
The details of the assets and liabilities acquired on 2 July 2014 have been detailed in note B21 and are reflected
in the operating results and financial position of the Group from 2 July 2014. On 30 January 2015, Queensland
Motorways Group changed its name to Transurban Queensland (‘TQ’).
Creation of the NorthWestern Roads Group
On 31 October 2014, the NorthWestern Roads Group (‘NWRG’) was created with the other members of the
consortium that hold the equity interests in Westlink M7. As part of this transaction, the Group contributed a
number of entities (‘the CARS Group’) and in return for contributing these entities the Group received an equity
interest equal to 50% of the fair value of NWRG (including Westlink M7) on the date of the transaction.
This transaction resulted in the Term Loan Notes (‘TLNs’) owed by Westlink M7 to the CARS Group being
derecognised by the Group and instead the Group has recognised an equity accounted investment in NWRG for
an amount equal to the value of the TLNs on the date of the transaction. NWRG also holds the Group’s interest in
the NorthConnex Project in the NSW network that reached financial close on 31 January 2015.
Acquisition of Legacy Way
On 25 June 2015, the Legacy Way tunnel officially opened to traffic. The Group has subsequently achieved
financial close on 29 June 2015, with a payment of $118 million made to Brisbane City Council on 10 July 2015.
This payment has been included within trade and other payables at 30 June 2015.
Acquisition of remaining equity interest in the 95 Express Lanes and 495 Express Lanes
On 29 June 2015 the Group acquired the remaining 25% shareholding in DRIVe that it did not already own for
US$145 million ($189 million). This acquisition increases the Group’s equity interest to 100% in both the 95
Express Lanes and 495 Express Lanes in Northern Virginia, USA from 77.5% and 94% respectively. The Group
completed the acquisition by using existing corporate debt facilities. Refer to note B23.
Change of accounting policy relating to the preparation of the Group’s financial statements
During FY15, the Group undertook a reassessment of its accounting policy relating to the preparation of
consolidated / combined financial statements for the Group. This reassessment has resulted in the
Group no longer applying UIG 1013 Pre-date of transition stapling arrangements and AASB 1002
Post date of transition stapling arrangements to enable the preparation of consolidated/combined
financial statements for the Group.
59
59
2015 Transurban Annual Report Transurban Holdings Limited
Transurban Holdings Limited
Notes to the consolidated financial statements
Notes to the consolidated financial statements
for the year ended 30 June 2015
for the year ended 30 June 2015
B2 Summary of significant changes in the current reporting period (continued)
Change of accounting policy relating to the preparation of the Group’s financial statements
(continued)
The Group will now apply AASB 10 Consolidated financial statements as the basis for preparing the
Group financial statements. Under this revised accounting policy, THL has been identified as the parent
entity of the stapled Group and THL will prepare consolidated financial statements. This treatment
complies with Australian accounting standards and international financial reporting standards and as
such, the Group is no longer required to rely on the Australian securities and investment commission
Class Order 13/1050 in order to be able to prepare consolidated / aggregated financial statements for
the stapled Group.
The impact of this change on the Group’s consolidated financial statements is the reclassification of
THT’s equity components to a ‘non-controlling interests’ line in the financial statements, consistent with
the presentation of TIL, as outlined in the opening balance adjustments to the statement of changes in
equity.
The Group also elected to apply the option under ASIC Class Order 05/642 Combining financial reports
of stapled security issuers to present the consolidated financial statements in one section (Section A),
and all other reporting group members in a separate section (Section C). In the previous period,
separate financial statements were prepared for THL, THT and TIL.
B3 Basis of preparation
The Group financial statements are general purpose financial statements which:
Have been prepared in accordance with the Corporations Act 2001, Australian accounting standards,
and other authoritative pronouncements of the Australian Accounting Standards Board;
Have adopted all accounting policies in accordance with Australian accounting standards, and where a
standard permits a choice in accounting policy, the policy adopted by the Group has been disclosed in
these financial statements;
Do not early adopt any accounting standards or interpretations that have been issued or amended but
are not yet effective;
Comply with International financial reporting standards (‘IFRS’) as issued by the International Accounting
Standards Board (‘IASB’);
Have been prepared under the historical cost convention, as modified by the revaluation of other
financial assets and liabilities (including derivative financial instruments);
Are presented in Australian dollars, which is THL’s functional and presentation currency.
Have been rounded to the nearest million dollars, unless otherwise stated, in accordance with ASIC
Class Order 98/100;
Have applied the option under ASIC Class Order 05/642 to present consolidated financial statements in
one section and all other reporting group members in a separate section; and
The presentation of comparative amounts have been restated, where applicable, to conform to the
current period presentation.
Going concern
The financial report has been prepared on a going concern basis, which assumes the continuity of normal
operations. This is based on the following:
The Group has generated positive cash inflows from operating activities of $304 million, after payment of
$429 million in transaction and integration costs relating to acquisitions (2014: $521 million);
The Group has available a total of $356 million of undrawn borrowing facilities across a number of
finance providers; and
The Group cash balance includes proceeds raised from a Euro bond issuance in May 2015 that will be
used to repay upcoming maturities and drawn debt under existing working capital facilities. The Group
expects that remaining borrowings classified as current at 30 June 2015 will be refinanced during the
next financial year.
60
60
2015 Transurban Annual Report Transurban Holdings Limited
Transurban Holdings Limited
Notes to the consolidated financial statements
Notes to the consolidated financial statements
for the year ended 30 June 2015
for the year ended 30 June 2015
B3 Basis of preparation (continued)
Foreign currency translation
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 year end exchange rates of monetary assets and liabilities denominated
in foreign currencies, are recognised in profit or loss, except when they are deferred in equity as qualifying cash
flow hedges and qualifying net investment hedges or are attributable to part of the net investment in a foreign
operation.
Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates
at the date when the fair value was determined. Translation differences on assets and liabilities carried at fair
value are reported as part of the fair value gain or loss. For example, translation differences on non-monetary
assets and liabilities such as equities held at fair value through profit or loss are recognised in profit or loss as part
of the fair value gain or loss and translation differences on non-monetary assets such as equities classified as
available-for-sale financial assets are recognised in the fair value reserve in equity.
Foreign operations
The results and financial position of all of the Group entities that have a functional currency different from the
presentation currency are translated into the presentation currency as follows:
assets and liabilities are translated at the closing rate at the reporting date;
income and expenses are translated at average exchange rates (unless this is not a reasonable
approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case
income and expenses are translated at the dates of the transactions); and
all resulting exchange differences are recognised in other comprehensive income.
On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and
of borrowings and other financial instruments designated as hedges of such investments, are taken to other
comprehensive income.
New and amended standards
The Group has adopted the following new or revised accounting standards which became effective for the annual
reporting period commencing on 1 July 2014. The Group determined there is no impact on the financial
statements:
Reference
Description
AASB 2012-3
AASB 2012-3 adds application guidance to AASB 132 Financial instruments: presentation to
address inconsistencies identified in applying some of the offsetting criteria of AASB 132.
AASB 2013-9
Amendments to Australian accounting standards conceptual framework, materiality and
financial instruments. Part B makes amendments to particular standards to delete references
to AASB 1031 and minor amendments to other standards.
AASB 2014-1
Amendments to Australian accounting standards arising from the issuance by the IASB Annual
improvements to IFRSs 2010-2012 and 2011-2013 cycles. These address various Australian
accounting standards.
AASB 1031
The revised AASB 1031 is an interim standard that cross-references to other standards that
contains guidance on materiality. AASB 1031 will be withdrawn when references to AASB
1031 in all standards and interpretations have been removed.
Interpretation 21 This interpretation confirms that a liability to pay a levy is only recognised when the activity
that triggers the payment occurs.
61
61
2015 Transurban Annual Report Transurban Holdings Limited
Transurban Holdings Limited
Notes to the consolidated financial statements
Notes to the consolidated financial statements
for the year ended 30 June 2015
for the year ended 30 June 2015
B3 Basis of preparation (continued)
Accounting standards and interpretations issued but not yet effective
Certain new accounting standards and interpretations have been published but are not mandatory for 30 June
2015 reporting periods. The Group's assessment of the impact of these new standards and interpretations is set
out below.
Application
of the
standard
1 January
2018
Application
by the Group
1 July 2018
1 January
2017
1 July 2017
1 January
2016
1 July 2016
1 January
2016
1 July 2016
1 January
2016
1 July 2016
1 January
2016
1 July 2016
Reference
Description
Impact on the Group
AASB 9
Financial
instruments
AASB 15
Revenue from
contracts with
customers
AASB 2014-4
AASB 9 addresses the
classification, measurement
and derecognition of financial
assets and financial liabilities.
It also includes an expected
loss impairment model and a
reformed approach to hedge
accounting.
AASB 15 establishes principles
for reporting useful information
to users of financial statements
about the nature, amount,
timing and uncertainty of
revenue and cash flows arising
from an entity’s contracts with
customers. AASB 15
supersedes a number of
current revenue standards.
Amendment clarifies that
revenue is generally presumed
to be an inappropriate basis for
measuring the consumption of
the economic benefits
embodied in an intangible
asset. This presumption,
however, can be rebutted in
certain limited circumstances.
AASB 2014-10 Amends AASB 10 and AASB
AASB 2015-1
AASB 2015-2
128 to address an
inconsistency between the
requirements in dealing with the
sale or contribution of assets
between an investor and its
associate or joint venture.
These amendments clarify
various Australian accounting
standards.
These amendments are
designed to further encourage
companies to apply
professional judgment in
determining what information to
disclose in the financial
statements.
Management is in the
process of assessing the
impact of this standard on
the Group’s financial
assets, but does not
believe the impact will be
significant. There will be
no impact on the Group's
accounting for financial
liabilities.
Although a formal
assessment has not been
completed, the impact of
the application of the new
standard is not expected
to be material.
The Group does not use
the revenue based
amortisation method and
therefore the impact of the
application of the new
standard is not expected
to be material.
Although a formal
assessment has not been
completed, the impact of
the application of the new
standard is not expected
to be material.
Although a formal
assessment has not been
completed, the impact of
the application of the new
standard is not expected
to be material.
Although a formal
assessment has not been
completed, the impact of
the application of the new
standard is not expected
to be material.
62
62
2015 Transurban Annual Report Transurban Holdings Limited
Transurban Holdings Limited
Notes to the consolidated financial statements
Notes to the consolidated financial statements
for the year ended 30 June 2015
for the year ended 30 June 2015
B3 Basis of preparation (continued)
Critical accounting estimates and judgements
Estimates and judgements are continually evaluated by management and are based on historical experience and
other factors, including expectations of future events that may have a financial impact on the Group and that are
believed to be reasonable under the circumstances. The estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of assets and liabilities are found in the following notes:
Income taxes
Fair value of derivatives and other financial instruments
Note B7
Note B15
Estimated impairment of intangible assets and cash generating units Note B16
Provision for maintenance expenditure
Valuation of promissory notes and concession notes
Note B17
Note B18
63
63
2015 Transurban Annual Report Transurban Holdings Limited
Transurban Holdings Limited
Transurban Holdings Limited
Notes to the consolidated financial statements
Notes to the consolidated financial statements
Notes to the consolidated financial statements
for the year ended 30 June 2015
for the year ended 30 June 2015
for the year ended 30 June 2015
Operating performance
Operating performance
B4 Segment information
B4 Segment information
In the segment information provided to the Executive Committee (chief operating decision maker), segments are
In the segment information provided to the Executive Committee (chief operating decision maker), segments are
defined by the geographical networks in which the Group operates being Victoria (‘VIC’), New South Wales
defined by the geographical networks in which the Group operates being Victoria (‘VIC’), New South Wales
(‘NSW’), Queensland (‘QLD’) and the United States of America (‘USA’). The Group's corporate function is not an
(‘NSW’), Queensland (‘QLD’) and the United States of America (‘USA’). The Group's corporate function is not an
operating segment under the requirements of AASB 8 as its revenue generating activities are only incidental to
operating segment under the requirements of AASB 8 as its revenue generating activities are only incidental to
the business.
the business.
The Executive Committee assess the performance of the networks based on a measure of proportional earnings
The Executive Committee assess the performance of the networks based on a measure of proportional earnings
before interest, tax, depreciation and amortisation expenses (‘Proportional EBITDA’) excluding the impact of
before interest, tax, depreciation and amortisation expenses (‘Proportional EBITDA’) excluding the impact of
significant items (‘Underlying proportional EBITBA’). This reflects the contribution of each network in the Group in
significant items (‘Underlying proportional EBITBA’). This reflects the contribution of each network in the Group in
the proportion of Transurban's equity ownership. Interest income and expenses are allocated to the networks
the proportion of Transurban's equity ownership. Interest income and expenses are allocated to the networks
where the amounts are related specifically to the assets. Otherwise they are allocated to the Corporate function.
where the amounts are related specifically to the assets. Otherwise they are allocated to the Corporate function.
The diagram1 below shows the assets included in each geographical network, together with the ownership
The diagram1 below shows the assets included in each geographical network, together with the ownership
interests held by the Group for the current financial year:
interests held by the Group for the current financial year:
VIC
NSW
QLD
USA
CityLink
(100%)
Lane Cove
Tunnel
(100%)
Hills M2
Motorway
(100%)
Roam /
TollAust
(100%)
Cross City
Tunnel
(100%)
M1 Eastern
Distributor
(75.1%)
Logan
Motorway
(62.5%)
Gateway
Motorway
(62.5%)
95 Express
Lanes
(77.5%)2
495 Express
Lanes
(94%)2
Go Between
Bridge
(62.5%)
CLEM7
(62.5%)
Legacy
Way
(62.5%)
Westlink
M7
(50%)
Interlink
M5
(50%)
North
Connex
(50%)
D
E
N
W
O
Y
L
L
O
H
W
D
E
N
W
O
%
0
0
1
-
N
O
N
D
E
T
A
D
I
L
O
S
N
O
C
D
N
A
D
N
A
D
E
N
W
O
%
0
0
1
-
N
O
N
D
E
T
N
U
O
C
C
A
Y
T
U
Q
E
I
1. Refer to the Group structure section (notes B19 – B24) of the financial statements for further details of the legal entity structure of the Group.
1. Refer to the Group structure section (notes B19 – B24) of the financial statements for further details of the legal entity structure of the Group.
The NSW tolling businesses of Roam and Tollaust have also been included in the NSW network as they provide tolling services to all of the
The NSW tolling businesses of Roam and Tollaust have also been included in the NSW network as they provide tolling services to all of the
NSW assets.
NSW assets.
2. The acquisition of the non-controlling interest in the USA assets on 29 June 2015 does not impact the segment disclosures below which
2. The acquisition of the non-controlling interest in the USA assets on 29 June 2015 does not impact the segment disclosures below which
continue to be shown on a proportional basis in the current financial year. The proportional ownership of the USA assets will be reported at
continue to be shown on a proportional basis in the current financial year. The proportional ownership of the USA assets will be reported at
100% from 1 July 2015.
100% from 1 July 2015.
64
64
64
2015 Transurban Annual Report
Transurban Holdings Limited
Transurban Holdings Limited
Notes to the consolidated financial statements
Notes to the consolidated financial statements
for the year ended 30 June 2015
for the year ended 30 June 2015
B4 Segment information (continued)
Segment information – proportional income statement
2015
$M
Toll revenue
Fee and other revenue
Total proportional revenue
Underlying proportional EBITDA
Significant items
Proportional EBITDA
VIC
577
58
635
538
–
538
1. The QLD segment assets were acquired 2 July 2014.
2014
$M
Toll revenue
Fee and other revenue
Total proportional revenue
Proportional EBITDA
NSW
668
65
733
559
–
559
VIC
535
53
588
484
QLD1
247
21
268
185
(262)
(77)
USA
Corporate
and other
67
14
81
33
–
33
–
9
9
(26)
(10)
(36)
NSW
USA
Corporate
and other
551
49
600
466
31
5
36
4
–
8
8
(20)
Total
1,559
167
1,726
1,289
(272)
1,017
Total
1,117
115
1,232
934
Reconciliation of segment information to statutory financial information
The proportional results presented above are different from the statutory financial results of the Group due to the
proportional presentation of each asset’s contribution to each geographical network.
Segment revenue
Revenue from external customers is through toll and fee revenues earned on toll roads. There are no inter-
segment revenues. Segment revenue reconciles to total statutory revenue as follows:
Note
B5
Total segment revenue (proportional)
Add:
Revenue attributable to non-100% owned consolidated assets
Construction revenue from road development activities
Business development revenue
Other
Less:
Revenue of non-100% owned equity accounted assets
Total statutory revenue
Proportional EBITDA
Proportional EBITDA reconciles to profit/(loss) before income tax as follows:
Proportional EBITDA
Add: EBITDA attributable to non-100% owned consolidated assets
Less: Proportional EBITDA of non-100% owned equity accounted assets
Statutory profit before depreciation, amortisation, net finance costs, equity
accounted investments and income taxes
Statutory net finance costs
Statutory depreciation and amortisation
Share of net profit from equity accounted investments
(Loss)/profit before income tax
65
2015
$M
1,726
200
185
–
–
(251)
1,860
2015
$M
1,017
(21)
(214)
782
(611)
(551)
17
(363)
2014
$M
1,232
27
106
35
3
(253)
1,150
2014
$M
934
14
(189)
759
(345)
(330)
115
199
65
2015 Transurban Annual Report B5 Revenue
Toll revenue
Fee revenue
Construction revenue
Other revenue
Total revenue
Transurban Holdings Limited
Transurban Holdings Limited
Notes to the consolidated financial statements
Notes to the consolidated financial statements
for the year ended 30 June 2015
for the year ended 30 June 2015
2015
$M
1,514
112
190
44
1,860
2014
$M
906
79
110
55
1,150
Accounting policy
The Group generates the following types of revenue:
Revenue type
Recognition
Toll revenue
Fee revenue
Recognised when the charge is incurred by the user.
Recognised when the charge is incurred by the user and the amount is determined to be
recoverable by the Group.
Construction revenue Revenue for the construction of service concession infrastructure assets is recognised in
accordance with the percentage of completion method, which is measured by reference to
costs incurred to date as a percentage of total forecast costs for each project.
Other revenue
Includes management fee revenue, business development revenue and other road
revenue, and is recognised to the extent that incurred costs will be recovered.
B6 Significant items
Significant items are those items where their nature and amount is considered material to the financial statements
and not in the ordinary course of business. Such items which have been included in transaction and integration
costs within the Group's result for the year and are detailed below:
2015
2014
Statutory
$M
Proportional
$M
Statutory
$M
Proportional
$M
Stamp duty on acquisition of Queensland Motorways
Group1
Other transaction fees on acquisition
of Queensland Motorways Group1
Integration costs relating to the acquisition
of Queensland Motorways Group1
Total significant items
Income tax benefit associated with the transaction and
integration costs of Queensland Motorways Group1
Net significant items
(a)
(a)
(b)
384
23
22
429
(11)
418
1. Queensland Motorways changed its name to Transurban Queensland on 30 January 2015.
(a) Stamp duty and other transaction fees
240
18
14
272
(7)
265
–
–
–
–
–
–
–
–
–
–
–
–
The acquisition of Queensland Motorways Group (Transurban Queensland) by a Transurban-led consortium was
completed on 2 July 2014. The consortium incurred stamp duty and other transaction costs as a result of the
acquisition. These costs are in addition to the $9 million in acquisition costs that were already incurred, and
disclosed, during the year ended 30 June 2014 which were not disclosed as a significant item.
(b) Integration costs relating to acquisition of Queensland Motorways Group
Since acquisition, the Group has incurred costs to integrate the Queensland Motorways Group business into
Transurban. These costs include employee costs, consulting and legal fees.
