Annual Report to shareholders

Page 1 of 1

16 August 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 4E – results for announcement to the market for the year ended 30 June 2018;
2. 2018 Annual Report;
3. Market release dated 16 August 2018;
4. Investor Presentation; and
5. Appendix 4G – Key to Disclosures Corporate Governance Principles and
Recommendations.

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 year ended 30 June 2018
Appendix 4E
2018
2017
%
$'m
$'m
change
Revenue from ordinary activitie
s12,016.6 7,267.1
Other income14.3 20.3
Total revenue and other income from ordinary activitie
s12,030.9 7,287.4 65.1%
Total revenue including joint ventures and other income 12,620.2 7,812.3 61.5%
204.8 277.8 (26.3%)
271.5 285.2 (4.8%)
71.4 181.5 (60.7%)
117.9 186.6 (36.8%)
2018
2017
%
cents
cents
change
Basic earnings per shar
e10.7 35.8 (70.1%)
Diluted earnings per share
(i)
10.7 35.0 (69.4%)
Net tangible asset backing per ordinary share
(ii)
26.0 93.4 (72.2%)
(i)
At 30 June 2018, the ROADS are deemed anti-dilutive and consequently, diluted EPS remained at 10.7 cents per share.
Dividend20182017
FinalFinal
Dividend per share (cents)14.012.0
Franked amount per share (cents)7.012.0
Conduit foreign income (CFI)50
% -
Dividend record dat
e30/08/201812/09/2017
Dividend payable date27/09/201810/10/2017
Redeemable Optionally Adjustable Distributing Securities (ROADS)
Dividend per ROADS (in Australian cents)4.01 4.28
New Zealand imputation credit percentage per ROADS 100
%100%
ROADS payment dat
eQuarter 1Quarter 2Quarter 3Quarter 4
Instalment date FY201
815/09/201715/12/201715/03/201815/06/2018
Instalment date FY201715/09/201615/12/201615/03/201715/06/2017
For commentary on the results for the year and review of operations, please refer to the Directors' Report and separate
media release attached.
Earnings before interest and tax
Profit from ordinary activities after tax before amortisation of acquired
intangible assets (NPATA)
Downer EDI's Dividend Reinvestment Plan (DRP) has been suspended.
Earnings before interest and tax and amortisation of acquired intangible
assets (EBITA)
Profit from ordinary activities after tax attributable to members of the
parent entity
(ii)
June 2017 balance was restated to reflect the impact of acquisition accounting adjustments made during the period on opening
balances.

Annual
Report
2018
SCHOOL
HOSPITAL
HOTEL
LAUNDRYCLEANOGAS CO

This Annual Report includes
the Downer EDI Limited
Directors’ Report, the
Annual Financial Report and
Independent Audit Report
for the financial year ended
30 June 2018. The Annual
Report is available on
the Downer website
www.downergroup.com.

Annual Report 2018 1
Contents
Directors’ Report
Page 2
Auditor’s signed reports
Page 52 Auditor’s Independence Declaration
Page 53 Independent Auditor’s Report
Financial Statements
Page 62 Consolidated Statement of Profit or Loss and Other Comprehensive Income
Page 63 Consolidated Statement of Financial Position
Page 64 Consolidated Statement of Changes in Equity
Page 65 Consolidated Statement of Cash Flows
Notes to the consolidated financial statements
A
About this
report
Page 66-67
B
Business
performance
Page 68-77
C
Operating assets
and liabilities
Page 78-87
D
Employee
benefits
Page 88
E
Capital structure
and financing
Page 89-95
F
Group
structure
Page 96-106
G
Other
Page 107-120
B1
Segment
information
C1
Reconciliation
of cash and
cash equivalents
D1
Employee benefits
E1
Borrowings
F1
Joint arrangements
and associate
entities
G1
New accounting
standards
B2
Profit from
ordinary activities
C2
Trade and other
receivables
D2
Key management
personnel
compensation
E2
Financing facilities
F2
Acquisition of
businesses
G2
Capital and financial
risk management
B3
Earnings per share
C3
Rendering of
services and
construction
contracts
D3
Employee discount
share plan
E3
Commitments
F3
Disposal of
business
G3
Other financial
assets and liabilities
B4
Taxation
C4
Inventories
E4
Issued capital
F4
Controlled entities
B5
Remuneration
of auditors
C5
Trade and other
payables
E5
Reserves
F5
Related party
information
B6
Subsequent events
C6
Property, plant
and equipment
E6
Dividends
F6
Parent entity
disclosures
C7
Intangible assets
C8
Provisions
C9
Contingent
liabilities
Page 121 Directors’ Declaration
Other information
Page 122 Sustainability Performance Summary 2018
Page 127 Corporate Governance
Page 136 Information for Investors

