Half Yearly Report and Accounts

Page 1 of 1

21 February 2018


Company Announcements Office
ASX Limited
Exchange Centre
Level 4, 20 Bridge Street
SYDNEY NSW 2000



Dear Sir/Madam

Please find attached the following documents:
1. Appendix 4D – results for announcement to the market for the half-year ended
31 December 2017;
2. Condensed Consolidated Half-year Financial Report dated 31 December 2017;
3. Market release dated 21 February 2018; and
4. Investor Presentation.

Yours sincerely,
Downer EDI Limited

Peter Tompkins
Company Secretary

Downer EDI Limited
ABN 97 003 872 848
Triniti Business Campus
39 Delhi Road
North Ryde NSW 2113
1800 DOWNER
www.downergroup.com

Results for announcement to the market
for the half-year ended 31 December 2017
Appendix 4D
31 Dec 2017
31 Dec 2016
change
$'m
$'m
%
Revenue from ordinary activities5,798.5 3,333.6
Other income4.6 1.0
Total revenue and other income from ordinary activities5,803.1 3,334.6 74.0%
Total revenue including joint ventures and other income 6,100.5 3,603.0 69.3%
Earnings before interest and tax 52.3 120.8 (56.7%)
83.0 124.2 (33.2%)
(11.1)78.2 (114.2%)
5.7 80.6 (92.9%)
31 Dec 2017
31 Dec 2016
change
cents
cents
%
Basic (loss) / earnings per share
(i)
(2.6)16.6 (115.7%)
Diluted (loss) / earnings per share
(i) (ii)
(2.6)16.2 (116.0%)
Net tangible asset backing per ordinary share 36.1 255.6 (85.9%)
Dividend31 Dec 201731 Dec 2016
InterimInterim
Dividend per share (cents)13.012.0
Franked amount per share (cents)6.512.0
Conduit foreign income (CFI)50%-
Dividend record date07/03/201816/02/2017
Dividend payable date04/04/201816/03/2017
Redeemable Optionally Adjustable Distributing Securities (ROADS)
Dividend per ROADS (in Australian cents)1.99 2.17
New Zealand imputation credit percentage per ROADS 100%100%
ROADS payment dateQuarter 1Quarter 2
Instalment date FY201815/09/201715/12/2017
Instalment date FY201715/09/201615/12/2016
Earnings before interest and tax and amortisation of acquired
intangible assets (EBITA)
Profit from ordinary activities after tax before amortisation of
acquired intangible assets (NPATA)
Forcommentaryontheresultsfortheperiodandreviewofoperations,pleaserefertotheDirectors'Reportand
separate media release attached.
(Loss) / Profit from ordinary activities after tax attributable to
members of the parent entity
Downer EDI's Dividend Reinvestment Plan (DRP) has been suspended.
(i)
Basic and diluted EPS calculation for December 2016 were restated to exclude the bonus element of the 169.9 million shares issued from
the capital raising made as part of the Spotless takeover offer announced on 21 March 2017.
(ii)
At 31 December 2017, the ROADS are deemed anti-dilutive and consequently, diluted EPS remained at (2.6) cents per share.

Condensed Consolidated
Half-year Financial Report
31 December 2017

Condensed Consolidated Financial Report
for the half-year ended 31 December 2017
Contents
Directors' Report
Page 2
Auditor's signed report
Page 20Auditor's Independence Declaration
Page 21Independent Auditor's Review Report
Financial Statements
Page 23Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income
Page 24Condensed Consolidated Statement of Financial Position
Page 25Condensed Consolidated Statement of Changes in Equity
Page 26Condensed Consolidated Statement of Cash Flows
ABCDE
B1C1D1E1
B2C2D2
B3C3D3
B4C4D4
C5D5
D6
Directors' Declaration
Page 54
Notes to the condensed consolidated financial report
Page 27Page 28-32Page 39-50Page 33-38
About this reportBusiness
performance
Contingent liabilities
Acquisition and
disposal of
businesses
Other disclosuresCapital structure and
financing
Profit from ordinary
activities
Financing facilitiesIntangible assets
Joint arrangements
and associate
entities
Segment informationBorrowings Property, plant and
equipment
ReservesSubsequent events
Earnings per share Issued capitalDisposal group held
for sale
Other
Page 51-53
New accounting
standards
Dividends
Page 1 of 54

DIRECTORS’ REPORT
For the half-year ended 31 December 2017

The Directors of Downer EDI Limited (Downer) submit the condensed consolidated financial report of the
Company for the half-year ended 31 December 2017. In accordance with the provisions of the Corporations
Act 2001 (Cth), the Directors' Report is set out below:

Directors

The names of the Directors of the Company during, or since the end of, the half-year are:

R M Harding (Chairman, Independent Non-executive Director)
G A Fenn (Managing Director and Chief Executive Officer)
S A Chaplain (Independent Non-executive Director)
P S Garling (Independent Non-executive Director)
T G Handicott
(Independent Non-executive Director)
E A Howell (Independent Non-executive Director) – retired on 2 November 2017
C G Thorne (Independent Non-executive Director)

REVIEW OF OPERATIONS

PRINCIPAL ACTIVITIES

Downer EDI Limited (Downer) is a leading provider of integrated services in Australia and New Zealand.
Downer exists to create and sustain the modern environment and its promise is to work closely with its
customers to help them succeed, using world leading insights and solutions to design, build and sustain
assets, infrastructure and facilities. Downer employs about 56,000 people, mostly in Australia and New
Zealand but also in the Asia-Pacific region, South America and Southern Africa. Downer reports its results
under six service lines and an outline of each service line is s et out below.

TRANSPORT

Transport comprises Downer’s road, transport infrastructure, bridge, airport and port businesses. It features
a broad range of transport infrastructure services including earthworks, civil construction, asset
management, maintenance, surfacing and stabilisation, supply of bituminous products and logistics, open
space and facilities management a nd rail track signalling and electrification works.


Transport

1 Total revenue is a non-statutory disclosure and includes revenue, other income and notional revenue from joint ventures and other
alliances not proportionately consolidated. Due to rounding, divisional percentages do not add up precisely to 100%.
2 Downer calculates EBITA by adjusting EBIT to add back acquired intangibles amortisation expense.






21.8%
EBITA
2
(HY18)
Page 2 of 54

Road Services

Downer offers one of the largest non-government owned road infrastructure services businesses in Australia
and New Zealand, maintaining more than 33,000 kilometres of road in Australia and more than 25,000
kilometres in New Zealand.

Downer delivers a wide range of tailored pavement treatments and traffic control services and also provides
high-level capabilities in strategic and tactical asset management, network planning and intelligent transport
systems. The Company continues to invest in state-of-the-art technology to drive innovation and
performance, including asphalt plants that use more recycled products and substantially less energy.

Downer is also a leading manufacturer and supplier of bitumen based products and a provider of soil and
pavement stabilisation, pressure injection stabilisation, pavement recycling, pavement profiling, spray sealing
and asset management.

Downer’s Road Services customers include all of Australia’s State Road Authorities, the New Zealand
Transport Agency and the majority of local government councils and authorities in both countries.

Other transport infrastructure

Downer provides a range of transport infrastructure services to its customers including earthworks, civil and
rail track construction, design, construction and commissioning of facilities and signalling and electrification
works.

Downer also provides integrated services to its airport and port customers including pavement construction,
facilities maintenance, communications technologies, open space and asset management and turnkey
electrical and communication systems. It also provides whole-of-life asset solutions for associated
infrastructure such as roads, rail lines and car parks.

UTILITIES

The Utilities division provides complete lifecycle solutions to customers in the power, gas, water, renewable
energy and communications sectors.



Utilities

1 Total revenue is a non-statutory disclosure and includes revenue, other income and notional revenue from joint ventures and other
alliances not proportionately consolidated. Due to rounding, divisional percentages do not add up precisely to 100%.
2 Downer calculates EBITA by adjusting EBIT to add back acquired intangibles amortisation expense.

Power and Gas

Downer offers customers a wide range of services including planning, designing, constructing, operating,
maintaining, managing and decommissioning power and gas network assets.

Downer maintains over 110,000 kilometres of electricity and gas networks across more than 185,000 square
kilometres; connects tens of thousands of new power and gas customers each year; designs and constructs
steel lattice transmission towers and designs and builds substations.

Customers include Ausgrid, Ergon Energy, Transgrid, Powerco, Wellington Electricity and Powerlink.
17.9%
EBITA
2
(HY18)
Page 3 of 54

Water

Downer provides complete water lifecycle solutions for municipal and industrial water users, with expertise
including waste and waste water treatment, pumping and water transfer, desalination and water re-use, and
abstraction and dewatering.

Downer supports its customers across the full asset lifecycle from the conceptual development of a project
through design, construction, commissioning and optimisation, providing complete water lifecycle solutions
for municipal and industrial water users including pipe bursting and civil maintenance. Downer also operates
and maintains treatment, storage, pump stations and network assets.

Customers include Auckland Council, Invercargill City Council, Logan City Council, Mackay Regional
Council, Melbourne Water, Queensland Urban Utilities, Tauranga City Council, Yarra Valley Water, Wagga
Wagga City Council, Watercare and Whangarei City Council.

Renewable energy

Downer is one of Australia’s largest and most experienced providers in the renewable energy market,
offering design, build and maintenance services for wind farms, wind turbine sites and solar farms.

Downer offers the services required for the entire asset life-cycle including procurement, assembly,
construction, commissioning and maintenance.

Communications


Downer provides an end-to-end infrastructure service offering comprising feasibility, design, civil
construction, network construction, commissioning, testing, operations and maintenance across fibre, copper
and radio networks in Australia and New Zealand.

Customers include nbn™, Telstra, Chorus, Spark and Vodafone.


SPOTLESS
Spotless operates in Australia and New Zealand and provides outsourced facility services, catering and
laundry services, technical and engineering services, maintenance and asset management services and
refrigeration solutions to various industries. Its customers include corporations and government departments,
agencies and authorities at the Federal, State and Municipal level.




Spotless

1 Total revenue is a non-statutory disclosure and includes revenue, other income and notional revenue from joint ventures and other
alliances not proportionately consolidated. Due to rounding, divisional percentages do not add up precisely to 100%.
2 Downer calculates EBITA by adjusting EBIT to add back acquired intangibles amortisation expense.


30.8%
EBITA
2
(HY18)
Page 4 of 54

Spotless employs about 36,000 people who deliver services to customers in a diverse range of industry
sectors including: defence; education; government; healthcare; senior living; sports and venues; resources;
leisure and hospitality; airports; industrial; commercial; property; utilities and public private partnerships.

Spotless owns a number of businesses including AE Smith, Alliance, Asset Services, Ensign, EPICURE,
Clean Event, Clean Domain, Mustard, Nuvo, Skilltech, Taylors, TGS, UAM and UASG.


RAIL

Downer is Australia's leading provider of passenger rolling stock asset management services, delivering
reliable and safe services to the fast-growing and dynamic public transport sector. Downer partners with its
customers to deliver solutions across all transport domains including heavy rail, electric and diesel trains,
light rail, bus and multi-modal transport solutions.




Rail

1 Total revenue is a non-statutory disclosure and includes revenue, other income and notional revenue from joint ventures and other
alliances not proportionately consolidated. Due to rounding, divisional percentages do not add up precisely to 100%.
2 Downer calculates EBITA by adjusting EBIT to add back acquired intangibles amortisation expense.

Downer’s track record spans across project management services, engineering design, systems
engineering, supply chain engagement, systems integration, manufacturing, logistics, testing,
commissioning, asset management, fleet maintenance, rail infrastructure design and construction, and
through-life-support and operations.

In November 2017, Downer entered an agreement to sell its Freight Rail business to Progress Rail. The sale
was completed on 2 January 2018.

The Keolis Downer joint venture is Australia’s largest private provider of multi-modal public transport
solutions, with contracts to operate and maintain Yarra Trams in Melbourne, the Gold Coast light rail system
in Queensland, and a new integrated public transport system for the city of Newcastle in NSW. Keolis
Downer is also one of Australia’s most significant bus operators with operations in South Australia, Western
Australia and Queensland. Keolis Downer provides more than 210 million passenger trips each year.

Downer’s Rail customers include Sydney Trains, Transport for NSW, Public Transport Authority (WA), Metro
Trains Melbourne, Public Transport Victoria, and Queensland Rail.

Downer is currently working on the Sydney Growth Trains (SGT) project in New South Wales and the High
Capacity Metro Trains (HCMT) project in Victoria.


7.0%
EBITA
2
(HY18)
Page 5 of 54

ENGINEERING, CONSTRUCTION AND MAINTENANCE (EC&M)

Downer works with customers in the public and private sectors delivering services including design,
engineering, construction, maintenance and ongoing management of critical assets.

The EC&M service line includes Hawkins, which Downer acquired in March 2017. The principal activities of
Hawkins include construction, infrastructure development and project management throughout New Zealand.




EC&M

1 Total revenue is a non-statutory disclosure and includes revenue, other income and notional revenue from joint ventures and other
alliances not proportionately consolidated. Due to rounding, divisional percentages do not add up precisely to 100%.
2 Downer calculates EBITA by adjusting EBIT to add back acquired intangibles amortisation expense.

Multi-disciplined teams project manage and self-execute a wide range of services for greenfield and
brownfield projects across a range of industry sectors including: oil and gas; power generation; commercial /
non-residential; iron ore; coal; and industrial materials. T hese services are delivered on complex resources
and industrial sites as well as commercial operations with critical infrastructure requirements such as data
centres, airport facilities and hospitals.

Downer supports customers across all stages of the project lifecycle with services including:
 feasibility studies;
 engineering design;
 civil works;
 structural, mechanical and piping;
 electrical and instrumentation;
 mineral process equipment design and manufacture;
 commissioning;
 maintenance;
 shutdowns, turnarounds and outages;
 strategic asset management; and
 decommissioning.

Customers include Alcoa, Bechtel, BHP Billiton, Chevron, Newcrest, Orica, Origin Energy, POSCO,
Powerlink Queensland, Rio Tinto, Santos, Wesfarmers, Woodside Energy, Christchurch and Auckland City
Councils, Auckland University, Auckland and Wellington Airports and the Ministry of Education in New
Z
ealand.



14.4%
EBITA
2
(HY18)
Page 6 of 54

MINING

Downer is one of Australia’s leading diversified mining contractors serving its customers across more than 50
sites in Australia, Papua New Guinea, South America and Southern Africa.



Mining

1 Total revenue is a non-statutory disclosure and includes revenue, other income and notional revenue from joint ventures and other
alliances not proportionately consolidated. Due to rounding, divisional percentages do not add up precisely to 100%.
2 Downer calculates EBITA by adjusting EBIT to add back acquired intangibles amortisation expense.

Downer’s Mining division generates its revenues primarily from open cut mining and blasting services, with
contributions also from tyre management and underground mining. Downer supports its customers at all
stages of the mining lifecycle including:

 asset management;
 blasting services, explosives manufacture and supply;
 civil projects (mine site infrastructure);
 crushing;
 exploration drilling;
 mine closure and mine site rehabilitation;
 mobile plant maintenance;
 open cut mining;
 training and development for ATSI employees;
 tyre management (through the subsidiary Otraco International); and
 underground mining.

Customers include BHP Mitsubishi Alliance, Roy Hill Iron Ore, Glencore, Karara Mining, Millmerran Power
Partners, Newmarket Gold, Newmont, Rio Tinto, Stanwell Corporation and Yancoal Australia.

GROUP FINANCIAL PERFORMANCE

On 27 June 2017, the Group’s ownership interest in Spotless Group Holdings Limited (Spotless) exceeded
50%, requiring the consolidation of Spotless’s financial statements from that time. The Group’s offer for the
remaining shares of Spotless closed on 28 August 2017. As a result of the acquisition, Downer owns 87.8%
of Spotless.

The financial performance and cash flow of Spotless are included in the Group’s results for the six month
period from 1 July 2017 to 31 December 2017.

The main features of the result for the six months to 31 December 2017 were:
• Total revenue of $6.1 billion, up 69.3%;
• Statutory earnings before interest and tax (EBIT) of $52.3 million, down from $120.8 million;
• Statutory earnings before interest, tax and amortisation of acquired intangible assets (EBITA) of
$83.0 million, down from $124.2 million;
• Individually Significant Items (pre-tax) recognised in the period of $139.3 million;
• Statutory net loss after tax of $15.9 million;
8.2%
EBITA
2
(HY18)
Page 7 of 54

• Statutory net profit after tax and before amortisation of acquired intangible assets (NPATA) of $5.7
million, down from $80.6 million;
• Underlying EBITA of $222.3 million, up 79.0%; and
• Underlying NPATA of $132.0 million, up 63.8%.


During the period, the Group identified Individually Significant Items (ISI) totalling $126.3 million after tax
including:
• Mining goodwill impairment of $76.4 million;
• $40.0 million write-downs from the freight rail divestment; and
• Spotless related management redundancies, transaction costs, and residual Strategy Reset costs of
$9.9 million.

Details of the ISI are disclosed in Note B2(c) of the Financial Report.


REVENUE

Total revenue for the Group increased by $2.5 b illion, or 69.3%, to $6.1 billion.

Transport revenue increased by 35.9% to $1.2 billion due to continuing strong performance by the Roads
business in Australia and New Zealand, and ongoing investment in transport projects in Australia.

Utilities revenue increased by 23.8% to $851.9 million, due to continuing strong contributions from
nbn
TM
contracts in Australia as well as new Renewable projects.

