2022 Corporate Report

Corporate Report for the year ended 30 June 2022

Introduction and overview

Business performance

Governance and risk

Directors’ report

Remuneration report

Financial statements

Sustainability supplement

Security holder information

Long Term Incentive (LTI)—how does it work? (continued)

Targets

Relative TSR is measured against a bespoke comparator group comprising companies in the transport, utilities, real estate, construction and infrastructure Global Industry Classification standards sectors of the ASX150. The companies in this group for grants made during FY22 were: Abacus Property Group, AGL Energy Limited, Auckland International Airport Limited, APA Group, Atlas Arteria, Aurizon Holdings Limited, AusNet Services Limited, BWP Trust, Charter Hall Group, Charter Hall Long, Chorus Limited, Cromwell Property Group, Dexus, Goodman Group, GPT Group, Growthpoint Properties Australia, Lendlease Group, Mirvac Group, National Storage REIT, Origin Energy Limited, Qantas Airways Limited, Qube Holdings Limited, Scentre Group, Shopping Centres Australasia Property Group, Spark Infrastructure Group, Spark New Zealand Limited, Stockland, Sydney Airport, Telstra Corporation Limited, TPG Telecom Limited, Transurban Group, Vicinity Centres. Changes to the comparator group in FY22 are as follows: • Excluded (moved out of ASX150): Charter Hall Retail and Waypoint • Excluded (delisted): Vocus Group Limited (on 23 July 2021); AusNet Services Limited (on 16 February 2022); Spark Infrastructure FCF 1 per security targets are set by the Board utilising the annual budget and forecasts as the primary inputs (consistent with the approach taken for STI measures of Proportional EBITDA and Proportional Net Costs). Once the budget and forecast has been finalised, the Board determines the FCF targets by analysing the cash flow outcomes, ensuring sufficient stretch is incorporated. The actual FCF outcomes are reviewed in detail against targets to consider key reasons for variance and assess whether any adjustments should be made in determining management’s performance. The Board may adjust where a decision has been made, in the interests of the Transurban Group and its security holders that differs from the original budgeted assumptions. This may include factors such as significant equity raisings to fund growth opportunities or changes to the timing or quantum of anticipated capital releases. Factors that may cause FCF growth to fluctuate from year to year include activities that are intended to generate long-term value for the business but may negatively impact FCF growth in the near term. The Group is currently in a significant development phase with seven major projects to be delivered in Australia and North America (see page 15 for the project pipeline). The FCF calculation is included in note B10 of the audited financial statements. Group (on 23 December 2021); Sydney Airport (on 10 March 2022) • Included (moved into ASX150): Auckland International Airport Limited • Included (change in GICS Industry Classification): Origin Energy Limited TSR 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. TSR measures total return on investment of a security, taking into account both capital appreciation and distributed and/or dividend income that was reinvested on a pre-tax basis. Growth in FCF per security reflects the Group’s continued focus on maximising available free cash. The Group seeks to consistently grow its distributions year on year and to align security holder distributions with FCF per security. Face value allocation methodology (discounted for distributions and/or dividends foregone throughout the performance period). For each grant cycle, the allocation calculations are performed on 1 July of the first performance year using a valuation determined by an independent third party. This methodology is an alternative to paying dividend equivalent payments on LTI plans. The performance awards are subject to performance hurdles and are forfeited and lapse if performance hurdles are not achieved. Participants only receive performance awards which vest at the end of the performance period. Transurban will adopt a full-face value allocation methodology for the FY24 LTI grants.

Why are these per-formance measures used?

Allocation

Vesting

Following the end of the performance period, the performance measures are tested, and the Board assesses the LTI outcome.

TSR component The Group uses an independent report that sets out the Group’s TSR growth and that of each company in the bespoke comparator group. A VWAP of securities for the 20 trading days up to and including the testing date is used to calculate TSR. The level of TSR growth achieved by the Group is given a percentile ranking in relation to the Group’s performance compared to the performance of other companies in the comparator group (the highest-ranking company is ranked at the 100th percentile). The TSR performance is tested at the end of the performance period, and this ranking determines the extent to which performance awards subject to this component vest. Following testing, any awards that do not vest lapse, and any awards that vest are automatically exercised into Transurban stapled securities or settled in cash at the discretion of the Board. No price is payable on exercise. TSR vesting schedule The TSR component of performance awards vest on a straight-line basis in accordance with the following table: The Group’s relative TSR ranking in the comparator group % of performance awards that vest At or below the 50th 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

1 References to FCF in relation to FY23 LTI Plan exclude Capital Releases

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