2 Downer EDI Limited
Directors’ Report
for the year ended 30 June 2018
The Directors of Downer EDI Limited submit the Annual
Financial Report of the Company for the financial year
ended 30 June 2018. In compliance with the provisions
of the Corporations Act 2001 (Cth), the Directors’ Report
is set out below.
Board of Directors
R M HARDING (69)
Chairman since November 2010, Independent
Non‑executive Director since July 2008
Mr Harding has held management positions around the world
with British Petroleum (BP), including President and General
Manager of BP Exploration Australia.
Mr Harding is currently the Chairman of Lynas Limited and a
Director of Cleanaway Waste Management Limited, a former
Chairman of Roc Oil Company Limited and Clough Limited
and a former Director of Santos Limited.
Mr Harding holds a Masters in Science, majoring in
Mechanical Engineering.
Mr Harding lives in Sydney.
G A FENN (53)
Managing Director and Chief Executive Officer since
July 2010
Mr Fenn has over 30 years’ experience in operational
management, strategic development and financial management.
He joined Downer in October 2009 as Chief Financial Officer and
was appointed Chief Executive Officer in July 2010.
He was previously a member of the Qantas Executive
Committee, holding a number of senior roles over 14 years,
as well as Chairman of Star Track Express and a Director of
Australian Air Express. He worked at KPMG for eight years
before he joined Qantas.
Mr Fenn is currently a Director of Sydney Airport Limited
and Spotless Group Holdings Limited and a Member of the
UTS Engineering and IT Industry Advisory Board.
Mr Fenn holds a Bachelor of Economics from Macquarie
University and is a member of the Australian Institute of
Chartered Accountants.
Mr Fenn lives in Sydney.
S A CHAPLAIN (60)
Independent Non‑executive Director since July 2008
Ms Chaplain is a former investment banker with extensive
experience in public and private sector debt financing. She also
has considerable experience as a Director of local and state
government-owned corporations involved in road, water and
port infrastructure.
Ms Chaplain is Chairman of Queensland Airports Limited and a
Director of Seven Group Holdings Limited. Ms Chaplain is also
Chairman of Canstar Pty Ltd, a financial services research and
ratings company and a Director of Credible Labs Inc and The
Australian Ballet. Her former board roles include being a member
of the Board of Taxation, a Director of EFIC, Australia’s export
credit agency and a Director of PanAust .
A Fellow of the Australian Institute of Company Directors,
Ms Chaplain holds a Bachelor of Arts degree majoring in
Economics and Mandarin from Griffith University in addition to
a Masters of Business Administration (MBA) from the University
of Melbourne. She holds an honorary doctorate from Griffith
University for her service to banking and finance, and to the
Gold Coast community.
Ms Chaplain lives on the Gold Coast.
P S GARLING (64)
Independent Non‑executive Director since November 2011
Mr Garling has over 35 years’ experience in the infrastructure,
construction, development and investment sectors. He was
the Global Head of Infrastructure at AMP Capital Investors,
a role he held for nine years. Prior to this, Mr Garling was CEO
of Tenix Infrastructure and a long-term senior executive at the
Lend Lease Group, including five years as CEO of Lend Lease
Capital Services.
Mr Garling is currently the Chairman of Tellus Holdings Limited,
Energy Queensland Limited and Newcastle Coal Infrastructure
Group and a Director of Charter Hall Limited and the NSW
electricity distributor, Essential Energy. He is a former Director of
Spotless Group Holdings Limited and a past President of Water
Polo Australia Limited.
Mr Garling holds a Bachelor of Building from the University of
New South Wales and the Advanced Diploma from the Australian
Institute of Company Directors. He is a Fellow of the Australian
Institute of Building, Australian Institute of Company Directors
and Institution of Engineers Australia.
Mr Garling lives in Sydney.

Annual Report 2018 3
T G HANDICOTT (55)
Independent Non‑executive Director since September 2016
Ms Handicott is a former corporate lawyer with over 30 years’
experience in mergers and acquisitions, capital markets and
corporate governance. She was a partner of national law firm
Corrs Chambers Westgarth for 22 years, serving as a member
of its National Board for seven years including four years
as National Chairman. She also has extensive experience in
governance of local and state government organisations.
Ms Handicott is currently the Chairman of listed company
PWR Holdings Limited and a Director of LGE Holding Company
Pty Ltd trading as Peak Services, which is the subsidiary of the
Local Government Association of Queensland that is responsible
for its commercial operations. Ms Handicott is also a Director
of Bangarra Dance Theatre Limited and a Divisional Councillor
of the Queensland Division of the Australian Institute of
Company Directors.
Ms Handicott is a former Director of CS Energy Limited, a former
member of the Queensland University of Technology (QUT)
Council, the Takeovers Panel and Corporations and Markets
Advisory Committee and a former Associate Member of the
Australian Competition and Consumer Commission.
A Senior Fellow of Finsia and Member of the Australian Institute
of Company Directors and Chief Executive Women, Ms Handicott
holds a Bachelor of Laws (Hons) degree from the Queensland
University of Technology.
Ms Handicott lives in Brisbane.
N M HOLLOWS (47)
Independent Non‑executive Director since June 2018
Ms Hollows has over 20 years’ experience in the resources
sector in a number of senior managerial roles across both the
public and private sectors, including in mining, utilities and rail.
Her experience spans operational management, accounting
and finance, mergers and acquisitions, capital management
and corporate governance.
Ms Hollows is currently the Chief Executive Officer of SunWater
Limited, a Queensland Government owned corporation. She is
the Chair of The Salvation Army Brisbane Red Shield Appeal
Committee and an advisory committee member of the Salvation
Army Queensland Advisory Council and also a board member of
the Water Services Association of Australia and a member of the
CEO Advisory Committee for Dean of Queensland University of
Technology Business School.
She was formerly the Chief Financial Officer and subsequently
Chief Executive Officer of Macarthur Coal Limited, Managing
Director of AMCI Australia and South East Asia and Interim Chair
of Queensland Rail Limited.
A Fellow of the Australian Institute of Company Directors
and a Member of Chief Executive Women and the Institute
of Chartered Accountants, Ms Hollows holds a Bachelor of
Business – Accounting and a Graduate Diploma in Advanced
Accounting (Distinction) from the Queensland University of
Technology and is a Graduate of Harvard Business School’s
Program for Management Development.
Ms Hollows lives in Brisbane.
C G THORNE (68)
Independent Non‑executive Director since July 2010
Dr Thorne has over 36 years’ experience in the mining and
extraction industry, specifically in senior operational and
executive roles with Rio Tinto. His experience spanned a range
of product groups and functional activities in Australia and
overseas. After serving in London as Group Mining Executive
from 1996 to 1998, Dr Thorne moved to Indonesia as President
Director of Kaltim Prima Coal and then returned to Australia
to manage Rio Tinto’s Australian coal business as Managing
Director of Rio Tinto Coal Australia and the publicly listed Coal
and Allied Industries. He was President of the Queensland
Resources Council in 2001-2003.
In 2006, Dr Thorne was appointed global head of Rio Tinto’s
technology, innovation and project engineering functions,
reporting to the Chief Executive. He was a member of Rio Tinto’s
Executive Committee and Investment Committee. He retired
from Rio Tinto in 2011.
Dr Thorne is a Director of Spotless Group Holdings Limited and
a former Director of Wesley Research Institute, JK Tech and
Queensland Energy Resources Limited. He is a Fellow of the
Australasian Institute of Mining and Metallurgy.
Dr Thorne also holds directorships with a number of
private companies.
He holds Bachelor and Doctoral degrees in Metallurgy from the
University of Queensland and is a Graduate of the Australian
Institute of Company Directors.
Dr Thorne lives on the Sunshine Coast.