Spotless revenue for the six months was $1.5 billion. The major contributors to this result were Government-
related contracts in the defence, health and education sectors, Public Private Partnerships (PPPs),
construction projects and lifecycle maintenance contracts.

Rail revenue increased by 36.1% to $543.9 million driven by the Sydney Growth Trains and High Capacity
Metro Trains projects as well as continued strong performance on the Waratah and Millennium maintenance
contracts. A significant portion of the increase relates to pass-through revenue to the manufacturing
construction partner.

EC&M revenue increased by 27.3% to $1.2 billion as a result of increased activities on the Ichthys project in
the Northern Territory and a full six months’ contribution from Hawkins. This increase was partially offset by a
reduction in activities on the Gorgon and Wheatstone projects in Western Australia.

Mining revenue increased by 8.5% to $689.5 million, mainly due to increased activities at Goonyella and Roy
Hill although this was partially offset by the completion of the Christmas Creek contract in the prior
corresponding period (pcp).


EXPENSES

Total expenses increased by 78.5% which is greater than the 69.3% increase in total revenue due to the
$139.3 million of individually significant items which have no corresponding revenue. Excluding these, total
expenses increased 74.2%.

Employee benefits expenses increased by 43.8%, or $603.5 million, to $2.0 billion and represents 34.4% of
Downer’s cost base. This increase is mainly due to Spotless’ contribution ($550.2 million), higher activity
across the Group and a more labour intensive contract base compared to the pcp.

Subcont
ractor costs increased by $1.0 billion to $1.7 billion and represents 30.1 % of Downer’s cost base.
This increase is as a result of the Spotless contribution ($508.3 million), higher contract activities and the
change in the subcontractor mix on some contracts during the period. The continued use of subcontracting
accords with the Group’s strategy to retain cost base flexibility.

Page 8 of 54

Raw materials and consumables expense increased by 90.6% to $1.1 billion and represents 18.8% of
Downer’s cost base. The increase is the net impact of raw material requirements for new projects
(particularly in Utilities and Transport) and Spotless’ contribution ($245.4 million); partially offset by lower
requirements as a result of completion of contracts in Mining.

Plant and equipment costs increased by 37.5 % to $348.1 million and represents 6.0% of Downer’s cost
base. This largely reflects the increased activity on some Mining contracts and new contract wins.

Depreciation and amortisation increased by 76.4% to $185.2 million and represents 3.2% of Downer’s cost
base. This increase is predominantly due to amortisation on acquired intangible assets from the Spotless
acquisition and increased activity in Mining.

Other expenses, which include communication, travel, occupancy, professional fees costs and ISIs, have
increased by 121.1 % to $427.8 million and represents 7.4% of Downer’s cost base. Included in other
expenses there is $136.2 million of pre-tax ISI’s, comprising of $76.4 million Mining impairment, $49.3 million
from the divestment of freight rail, and $10.5 million of transaction costs related to Spotless.

EARNINGS

Underlying EBITA for the Group increased by 79.0% to $222.3 million, consistent with the increase in EBITA
achieved by Transport, Utilities, Rail and EC&M, partially offset by Mining. Spotless’ EBITA contribution for
the six months was $78.6 million.

Underlying Net Profit After Tax (NPAT) for the Group increased by 41.2% to $110.4 million.

Underlying NPATA for the Group increased by 63.8% to $132.0 million.

Statutory Net Loss After Tax for the Group was $15.9 million, including $126.3 million of ISIs. Details of the
impact of the ISIs on the Group’s EBIT and NPAT are set out below and also disclosed in Note B2(c).

1H18
$m
EBIT
Net
interest
expense
Tax
expense
NPAT
Amortisation
of acquired
intangibles
NPATA
Underlying result 191.6 (41.0) (40.2) 110.4 21.6 132.0

Loss on divestment of freight rail (49.3) - 9.3 (40.0) - (40.0)
Mining goodwill impairment (76.4) - - (76.4) - (76.4)
Spotless integration costs (3.4) - 0.8 (2.6) - (2.6)
Spotless Management redundancies
and integration costs
(3.1) - 0.9 (2.2) - (2.2)
Spotless residual Strategy Reset costs (7.1) - 2.0 (5.1) - (5.1)
Individually Significant Items (139.3) - 13.0 (126.3) - (126.3)
Statutory result 52.3 (41.0) (27.2) (15.9) 21.6 5.7


Transport EBITA increased by 34.3% to $55.6 million due to continued strong performance and the
successful integration of the RPQ acquisition.

Utilities EBITA increased by 7.8% to $45.8 million, driven by the strong performance from nbn
TM
contracts in
Australia, the New Zealand communication business, as well as contributions from the acquisitions of
UrbanGrid and ITS.

Spotless’ underlying EBITA contribution for the six months was $78.6 million mainly driven by Defence,
Government related contracts and PPPs.

Rail EBITA increased by 28.6% to $18.0 million, reflecting profit contributions from the SGT and HCMT
projects (which made immaterial contributions in the pcp).

Page 9 of 54

EC&M EBITA increased by 35.4% to $36.7 million due to the acquisitions of Hawkins in New Zealand and
AGIS in Australia as well as strong performances on Australian gas projects and by the Operations
Maintenance and Services business. The Mineral Technologies business has increased revenue and
returned to profitability during the six month period.

Mining EBITA decreased by $23.5 million to $20.9 million due predominantly to the completion of the
contract at Christmas Creek.

Corporate costs increased by $3.1 million, or 10.3%, to $33.3 million mainly due to restructuring costs.
Net finance costs increased by $27.3 million to $41.0 million, due primarily to the acquisition of Spotless.

The statutory effective tax rate is higher than the statutory rate of 30.0% due to the impact of non-deductible
goodwill impairment associated with Mining and the disposal of the Freight Rail business. The underlying
effective tax rate is 26.7%.

DIVISIONAL FINANCIAL PERFORMANCE
Transport


 Total revenue of $1.2 billion, up 35.9%;
 EBITA of $55.6 million, up 34.3%;
 EBITA margin stable at 4.5%;
 ROFE
1
of 24.5%, up from 21.0%; and
 Work-in-hand of $5.7 billion.


Utilities


 Total revenue of $851.9 million, up 23.8%;
 EBITA of $45.8 million, up 7.8%;
 EBITA margin of 5.4%, down 0.8ppts;
 ROFE
1
of 23.6%, up from 19.7%; and
 Work-in-hand of $2.8 billion.

Spotless


 Total revenue of $1.5 billion, up 6.0%;
 EBITA of $78.6 million, up 12.4%;
 EBITA margin of 5.1%, up 0.3ppts;
 ROFE
1
of 14.7%, up from 14.5%; and
 Work-in-hand of $17.5 billion.

* The HY17 and HY18 EBIT have been based on underlying
performance.
Note: Spotless past performance has been shown as a reference only as
it has started contributing to the Downer Group from 1 July 2017 (HY18).

1- ROFE = EBITA divided by average funds employed (AFE). AFE = Average Opening and Closing Net Debt + Equity.
0. 0%
1. 0%
2. 0%
3. 0%
4. 0%
5. 0%
6. 0%
0
200
400
600
800
1, 000
1, 200
1, 400
HY 14HY 15HY 16
HY 17HY 18
( $m)
RevenueEBIT A margin
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
0
100
200
300
400
500
600
700
800
900
HY14HY15HY16HY17HY18
($m)
RevenueEBITA margin
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
HY14HY15HY16
HY17 *HY18 *
($m)
RevenueEBITA margin
Page 10 of 54

Rail




 Total revenue of $543.9 million, up 36.1%;
 EBITA of $18.0 million, up 28.6%;
 EBITA margin of 3.3%, down 0.2 ppts;
 ROFE
1
of 8.4%, up from 5.4%; and
 Work-in-hand of $8.7 billion.



Engineering, Construction and Maintenance (EC&M)




 Total revenue of $1.2 billion, up 27.3%;
 EBITA of $36.7 million, up 35.4%;
 EBITA margin of 3.0%, up 0.2 ppts;
 ROFE
1
of 26.9%, up from 25.1%; and
 Work-in-hand of $2.5 billion.



Mining


 Total revenue of $689.5 million, up 8.5%;
 EBITA of $20.9 million, down from $44.4 million;
 EBITA margin of 3.0%, down 4.0 ppts;
 ROFE
1
of 9.5%, down from 16.3%; and
 Work-in-hand of $2.0 billion.


1- ROFE = EBITA divided by average funds employed (AFE). AFE = Average Opening and Closing Net Debt + Equity.


0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
0
100
200
300
400
500
600
HY14HY15HY16HY17
HY18
($m)
RevenueEBITA margin
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
0
200
400
600
800
1,000
1,200
1,400
HY14
HY15HY16HY17HY18
($m)
Revenue
EBITA margin
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
0
200
400
600
800
1,000
1,200
HY14HY15HY16HY17HY18
($m)
RevenueEBITA margin
Page 11 of 54

GROUP FINANCIAL POSITION

Funding, liquidity and capital are managed at Group level, with Divisions focused on working capital and
operating cash flow management.

OPERATING CASH FLOW

Operating cash flow was strong at $307.1 million, up 26.1% on pcp due to strong contract performance,
advance payments received and higher distributions from equity accounted investees. Operating cash flow /
EBITDA conversion continued to be strong at 88.1%.
Operating cash flow ($’m) Dec-14 Dec-13
INVESTING CASH

Total investing cash flow was $647.4 million, up $524.0 million. This includes $391.8 million payment for the
additional 22% ownership in Spotless funded during the period, and $37.6 million in other acquisitions
including UrbanGrid Australia and Cabrini Health.

The business continued to invest in capital equipment to support the existing contracted operations and
future operations, resulting in net capital expenditure of $188.4 million.

DEBT AND BONDING

The Group’s performance bonding facilities totalled $1,901.1 million at 31 December 2017 with $740.0
million undrawn. There is material available capacity to support the ongoing operations of the Group.

As at 31 December 2017, the Group had liquidity of $1.4 billion comprising cash balances of $490.4 million
and undrawn committed debt facilities of $885.0 million. $1.1 billion of the total liquidity is available through
Downer’s facilities and $263.9 million through Spotless’ facilities.

The Group continues to be rated BBB (Stable) by Fitch Ratings.

BALANCE SHEET

The net assets of Downer decreased by 10.6% to $3.2 billion.

Cash and cash equivalents decreased by $354.2 million, or 41.9%, to $490.4 million, due to $391.8 million
consideration paid to acquire additional ownership in Spotless, $37.6 million paid for other acquisitions and
capital expenditure, offset by continued strong operating cash flows.

Net debt increased from $620.2 million at 30 June 2017 to $1,046.9 million at 31 December 2017. This
reflects a reduced cash position and an increase in gross debt arising from the acquisition of Spotless and
other investments during the period. The reduced cash and increased net debt position resulted in 24.6%
gearing (net debt to net debt plus equity) at 31 December 2017, up from 1 4.7% at 30 June 2017. The
present value of operating lease commitments for plant and equipment reduced from $151.5 million to
$139.2 million, representing an off balance sheet gearing of 27.0% at 31 December 2017, up from 17.7% at
30 June 2017.

Subsequent to 31 December 2017, the $60.0 million drawn under the syndicated bank bridge loan facility
has been repaid and the facility limit has been cancelled at the election of Downer.

Current trade and other receivables decreased by $ 29.5 million to $1,692.5 million reflecting continued focus
on cash collections and the reclassification of freight rail receivables to be divested to assets classified as
held for sale.

Inventories decreased by $25.5 million to $276.2 million reflecting the reclassification of freight rail inventory
to assets held for sale coupled with continued tight inventory management.

Current
tax assets decreased by $13.8 million to $31.7 million due to the timing of cash tax payments.

Interest in joint ventures and associates increased by $2.4 million, with $7.3 million of distributions received
offset by Downer’s share of net profits from joint ventures and associates of $9.9 million.
Page 12 of 54

The net value of Property Plant and Equipment increased by $7.6 million due to increased capital
expenditure in Mining offset by reclassification of freight rail assets to be divested to assets classified as held
for sale.
Intangible assets decreased by $39.5 million due to $76.4 million Mining goodwill impairment, $14.2 million
impairment of freight rail goodwill as a result of the divestment, offset by goodwill and other acquired
intangible assets recognised following the acquisitions of UrbanGrid, Cabrini and Hawkins.
Trade and other payables decreased by $10.0 million as a result of project completions and timing of
payments.

Total drawn borrowings of $1.5 billion represents 37.3% of Downer’s total liabilities and has increased by
$73.3 million as a result of the drawdown of debt during the period to fund the Spotless acquisition.

Other financial liabilities of $64.7 million increased by $19.2 million and represents 1.6% of Downer’s total
liabilities. The increase reflects the $12.5 million deferred consideration on acquisitions of Urban Grid and
the higher mark to market revaluation on cross-currency and interest rate swaps.

Deferred tax liability of $181.3 million primarily represents temporary differences in work in progress,
property plant and equipment, and in customer contracts intangibles recognised.

Provisions of $505.0 million decreased by $21.9 million and represents 12.4% of Downer’s total liabilities.
Employee provisions (annual leave and long service leave) made up 73.5 % of this balance with the
remainder covering onerous contracts provisions and return conditions obligations for leased assets and
property and warranty obligations.

Shareholder equity decreased by $380.4 million driven by the payment to minority shareholders of Spotless
for additional 22% ownership, the impact of minority interest representing the current period of Spotless
losses, the parent entity net losses after tax of $11.1 million, and $75.3 million of dividend payments made
during the period. Net foreign currency gains on translation of foreign operations, particularly in New
Zealand, resulted in a movement in the foreign currency translation reserve by $8.1 million.


DIVIDENDS

The Downer Board resolved to pay an interim dividend of 13.0 cents per share, 50% franked (12.0 cents per
share fully franked in the prior corresponding period), payable on 4 April 2018 to shareholders on the register
at 7 March 2018. The unfranked portion of the dividend (50%) will be paid out of Conduit Foreign Income
(CFI).

The Board also determined to continue to pay a fully imputed dividend on the ROADS security, which having
been reset on 15 June 2017 has a yield of 6.05% per annum payable quarterly in arrears, with the next
payment due on 15 March 2018. As this dividend is fully imputed (the New Zealand equivalent of being fully
franked), the actual cash yield paid by Downer will be 4.36% per annum for the next six months.


Page 13 of 54

ZERO HARM
Downer’s Total Recordable Injury Frequency Rate (TRIFR) reduced from 3.61 to 3.38 per million hours
worked, while Lost Time Injury Frequency Rate (LTIFR) increased from 0.55 to 0.69.

Note: This data excludes Hawkins and Spotless.


OUTLOOK

Downer is targeting consolidated underlying NPATA of $295 million before minority interests for the 2018
financial year. This includes underlying NPATA of $202 million for Downer and $93 million for Spotless.




3.61
3.38
0.55
0.69
-
1.00
2.00
3.00
4.00
5.00
0.00
1.00
2.00
3.00
4.00
5.00
Dec-16
Jan-17
Feb-17
Mar-17
Apr-17
May-17
Jun-17
Jul-17
Aug-17Sep-17
Oct-17
Nov-17Dec-17
LTIFR
TRIFR
Downer Group Safety Performance
(12-month rolling frequency rates)
TRIFRLTIFR
Page 14 of 54

GROUP BUSINESS STRATEGIES AND PROSPECTS FOR FUTURE FINANCIAL YEARS
Downer’s strategy focuses on safety, driving improvement in existing businesses, investing in growth, and
creating new positions. Downer’s strategic objectives, prospects, and the risks that could adversely affect the
achievement of these objectives, are set out in the table below.

Strategic
Objective
Prospects Risks and risk management
Maintain focus on
Zero Harm
Zero Harm is embedded in Downer’s
culture and is fundamental to the
Company’s future success. It requires
constant vigilance and focus at all levels
of the Downer business to ensure the
Company meets its desired objective of
ensuring that all of our staff, suppliers and
subcontractors return home each night
incident and injury free.

Downer has sought to mitigate risks by
assessing, understanding and mitigating
the “critical risks” facing Downer and
implementing Cardinal Rules which
provide direction and guidance on these
critical risks.

Improve value
and service for
customers and
their customers
Providing valuable and reliable products
and services to Downer’s customers, and
their customers, is at the very heart of
Downer’s culture. It enables Downer’s
customers to focus more on their core
expertise whilst Downer delivers non-core
operational services.

Through ongoing analysis of markets,
customers and competitors, Downer is
well positioned to improve value and
service for its customers and their
customers.
Relationships creating success continues
to be Downer’s core operating philosophy
that drives delivery of projects and
services. It helps to ensure investment,
initiatives and activities are focused on
helping the Group’s customers to
succeed. Risks to be managed include:

- commoditisation of core products and
services, which affects margins;
- not keeping pace with changing
customer expectations for service
improvements; and
- lack of focus on customer feedback
channels.
Position for
greater
government
outsourcing
Following the acquisition of Spotless,
Downer is the largest and most diverse
services contractor in the Asia-Pacific
region with over $10 billion in annual
revenues. This scale and breadth gives
Downer greater resilience to withstand
economic headwinds when they arise.

Downer is well positioned to pursue
government outsourcing opportunities in
the Australian and New Zealand markets
now and into the future.
Government outsourcing provides a high
level of opportunity for Downer as
government fiscal demands increase and
citizens desire more service from less
spend. Risks to be managed include:
- longer procurement contract
durations reducing opportunities to
tender for new opportunities;
- commoditisation of long-term
contracts; and
- introduction of foreign and technology
based competitors that bring a
different value proposition.