66
66
2015 Transurban Annual Report Transurban Holdings Limited
Transurban Holdings Limited
Notes to the consolidated financial statements
Notes to the consolidated financial statements
for the year ended 30 June 2015
for the year ended 30 June 2015
B7
Income tax
Income tax expense/(benefit)
Current tax
Deferred tax
Under provision in prior years
Deferred income tax expense/(benefit) included in income tax expense/(benefit) comprises:
(Increase) in deferred tax assets
Decrease in deferred tax liabilities
Reconciliation of income tax expense/(benefit) to prima facie tax payable
(Loss)/profit before income tax expense/(benefit)
Tax at the Australian tax rate of 30.0% (2014: 30.0%)
Tax effect of amounts which are not deductible/(taxable) in calculating taxable income:
Trust income not subject to tax
Trust losses not claimable
Equity accounted results
Tax rate differential
Non-deductible interest
Non-deductible stamp duty
Deferred tax balance derecognised on disposal
Sundry items
Under/(over) provision in prior years
Income tax expense/(benefit)
Tax expense/(income) relating to items of other comprehensive income
Cash flow hedges
Foreign currency translation
Deferred tax assets and liabilities
2015
$M
(24)
23
11
10
(62)
85
23
2015
$M
(363)
(109)
–
35
5
13
13
25
8
9
11
10
(6)
–
(6)
2014
$M
(4)
(44)
3
(45)
(56)
12
(44)
2014
$M
199
60
(81)
–
(47)
15
10
–
–
(5)
3
(45)
(23)
2
(21)
The balance comprises temporary differences attributable to:
Provisions
Current and prior year losses
Fixed assets/intangibles
Concession fees and promissory notes
Cash flow hedges
Other
Tax assets/(liabilities)
Set-off of tax
Net tax assets/(liabilities)
Movements:
Opening balance at 1 July
Credited to the statement of comprehensive income
Credited/(charged) to equity
Acquired
Foreign exchange movements
Transfer from deferred tax assets/liabilities
Other
Closing balance at 30 June
Deferred tax assets/(liabilities) to be recovered after more than 12 months
67
Assets
2015
$M
258
729
773
–
108
13
1,881
(920)
961
900
62
(36)
873
15
72
(5)
1,881
1,881
2014
$M
102
638
27
–
118
15
900
(836)
64
770
56
4
80
(14)
4
–
900
900
Liabilities
2015
$M
2014
$M
–
–
(1,434)
(368)
(87)
–
(1,889)
920
(969)
(1,500)
(85)
48
(264)
(12)
(72)
(4)
(1,889)
(1,889)
–
–
(1,041)
(370)
(69)
(20)
(1,500)
836
(664)
(1,391)
(11)
(49)
(49)
4
(4)
–
(1,500)
(1,500)
67
2015 Transurban Annual Report Transurban Holdings Limited
Transurban Holdings Limited
Notes to the consolidated financial statements
Notes to the consolidated financial statements
for the year ended 30 June 2015
for the year ended 30 June 2015
B7
Income tax (continued)
Accounting policy
The income tax expense/benefit for the period is the tax payable or benefit on the current period's taxable income
based on the applicable income tax rate for each jurisdiction, adjusted by changes in deferred tax assets and
liabilities attributable to temporary differences and to unused tax losses.
The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the
end of the reporting period in the countries where the Company operates and generates taxable income.
Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax
regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts
expected to be paid to the tax authorities.
The Transurban stapled group comprises two corporate entities (THL and TIL) and a trust (THT). THT operates
as a flow-through trust, and is not liable to pay tax itself. Instead, security holders pay tax on the distributions they
receive from the trust at their individual marginal tax rates. The Group is structured in this way because the initial
heavy capital investment and associated debt funding required for infrastructure investments results in
accounting losses being generated in the initial years which would otherwise prevent a company from paying
dividends. The trust enables distributions to be made to security holders throughout the life of the asset.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the
tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. 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
substantially enacted by the reporting date and are expected to apply when the related deferred income tax asset
is realised or the deferred income tax liability is settled.
Deferred tax assets 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.
Deferred tax assets and liabilities are not recognised for temporary differences between the carrying amount and
tax bases of investments in foreign operations where the Company is able to control the timing of the reversal of
the temporary differences and it is probable that the differences will not reverse in the foreseeable future.
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. Current tax assets and tax
liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net
basis, or to realise the asset and settle the liability simultaneously.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in
other comprehensive income or directly in equity.
Investment allowances
Companies within the Group may be entitled to claim special tax deductions for investments in qualifying assets
(investment allowances). The Group accounts for such allowances as tax credits, which means that the allowance
reduces income tax payable and current tax expense. A deferred tax asset is recognised for unclaimed tax credits
that are carried forward as tax losses.
Tax consolidation legislation
The Transurban Group has adopted the Australian tax consolidation legislation for THL and its wholly-owned
Australian entities from 1 July 2005.
All entities within the Australian tax consolidated groups continue to account for their own current and deferred tax
amounts. These tax amounts are measured as if each entity in the tax consolidation group is a separate taxpayer
within the tax consolidated group.
68
68
2015 Transurban Annual Report B7
Income tax (continued)
Transurban Holdings Limited
Notes to the consolidated financial statements
Transurban Holdings Limited
for the year ended 30 June 2015
Transurban Holdings Limited
Notes to the consolidated financial statements
Notes to the consolidated financial statements
for the year ended 30 June 2015
for the year ended 30 June 2015
Income tax (continued)
Tax consolidation legislation (continued)
B7
The tax consolidated groups within the Group are summarised as follows:
Tax consolidation legislation (continued)
The tax consolidated groups within the Group are summarised as follows:
TRANSURBAN GROUP
THL
THT2
TIL
Airport
Motorway
Limited
(M1 Eastern
Distributor)
THL
TAX GROUP
TRANSURBAN QUEENSLAND
(TQ) TAX GROUP
CityLink
Melbourne
Limited
(CityLink)
Hills
Motorway
Limited
(Hills M2)
LCT MRE
Pty Limitied
(LCT)
Transurban
Limited
Transurban
Finance
Company
Pty Limited
Roam Tolling
Pty Limited
CCT Pty
Limited
(CCT)
Tollaust Pty
Limited
TQ Holdings
Pty Limited
GBB
Operations
Pty Limited
(Go Between
Bridge)
LW
Operations
Pty Limited
(Legacy Way)
Gateway
Motorway
Pty Limited
(Gateway
Motorway)
Logan
Motorway
Pty Limited
(Logan
Motorway)
Project T
Partnership
(CLEM7)
1. Entity is classified as a partnership for tax purposes
2. There are no tax groups under THT
DRIVe
US TAX GROUP
Transurban
DRIVe
Holdings LLC
Transurban
Express
Lanes LLC
Capital
Beltway
Express LLC
(495 Express
Lanes)1
95 Express
Lanes LLC
(95 Express
Lanes)1
1. Entity is classified as a partnership for tax purposes
THL tax consolidated group
2. There are no tax groups under THT
The entities in the THL tax consolidated group entered into a tax sharing agreement (‘TSA’) effective from
29 April 2009.
THL tax consolidated group
The entities in the THL tax consolidated group have also entered into a tax funding agreement (‘TFA’) effective from
The entities in the THL tax consolidated group entered into a tax sharing agreement (‘TSA’) effective from
1 July 2008. Under the TFA the wholly-owned entities fully compensate THL for any current tax payable assumed and
29 April 2009.
are compensated by THL for any current tax receivable and deferred tax assets relating to tax losses. The funding
The entities in the THL tax consolidated group have also entered into a tax funding agreement (‘TFA’) effective from
amounts are determined by reference to the amounts recognised in the wholly-owned entities’ financial statements.
1 July 2008. Under the TFA the wholly-owned entities fully compensate THL for any current tax payable assumed and
The amount receivable/payable under the TFA is calculated at the end of the financial year for each wholly-owned
are compensated by THL for any current tax receivable and deferred tax assets relating to tax losses. The funding
entity. THL determined and communicates the amount payable/receivable to each wholly-owned entity along with the
amounts are determined by reference to the amounts recognised in the wholly-owned entities’ financial statements.
method of calculation and any other information deemed necessary.
The amount receivable/payable under the TFA is calculated at the end of the financial year for each wholly-owned
entity. THL determined and communicates the amount payable/receivable to each wholly-owned entity along with the
Transurban Queensland tax consolidated group
method of calculation and any other information deemed necessary.
The entities in the Transurban Queensland Holdings 1 Pty Ltd (‘TQH1’) tax consolidated group entered into a TSA
effective from 2 July 2014. The entities in the TQH1 tax consolidated group have also entered into a TFA effective
Transurban Queensland tax consolidated group
from 2 July 2014. Under the TFA the wholly-owned entities fully compensate TQH1 for any current tax payable
The entities in the Transurban Queensland Holdings 1 Pty Ltd (‘TQH1’) tax consolidated group entered into a TSA
assumed and are compensated by TQH1 for any current tax receivable and deferred tax assets relating to tax
effective from 2 July 2014. The entities in the TQH1 tax consolidated group have also entered into a TFA effective
losses. The funding amounts are determined by reference to the amounts recognised in the wholly-owned entities
from 2 July 2014. Under the TFA the wholly-owned entities fully compensate TQH1 for any current tax payable
financial statements.
assumed and are compensated by TQH1 for any current tax receivable and deferred tax assets relating to tax
The amount receivable/payable under the TFA is calculated at the end of the financial year for each wholly-owned
losses. The funding amounts are determined by reference to the amounts recognised in the wholly-owned entities
entity. TQH1 determines and communicates the amount payable / receivable to each wholly-owned entity along
financial statements.
with the method of calculation and any other information deemed necessary.
The amount receivable/payable under the TFA is calculated at the end of the financial year for each wholly-owned
entity. TQH1 determines and communicates the amount payable / receivable to each wholly-owned entity along
with the method of calculation and any other information deemed necessary.
69
69
69
2015 Transurban Annual Report Transurban Holdings Limited
Transurban Holdings Limited
Notes to the consolidated financial statements
Notes to the consolidated financial statements
for the year ended 30 June 2015
for the year ended 30 June 2015
B7
Income tax (continued)
Transurban DRIVe tax consolidated group
Transurban DRIVe Holdings LLC (‘TDH’) is the head company of the DRIVe tax consolidated group. The DRIVe
tax consolidated group is consolidated for US tax purposes in the sense that the 100% subsidiaries of TDH have
elected to be treated as disregarded entities for US tax purposes. This treatment means that those entities are
ignored for US tax purposes and that TDH, as head entity, carries any tax liability or benefits arising in the group.
The DRIVe tax consolidated group currently owns partnership interests in both 495 Express Lanes and 95
Express Lanes and includes its share of each asset’s profits or losses in its US tax return.
Goods and Services Tax (‘GST’)
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is
not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the
asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of
GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the
balance sheet.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or
financing activities which are recoverable from, or payable to the taxation authority, are presented as operating
cash flows.
Key estimate
The Group is subject to income taxes in Australia and the USA. Significant judgement is required in
determining the provision for income taxes. There are many transactions and calculations undertaken during
the ordinary course of business for which the ultimate tax determination is uncertain. The Group recognises
liabilities for anticipated tax audit issues based on whether additional taxes will be due. Where the final tax
outcome of these matters is different from the amounts that were initially recorded, such differences will impact
the current and deferred tax assets and liabilities in the period in which such determination is made.
The Group has recognised deferred tax assets relating to carried forward tax losses to the extent there are
sufficient taxable temporary differences relating to the same taxation authority against which the unused tax
losses can be utilised. However, the utilisation of tax losses also depends on the ability of the Group to satisfy
certain tests at the time the losses are recouped. In the USA tax losses generally expire after a 20 year period.
Management has reviewed the potential future taxable profits and has recognised deferred tax assets in
relation to tax losses.
70
70
2015 Transurban Annual Report Transurban Holdings Limited
Transurban Holdings Limited
Notes to the consolidated financial statements
Notes to the consolidated financial statements
for the year ended 30 June 2015
for the year ended 30 June 2015
B8 Working capital
The Group’s working capital balances are summarised as follows:
Current assets
Cash and cash equivalents
Trade receivables
Other receivables
Prepayments
Current liabilities
Trade payables and accruals
Legacy Way consideration payable
Net working capital
Cash and cash equivalents
2015
$M
1,249
61
45
11
117
1,366
(222)
(118)
(340)
1,026
2014
$M
2,879
39
36
9
84
2,963
(181)
–
(181)
2,782
For the purpose of presentation in the consolidated statement of cash flows, cash and cash equivalents includes
cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with
original maturities of three months or less that are readily convertible to known amounts of cash and which are
subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within
borrowings in current liabilities. All cash balances are interest bearing.
The amount shown in cash and cash equivalents includes $202 million not available for general use at
30 June 2015 (2014: $124 million) of which $140 million (2014: $59 million) belongs to TIL. This comprises
amounts required to be held under maintenance and funding reserves and prepaid tolls, which are not available
for general use.
Trade and other receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted
in an active market. They are included in current assets, except for those with maturities greater than 12 months
after the reporting date which are classified as non-current assets. Trade receivables are recognised initially at
fair value and subsequently measured at amortised cost using the effective interest method, less allowance for
impairment. Trade receivables are due for settlement no more than 30 days from revenue recognition.
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be unrecoverable
are written off by reducing the carrying amount of trade debtors directly. An allowance for impairment is used
when there is evidence that the Group will not be able to collect all amounts due according to the original terms of
the receivables. The amount of the allowance for impairment is the difference between the carrying amount and
the amount expected to be recoverable. The additional amount of the allowance for doubtful debtors is recognised
in profit or loss.
As at 30 June 2015, the Group held an allowance for doubtful debtors of $7 million (2014: $1 million), recognised
for current trade receivables that were considered potentially unrecoverable. As at 30 June 2015, trade
receivables of $19 million (2014: $6 million) were overdue but the Group still believe that these overdue amounts
will be received in full. The other classes within trade and other receivables do not contain amounts that are
considered to be potentially unrecoverable.
The carrying amount of trade and other receivables approximates their fair value.
71
71
2015 Transurban Annual Report Transurban Holdings Limited
Transurban Holdings Limited
Notes to the consolidated financial statements
Notes to the consolidated financial statements
for the year ended 30 June 2015
for the year ended 30 June 2015
Security holder outcomes
B9 Earnings per stapled security
Reconciliation of earnings used in calculating earnings per security
(Loss)/profit attributable to ordinary security holders of the stapled group ($M)
Weighted average number of securities (M)
Basic and diluted earnings per security attributable to the ordinary security holders
of the stapled group (Cents)
2015
(182)
1,908
(9.5)
2014
282
1,539
18.3
B10 Dividends/distributions and free cash
Dividends/distributions paid by the Group
Total
$M
Paid in
cash
$M
Settled in
securities
$M
Cents
Date paid/
payable
2014
Declared 21 May 2013
Franked THL
Unfranked THT
Declared 3 December 20131
Franked THL
Unfranked THT
Total paid FY14
2015
Declared 23 May 20141
Franked THL
Franked THT
Unfranked THT
Declared 3 December 20142
Franked THL
Unfranked THT
Total paid FY15
Dividends/distributions payable by the Group
Declared 15 May 20152
Franked THL
Unfranked THT
1. Total declared FY14 is $594 million.
2. Total declared FY15 is $764 million.
52
178
230
52
201
253
483
19
47
274
340
68
305
373
713
66
325
391
46
159
205
39
175
214
419
3
39
227
269
42
259
301
570
–
–
–
6
19
25
13
26
39
64
16
8
47
71
26
46
72
143
–
–
–
3.5
12.0
15.5
3.5
13.5
17.0
32.5
1.0
2.5
14.5
18.0
3.5
16.0
19.5
37.5
3.5
17.0
20.5
14 August 2013
14 February 2014
14 August 2014
13 February 2015
14 August 2015
72
72
2015 Transurban Annual Report Transurban Holdings Limited
Transurban Holdings Limited
Notes to the consolidated financial statements
Notes to the consolidated financial statements
for the year ended 30 June 2015
for the year ended 30 June 2015
B10 Dividends/distributions and free cash (continued)
Distribution policy and free cash calculation
The Group's distribution policy is to align distributions with free cash from operations. The Group calculates free
cash as follows:
Cash flows from operating activities
Add back transaction and integration costs related to acquisitions (non 100% owned entities)1
Add back payments for maintenance of intangible assets
Less cash flow from operating activities from consolidated non 100% owned entities
Less allowance for maintenance of intangible assets for 100% owned assets
Adjust for distributions and interest received from non 100% owned entities
M1 Eastern Distributor distribution
M5 distribution and term loan note interest
Transurban Queensland distribution and shareholder loan note interest
NWRG distribution and M7 term loan note interest
Free cash
Weighted average securities on issue (millions)2
Free cash per security (cents) – weighted average securities
2015
$M
304
419
91
(338)
(11)
31
67
118
87
768
1,910
40.2
2014
$M
521
–
36
(96)
(21)
26
59
–
47
572
1,690
33.9
1. Transaction and integration cash payments reflect only those costs that were paid directly by the consortium that acquired Queensland
Motorways Group. Additional costs were incurred directly by the Transurban Group and have been included in the total cash flow reported in
the Consolidated statement of cash flows.
2. The weighting applied to securities is based on their eligibility for distributions during the year.
Franking credits
Franking credits available for subsequent periods based on a tax rate of 30.0% (2014: 30.0%)
2015
$M
246
2014
$M
259
Distribution provision
A provision for distribution is recognised for any distribution declared and authorised on or before the end of the
reporting period, but not distributed by the end of the reporting period. These distributions are provided for once
they are approved by the board, are announced to equity holders and are no longer at the discretion of the entity.
Movements in distribution provision
Movements in the distribution provision during the financial year are set out below:
Balance at 1 July 2013
Additional provision recognised
Amounts paid
Amounts reinvested
Balance at 30 June 2014
Additional provision recognised
Amounts paid
Amounts reinvested
Balance at 30 June 2015
Distribution to
security holders
$M
Distributions to
non-controlling
interest – other
$M
230
594
(419)
(65)
340
764
(570)
(143)
391
33
9
(2)
–
40
64
(57)
–
47
Total
$M
263
603
(421)
(65)
380
828
(627)
(143)
438
73
73
2015 Transurban Annual Report Capital and borrowings
B11 Contributed equity
Fully paid stapled securities
Stapled securities
Transurban Holdings Limited
Transurban Holdings Limited
Notes to the consolidated financial statements
Notes to the consolidated financial statements
for the year ended 30 June 2015
for the year ended 30 June 2015
2015
$M
1,237
1,237
2014
$M
1,208
1,208
Stapled securities are classified as equity and entitle the holder to participate in distributions and on winding up of
the Group in proportion to the number of securities held. Every holder of a stapled security present at a meeting,
in person or by proxy, is entitled to one vote. The issued units of the Group are made up of a parcel of stapled
securities, each parcel comprising one share in THL, one unit in THT and one share in TIL. The individual
securities comprising a parcel of stapled securities cannot be traded separately.
Other contributed equity attributable to security holders of the Group relating to THT and TIL of $9,863 million is
included within Non-controlling interests – THT & TIL.
B12 Reserves
Balance 1 July 2013
Revaluation – gross
Deferred tax
Amount attributable to
non-controlling interest
Currency translation differences
Transfers to profit or loss
Other movements
Balance 30 June 2014
Revaluation – gross
Deferred tax
Currency translation differences
Transfers to profit or loss
Balance 30 June 2015
Cash flow
hedges
$M
(38)
(23)
6
Share-based
payments
$M
1
–
–
Foreign
currency
translation
$M
(9)
–
22
Transactions
with non-
controlling
interests
$M
(6)
–
–
–
–
–
–
(55)
(43)
6
–
(2)
(94)
–
–
–
1
2
(2)
–
–
–
–
35
(18)
(22)
–
8
–
–
15
–
23
–
–
–
7
1
–
–
–
–
1
Total
$M
(52)
(23)
28
35
(18)
(22)
8
(44)
(45)
6
15
(2)
(70)
Nature of reserves
Purpose of reserves
Cash flow hedges
Used to record gains or losses on cash flow hedging instruments, which are used by the
Group to mitigate the risk of movements in exchange rates and interest rates. Amounts
are reclassified to profit or loss when the transaction to which the hedge is linked (such
as the payment of interest) affects profit or loss.
Share-based payments
Used to recognise the fair value of long-term incentives issued but not exercised.
Foreign currency
translation
Exchange differences arising on translation of the US operations of the Group are
recognised in this reserve.
Transactions with
non-controlling interests
The Group uses the economic entity approach when accounting for transactions with
non-controlling interests.
74
74
2015 Transurban Annual Report Transurban Holdings Limited
Transurban Holdings Limited
Notes to the consolidated financial statements
Notes to the consolidated financial statements
for the year ended 30 June 2015
for the year ended 30 June 2015
B13 Net finance costs
Finance income
Interest income on held-to-maturity investments
Interest income on bank deposits
Unwind of discount on liabilities – promissory and concession notes
Net foreign exchange gains
Total finance income
Finance costs
Interest and finance charges paid/payable
Unwind of discount on liabilities – maintenance provision
Net foreign exchange losses
Total finance costs
Net finance costs
2015
$M
41
14
13
–
68
(625)
(43)
(11)
(679)
(611)
2014
$M
106
18
6
1
131
(463)
(13)
–
(476)
(345)
An additional $10 million (2014: $1 million) of financing costs have been capitalised and included in the carrying
value of assets under construction.
B14 Borrowings
Current
Capital markets debt
U.S. private placement
Term debt
Syndicated facilities
Total current borrowings
Non-current
Working capital facilities
Capital markets debt
U.S. private placement
Term debt
Syndicated facilities
TIFIA
Shareholder loan notes
Total non-current borrowings
Total borrowings
Accounting policy
2015
$M
500
128
–
–
628
530
4,226
1,239
3,883
245
1,067
281
11,471
12,099
2014
$M
–
106
400
215
721
245
2,550
1,126
1,095
383
678
–
6,077
6,798
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption
amount is recognised in profit or loss over the period of the borrowings using the effective interest method. Fees
paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is
probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down
occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down,
the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which
it relates.
Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged,
cancelled or expired. The difference between the carrying amount of a financial liability that has been
extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred
or liabilities assumed, is recognised in profit or loss as finance income or finance costs. Borrowings are classified
as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least
12 months after the reporting period.
75
75
2015 Transurban Annual Report Transurban Holdings Limited
Transurban Holdings Limited
Notes to the consolidated financial statements
Notes to the consolidated financial statements
for the year ended 30 June 2015
for the year ended 30 June 2015
B14 Borrowings (continued)
Accounting policy (continued)
Borrowing costs are recognised as expenses in the period in which they are incurred, except to the extent to
which they relate to the construction of qualifying assets in which case specifically identifiable borrowing costs are
capitalised into the cost of the asset. Borrowing costs include interest on short-term and long-term borrowings.