4 Downer EDI Limited
Directors’ Report – continued
for the year ended 30 June 2018
Directors’ shareholdings
The following table sets out each Director’s relevant interest (direct and indirect) in shares, debentures, and rights or options in shares
or debentures (if any) of the Company at the date of this report. No Director has any relevant interest in shares, debentures and rights
or options in shares or debentures, of a related body corporate as at the date of this report.
Director
Number of Fully Paid
Ordinary Shares
Number of Fully Paid
Performance Rights
Number of Fully Paid
Performance Options
R M Harding14,210––
G A Fenn
1
1,164,2031, 5 47,403–
S A Chaplain103,799––
P S Garling16,940––
T G Handicott14,000––
N M Hollows–––
C G Thorne82,922––
1 Performance rights granted to Mr Fenn are subject to performance and/or service period conditions over the period 2015 to 2020. Further details regarding the conditions
relating to these restricted shares and performance rights are outlined in sections 6.4 and 9.2 of the Remuneration Report.
Company Secretary
The Company Secretarial function is responsible for ensuring that
the Company complies with its statutory duties and maintains
proper documentation, registers and records. It also provides
advice to Directors and officers about corporate governance
and gives practical effect to any decisions made by the Board.
Mr Peter Tompkins was appointed Company Secretary on
27 July 2011. He has qualifications in law and commerce
from Deakin University and corporate governance from the
Governance Institute of Australia and is an admitted solicitor
in New South Wales. Mr Tompkins joined Downer in 2008
and was appointed General Counsel in 2010.
Mr Peter Lyons was appointed joint Company Secretary on
27 July 2011. A member of CPA Australia and the Governance
Institute of Australia, he has qualifications in commerce from
the University of Western Sydney and corporate governance
from the Governance Institute of Australia. Mr Lyons was
previously Deputy Company Secretary and has been in
financial and secretarial roles at Downer for over 15 years.
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 as follows:

Annual Report 2018 5
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 and rail track signalling and
electrification works.
Total revenue
1
(FY18)
Transport
EBITA
2
(FY18)
22.3%25.3%
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.
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
Other transport infrastructure includes rail construction, light rail
construction, rail systems, transport mechanical and electrical
construction, car park construction, airport pavements, port
construction and associated maintenance services.
Utilities
The Utilities division provides complete lifecycle solutions
to customers in the power, gas, water, renewable energy and
communications sectors.
Total revenue
1
(FY18)
Utilities
EBITA
2
(FY18)
14.1%16.8%
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
and connects tens of thousands of new power and gas
customers each year for customers across all States of Australia
and both islands in New Zealand. Downer also designs and
constructs steel lattice transmission towers, designs and builds
substations, and maintains large and complex power and gas
reticulation networks.
Customers include AusNet, ElectraNet, Transgrid, Powerco,
Wellington Electricity and Powerlink.
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,
water re-use, 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. Downer
purchased ITS Pipetech in March 2017 and its principal activities
include pipe bursting, civil maintenance and robotics. 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 Horowhenua
Council (Alliance).

6 Downer EDI Limited
Directors’ Report – continued
for the year ended 30 June 2018
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 and solar farms.
Downer offers the services required for the entire asset lifecycle
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,
Enable 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.
Total revenue
1
(FY18)
Spotless
EBITA
2
(FY18)
24.6%29.6%
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.
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.
Its customers include corporations and government
departments, agencies and authorities at the Federal, State and
Municipal level.
Infrastructure & Construction
Spotless provides M&E and HVAC services to customers in
markets including health, education, commercial & industrial,
defence, justice and transport.
Its AE Smith and Nuvo businesses provide services across
the asset lifecycle from design through to commissioning, fine-
tuning and maintenance to more than 2,000 commercial facilities
in Australia and New Zealand.
Key customers include Probuild, Watpac, Lendlease, John Holland,
Crown Casino, Honeywell and Melbourne University.
Government
Spotless provides integrated facilities management, business
process outsourcing, and operational support to a range of
government customers.
Key customers include NSW Department of Education, Victorian
Department of Education, SA Department of Planning, Transport
and Infrastructure, SA Health, The Housing Authority of WA and
Children’s Health Partnership.
Hospitality & Facilities Management
Spotless provides integrated facilities management services to
customers in markets including aged care, education, healthcare,
airports, business and industry, hospitality, retail, stadia,
functions, and special events.
Key customers include Melbourne Cricket Club, Virgin Airlines,
Taronga Zoo, Brisbane City Hall, Emirates, and The Kings School.
Laundries
Spotless provides linen and garment services to social
infrastructure, industry, accommodation and resources
customers in Australia and New Zealand, with 16 laundries
processing more than 100,000 tonnes of laundry a year.
Key customers include Ramsay Health, HealthScope, WA Health,
SA Health, St John of God, and Inghams.
Defence
Spotless delivers a range of facilities and asset management
services for the Australian Government Department of Defence
and the New Zealand Defence Force. These services include
management services, cleaning and housekeeping, estate
upkeep, pest and vermin control and treatment, reprographic
services, sport and recreation, training area and range services,
and transport and air operations.
Key customers include the Australian Department of Defence
and NZ Defence Force.