Leverage
opportunities that
will emerge from
greater
urbanisation in
major cities
As cities become larger and more
complex, opportunities will emerge for
Downer in connecting, managing and
monitoring their core infrastructure. This
will include transport infrastructure, public
transport, utilities, telecommunications,
and other technology platforms.

Downer is well positioned to work with
governments and citizens to understand
and shape the infrastructure and networks
that will underpin the megacities of the
future.
Greater urbanisation is likely to result in a
consolidation of competition,
opportunities, and capital. Risks to be
managed include:
- intensification of competition as
customers converge into large single
market procurement channels;
- introduction of foreign and technology
based competitors that bring a
different value proposition; and
- greater investment in technology.

Page 15 of 54

Strategic
Objective
Prospects Risks and risk management
Create a position
in social
infrastructure,
particularly in the
areas of health
and aged care
Greater life expectancy will result in
greater demand for services to aged
people – not just in health and aged care,
but also transport, logistics and amenity.
This will create a wide range of
opportunities for Downer across a range
of service lines.

Downer is well positioned to participate in
these opportunities as this market is
willing to outsource non-core services and
challenge the status quo to continuously
improve the quality of services it provides.

Through the acquisition of Spotless,
Downer has an excellent foundation to
build its value proposition to customers
across Australia and New Zealand. For
Downer to be truly successful, it will need
to work with customers and co-invest or
co-create solutions across healthcare
services and patient management
solutions that improve the core user
experience.


Orient Downer’s
portfolio to growth
markets
Downer continues to enjoy wide reaching
access to substantial asset management,
projects, and services opportunities in its
core geographies of Australia and New
Zealand. Whilst these geographies will
remain the core focus for the foreseeable
future, Downer continues to investigate
and pursue identified and evaluated
opportunities in Southern Africa, South
America, North America, Europe, and
Asia.


Downer continues to review the current
shape of its service offerings as well as
the exportability of a number of
established and mature service offerings
which have reached leadership in the
Group’s core markets. Risks to be
managed include:

- balancing growth objectives against
sustainable profit outcomes; and
- determining the optimal timing to
export core competencies to new
growth markets or to further diversify
Downer’s offering.
Embed
operational
technology into
core service
offerings
Downer is focused on increasing the
utilisation of operational technology
across all its service lines to improve
differentiation and competitive advantage.
This includes investing in partnerships
with global technology experts, co-
creating bespoke products and services to
meet customer needs, and investigating
selective M&A opportunities to improve
the quality of the Group’s service offering.


Downer has opportunities to invest in new
skills to manage the risks that will emerge
from technological advancements. These
risks include:
- market disruption;
- cybersecurity and data hacks as
more assets and infrastructure
networks are managed remotely; and
- switching costs associated with
technological infrastructure and
networks.



Page 16 of 54

The following table provides an overview of the key prospects relevant to each of Downer’s service lines and
summarises Downer’s intended strategic response across each sector to maximise the Company’s
performance and realise future opportunities.

Service line Prospects Downer’s response
Transport The market for transport infrastructure
and services continues to exhibit good
growth in both Australia and New
Zealand, as respective governments
invest in a range of projects to reduce
congestion, improve mobility, and provide
better linkages between communities.
The urban nature of this investment
allows Downer to leverage core resources
into these opportunities and build a strong
pipeline of revenue.
As a market leader in Australia and New
Zealand, Downer is well positioned to
capitalise on future transport
opportunities. In particular, focus will be
upon the markets for road maintenance
services, road surfacing and bitumen
supply, and rail infrastructure delivery.
Downer continues to innovate across its
core service offerings, to ensure it brings
to customers global insights and
competitively benchmarked solutions. It
also continues to selectively acquire scale
where this creates value for shareholders.

Utilities Growth across power and gas utility
markets is multi-faceted with a good
pipeline of prospects in both Australia and
New Zealand. In Australia, growth will be
driven by prospects in electricity
transmission and distribution, as well as
significant new capital projects in the
renewable energy market. In New
Zealand, increasing demand from a
growing population is seeing higher levels
of activity across the water and power &
gas sectors.
Activity in telecommunications markets
continues to be dynamic, with large
capital builds in both Australia and New
Zealand coming to a close. However,
increasing demand for data services will
see a solid baseload of activity in this
sector remains.
Downer has market leading positions in
the electricity, water, gas and
telecommunications sectors in both
Australia and New Zealand.
Downer is strongly positioned to take
advantage of the growth opportunities
available in these sectors, with a
demonstrable track record of excellence
in service delivery, and a greater focus on
int roducing operational technology to
improve the value we bring to customers.
The business is focused on maximising its
share of the outsourced ‘poles and wires’
services market. It is also turning its
attention towards participating in the
market for the ‘Internet of Things’, such as
through the installation and monitoring of
sensors on critical infrastructure.

Rail The manufacture and associated
servicing of rail rolling stock continues to
be a strong growth market for Downer.
Major procurement activities have been
undertaken in Queensland, NSW and
Victoria in recent years, with the resulting
volume of work continuing to permeate
the market.
Looking forward, potential outsourcing
and franchising opportunities may further
expand Downer’s portfolio in public
transport operations.
Downer’s rail asset management model is
a clear market leader with a strong focus
on ‘return on investment’ – i.e. increasing
fleet availability and reliability for
customers’ customers.
Downer maintains strong strategic
partnerships with leading global transport
solutions providers and, through this
model, is pursuing opportunities in rolling
stock manufacture and maintenance, and
transport network operations and
maintenance.
The Keolis Downer joint venture is a
leading Australian multi-modal transport
operator, through its light rail and bus
operations.

Page 17 of 54

Service line Prospects Downer’s response
EC&M EC&M comprises resources-related
infrastructure, infrastructure projects, and
non-residential building.
Resources-related infrastructure
continues to be impacted by a prolonged
downturn and high volatility in commodity
prices, with investment focus on
sustaining capital projects rather than
new production infrastructure.
Good growth prospects in the commercial
sector are expected as business
confidence remains high in both Australia
and New Zealand, while investment into
social infrastructure continues with
particular focus on health and education.
Downer is a market leader in electrical
and instrumentation work, particularly in
the Oil & Gas sector, and is growing its
structural mechanical piping business.
Downer is currently working on all of the
major Oil & Gas developments in
Australia and Papua New Guinea.
Outside of Oil & Gas, Downer continues
to be a major player in the delivery of
resources related engineering,
construction and maintenance services
with long and enduring relationships with
all of Australia’s major mining and
industrial customers.
Downer increased its presence in the
growing market for infrastructure and
building in New Zealand through the
acquisition of Hawkins, the country’s
second-largest builder.
Mining Mine owners continue to focus on cost
reduction. Some mine owners are
currently shifting their operating models to
maximise supply chain benefits, which
opens opportunities for contractors to
work collaboratively to drive productivity
improvements and reduce production
costs.
Greenfield iron ore and coal opportunities
are at their lowest point in a decade,
however green shoots of growth have
emerged in gold, lithium and precious
metals in Australia, Southern Africa and
South America.
Downer is one of Australia's leading
diversified mining contractors offering
customers open cut, underground, mining
services, tyre management, drill and
blast, and engineering and technology
services.
Spotless The facilities management and services
market is undergoing consolidation, as
operators look to leverage scale across
multiple service lines. The proliferation of
operational technology to enable real-time
performance monitoring is shaping the
future of outsourcing, leading to bundling
services and the provision of ‘anything as
a service’.
The Defence, Health, Education,
Corrections, and Commercial markets
continue to grow with a strong pipeline of
opportunities in both Australia and New
Zealand.
The acquisition of Spotless is now largely
complete. Downer is now a major force in
both Australia and New Zealand with
market leading positions across key
sectors including: Defence; Health;
Education; Corrections; Commercial;
Stadia and Open Space Management;
Leisure; and Resources.



Page 18 of 54

Auditor’s independence declaration

The auditor’s independence declaration, as required under Section 307C of the Corporations Act 2001, is set
out on page 20.

Signed in accordance with a resolution of the Directors.

On behalf of the Directors

R M Harding
Chairman
Sydney, 21 February 2018
Page 19 of 54

KPMG, an Australian partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity.

Liability limited by a scheme approved under
Professional Standards Legislation.
Lead Auditor’s Independence Declaration under
Section 307C of the Corporations Act 2001
To the Directors of Downer EDI Limited
I declare that, to the best of my knowledge and belief, in relation to the review of Downer EDI Limited
for the half-year ended 31 December 2017 there have been:
i. no contraventions of the auditor independence requirements as set out in the Corporations
Act 2001 in relation to the review; and
ii. no contraventions of any applicable code of professional conduct in relation to the review,
except as set out below:

As a direct consequence of the takeover of Spotless Group Holdings Limited, the previous CEO of
Spotless Group Holdings Limited, who had been a member of KPMG within the preceding two years
and a member of KPMG's audit team for the audit of Downer EDI Limited for the year ended 30 June
2015, became on or about 27 June 2017 a deemed officer (for the purposes of the auditor
independence provisions of the Corporations Act) of Downer EDI Limited for the period from that date
to his resignation on 22 August 2017. As a result, the individual was for a limited period technically in
breach of section 324CI of the Corporations Act, which sets out a 'special rule for retiring partners of
audit firms'.



KPM_INI_01

PAR_SIG_01 PAR_NAM_01 PAR_POS_01 PAR_DAT_01 PAR_CIT_01

KPMG





John Teer
Partner

Sydney
21 February 2018
Page 20 of 54

Liability limited by a scheme approved under
Professional Standards Legislation.

KPMG, an Australian partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity.
Independent Auditor’s Review Report

To the Shareholders of Downer EDI Limited
Conclusion
We have reviewed the accompanying
Half-year
Financial Report
of Downer EDI Limited.
Based on our review, which is not an audit, we
have not become aware of any matter that
makes us believe that the half-year Financial
Report of Downer EDI Limited is not in
accordance with the Corporations Act 2001,
including:
•

giving a true and fair view

of the
Group’s

financial position as at 31 December 2017
and of its performance for the half-year
ended on that date; and
•

complying with Australian Accounting
Standard AASB 134 Interim Financial
Reporting and the Corporations Regulations
2001.
The
Half-year Financial Report
comprises:
•

the condensed consolidated statement of
financial position as at 31 December 2017;
•

condensed consolidated statement of profit
or loss and other comprehensive income,
condensed consolidated statement of
changes in equity and condensed
consolidated statement of cash flows for the
half-year ended on that date
•

notes A to E comprising a summary of
significant accounting policies and other
explanatory information
•

the Directors’ Declaration.
The
Group
comprises Downer EDI Limited (the
Company) and the entities it controlled at the half
year’s end or from time to time during the half-
year.
The
Half-year period
is the 6 months ended on
31 December 2017.
Responsibilities of the Directors for the half-year financial report
The Directors of the Company are responsible for:
•

the preparation of the Half-year Financial Report that gives a true and fair view in accordance with
Australian Accounting Standards and the Corporations Act 2001;


•

for such internal control as the Directors determine is necessary to enable the preparation of the
Half-year Financial Report that is free from material misstatement, whether due to fraud or error.










Page 21 of 54

Auditor’s responsibility for the review of the Half-year Financial Report
Our responsibility is to express a conclusion on the Half-year Financial Report based on our review.
We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410
Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state
whether, on the basis of the procedures described, we have become aware of any matter that makes
us believe that the Half-year Financial Report is not in accordance with the Corporations Act 2001
including: giving a true and fair view of the Group’s financial position as at 31 December 2017 and its
performance for the half-year ended on that date; and complying with Australian Accounting Standard
AASB 134 Interim Financial Reporting and the Corporations Regulations 2001. As auditor of Downer
EDI Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit
of the annual financial report.
A review of a Half-year Financial Report consists of making enquiries, primarily of persons responsible
for financial and accounting matters, and applying analytical and other review procedures. A review is
substantially less in scope than an audit conducted in accordance with Australian Auditing Standards
and consequently does not enable us to obtain assurance that we would become aware of all
significant matters that might be identified in an audit. Accordingly, we do not express an audit
opinion.
In conducting our review, we have complied with the independence requirements of the
Corporations Act 2001.



KPMG


John Teer
Partner
Sydney
21 February 2018
Cameron Slapp
Partner
Sydney
21 February 2018

Page 22 of 54

Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income
for the half-year ended 31 December 2017
31 Dec
31 Dec
2017
2016
Note
$'m
$'m
Revenue from ordinary activitiesB2
5,798.5
3,333.6
Other incomeB24.6
1.0
Total revenue and other income5,803.1 3,334.6
Employee benefits expenseB2
(1,982.4)
(1,378.9)
Subcontractor costs(1,734.7)
(729.2)
Raw materials and consumables used(1,082.5)(567.9)
Plant and equipment costs(348.1)(253.2)
Depreciation and amortisation D1,D2
(185.2)
(105.0)
Other expenses from ordinary activities (427.8)
(193.5)
Total expenses(5,760.7)(3,227.7)
Share of net profit of joint ventures and associates9.9
13.9
Earnings before interest and tax52.3 120.8
Finance income
3.4
4.7
Finance costs(44.4)(18.4)
Net finance costs(41.0)(13.7)
Profit before income tax11.3 107.1
Income tax expense
(27.2)(28.9)
(Loss) / profit after income tax(15.9)78.2
(Loss) / profit for the period that is attributable to:
-Non-controlling interest(4.8)
-
-
Members of the parent entity(11.1)78.2
(Loss) / profit for the period
(15.9)78.2
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
-
(8.1)4.1
-(2.5)3.8
-
(0.4)(0.3)
-Available for sale revaluation reserve(0.6) -
-0.6 (1.1)
(11.0)6.5
Other comprehensive (loss) / income for the period is attributable to:
-Non-controlling interest
0.7 -
-Members of the parent entity(11.7)
6.5
Other comprehensive (loss) / income for the period
(11.0)6.5
Total comprehensive (loss) / income for the period(26.9)84.7
Earnings per share (cents)
Restated
(i)
- Basic (loss) / earnings per shareB3(2.6)16.6
-
Diluted (loss) / earnings per share
(ii)
B3(2.6)16.2
(i)
2016 Earnings per share calculation has been restated to allow for the impact of the capital raising announced on 21 March 2017. Refer to Note B3.
(ii)
At 31 December 2017, the ROADS are deemed anti-dilutive and consequently, diluted EPS remained at (2.6) cents per share.
Net (loss) / gain on foreign currency forward contracts taken to equity
Other comprehensive (loss) / income for the period (net of tax)
Income tax relating to components of other comprehensive income
The condensed consolidated statement of profit or loss and other comprehensive income should be readin
conjunction with the accompanying notes on pages 27 to 53.
Exchange differences arising on translation of foreign operations
Net loss on cross currency interest rate swaps taken to equity
Page 23 of 54

Condensed Consolidated Statement of Financial Position
as at 31 December 2017
DecJun
2017
2017
Note
$'m
$'m
ASSETS
Current assets
Cash and cash equivalents 490.4 844.6
Trade and other receivables
(i)
1,692.5 1,722.0
Other financial assets19.9 12.5
Inventories
276.2
301.7
Current tax assets31.7
45.5
Prepayments and other assets46.2 49.5
Assets classified as held for sale D3134.6 -
Total current assets2,691.5 2,975.8
Non-current assets
Trade and other receivables
(i)
88.9 64.6
Interest in joint ventures and associates90.4 88.0
Property, plant and equipment
(i)
D11,288.0 1,280.4
Intangible assets
(i)
D22,991.7 3,031.2
Other financial assets16.5 17.1
Deferred tax assets
(i)
84.4
95.8
Prepayments and other assets23.5 31.7
Total non-current assets4,583.4 4,608.8
Total assets7,274.9 7,584.6
LIABILITIES
Current liabilities
Trade and other payables1,745.9 1,761.0
BorrowingsC1170.1 863.2
Other financial liabilities31.8 23.8
Employee benefits provision338.6 365.4
Provisions
(i)
58.6 70.1
Current tax liabilities6.9 7.2
Liabilities directly associated with assets held for saleD310.9 -
Total current liabilities2,362.8 3,090.7
Non-current liabilities
Trade and other payables
(i)
35.8 30.7
BorrowingsC1
1,348.2
581.8
Other financial liabilities32.9 21.7
Employee benefits provision32.6 38.2
Provisions
(i)
75.2 53.2
Deferred tax liabilities
(i)
181.3 181.8
Total non-current liabilities1,706.0 907.4
Total liabilities4,068.8 3,998.1
Net assets3,206.1 3,586.5
EQUITY
Issued capitalC32,421.9 2,421.8
ReservesC4(20.3)(10.9)
Retained earnings654.0 740.4
Parent interests3,055.6 3,151.3
Non-controlling interestD5150.5 435.2
Total equity3,206.1 3,586.5
Thecondensed consolidated statement of financial position should be readinconjunctionwiththe
accompanying notes on pages 27 to 53.
(i)
June 2017 balances were restated to reflect the impact of acquisition accounting adjustments made during the period on opening balances.
Page 24 of 54