Costs incurred in connection with the arrangement of borrowings are capitalised and amortised over the effective
period of the funding.
Financing arrangements and credit facilities
Credit facilities are provided as part of the overall debt funding structure of the Group. The drawn component of
each facility is shown below:
Corporate debt
Working capital facilities drawn
AUD 150m facility1
AUD 125m facility
AUD 125m facility
AUD 100m facility
AUD 100m facility
AUD 125m facility
Net capitalised borrowing costs
Capital markets debt
Domestic wrapped bond AUD 300m
Domestic unwrapped bond AUD 200m
Domestic wrapped bond AUD 300m
EMTN CAD 250m
EMTN EUR 500m
EMTN EUR 600m
EMTN EUR 500m
Net capitalised borrowing costs
Syndicated facilities
Syndicated debt AUD 215m1
Syndicated debt AUD 160m1
Syndicated debt USD 93m
Syndicated debt AUD 125m
Net capitalised borrowing costs
U.S. private placement
Dec 2004 – Tranche A USD 100m1
Aug 2005 – Tranche A USD 98m
Nov 2006 – Tranche A USD 43m (plus accreted interest)
Dec 2004 – Tranche B USD 39m
Aug 2005 – Tranche B USD 126m
Nov 2006 – Tranche B USD 136m (plus accreted interest)
Dec 2004 – Tranche C USD 109m
Dec 2004 – Tranche D AUD 72m
Aug 2005 – Tranche C USD 157m
Nov 2006 – Tranche C USD 121m (plus accreted interest)
Nov 2006 – Tranche D USD 50m (plus accreted interest)
Net capitalised borrowing costs
Maturity
Carrying value
2015
$M
2014
$M
Jan 2016
Aug 2016
Aug 2016
Dec 2016
Apr 2017
Jun 2017
Nov 2015
Jun 2016
Nov 2017
Mar 2019
Oct 2020
Sep 2024
Aug 2025
Feb 2015
Feb 2017
May 2017
Aug 2017
Dec 2014
Aug 2015
Nov 2016
Dec 2016
Aug 2017
Nov 2018
Dec 2019
Dec 2019
Aug 2020
Nov 2021
Nov 2026
–
124
88
94
91
118
(2)
300
200
300
262
728
874
728
(23)
–
–
120
125
–
–
128
74
51
164
236
141
72
204
211
88
(2)
131
116
–
–
–
–
(2)
300
200
300
249
724
–
–
(12)
215
160
99
125
(1)
106
104
61
41
133
193
115
72
166
172
72
(3)
Total corporate debt, net of capitalised borrowing costs
5,494
3,835
76
76
2015 Transurban Annual Report Transurban Holdings Limited
Transurban Holdings Limited
Notes to the consolidated financial statements
Notes to the consolidated financial statements
for the year ended 30 June 2015
for the year ended 30 June 2015
B14 Borrowings (continued)
Financing arrangements and credit facilities (continued)
Non-recourse debt
Working capital facilities
Transurban Queensland Finance – facility AUD 25m
Capital markets debt
Airport Motorway Trust – Domestic bond AUD 300m
Transurban Queensland Finance – Domestic bond AUD 250m
Transurban Queensland Finance – Domestic bond AUD 200m
95 Express Lanes – Private activity bonds USD 72m
95 Express Lanes – Private activity bonds USD 170m
495 Express Lanes – Private activity bonds USD 225m
Net capitalised borrowing costs
Term debt
Hills Motorway Trust – Term debt AUD 400m1
Lane Cove Tunnel Trust – Term debt AUD 260m
Transurban Queensland Finance – Bridge facility AUD 350m
Hills Motorway Trust – Term debt AUD 65m1
Hills Motorway Trust – Capex facility AUD 275m1
Clem7 – Term debt AUD 270m
Cross City Tunnel Trust – Term debt AUD 277m
Transurban Queensland Finance – Capex facility AUD 375m
Transurban Queensland Finance – Term debt AUD 750m
Hills Motorway Trust – Term debt AUD 405m
Airport Motorway Trust – Term debt AUD 225m
Transurban Queensland Finance – Term debt AUD 750m
Hills Motorway Trust – Term debt AUD 350m
Transurban Queensland Finance – Term debt AUD 200m
Net capitalised borrowing costs
TIFIA loans
495 Express Lanes – Facility limit USD 589m (plus accreted interest)
95 Express Lanes – Facility limit USD 300m (plus accreted interest)
Net capitalised borrowing costs
Shareholder loan notes
Loan from Transurban Queensland consortium partners – AUD 281m
Total non-recourse debt, net of capitalised borrowing costs
Total debt
1. These facilities were refinanced during FY15.
Working capital facilities
Maturity
Carrying value
2015
$M
2014
$M
Jul 2017
Dec 2020
Dec 2021
Dec 2024
Jul 2034
Jan 2040
Dec 2047
Nov 2014
Aug 2016
Jul 2016
Nov 2016
Nov 2016
Dec 2016
Jun 2017
Jul 2017
Jul 2017
Mar 2018
Jul 2018
Jul 2019
Mar 2020
Apr 2030
Dec 2047
Jan 2048
Jun 2048
17
300
250
200
93
222
293
(1)
–
260
350
–
–
270
277
74
750
405
225
750
350
200
(28)
768
299
–
281
–
300
–
–
70
187
239
(6)
400
260
–
65
275
–
277
–
–
–
225
–
–
–
(7)
589
89
–
–
6,605
12,099
2,963
6,798
The corporate facilities are secured by first ranking charges over the cash flows of the Group; and
The Transurban Queensland Finance facilities are secured against the respective rights of Transurban
Queensland Holdings 1 Pty Limited, Transurban Queensland Holdings 2 Pty Limited, Transurban
Queensland Invest Trust and their assets.
77
77
2015 Transurban Annual Report Transurban Holdings Limited
Transurban Holdings Limited
Notes to the consolidated financial statements
Notes to the consolidated financial statements
for the year ended 30 June 2015
for the year ended 30 June 2015
B14 Borrowings (continued)
Capital markets debt
The corporate domestic bonds are secured by first ranking charges over the cash flows of the Group;
A corporate secured EMTN program was established in October 2011 with a program limit of USD $2
billion, which increased to USD $5 billion in May 2015. Under the program the Group may from time to
time issue notes denominated in any currency. These facilities are secured by first ranking charges over
the cash flows of the Group;
The Airport Motorway Trust domestic bond is secured against the respective rights of Airport Motorway
Limited and Airport Motorway Trust and their assets;
The Transurban Queensland Finance domestic bonds are secured against the respective rights of
Transurban Queensland Holdings 1 Pty Limited, Transurban Queensland Holdings 2 Pty Limited,
Transurban Queensland Invest Trust and their assets;
The 95 Express Lanes Private Activity Bonds (‘PABs’) are secured against the rights of 95 Express
Lanes LLC and its assets; and
The 495 Express Lanes PABs are supported by bank-issued, irrevocable letters of credit maturing June
2016. The PAB’s are secured against the rights of Capital Beltway Express LLC and its assets.
Syndicated facilities
The corporate syndicated bank debt is secured by first ranking charges over the cash flows of the Group.
U.S. private placement
Corporate U.S. private placement facilities are secured by a first ranking charge over the cash flows of
the Group.
Term debt
The Airport Motorway facility is fully secured against the respective rights of Airport Motorway Limited
and the Airport Motorway Trust and their assets;
The Hills Motorway Trust facilities are fully secured against the respective rights of Hills Motorway
Limited and Hills Motorway Trust and their assets;
The Lane Cove Tunnel facility is fully secured against the respective rights of LCT-MRE Pty Limited and
LCT-MRE Trust and their assets;
The Cross City Tunnel facility is fully secured against the respective rights of Transurban CCT Pty
Limited and Transurban CCT Trust and their assets;
The Clem7 facility is fully secured against the respective rights of the Project T Partnership and their
assets; and
The Transurban Queensland Finance facilities are secured against the respective rights of Transurban
Queensland Holdings 1 Pty Limited, Transurban Queensland Holdings 2 Pty Limited, Transurban Queensland
Invest Trust and their assets.
Transportation Infrastructure Finance and Innovation Act (‘TIFIA’)
The 495 Express Lanes TIFIA facility is secured against the rights of Capital Beltway Express LLC and
its assets; and
The 95 Express Lanes TIFIA facility is secured against the rights of 95 Express Lanes LLC and its
assets.
Shareholder loan notes
The loans from Transurban Queensland to the non-Transurban Group acquisition consortium partners
are unsecured.
78
78
2015 Transurban Annual Report Transurban Holdings Limited
Transurban Holdings Limited
Notes to the consolidated financial statements
Notes to the consolidated financial statements
for the year ended 30 June 2015
for the year ended 30 June 2015
B14 Borrowings (continued)
Letters of credit and corporate credit facilities
Letter of credit facility
Letter of credit facility
General credit facility1
7General credit facility2
Total
Maturity
Nov 2016
Dec 2019
Dec 2014
Aug 2017
2015
$M
2014
$M
Facility
amount
60
240
–
4
304
Amount
issued
37
240
–
3
280
Facility
amount
60
–
7
–
67
Amount
issued
51
–
7
–
58
1. The general credit facility covers corporate requirements including letters of credit, bank guarantees, credit card facilities, online banking and an
overdraft facility.
2. The general credit facility covers corporate requirements including credit card facilities, online banking and an overdraft facility.
Letters of credit and bank guarantees to the value of $17 million (2014: $57 million) have also been issued under
multi-option facilities and working capital facilities. All letters of credit are currently undrawn and therefore no
liability is recorded.
Covenants
A number of the Group's consolidated borrowings include covenants, some of which are listed below. There have
been no breaches of any of these covenants during the year.
Corporate Debt
Covenant
Senior interest coverage ratio
Group Market Capitalisation
CityLink Interest Coverage Ratio
Non-Recourse Debt
Covenant
Airport Motorway Trust Interest Coverage Ratio
Hills Motorway Trust Interest Coverage Ratio
Lane Cove Tunnel Trust Interest Coverage Ratio
Cross City Tunnel Trust Senior Debt Service Coverage Ratio
Transurban Queensland Finance Interest Coverage Ratio
Clem7 Interest Coverage Ratio
495 Express Lanes Senior Debt Service Coverage Ratio
95 Express Lanes Senior Debt Service Coverage Ratio
Threshold
Greater than 1.25 times
Gearing must not exceed 60%1
Greater than 1.1 times
Threshold
Greater than 1.15 times
Greater than 1.20 times
Greater than 1.15 times
Greater than 1.15 times
Greater than 1.20 times
Greater than 1.20 times
Greater than 1.15 times2
The first relevant calculation date is in December
2017, three years from project substantial
completion
1. Based on the balance sheet as at 30 June 2015, the Group’s security price would need to close below $5.23 (2014: $2.16) per security for
20 consecutive days to trigger this clause.
2. The first relevant calculation date for this ratio is 31 December 2015. Senior lenders provided a waiver with respect to the DSCR ratio
requirement for 30 June 2014, 31 December 2014 and 30 June 2015.
79
79
2015 Transurban Annual Report Transurban Holdings Limited
Transurban Holdings Limited
Notes to the consolidated financial statements
Notes to the consolidated financial statements
for the year ended 30 June 2015
for the year ended 30 June 2015
B15 Derivatives and financial risk management
Derivatives
2015
$M
2014
$M
Current
Non-current
Current Non-current
Assets
Interest rate swap contracts – cash flow hedges
Forward exchange contracts – cash flow hedges
Cross-currency interest rate swap contracts – cash flow hedges
Cross-currency interest rate swap contracts – net investment hedge
Total derivative financial instrument assets
Liabilities
Interest rate swap contracts – cash flow hedges
Cross-currency interest rate swap contracts – cash flow hedges
Cross-currency interest rate swap contracts – net investment hedge
Total derivative financial instrument liabilities
–
4
–
–
4
3
1
–
4
16
–
66
–
82
227
41
57
325
–
–
–
–
–
7
28
–
35
–
–
–
16
16
219
179
–
398
Accounting policy
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
subsequently remeasured to their fair value at the end of each reporting period. The accounting for subsequent
changes in fair value depends on whether the derivative is designated as a hedging instrument, and if so, the
nature of the item being hedged. The Group designates certain derivatives as either:
hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedges);
hedges of a particular risk associated with the cash flows of recognised assets and liabilities and highly
probable forecast transactions (cash flow hedges); or
hedges of a net investment in a foreign operation (net investment hedges).
At the inception of the hedging transaction the Group documents the relationship between hedging instruments
and hedged items, as well as its risk management objective and strategy for undertaking various hedge
transactions. The Group also documents its assessment, both at hedge inception and on an ongoing basis, of
whether the derivatives that are used in hedging transactions have been and will continue to be highly effective
in offsetting changes in fair values or cash flows of hedged items.
The fair values of various derivative financial instruments used for hedging purposes are disclosed in this note.
Movements in the cash flow hedging reserve in shareholders' equity are shown in note B12. The full fair value of
a hedging derivative is classified as a non-current asset or liability when the remaining maturity of the hedged
item is more than 12 months.
Fair value hedges
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in profit
or loss, together with any changes in the fair value of the hedged asset or liability that are attributable to the
hedged risk. The gain or loss relating to the effective portion of interest rate swaps and cross currency swaps
hedging fixed rate borrowings is recognised in profit or loss within finance costs, together with changes in the fair
value of the hedged fixed rate borrowings attributable to interest rate risk. The gain or loss relating to the
ineffective portion is recognised in profit or loss.
If the hedge no longer meets the criteria for hedge accounting, the adjustment to the carrying amount of a
hedged item for which the effective interest method is used is amortised to profit or loss over the period to
maturity using a recalculated effective interest rate.
80
80
2015 Transurban Annual Report Transurban Holdings Limited
Transurban Holdings Limited
Notes to the consolidated financial statements
Notes to the consolidated financial statements
for the year ended 30 June 2015
for the year ended 30 June 2015
B15 Derivatives and financial risk management (continued)
Cash flow hedges
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow
hedges is recognised in other comprehensive income and accumulated in reserves in equity. The gain or loss
relating to the ineffective portion is recognised immediately in profit or loss.
Amounts accumulated in equity are reclassified to profit or loss in the periods when the hedged item affects profit
or loss.
When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for
hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognised
when the forecast transaction is ultimately recognised in profit or loss. When a forecast transaction is no longer
expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to profit or
loss.
Net investment hedges
Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges.
Any gain or loss on the hedging instrument relating to the effective portion of the hedge is recognised in other
comprehensive income and accumulated in reserves in equity. The gain or loss relating to the ineffective portion
is recognised immediately in profit or loss.
Gains and losses accumulated in equity are included in profit or loss when the foreign operation is partially
disposed of or sold.
Derivatives that do not quality for hedge accounting
Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value of any derivative
instrument that does not qualify for hedge accounting are recognised immediately in profit or loss.
Hedging strategy and instruments used by the Group
The Group uses derivative financial instruments in the normal course of business in order to hedge exposures to
fluctuations in interest rates and foreign exchange rates in accordance with the Group’s financial risk
management policies. The Group’s policies allow derivative transactions to be undertaken for the purpose of
reducing risk and do not permit speculative trading. The instruments used by the Group are as follows:
Interest rate swap contracts – cash flow hedges
The Group uses interest rate swap contracts to manage the Group’s exposure to variable interest rates related to
borrowings. Interest rate swap contracts currently in place cover 83% (2014: 93%) of the variable debt held by the
Group (excluding working capital facilities).
Forward exchange contracts – cash flow hedges
The Group currently uses forward exchange contracts to protect against exchange rate movements between the
AUD and foreign currencies. The Group has hedged a portion of its USD interest commitments and its capital
expenditure commitments.
Cross-currency interest rate contracts – cash flow hedges
The Group has entered into cross-currency interest rate swap contracts to remove the risk of unfavourable
exchange rate movements on borrowings held in foreign currencies. Under these contracts, the Group receives
foreign currency at fixed rates and pays AUD at either fixed or floating rates. The Group then uses the interest
rate swap contracts to hedge the floating interest rate commitments back to fixed interest rates.
81
81
2015 Transurban Annual Report Transurban Holdings Limited
Transurban Holdings Limited
Notes to the consolidated financial statements
Notes to the consolidated financial statements
for the year ended 30 June 2015
for the year ended 30 June 2015
B15 Derivatives and financial risk management (continued)
Offsetting financial assets and financial liabilities
Currently there is no right or basis to present any financial assets or financial liabilities on a net basis, and as such
no financial assets or financial liabilities have been presented on a net basis in the Group's balance sheet at the
end of the financial year.
Hedge of net investment in foreign entity
Transurban's investment in its US based assets (495 Express Lanes and 95 Express Lanes) acts as a natural
hedge against the exposure to foreign currency movements for a portion of the Group’s USD denominated
borrowings. Exchange differences arising on the revaluation of these USD denominated borrowings are
recognised in profit or loss in the separate financial statements of Transurban Finance Company Pty Limited.
In the Group financial statements these exchange differences are recognised in the foreign currency
translation reserve in equity and will be transferred to profit or loss when the Group disposes its interest in the
US based assets. As at 30 June 2015, the Group has deferred $87 million in losses (2014: $50 million gains).
Financial risk management
The Group’s activities expose it to a variety of financial risks: market risk (including currency risk and interest rate
risk), credit risk and liquidity risk. The financial risk management function is carried out centrally under the policies
approved by the Board. The Group reviews operations actively to identify and monitor all financial risks and to
mitigate these risks through the use of hedging instruments where appropriate. The Board are informed on a
regular basis of any material exposures to financial risks.
The Group continuously monitor risk exposures over time through review of cash flows, price movements, market
analysis and ongoing communication within the Group. When measuring financial risk, The Group consider
positive and negative exposures, existing hedges and the ability to offset exposures where possible.
Market risk
Foreign exchange risk
The Group operates internationally and is exposed to foreign exchange risk when future transactions and
recognised assets and liabilities are denominated in a currency that is not the entity’s functional currency.
Foreign currency exposures are viewed as either investment exposures or operating exposures. Exposures from
investments in foreign assets are generally managed using foreign currency debt. All known material operating
exposures out to 12 months are hedged, using hedging instruments, offsetting exposures or drawing on foreign
currency funds.
Exposure to foreign currency risk at the reporting date, denominated in the currency in which the risk arises, was
as follows:
Net investment in foreign operation
Borrowings
Cross-currency interest rate swaps
Net exposure
2015
$M
CAD
–
(250)
250
–
USD
1,093
(1,484)
529
138
EUR
–
(1,600)
1,600
–
USD
872
(1,421)
629
80
2014
$M
CAD
–
(250)
250
–
EUR
–
(500)
500
–
82
82
2015 Transurban Annual Report Transurban Holdings Limited
Transurban Holdings Limited
Notes to the consolidated financial statements
Notes to the consolidated financial statements
for the year ended 30 June 2015
for the year ended 30 June 2015
B15 Derivatives and financial risk management (continued)
Foreign exchange risk (continued)
Sensitivity
Sensitivity to exchange rate movements based on the translation of financial instruments held at the end of the
period is as follows:
AUD/USD
+ 10 cents
- 10 cents
AUD/CAD
+ 10 cents
- 10 cents
AUD/EUR
+ 5 cents
- 5 cents
2015
$M
2014
$M
Movement in
post-tax profit
Increase /
(decrease) in
equity
Movement in
post-tax profit
Increase /
(decrease) in
equity
–
–
–
–
–
–
(36)
50
(2)
3
(42)
56
–
–
–
–
–
–
(17)
22
(2)
3
(15)
20
The Group revalues its foreign currency denominated borrowings each period using market spot rates and, where
these borrowings have been appropriately hedged, defers these movements in the cash flow hedge reserve in
equity. The volatility in the cash flow hedge reserve is caused mainly by fair value movements of the cross
currency interest rate swaps, which are affected by changes in forward Australian dollar/foreign currency
exchange rates.
Interest rate risk
The Group’s main exposure to interest rate risk arises from cash and cash equivalents, and long-term borrowings.
The Group manages interest rate risk by entering into fixed rate debt facilities or by using interest rate swaps to
convert floating rate debt to fixed interest rates. Generally, the Group raises long term borrowings at floating
interest rates and swaps them into fixed interest rates that are lower than those available if the Group borrowed at
fixed rates directly. The Group’s policy is to hedge interest rate exposure at a minimum in compliance with the
covenant requirements of funding facilities and up to 100%. Covenant requirements vary by debt facility, and
require a minimum of between 50% and 80% of the interest rate exposure to be hedged. At 30 June 2015, 75%
(2014: 86%) of the Group’s interest rate exposure on variable rate borrowings was hedged.