Annual Report 2018 7
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.
Total revenue
1
(FY18)
Rail
EBITA
2
(FY18)
9.3%6.9%
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.
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. Hawkins delivers a range of non-
residential building services across a variety of sectors.
Total revenue
1
(FY18)
EC&M
EBITA
2
(FY18)
19.0%12.5%
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. These 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, Powerlink Queensland, Rio Tinto,
Santos, Wesfarmers, Christchurch City and Auckland Councils,
Auckland University, Auckland and Wellington Airports and the
Ministry of Education in New Zealand.

8 Downer EDI Limited
Directors’ Report – continued
for the year ended 30 June 2018
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.
Total revenue
1
(FY18)
Mining
EBITA
2
(FY18)
10.8%8.9%
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, OZ Minerals 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’ 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 Group financial performance
includes a full-year contribution from Spotless for the year
ended 30 June 2018.
The main features of the result for the 12 months ended
30 June 2018 were:
–Total revenue of $12.6 billion, up 61.5%;
–Underlying earnings before interest, tax and amortisation of
acquired intangible assets (EBITA) of $479.6 million, up 68.2%
from $285.2 million;
–Statutory EBITA of $271.5 million, down from $285.2 million;
–Statutory earnings before interest and tax (EBIT) of
$204.8 million, down from $277.8 million;
–Individually Significant Items (ISI) recognised in EBIT in the
period of $208.1 million ($178.6 million after tax);
–Underlying net profit after tax and before amortisation of
acquired intangible assets (NPATA) of $296.5 million, up
58.9% from $186.6 million;
–Statutory NPATA of $117.9 million, down from
$186.6 million; and
–Statutory net profit after tax (NPAT) of $71.1 million.
During the period, the Group identified Individually Significant
Items totalling $178.6 million after tax including:
–$76.4 million Mining goodwill impairment;
–$40.6 million loss on divestment of freight rail;
–$17.5 million unsuccessful Auburn rail claim;
–$20.0 million Divisional merger costs; and
–$24.1 million related to Spotless management redundancies,
transaction costs and residual Strategy Reset costs.
Details of the ISI are disclosed in Note B2(b) of the
Financial Report.

Annual Report 2018 9
Revenue
Total revenue for the Group increased by $4.8 billion, or 61.5%,
to $12.6 billion.
Transport revenue increased by 30.8% to $2.8 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 17.5% to $1.8 billion, due to
continuing strong contributions from nbn™ contracts in Australia
as well as new renewable energy projects.
Spotless revenue for the 12 months was $3.1 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 37.5% to $1.2 billion driven by the
Sydney Growth Trains and High Capacity Metro Trains projects
as well as continued strong performance on the Waratah
maintenance contract. This result was achieved despite the
divestment of the freight rail business. A significant portion
of the increase relates to pass-through revenue to the
manufacturing construction partner on Sydney Growth Trains.
EC&M revenue increased by 19.9% to $2.4 billion as a result
of increased activities on the Ichthys project in the Northern
Territory and a full year 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 4.5% to $1.4 billion, mainly due to
increased activities at Roy Hill and Goonyella and contributions
from JVs and new contracts. These partially offset the
completion of the Boggabri contract in the first half and the
Christmas Creek contract in FY17.
Expenses
Total expenses increased by 68.5% and include $208.1 million
of Individually Significant Items (ISIs). Excluding these ISIs, total
expenses increased 65.6% as explained below.
Employee benefits expenses increased by 44.7%, or $1.2 billion,
to $4.0 billion and represent 34.0% of Downer’s cost base. This
increase is mainly due to Spotless’ contribution ($1.1 billion),
higher activity across the Group and a more labour intensive
contract base compared to the prior period. Included in
employee expenses is $23.4 million of pre-tax ISIs in relation to
divisional merger costs and Spotless transition-related costs as
described in Note B2(b) in the Financial Report.
Subcontractor costs increased by $2.0 billion to $3.8 billion
and represent 31.9% of Downer’s cost base. This increase is as
a result of Spotless’ contribution ($1.1 billion), higher contract
activities and the change in the subcontractor mix on some
contracts during the period.
Raw materials and consumables costs increased by 62.1% to
$2.2 billion and represent 18.6% of Downer’s cost base.
The increase is the net impact of raw material requirements for
new projects (particularly in Transport, Utilities and Rail) and
Spotless’ contribution ($421.8 million); partially offset by lower
requirements as a result of the completion of contracts in Mining.
Plant and equipment costs increased by 34.7% to $677.1 million
and represent 5.7% of Downer’s cost base. This largely reflects
the Spotless contribution and the increased activity in Transport.
The lower increase in plant and equipment costs compared to
other types of expenses reflects a less capital intensive business.
Depreciation and amortisation increased by 68.1% or
$150.0 million to $370.2 million and represents 3.1% of Downer’s
cost base. This increase is predominantly from Spotless’
contribution and from additional $59.3 million in amortisation
on acquired intangible assets following several acquisitions,
including Spotless.
Other expenses, which include communication, travel,
occupancy, professional fees costs and ISIs, have increased by
86.0% to $788.5 million and represent 6.7% of Downer’s cost
base. Included in other expenses is $184.7 million of pre-tax ISIs,
comprising $76.4 million Mining impairment, $50.2 million from
the divestment of freight rail, $25.0 million unsuccessful Auburn
rail claim costs, $15.8 million divisional merger costs including
surplus lease provision and asset write-offs and $17.3 million of
transaction costs related to Spotless.