Condensed Consolidated Statement of Changes in Equity
for the half-year ended 31 December 2017
Dec 2017
$'m
Issued
capitalReserves
Retained
earnings
Attributable
to owners
of the
parent
Non-
controlling
interestTotal
Balance at 1 July 2017
2,421.8 (10.9)740.4 3,151.3 435.2 3,586.5
Profit after income tax
- - (11.1)(11.1)(4.8)(15.9)
Other comprehensive (loss) / income for the
period (net of tax)
- (11.7) - (11.7)0.7 (11.0)
Total comprehensive (loss) for the period
- (11.7)(11.1)(22.8)(4.1)(26.9)
Capital raising costs net of tax
(0.1) - - (0.1) - (0.1)
Vested executive incentive shares transactions
0.2 (0.2) - - - -
Share-based employee benefits expense
- 2.0 - 2.0 - 2.0
Income tax relating to share-based transactions
during the period
- 0.5 - 0.5 - 0.5
Payment of dividends
(i)
- - (75.3)(75.3) - (75.3)
Acquisition of non-controlling interest
- - - - (280.6)(280.6)
Balance at 31 December 2017
2,421.9 (20.3)654.0 3,055.6 150.5 3,206.1
Dec 2016
$'m
Issued
capitalReserves
Retained
earnings
Attributable
to owners
of the
parent
Non-
controlling
interestTotal
Balance at 1 July 2016
1,427.8 (8.8)669.5
2,088.5 - 2,088.5
Profit after income tax
- - 78.2
78.2 - 78.2
Other comprehensive income for the period
(net of tax)
- 6.5 - 6.5 - 6.5
Total comprehensive income for the period
- 6.5 78.2 84.7 - 84.7
Vested executive incentive shares transactions
1.0 (1.0) - - - -
Share-based employee benefits expense
- 1.2 - 1.2 - 1.2
Income tax relating to share-based transactions
during the period
- (0.7) - (0.7) - (0.7)
Payment of dividends
(i)
- - (55.3)(55.3) - (55.3)
Balance at 31 December 2016
1,428.8 (2.8)692.4 2,118.4 - 2,118.4
The condensed consolidated statement of changesin equity should be readin conjunctionwiththe accompanying notes
on pages 27 to 53.
(i)
Payment of dividend relates to the 2016 final dividend and $4.3m ROADS dividends paid during the financial period.
(i)
Payment of dividend relates to the 2017 final dividend and $4.0m ROADS dividends paid during the financial period.
Page 25 of 54

Condensed Consolidated Statement of Cash Flows
for the half-year ended 31 December 2017
31 Dec
31 Dec
2017
2016
Note
$'m
$'m
Cash flows from operating activities
Receipts from customers6,446.5 3,821.4
Distributions from equity accounted investees7.3 6.8
Payments to suppliers and employees(6,121.7)(3,596.5)
Interest received4.1 4.1
Interest and other costs of finance paid(38.4)(17.3)
Net income tax received9.3 25.1
Net cash inflow from operating activities 307.1 243.6
Cash flows from investing activities
Proceeds from sale of property, plant and equipment13.1 17.8
Payments for property, plant and equipment(201.5)(72.2)
Payments for intangible assets(29.2)(16.4)
Payments for acquisition of SpotlessD5(391.8) -
Payments for businesses acquiredD5(37.6)(52.6)
Advances to joint ventures(4.9) -
Proceeds from sale of assets 4.5 -
Net cash used in investing activities(647.4)(123.4)
Cash flows from financing activities
Issue of shares (net of costs)(0.2) -
Proceeds from borrowings 498.8 -
Repayments of borrowings(435.1)(32.8)
Dividends paid(75.3)(55.3)
Net cash used in financing activities(11.8)(88.1)
Net (decrease) / increase in cash and cash equivalents(352.1)32.1
Cash and cash equivalents at the beginning of the period844.6 569.4
Effect of exchange rate changes(2.1)0.6
Cash and cash equivalents at the end of the period490.4 602.1
The condensed consolidated statement ofcashflowsshould be readin conjunctionwiththe accompanying notes
on pages 27 to 53.
Page 26 of 54

Notes to the condensed consolidated financial report
for the half-year ended 31 December 2017
About this report
Statement of compliance and basis of preparation
Rounding of amounts
Accounting estimates and judgements
A
The condensed consolidated half-year Financial Report (Financial Report) represent the consolidated results of
DownerEDILimited(ABN97 003 872 848). The Financial Reportis a general purpose financial statementwhich
has been preparedin accordancewithAASB134Interim Financial Reportingand theCorporationsAct2001(Cth),
and with IAS 34 Interim Financial Reporting.
The Financial Report does not includeallthe information required for an annual financial report and should be read
in conjunction with the 2017 Annual Report.
Accountingpoliciesare selected and appliedina manner that ensures the resulting financial informationsatisfies
the concepts of relevance andreliability,thereby ensuring that the substance of the underlying transactions or other
eventsisreported. The accountingpoliciesand methods of computation appliedinthe Financial Report are
consistentwiththose adopted and disclosedinthe 2017 Annual Report. Amountsinthe Financial Report are
presentedin Australian dollars unless otherwise noted and has been prepared ona historicalcostbasis, except for
revaluation of certain financial instruments.
The Financial Report was authorised for issue by the Directors on 21 February 2018.
Downerisa company of thekindreferredtoinASICCorporations (RoundinginFinancial/ Directors’ reports)
Instrument 2016/191, relatingtothe “roundingoff”of amountsinthe Directors' Report and consolidated financial
statements. Unless otherwise expressly stated, amounts have been rounded offtothe nearest whole number of
millionsof dollars and one place of decimals representing hundreds of thousands of dollarsin accordancewiththat
Instrument. Amounts shown as $- represent amounts less than $50,000 which have been rounded down.
Significant judgement, estimates and assumptions about future events are made by management when applying
accountingpoliciesand preparing the Financial Reportwhichare consistentwiththose describedinthe 2017
Annual Report.
Page 27 of 54

Notes to the condensed consolidated financial report - continued
for the half-year ended 31 December 2017
Business performance
B1. Segment informationB3. Earnings per share
B2. Profit from ordinary activitiesB4. Subsequent events
B1. Segment information
31 Dec 2017
$'m
TransportUtilitiesSpotlessRailEC&MMining Total
Revenue
1,206.4 851.9 1,539.0 317.0 1,225.0 668.4
22.9
5,830.6
Inter-segment sales
- - - - - -
(27.5)(27.5)
Total segment revenue
1,206.4 851.9 1,539.0 317.0 1,225.0 668.4 (4.6)5,803.1
31.6 - 3.5 226.9 14.3 21.1 - 297.4
1,238.0 851.9 1,542.5 543.9 1,239.3 689.5 (4.6)6,100.5
55.6 45.8 78.6 18.0 36.7 20.9 (172.6)83.0
(0.1)(0.8)(
5.5)
- (0.2) - (24.1)(30.7)
55.5 45.0 73.1 18.0 36.5 20.9
(196.7)
52.3
31 Dec 2016
$'mTransportUtilitiesSpotlessRailEC&MMining
Total
Revenue885.5 688.2 - 202.0 951.6 612.2 5.2
3,344.7
Inter-segment sales - - - - - - (10.1)
(10.1)
Total segment revenue 885.5 688.2 -
202.0 951.6 612.2 (4.9)3,334.6
25.7 - - 197.7 21.8 23.2 -
268.4
911.2 688.2 - 399.7 973.4 635.4 (4.9)
3,603.0
41.4 42.5 - 14.0 27.1 44.4 (45.2)124.2
- - - - - - (3.4)(3.4)
41.4 42.5 - 14.0 27.1 44.4 (48.6)
120.8
Un-
allocated
Un-
allocated
Amortisation of acquired
intangibles
Share of sales revenue from
joint ventures and associates
EBIT before amortisation of
acquired intangibles (EBITA)
Share of sales revenue from
joint ventures and associates
Total revenue including joint
ventures and other income
Total revenue including joint
ventures and other income
Total reported segment
results (EBIT)
Total reported segment
results (EBIT)
EBIT before amortisation of
acquired intangibles (EBITA)
Amortisation of acquired
intangibles
Anoperating segmentisa component of an entity that engagesinbusinessactivitiesfromwhichit may earn
revenue and incur expenses. The operating segments have been identified based on the nature of theservice
provided and the internal reports that are reviewed regularly by the GroupCEOinassessingperformance andin
determining the allocation of resources.
There have been no changestothe composition of the Group's reportable segmentssincelastreportedin the 2017
Annual Report. The reportable segments identified within the Group are outlined below:
B
Page 28 of 54

Notes to the condensed consolidated financial report - continued
for the half-year ended 31 December 2017
B1. Segment information - continued
Reconciliation of segment net operating (loss) / profit to net (loss) / profit after income tax:
31 Dec
31 Dec
2017
2016
Note
$'m
$'m
Segment earnings before interest and tax249.0 169.4
Unallocated:
Mining goodwill impairment B2(c)(76.4) -
Divestment of Freight Rail B2(c)(49.3) -
Spotless management redundancies and integration costs B2(c)(3.1) -
Spotless residual strategy reset costs B2(c)(7.1) -
Spotless integration costsB2(c)(3.4) -
Amortisation of Spotless and Tenix acquired intangible assets(24.1)(3.4)
Bid costs referable to New Intercity Fleet rail projectB2(c) - (10.0)
Settlement of contractual claims - (5.0)
Corporate costs(33.3)(30.2)
Total unallocated (196.7)(48.6)
Group earnings before interest and tax52.3 120.8
Net finance costs(41.0)(13.7)
Profit before income tax11.3 107.1
Income tax expense(27.2)(28.9)
(Loss) / profit after income tax(15.9)78.2
Segment results
Page 29 of 54

Notes to the condensed consolidated financial report - continued
for the half-year ended 31 December 2017
B2. Profit from ordinary activities
a)Revenue and other income
31 Dec
31 Dec
2017
2016
$'m
$'m
Sales revenue
Rendering of services4,675.6 2,735.3
Construction contracts933.9 482.1
Sale of goods157.8 104.8
Other revenue31.2 11.4
Total revenue from ordinary activities5,798.5 3,333.6
Other income4.6 1.0
Total revenue and other income5,803.1 3,334.6
Share of sales revenue from joint ventures and associates
(i)
297.4 268.4
Total revenue including joint ventures and associates and other income
(i)
6,100.5 3,603.0
b) Operating expenses
31 Dec
31 Dec
2017
2016
$'m
$'m
Employee benefits expense:
- Defined contribution plans
109.8 73.9
- Share-based employee benefits expense
2.0 1.2
- Employee benefits1,870.6 1,303.8
Total employee benefits expense
1,982.4 1,378.9
Oper
ating lease expenses relating to land and building
44.1 33.6
Operating lease expenses relating to plant and equipment62.4 45.5
Total operating lease expenses106.5 79.1
(i)
Thisisa non-statutory disclosure asit relatestoDowner's share of revenuefromequity accounted joint ventures and
associates.
Page 30 of 54

Notes to the condensed consolidated financial report - continued
for the half-year ended 31 December 2017
B2. Profit from ordinary activities- continued
c) Individually significant items
The following material items are relevant to an understanding of the Group's pre-tax financial performance:
31 Dec
31 Dec
2017
2016
Note
$'m
$'m
Spotless transaction related(13.6)
-
Mining goodwill impairment D2(76.4)
-
Divestment of freight rail D3(49.3)
-
Bid costs written-off - (10.0)
Loss before interest and tax(139.3)(10.0)
Spotless transaction related
Mining goodwill impairment
Divestment of freight rail
Bid costs written-off
The above individually significant items are classified in the statement of profit or loss as follows:
31 Dec
2017
$'m
Employee benefit expense(3.1) - - (3.1)
Other expenses from ordinary activities(10.5)(76.4)(49.3)(136.2)
Loss before interest and tax (13.6)(76.4)(49.3)(139.3)
Net finance income - - - -
Income tax benefit3.7 - 9.3 13.0
Loss after income tax (9.9)(76.4)(40.0)(126.3)
Followingthe identification of possible impairment indicators, the Group undertook an assessment of the carrying
value of the Mining business.Asa result ofthisassessment,a goodwill impairment of $76.4millionhas been
recognised. Refer to Note D2 for further details.
On21 November 2017, Downer entered an agreementtosell itsFreightRailbusinesstoProgressRailfor $109
million($123.7millionafter adjusting for working capital movements throughto31 December 2017).Asa result of
the transaction, Downer recogniseda non-cash pre-taxwritedown of assets held forsaleof $49.3million($40.0
million after tax). Refer to Note D3 for further details.
Downerwasa member of the ConstellationRailconsortium.On18 August 2016, the consortiumwasadvised thatit
had not beensuccessfulin its bidtodeliver and maintain the NewIntercityFleet(NIF)for Transport forNSW.
Accordingly, an amount of $10.0million,referabletoDowner's share of pre-taxbidcosts,has been expensed as at
31 December 2016.
Spotless related transactioncostsof $13.6millionincludes $7.1millionofcostsincurredin exitingcontracts as part
of Spotless Strategy Reset; $3.4millionof integrationcostsincurred during the period and $3.1millionSpotless'
management redundancies and other integration costs.
Divestment
of Freight
Rail
Mining
Impairment
Spotless
transaction
related
Page 31 of 54

Notes to the condensed consolidated financial report - continued
for the half-year ended 31 December 2017
B3. Earnings per share
Basic earnings per share
Restated
(iv)
31 Dec31 Dec
2017
2016
(Loss) / profit attributable to members of the parent entity ($'m)(11.1)78.2
Adjustment to reflect ROADS dividends paid ($'m)(4.0)(4.3)
(15.1)73.9
Weighted average number of ordinary shares (WANOS) on issue (m's)
(i)
590.5 445.9
Basic (loss) / earnings per share (cents per share)(2.6)16.6
Diluted earnings per share
Restated
(iv)
31 Dec31 Dec
2017
2016
(11.1)78.2
Weighted average number of ordinary shares - diluted
Weighted average number of ordinary shares (WANOS) on issue (m's)
(i)(ii)
590.5 445.9
WANOS adjustment to reflect potential dilution for ROADS (m's)
(iii)
27.6 37.7
WANOS used in the calculation of diluted EPS (m's)618.1 483.6
Diluted (loss) / earnings per share (cents per share)
(v)
(2.6)16.2
(i)
(ii)
(iii)
(iv)
(v)
B4. Subsequent events
a)
b)
c)
The WANOS on issue has been adjusted by the weighted average effect of the unvested executive incentive shares.
Fordiluted earnings per share,theWANOShas been further adjusted bythepotential vesting of executive incentive
shares.
TheWANOSadjustmentis thevalue ofROADSthat could potentially be convertedintoordinary shares atthereporting
date.It is calculated based ontheissued value ofROADSinNewZealand dollars convertedtoAustralian dollars atthe
spotrateprevailing atthereporting date,which was$182.0million(Dec2016: $192.4million),divided bytheaverage
marketpriceoftheCompany's ordinary sharesfor theperiod1 July 2017to31 December 2017 discounted by 2.5%
according to the ROADS contract terms, which was $6.59 (Dec 2016: $5.10).
Basicand dilutedEPScalculationforDecember 2016wererestated asa result of 169.9millionshares issuedfromthe
capital raising made as part oftheSpotless takeoverofferannounced on 21March2017. Undertheentitlementoffer,two
new sharesforeachfiveoutstanding shareswereissued ata discountedpriceof $5.95 per share.As aresult ofthenew
shares issued,theweighted average number of ordinary shares(WANOS)tocalculateEPSneedstobe adjusted bya
theoretical ex-rightsprice (TERP)factor.Theadjustmentfactorof 0.943wasutilisedto restateWANOSfor thebasic and
diluted EPS calculations.
The Group's operations in future financial years;
At31 December 2017,theROADSaredeemed anti-dilutive and consequently, dilutedEPSremained at (2.6) cents per
share.
The results of those operations in future financial years; or
The Group's state of affairs in future financial years.
Other than the Mining goodwillCGUimpairment and the completion of the divestment of FreightRailas noted on
notesB2(c)and D3, at the date ofthisreport thereis no matter orcircumstancethat has arisensincethe end of the
period, that has significantly affected, or may significantly affect:
(Loss) / profit attributable to members of the parent entity ($'m)
The calculation of basic earnings per share(EPS)isbased on the(loss)/ profit attributabletoordinary
shareholders and the weighted-average number of ordinary shares outstanding.
The calculation of dilutedEPSis based on the(loss)/ profit attributabletoordinary shareholders and the weighted-
average number of ordinary shares outstanding after adjustments for the effects ofall dilutivepotential ordinary
shares.
(Loss) / profit attributable to members of the parent entity used in calculating EPS
Page 32 of 54

Notes to the condensed consolidated financial report - continued
for the half-year ended 31 December 2017
Capital structure and financing
C1. BorrowingsC4. Reserves
C2. Financing facilitiesC5. Dividends
C3. Issued capital
C1. Borrowings
Dec
Jun
2017
2017
$'m
$'m
Current
Secured:
-Finance lease liabilities
12.3 20.4
-Hire purchase liabilities 0.2 0.4
12.5 20.8
Unsecured:
-Bank loans
4.8 836.4
-AUD medium term notes (series 2009-1)6.7 13.3
-AUD medium term notes (series 2013-1)150.0 -
-Deferred finance charges(3.9)(7.3)
157.6 842.4
Total current borrowings170.1 863.2
Non-current
Secured:
-Finance lease liabilities
21.5 14.8
-Hire purchase liabilities 0.1 0.2
21.6 15.0
Unsecured:
-Bank loans
914.1 2.1
-USD notes137.2 139.1
-AUD notes 30.0 30.0
-AUD medium term notes (series 2013-1) - 150.0
-AUD medium term notes (series 2015-1)250.0 250.0
-Deferred finance charges(4.7)(4.4)
1,326.6 566.8
Total non-current borrowings1,348.2 581.8
Total borrowings1,518.3 1,445.0
C
Page 33 of 54

