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

Section B: Notes to the Group financial statements for the year ended 30 June 2022

Pages 25 & 53 reference destination: See Financial Statements B2

Section B: Notes to the Group financial statements for the year ended 30 June 2022

Section B: Notes to the Group financial statements

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 THL and its controlled entities (Transurban, Transurban Holdings Limited Group, Transurban Group or the Group). The controlled entities of THL include the other members of the stapled group being Transurban Infrastructure Management Limited (TIML) as the responsible entity of Transurban Holding Trust and its controlled entities (THT) and Transurban International Limited and its controlled entities (TIL). The equity securities of THL, TIL and THT are stapled and cannot be traded separately. The Group is a for-profit entity. Entities within the Group are domiciled and incorporated in Australia, the United States of America and Canada. The consolidated financial statements of the Transurban Group for the year ended 30 June 2022 were authorised for issue in accordance with a resolution of the Directors on 18 August 2022. Directors have the power to amend and reissue the financial statements. B2 Summary of significant changes in the current reporting period The financial position and performance of the Group was particularly affected by the following transactions and events during the reporting period: Coronavirus global pandemic (COVID-19) COVID-19 has continued to impact the Group’s operating performance, particularly traffic volumes and consequently toll revenue. In Sydney, impacts were as a result of comparatively more severe government mandated restrictions on movement in the first half of the reporting period compared to the prior period. In Melbourne, government mandated restrictions applied for part of the reporting period, however, the restrictions were less severe compared to the prior period. Traffic improved in the second half of the financial year. In the last quarter of FY22, traffic exceeded pre-pandemic levels. Traffic in each of Transurban’s markets continues to be sensitive to government responses to COVID-19, to behavioural aspects related to COVID-19 and to economic conditions. Despite the impact on traffic volumes and toll revenue, the Group's operations, liquidity and financial position have not been significantly impacted by COVID-19 in the current reporting period. The Group's concession assets have remained fully operational and investment into networks and major development projects has continued. The Group also successfully raised $1,789 million of debt inclusive of new facilities across bank and debt capital markets during the year ended 30 June 2022 to fund future capital requirements, refinance existing debt and for general corporate purposes. Group equity issuance and equity injection to Sydney Transport Partners Joint Venture (STP JV) On 13 October 2021, the Group successfully completed the fully underwritten institutional and retail components of its pro-rata accelerated renounceable 1 for 9 entitlement offer. The institutional component raised gross proceeds of $2,898 million at an issue price of $13.00 per security. The retail component raised gross proceeds of $1,068 million at an issue price of $13.00 per security. A further $250 million was raised through a placement to AustralianSuper at an issue price of $13.07 per security. The total gross proceeds of $4,216 million ($4,150 million net of costs and tax) were used to fund the Group’s contribution to the acquisition of the remaining 49% equity stake in WestConnex by the STP JV, which was completed on 29 October 2021. To fund the acquisition, the Group contributed $4,856 million of equity to the STP JV and also issued shareholder loan notes with a face value of $699 million. The Group’s equity interest in STP JV remains at 50%. The Group’s proportional equity interest in WestConnex through its equity investment in STP JV increased from 25.5% to 50% on 29 October 2021. Refer to Note B25 for further information. Final agreement reached on revised terms for the delivery of the West Gate Tunnel Project On 16 December 2021, the Group reached agreement with the State of Victoria (the State) and the D&C Subcontractor on revised terms for the delivery of the West Gate Tunnel Project, including a new expected completion date of late 2025. The parties finalised binding detailed documentation for the settlement on 23 March 2022. The total cost of the D&C Subcontract has been increased by $3,440 million (Contract Sum Adjustment), with Transurban and the State each contributing $1,720 million. Transurban is expected to incur additional net project related costs of approximately $300 million including the Group's share of site activation and insurance costs as well as Transurban's direct project management costs. Transurban's future revenues will be impacted due to the later completion date in late 2025. There have been no changes to concession rights or tolling arrangements as a result of the settlement. The D&C Subcontractor has provided releases of historic claims that would have otherwise impacted construction costs and time. Transurban has also provided equivalent releases to the State. Transurban's share of the Contract Sum Adjustment is being accounted for as capital expenditure (increasing the concession intangible asset as the expenditure is incurred) and does not impact Free Cash. Refer to Note B29.

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