10 Downer EDI Limited
Directors’ Report – continued
for the year ended 30 June 2018
Earnings
Underlying EBITA for the Group increased by 68.2% to $479.6 million, as a result of 12 months Spotless contribution and the increase
in EBITA achieved by Transport, Utilities, Rail and EC&M, partially offset by Mining. Spotless’ EBITA contribution for the 12 months was
$167.7 million.
Underlying NPATA for the Group increased by 58.9% to $296.5 million.
Underlying NPAT for the Group increased by 37.6% to $249.7 million.
Statutory NPAT for the Group was $71.1 million, including $178.6 million of ISIs.
A reconciliation of the underlying result to the statutory result is set out below.
FY18
$mEBIT
Net
interest
expense
Ta x
expenseN PAT
Add back:
Amortisation
of acquired
intangible
assetsN PATA
Underlying result412 .9(76.3)(86.9)249.746.8296.5
Loss on divestment of freight rail(50.2)–9.6(4 0. 6)–(4 0. 6)
Mining goodwill impairment( 76 .4)––( 76 .4)–( 76 .4)
Auburn Rail claim(25.0)–7. 5(17. 5)–(17. 5)
Spotless integration costs( 7. 3)–2.0(5.3)–(5.3)
Spotless Management redundancies
and integration costs(9.4)(3.3)3.0(9.7)–(9.7)
Spotless residual Strategy Reset costs(11.3)(1.5)3.7(9.1)–(9.1)
Divisional merger costs(28.5)–8.5(20.0)–(20.0)
Individually Significant Items(208.1)(4 . 8)34.3(178.6)–(178.6)
Statutory result204.8(81.1)(52.6)71.146.8117.9
Transport EBITA increased by 14.4% to $142.9 million due to continued strong performance across Australia and New Zealand and good
progress on infrastructure projects in Australia.
Utilities EBITA increased by 12.7% to $94.8 million, driven by the strong performance from nbn™ contracts in Australia, as well as full year
contributions from the acquisitions of UrbanGrid and ITS PipeTech.
Spotless’ underlying EBITA contribution was $167.7 million mainly driven by Government related contracts and PPPs.
Rail EBITA increased by 29.4% to $39.2 million, reflecting profit contributions from the SGT and HCMT projects (which made immaterial
contributions in the prior period).
EC&M EBITA increased by 34.2% to $70.6 million due to 12 months’ contribution from Hawkins in New Zealand and the acquisitions
of AGIS and Envista. There were strong performances on Australian gas projects and by the Operations Maintenance and Services
business. The Mineral Technologies business increased revenue and returned to profitability during the year.
Mining EBITA decreased by $33.0 million to $50.4 million predominantly due to the completion of contracts at Christmas
Creek and Boggabri.
Corporate costs increased by $9.3 million, or 12.1%, to $86.0 million mainly due to investment in governance and risk management
functions following the acquisition of Spotless.
Net finance costs increased by $54.3 million to $81.1 million due to $43.4 million additional interest from Spotless (nil in pcp),
incremental interest incurred following the acquisition of an additional 22% interest in Spotless and lower interest income contribution.
The underlying effective tax rate is 25.8% which is lower than the statutory rate of 30.0% due to the impact of non-assessable R&D tax
incentives, non-taxable distributions from joint ventures and lower overseas tax rates (e.g. New Zealand). The statutory effective tax
rate is 42.5% mainly as a result of the impact of ISIs including non-deductible goodwill impairment associated with Mining.