Notes to the condensed consolidated financial report - continued
for the half-year ended 31 December 2017
C2. Financing facilities
Financing facilities
Dec
Jun
2017
2017
$'m
$'m
Syndicated bank bridge loan facility
190.0
500.0
Syndicated bank loan facilities455.0 500.0
Bilateral bank loan facilities240.0 190.0
Total unutilised bank loan facilities885.0 1,190.0
Syndicated and bilateral bank and bilateral insurance bonding facilities740.0 738.3
Total unutilised bonding facilities740.0 738.3
Unutilised bank loans
-
Syndicated loan facilities
- $200.0 million maturing in April 2019;
- $55.0 million maturing in December 2020; and
- $200.0 million maturing in April 2021.
-
Bilateral bank loans facilities
Utilised bank loans
Utilised USD Notes
Utilised AUD Notes
Utilised AUD Medium Term Notes (MTNs)
The Group has the following unsecured MTNs on issue:
-
-
-
The above bank loan facilities and Notes issues are subject to certain Group guarantees.
At 31 December 2017, the Group had the following facilities that were not utilised:
The syndicated bank bridge loanfacilityof $190.0million isnon-revolving, unsecured and maturesin March 2019
(subjecttoDowner exercisingitstwosixmonth extension options at each of March 2018 and September 2018)
andis tobespecificallyusedtoacquire sharesinSpotless Group HoldingsLimitedand other related purposes.
The unutilised amount ofthis facilitywas$500.0millionat June 2017;sincethen thefacilityhas been drawnto
$60.0million (Nildrawn at June 2017) and effective 15 December 2017, thefacility limitwas(at the election of
Downer) reduced from $500.0 million to $250.0 million.
AllSpotless bank loans thatwereclassifiedas "Current" at June 2017 have been extended andallloans are now "Non-
Current" at December 2017.Inadditionalllenders have waived the "Change of Control Review Event" upto100% of
the issued share capital of Spotless (previously 90%).
Giventhat Downer’s interestinSpotless remains below 90%, Spotlesswillcontinuetofunditselfona stand-alone
basis. A refinancing of all Spotless bank loan facilities will be undertaken in the normal course.
USDunsecured private placement notes are onissuefora total amount of US$107.0million.US$7.0millionnotes
maturein September 2019 and US$100.0million in July2025. TheUSDdenominated principal and interest amounts
have been fully hedged against the Australian dollar through cross-currency interest rate swaps.
AUDunsecured private placement notes are onissuefora total amount of $30.0millionwitha maturity date ofJuly
2025.
Series 2009-1 amortises through even semi-annual instalments, until the final maturity date ofApril2018; current
balance $6.7 million;
Subsequentto31 December 2017, the $60.0milliondrawn under the syndicated bank bridge loanfacilityhas been
repaid and the facility limit has been cancelled at the election of Downer.
The syndicated bank loanfacilities, totalling$455.0million,are revolving, unsecured and aresplit intothefollowing
tranches:
These facilities are revolving and unsecured and due for renewal in multiple tranches in calendar year 2019.
Series 2013-1 for $150.0 million, which matures in November 2018; and
Series 2015-1 for $250.0 million, which matures in March 2022.
Page 34 of 54

Notes to the condensed consolidated financial report - continued
for the half-year ended 31 December 2017
C2. Financing facilities - continued
Utilised Finance lease / Hire purchase facilities
Covenants on financing facilities
Bonding
Refinancing requirements
Credit ratings
The Group’sfacilitiesare provided bya number of banks and insurance companies on an unsecured basis and are
subjecttocertain Group guarantees. $1,161.1million(refertoNote D6) of thesefacilitieswereutilisedas at 31
December 2017with$740.0millionunutilised. Thesefacilitieshave varying maturity dates between calendar years
2018 and 2020.
The underlyingriskbeing assumed by the relevant financier underallbondsis Group corporate creditrisk,rather than
project specific risk.
The Group has an Investment Grade credit rating ofBBB(Outlook Stable) fromFitchRatings. Where the credit rating
isreduced or placed on negative watch, customers and suppliers may beless willingtocontractwiththe Group.
Furthermore, banks and other lending institutions may demand more stringent terms (including increased pricing,
reduced tenors and lower facility limits) on debt and bonding facilities, to reflect the deteriorating credit risk profile.
The Group has certain securedfacilitiesof these typeswhichare for an aggregate amount of $34.1millionandwhich
amortise over different periods of up to five years.
Certain of the Group's financingfacilitiescontain undertakingstocomplywithfinancial covenants.Thisrequires the
Downer Grouptooperatewithincertain financial ratios aswellas ensuring that subsidiaries that contribute certain
minimum threshold amounts of Group EBIT and Group Total Tangible Assets are guarantors under various facilities.
Themainfinancial covenantswhichthe Groupis subjecttoare Net Worth, InterestServiceCoverage (calculated as
rolling 12-month EBIT to Net Interest Expense) and Leverage (calculated as Net Debt to Total Capitalisation).
Financial covenants testingis undertaken and reportedtothe Downer Board ona monthly basis. Reporting of financial
covenantstofinanciers occurs semi-annually for therolling12-month periodsto30 June and 31 December. The
Downer Group was in compliance with all its financial covenants as at 31 December 2017.
The Group has theflexibility inrespect of certain committedfacilityamounts (shown as part of the unutilised bilateral
bank loan facilities) which can at the election of the Group, be utilised for bonding purposes.
Whereexisting facilitiesapproach maturity, the Groupwillnegotiatewithexistingand new financierstoextend the
maturity date of thesefacilities.The Group’s financialmetricsand credit rating aswellas conditionsinfinancial
markets and other factors may influence the outcome of these negotiations.
Spotless Group HoldingsLimitedhas financial covenants relatedtoleverage and interestservicecoverage aswellas
ensuring that subsidiaries that contribute certainminimumthreshold amounts of GroupEBITDAand Group Total
Assetsare guarantors under variousfacilities.Financial covenants are reviewed by the Spotless Board of Directors
and reportedtofinanciers ona semi-annual basis. Spotlesswasin compliancewithall itsfinancial covenants as at 31
December 2017.
The Group has $1,901.1millionof bank guarantee and insurance bondfacilitiestosupportitscontractingactivities.
$983.5millionof thesefacilitiesare providedto the Group ona committed basis and $917.6millionon an uncommitted
basis. Includedin thesefacilities isa syndicated $210.0millioncommitted revolving bank guaranteefacilityrelatingto
a specific passenger rail contract and of which $65.8 million is utilised and $144.2 million is unutilised.
Page 35 of 54

Notes to the condensed consolidated financial report - continued
for the half-year ended 31 December 2017
C3. Issued capital

Dec
Jun
2017
2017
$'m
$'m
Ordinary shares
594,702,512 ordinary shares (Jun 2017: 594,702,512)
2,263.1 2,263.2
Unvested executive incentive shares
4,207,358 ordinary shares (Jun 2017: 4,257,373)
(19.8)(20.0)
Redeemable Optionally Adjustable Distributing Securities (ROADS)
200,000,000 ROADS (Jun 2017: 200,000,000)
178.6 178.6
2,421.9 2,421.8
Fully paid ordinary share capital
Fully paid ordinary shares carry one vote per share and carry the right to dividends.
m's $'m
m's $'m
Fully paid ordinary share capital
Balance at the beginning of the financial period / year594.7 2,263.2
424.8 1,270.2
Capital raising
(i)
- - 169.9 1,011.0
Capital raising costs net of tax - (0.1) - (18.0)
Balance at the end of the financial period / year594.7 2,263.1 594.7 2,263.2
Unvested executive incentive shares
Balance at the beginning of the financial period / year4.3 (20.0)4.5 (21.0)
Vested executive incentive shares transactions
(ii)
(0.1)0.2 (0.2)1.0
Balance at the end of the financial period / year4.2 (19.8)4.3 (20.0)
Redeemable Optionally Adjustable Distributing
Securities (ROADS)
m's $'m
m's $'m
200.0 178.6 200.0 178.6
2017
2017
(i)
Relatesto169.9millionshares issuedfromcapital raising as part of the Spotless takeover offer wheretwonew shares for everyfiveoutstanding
shares were issued at a discounted price of $5.95 per share.
(ii)
Represents 50,015 vested shares fora value of $192,660, referabletothe second deferred component of the 2015STIaward andfirstdeferred
component of the 2016STIaward. June 2017 figures referabletothe second deferred component of the 2014STIaward andfirstdeferred
component of the 2015 STI award totalling 196,083 vested shares for a value of $955,174.
Unvested executive incentive shares arestockmarket purchases and are held by the Executive Employee SharePlan
Trust under the Long Term Incentive (LTI) plan.Fromthe 2011 LTI plan onwards, no dividendswillbe distributed on
shares heldin trust during the performance measurement andserviceperiods. Accumulated dividendswillbe paid out
to executives afterallvesting conditions have been met. Otherwise,excessnet dividends are retainedin the trustto be
used by the Company to acquire additional shares on the market for employee equity plans.
Dec
Jun
2017
2017
Dec
Balance at the beginning and at the end of the
financial period / year
Jun
Page 36 of 54

Notes to the condensed consolidated financial report - continued
for the half-year ended 31 December 2017
C4. Reserves
Hedge
reserve
Foreign
currency
translation
reserve
Employee
benefits
reserve
Available-
for-sale
revaluation
reserve
Total
attributable
to members
of the parent
Balance at 1 July 2017
(6.2)(18.0)14.1 (0.8)(10.9)
Foreign currency translation difference - (8.7) - - (8.7)
Change in fair value of cash flow hedges (net of tax)(2.4) - - - (2.4)
Change in fair value of available-for-sale assets - - - (0.6)(0.6)
Total comprehensive income for the period(2.4)(8.7) - (0.6)(11.7)
Vested executive incentive share transactions - - (0.2) - (0.2)
Share-based employee benefits expense - - 2.0 - 2.0
- 0.5 -
Balance at 31 December 2017(8.6)(26.7)16.4 (1.4)(20.3)
Balance at 1 July 2016(2.6)(18.4)12.2 - (8.8)
Foreign currency translation difference
- 4.1 - - 4.1
2.4 - - - 2.4
Total comprehensive income for the period2.4 4.1 - - 6.5
Vested executive incentive share transactions - - (1.0) - (1.0)
Share-based employee benefits expense
- - 1.2 - 1.2
- - (0.7) - (0.7)
Balance at 31 December 2016(0.2)(14.3)11.7 - (2.8)
Hedge reserve
Foreign currency translation reserve
Employee benefit reserve
Available-for-sale revaluation reserve
0.5 -
Other comprehensive income for the
period (net of tax)
Dec 2017
$'m
Dec 2016
$'m
Income tax relating to share-based transactions
during the period
The hedge reserve comprises the effective portion of the cumulative net changeinthefairvaluecashflowhedging
instruments relating to future transactions.
The foreign currency translation reserve comprises foreign exchange differencesarisingfrom the translation of the
financial statements of operations where their functional currency is different to the presentation currency of the Group.
The employee benefit reserveis usedtorecognise thefairvalue of share-based payments issuedtoemployees over
the vesting period, and to recognise the value attributable to the share-based payments during the reporting period.
Thefairvalue reserve includes the cumulative net movement abovecostof thefairvalue of available-for-sale
investment until the assetis realised or impaired or control of an acquireis obtained atwhichtimethe cumulative gain
or loss previously recognised in the available-for-sale revaluation reserve is included in the profit or loss.
Income tax relating to share-based transactions
during the period
Page 37 of 54

Notes to the condensed consolidated financial report - continued
for the half-year ended 31 December 2017
C5. Dividends
a) Ordinary shares
2018
Interim
2017
Final
2017
Interim
Dividend per share (in Australian cents)13.012.012.0
Franking percentage50%100%100%
Cost (in $'m)77.371.4 51.0
Dividend record date07/03/201812/09/201716/02/2017
Payment date04/04/201810/10/201716/03/2017
b) Redeemable Optionally Adjustable Distributing Securities (ROADS)
2018Quarter 1Quarter 2Total
Dividend per ROADS (in Australian cents)1.00 0.99 1.99
100%100%100%
Cost (in A$'m)2.0 2.0 4.0
Payment date15/09/201715/12/2017
2017Quarter 1Quarter 2Quarter 3Quarter 4Total
Dividend per ROADS (in Australian cents)1.08 1.09 1.03 1.08 4.28
100%100%100%100%100%
Cost (i
n A$'m)2.1 2.2 2.1 2.2 8.6
Payment date15/09/201615/12/201615/03/201715/06/2017
New Zealand imputation credit percentage
The 2018interimdividend has not been declared at the reporting date and thereforeis not reflectedinthe financial
statements.
New Zealand imputation credit percentage
Page 38 of 54

Notes to the condensed consolidated financial report - continued
for the half-year ended 31 December 2017
Other disclosures
D1. Property, plant and equipmentD4. Joint arrangements and associate entities
D2. Intangible assetsD5. Acquisition and disposal of businesses
D3. Disposal group held for saleD6. Contingent liabilities
D1. Property, plant and equipment
Freehold Land
and Buildings
Plant and
Equipment
Equipment
under
Finance
Lease
Laundries
rental stockTotal
Carrying amount as at 1 July 2017 (restated)
(ii)
129.4 1,061.2 52.3 37.5 1,280.4
Additions
0.3 184.4 6.1 16.7 207.5
Disposals at net book value
(1.2)(4.7)(0.7) - (6.6)
Acquisition of businesses
- 4.1 7.6 1.6 13.3
Depreciation expense
(2.5)(115.2)(6.0)(18.4)(142.1)
Reclassifications at net book value
- 26.5 (29.1)
2.6
-
Reclassified as intangible assets
(i)
- (0.3) - - (0.3)
Reclassified as held for sale - (57.4) - - (57.4)
(0.5)(5.3)
- (1.0)(6.8)
125.5 1,093.3 30.2 39.0 1,288.0
Cost
159.2 2,434.7 47.0 56.8 2,697.7
Accumulated depreciation(33.7)(1,341.4)(16.8)(17.8)(1,409.7)
Carrying amount as at 1 July 2016
68.5 859.9 59.9 - 988.3
Additions
7.4 212.7 2.2 - 222.3
Disposal
s at net book value
(0.1)(17.6)(0.2) - (17.9)
Acquisition of business (restated)
(ii)
57.4 180.2 17.5 37.5 292.6
Depreciation expense
(4.7)(182.3)(6.2)
- (193.2)
Recl
assifications at net book value
1.0 18.7 (19.7) - -
Reclassified as intangible assets
(i)
- (7.2) - - (7.2)
(0.1)(3.2)(1.2) - (4.5)
129.4 1,061.2 52.3 37.5 1,280.4
Cost (restated)
(ii)
160.9 2,355.4 92.7 37.5 2,646.5
Accumulated depreciation(31.5)(1,294.2)(40.4) - (1,366.1)
(ii)
June 2017 balances were restated to reflect the impact of acquisition accounting adjustments made during the period on opening balances.
Refer to Note D5 for further information.
Jun 2017
Net foreign currency exchange differences at
net book value
D
Dec 2017
$'m
(i)
Refers to the reclassification of software from Capital Work In Progress to Intangible Assets.
Net foreign currency exchange differences at
net book value
Closing net book value as at 30 June 2017
(restated)
(ii)
Closing net book value as at 31 December
2017
Page 39 of 54

Notes to the condensed consolidated financial report - continued
for the half-year ended 31 December 2017
D2. Intangible assets
Goodwill
Customer
contracts
and
relationships
Brand
names on
acquisition
Intellectual
property on
acquisition
Software
and system
developmentTotal
2,341.1 409.1 56.9 3.5 220.6 3,031.2
Additi
ons
- - - - 29.0 29.0
Acquisition of businesses
62.6 8.2 - - 0.3 71.1
Disposals at net book value
- - - - (0.2)(0.2)
Reclassifications at net book value
(i)
- - - - 0.3 0.3
Amortisation expense
- (29.3)(1.4) - (12.4)(43.1)
Reclassified as held for sale(14.2) - - - - (14.2)
Impairment of goodwill
(76.4) - - - - (76.4)
(5.4) - - - (0.6)(6.0)
2,307.7 388.0 55.5 3.5 237.0 2,991.7
Cost
2,460.1 437.5 57.1 3.5 384.2 3,342.4
(152.4)(49.5)(1.6) - (147.2)(350.7)
Carrying amount as at 1 July 2016
805.3 37.1 - - 127.5 969.9
Additi
ons
- - - - 38.5 38.5
Acquisition of business (restated)
(ii)
1,533.0 379.2 57.1 3.5 67.7 2,040.5
Disposals at net book value
- - - - (0.7)(0.
7)
Reclassifications at net book value
(i)
- - - - 7.2 7.2
Amortisation expense
- (7.2)(0.
2)
- (19.6)(27.
0)
2.8 - - - - 2.8
2,341.1 409.1 56.9 3.5 220.6 3,031.2
Cost (restated)
(ii)
2,417.1 429.3 57.1 3.5 359.2 3,266.2
(76.0)(20.2)(0.2) - (138.6)(235.0)
Dec 2017
$'m
Net foreign currency exchange
differences at net book value
Jun 2017
Net foreign currency exchange
differences at net book value
Closing net book value as at 30 June
2017 (restated)
(ii)
Carrying amount as at 1 July 2017
(restated)
(ii)
Accumulated amortisation and
impairment
Closing net book value as at 31
December 2017
Accumulated amortisation and
impairment
(ii)
June 2017 balances were restated to reflect the impact of acquisition accounting adjustments made during the period on opening balances.
Refer to Note D5 for further information.
(i)
Refers to the reclassification of software from Capital Work In Progress to Intangible Assets.
Page 40 of 54