As at the reporting date, the Group had the following cash balances, variable rate borrowings and interest rate
swap contracts outstanding:
Cash and cash equivalents
Floating rate borrowings
Interest rate swaps (notional principal amount)
Net exposure to interest rate risk
2015
$M
1,249
(5,852)
4,409
(194)
2014
$M
2,879
(3,257)
2,808
2,430
83
83
2015 Transurban Annual Report Transurban Holdings Limited
Transurban Holdings Limited
Notes to the consolidated financial statements
Notes to the consolidated financial statements
for the year ended 30 June 2015
for the year ended 30 June 2015
B15 Derivatives and financial risk management (continued)
Interest rate risk (continued)
Sensitivity
Sensitivity to interest rate movements based on variable rate obligations is as follows:
Interest rates +100bps
Interest rates –100bps
Credit risk
Movement in post-tax profit
2015
$M
(2)
2
2014
$M
24
(24)
The Group has no significant concentrations of credit risk from operating activities, and has policies in place to
ensure that transactions are made with commercial customers with an appropriate credit history. However, as an
operator of large infrastructure assets, the Group is exposed to credit risk with its financial counterparties through
entering into financial transactions through the ordinary course of business. These include funds held on deposit,
cash investments and the market value of derivative transactions.
The Group assesses the credit strength of potential financial counterparties using objective ratings provided by
multiple independent rating agencies. The Board approved policies ensure that higher limits are granted to higher
rated counterparties. The Group also seeks to mitigate its total credit exposure to counterparties by only dealing
with credit worthy counterparties, limiting the exposure to any one counterparty, minimising the size of the
exposure where possible through netting offsetting exposures, diversifying exposures across counterparties,
closely monitoring changes in total credit exposures and changes in credit status, and taking mitigating action
when necessary.
Liquidity risk
The Group maintains sufficient cash and undrawn facilities to maintain short term flexibility and enable the Group
to meet financial commitments in a timely manner. The Group assesses liquidity over the short term (up to 12
months) and medium term (one to five years) by maintaining accurate forecasts of operating expenses,
committed capital expenditure and payments to security holders. Long term liquidity requirements are reviewed as
part of the annual strategic planning process.
Short term liquidity is managed by maintaining a strategic liquidity reserve. This reserve is based on the Group’s
forecast annual operating costs and certain risk exposure scenarios as maintained by the Group’s strategic risk
register, and is maintained as cash and undrawn facilities. The reserve is maintained on a rolling 12 month basis.
Medium term liquidity forecasting is maintained on a rolling five year horizon.
Financing arrangements
The Group had access to the following undrawn borrowing facilities at the end of the reporting period:
Floating rate
Expiring beyond one year
2015
$M
356
356
2014
$M
421
421
84
84
2015 Transurban Annual Report Transurban Holdings Limited
Transurban Holdings Limited
Notes to the consolidated financial statements
Notes to the consolidated financial statements
for the year ended 30 June 2015
for the year ended 30 June 2015
B15 Derivatives and financial risk management (continued)
Financing arrangements (continued)
As at 30 June 2015, the Group has letter of credit facilities and general credit facilities in place with undrawn
capacity of $24 million (2014: $9 million). The facilities are committed for the term of the facility and cannot be
withdrawn by the lenders without notice.
Contractual maturities of financial liabilities
The amounts disclosed in the table are the contractual undiscounted cash flows of the Group’s financial liabilities.
For interest rate swaps, the cash flows have been estimated using forward interest rates applicable at the end of
the reporting period.
2015
$M
Trade payables
Borrowings
Interest rate swaps
Cross-currency swaps
Concession and
promissory notes
Total
2014
$M
Trade payables
Borrowings
Interest rate swaps
Cross-currency swaps
Concession and
promissory notes
Total
1 year
or less
340
903
88
47
–
1,378
1 year
or less
180
885
86
55
Over
1 to 2
years
–
2,266
70
72
–
2,408
Over
1 to 2
years
–
943
65
48
–
1,206
–
1,056
Over
2 to 3
years
–
2,113
39
64
–
2,216
Over
2 to 3
years
–
1,514
41
52
–
1,607
Over
3 to 4
years
–
1,042
23
35
–
1,100
Over
4 to 5
years
–
1,577
8
60
–
1,645
Over
3 to 4
years
Over
4 to 5
years
–
681
24
48
–
753
–
833
11
38
–
882
Over 5
years
–
10,166
7
(345)
440
10,268
Over 5
years
–
5,827
32
(26)
403
6,236
Total
contractual
cash flows
Carrying
amount
340
18,067
235
(67)
440
19,015
340
12,099
214
29
46
12,728
Total
contractual
cash flows
Carrying
amount
180
10,683
259
215
403
11,740
180
6,798
226
191
56
7,451
Capital risk management
The Group is subject to a gearing ratio covenant imposed by senior secured lenders and monitors capital on the
basis of the gearing ratio to ensure compliance with the covenant. There have been no breaches of the covenant
during the current financial year. For further information refer to the Borrowings note B14.
The Group's objectives when managing capital is to safeguard its ability to continue as a going concern and to
maintain an optimal capital structure to reduce the cost of capital, so that it can continue to provide returns to
security holders and benefits for other stakeholders.
Fair value measurements
The carrying value of the Group’s financial assets and liabilities approximate fair value. This is also generally the
case with borrowings since either the interest payable on those borrowings is close to current market rates or the
borrowings are of a short-term nature. The fair values of non-current borrowings are determined based on
discounted cash flows using a current borrowing rate. They are classified as level 2 fair values in the fair value
hierarchy due to the use of observable inputs.
85
85
2015 Transurban Annual Report Transurban Holdings Limited
Transurban Holdings Limited
Notes to the consolidated financial statements
Notes to the consolidated financial statements
for the year ended 30 June 2015
for the year ended 30 June 2015
B15 Derivatives and financial risk management (continued)
Fair value measurements (continued)
Fair value is categorised within the fair value hierarchy based on the lowest level of input that is significant to the
fair value measurement as a whole:
Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities
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)
Level 3 – inputs for the asset or liability that are not based on observable market data (unobservable
inputs).
All of the Group’s financial instruments measured, recognised and disclosed at fair value were valued using
market observable inputs (Level 2).
There were no transfers between levels during the period and there has been no change in the valuation
techniques applied.
Key estimate
The fair value of financial instruments that are not traded in an active market (for example, over-the-counter
derivatives) is determined using valuation techniques. The Group uses its judgement to select a variety of
methods and makes assumptions that are mainly based on market conditions existing at each reporting date.
The fair value of both cross-currency interest rate swaps and interest rate swaps is calculated as the present
value of the estimated future cash flows. The fair value of forward exchange contracts is determined using
forward exchange market rates at the end of the reporting period.
86
86
2015 Transurban Annual Report Transurban Holdings Limited
Transurban Holdings Limited
Notes to the consolidated financial statements
Notes to the consolidated financial statements
for the year ended 30 June 2015
for the year ended 30 June 2015
Network summary
The table below summarises the key balance sheet items of the Group’s concession assets by network:
2015
$M
VIC
NSW
QLD1
USA
Total
Equity accounted
investment
carrying amount
Concession
assets
Goodwill
Maintenance
provision
Non-recourse
borrowings
–
1,092
–
–
1,092
2,632
5,111
6,411
2,562
16,716
1
260
205
–
466
(118)
(142)
(531)
(24)
(815)
–
(1,810)
(2,839)
(1,675)
(6,324)
1. The QLD segment assets were acquired on 2 July 2014.
2014
$M
VIC
NSW
USA
Total
Equity accounted
investment
carrying amount
Concession
assets
Goodwill
Maintenance
provision
Non-recourse
borrowings
–
268
–
268
2,780
5,247
1,288
9,315
1
260
–
261
(109)
(169)
(10)
(288)
–
(1,795)
(1,168)
(2,963)
B16 Intangible assets
2015
$M
Cost
Accumulated amortisation
Net book amount
2014
$M
Cost
Accumulated amortisation
Net book amount
Concession
assets
Assets under
construction
20,474
(3,758)
16,716
138
–
138
Concession
assets
Assets under
construction
12,560
(3,245)
9,315
810
–
810
Goodwill
466
–
466
Goodwill
261
–
261
Total
21,078
(3,758)
17,320
Total
13,631
(3,245)
10,386
87
87
2015 Transurban Annual Report Transurban Holdings Limited
Transurban Holdings Limited
Notes to the consolidated financial statements
Notes to the consolidated financial statements
for the year ended 30 June 2015
for the year ended 30 June 2015
Concession
assets
$M
7,213
19
1,804
(16)
596
(301)
9,315
140
6,431
297
1,046
(513)
16,716
Assets under
construction
$M
656
82
667
1
(596)
–
810
212
–
162
(1,046)
–
138
Goodwill
$M
260
–
1
–
–
–
261
–
205
–
–
–
466
Total
$M
8,129
101
2,472
(15)
–
(301)
10,386
352
6,636
459
–
(513)
17,320
B16 Intangible assets (continued)
Movement in intangible assets
Opening balance 1 July 2013
Additions
Acquisition of subsidiary
Currency and other adjustments
Transfers
Amortisation charge
Net book amount 30 June 2014
Additions
Acquisition of subsidiary
Currency and other adjustments
Transfers
Amortisation charge
Net book amount 30 June 2015
Concession assets
Concession assets represent the Group's rights to operate roads under Service Concession Arrangements.
All concession assets are classified as intangible assets and are amortised on a straight line basis over the
term of the right to operate the asset.
Transurban has the right to toll the concession assets for the concession period. Extensions to the concession
period have been granted during the period for a number of individual concessions as a result of road
development projects and improvements. At the end of the concession period, all concession assets are returned
to the respective Government. The remaining terms of the right to operate are reflected below:
VIC – Victorian State Government
NSW – New South Wales State Government
QLD – Queensland State Government and Brisbane City Council
USA – Virginia State Government (United States of America)
Assets under construction
2015
Years
20
21 – 33
36 – 50
72
2014
Years
20
21 – 32
–
73
Assets under construction relate to the remaining upgrade work on the Lane Cove Road on-ramps and the
Vimiera Road embankment works in New South Wales, Australia. Construction costs relating to completed works
on the 95 Express Lanes, which began tolling on 29 December 2014, were transferred to the concession asset
during the year. Remaining costs will be transferred to the concession asset upon final completion of the projects.
Goodwill
Goodwill primarily relates to the Group's Sydney Network and Queensland Network and has arisen from the
acquisition of Hills Motorway Group, Tollaust Pty Limited and the Sydney Roads Group in Sydney and the
Queensland Motorways Group in Queensland.
88
88
2015 Transurban Annual Report Transurban Holdings Limited
Transurban Holdings Limited
Notes to the consolidated financial statements
Notes to the consolidated financial statements
for the year ended 30 June 2015
for the year ended 30 June 2015
B16 Intangible assets (continued)
Impairment testing of goodwill and other intangible assets
At each reporting date, the Group assesses whether there is any indication that an asset may be impaired. Where
an indicator of impairment exists, the Group makes an estimate of the recoverable amount. Goodwill is tested for
impairment on an annual basis, regardless of whether an indicator of impairment exists.
Recoverable amount is the greater of fair value less costs to sell and value in use. For the purpose of assessing
impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which
are largely independent of the cash inflows from other assets or groups of assets (cash-generating units).
Where the carrying amount of an intangible asset exceeds its recoverable amount, the asset is considered
impaired and is written down to its recoverable amount through profit or loss. The decrement in the carrying
amount is recognized as an expense in profit or loss in the reporting period in which the impairment occurs.
The recoverable amount of the Group’s cash generating units have been determined based on value-in-use
calculations.
The following table sets out the key assumptions on which management has based its cash flow projections.
The calculations use 2 year cash flow projections based on financial budgets reviewed by the Board. Cash
flows beyond this period are modelled using the same set of assumptions up to the end of the applicable
concession period:
Long term CPI (% annual growth)
Long term average weekly earnings (% annual
growth)
Pre-tax discount rate (%)
VIC
NSW
QLD
USA
2015
2.5%
4.0%
8.2%
2014
2.5%
4.0%
8.2%
2015
2.5%
4.0%
8.2%
2014
2.5%
4.0%
8.2%
2015
2.7%
N/A
8.2%
2014
–
–
–
2015
2.5%
3.0%
8.2%
2014
2.5%
3.0%
8.2%
Management has determined the values assigned to each of the above key assumptions as follows:
Assumption
Traffic volume
Approach used to determine values
Based on historical trends and the Group’s long term traffic forecasting
models
Long term CPI (% annual growth)
Based on independent external forecasts
Long term average weekly earnings (%
annual growth)
Pre-tax discount rate
Based on independent external forecasts
Discount rates consider specific risks relating to the CGU. In
performing the value-in-use calculations for each CGU, the Group has
applied post-tax discount rates to discount the forecast future
attributable post tax cash flows. The equivalent pre-tax discount rates
are disclosed in the table above.
Key estimate
The Group makes certain assumptions in calculating the recoverable amount of its goodwill and other
intangible assets. These include assumptions around expected traffic flows and forecast operational costs.
In performing the value-in-use calculation, the Group has applied the assumptions noted in the above table.
Management does not consider that any reasonable possible change in the assumptions will result in the
carrying value of a CGU exceeding its recoverable amount.
89
89
2015 Transurban Annual Report B17 Maintenance provision
Movement in maintenance provision
Carrying value at 1 July 2013
Additional provision recognised
Acquisition of subsidiary
Amounts paid/utilised
Unwinding of discount
Transfer
Carrying value at 30 June 2014
Additional provision recognised
Acquisition of subsidiary
Amounts paid/utilised
Unwinding of discount
Transfer
Movement in foreign exchange
Carrying value at 30 June 2015
Transurban Holdings Limited
Transurban Holdings Limited
Notes to the consolidated financial statements
Notes to the consolidated financial statements
for the year ended 30 June 2015
for the year ended 30 June 2015
Current
$M
44
32
30
(39)
–
10
77
80
28
(91)
–
(10)
(2)
82
Non-current
$M
185
–
23
–
13
(10)
211
–
468
–
43
10
1
733
Key estimate
As part of its obligations under the service concession arrangements, the Group assumes responsibility for the
maintenance and repair of installations of the publicly owned roads it operates. The Group records a provision
for its present obligation to maintain the motorways held under concession deeds. The provision is included in
the financial statements at the present value of expected future payments. The calculations to discount these
amounts to their present value are based on the estimated timing and profile of expenditure occurring on the
roads.
B18 Other liabilities – concession and promissory notes
M1 Eastern Distributor concession note
M2 Motorway promissory note
Total
Key estimate
2015
$M
26
20
46
2014
$M
31
25
56
The Group has non-interest bearing long term debt, represented by promissory notes and concession notes
payable to the Government, measured at the present value of expected future payments. The calculations to
discount these notes to their present value are based on the estimated timing and profile of the repayments.
Assumptions are made in determining the timing and profile, based on expected available equity cash flows of
the Group's cash generating units. A discount rate is used to value the promissory notes and concession notes
to their present value, which is determined through reference to other facilities in the market with similar
characteristics. A discount rate of 12% (2014: 12%) has been used, which recognises the subordinated nature
of these notes.
90
90
2015 Transurban Annual Report Transurban Holdings Limited
Transurban Holdings Limited
Notes to the consolidated financial statements
Notes to the consolidated financial statements
for the year ended 30 June 2015
for the year ended 30 June 2015
B18 Other liabilities – concession and promissory notes (continued)
M1 Eastern Distributor
The Eastern Distributor project deed between Airport Motorway Limited, Airport Motorway Trust and the New
South Wales Roads and maritime services (‘RMS’) provides for annual concession fees of $15 million during the
construction phase and for the first 24 years after completion of construction of the M1 Eastern Distributor. Until a
certain threshold return is achieved, payments of concession fees due under the Project Deed will be satisfied by
means of the issue of non-interest bearing concession notes.
The face value of concession notes on issue at 30 June 2015 is $270 million (2014: $255 million).
M2 Motorway
The Hills Motorway Trust has entered into leases with the RMS. Annual lease liabilities under these leases total
$7 million (2014: $7 million), indexed annually to the consumer price index over the estimated period that the M2
Motorway will be used. Until such time as a threshold return is achieved, payments under these leases can be
made at any time at the discretion of the trustee of the Hills Motorway, by means of the issue of non-interest
bearing promissory notes to the RMS.
The face value of promissory notes on issue at 30 June 2015 is $170 million (2014: $159 million).
91
91
2015 Transurban Annual Report Transurban Holdings Limited
Transurban Holdings Limited
Notes to the consolidated financial statements
Notes to the consolidated financial statements
for the year ended 30 June 2015
for the year ended 30 June 2015
Group structure
B19 Principles of consolidation
Subsidiaries
Subsidiaries are fully consolidated from the date the Group gains control of the subsidiary and are de-
consolidated from the date that control ceases.
In preparing the consolidated financial statements of the Group, all inter-entity transactions and balances have
been eliminated. The accounting policies adopted by the individual entities comprising the Group are consistent
with the parent company.
Non-controlling interests consist of two components:
Non-controlling interest – other: external non-controlling interests relating to Transurban Queensland,
Eastern Distributer, 495 Express Lanes and 95 Express Lanes in the results and equity of subsidiaries
are shown separately in the Group financial statements. The remaining external non-controlling interests
related to the 495 Express Lanes and 95 Express Lanes were acquired on 29 June 2015 (refer note
B23).
Non-controlling interests that relate to THT and TIL are presented separately, but relate to equity holders
of the stapled group.
Associates and joint ventures
Associates are all entities over which the Group has significant influence but not control and relate to the Group’s
investments in Interlink M5 and the NorthWestern Roads Group (which holds the Westlink M7 and NorthConnex
assets).
The Group's share of the post-acquisition profits or losses in associates is recognised in profit or loss and its
share of post-acquisition movements in reserves is recognised in other comprehensive income. These post-
acquisition movements are adjusted against the carrying amount of the investment. When the Group’s cumulative
share of losses in an associate exceeds its investment in the asset, the Group does not recognise any further
losses from this point. Dividends received from the assets listed above reduce the carrying amount of the
investment.
Changes in ownership interest
The Group treats transactions with non-controlling interests that do not result in a loss of control, as transactions
with equity owners of the Group. A change in ownership interest results in an adjustment between the carrying
amounts of the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any
difference between the amount of the adjustment to non-controlling interests and any consideration paid or
received is recognised in a separate reserve within equity.
92
92
2015 Transurban Annual Report Transurban Holdings Limited
Transurban Holdings Limited
Notes to the consolidated financial statements
Notes to the consolidated financial statements
for the year ended 30 June 2015
for the year ended 30 June 2015
B20 Material subsidiaries
The Group’s material subsidiaries are outlined in the Group structure diagram below.
TRANSURBAN
HOLDINGS LIMITED
TRANSURBAN
HOLDINGS TRUST
TRANSURBAN
INTERNATIONAL LIMITED
CORPORATE
ENTITIES
ROAD / OPERATING
ENTITIES
Transurban Ltd
CityLink Melbourne Ltd
(CityLink)
CityLink Trust
(CityLink)
OTHER
ENTITIES
Transurban
Finance Trust
ROAD / OPERATING
ENTITIES
CORPORATE
ENTITIES
Transurban DRIVe
Holdings LLC1
Transurban
(USA) Inc
Transurban Finance
Company Pty Ltd
Hills Motorway Ltd
(Hills M2)
Hills Motorway Trust
(Hills M2)
Transurban NCX
M7 Hold Trust
495 Express Lanes LLC
Transurban Infrastucture
Management Ltd
LCT MRE Pty Ltd
(LCT)
LCT MRE Trust
(LCT)
95 Express Lanes LLC
Transurban CCT Pty Ltd
(CCT)
Transurban CCT Trust
(CCT)
Tollaust Ltd /
Roam Tolling Pty Ltd
Airport Motorway Ltd
(M1 Eastern Distributor)
Airport Motorway Trust
(M1 Eastern Distributor)
Transurban Queensland
Property Trust
Transurban Queensland
Finance Pty Ltd
Logan Motorway Pty Ltd
(Logan Motorway)
Gateway Motorway Pty Ltd
(M1 Eastern Distributor)
Project T Partnership
(CLEM7)
GBB Operations Pty Ltd
(Go Between Bridge)
LW Operations Pty Ltd
(Legacy Way)
75.1%
62.5%
62.5%
62.5%
62.5%
62.5%
D
E
N
W
O
%
0
0
1
I
D
E
T
A
D
L
O
S
N
O
C
1. Acquisition of non-controlling interest occurred on 29 June 2015.
B21 Business combinations
Accounting policy
Business combinations are accounted for using the acquisition method. The consideration transferred for the
acquisition of a subsidiary comprises the fair values of the assets transferred, the liabilities incurred and the equity
interests issued by the Group. The consideration transferred also includes the fair value of any contingent
consideration arrangement and the fair value of any pre-existing equity interest in the subsidiary. Acquisition-
related costs 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. On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the
acquiree either at fair value or at the non-controlling interest's proportionate share of the acquiree's net identifiable
assets.
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 Group's share of
the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net
identifiable assets of the subsidiary acquired and the measurement of all amounts has been reviewed, the
difference is recognised directly in profit or loss as a bargain purchase.
93
93
2015 Transurban Annual Report
Transurban Holdings Limited
Transurban Holdings Limited
Notes to the consolidated financial statements
Notes to the consolidated financial statements
for the year ended 30 June 2015
for the year ended 30 June 2015
B21 Business combinations (continued)
Accounting policy (continued)
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted
to their present value as at the date of exchange. The discount rate used is the entity's incremental borrowing
rate, being the rate at which a similar borrowing could be obtained from an independent financier under
comparable terms and conditions.
Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial
liability are subsequently remeasured to fair value with changes in fair value recognised in profit or loss.
2015 acquisitions
Queensland Motorways Group (Transurban Queensland)
On 24 April 2014 the Group announced that a consortium (in which the Group holds a 62.5% equity interest) had
reached agreement to acquire the Queensland Motorways Group through an all cash offer to the existing
shareholder. The acquisition was completed on 2 July 2014.
The Queensland Motorways Group portfolio is a motorway network in Brisbane, Australia comprising four
concessions covering the Logan and Gateway motorways, Clem7, Go Between Bridge and Legacy Way.
This urban motorway network is complementary to the Group’s existing networks in Sydney and Melbourne,
and contributes additional scale, long dated concessions, investment potential and strategic value to the
Group’s current portfolio.
The Group elected to measure the non-controlling interest in Queensland Motorways at the proportionate share
of its interest in the identifiable net assets.
On 30 January 2015, Queensland Motorways changed its name to Transurban Queensland.
Purchase consideration
Cash paid
Total purchase consideration
$M
6,419
6,419
The consideration of $6,403 million was paid on 2 July 2014 with an additional $16 million payment made in
September 2014 as a working capital adjustment. This has been reflected in the Group’s current year financial
statements.
Reconciliation of purchase consideration to cash acquired
Cash paid
Less: cash acquired
Payment for business combination, net of cash
Acquisition-related costs
$M
6,419
(22)
6,397
Total acquisition and integration costs incurred to date are $438 million, inclusive of $384 million of stamp duty.
Of these costs, $429 million has been incurred in the current financial year. These acquisition costs are not
included in the purchase consideration disclosed above.
94
94
2015 Transurban Annual Report Transurban Holdings Limited
Transurban Holdings Limited
Notes to the consolidated financial statements
Notes to the consolidated financial statements
for the year ended 30 June 2015
for the year ended 30 June 2015
B21 Business combinations (continued)
2015 acquisitions (continued)
Queensland Motorways Group (Transurban Queensland) (continued)
Identifiable assets acquired and liabilities assumed
The final fair values of the assets and liabilities of Queensland Motorways Group as at acquisition date are as
follows:
Cash and cash equivalents
Trade and other receivables
Other assets
Property, plant and equipment
Deferred tax assets
Intangible assets
Trade and other payables
Provisions
Interest bearing liabilities
Other liabilities
Total identified assets acquired
Goodwill
Total
Less: non-controlling interest share of net assets
Net identifiable assets acquired
Goodwill
Provisional fair value
disclosed at 31
December 2014
$M
Adjustments to
provisional
fair value
$M
Final fair value
$M
22
14
5
16
665
6,641
(52)
(764)
(270)
(6)
6,271
148
6,419
(2,407)
4,012
–
–
(1)
–
(56)
(210)
–
210
–
–
(57)
57
–
–
–
22
14
4
16
609
6,431
(52)
(554)
(270)
(6)
6,214
205
6,419
(2,407)
4,012
The goodwill of $205 million is attributable to the expected synergies to be realised through managing the portfolio
of both the acquired assets and the Group’s existing assets, and to the measurement of deferred income taxes
based on nominal amounts rather than fair value. None of the goodwill recognised is expected to be deductible for
tax purposes.
Revenue and profit contribution
From the date of acquisition to 30 June 2015, revenue of $429 million and a statutory loss after taxation of
$499 million was included in the profit or loss with regard to Transurban Queensland. Excluding significant items
related to the acquisition, Transurban Queensland contributed a net loss after taxation of $81 million.
2014 acquisitions
Cross City Tunnel
On 30 December 2013, the Group gained control of the Cross City Tunnel Group (‘CCT Group’) by acquiring the
secured senior debt of the CCT Group. The concession asset was subsequently purchased on 26 June 2014.
The operations of the CCT Group were classified as held-for-sale and presented as discontinued operations
between the acquisition date and 26 June 2014 while the receivers and managers conducted a sale process.
The cash outflow was $475 million ($491 million purchase price less cash acquired of $16 million).
In the event of material CCT Group traffic outperformance relative to the Transurban base case assumptions and
if certain other conditions are satisfied, a further payment will be made to RBS over four years of up to $28 million.
No value has been ascribed to this contingent liability (2014: nil).
95
95
2015 Transurban Annual Report Transurban Holdings Limited
Transurban Holdings Limited
Notes to the consolidated financial statements
Notes to the consolidated financial statements
for the year ended 30 June 2015
for the year ended 30 June 2015
B21 Business combinations (continued)
2014 acquisitions (continued)
DRIVe, 495 Express Lanes and 95 Express Lanes
On 4 June 2014 it was determined that the Group had gained control of Transurban DRIVe, 495 Express Lanes and
95 Express Lanes due to the additional equity interest in 495 Express Lanes acquired by the Group on 11 April 2014
and 4 June 2014 as well as the additional equity in 95 Express Lanes acquired by the Group on 11 April 2014.
Therefore the Group accounted for the acquisition of DRIVe, 95 Express Lanes and 495 Express Lanes, as a business
combination on 4 June 2014. Transurban DRIVe LLC had historically been recognised as an equity accounted
investment. The cash outflow was $232 million ($345 purchase price less $113 million cash acquired).
There have not been any adjustments to the fair value of the assets and liabilities acquired as presented at
30 June 2014.
B22 Equity accounted investments
Below is the reconciliation of the equity accounted carrying value of investments:
NorthWestern
Roads Group
2015
$M
2014
$M
M5 Motorway
Transurban
DRIVe
Total
2015
$M
268
–
–
–
17
(65)
–
220
2014
$M
304
–
–
–
21
(57)
–
268
–
–
–
–
–
–
–
–
677
–
–
2015
$M
–
–
–
–
–
–
–
–
2014
$M
229
27
–
–
102
–
(358)
2015
$M
268
–
892
10
17
(95)
2014
$M
533
27
–
–
123
(57)
–
(358)
–
–
1,092
624
268
677
Opening carrying value 1 July
Additional investment
Transfer of Westlink M7 Term loan note
balance into equity accounted
investment
Costs capitalised on creation of NWRG
Group’s recognised share of total
comprehensive income
Dividends received
Cessation of equity accounting on gain of
control
Closing carrying value
Losses not recognised
Joint ventures
–
–
892
10
–
(30)
–
872
624
NorthWestern Roads Group (50% ownership interest)
The Group has a 50% ownership interest in the NorthWestern Roads Group, which holds 100% of the Westlink
M7 Group and the NorthConnex Group. Westlink M7 holds the concession to design, construct, finance and
operate the Westlink M7 Motorway in Sydney for a period of 31 years from the date of operation (16 December
2005) until February 2037, and NorthConnex holds the concession to design, construct, finance and operate the
NorthConnex Tunnel in Sydney until 2048.
The following entities are a part of the Westlink Group:
WSO Co Pty Limited (the operator of the Motorway).
Westlink Motorway Limited (the nominee manager of the Westlink Motorway Partnership).
WSO Finance Pty Limited (the financier of the Motorway).
Westlink Motorway Partnership (was responsible for the construction of the Motorway).
The following entities are part of the NorthConnex Group:
NorthConnex Company Pty Limited (the operator of the Motorway).
96
96
2015 Transurban Annual Report Transurban Holdings Limited
Transurban Holdings Limited
Notes to the consolidated financial statements
Notes to the consolidated financial statements
for the year ended 30 June 2015
for the year ended 30 June 2015
B22 Equity accounted investments (continued)
Joint ventures (continued)
NorthWestern Road Groups (continued)
NorthConnex Finance Company Pty Limited (the financier of the Motorway).
NorthConnex State Works Contractor Pty Limited (was responsible for the construction of the Motorway).
M5 Motorway (50% ownership interest)
Tolls are collected on the M5 in both directions, with four toll collection points. The concession for the M5
Motorway extends to December 2026 following completion of the M5 widening. At the end of the concession,
all concession assets will be returned to the NSW State Government.
Transurban DRIVe (75% ownership interest until cessation of equity accounting)
Prior to 4 June 2014 the Group applied equity accounting for its 75% ownership interest in DRIVe. On 4 June
2014, the Group gained control of Transurban DRIVe and therefore ceased equity accounting this investment,
as discussed in note B21.
Summarised financial information of equity accounted investments
Set out below is the summarised financial information for those investments accounted for using the equity
method. The summarised financial information presented below is on a 100 per cent basis for each equity
accounted investment.
Summarised balance sheet – 100%
Cash and cash equivalents
Other current assets
Non-current assets
Current liabilities
Non-current liabilities
Net assets
Summarised statement of
comprehensive income – 100%
Revenue
Depreciation and amortisation
Other expenses
Gain on transfer of Pocahontas
Interest expense
Income tax expense
Profit/(loss)
Other comprehensive income
Total comprehensive income
North Western
Roads Group
2015
$M
2014
$M
53
11
1,915
(4)
(1,579)
396
86
8
1,798
(45)
(3,201)
(1,354)
272
(76)
(40)
–
(104)
3
55
(2)
53
236
(70)
(47)
–
(298)
11
(168)
13
(155)
M5 Motorway
Transurban
DRIVe
Total
2015
$M
5
11
459
(48)
(904)
(477)
230
(28)
(32)
–
(36)
(46)
88
1
89
2014
$M
31
1
418
(86)
(801)
(437)
206
(15)
(28)
–
(26)
(41)
96
(1)
95
2015
$M
2014
$M
2015
$M
2014
$M
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
58
22
2,374
(52)
(2,483)
(81)
117
9
2,216
(131)
(4,002)
(1,791)
42
(9)
(32)
326
(69)
(104)
154
37
191
502
(104)
(72)
–
(140)
(43)
143
(1)
142
484
(94)
(107)
326
(393)
(134)
82
49
131
The following table reconciles the above summarised financial information presented on a 100 per cent basis to the proportional
amounts recognised by the Group.
Ownership interest
Proportional total comprehensive
income
Amortisation of fair value uplift
Group's share of comprehensive
income
Losses not recognised
Unrecognised gain on transfer
Transfer of reserves
Group's recognised share of total
profit
Group’s share of dividends received
50%
27
–
27
(27)
–
–
–
30
50%
(78)
–
(78)
78
–
–
–
–
50%
44
(27)
17
–
–
–
17
65
50%
48
(27)
21
–
–
–
21
57
75%
–
–
–
–
–
–
–
–
75%
143
–
143
(104)
70
(15)
94
–
–
71
(27)
44
(27)
–
–
17
95
–
113
(27)
86
(26)
70
(15)
115
57
97
97
2015 Transurban Annual Report Transurban Holdings Limited
Transurban Holdings Limited
Notes to the consolidated financial statements
Notes to the consolidated financial statements
for the year ended 30 June 2015
for the year ended 30 June 2015
B23 Non-controlling interests – other
Set out below is summarised financial information for each material subsidiary (see note B20) that has non-
controlling interests that are material and external to the stapled Group and the total external non-controlling
interest. The amounts disclosed are before inter-company eliminations.
Summarised balance sheet
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net assets
Carrying amount of NCI
Summarised statement of comprehensive income
Revenue
Expenses
Profit for the year
Other comprehensive income
Total comprehensive income
(Loss)/profit allocated to NCI
OCI allocated to NCI
Summarised cash flows
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Net increases in cash and cash equivalents
Transurban Queensland
37.5%
Total non-controlling
interests – other
2015
$M
92
7,267
(243)
(4,187)
2,929
1,099
429
(929)
(500)
(24)
(524)
(187)
(9)
(290)
(6,429)
6,745
26
2014
$M
2015
$M
21
–
–
–
21
8
–
(20)
(20)
–
(20)
8
–
(20)
40
–
20
102
9,061
(448)
(5,296)
3,419
1,227
630
(1,171)
(541)
(42)
(583)
(191)
15
(248)
(6,595)
7,062
219
2014
$M
164
4,725
(299)
(3,223)
1,367
258
112
(313)
(201)
(8)
(209)
30
2
10
6
(8)
8
Transactions with non-controlling interests
On 29 June 2015 the Group acquired the remaining 25% shareholding in DRIVe for US$145 million ($189 million).
This acquisition increases the Group’s equity interest to 100% in both the 95 Express Lanes and 495 Express
Lanes in Northern Virginia, USA from 77.5% and 94% respectively. The group recognised a decrease in non-
controlling interests of $133 million and a decrease in equity attributable to owners of the parent of $56 million.
The effect on the equity attributable to the owners of the Group during the year is summarised as follows:
Carrying amount of non-controlling interests acquired
Consideration paid to non-controlling interests
Excess of consideration paid recognised in equity
B24 Deed of cross and intra-group guarantees
Deed of cross guarantee
$M
133
(189)
(56)
Transurban Holdings Limited, Transurban Limited, Tollaust Pty Limited, Roam Tolling Pty Limited, Sydney Roads
Limited, Sydney Roads Management Limited, Statewide Roads Limited, M4 Holdings No. 1 Pty Limited, M5
Holdings Pty Limited and Devome Pty Limited are party to a deed of cross guarantee under which each company
guarantees the debts of the others. By entering into the deed, the wholly-owned entities have been relieved from
the requirement to prepare a financial report and Directors’ report under Class Order 98/1418 (as amended)
issued by the Australian Securities and Investments Commission. The companies represent a 'closed group' for
the purposes of the Class Order, and as there are no other parties to the deed of cross guarantee that are
controlled by THL, they also represent the 'extended closed group’. Set out below is the summary financial
information of the closed group:
98
98
2015 Transurban Annual Report B24 Deed of cross and intra-group guarantees (continued)
Transurban Holdings Limited
Transurban Holdings Limited
Notes to the consolidated financial statements
Notes to the consolidated financial statements
for the year ended 30 June 2015
for the year ended 30 June 2015
Summarised statement of comprehensive income
Revenue
Operating costs
Depreciation and amortisation expense
Net finance costs
Profit/(loss) before income tax
Income tax (expense)/benefit
Profit/(loss) for the year
Total comprehensive income/(loss) for the year
Summarised movements in retained earnings
Accumulated losses at the beginning of the year
Profit/(loss) for the year
Dividends provided for or paid
Retained earnings at the end of the year
Summarised balance sheet
Current assets
Cash and cash equivalents
Trade and other receivables
Total current assets
Non-current assets
Other financial assets
Property, plant and equipment
Deferred tax assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Provisions
Total current liabilities
Non-current liabilities
Payables
Deferred tax liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Other reserves
Retained earnings
Total equity
Intra–group guarantees
2015
$M
2014
$M
321
(186)
(25)
22
132
(23)
109
109
(600)
109
(134)
(625)
542
1,903
2,445
2,090
227
540
2,857
5,302
4,165
87
4,252
351
78
7
436
4,688
614
1,237
1
(624)
614
208
(136)
(22)
(132)
(82)
34
(48)
(48)
(478)
(48)
(74)
(600)
2,347
867
3,214
1,709
215
557
2,481
5,695
3,191
35
3,226
1,814
39
7
1,860
5,086
609
1,208
1
(600)
609
As at 30 June 2015, the Transurban Group comprises Transurban Holdings Limited, Transurban Holding Trust
and Transurban International Limited, traded and quoted on the ASX as one triple stapled security.
Under the stapling arrangement, each entity is able to provide direct and/or indirect support to each other entity
and its controlled entities within the Group on a continual basis.
99
99
2015 Transurban Annual Report Transurban Holdings Limited
Transurban Holdings Limited
Notes to the consolidated financial statements
Notes to the consolidated financial statements
for the year ended 30 June 2015
for the year ended 30 June 2015
Items not recognised
B25 Contingencies
Contingent liabilities
As a result of the acquisition of the concession assets noted below, the Group may be required to make further
payments to the respective vendor’s in the event that the traffic and toll revenue performance of the relevant asset
exceeds certain criteria. The contingent consideration is recorded at the end of each reporting period at its fair
value based upon the same traffic and revenue assumptions as outlined in note B16. The following table details
the current carrying value of the contingent consideration recognised within ‘Other provisions’ in the consolidated
balance sheet, the maximum nominal value that could be paid under each contract and the date at which the
contingent consideration is assessed and becomes payable:
Concession asset
Cross City Tunnel
Legacy Way Tunnel
Legacy Way Tunnel
Go Between Bridge
Carrying
value
$M
Maximum
consideration
payable
$M
Assessment
/ payment
date
–
–
23
33
28
200
Unlimited1
Unlimited1
Dec 2017
Jun 2017
Jun 2020
Jun 2018
No contingent consideration was recognised at June 2014.
The parent entity does not have any contingent liabilities at reporting date (2014: nil).
The equity accounted investments of the Group do not have any contingent liabilities at reporting date (2014: nil).
1. The maximum consideration payable will reflect a portion of the cumulative outperformance of the concession asset as compared against an
internal rate of return agreed between Transurban Queensland and the Brisbane City Council.
B26 Commitments
Within one year
Later than one year but not later
than five years
Later than five years
Operating
commitments
Capital
commitments
2015
$M
100
247
248
595
2014
$M
52
92
297
441
2015
$M
139
763
–
902
2014
$M
152
–
–
152
Share of commitments for equity accounted investments
Capital commitments
Operating commitments
North Western Roads Group
50%
M5 Motorway
50%
2015
$M
1,247
186
1,433
2014
$M
–
182
182
2015
$M
–
2
2
2014
$M
40
–
40
Operating lease
commitments
2015
$M
2014
$M
–
13
17
30
Total
2015
$M
1,247
188
1,435
–
10
21
31
2014
$M
40
182
222
100
100
2015 Transurban Annual Report Transurban Holdings Limited
Transurban Holdings Limited
Notes to the consolidated financial statements
Notes to the consolidated financial statements
for the year ended 30 June 2015
for the year ended 30 June 2015
B27 Subsequent events
The following events have occurred subsequent to year end:
On 2 July 2015, Transurban Queensland priced approximately $900 million in senior secured notes
(‘Notes’). The Notes will be issued in three tranches of approximately $200 million, $300 million and
$400 million with tenors of 10, 12 and 15 years respectively. The proceeds will be used to repay existing
debt that begins to reach maturity from July 2016. Settlement is expected to occur on 22 September
2015 and is subject to certain closing conditions; and
On 9 July 2015, Interlink Roads Pty Limited (operator of M5 South West Motorway) reached financial
close on a $742 million refinancing of its senior secured debt facilities. The new facility will have
maturities of 5.5 years ($272 million), 7.5 years ($180 million) and 10 years ($275 million) and will be
subject to amortisation resulting in full repayment of the debt at the end of its term. Transurban holds a
50% interest in Interlink with the investment recorded within the equity accounted investments balance.
Other than what is noted above, there has not arisen in the interval between the end of the financial year and the
date of this report any matter or circumstance that has significantly affected, or may significantly affect, the
operations of the Group, and results of those operations, or the state of affairs of the Group, in future financial
years.
101
101
2015 Transurban Annual Report Other
B28 Related party transactions
Transactions with related parties
Revenue from services
Interest income
Repayment of M5 debt notes
Outstanding balances with related parties
M7 Term loan notes
M5 debt notes
NorthConnex shareholder loan notes
Transurban Holdings Limited
Transurban Holdings Limited
Notes to the consolidated financial statements
Notes to the consolidated financial statements
for the year ended 30 June 2015
for the year ended 30 June 2015
Joint ventures
2015
$’000
13,346
41,113
11,683
–
70,000
95,253
2014
$’000
39,502
105,538
27,098
886,746
58,318
–
No provision for doubtful debts has been raised in relation to any outstanding balances, and no expense has been
recognised in respect of bad or doubtful debts from related parties.
M5 debt notes
The M5 debt notes are Transurban’s debt funding contribution to the M5 West Widening Project. The fixed
maturity date of the notes is 10 years after financial close of the Project. The interest rate charged on these notes
is fixed at 5.0% for the first three years following financial close.
M7 Term loan notes
The Term loan notes (‘TLNs’) earn interest at a fixed rate of 11.93% until the earlier of 34 years and the
termination of the Agreement to Lease between the RMS and Westlink Motorway Limited. Any unpaid interest is
capitalised and deemed to subscribe for further loan notes with an aggregate principal amount equal to that
unpaid interest.
The TLNs are classified as a held-to-maturity receivable. It is not classified as an investment for equity accounting
purposes, and therefore has not been affected by equity accounting losses from the associate. All TLNs are
denominated in Australian currency. The Group has derecognised these TLNs during FY15 as described in note
B2.
NorthConnex shareholder loan notes
The Shareholder loan notes (‘SLNs’) earn interest at a fixed rate of 9.0% until the final day of the NorthConnex
concession period. Any unpaid interest is capitalised and deemed to subscribe for further loan notes with an
aggregate principal amount equal to that unpaid interest.
The SLNs are classified as a held-to-maturity receivable. It is not classified as an investment for equity accounting
purposes, and therefore has not been affected by equity accounting losses from the associate. All SLNs are
denominated in Australian currency.
102
102
2015 Transurban Annual Report Transurban Holdings Limited
Transurban Holdings Limited
Notes to the consolidated financial statements
Notes to the consolidated financial statements
for the year ended 30 June 2015
for the year ended 30 June 2015
B29 Key management personnel compensation
The remuneration amounts below represent the entire amounts paid by the Group.