Annual Report 2018 11
Divisional Financial Performance
Transport
($m)(%)
FY14FY15FY16FY17FY18
EBITA marginRevenue
6.0
5.0
4.0
3.0
2.0
1.0
0.0
3,000
2,500
2,000
1,500
1,000
500
0
–Total revenue of $2.8 billion, up 30.8%;
–EBITA of $142.9 million, up 14.4%;
–EBITA margin of 5.1%, down 0.7ppts;
–ROFE
1
of 24.2%, up from 22.2%; and
–Work-in-hand of $7.4 billion.
Utilities
($m)(%)
EBITA marginRevenue
2,000
1,500
1,000
500
0
FY14FY15FY16FY17FY18
6.0
5.0
4.0
3.0
2.0
1.0
0.0
–Total revenue of $1,783.0 million, up 17.5%;
–EBITA of $94.8 million, up 12.7%;
–EBITA margin of 5.3%, down 0.2ppts;
–ROFE
1
of 26.1%, up from 22.7%; and
–Work-in-hand of $3.4 billion.
Spotless
($m)(%)
EBITA marginRevenue
3,500
3,000
2,500
2,000
1,500
1,000
500
0
FY14FY15FY16FY17*FY18*
9.0
7.5
6.0
4.5
3.0
1.5
0.0
–Total revenue of $3.1 billion, up 3.2%;
–EBITA of $167.7 million, down 2.4%;
–EBITA margin of 5.4%, down 0.3ppts;
–ROFE
1
of 14.1%, up from 12.1%; and
–Work-in-hand of $18.0 billion.
* The FY17 and FY18 EBITA have been based on underlying performance.
Note: Spotless past performance has been shown as a reference only as it has
started contributing to the Downer Group from 1 July 2017 (FY18).
Rail
($m)(%)
EBITA marginRevenue
5.0
4.0
3.0
2.0
1.0
0.0
1,500
1,000
500
0
FY14FY15FY16FY17FY18
–Total revenue of $1,169.2 million, up 37.5%;
–EBITA of $39.2 million, up 29.4%;
–EBITA margin of 3.4%, down 0.2ppts;
–ROFE
1
of 12.0%, up from 7.3%; and
–Work-in-hand of $8.2 billion.
Engineering, Construction and Maintenance (EC&M)
($m)(%)
EBITA marginRevenue
3,000
2,500
2,000
1,500
1,000
500
0
FY14FY15FY16FY17FY18
6.0
5.0
4.0
3.0
2.0
1.0
0.0
–Total revenue of $2.4 billion, up 19.9%;
–EBITA of $70.6 million, up 34.2%;
–EBITA margin of 2.9%, up 0.3ppts;
–ROFE
1
of 27.0%, up from 23.0%; and
–Work-in-hand of $2.2 billion.
Mining
($m)(%)
EBITA marginRevenue
10.0
8.0
6.0
4.0
2.0
0.0
2,500
2,000
1,500
1,000
500
0
FY14FY15FY16FY17FY18
–Total revenue of $1.4 billion, up 4.5%;
–EBITA of $50.4 million, down from $83.4 million;
–EBITA margin of 3.7%, down from 6.4%;
–ROFE
1
of 8.6%, down from 13.2%; and
–Work-in-hand of $2.8 billion.
1 ROFE = EBITA divided by average funds employed (AFE). AFE = Average
Opening and Closing Net Debt + Equity.

12 Downer EDI Limited
Directors’ Report – continued
for the year ended 30 June 2018
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 $583.3 million, up 32.1% from
last year due to strong contract performance, advance payments
received and a full year contribution from Spotless. Operating
cash flow / EBITDA conversion continued to be strong at 90.6%.
Investing Cash
Total investing cash flow was $729.6 million, down $266.2 million.
This includes $391.8 million consideration paid in relation to
Spotless acquisition (including an additional 22% ownership
interest) and a further $84.1 million in net cash consideration
paid for other acquisitions including Envista, UrbanGrid and
Cabrini. This was partially offset by $129.6 million proceeds
received from the divestment of the freight rail business.
The business continued to invest in capital equipment
to support the existing contracted operations and future
operations, resulting in net capital expenditure of $334.1 million.
Debt and Bonding
The Group’s performance bonding facilities totalled
$1,915.9 million at 30 June 2018 primarily with $574.3 million
undrawn. There is sufficient available capacity to support the
ongoing operations of the Group.
As at 30 June 2018, the Group had liquidity of $1.5 billion
comprising cash balances of $606.2 million and undrawn
committed debt facilities of $925.0 million. Total liquidity
available is $1.2 billion through Downer’s facilities and
$321.2 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 $238.4 million, or
28.2%, to $606.2 million, due to $391.8 million consideration paid
in relation to Spotless acquisition (including an additional 22%
ownership interest) and $84.1 million paid for other acquisitions.
These payments were offset by $129.6 million proceeds received
from the divestment of the freight rail business and from
continued strong operating cash flows.
Net debt increased from $620.2 million at 30 June 2017 to
$940.0 million at 30 June 2018 primarily as a result of a reduced
net cash position. This resulted in an increase in gearing
(net debt to net debt plus equity) to 22.7%, up from 14.7%
at 30 June 2017.
The present value of operating lease commitments for plant
and equipment reduced from $151.5 million to $138.1 million.
Total gearing (including off-balance sheet operating lease
commitments) was 25.2% at 30 June 2018, up from 17.7% in
the prior year.
Current trade and other receivables increased by $399.9 million
to $2,121.9 million reflecting higher activities across Transport,
Utilities and Mining.
Inventories decreased by $32.9 million to $268.8 million
reflecting the divestment of freight rail inventory coupled with
continued tight inventory management.
Current tax assets increased by $23.8 million to $69.3 million due
to the timing of tax payments.
Interest in joint ventures and associates increased by
$8.0 million, with $16.9 million of distributions received, offset by
Downer’s share of net profits from joint ventures and associates
of $25.1 million.
Property Plant and Equipment remained consistent at
$1,280.4 million as additional capital expenditure incurred during
the year was offset by the divestment of freight rail assets and
depreciation for the year including Spotless contribution.
Intangible assets increased by $19.5 million arising from
$160.1 million additional goodwill and other acquired intangible
assets recognised from the acquisition of Envista, UrbanGrid,
Cabrini, Integrated Services and Hawkins; $46.4 million additional
investment in software offset by a reduction in goodwill as a
result of the Mining goodwill impairment ($76.4 million) and
the divestment of freight rail ($14.2 million) and $91.9 million
amortisation in FY18 mainly related to Spotless’ acquired
intangible assets.