Notes to the condensed consolidated financial report - continued
for the half-year ended 31 December 2017
D2. Intangible assets - continued
Allocation of goodwill to cash-generating units
Carrying value of consolidated goodwill
Dec
Jun
2017
2017
Note
$'m
$'m
Transport
(i)
249.5 251.0
Utilities
(i) (v)
347.5 322.9
Rail
(ii)
55.3 69.5
EC&M
(i)
243.5 239.2
Mining
(iii)
B2(c) - 76.4
Spotless
(i) (iv) (v)
D51,411.9 1,382.1
2,307.7
2,341.1
(ii) Rail CGU goodwill reduced following disposal of freight rail business during the period.
(iii) The goodwill of the Mining CGU was fully impaired following an assessment of the carrying value of the CGU.
(v) June 2017 balances were restated to reflect the impact of acquisition accounting adjustments made during the period on opening balances.
Impairment of assets
The impairment assessment revealed that the carrying amount of the MiningCGUexceededitsrecoverable amount
and asa result $76.4million(referabletothe goodwill of the MiningCGU)wasimpaired at 31 December 2017 and
disclosed as an Individually Significant Item (Refer to Note B2 (c)).
(iv)The determination of the fair value of individual assets andliabilitiesacquiredfromSpotless (including goodwill) remains provisionally
accounted for as at 31 December 2017. The measurement period may extendto12 monthsfromdate of acquisition as allowed byAASB3
Business Combinations. Refer to Note D5.
Goodwill and intangible assets that have an indefinite usefullifeare tested annually for impairment, or more
frequentlyif events or changesin circumstances indicate that they might be impaired. Other assets are reviewed for
impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
Animpairmentloss isrecognised for the amount bywhichthe asset's carrying amount exceedsitsrecoverable
amount. For the purpose ofassessingimpairment, assets are grouped at the lowestlevelsforwhichthere are
separately identifiablecashinflowsthat are largely independent of thecashinflowsfrom other assets or groups of
assets (cash-generating units orCGUs).Non-financial assets other than goodwill that suffered impairment are
reviewed for possible reversal of the impairment at each reporting date.
Apart from the MiningCGU,it wasconcluded that thereisno indicator of impairment for the otherCGUsfor the
period ended 31 December 2017.Anindicator of impairmentwasidentified for the MiningCGUasa result of non-
renewal oftwomaterial contracts and delaysin securing alternative contracts. Consequently, impairment assessment
was performed for the Mining CGU at 31 December 2017.
Goodwill has been allocated, for impairment testing purposes,toCGUs(group of units) that are significant
individuallyorinaggregate, takingintoconsideration the nature of service, resource allocation, how operations are
monitored and where independentcashinflowsare identifiable.SixindependentCGUs(byserviceline)have been
identified across the Group againstwhichimpairment testing has been undertaken. Goodwill has been allocatedto
these CGUs as follows:
(i)Includedinthis amountisthe goodwill for certain acquisitions forwhichthe acquisition accounting remains provisional as at 31 December
2017.
Page 41 of 54

Notes to the condensed consolidated financial report - continued
for the half-year ended 31 December 2017
D2. Intangible assets - continued
Impairment of assets - continued
The Group’s methodology and approach for impairment testing of the Mining CGU is outlined below:
a) Methodology and testing of recoverable amount
Value in Use
(i) Projected cash flow
(ii) Long-term growth rate
(iii) Discount rates
(iv) Capital expenditure
(v) Working capital
Working capital has been maintained ata level requiredtosupport the businessactivitiesof the MiningCGU,taking
intoaccount changesinthe businesscycle.It has been assumedtobein linewithhistorictrends given the level of
utilisation and operating activity.
Capital expenditure includes significant expenditureinPP&Ethatwillbe requiredtoserviceexistingand future new
Mining contracts. Terminal year includes capital expendituretomaintain capital used forexistingplant andtoreplace
plant asit isretired from service. The resulting expenditure has been compared against the annual depreciation
charge to ensure that it is reasonable.
Post-tax discount rates of 11.0% reflect the Group’s estimate of thetimevalue of money andrisks specifictothe
MiningCGU.Indetermining the appropriate discount rate for the MiningCGU,consideration has been giventothe
estimated weighted averagecostof capital(WACC)for the Group adjusted for country and businessrisks specificto
the MiningCGU,including benchmarking against relevant peer group companies. The post-tax discount rateis
appliedtopost-taxcashflowsthat include an allowance for tax based on the respective jurisdiction's tax rate.This
methodis usedtoapproximate the requirement of the accounting standardstoapplya pre-tax discount ratetopre-
tax cash flows.
The future annual growth rate of 2.5% forFY22onwardstoperpetuityis based on the historical nominalGDPrates
for the country of operation.
The Group determines the recoverable amount based ona "valueinuse" calculation, using three anda half year
cashflowprojections based on the Management forecast for 2HFY18and the years ending 30 June 2019, 2020 and
2021. ForFY22onwards, the Group assumesa long-term growth ratetoallowfor organic growth on theexisting
asset base.
The following key assumptions have been used to determine the recoverable amount of the Mining CGU based on a
"value in use" calculation:
Cashflowprojections are determinedutilisingthe forecasted Earnings Before Interest, Tax, Depreciation and
Amortisation(EBITDA)lesstax, capital expenditure and working capital changes, adjustedtoexclude any
uncommitted restructuringcostsand future benefitstoprovidea "freecashflow"estimate.Thiscalculated"freecash
flow"is then discountedtoitspresent value usinga post-tax discount rate that reflects current market assessments
of thetimevalue of money and therisks specifictothe asset forwhichthe estimates of futurecashflowshave not
been adjusted.
The forecast compound annualEBITDAgrowth rate of 5.4% fromFY18to terminal yearis based on expected market
and business performance from existing contracts and certain future growth opportunities.
Page 42 of 54

Notes to the condensed consolidated financial report - continued
for the half-year ended 31 December 2017
D3. Disposal group held for sale
a) Impairment losses relating to the Net assets held for sale
Dec
2017
Note
$'m
Proceeds on disposal
123.7
Less carrying value of assets to be disposed
(168.7)
Total fair value write-down
(45.0)
Disposal costs incurred
(4.3)
Loss on disposal pre-tax
B2(c)
(49.3)
Income tax benefit
9.3
Total loss on disposal after tax
B2(c)
(40.0)
b) Assets and liabilities of disposal group held for sale
Dec 2017
Disposed
value
Fair value
adjustme
nts
Assets/
Liabilities
held for
sale
$'m $'m $'m
Trade and other receivables
29.3
Amounts due from customers under contracts
13.0
Inventory
51.2
Other assets
0.1
Intangibles (goodwill)
14.2(14.2)-
Property, plant and equipment
41.0
Assets classified as held for sale134.6
Trade and other payables
(2.2)
Amounts due to customers under contracts
(2.0)
Employee benefits provisions
(5.8)
Provisions
(0.9)
Liabilities directly associated with assets held for sale
(10.9)
Total123.7
On21 November 2017, Downer entered an agreementtosell itsFreightRailbusinesstoProgressRailfor $109
million($123.7millionafter adjusting for working capital movements thoughto31 December 2017),witha completion
date of2 January 2018.Asa consequence, the assets andliabilitiestobe divested have beenreclassifiedas current
assets and liabilities held for sale at 31 December 2017.
The disposal of the FreightRailbusinesswasmeasured at the lower ofitscarrying amount andfairvaluelesscosts
tosellresultingin a non-cash after taxwritedown of $40.0million.Thewritedown reflects the difference between the
expected final sale proceeds (less future costs) and the fair value of net assets to be divested as follows:
The write-down has been appliedtothefollowingassets held for sale: FreightRailgoodwill ($14.2million),contract
WIP($14.3million)and Property, plant and equipment ($16.5million). Fairvalue adjustmentswereclassified inthe
statement of profit orlossas "Other expenses from ordinaryactivities"for the period ended 31 December 2017.

At31 December 2017, the disposal groupwasstated atfairvaluelesscoststoselland consisted of thefollowing
assets and liabilities:
Page 43 of 54

Notes to the condensed consolidated financial report - continued
for the half-year ended 31 December 2017
D4. Joint arrangements and associate entities
31 Dec
31 Dec
2017
2016
Name of arrangementPrincipal activity
%
%
Allied Asphalt Limited
New Zealand
50 50
Australia50 50
Aust
ralia
50 50
Catering for functions at Eden Park
New Zealand
50 -
Aust
ralia
50 50
New Zeal
and
50 50
New Zealand50 50
RTL Mini
ng and Earthworks Pty Ltd
Australia
44 44
Australia50
50
ZFS Functions (Pty) Ltd
(i)
Australia
50 -
Associates
Australia27 27
Aust
ralia
49 49
Aust
ralia
- 49
(i)
Spotless joint ventures acquired as part of the Spotless Group Holdings Limited acquisition. Refer to Note D5.
There are no material commitments held by joint ventures or associates.
Alljoint ventures and associates havea statutory reporting date of 30 June,withthe exception ofMHPSPlant
Services Pty Ltd which has a statutory reporting date of 31 March.
Catering for functions at Federation Square
MHPS Plant Services Pty LtdRefurbishment, construction and
maintenance of boilers
Keolis Downer Pty LtdOperation and maintenance of Gold Coast
light rail, Melbourne tram network and bus
operation
Reliance Rail Pty Ltd Rail manufacturing and maintenance
VEC Shaw Joint VentureRoad construction
Bitumen Importers Australia Pty LtdBitumen importer
Eden Park Catering Limited
(i)
EDI Rail-Bombardier
Transportation Pty Ltd
Sale and maintenance of railway rolling
stock
Emulco LimitedEmulsion plant
Isaac Asphalt Limited Manufacture and supply of
asphalt
Contract mining; civil works and plant hire
Bitumen Importers Australia Joint
Venture
Construction of bitumen storage facility
The Group has interests in the following joint ventures and associates which are equity accounted:
Ownership interest
Country of
operation
Joint ventures
Asphalt plant
Page 44 of 54

Notes to the condensed consolidated financial report - continued
for the half-year ended 31 December 2017
D5. Acquisition and disposal of businesses
Acquisitions
Dec 2017
Spotless
Provisional
amount
disclosed at
30 Jun 2017
Acquisition
adjustments
Restated
(i)
balance at
30 Jun 2017
$'m $'m $'m
Cash and other cash equivalents
66.0 -
66.0
Trade and other receivables
412.7 (3.7)
409.0
Inventories
32.0 -
32.0
Other current assets
11.3 -
11.3
Equity accounted investments
1.8 -
1.8
Property, plant and equipment
281.2 (14.8)
266.4
Intangibles
65.9 422.8
488.7
Non-current trade and other receivables
73.4 (41.0)
32.4
Net deferred tax asset / (liability)
59.4 (90.5)
(31.1)
Other non-current assets
25.8 -
25.8
Trade and other payables
(381.6) -
(381.6)
Provisions
(162.7)(3.5)
(166.2)
Borrowings
(848.3) -
(848.3)
Financial liabilities
(2.3) -
(2.3)
Current tax payable
(7.2) -
(7.2)
Non-current trade and other payables
(11.5)(0.1)
(11.6)
Net identifiable (liabilities) / assets acquired
(384.1)269.2 (114.9)
Spotless non-controlling interest (NCI)
The following table summarises the NCI in relation to the Spotless acquisition:
Restated
(i)
Dec 2017
Jun 2017
$'m
$'m
Current assets
502.0
518.3
Non-current assets
2,284.1
2,292.9
Current liabilities
(477.1)
(1,348.2)
Non-current liabilities
(1,075.6)
(195.8)
Net assets
1,233.4
1,267.2
NCI percentage
12.198%
34.343%
Net assets attributable to NCI
150.5
435.2
(i)
30 June 2017 balances were restated to reflect the impact of acquisition accounting adjustments made during the period on opening
balances.
(i)
30 June 2017 balances were restated to reflect the impact of acquisition accounting adjustments made during the period on opening
balances.
On27 June 2017, the Group obtaineda controlling interestinSpotless Group Holdings Limited (Spotless). During
the half-year ended 31 December 2017, the Group commissioned an independent valuation of the identifiable
assets acquired andliabilitiesassumedinthe Spotless acquisition. The valuation determined the net identifiable
assets/(liabilities)as being $269.2millionhigher than previously reported.Asa consequence, the goodwill acquired
as part of Spotless acquisition has decreased by this amount resultingin the previously reported Spotless goodwill
of $1,651.3millionreducingto$1,382.1million.The comparative information shownin the financial statements has
been restatedtoinclude the adjusted fair values. There has been no impacttothe comparative profit or loss asa
result of these restatements.
Details of the identified adjustments are as follows:
During the half-year, the Group acquired an additional 22.15% interestinSpotless for $281.0million.The
consideration paidwasequaltothe carrying amount of theNCIand asa consequence, therewasno changein the
equity attributable to the owners of the Company from the acquisition of the NCI.
Page 45 of 54

Notes to the condensed consolidated financial report - continued
for the half-year ended 31 December 2017
D5. Acquisition and disposal of businesses - continued
The valuation techniques used for measuring the fair value of material assets acquired were as follows:
Asset acquiredValuation technique
Trade and other receivables
Property, plant and equipment
Intangible assets
Trade and other payables
Borrowings
Provisions
UrbanGrid

Cabrini
Market comparison technique andcosttechnique- the valuation model
considers quoted market prices forsimilaritems when available and
depreciated replacement cost when appropriate.
Multi-period excess earnings method: considers the present value of net
cashflowsexpectedtobe generated by the customer contracts and
relationships, intellectual property and brand names, excluding anycash
flowsrelatedtocontributoryassets.For the valuation of certain brand
names, discountedcashflow under the relief from royalty valuation
methodology has been utilised.
On1 July 2017, Downer acquired the net assets of UrbanGrid Australia (UrbanGrid) fora total consideration of
$28.4million.UrbanGrid providesa widerange of specialist servicestodevelop, operate and maintain Western
Australia’s essential water, energy and communications networks as well as civil projects.
Total consideration for this acquisition comprises $15.9millioncashpayment and $12.5millioncontingent
consideration. The contingent considerationis payable based on achievement of financial targets over the periods
through to 30 June 2020.
The fair value of the acquired net assets amountsto$4.2million,including $2.7millionfor acquired customer
contracts resultingina provisional goodwill of $24.2million.The acquisition accounting for UrbanGrid remains
provisionally accounted for as at 31 December 2017.
Cost technique- considers the expected economic benefits receivable
when due.
Cost technique- considers the expected economic outflow of resources
when due.
Cost technique- considers the expected economic outflow of resources
when due.
Cost technique- considers the expected economic outflow of resources
when due.
On1 July 2017, SpotlessFacilityServicesPtyLtd acquired the customer contracts and associated assets and
liabilitiesof Cabrini Linen Service(referredtoas “Cabrini”) from Cabrini Health Limited forapurchase
consideration of $20.0million(cashoutflow). Theprimarypurpose of this acquisitionis to strengthen Spotless' linen
capabilities, enhance customerserviceofferings and maintain Spotless' market-leading positioninthe Victorian
health sector.
The fair value of the acquired netliabilitiesamountsto$9.4million,including $5.5millionof acquired customer
contracts, resultingina provisional goodwill of $29.4million.The acquisition accounting for Cabrini remains
provisionally accounted for as at 31 December 2017.
Page 46 of 54

Notes to the condensed consolidated financial report - continued
for the half-year ended 31 December 2017
D5. Acquisition and disposal of businesses - continued
ITS PipeTech
Hawkins
Cash outflow on acquisitions
Spotless Other
(ii)
Total
$'m $'m $'m
Further NCI acquired during the period
(i)
281.0 -
281.0

Consideration payable at 30 June 2017
110.8 -
110.8
Gross purchase consideration
-
49.3
49.3

Deferred consideration paid during the period
(iii)
-
1.1
1.1

Less: Net cash acquired
- -
-
Less: Contingent consideration
- (12.8)
(12.8)
Total cash consideration391.8 37.6 429.4
Since 30 June 2017, as part of the acquisition accounting process, the purchase pricewasreduced by $1.8million
to$43.2million whilethe contingent consideration has increased by $0.3millionto$3.6million.Fair value
adjustments recognised during the period reduced the value of identifiable net assets by $5.7millionto$8.6million
predominately duetorevised values of acquired intangibles; resultingin$3.9millionadditional goodwill being
recognised. The acquisition accounting for ITS remains provisionally accounted for as at 31 December 2017.
On31March2017, the Group acquired the business of Hawkins, fora total consideration of $55.4million.The
principalactivitiesof Hawkins include construction, infrastructure development and project management throughout
New Zealand. The Hawkins acquisitionwillcomplement existing engineering, construction and maintenance
capabilities in New Zealand.
The netcashoutflow asa result of acquiringa further non-controlling interestin Spotless and from other business
acquisitions made during the period ended 31 December 2017 is as follows:
(i)
Represents the cash consideration paid during the period for 22.15% additional interest obtained in Spotless and $0.4 million of additional
NCI obtained and paid during the period.
(ii)
Other relates to the acquisition of UrbanGrid, ITS PipeTech, Hawkins, AGIS and Cabrini.
(iii)
Relates to AGIS deferred consideration paid during the period.
The Group continueswiththe acquisition accounting process for the Hawkins acquisition. Since 30 June 2017, fair
value adjustments identified resultedin$7.9millionof additional goodwill being recognisedwitha $0.6million
completion adjustment payment made during the period. The acquisition accounting for Hawkins remains
provisionally accounted for as at 31 December 2017.
On31March2017, the Group acquired 100% ofITSPipeTechPtyLtd(ITS),fora total consideration of $45.0
million.The principalactivitiesofITSinclude pipe bursting,civilmaintenance and robotics.ITScomplements,
grows and broadens existing pipeline capabilities in the Utilities business.
Page 47 of 54