Short-term employee benefits
Post-employment benefits
Long-term benefits
Share-based payments
Deferred short term incentives
Termination benefits
2015
$
2014
$
11,573,323
280,011
(83,978)1
3,631,691
1,279,396
347,272
17,027,715
11,056,992
257,966
73,043
3,645,461
1,620,545
333,356
16,987,363
1. Includes a reversal of accrued long service leave due to the departure of key management personnel during the year.
Detailed remuneration disclosures including the key management personnel are made in the remuneration report
in the Directors' report.
B30 Remuneration of auditors
During the year the following fees were paid or payable for services provided by the auditor of the Group and its
related practices:
Amounts received or due and receivable by PricewaterhouseCoopers
Audit and other assurance services
Audit and review of financial reports
Other assurance services
Other consulting services
Total remuneration for PricewaterhouseCoopers
Total auditors' remuneration
B31 Parent entity disclosures
2015
$
2014
$
2,293,000
173,600
2,466,600
243,915
2,710,515
2,710,515
1,337,000
594,000
1,931,000
–
1,931,000
1,931,000
The financial information for the parent entity, Transurban Holdings Limited, has been prepared on the same
basis as the consolidated financial statements, 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 parent entity financial
statements of Transurban Holdings Limited. Dividends received from associates are recognised in the parent
entity's profit or loss, rather than being deducted from the carrying amount of these investments.
Tax consolidation legislation
In addition to its own current and deferred tax amounts, Transurban Holdings Limited also recognises the current
tax liabilities (or assets) and the deferred tax assets arising from unused tax losses and unused tax credits
assumed from controlled entities in the tax consolidated group.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as
amounts receivable from or payable to other entities in the 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.
103
103
2015 Transurban Annual Report Transurban Holdings Limited
Transurban Holdings Limited
Notes to the consolidated financial statements
Notes to the consolidated financial statements
for the year ended 30 June 2015
for the year ended 30 June 2015
B31 Parent entity disclosures (continued)
Summary financial information
The individual financial statements for the parent entity report the following aggregate amounts:
Balance sheet
Current assets
Total assets
Current liabilities
Total liabilities
Net assets
Shareholders' equity
Contributed equity
Reserves
Retained earnings
Total equity
Profit/(loss) for the year
Total comprehensive income/(loss)
Guarantees entered into by the parent entity
2015
$M
1,933
5,826
(117)
(4,531)
1,295
1,237
1
57
1,295
104
104
2014
$M
1,352
6,095
(100)
(4,799)
1,296
1,208
1
87
1,296
(85)
(85)
There are cross guarantees given by Transurban Holdings Limited, Transurban Limited, Tollaust Pty Limited,
Roam Tolling Pty Limited, Sydney Roads Limited, Sydney Roads Management Limited, Statewide Roads Limited
and M5 Holdings Pty Limited as described in note B24.
104
104
2015 Transurban Annual Report Transurban Holdings Limited
Transurban Holdings Limited
for the year ended 30 June 2015
for the year ended 30 June 2015
for the year ended 30 June 2015
Section C: Transurban Holding Trust (‘THT’)
and Transurban International Limited (‘TIL’)
financial statements
Consolidated statement of comprehensive income
Consolidated balance sheet
Consolidated statement of changes in equity
Consolidated statement of cash flows
Section D: Notes to the THT and TIL financial statements
Basis of
preparation and
significant
changes
Operating
performance
Security holder
outcomes
D1
Introduction
D3
Segment
information
D6
Dividends/
distributions
D2
Trust formation and
termination
D4
Revenue
D5
Income tax
D7
Earnings per
stapled security
Capital and
borrowings
D8
Reserves
D9
Net finance income
and costs
D10
Borrowings
D11
Derivatives and
financial risk
management
Network
summary
D12
Intangible assets
D13
Other liabilities –
concession and
promissory notes
Group structure
D14
Equity accounted
investments
D15
Non-controlling
interests
Other
D16
Related party
transactions
D17
Parent entity
financial information
105
105
2015 Transurban Annual Report Transurban Holding Trust and Transurban International Limited
Consolidated statement of comprehensive income
Transurban Holding Trust and Transurban International Limited
Transurban Holding Trust and Transurban International Limited
for the year ended 30 June 2015
Consolidated statement of comprehensive income
Consolidated statement of comprehensive income
for the year ended 30 June 2015
for the year ended 30 June 2015
Note
Note
D4
D4
D9
D9
D14
D14
D15
D15
Revenue
Revenue
Employee benefits expense
Employee benefits expense
Road operating costs
Road operating costs
Construction costs
Construction costs
Transaction and integration costs
Transaction and integration costs
Corporate and other expenses
Corporate and other expenses
Total expenses
Total expenses
Earnings before depreciation and amortisation,
Earnings before depreciation and amortisation,
net finance costs, equity accounted
net finance costs, equity accounted
investments and income tax
investments and income tax
Depreciation and amortisation expense
Depreciation and amortisation expense
Net finance income/(costs)
Net finance income/(costs)
Share of net profits/(losses) of equity accounted
Share of net profits/(losses) of equity accounted
investments
investments
(Loss)/profit before income tax
(Loss)/profit before income tax
Income tax benefit/(expense)
Income tax benefit/(expense)
(Loss)/profit for the year
(Loss)/profit for the year
(Loss)/profit is attributable to:
(Loss)/profit is attributable to:
Ordinary security holders of TIL
Ordinary security holders of TIL
Ordinary unit holders of THT
Ordinary unit holders of THT
Non–controlling interests
Non–controlling interests
Other comprehensive income
Other comprehensive income
Items that may be reclassified to profit or loss
Items that may be reclassified to profit or loss
Changes in the fair value of cash flow hedges,
Changes in the fair value of cash flow hedges,
net of tax
net of tax
Exchange differences on translation of foreign
Exchange differences on translation of foreign
operations, net of tax
operations, net of tax
Other comprehensive income for the year,
Other comprehensive income for the year,
net of tax
net of tax
Total comprehensive income for the year
Total comprehensive income for the year
Total comprehensive income for the year is
Total comprehensive income for the year is
attributable to:
attributable to:
Ordinary security holders of TIL
Ordinary security holders of TIL
Ordinary unit holders of THT
Ordinary unit holders of THT
Non-controlling interests
Non-controlling interests
Transurban Holding
Transurban Holding
Trust
Trust
Transurban International
Transurban International
Limited
Limited
2015
2015
$M
$M
593
593
–
–
(4)
(4)
(18)
(18)
(311)
(311)
(2)
(2)
(335)
(335)
2014
2014
$M
$M
355
355
–
–
(12)
(12)
(48)
(48)
(7)
(7)
(2)
(2)
(69)
(69)
2015
2015
$M
$M
235
235
–
–
(39)
(39)
(142)
(142)
–
–
(19)
(19)
(200)
(200)
2014
2014
$M
$M
79
79
(3)
(3)
(21)
(21)
(33)
(33)
–
–
(19)
(19)
(76)
(76)
258
258
286
286
35
35
3
3
(276)
(276)
(71)
(71)
–
–
(89)
(89)
(8)
(8)
(97)
(97)
–
–
9
9
(106)
(106)
(97)
(97)
(17)
(17)
–
–
(17)
(17)
(114)
(114)
–
–
1
1
(115)
(115)
(114)
(114)
(123)
(123)
192
192
–
–
355
355
(3)
(3)
352
352
–
–
345
345
7
7
352
352
19
19
–
–
19
19
371
371
–
–
362
362
9
9
371
371
(29)
(29)
(165)
(165)
–
–
(159)
(159)
17
17
(142)
(142)
(134)
(134)
–
–
(8)
(8)
(142)
(142)
4
4
(22)
(22)
(18)
(18)
(160)
(160)
(177)
(177)
–
–
17
17
(160)
(160)
(4)
(4)
(127)
(127)
94
94
(34)
(34)
23
23
(11)
(11)
20
20
–
–
(31)
(31)
(11)
(11)
61
61
(42)
(42)
19
19
8
8
38
38
–
–
(30)
(30)
8
8
Earnings per security attributable to ordinary
Earnings per security attributable to ordinary
security holders of the group:
security holders of the group:
Basic and diluted earnings/(loss) per security
Basic and diluted earnings/(loss) per security
D7
D7
0.5
0.5
22.4
22.4
(7.0)
(7.0)
1.3
1.3
Cents
Cents
Cents
Cents
Cents
Cents
Cents
Cents
The above consolidated statements of comprehensive income should be read in conjunction with the
The above consolidated statements of comprehensive income should be read in conjunction with the
accompanying notes.
accompanying notes.
The above consolidated statements of comprehensive income should be read in conjunction with the
accompanying notes.
106
106
106
2015 Transurban Annual Report Transurban Holding Trust and Transurban International Limited
Consolidated balance sheet
Transurban Holding Trust and Transurban International Limited
Transurban Holding Trust and Transurban International Limited
for the year ended 30 June 2015
Consolidated balance sheet
Consolidated balance sheet
for the year ended 30 June 2015
for the year ended 30 June 2015
Transurban Holding
Trust
Transurban Holding
Trust
Transurban International
Transurban International
Limited
Limited
Note
Note
2015
2015
$M
$M
2014
2014
$M
$M
2015
2015
$M
$M
2014
2014
$M
$M
156
156
2,468
2,468
1
1
2,625
2,625
862
862
16
16
5,701
5,701
866
866
–
–
–
–
–
–
8,414
8,414
15,859
15,859
18,484
18,484
629
629
30
30
–
–
–
–
372
372
2
2
38
38
1,071
1,071
–
–
–
–
4,944
4,944
4,394
4,394
76
76
20
20
9,434
9,434
75
75
2,418
2,418
3
3
2,496
2,496
–
–
–
–
6,117
6,117
795
795
887
887
–
–
5
5
3,641
3,641
11,445
11,445
13,941
13,941
509
509
14
14
400
400
–
–
361
361
4
4
46
46
1,334
1,334
–
–
–
–
3,622
3,622
1,392
1,392
41
41
24
24
5,079
5,079
179
179
17
17
12
12
208
208
–
–
–
–
–
–
–
–
–
–
3
3
163
163
2,562
2,562
2,728
2,728
2,936
2,936
1,398
1,398
39
39
–
–
2
2
–
–
–
–
6
6
1,445
1,445
22
22
134
134
–
–
1,675
1,675
54
54
–
–
1,885
1,885
147
147
8
8
4
4
159
159
–
–
–
–
–
–
–
–
–
–
1
1
55
55
1,965
1,965
2,021
2,021
2,180
2,180
886
886
61
61
–
–
1
1
–
–
–
–
13
13
961
961
9
9
55
55
–
–
1,171
1,171
41
41
–
–
1,276
1,276
10,505
10,505
6,413
6,413
3,330
3,330
2,237
2,237
7,979
7,979
7,528
7,528
(394)
(394)
(57)
(57)
–
–
9,584
9,584
(43)
(43)
(2,579)
(2,579)
1,017
1,017
7,979
7,979
–
–
9,472
9,472
(35)
(35)
(1,958)
(1,958)
49
49
7,528
7,528
279
279
–
–
(145)
(145)
(528)
(528)
–
–
(394)
(394)
276
276
–
–
(46)
(46)
(395)
(395)
108
108
(57)
(57)
D14
D14
D5
D5
D12
D12
D10
D10
D6
D6
D11
D11
D5
D5
D10
D11
D10
D11
D8
D8
D15
D15
ASSETS
ASSETS
Current assets
Current assets
Cash and cash equivalents
Cash and cash equivalents
Loans to related parties
Loans to related parties
Trade and other receivables
Trade and other receivables
Total current assets
Total current assets
Non-current assets
Non-current assets
Equity accounted investments
Equity accounted investments
Derivative financial instruments
Derivative financial instruments
Related party receivables
Related party receivables
Concession notes
Concession notes
Term loan notes
Term loan notes
Property, plant and equipment
Property, plant and equipment
Deferred tax assets
Deferred tax assets
Intangible assets
Intangible assets
Total non-current assets
Total non-current assets
Total assets
Total assets
LIABILITIES
LIABILITIES
Current liabilities
Current liabilities
Related party payables
Related party payables
Trade and other payables
Trade and other payables
Borrowings
Borrowings
Maintenance provision
Maintenance provision
Distribution payable
Distribution payable
Derivative financial instruments
Derivative financial instruments
Other liabilities
Other liabilities
Total current liabilities
Total current liabilities
Non–current liabilities
Non–current liabilities
Maintenance provision
Maintenance provision
Deferred tax liabilities
Deferred tax liabilities
Related party payables
Related party payables
Borrowings
Borrowings
Derivative financial instruments
Derivative financial instruments
Other liabilities
Other liabilities
Total non–current liabilities
Total non–current liabilities
Total liabilities
Total liabilities
Net assets/(liabilities)
Net assets/(liabilities)
EQUITY
EQUITY
Contributed equity
Contributed equity
Issued units
Issued units
Reserves
Reserves
Accumulated losses
Accumulated losses
Non-controlling interests
Non-controlling interests
Total equity
Total equity
The above consolidated balance sheets should be read in conjunction with the accompanying notes.
The above consolidated balance sheets should be read in conjunction with the accompanying notes.
The above consolidated balance sheets should be read in conjunction with the accompanying notes.
107
107
107
2015 Transurban Annual Report Transurban Holding Trust and Transurban International Limited
Consolidated statement of changes in equity
Transurban Holding Trust and Transurban International Limited
for the year ended 30 June 2015
Consolidated statement of changes in equity
for the year ended 30 June 2015
Transurban Holding Trust and Transurban International Limited
Consolidated statement of changes in equity
for the year ended 30 June 2015
THT
THT
Attributable to security holders of
Transurban Holding Trust
Attributable to security holders of
Transurban Holding Trust
No. of units
M
No. of units
M
Issued units
$M
Issued units
$M
Reserves
Reserves
$M
$M
Accumulated
Accumulated
losses
losses
$M
$M
Non-
Non-
controlling
controlling
interests
interests
$M
$M
Total
Total
equity
equity
$M
$M
1,482
1,482
7,336
7,336
(52)
(52)
(1,780)
(1,780)
38
38
5,542
5,542
–
–
–
–
–
–
405
405
9
9
–
–
–
–
–
–
414
414
1,896
1,896
–
–
–
–
–
–
–
–
17
17
–
–
–
–
1
1
18
18
1,914
1,914
–
–
–
–
–
–
2,092
2,092
42
42
–
–
–
–
2
2
2,136
2,136
9,472
9,472
–
–
–
–
–
–
–
–
111
111
–
–
–
–
1
1
112
112
9,584
9,584
–
–
17
17
17
17
–
–
–
–
–
–
–
–
–
–
–
–
(35)
(35)
–
–
(8)
(8)
(8)
(8)
–
–
–
–
–
–
–
–
–
–
–
–
(43)
(43)
345
345
–
–
345
345
–
–
–
–
(523)
(523)
–
–
–
–
(523)
(523)
(1,958)
(1,958)
9
–
9
–
9
–
9
–
–
–
(630)
(630)
–
–
–
–
(630)
(630)
(2,579)
(2,579)
7
7
2
2
9
9
–
–
–
–
(14)
(14)
16
16
–
–
2
2
49
49
(106)
(106)
(9)
(9)
(115)
(115)
352
352
19
19
371
371
2,092
2,092
42
42
(537)
(537)
16
16
2
2
1,615
1,615
7,528
7,528
(97)
(17)
(114)
(97)
(17)
(114)
1,147
1,147
1,147
1,147
–
–
–
–
(64)
(64)
–
–
1,083
1,083
1,017
1,017
111
111
(630)
(630)
(64)
(64)
1
1
565
565
7,979
7,979
Balance at 1 July 2013
Balance at 1 July 2013
Comprehensive income
Comprehensive income
Profit for the year
Profit for the year
Other comprehensive income
Other comprehensive income
Total comprehensive income
Total comprehensive income
Treasury units
Treasury units
Distribution reinvestment plan
Distribution reinvestment plan
Distributions
Distributions
Equity contributions
Equity contributions
Employee share awards issued
Employee share awards issued
Balance at 30 June 2014
Balance at 30 June 2014
Comprehensive income
Comprehensive income
Profit for the year
Profit for the year
Other comprehensive income
Other comprehensive income
Total comprehensive income
Total comprehensive income
Contributions of equity, net of
Contributions of equity, net of
transaction costs
transaction costs
Distribution reinvestment plan
Distribution reinvestment plan
Distributions
Distributions
Distributions to NCI
Distributions to NCI
Employee share awards issued
Employee share awards issued
Balance at 30 June 2015
Balance at 30 June 2015
TIL
TIL
Attributable to security holders of
Transurban International Limited
Attributable to security holders of
Transurban International Limited
No. of
No. of
securities
securities
M
M
Contributed
Contributed
equity
equity
$M
$M
Reserves
Reserves
$M
$M
Accumulated
Accumulated
losses
losses
$M
$M
Non-
Non-
controlling
controlling
interests
interests
$M
$M
Total
Total
equity
equity
$M
$M
1,482
1,482
216
216
(72)
(72)
(414)
(414)
–
–
(270)
(270)
–
–
–
–
–
–
405
405
9
9
–
–
–
–
414
414
1,896
1,896
–
–
–
–
–
–
–
–
17
17
–
–
1
1
18
18
1,914
1,914
–
–
–
59
1
–
–
60
276
–
–
–
59
1
–
–
60
276
–
–
–
–
–
–
–
–
3
3
–
–
–
–
3
3
279
279
–
–
19
19
19
19
–
–
–
–
7
7
–
–
7
7
(46)
(46)
–
–
(43)
(43)
(43)
(43)
–
–
–
–
(56)
(56)
–
–
(56)
(56)
(145)
(145)
20
20
–
–
20
20
–
–
–
–
–
–
–
–
–
–
(394)
(394)
(134)
(134)
–
–
(134)
(134)
–
–
–
–
–
–
–
–
–
–
(528)
(528)
(31)
(31)
–
–
(31)
(31)
–
–
–
–
(7)
(7)
145
145
138
138
107
107
(8)
25
17
(8)
25
17
9
9
–
–
(133)
(133)
–
–
(124)
(124)
–
–
(11)
(11)
19
19
8
8
59
59
1
1
–
–
145
145
205
205
(57)
(57)
(142)
(18)
(160)
(142)
(18)
(160)
9
9
3
3
(189)
(189)
–
–
(177)
(177)
(394)
(394)
Balance at 30 June 2013
Balance at 30 June 2013
Comprehensive income
Comprehensive income
Profit for the year
Profit for the year
Other comprehensive income
Other comprehensive income
Total comprehensive income
Total comprehensive income
Contributions of equity
Contributions of equity
Distribution reinvestment plan
Distribution reinvestment plan
Transactions with NCI
Transactions with NCI
Equity contributions
Equity contributions
Balance at 30 June 2014
Comprehensive income
Profit for the year
Other comprehensive income
Total comprehensive income
Contributions of equity, net of
Balance at 30 June 2014
Comprehensive income
Profit for the year
Other comprehensive income
Total comprehensive income
Contributions of equity, net of
transaction costs
transaction costs
Distribution reinvestment plan
Transactions with NCI
Employee share awards issued
Distribution reinvestment plan
Transactions with NCI
Employee share awards issued
Balance at 30 June 2015
Balance at 30 June 2015
The above consolidated statements of changes in equity should be read in conjunction with the accompanying
notes.
The above consolidated statements of changes in equity should be read in conjunction with the accompanying
notes.
The above consolidated statements of changes in equity should be read in conjunction
with the accompanying notes.
108
108
108
2015 Transurban Annual Report Transurban Holding Trust and Transurban International Limited
Notes to the THT and TIL financial statements
Transurban Holding Trust and Transurban International Limited
30 June 2015
Notes to the THT and TIL financial statements
30 June 2015
Transurban
Holding Trust
Transurban International
Limited
Note
(a)
Cash flows from operating activities
Receipts from customers
Payments to suppliers
Payments for maintenance of intangibles
Transaction costs related to acquisitions
Interest received
Interest paid
Income taxes (paid)/refunds received
Net cash outflow from operating activities
Cash flows from investing activities
Payments for acquisition of subsidiary
Payment for investments in equity accounted
investments
Payments for intangible assets
Net cash outflow from investing activities
Cash flows from financing activities
Loans (to)/from related parties
Repayment of loans from/(to) related parties
Proceeds from issue of shares
Proceeds from borrowings(net of cost)
Repayment of borrowings
Payment for acquisition of non-controlling interest
Distributions paid to Transurban Group's security
holders
Distributions paid to non-controlling interests in
subsidiaries
Proceeds from equity issued to non-controlling interests
Net cash inflow from financing activities
Net increase/(decrease) in cash and cash
equivalents
Cash and cash equivalents at the beginning of the year
Effects of exchange rate changes on cash and cash
equivalents
Cash and cash equivalents at end of year
2015
$M
551
(42)
–
(311)
127
(413)
(3)
(91)
(5,240)
–
(21)
(5,261)
(1,590)
3,892
–
3,612
(1,056)
–
(515)
(57)
1,147
5,433
81
75
–
156
2014
$M
240
(21)
–
–
121
(341)
(4)
(5)
–
–
(441)
(441)
(354)
889
–
582
(295)
–
(337)
(9)
16
492
46
29
–
75
2015
$M
105
(83)
(1)
–
–
(24)
–
(3)
–
–
(166)
(166)
236
(4)
9
117
–
(189)
–
–
–
169
–
147
32
179
(a) Reconciliation of (loss)/profit after income tax to net cash inflow from operation activities
THT
TIL
(Loss)/profit for the year
Depreciation and amortisation
Non-cash net finance costs
Capitalised interest income
Net construction revenue
Share of net (profits)/losses of equity accounted
investments
Change in operating assets and liabilities:
(Increase)/decrease in trade and other receivables
(Decrease)/increase in related party operating loans
Increase/(decrease) in unearned income
Increase/(decrease) in trade creditors and accruals
Increase/(decrease) in other operating provisions
Increase/(decrease) in provision for income taxes
payable
Net cash outflow from operating activities
D14
2015
$M
(97)
276
(3)
(76)
–
–
43
(260)
1
20
–
5
(91)
2014
$M
352
123
(45)
(75)
–
–
(1)
(387)
19
11
–
(2)
(5)
2015
$M
(142)
29
65
–
(5)
–
(10)
80
(10)
(1)
10
(19)
(3)
2014
$M
82
(77)
–
–
(1)
(10)
1
(5)
(232)
(39)
(5)
(276)
731
(339)
–
32
–
–
–
–
–
424
143
5
(1)
147
2014
$M
(11)
4
–
–
–
(94)
13
(39)
3
(24)
18
125
(5)
The above consolidated statements of cash flows should be read in conjunction with the accompanying notes.