Annual Report 2018 13
Total trade and other payables increased by $516.4 million
(28.8%) primarily as a result of higher business activity and
timing of payments. Trade and other payables represent
50.4% of Downer’s total liabilities.
Other financial liabilities of $77.4 million increased by $31.9 million
and represents 1.7% of Downer’s total liabilities. The increase
mainly reflects deferred consideration payable for acquisitions
made during the year.
Deferred tax liability of $170.2 million primarily represents
temporary differences arising from work in progress, property
plant and equipment, and the tax effect of the recognition of
acquired intangibles.
Provisions of $490.5 million decreased by $36.4 million and
represent 10.7% of Downer’s total liabilities. Employee provisions
(annual leave and long service leave) made up 76.4% of this
balance with the remainder covering surplus lease contracts
provisions and return conditions obligations for leased assets
and property and warranty obligations.
Shareholder equity decreased by $381.4 million driven by the
payment for the acquisition of additional interest in Spotless and
the impact of minority interest, and $156.7 million of dividend
payments made during the year. This was offset by the parent
entity net profit after tax of $71.4 million. Net foreign currency
losses on translation of foreign operations, particularly in
New Zealand, resulted in a movement in the foreign currency
translation reserve by $8.8 million.
Dividends
The Downer Board resolved to pay a final dividend of 14.0 cents
per share, 50% franked (12.0 cents per share fully franked in the
prior corresponding period), payable on 27 September 2018 to
shareholders on the register at 30 August 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 2018 has a yield of 6.15% per annum payable quarterly
in arrears, with the next payment due on 17 September 2018.
As this dividend is fully imputed (the New Zealand equivalent of
being fully franked), the actual cash yield paid by Downer will be
4.43% per annum for the next 12 months.
Zero Harm
Downer’s Lost Time Injury Frequency Rate (LTIFR) increased
from 0.55 to 0.78 but importantly, the Total Recordable
Injury Frequency Rate (TRIFR) reduced from 3.50 to 3.27 per
million hours worked.
TRIFRLTIFR
LTIFR
TRIFR
Downer Group Safety Performance
(12-month rolling frequency rates)
Jun-17
Sep-17
Dec-17
Mar-18
Jun-18
0.0
0.5
1.0
1.5
2.0
2.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
3.50
3.27
0.55
0.78
Note: This data excludes Hawkins and Spotless.

14 Downer EDI Limited
Directors’ Report – continued
for the year ended 30 June 2018
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 ObjectiveProspects Risks and risk management
Maintain
focus on Zero Harm
Downer recognises that a sustainable and
embedded Zero Harm culture is fundamental to
the Company’s future success.
Zero Harm means working in an environment
that supports the health and safety of its people,
allows it to deliver its business activities in an
environmentally sustainable manner, and advances
the communities in which it operates.
This requires strong commitment to Downer’s Zero
Harm objectives from all levels of the business.
Downer’s Zero Harm culture is built on leading
and inspiring, managing risk, rethinking processes,
applying lessons learnt, and adopting and adapting
practices that aim to achieve zero work-related
injuries and minimise environmental harm.
Downer’s approach to Zero Harm enables the
Company to work safely and environmentally
responsibly in industry sectors where there are
inherent hazardous environments.
Downer has implemented a strong critical risk
program throughout its business. This program has
provided Downer with the opportunity to understand
the risks in its business that could cause serious
injury to people or the environment. That knowledge
has enabled Downer to implement a program to
eliminate or control those risks, and to monitor the
performance of those critical controls.
Each Downer Division has in place a Zero Harm
management system, certified as a minimum to
AS/NZS 4801 or BS OHSAS 18001, and ISO 14001.
Each management system is reviewed regularly,
undergoing internal and external audit.
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 while 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.
Improve asset
management and data
analytics utilisation
across the Group
The ISO 55001 standard sets a new baseline for
professional asset management across most
of the markets in which Downer operates. As a
leader in asset management, Downer aims to
adopt and implement world leading solutions
and insights to benefit its customers and their
customers. Additionally, the proliferation of data
points and connected devices, allows for greater
data and business intelligence to be captured and
monitored. This is key to driving greater levels of
efficiency as well as service improvements.
Customers and end users’ expectations continue
to grow with regard to reliable, intuitive, and
cost-effective assets and services. Investments
are required into asset management and
data analytics frameworks to ensure lifecycle
performance is monitored and timely decisions
are made to optimise asset utilisation. Risks to be
managed include:
–lack of value added services to customers
reducing their need for integrated
services partners;
–reduction in scope and service from customers
to pure maintenance / blue collar services; and
–inability to properly manage performance
frameworks and desired service outcomes.

Annual Report 2018 15
Strategic ObjectiveProspects Risks and risk management
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 $12 billion in
annual revenues. This scale and breadth gives
Downer greater resilience to withstand economic
headwinds when they arise, and the opportunity to
provide a more diverse range of services.
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.
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. While 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.

16 Downer EDI Limited
Directors’ Report – continued
for the year ended 30 June 2018
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 lineProspects Downer’s response
TransportThe 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.
In both Australia and New Zealand, Downer is
noticing a shift toward greater network integration,
journey management, and multi-modal solutions.
This is seeing not only a convergence between
transport modes but also between industries like
transport and energy. Two-way digital methods
of communication with passengers in real-time is
proliferating in the transport sector.
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, rail infrastructure
delivery, and public transport operations.
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.
Downer is particularly focused on transport issues
which affect communities like congestion, parking
management, transport integration, and value capture
from associated developments.
UtilitiesGrowth 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.
Downer’s view is that the timing of these large
network builds will extend beyond most analysts’
predictions. 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 introducing
operational technology to improve the value Downer
brings to customers.
In addition to maximising its share of the outsourced
‘poles and wires’ services market, the business is
focused on growing the national water sector and
participating in new construction, maintenance, and
operations contracts.
RailThe 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 across the transport
sector 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.