Notes to the condensed consolidated financial report - continued
for the half-year ended 31 December 2017
D5. Acquisition and disposal of businesses - continued
Dec 2016
RPQ Group
AGIS
Disposals
On1 July 2016, the Group acquired 100% ofAGISGroupPtyLimited(AGIS)fora total consideration of $16.7
million.AGISprovides project management,systemsengineering and integration, and capability development
advicetoa range of government agencies including the Department of Defence, Australian Defence Forces and
the Department of ForeignAffairsand Trade. TheAGISacquisition expands the Group's footprintinthe Defence
sector.
On30 September 2016, the Group acquired 100% ofRPQGroup(RPQ)fora total consideration of $51.1million.
The principalactivitiesofRPQinclude the supply of asphalt, bitumen spray sealing, roadmillingand profiling, road
maintenance, foam bitumen stabilisation, mobile asphalt production, mobile crushing and equipment hire.
The final accounting for the acquisition ofRPQwasdeterminedwithan additional $0.3millionof identifiable assets
being recognised, reducing the goodwill on acquisition to $35.0 million.
Atthe date of acquisition, the net asset value ofAGISwas$6.5millionresultingin$10.2millionof goodwill being
recognised.
Dec 2017
During the period ended 31 December 2017, the Group entered into an agreementtosellitsFreightRailbusiness
toProgressRailfor $109millionadjusted for working capital movements.Asthe transactionwascompleted on2
January 2018, the assets andliabilitiesdivested have been reclassified as current assets andliabilitiesheld for
sale at 31 December 2017. Refer to Note D3.
Dec 2016
The Group did not dispose any business during the period ended 31 December 2016.
Page 48 of 54

Notes to the condensed consolidated financial report - continued
for the half-year ended 31 December 2017
D6. Contingent liabilities
Dec
Jun
2017
2017
$'m
$'m
Bonding
1,161.1 1,185.5
Other contingent liabilities
i)
ii)
iii)
iv)
v)
vi)
Several New Zealand entitiesin the Group have been named as co-defendantsin five“leaky building”claims.
The leaky buildingclaimswhere Group entities are co-defendants generally relatetowater damagearising
from design and construction methodologies (and certification) for residential and other buildings thatwere
commoninNew Zealand during theearly-mid2000s. The Directors are of the opinion that disclosure of any
further information relating to the leaky building claims would be prejudicial to the interests of the Group.
Ground subsidence at some locations at the WaratahTrainMaintenance Centre located on Manchester
Road, Auburn(‘AMC’)has been identified. The design and construction of theAMCformed part of the
WaratahTrainProject,withRelianceRailcontracting Downertodesign andbuildtheAMC.Inturn, Downer
subcontractedthisworktoJohn HollandPtyLtd. The design and construction of the areasinwhich
subsidence has been observed formed part of the subcontractor’s design and construct obligations.A New
South Wales Supreme Court hearing concludedin December 2017in relationtoDowner’sclaimagainst John
Holland (anditsconsultants and supplier). The decisionis pending.If the Court findsin favour of Downer that
theAMCwasnot constructedinaccordancewiththe relevant subcontract obligations then the areas where
subsidenceis presentwillbe rectified.Inthe event that the Court finds against Downer, then Downerwillbe
liable for the legal costs of the defendants.
The Group carries the normal contractor’s and consultant’sliability inrelationtoservices,supply and
construction contracts (for example,liabilityrelatingtoprofessional advice, design, completion, workmanship,
and damage), aswellasliabilityfor personal injury/property damage during the course ofa project. Potential
liabilitymayarisefromclaims,disputes and/or litigation/arbitration by or against Group companies and/or joint
venture arrangementsinwhichthe Group has an interest. The Groupiscurrently managinga number of
claims,arbitration andlitigationprocessesin relationtoservices,supply and construction contracts aswellas
in relation to personal injury and property damage claims arising from project delivery.
The Group has bid bonds and performance bonds issued in respect of contract
performance in the normal course of business for wholly-owned controlled
entities
The Groupis calledupontogiveguarantees and indemnitiestocounterparties, relatingtothe performance of
contractual and financial obligations (including for controlled entities and related parties). Other than as noted
above, these guarantees and indemnities are indeterminable in amount.
The Groupis subjecttodesignliability inrelationto completed design and construction projects. The Directors
are of the opinion that thereisadequate insurancetocoverthisarea and accordingly, no amounts are
recognised in the financial statements.
The Groupissubjecttoproductliability claims. Provision ismade for the potentialcostsof carrying out
rectificationworksbased on knownclaimsand previousclaimshistory. However, as theultimateoutcome of
theseclaimscannot bereliablydetermined at the date ofthisreport, contingentliabilitymayexistfor any
amounts that ultimately becomes payable in excess of current provisioning levels.
Controlled entities have enteredintovarious joint arrangements underwhichthe controlled entityis jointlyand
severally liable for the obligations of the relevant joint arrangements.
Page 49 of 54

Notes to the condensed consolidated financial report - continued
for the half-year ended 31 December 2017
D6. Contingent liabilities - continued
vii)
viii)
ix)
On16 September 2015, the Group announced thatit had terminateda contractwithTecnicas ReunidasS.A.
(“TR”)following TR’s failuretoremedya substantial breach of the contract and that the Group would be
pursuinga claimagainstTRin the order of $65million.Downer hassincedemobilised from thesiteand has
commenceda claimthatwillbe determinedviaan arbitration process,witha hearing date now scheduledto
commenceinFebruary 2019.TRhasinitiateda counter-claim,whichisbeing defended by Downer. The
Directors are of the opinion that disclosure of any further information relatingtothismatter would be
prejudicial to the interests of the Group.
Spotless hasa 30 yearFacilitiesManagement Subcontract (“Subcontract”) at the new Royal Adelaide Hospital
(“nRAH”)and commencedservicedeliveryin September 2017. Spotless’ Subcontractis withCelsus,whichis
a special purposevehiclethatis delivering the hospitaltothe South Australian Government undera Public
Private Partnership model.
On27 November 2017, Spotless announced that the Subcontractisan underperforming contract. The
Subcontractiscashnegative and Spotlessisworkingtoresolvea number of commercial and operational
issues, which include significant preliminary claims and counter claims.
On25 May 2017,AlisonCourt, as applicant,fileda representative proceedingin the Federal Court ofAustralia
on behalf of shareholderswhoacquired Spotless shares from 25 August 2015to1 December 2015. The
applicant underthisproceeding alleges that Spotless engagedinmisleading or deceptive conduct and/or
breacheditscontinuous disclosure obligationsinrelationtoSpotless' financial results for the financial year
ended 30 June 2015, andin itsconductfollowingthe release of those financial results until Spotless issuedits
trading update of2 December 2015. The applicant seeks damages, declarations, interest andcosts.Spotless
isvigorously defending the proceeding.Noprovision has been recognisedinrespect of the representative
proceeding.
Page 50 of 54

Notes to the condensed consolidated financial report - continued
for the half-year ended 31 December 2017
Other
E1. New accounting standards
E1. New accounting standards
a) New and amended accounting standards adopted by the Group
Adoption of these standards has not resulted in any material changes to the Group’s financial statements.
b) New accounting standards and interpretations not yet adopted
AASB 9 - Financial Instruments
AASB 15 - Revenue from Contracts with Customers
- AASB2016-1AmendmentstoAustralian Accounting Standards– Recognition of Deferred TaxAssetsfor Unrealised
Losses (AASB 112);
E
AASB15 changes the way revenueis recognised and provides fora significant increasein thedisclosurerequirements
for the business.Thecoreprincipleis that an entity recognises revenuetodepict the transfer of promised goods or
servicestocustomersinan amount that reflects the considerationtowhich the entity expectstobe entitledin
exchange for those goods or services. This means that revenue will be recognised when control of goods or services is
transferred rather than on transfer of risks and rewards.
Thestandardis only expectedtoimpact those contracts that are ongoing at the date of adoption.TheGroupis inthe
process ofassessingthe full impact of the application ofAASB15, which involvescarryingouta review of all existing
major contractstoensure the impact and effect of the new standardis fullyunderstoodinadvance of theeffective
date.Asat 31 December 2017,a high level impactassessment acrossthe Group has been completedwithdetailed
contract reviews ona sample of key contractsacrossthe divisions ongoing.TheGroup has also performed project
assessments across new long-term service contracts.
Inthe current period, the Group has applieda number of new andrevisedaccounting standards issued by the
Australian Accounting Standards Board(AASB)that are mandatorilyeffectivefor an accounting period that begins on
or after 1 July 2017, as follows:
- AASB2016-2AmendmentstoAustralian Accounting Standards- DisclosureInitiative: AmendmentstoAASB107;
and
- AASB 2017-2 Amendments to Australian Accounting Standards – Further Annual Improvements 2014-2016 Cycle.
Thenew impairment model requires the recognition of impairment provisions based on expected credit losses rather
than only incurred creditlosses.Whilstthe Group hasyettofinalise itsdetailedassessmentof the impact ofAASB 9
and its interaction with AASB 15 it may result in earlier recognition of credit loss provisions.
Thenew standard also introduces expandeddisclosurerequirements and changesinpresentation. These are
expectedtochange the nature and extent of the Group’sdisclosureaboutitsfinancial instruments particularlyinthe
year of adoption of the new standard.
Thefollowing standards, amendmentstostandards and interpretations are relevanttocurrent operations. They are
available for early adoption but have not been applied by the Group in this Financial Report.
AASB 9addresses the classification, measurement and derecognition of financial assets and financialliabilitiesand
introduces new rules for hedge accounting anda new impairment model for financialassets.Thestandardisnot
applicable until 1 July 2018.
TheGroup expects existing hedge relationships would appeartoqualify as continuing hedge relationships upon
adoption of the new standard and does not expect the standardtohavea significant impact on the recognition or
measurement of the Group’s financial instruments.
Page 51 of 54

Notes to the condensed consolidated financial report - continued
for the half-year ended 31 December 2017
E1. New accounting standards - continued
b) New accounting standards and interpretations not yet adopted - continued
AASB 15 - Revenue from Contracts with Customers - continued
While a detailed assessment is yet to be concluded, the Group expects the following impacts:
-
-
-
Implementation may require some development of current reporting systems and processes.
-
Public Private Partnership accounting may be impacted.
AASB 16 - Leases
AASB 15 requires only incremental costs of obtaining a contract to be capitalised and then expensed over the
contract period.
Thenew standard also introduces expandeddisclosurerequirements and changesinpresentation, particularlyin
relationtokey judgements and future revenue expectedtobe generated. These are expectedtochange the nature
and extent of the Group’sdisclosureaboutitsrevenue from contractswithcustomersand associatedassets,
particularly in the year of adoption of the new standard.
AASB15 needstobe implemented eitherfullyretrospectively, which would require restatement of comparatives, or
using the cumulative effect method, which would not requirea restatement of comparatives, upon theeffectivedate of
1 July 2018.AASB15 presentstwotransition approaches(fullyretrospectiveand modifiedretrospectiveapproach)
each of them containinga number of practical expedients. Although the detailedassessmentis not finalisedyet,the
modifiedretrospectiveapproach was elected under the transition rules,withthe cumulative effect ofinitiallyapplying
the new standard to be recognised at the date of initial application (1 July 2018) in opening retained earnings.
AASB16willreplace the current leasing standardAASB117, and contains significant changestothe accounting
treatment of leases around howtorecognise, measure anddiscloseleases.Thenew standard providesa single
lessee accounting model, requiring lesseestorecognise assets andliabilitiesfor all leases,withthe exception of short-
term(lessthan 12 months) and low value leases.AASB16 appliestoannual reporting periods beginning on or after1
July 2019.
TheGroup managesitsowned and leased assetstoensure thereisan appropriate level of equipmenttomeetits
current obligations andtotender for new work.Thedecision astowhethertolease or purchase an assetis dependent
on the finance available at thetimeand the residualriskof ownership following the anticipated completion of the
project.
AASB15willbecome mandatory for reporting periods beginning on or after1 July 2018.TheGroup does not intendto
early adopt this standard beforeitsmandatoryeffectivedate and thereforeAASB15willbe applied for thefirsttime in
the 2019 half-year Financial Report.
AASB15 hasa higher threshold of probability and therefore revenueistobe recognised only whenit ishighly
probable thata significantreversalwillnotoccur.It isexpected thiswillimpact thetiming/ quantum of project
variances, variable and incentive based payments, andclaimsrecognised as part of “amounts due fromcustomers
under contract and rendering of services”.
Page 52 of 54

Notes to the condensed consolidated financial report - continued
for the half-year ended 31 December 2017
E1. New accounting standards - continued
b) New accounting standards and interpretations not yet adopted - continued
AASB 16 - Leases - continued
-
-
- Depreciation charge will increase as the right of use asset is recognised;
- Lease rental expenses will decrease due to the recognition of interest and depreciation noted above; and
-
Other
- IFRIC 22 Foreign currency transactions and Advance consideration;
- AASB 2017-4 Amendments to Australian Accounting Standards – Uncertainty over Income Tax Treatments.
-AASB2014-10AmendmentstoAustralian Accounting Standards: Sale or Contribution ofAssetsBetween an
Investor and its Associate or Joint Venture;
- IFRIC 23 Uncertainty over Income Tax Treatments; and
AASB16 needstobe implemented retrospectively, eitherwiththe restatement of comparatives orwiththe cumulative
impact of application recognised as at1 July 2019 under the modifiedretrospectiveapproach.TheGroupis inthe
process of assessing the available options for transition.
Thefollowing new or amended standards are not expectedtohavea significant impact on the Group’s consolidated
financial statements:
Todate, management has focused on the identification of the provisions of the standard whichwillmostimpact the
Group andis inthe process of determining whether any additional arrangementsin excessof the current portfoliowill
be considered asa lease, togetherwitha review of the lease contracts and financial reportingsystemsinplace.As
such, the Group has not quantifiedyetthe effect of the new standard however; the following impacts are expected on
implementation date:
Total assets and totalliabilities willincrease, duetothe recognition ofa “Right ofUseAsset”anda “LeaseLiability”
grossing up the assets and liabilities in the Consolidated Statement of Financial Position;
Interest expensewillincrease duetotheeffectiveinterest rateimplicit inthe lease, where the interest expense
component is higher on early years on the lease;
Operatingcashflowswillbe higher as repayment of the principle portion of all leaseliabilities willbeclassifiedas
financing activities.
Page 53 of 54

Directors' Declaration
for the half-year ended 31 December 2017
In the opinion of the Directors' of Downer EDI Limited:
(a)
(i)
(ii)
(b)
On behalf of the Directors
R M Harding
Chairman
Sydney, 21 February 2018
the condensed consolidated half-year Financial Report and notes set out on pages 23to53, arein
accordance with the Corporations Act 2001 (Cth), including:
there are reasonable groundstobelieve that the Companywillbe abletopayitsdebts as and when they
become due and payable.
Signed in accordance with a resolution of the Directors:
givinga true andfairviewof the Group's financial position as at 31 December 2017 and ofits
performance for the six month period ended on that date; and
complyingwithAustralian Accounting StandardAASB134Interim Financial Reportingand the
Corporations Regulations 2001; and
Page 54 of 54

Media/ASX and NZX Release
21 February 2018
DOWNER DELIVERS STRONG RESULT
MAINTAINS FULL YEAR GUIDANCE
Downer EDI Limited (Downer) today announced its financial results for the six months to 31 December 2017.
 Total revenue of $6.1 billion, up 69.3% (up 20.6% on a pro forma basis);
 Underlying earnings before interest, tax and amortisation of acquired intangible assets (EBITA) of
$222.3 million, up 79.0% (up 14.5% on a pro forma basis);
 Underlying earnings before interest and tax (EBIT) of $191.6 million, up 58.6% (up 3.2% on a pro forma
basis);
 Underlying net profit after tax and before amortisation of acquired intangible assets (NPATA) of
$132.0 million, up 63.8% (up 12.7% on a pro forma basis);
 Statutory NPATA of $5.7 million after $126.3 million of individually significant items;
 Statutory net loss after tax of $15.9 million after deducting post-tax amortisation of acquired intangible
assets of $21.6 million;
 Operating cash flow of $307.1 million, representing cash conversion of 88% of earnings before interest,
tax, depreciation and amortisation (EBITDA);
 Gearing (including Spotless) of 24.6% (27.0% including off-balance sheet debt);
 Available liquidity of $1.4 billion;
 Work-in-hand of $39.2 billion; and
 Lost Time Injury Frequency Rate of 0.69 per million hours worked; Total Recordable Injury Frequency
Rate of 3.38 per million hours worked.
The references to “a pro forma basis” above mean that Spotless’ contribution for the period 1 July 2016 to
31 December 2016 has been included to allow comparison of the combined Downer and Spotless results as
if the acquisition of Spotless had occurred on 1 July 2016.
All the figures above include 100% contribution from Spotless, before minority interests.
A full reconciliation from the underlying result to the statutory result is provided on slide 13 of the Investor
Presentation.