The above consolidated statements of cash flows should be read in conjunction with the accompanying notes.
109
109
2015 Transurban Annual Report Transurban Holding Trust and Transurban International Limited
Transurban Holding Trust and Transurban International Limited
Notes to the THT and TIL financial statements
Notes to the THT and TIL financial statements
30 June 2015
30 June 2015
Basis of preparation and significant changes
D1
Introduction
The Transurban Holding Trust Group consists of Transurban Holding Trust (‘THT’) and the entities it controls
(‘THT Group’) and the Transurban International Limited Group consists of Transurban International Limited (‘TIL’)
and the entities it controls (‘TIL Group’). THT and TIL form part of the stapled Transurban Group.
THT is registered as a managed investment scheme under Chapter 5C of the Corporations Act 2001, and as a
result requires a responsible entity. The responsible entity of the THT is Transurban Infrastructure Management
Limited (‘TIML’). TIML is the responsible entity of the Trust and is responsible for performing all functions that are
required under the Corporations Act 2001 of a responsible entity.
THT is a Trust registered and domiciled in Australia.
TIL is a public company limited by shares and incorporated in Australia.
Going concern
TIL’s current liabilities exceed its current assets by $1,237 million as at 30 June 2015. This is primarily driven by a
$1,398 million loan payable to another entity within the Transurban Group. Excluding this loan, the TIL Group has
net current assets of $161 million.
Under the stapling arrangement, each entity is able to provide direct and / or indirect support to each other entity
and its controlled entities within the Transurban Group.
The financial reports have been prepared on a going concern basis, which assumes the continuity of normal
operations.
D2 Trust formation and termination
The Transurban Holding Trust was established on 15 November 2001 and has no termination date. The Trust
was registered as a managed investment scheme by the Australian Securities and Investments Commission on
28 November 2001.
110
110
2015 Transurban Annual Report Transurban Holding Trust and Transurban International Limited
Transurban Holding Trust and Transurban International Limited
Notes to the THT and TIL financial statements
Notes to the THT and TIL financial statements
30 June 2015
30 June 2015
Operating performance
D3 Segment information
Refer to note B4 for further information around the structure of the segments for the Transurban Group.
THT operating segments
Management has determined that THT has one operating segment.
THT operations involve the leasing of assets and the provision of funding to the Transurban Group or associates
of the Transurban Group. All revenues and expenses are directly attributable to these activities. The management
structure and internal reporting of the Trust are based on this one operating segment.
TIL operating segments
Management has determined that TIL has one operating segment.
TIL operations involve the development, operation and maintenance of toll roads in the USA. All revenues and
expenses are directly attributable to these activities. The management structure and internal reporting of TIL are
based on this one operating segment.
Reconciliation of segment information to statutory financial information
Segment information for TIL as disclosed in the Transurban Group segment note at B4 is reconciled to the TIL
statutory financial information below.
Segment revenue
Revenue from external customers is through toll and fee revenues earned on toll roads. There are no inter-
segment revenues. Segment revenue reconciles to total statutory revenue as follows:
Total segment revenue (proportional)
Add:
Construction revenue from road development activities
Business development revenue
Corporate fee and other revenue
Less:
Revenue of equity accounted assets
Total revenue
Reconciliation of proportional EBITDA to statutory profit for the year
Proportional EBITDA reconciles to statutory net profit as follows:
Proportional EBITDA
Add:
EBITDA attributable to non-100% owned and consolidated assets
EBITDA attributable to TIL corporate activities (disclosed in corporate and other)
Proportional EBITDA of non-100% owned and equity accounted assets
Statutory earnings before depreciation and amortisation, net finance costs,
equity accounted investments and tax
Statutory net finance costs
Statutory depreciation and amortisation
Share of net losses of equity accounted investments
Loss before tax for the year from continuing operations
1. The USA segment is disclosed in note B4.
111
TIL1
2015
$M
2014
$M
81
144
–
10
–
235
36
33
35
7
(32)
79
TIL1
2015
$M
2014
$M
33
2
–
–
35
(165)
(29)
–
(159)
4
1
2
(4)
3
(127)
(4)
94
(34)
111
2015 Transurban Annual Report D4 Revenue
Toll revenue
Fee revenue
Rental income
Construction revenue
Other revenue
Concession fees
Total revenue
Transurban Holding Trust and Transurban International Limited
Transurban Holding Trust and Transurban International Limited
Notes to the THT and TIL financial statements
Notes to the THT and TIL financial statements
30 June 2015
30 June 2015
THT
2015
$M
–
–
546
18
1
28
593
2014
$M
–
–
272
55
–
28
355
TIL
2015
$M
77
8
–
147
3
–
235
2014
$M
3
1
–
37
38
–
79
Revenue type
Recognition
Rental income
Rental income is derived from property held by THT and is recognised in profit and loss in
accordance with the lease contract.
Concession fees
Other income from concession fees relates to the CityLink concession notes. Pursuant to
the Agreement for the Melbourne CityLink Concession Deed (the Concession Deed),
CityLink Melbourne Limited (CityLink) (a member of the Transurban Group), is required to
pay annual concession fees for the duration of CityLink's concession period. Until a certain
threshold rate of return on the project is achieved, the payment of concession fees due
under the Concession Deed can be satisfied by means of non-interest bearing concession
notes.
Following agreements reached with the State of Victoria (the State), the Group paid a total
of $765 million to the State to have all current concession notes issued by the State
assigned to Transurban Holding Trust, and the State directed CityLink to pay future
concession notes to Transurban Holding Trust. Accordingly, CityLink continues to issue
notes semi-annually to Transurban Holding Trust, and the Group recognises concession
note income from the issue of these notes, at the present value of expected future
repayments.
D5
Income tax
TIL deferred tax assets and liabilities
The balance comprises temporary difference
attributable to:
Accrued expenses
Provisions
Current and prior year losses
Unearned income
Fixed assets/intangibles
Cash flow hedges
Tax assets/(liabilities)
Set off of tax
Net tax assets/(liabilities)
Movements:
Opening balance at 1 July
Credited /(charged) to the statement of comprehensive
income
Credited /(charged) to equity
Acquired on consolidation of DRIVe
Foreign exchange movements
Other
Closing balance 30 June
Deferred tax assets/(liabilities) to be recovered after more
than 12 months
112
112
Asset
2015
$M
2014
$M
8
–
167
–
43
21
239
(76)
163
109
104
7
–
15
4
239
239
7
6
77
3
1
15
109
(54)
55
9
28
6
80
(14)
–
109
109
Liability
2015
$M
–
–
–
–
(210)
–
(210)
76
(134)
(108)
(82)
–
–
(12)
(8)
(210)
(210)
2014
$M
–
–
–
–
(108)
–
(108)
54
(54)
–
(33)
(27)
(49)
1
–
(108)
(108)
2015 Transurban Annual Report Transurban Holding Trust and Transurban International Limited
Transurban Holding Trust and Transurban International Limited
Transurban Holding Trust and Transurban International Limited
Transurban Holding Trust and Transurban International Limited
Notes to the THT and TIL financial statements
Notes to the THT and TIL financial statements
Notes to the THT and TIL financial statements
Notes to the THT and TIL financial statements
30 June 2015
30 June 2015
30 June 2015
30 June 2015
Security holder outcomes
Security holder outcomes
Security holder outcomes
D6 Distributions
D6 Distributions
D6 Distributions
Refer to note B10 of the THL financial statements for the dividends/distributions paid and payable by the Group.
Refer to note B10 of the THL financial statements for the dividends/distributions paid and payable by the Group.
Refer to note B10 of the THL financial statements for the dividends/distributions paid and payable by the Group.
Movements in distribution provision – THT
Movements in distribution provision – THT
Movements in distribution provision – THT
Balance at 1 July 2013
Balance at 1 July 2013
Balance at 1 July 2013
Additional provision recognised
Additional provision recognised
Additional provision recognised
Amounts paid
Amounts paid
Amounts paid
Amounts reinvested
Amounts reinvested
Amounts reinvested
Balance at 30 June 2014
Balance at 30 June 2014
Balance at 30 June 2014
Additional provision recognised
Additional provision recognised
Additional provision recognised
Amounts paid
Amounts paid
Amounts paid
Amounts reinvested
Amounts reinvested
Amounts reinvested
Balance at 30 June 2015
Balance at 30 June 2015
Balance at 30 June 2015
Distribution to
Distribution to
Distribution to
security
security
security
holders
holders
holders
$M
$M
$M
Distributions to
Distributions to
Distributions to
non-controlling
non-controlling
non-controlling
interest
interest
interest
in subsidiaries
in subsidiaries
in subsidiaries
$M
$M
$M
178
178
178
523
523
523
(337)
(337)
(337)
(42)
(42)
(42)
322
322
322
630
630
630
(515)
(515)
(515)
(111)
(111)
(111)
326
326
326
33
33
33
15
15
15
(9)
(9)
(9)
–
–
–
39
39
39
64
64
64
(57)
(57)
(57)
–
–
–
46
46
46
Total
Total
Total
$M
$M
$M
211
211
211
538
538
538
(346)
(346)
(346)
(42)
(42)
(42)
361
361
361
694
694
694
(572)
(572)
(572)
(111)
(111)
(111)
372
372
372
D7 Earnings per stapled security
D7 Earnings per stapled security
D7 Earnings per stapled security
Profit/(loss) attributable to ordinary security holders ($M)
Profit/(loss) attributable to ordinary security holders ($M)
Profit/(loss) attributable to ordinary security holders ($M)
THT
THT
THT
2015
2015
2015
9
9
9
2014
2014
2014
345
345
345
TIL
TIL
TIL
2015
2015
2015
(134)
(134)
(134)
2014
2014
2014
20
20
20
Weighted average number of securities (M)
Weighted average number of securities (M)
Weighted average number of securities (M)
1,908
1,908
1,908
1,539
1,539
1,539
1,908
1,908
1,908
1,539
1,539
1,539
Basic and diluted earnings per security attributable to the
Basic and diluted earnings per security attributable to the
Basic and diluted earnings per security attributable to the
ordinary security holders (Cents)
ordinary security holders (Cents)
ordinary security holders (Cents)
0.5
0.5
0.5
22.4
22.4
22.4
(7.0)
(7.0)
(7.0)
1.3
1.3
1.3
113
113
113
113
2015 Transurban Annual Report Transurban Holding Trust and Transurban International Limited
Transurban Holding Trust and Transurban International Limited
Transurban Holding Trust and Transurban International Limited
Transurban Holding Trust and Transurban International Limited
Notes to the THT and TIL financial statements
Notes to the THT and TIL financial statements
Notes to the THT and TIL financial statements
Notes to the THT and TIL financial statements
30 June 2015
30 June 2015
30 June 2015
30 June 2015
Transurban Holding Trust and Transurban International Limited
Notes to the THT and TIL financial statements
30 June 2015
Capital and borrowings
Capital and borrowings
Capital and borrowings
Capital and borrowings
D8 Reserves
D8 Reserves
D8 Reserves
D8 Reserves
Refer to note B12 for a description of the nature and purpose of each reserve.
Refer to note B12 for a description of the nature and purpose of each reserve.
Refer to note B12 for a description of the nature and purpose of each reserve.
Refer to note B12 for a description of the nature and purpose of each reserve.
THT
THT
THT
THT
Balance 1 July 2013
Balance 1 July 2013
Balance 1 July 2013
Balance 1 July 2013
Revaluation
Revaluation
Revaluation
Revaluation
Transfer to issued units
Transfer to issued units
Transfer to issued units
Transfer to issued units
Balance 30 June 2014
Balance 30 June 2014
Balance 30 June 2014
Balance 30 June 2014
Revaluation
Revaluation
Revaluation
Revaluation
Balance 30 June 2015
Balance 30 June 2015
Balance 30 June 2015
Balance 30 June 2015
TIL
TIL
TIL
TIL
Cash flow
Cash flow
Cash flow
Cash flow
hedges
hedges
hedges
hedges
$M
$M
$M
$M
Balance 1 July 2013
Balance 1 July 2013
Balance 1 July 2013
Balance 1 July 2013
Movement in equity accounted investment's reserve
Movement in equity accounted investment's reserve
Movement in equity accounted investment's reserve
Movement in equity accounted investment's reserve
Employee share options issued
Employee share options issued
Employee share options issued
Employee share options issued
Currency translation differences
Currency translation differences
Currency translation differences
Currency translation differences
Transfers
Transfers
Transfers
Transfers
Balance 30 June 2014
Balance 30 June 2014
Balance 30 June 2014
Balance 30 June 2014
Revaluation, net of tax
Revaluation, net of tax
Revaluation, net of tax
Revaluation, net of tax
Currency translation differences
Currency translation differences
Currency translation differences
Currency translation differences
Transactions with NCI
Transactions with NCI
Transactions with NCI
Transactions with NCI
Balance 30 June 2015
Balance 30 June 2015
Balance 30 June 2015
Balance 30 June 2015
(77)
(77)
(77)
(77)
40
40
40
40
–
–
–
–
–
–
–
–
37
37
37
37
–
–
–
–
4
4
4
4
–
–
–
–
–
–
–
–
4
4
4
4
D9 Net finance income and costs
D9 Net finance income and costs
D9 Net finance income and costs
D9 Net finance income and costs
Finance income
Finance income
Finance income
Finance income
Interest income from related parties
Interest income from related parties
Interest income from related parties
Interest income from related parties
Other interest income
Other interest income
Other interest income
Other interest income
Net foreign exchange gains
Net foreign exchange gains
Net foreign exchange gains
Net foreign exchange gains
Re-measurement of promissory note payable
Re-measurement of promissory note payable
Re-measurement of promissory note payable
Re-measurement of promissory note payable
Re-measurement of concession notes receivable
Re-measurement of concession notes receivable
Re-measurement of concession notes receivable
Re-measurement of concession notes receivable
Total finance income
Total finance income
Total finance income
Total finance income
Finance costs
Interest and finance charges paid/payable
Net foreign exchange losses
Net movement in promissory note payable
Total finance costs
Finance costs
Finance costs
Finance costs
Interest and finance charges paid/payable
Interest and finance charges paid/payable
Interest and finance charges paid/payable
Net foreign exchange losses
Net foreign exchange losses
Net foreign exchange losses
Net movement in promissory note payable
Net movement in promissory note payable
Net movement in promissory note payable
Total finance costs
Total finance costs
Total finance costs
Net finance (costs)/income
Net finance (costs)/income
Net finance (costs)/income
Net finance (costs)/income
Re-measurement of concession notes
Re-measurement of concession notes
Re-measurement of concession notes
Re-measurement of concession notes
Cash flow
Cash flow
Cash flow
Cash flow
hedges
hedges
hedges
hedges
$M
$M
$M
$M
(57)
(57)
(57)
(57)
17
17
17
17
–
–
–
–
(40)
(40)
(40)
(40)
(8)
(8)
(8)
(8)
(48)
(48)
(48)
(48)
Share-based
Share-based
Share-based
Share-based
payments
payments
payments
payments
$M
$M
$M
$M
5
5
5
5
2
2
2
2
(2)
(2)
(2)
(2)
5
5
5
5
–
–
–
–
5
5
5
5
Share-
Share-
Share-
Share-
based
based
based
based
payments
payments
payments
payments
Foreign
Foreign
Foreign
Foreign
currency
currency
currency
currency
translation
translation
translation
translation
Transactions
Transactions
Transactions
Transactions
with non-
with non-
with non-
with non-
controlling
controlling
controlling
controlling
interests
interests
interests
interests
$M
$M
$M
$M
14
14
14
14
–
–
–
–
–
–
–
–
(36)
(36)
(36)
(36)
(22)
(22)
(22)
(22)
(44)
(44)
(44)
(44)
–
–
–
–
(47)
(47)
(47)
(47)
–
–
–
–
(91)
(91)
(91)
(91)
2014
2014
2014
2014
$M
$M
$M
$M
523
523
523
523
1
1
1
1
–
–
–
–
–
–
–
–
49
49
49
49
573
573
573
573
(379)
(379)
(379)
(379)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(381)
(381)
(381)
(381)
$M
$M
$M
$M
1
1
1
1
–
–
–
–
(1)
(1)
(1)
(1)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
THT
THT
THT
THT
2015
2015
2015
2015
$M
$M
$M
$M
371
371
371
371
1
1
1
1
9
9
9
9
6
6
6
6
44
44
44
44
431
431
431
431
(502)
(502)
(502)
(502)
–
–
–
–
–
–
–
–
(502)
(502)
(502)
(502)
(71)
(71)
(71)
(71)
Total
Total
Total
Total
$M
$M
$M
$M
(52)
(52)
(52)
(52)
19
19
19
19
(2)
(2)
(2)
(2)
(35)
(35)
(35)
(35)
(8)
(8)
(8)
(8)
(43)
(43)
(43)
(43)
Total
Total
Total
Total
$M
$M
$M
$M
(71)
(71)
(71)
(71)
40
40
40
40
(1)
(1)
(1)
(1)
(36)
(36)
(36)
(36)
22
22
22
22
(46)
(46)
(46)
(46)
4
4
4
4
(47)
(47)
(47)
(47)
(56)
(56)
(56)
(56)
(145)
(145)
(145)
(145)
$M
$M
$M
$M
(9)
(9)
(9)
(9)
–
–
–
–
–
–
–
–
–
–
–
–
7
7
7
7
(2)
(2)
(2)
(2)
–
–
–
–
–
–
–
–
(56)
(56)
(56)
(56)
(58)
(58)
(58)
(58)
TIL
TIL
TIL
TIL
2015
2015
2015
2015
$M
$M
$M
$M
2014
2014
2014
2014
$M
$M
$M
$M
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1
–
–
1
–
–
–
–
–
–
1
1
1
–
–
–
–
–
–
1
1
1
(154)
(154)
(154)
(154)
(11)
(11)
(11)
(11)
–
–
–
–
(165)
(165)
(165)
(165)
(128)
(128)
(128)
(128)
–
–
–
–
–
–
–
–
(128)
(128)
(128)
(128)
192
192
192
192
(165)
(165)
(165)
(165)
(127)
(127)
(127)
(127)
Re-measurement of concession notes represents the discount unwinding over the passage of time on these notes
and the change in the payment profile of the concession notes.
Re-measurement of concession notes represents the discount unwinding over the passage of time on these notes
Re-measurement of concession notes represents the discount unwinding over the passage of time on these notes
Re-measurement of concession notes represents the discount unwinding over the passage of time on these notes
and the change in the payment profile of the concession notes.
and the change in the payment profile of the concession notes.
and the change in the payment profile of the concession notes.
114
114
114
114
114
2015 Transurban Annual Report Transurban Holding Trust and Transurban International Limited
Transurban Holding Trust and Transurban International Limited
Notes to the THT and TIL financial statements
Notes to the THT and TIL financial statements
30 June 2015
30 June 2015
D10 Borrowings
Refer to note B14 for a description of each facility type.
THT
TIL
Current
Term debt
Non-current
Working capital facilities
Term debt
Capital markets debt
TIFIA
Total borrowings
D11 Derivative and financial risk management
The instruments used by the Group are described in note B15.
2015
$M
2015
$M
–
–
16
3,633
745
–
4,394
4,394
2014
$M
400
400
–
1,096
296
–
1,392
1,792
2014
$M
–
–
–
–
493
678
1,171
1,171
2015
$M
–
–
–
–
608
1,067
1,675
1,675
2014
$M
Current
THT
TIL
Non-current
THT
TIL
Current
THT
TIL
Non-current
THT
TIL
–
2
2
–
–
–
16
76
76
–
54
54
–
4
4
–
–
–
–
–
41
41
41
41
Assets
Interest rate swap contracts –
cash flow hedges
Liabilities
Interest rate swap contracts –
cash flow hedges
Market risk
Foreign exchange risk
Exposure to foreign currency risk at the reporting date, denominated in the currency in which the risk arises, was
as follows:
Receivables
Borrowings
Net exposure
Sensitivity
THT
AUD/USD
+ 10 cents
- 10 cents
THT
TIL
2015
USD
$M
1,110
(1,072)
38
2014
USD
$M
946
(909)
37
2015
AUD
$M
1
(8)
(7)
Movement in
post-tax profit
2015
$M
(6)
7
THT equity is not impacted by movements in foreign exchange.