Downer EDI Limited
ABN 97 003 872 848
Triniti Business Campus
39 Delhi Road
North Ryde NSW 2113
1800 DOWNER
www.downergroup.com

Page 2 of 3

Downer reports its financial results under six service lines and the performance of each service line,
compared with the previous corresponding period, is summarised below:

Transport Utilities
Total revenue of $1.2 billion, up 35.9% Total revenue of $851.9 million, up 23.8%
EBITA of $55.6 million, up 34.3% EBITA of $45.8 million, up 7.8%
Work-in-hand of $5.7 billion Work-in-hand of $2.8 billion

Rail Engineering, Construction & Maintenance
Total revenue of $543.9 million, up 36.1% Total revenue of $1.2 billion, up 27.3%
EBITA of $18.0 million, up 28.6% EBITA of $36.7 million, up 35.4%
Work-in-hand of $8.7 billion Work-in-hand of $2.5 billion

Mining Spotless
Total revenue of $689.5 million, up 8.5% Total revenue of $1.5 billion, up 6.0%
EBITA of $20.9 million, down 52.9% EBITA of $78.6 million, up 12.4%
Work-in-hand of $2.0 billion Work-in-hand of $17.5 billion

The Chief Executive Officer of Downer, Grant Fenn, said he was very pleased that Downer had maintained
its target of delivering consolidated underlying NPATA of $295 million before minority interests for the full
financial year, despite the sale of the freight rail business and a significantly softer result from the Mining
service line.
“Our Transport service line performed strongly once again, growing both revenue and EBIT,” Mr Fenn said.
“This growth was driven by the Roads business in both Australia and New Zealand and ongoing government
investment in transport infrastructure projects. We expect this investment to continue and the outlook for
Transport remains positive.”
Growth in the Utilities service line continues to be driven by increased nbn
TM
volumes, while the performance
of the New Zealand Communications and Water businesses has improved. The environment for Renewables
remains competitive and this has impacted margins.
The growth achieved by the Rail service line was driven by two major projects, High Capacity Metro Trains in
Victoria and Sydney Growth Trains in New South Wales, while the long term Waratah and Millennium
maintenance contracts also continued to perform well.
Downer announced on 21 November 2017 that it had entered into an agreement to sell its freight rail
business to Progress Rail, a Caterpillar company and the world’s leading manufacturer of diesel-electric
locomotives, for $109 million. The sale was completed on 2 January 2018.
“It is very pleasing that the loss of earnings from the sale of our freight rail business will be offset in the
second half of the year by contributions from the major Rail projects, our passenger rolling stock business
and Keolis Downer,” Mr Fenn said.
“Downer is Australia’s leading provider of passenger rolling stock asset management services and we are
very well placed to drive reliable and safe services to the fast growing and dynamic public transport sector.”
The Gorgon and Wheatstone gas projects continued to make a strong contribution to the performance of
Engineering, Construction & Maintenance (EC&M), while Downer also ramped up its activities at the Ichthys
gas project. The Mineral Technologies consultancy, which has been challenged in recent years, delivered a
significantly improved performance.

Page 3 of 3

EC&M’s result included a full six month contribution from Hawkins, which has been performing well since its
acquisition in March 2017. On 11 December 2017, a Downer-Ausenco joint venture was awarded a contract
by OZ Minerals Carrapateena Pty Ltd for work at the Carrapateena copper gold mine project in South
Australia.
On 5 February 2018, Downer announced a $77 million impairment of Mining goodwill. This charge is a non-
cash item and has been disclosed as an individually significant non-recurring item. It has no impact on cash
flow or the company’s existing operations.
The significant fall in EBITA for the Mining service line is predominantly due to the conclusion of the
Christmas Creek contract in the prior corresponding period. Pleasingly, on 20 December 2017 Downer was
awarded a five year contract valued at approximately $400 million to provide mining services at the Gruyere
Gold Project in Western Australia.
“The earnings for Spotless in the six month period are in line with Downer’s business case, cost synergies
are expected to exceed our original estimates and integration continues to progress very well,” Mr Fenn said.
Spotless and Downer continue to focus on the Royal Adelaide Hospital contract which, as reported in
November, is an underperforming contract that is currently cash negative. Spotless and Downer are working
hard to address the various issues and turn the contract performance around. Commercial discussions are
continuing with the customer.
Safety
Downer continues to perform well against key health and safety indicators with a Lost Time Injury Frequency
Rate of 0.69 per million hours worked and a Total Recordable Injury Frequency Rate of 3.38 per million
hours worked.
Dividend
The Downer Board resolved to pay an interim dividend of 13.0 cents per share, 50% franked, (12.0 cents per
share fully franked in the prior corresponding period) payable on 4 April 2018 to shareholders on the register
at 7 March 2018. The unfranked portion of the dividend (50%) will be paid out of Conduit Foreign Income.
The company’s Dividend Reinvestment Plan (DRP) remains suspended and will not operate for this
dividend.
Outlook
Downer is targeting consolidated underlying NPATA of $295 million before minority interests for the 2018
financial year. This includes underlying NPATA of $202 million for Downer and $93 million for Spotless.


For further information please contact:
Michael Sharp, Group Head of Corporate Affairs and Investor Relations +61 439 470145

About Downer
Downer is the leading provider of integrated services in Australia and New Zealand and customers are at the heart of
everything it does. It exists to create and sustain the modern environment and its promise is to work closely with its
customers to help them succeed, using world-leading insights and solutions to design, build and sustain assets,
infrastructure and facilities. Downer employs approximately 56,000 people across more than 300 sites, primarily in
Australia and New Zealand, but also in the Asia-Pacific region, South America and Southern Africa. It also owns 88 per
cent of Spotless Group Holdings Limited. For more information visit downergroup.com

Downer Half Year Results | 21 February 2018
INVESTOR PRESENTATION

OVERVIEW
Total revenue
1
$6.1 billion, up 69.3% (up 20.6% on a pro forma basis)
1 Total revenue is a non-statutory disclosure and includes revenue from joint ventures and other alliances and other income.
Underlying Earnings Before Interest and Tax (EBIT) $191.6 million, up 58.6% (up 3.2% on a pro
forma basis)
Underlying Earnings Before Interest, Tax and Amortisation of acquired intangible assets (EBITA)
$222.3 million, up 79.0% (up 14.5% on a pro forma basis)

2
Statutory Net Profit After Tax before Amortisation of acquired intangible assets (NPATA) of $5.7
million, after $126.3 million of individually significant items
The references to ‘a pro forma’ basis above mean that Spotless’ contribution for the period 1 July 2016 to 31 December 2016 has been
included to allow comparison of the combined Downer and Spotless results as if the acquisition had occurred on 1 July 2016.
Statutory Net Loss After Tax of $15.9 million after deducting post-tax amortisation of acquired intangible
assets of $21.6 million
All figures above include 100% contribution from Spotless, before minority interest. A full reconciliation from underlying to statutory results
is provided on slide 13.
Underlying NPATA of $132.0 million, up 63.8% (up 12.7% on a pro forma basis)

OVERVIEW (continued)
Operating cash flow $307.1 million, EBITDA conversion 88%
1 Adjusted for the mark-to-market of derivatives and deferred finance charges.
2Gearing = Net debt / net debt + equity.
Gearing of 22.6% post-Freight Rail divestment.
Gearing including off-balance sheet debt based on present value of plant and equipment
operating leases discounted at 10% pa: $139.2m (June 2017: $151.5m).
3Work-in-hand numbers are unaudited.
4Lost Time Injury Frequency Rate - the number of lost time injuries (LTIs) per million hours worked.
5Total Recordable Injury Frequency Rate – the number of LTIs and medically treated injuries per million
hours worked.

Gearing (including Spotless) 24.6%
2
, 27.0% including off balance sheet debt
Net debt
1
$1,046.9 million (including $806.6 million from Spotless)

LTIFR
4
of 0.69, up from 0.55 at 31 December 2016; TRIFR
5
of 3.38, down from 3.61 at
31 December 2016
3
Interim dividend declared: 13.0 cps, 50% franked; no Dividend Reinvestment Plan
Liquidity of $1,375.4 million (Downer $1,111.5 million; Spotless $263.9 million)

Work in hand
3

$39.2 billion (Downer $21.7 billion, Spotless $17.5 billion)

TRANSPORT
OPPORTUNITIES
Total revenue
1
$m EBITA margin EBITA
2
$m ROFE
3
55.6
41.4
0
10
20
30
40
50
60
HY18HY17
4.5% 4.5%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
HY18HY17
1,238.0
911.2
0
200
400
600
800
1,000
1,200
1,400
HY18HY17
4
Growth driven by:
–strong performance by the Roads business in Australia and New Zealand
–ongoing Government investment in transport infrastructure projects in Australia
Continuing good performance in New Zealand, including Kaikoura earthquake recovery works
24.5%
21.0%
0%
5%
10%
15%
20%
25%
30%
HY18HY17
1Total revenue includes joint ventures and other income.
2Downer calculates EBITA adjusting EBIT to add back acquired intangible assets amortisation expenses. HY18: $0.1m (HY17: $nil).
3ROFE = EBITA divided by average funds employed (AFE). AFE = Average Opening and Closing Net Debt + Equity.

UTILITIES
Total revenue
1
$m EBITA margin EBITA
2
$m ROFE
3
851.9
688.2
0
200
400
600
800
1,000
HY18HY17
45.8
42.5
0
10
20
30
40
50
HY18HY17
5.4%
6.2%
0%
1%
2%
3%
4%
5%
6%
7%
HY18HY17
23.6%
19.7%
0%
5%
10%
15%
20%
25%
HY18HY17
5
Growth driven by increased nbn
TM
volumes
Environment for Renewables remains very competitive, impacting margins
Improved performance from Communications and Water businesses in New Zealand
Increased opportunities for Power business in Australia
1Total revenue includes joint ventures and other income.
2Downer calculates EBITA adjusting EBIT to add back acquired intangible assets amortisation expenses. HY18: $0.8m (HY17: $nil).
3ROFE = EBITA divided by average funds employed (AFE). AFE = Average Opening and Closing Net Debt + Equity.

RAIL
Total revenue
1
$m EBITA margin EBITA
2
$m ROFE
3
543.9
399.7
0
100
200
300
400
500
600
HY18HY17
18.0
14.0
0.0
5.0
10.0
15.0
20.0
HY18HY17
3.3%
3.5%
0%
1%
2%
3%
4%
HY18HY17
8.4%
5.4%
0%
2%
4%
6%
8%
10%
HY18HY17




6
Major projects (Sydney Growth Trains, High Capacity Metro Trains) performing well – first Sydney Growth
Train has left Dalian port
Continuing strong performance on maintenance contracts (Waratah TLS, Millennium)
Keolis Downer awarded seven year extension to operate Yarra Trams franchise
Loss of earnings from sale of freight rail (completed 2 January 2018) will be offset in the second half of the
year by contributions from major projects, passenger rail business and Keolis Downer
1Total revenue includes joint ventures and other income.
2Downer calculates EBITA adjusting EBIT to add back acquired intangible assets amortisation expenses. HY18: $nil (HY17: $nil).
3ROFE = EBITA divided by average funds employed (AFE). AFE = Average Opening and Closing Net Debt + Equity.

Total revenue
1
$m EBITA margin EBITA
2
$m ROFE
3
36.7
27.1
0.0
10.0
20.0
30.0
40.0
HY18HY17
3.0%
2.8%
0%
1%
2%
3%
4%
HY18HY17
26.9%
25.1%
0%
5%
10%
15%
20%
25%
30%
HY18HY17
1,239.3
973.4
0
500
1000
1500
HY18HY17
ENGINEERING, CONSTRUCTION & MAINTENANCE
7
Strong contributions from LNG construction contract extensions at Gorgon, Wheatstone and Ichthys
Full six month contribution from Hawkins (acquired March 2017)
Strong growth of Maintenance business – diverse portfolio of long term service contracts in oil &
gas, resources, and power generation sectors
New construction wins – BHP Iron Ore and Oz Minerals’ Carrapateena project (gold and copper)
Continued growth in Defence Engineering (AGIS) and Minerals Technology consultancies
1Total revenue includes joint ventures and other income.
2Downer calculates EBITA adjusting EBIT to add back acquired intangible assets amortisation expenses. HY18: $0.2m (HY17: $nil).
3ROFE = EBITA divided by average funds employed (AFE). AFE = Average Opening and Closing Net Debt + Equity.

MINING
Total revenue
1
$m EBITA margin EBITA
2
$m ROFE
3
689.5
635.4
0
100
200
300
400
500
600
700
800
HY18HY17
20.9
44.4
0
10
20
30
40
50
HY18HY17
3.0%
7.0%
0%
2%
4%
6%
8%
HY18HY17
9.5%
16.3%
0%
5%
10%
15%
20%
HY18HY17
8
$77 million non-cash charge for impairment of Mining goodwill (announced 5 February)
Significant EBITA reduction primarily due to conclusion of Christmas Creek contract (September 2016)
Volume increases at Roy Hill and Goonyella
Gruyere Gold Project commences in early 2018 (approximately $400 million over five years)

1Total revenue includes joint ventures and other income.
2Downer calculates EBITA adjusting EBIT to add back acquired intangible assets amortisation expenses. HY18: $nil (HY17: $nil).
3ROFE = EBITA divided by average funds employed (AFE). AFE = Average Opening and Closing Net Debt + Equity.

SPOTLESS

9
1Total revenue includes joint ventures and other income.
2Downer calculates EBITA adjusting EBIT to add back acquired intangible assets amortisation expenses. HY18: $5.5m (HY17: $5.1m).
3ROFE = EBITA divided by average funds employed (AFE). AFE = Average Opening and Closing Net Debt + Equity.
Total Underlying revenue
1
$m Underlying EBITA margin Underlying EBITA
2
$m

1,542.5

1,455.4
0
500
1,000
1,500
2,000
HY18HY17
78.6
69.9
0
20
40
60
80
100
HY18HY17
5.1%
4.8%
0%
1%
2%
3%
4%
5%
6%
HY18HY17
Earnings for the six month period in line with Downer’s business case
Cost synergies expected to exceed original estimates and revenue opportunities are significant
Integration continues to progress well and quickly
Key process and management changes

14.7%
14.5%
0%
2%
4%
6%
8%
10%
12%
14%
16%
HY18HY17
ROFE
3

ROYAL ADELAIDE HOSPITAL
10

Key Challenge
─Higher number of FTEs to meet additional scope
─Currently cash negative

Commercial discussions ongoing

Spotless improvement plan in action

UNDERLYING FINANCIAL PERFORMANCE

1.Represents 100% contribution before minority interests.
2.Includes statutory HY17 for Downer and underlying HY17 for Spotless.
3.Total revenue includes joint ventures and other income.
4.Downer calculates EBITA and NPATA by adjusting EBIT and NPAT to add back acquired intangible assets amortisation expenses. HY18: $30.7m , $21.6m after-tax (HY17: $8.5m, $5.9m after-tax).
5.ROFE = EBITA divided by average funds employed (AFE); AFE = Average Opening and Closing Net Debt + Equity. HY18 ROFE based on ‘a pro forma’ 12 month rolling underlying EBITA of $480.6m
for the Combined group (Downer $300.1m plus Spotless underlying EBITA of $180.5m) divided by the closing funds employed as at 31 December 2017.
6.Ordinary dividend payout ratio = Dividends divided by (NPATA – ROADS dividend).
$m Downer Spotless
1
Acquisition
Adjustment

Combined
Group HY18

Pro forma
HY17
2
Change
(%)
Total revenue
3
4,558.0 1,542.5 - 6,100.5 5,058.4 20.6
EBITDA 253.8 123.0 - 376.8 346.9 8.6
EBITA
4
143.7 78.6 - 222.3 194.1 14.5
EBIT 139.2 73.1 (20.7) 191.6 185.6 3.2
Net interest expense (16.6) (20.4) (4.0) (41.0) (33.9) (20.9)
Tax expense (32.0) (15.6) 7.4 (40.2) (40.5) 0.7
Net profit after tax 90.6 37.1 (17.3) 110.4 111.2 (0.7)
NPATA
4
93.8 41.0 (2.8) 132.0 117.1 12.7
EBITA margin 3.2% 5.1% 3.6% 3.8% (0.2)
Effective tax rate 26.1% 29.6% 30.0% 26.7%
26.7% -
ROFE
5
11.3%
Dividend declared (cps) 13.0 12.0 8.3
Ordinary Dividend payout ratio
6
60.4%

12

RECONCILIATION OF UNDERLYING TO
STATUTORY RESULT


1H18
$m
EBIT
Net
interest
expense
Tax
expense
NPAT
Add back:
Amortisation
Post-Tax
NPATA
Underlying result 191.6 (41.0) (40.2) 110.4 21.6 132.0
Loss on divestment of freight rail

(49.3) - 9.3 (40.0) - (40.0)
Mining goodwill impairment

(76.4) - - (76.4) - (76.4)
Spotless integration costs

(3.4) - 0.8 (2.6) - (2.6)
Spotless Management redundancies and
integration costs

(3.1) - 0.9 (2.2) - (2.2)
Spotless residual Strategy Reset costs

(7.1) - 2.0 (5.1) - (5.1)
Individually Significant Items (139.3) - 13.0 (126.3) - (126.3)
Statutory result 52.3 (41.0) (27.2) (15.9) 21.6 5.7
13
Note:
•Results represent 100% contribution before minority interests.
•Downer’s statutory results are reported under International Financial Reporting Standards. Earnings before individually signific ant items (ISI) is a non-IFRS
measure reported to provide a greater understanding of the underlying business performance of the Group. ISI are detailed in Note B2(c) of the Half Year
Financial Report and relate to amounts of expense that are associated with business disposal, impairment of goodwill and Spotless related transactions.