TIL’s profit and equity are not materially impacted by movements in foreign exchange.
115
2014
AUD
$M
1
(2)
(1)
2014
$M
(4)
5
115
2015 Transurban Annual Report Transurban Holding Trust and Transurban International Limited
Transurban Holding Trust and Transurban International Limited
Notes to the THT and TIL financial statements
Notes to the THT and TIL financial statements
30 June 2015
30 June 2015
D11 Derivative and financial risk management (continued)
Interest rate risk
THT and TIL are not materially impacted by movements in interest rates. As at the reporting date, the Group had
the following variable rate borrowings and interest rate swap contracts outstanding:
2015
$M
THT
156
(3,857)
3,417
(284)
TIL
179
(293)
293
179
2014
$M
THT
75
(1,502)
1,398
(29)
TIL
147
(238)
238
147
Cash and cash equivalents
Floating rate borrowings
Interest rate swaps (notional principal amount)
Net exposure to interest rate risk
Liquidity risk
Contractual maturities of financial liabilities
The amounts disclosed in the table are the contractual undiscounted cash flows of the Group’s financial liabilities.
For interest rate swaps, the cash flows have been estimated using forward interest rates applicable at the end of
the reporting period. For further information refer to note B15.
2015
$M
Trade payables
Borrowings
Related party loans
Interest rate swaps
Concession and
promissory notes
Total
2014
$M
Trade payables
Borrowings
Related party loans
Interest rate swaps
Concession and
promissory notes
Total
1 year
or less
30
137
1,055
44
Over
1 to 2
years
–
1,031
991
31
Over
2 to 3
years
–
1,348
796
13
–
–
–
Over
3 to 4
years
Over
4 to 5
years
Over 5
years
Total
contractual
cash flows
Carrying
amount
–
313
617
3
–
–
1,156
375
(2)
–
–
1,114
3,348
(31)
170
4,601
30
5,099
7,182
58
170
30
4,394
5,573
62
20
12,539
10,079
1,266
2,053
2,157
933
1,529
1 year
or less
Over
1 to 2
years
Over
2 to 3
years
Over
3 to 4
years
Over
4 to 5
years
Over 5
years
Total
contractual
cash flows
Carrying
amount
14
464
737
21
–
–
65
958
16
–
–
923
639
7
–
1,236
1,039
1,569
–
27
711
3
–
741
–
242
512
1
–
755
–
325
1,544
–
148
2,017
14
2,046
5,101
48
148
7,357
14
1,792
4,131
45
24
6,006
116
116
2015 Transurban Annual Report Transurban Holding Trust and Transurban International Limited
Transurban Holding Trust and Transurban International Limited
Notes to the THT and TIL financial statements
Notes to the THT and TIL financial statements
30 June 2015
30 June 2015
D11 Derivative and financial risk management (continued)
TIL
2015
$M
Trade payables
Borrowings
Related party loans
Interest rate swaps
Total
2014
$M
Trade payables
Borrowings
Related party loans
Interest rate swaps
Total
1 year
or less
39
20
1,480
9
1,548
Over
1 to 2
years
Over
2 to 3
years
Over
3 to 4
years
Over
4 to 5
years
–
22
–
8
30
–
22
–
7
29
–
71
–
6
77
–
84
–
5
89
Over 5
years
–
4,579
–
34
4,613
Total
contractual
cash flows
Carrying
amount
39
4,798
1,480
69
6,386
39
1,675
1,398
54
3,166
1 year
or less
Over
1 to 2
years
Over
2 to 3
years
Over
3 to 4
years
Over
4 to 5
years
Over 5
years
Total
contractual
cash flows
Carrying
amount
61
9
938
8
1,016
–
17
–
8
25
–
17
–
6
23
–
17
–
5
22
–
58
–
4
62
–
3,877
–
23
3,900
61
3,995
938
54
5,048
61
1,171
886
41
2,159
117
117
2015 Transurban Annual Report Transurban Holding Trust and Transurban International Limited
Transurban Holding Trust and Transurban International Limited
Notes to the THT and TIL financial statements
Notes to the THT and TIL financial statements
30 June 2015
30 June 2015
Network summary
Refer to the Network summary section of the Group financial statements for the intangible assets, maintenance
provision, goodwill, and concession and promissory note accounting policies.
D12 Intangible assets
2015
$M
Concession assets
Assets under construction
Total
THT
TIL
THT
TIL
THT
Cost
Accumulated amortisation
Net book amount
9,671
(1,340)
8,331
2,593
(31)
2,562
83
–
83
–
–
–
9,754
(1,340)
8,414
2014
$M
Cost
Accumulated amortisation
Net book amount
Concession assets
Assets under construction
Total
THT
TIL
THT
4,650
(1,064)
3,586
1,291
(2)
1,289
55
–
55
TIL
676
–
676
THT
4,705
(1,064)
3,641
Movement in intangible assets
Opening balance 1 July 2013
Additions
Acquisition of subsidiary
Currency and other adjustments
Transfer
Amortisation charge
Net book amount 30 June 2014
Additions
Acquisition of subsidiary
Currency and other adjustments
Transfer
Amortisation charge
Net book amount 30 June 2015
Concession assets
$M
Assets under construction
$M
Total
$M
THT
2,731
382
–
–
596
(123)
3,586
–
5,240
–
(219)
(276)
8,331
TIL
–
–
1,291
–
–
(2)
1,289
–
–
323
979
(29)
2,562
THT
596
55
–
–
(596)
–
55
19
–
–
9
–
83
TIL
–
–
667
9
–
–
676
142
–
161
(979)
–
–
THT
3,327
437
–
–
–
(123)
3,641
19
5,240
–
(210)
(276)
8,414
TIL
2,593
(31)
2,562
TIL
1,967
(2)
1,965
TIL
–
–
1,958
9
–
(2)
1,965
142
–
484
–
(29)
2,562
D13 Other liabilities – concession and promissory notes
M2 Motorway
The face value of promissory notes on issue at 30 June 2015 is $170 million (2014: $159 million). The net present
value at 30 June 2015 of the redemption payments relating to these promissory notes is $20 million (2014: $25
million).
118
118
2015 Transurban Annual Report Transurban Holding Trust and Transurban International Limited
Transurban Holding Trust and Transurban International Limited
Notes to the THT and TIL financial statements
Notes to the THT and TIL financial statements
30 June 2015
30 June 2015
Group structure
D14 Equity accounted investments
Set out below is the summarised financial information for the THT Group’s investments accounted for using the
equity method. The summarised financial information presented below is on a 100 per cent basis. Refer to note
B22 for the details of the North Western Roads Group.
THT
NorthWestern
Roads Group
Summarised balance sheet – 100%
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net assets
Summarised statement of comprehensive income – 100%
Revenue
Depreciation and amortisation
Other expenses
Interest expense
Income tax expense
Loss for the year
Other comprehensive income
Total comprehensive income
2015
$M
35
2,534
(64)
(1,340)
1,165
128
(47)
(5)
(154)
1
(77)
–
(77)
The following table reconciles the above summarised financial information presented on a 100 per cent basis to the
proportional amounts recognised by the Group
Ownership interest
Proportional total comprehensive income
Losses not recognised
Group's share of comprehensive income
50%
(38)
(38)
–
2014
$M
46
2,508
(42)
(3,139)
(627)
125
(54)
–
(159)
–
(88)
10
(78)
50%
(39)
(39)
–
Reconciliation of summarised financial information
Reconciliation of the summarised financial information presented to the carrying amount of the Group’s interest in
associates
THT
Opening carrying value 1 July
Transfer of Westlink M7 term loan note balance into equity accounted investment
Group’s recognised share of total comprehensive income
Distributions received
Closing carrying value
Losses not recognised
119
NorthWestern
Roads Group
50%
2015
$M
–
892
–
(30)
862
352
2014
$M
–
–
–
–
–
314
119
2015 Transurban Annual Report Transurban Holding Trust and Transurban International Limited
Transurban Holding Trust and Transurban International Limited
Notes to the THT and TIL financial statements
Notes to the THT and TIL financial statements
30 June 2015
30 June 2015
D15 Non-controlling interests
Set out below is summarised financial information for each material subsidiary that has non-controlling interests
that are material to THT. The amounts disclosed for each subsidiary are before inter-company eliminations.
THT
Summarised balance sheet
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net assets
Carrying amount of NCI
Summarised statement of comprehensive income
Revenue
Profit for the year
Other comprehensive income
Total comprehensive income
(Profit)/loss allocated to NCI
OCI allocated to NCI
Summarised cash flows
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Net increases in cash and cash equivalents
Transurban
Queensland
37.5%
Airport Motorway
Trust
24.9%
Total
2015
$M
2014
$M
2015
$M
2014
$M
2015
$M
2014
$M
117
5,114
(21)
(2,606)
2,604
976
240
(327)
(24)
(351)
(123)
(9)
(152)
(5,240)
5,417
25
21
–
–
–
21
8
–
(19)
–
(19)
7
–
(20)
40
–
20
21
867
(186)
(539)
163
41
21
837
(158)
(537)
163
41
138
5,981
(207)
(3,145)
2,767
1,017
42
837
(158)
(537)
184
49
103
69
–
69
17
–
41
–
(41)
–
100
58
–
58
(14)
–
343
(258)
(24)
(282)
(106)
(9)
–
–
–
–
(111)
(5,240)
5,376
25
100
39
–
39
(7)
–
(20)
40
–
20
120
120
2015 Transurban Annual Report Transurban Holding Trust and Transurban International Limited
Transurban Holding Trust and Transurban International Limited
Notes to the THT and TIL financial statements
Notes to the THT and TIL financial statements
30 June 2015
30 June 2015
Other
D16 Related party transactions
THT
Transactions with related parties
Rental income
Interest income
Interest expense
Other expenses
Outstanding balances with related parties
Current receivables
M7 Term loan notes
Non-current receivables
Concession notes
Current liabilities
Non-current liabilities
TIL
Transactions with related parties
Revenue from services
Interest expense
Other expenses
Outstanding balances with related parties
Loan to related parties
Loan from related parties
1. Transactions and outstanding balances between THT/TIL and THL.
D17 Parent entity financial information
Summary financial information
THL1
Joint ventures
2015
$’000
545,914
335,706
241,630
4,408
2014
$’000
271,512
418,960
267,000
11,945
2,468,660
–
5,701,214
866,153
628,947
4,943,438
2,532,252
–
6,117,308
794,687
508,256
3,640,847
2015
$’000
–
35,569
–
–
–
–
–
–
–
–
2014
$’000
–
103,437
–
–
–
886,746
–
–
–
–
THL1
2015
$’000
–
75,000
10,374
2014
$’000
37,935
45,141
9,511
17,469
1,398,138
8,415
886,235
The individual financial statements for the parent entities (THT and TIL) show the following aggregate amounts:
Balance sheet
Current assets
Total assets
Current liabilities
Total liabilities
Net assets
Contributed equity
Reserves
Retained earnings
Shareholders’ equity
Profit/(loss) for the year
Exchange differences on translation of US operations,
net of tax
Total comprehensive income/(loss)
THT
2015
$M
2,943
13,943
496
5,361
8,582
9,584
4
(1,006)
8,582
787
–
787
2014
$M
3,442
12,577
473
4,249
8,328
9,472
5
(1,149)
8,328
697
–
697
TIL
2015
$M
338
338
3
3
335
279
58
(2)
335
(3)
58
55
2014
$M
273
273
–
–
273
277
(4)
–
273
–
(4)
(4)
121
121
2015 Transurban Annual Report Transurban Holdings Limited, Transurban Holding Trust and Transurban International Limited
Transurban Holdings Limited, Transurban Holding Trust and Transurban International Limited
Directors’ declaration
Directors’ declaration
30 June 2015
30 June 2015
Section E: Signed reports
In the opinion of the Directors of Transurban Holdings Limited, Transurban Infrastructure Management Limited (as
the responsible entity of Transurban Holding Trust) and Transurban International Limited (collectively referred to
as ‘the Directors’):
(a)
the financial statements and notes of Transurban Holdings Limited and its controlled entities, including
Transurban Holding Trust and its controlled entities and Transurban International Limited and its controlled
entities set out on pages 51 to 121 are in accordance with the Corporations Act 2001, including:
(i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory
professional reporting requirements, and
(ii) giving a true and fair view of the Transurban Holdings Limited Group's, Transurban Holding Trust
Group’s and Transurban International Group’s financial position as at 30 June 2015 and of its
performance for the year ended on that date, and
(b)
there are reasonable grounds to believe that the Transurban Holdings Group, Transurban Holding Trust
Group and Transurban International Group will be able to pay their debts as and when they become due and
payable, and
(c) at the date of this declaration, there are reasonable grounds to believe that the members of the Extended
Closed Group identified in note B24 will be able to meet any obligations or liabilities to which they are, or
may become, subject by virtue of the deed of cross guarantee described in note B24.
Note B3 confirms that the financial statements also comply with International financial reporting standards as
issued by the International Accounting Standards Board.
The Directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer
required by section 295A of the Corporations Act 2001.
Lindsay Maxsted
Director
Scott Charlton
Director
Melbourne
11 August 2015
122
122
2015 Transurban Annual Report
Independent auditor’s report to the stapled security holders of
the Transurban Group
Report on the financial report
We have audited the accompanying financial report which comprises;
•
•
•
Transurban Holdings Limited (the company), which comprises the consolidated balance sheet
as at 30 June 2015, the consolidated statement of comprehensive income, consolidated
statement of changes in equity and consolidated statement of cash flows for the year ended on
that date, a summary of significant accounting policies, other explanatory notes and the
directors’ declaration for Transurban Holdings Limited (the Transurban Group). The
Transurban Group comprises the company and the entities it controlled at year’s end or from
time to time during the financial year including the other members of the stapled group being
Transurban International Limited and Transurban Holdings Trust and their controlled
entities.
Transurban Holding Trust (the Trust), which comprises the consolidated balance sheet as at
30 June 2015, the consolidated statement of comprehensive income, consolidated statement
of changes in equity and consolidated statement of cash flows for the year ended on that date,
a summary of significant accounting policies, other explanatory notes and the directors’
declaration for Transurban Holding Trust (THT). THT comprises the Trust and the entities it
controlled at year’s end or from time to time during the financial year.
Transurban International Limited (the international company), which comprises the
consolidated balance sheet as at 30 June 2015, the consolidated statement of comprehensive
income, consolidated statement of changes in equity and consolidated statement of cash flows
for the year ended on that date, a summary of significant accounting policies, other
explanatory notes and the directors’ declaration for Transurban International Limited (TIL).
TIL comprises the international company and the entities it controlled at year’s end or from
time to time during the financial year.
Directors’ responsibility for the financial report
The directors of the Transurban Holdings Limited, Transurban International Limited and Transurban
Infrastructure Management the responsible entity of Transurban Holding Trust (collectively referred
to as “the directors”) are responsible for the preparation of the financial report that gives a true and
fair view in accordance with Australian Accounting Standards, the Corporations Act 2001 and for such
internal control as the directors determine is necessary to enable the preparation of the financial
report that is free from material misstatement, whether due to fraud or error. In Note B3, the directors
also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements,
that the financial statements comply with International Financial Reporting Standards.
Auditor’s responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted
our audit in accordance with Australian Auditing Standards. Those standards require that we comply
with relevant ethical requirements relating to audit engagements and plan and perform the audit to
obtain reasonable assurance whether the financial report is free from material misstatement.
PricewaterhouseCoopers, ABN 52 780 433 757
Freshwater Place, 2 Southbank Boulevard, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001
T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
123
123
2015 Transurban Annual Report An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial report. The procedures selected depend on the auditor’s judgement, including the
assessment of the risks of material misstatement of the financial report, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the Transurban
Group’s preparation and fair presentation of the financial report in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of accounting estimates made by the directors, as well
as evaluating the overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations
Act 2001.
Auditor’s opinion
In our opinion:
(a)
the financial reports of the Transurban Group, THT and TIL are in accordance with the
Corporations Act 2001, including:
(i)
(ii)
giving a true and fair view of the Transurban Group, THT and TIL financial position as at
30 June 2015 and of their performance for the year ended on that date; and
complying with Australian Accounting Standards (including the Australian Accounting
Interpretations), the Corporations Regulations 2001 and
(b)
the financial report and notes also comply with International Financial Reporting Standards as
disclosed in Note B3.
Report on the Remuneration Report
We have audited the remuneration report included in pages 21 to 47 of the directors’ report for the
year ended 30 June 2015. The directors of the company 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.
Auditor’s opinion
In our opinion, the remuneration report of the Transurban Group for the year ended 30 June 2015
complies with section 300A of the Corporations Act 2001.
PricewaterhouseCoopers
Chris Dodd
Partner
124
Melbourne
11 August 2015
124
2015 Transurban Annual Report Security holder information
The security holder information set out below was applicable as at 12 August 2015.
Distribution of stapled securities
The number of holders of stapled securities, which comprise one share in Transurban Holdings Limited, one
share in Transurban International Limited and one unit in Transurban Holding Trust, was 78,091.
The voting rights are one vote per stapled security.
The percentage of total holdings held by or on behalf of the 20 largest holders of these securities was
79.57 per cent.
The distribution of holders was as follows:
Security grouping
Total holders
Stapled securities
% of issued stapled
ssecurities
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - 999,999,999
Total
25,561
36,845
9,426
5,984
275
78,091
10,987,006
92,572,644
66,677,701
127,831,422
1,616,393,143
1,914,461,916
0.57
4.84
3.48
6.68
84.43
100.00
There were 3,040 holders of less than a marketable parcel of stapled securities.
There were 1,914,461,916 stapled securities on issue.
20 largest holders of stapled securities
Name
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
NATIONAL NOMINEES LIMITED
J P MORGAN NOMINEES AUSTRALIA LIMITED
CITICORP NOMINEES PTY LIMITED
BNP PARIBAS NOMS PTY LTD
CITICORP NOMINEES PTY LIMITED
AUSTRALIAN FOUNDATION INVESTMENT COMPANY LIMITED
UBS WEALTH MANAGEMENT AUSTRALIA NOMINEES PTY LTD
AMP LIFE LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
BNP PARIBAS NOMINEES PTY LTD
UBS NOMINEES PTY LTD
ARGO INVESTMENTS LIMITED
RBC INVESTOR SERVICES AUSTRALIA NOMINEES PTY LIMITED
AUSTRALIAN UNITED INVESTMENT COMPANY LIMITED
DIVERSIFIED UNITED INVESTMENT LIMITED
BOND STREET CUSTODIANS LIMITED
MILTON CORPORATION LIMITED
NAVIGATOR AUSTRALIA LTD
BOND STREET CUSTODIANS LIMITED
Total
Substantial holders
Substantial security holders as at 12 August 2015 were as follows:
Name
UNISUPER
COMMONWEALTH BANK OF AUSTRALIA
Number of stapled
securities held
% of issued stapled
securities
521,911,659
440,885,748
264,837,393
118,362,749
47,593,780
36,854,604
18,335,264
13,458,754
13,161,624
7,012,468
5,836,330
5,517,440
5,481,463
5,022,427
4,000,000
3,700,000
3,328,881
3,328,081
2,343,238
2,304,368
1,523,276,271
27.26
23.03
13.83
6.18
2.49
1.93
0.96
0.70
0.69
0.37
0.30
0.29
0.29
0.26
0.21
0.19
0.17
0.17
0.12
0.12
79.57
Number of stapled
securities held
% of issued
stapled securities
210,913,229
121,869,397
11.06
6.42
125
2015 Transurban Annual Report
This page has been left blank intentionally
126
2015 Transurban Annual Report This page has been left blank intentionally
127
2015 Transurban Annual Report This page has been left blank intentionally
128
2015 Transurban Annual Report Enquiries
Enquiries about your Transurban stapled securities
The stapled securities register is maintained by Computershare
Investor Services Pty Ltd.
If you have a question about your Transurban securities
or distributions please contact:
Computershare
Yarra Falls
452 Johnston Street
Abbotsford, Victoria 3067
Australia
Mail
The Registrar
Computershare Investor Services Pty Ltd
GPO Box 2975
Melbourne, Victoria 3001
Australia
Phone
(Australia ) 1300 555 159
(Overseas) +61 3 9415 4062
AUSTRALIA
MELBOURNE (HEAD OFFICE)
Level 23
Tower One, Collins Square
727 Collins Street
Docklands
Victoria 3008
SYDNEY
Level 9
1 Chifley Square
Sydney
New South Wales 2000
BRISBANE
7 Brandl Street
Eight Mile Plains
Queensland 4113
MAILING ADDRESS
Locked Bag 28
South Melbourne
Victoria 3205
Phone +61 3 8656 8900
Fax +61 3 8656 8585
UNITED STATES
WASHINGTON DC AREA
6440 General Green Way
Alexandria VA 22312
USA
Phone +1 (571) 419 6100
Email corporate@transurban.com
transurban.com