Annual Report 2018 17
Service lineProspects Downer’s response
EC&MEC&M comprises resources-related
infrastructure, infrastructure projects, and non-
residential building.
Resources-related infrastructure is showing green
shoots of growth for the first time in a long period.
Downer expects this investment to largely focus
on brownfield expansions with relatively few new
greenfield developments.
Good growth prospects in the non-residential
building and 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 has experience working on all of the
recent Australian major oil & gas developments. While
the first phase of major LNG construction comes
to an end, Downer does envisage the potential for
additional trains to be constructed in the near future
due to the improving productivity of gas extraction at
these facilities.
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.
MiningWhile mine owners continue to have a strong
focus on cost reduction, Downer is seeing green
shoots of growth particularly in Western Australia
across iron ore, gold and other precious metals.
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.
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.
A core focus is to drive efficiency in the way Downer
delivers services to ensure it creates value for
its customers.
SpotlessThe facilities management and services market
is undergoing consolidation, as operators look
to leverage scale across multiple service lines.
Downer and Spotless continue to see large-scale
and long-term outsourcing contracts come to
market across the government sector, however
the volume of PPPs in social infrastructure and
integrated services contracts in the resources
sector appears to be slowing.
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 provide a range
of exciting opportunities on the short-to-medium
term horizon in both Australia and New Zealand.
Through the acquisition of Spotless, 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.
There is a focus on leveraging both businesses’ scale
and routes to market to position the Group’s core
services offerings in an integrated way.

18 Downer EDI Limited
Directors’ Report – continued
for the year ended 30 June 2018
Outlook
Downer is targeting consolidated net profit after tax and
before amortisation of acquired intangible assets (NPATA) of
$335 million before minority interests.
Subsequent events
There have been no matters or circumstances other than those
referred to in the financial statements or notes thereto, that have
arisen since the end of the financial year, that have significantly
affected, or may significantly affect, the operations of the Group,
the results of those operations, or the state of affairs of the
Group in subsequent financial years.
Changes in state of affairs
During the financial year there was no significant change
in the state of affairs of the Group other than that referred
to in the financial statements or notes thereto.
Environmental
Downer makes a positive contribution in industry sectors such
as utilities, renewable energy, public transport, infrastructure
and facilities management. Downer recognises it also operates
in highly carbon-intensive industry sectors, for example, mining.
Downer’s strategy focuses on driving improvement in existing
businesses, investing in sustainable growth, and adapting
as industry and customer needs and preferences change.
Downer’s business diversity allows it to leverage emerging
opportunities such as increasing and ageing populations,
infrastructure renewal requirements and the increased need for
inter-connected smart cities and regional city hubs.
Downer recognises its obligation to stakeholders, including
customers, shareholders, employees, contractors and the
communities in which it operates, to advance sustainability
and mitigate the Company’s environmental impact. Downer
acknowledges its role as a corporate citizen, and respects the
places and communities in which it operates. Downer’s Purpose,
Promise and Pillars underpin everything it does and Downer
is committed to conducting its operations in a manner that is
environmentally responsible and sustainable.
The Board oversees the Company’s environmental and
sustainability performance via the Zero Harm Board Committee.
The Zero Harm Management System Framework sets the
minimum standard for environment and sustainability within
the Divisions. As such, each Division is required to have an
Environmental Sustainability Action Plan (ESAP) and strategies
in place supported by suitably qualified environment and
sustainability professionals. The ESAP allocates internal
responsibilities for reducing the impact of its operations and
business activities on the environment. In addition, all Downer
Divisions’ environment management systems are audited by
both internal and external independent third parties.
The international environmental standard ISO 14001:2015, is
used as a benchmark for assessing, improving and maintaining
the environmental integrity of our business management
systems. The Company’s Divisions also adhere to environmental
management requirements established by customers in addition
to all applicable licence and regulatory requirements.
Dividends
In respect of the financial year ended 30 June 2018, the Board:
–declared a 50% franked interim dividend of 13.0 cents per
share that was paid on 4 April 2018 to shareholders on the
register at 7 March 2018 with the unfranked portion paid out
of Conduit Foreign Income; and
–declared a 50% franked final dividend of 14.0 cents per
share, payable on 27 September 2018 to shareholders on the
register at 30 August 2018 with the unfranked portion to be
paid out of Conduit Foreign Income.
Due to the strength of Downer’s balance sheet, the Company’s
Dividend Reinvestment Plan remains suspended.
As detailed in the Directors’ Report for the 2017 financial year,
the Board declared a fully franked final dividend of 12.0 cents
per share, that was paid on 10 October 2017 to shareholders
on the register at 12 September 2017.

Annual Report 2018 19
Employee Discount Share Plan (ESP)
An ESP was instituted in June 2005. In accordance with the provisions of the plan, as approved by shareholders at the 1998 Annual
General Meeting, permanent full-time and part-time employees of Downer EDI Limited and its subsidiary companies who have
completed six months service may be invited to participate.
No shares were issued under the ESP during the years ended 30 June 2018 or 30 June 2017.
There are no performance rights or performance options, in relation to unissued shares, that are outstanding.
Directors’ meetings
The following table sets out the number of Directors’ meetings (including meetings of Board Committees) held during the 2018 financial
year and the number of meetings attended by each Director (while they were a Director or Board Committee member). During the year,
22 Board meetings, seven Audit and Risk Committee meetings, five Zero Harm Committee meetings, four Remuneration Committee
meetings and three Nominations and Corporate Governance Committee meetings were held. In addition, 28 ad hoc meetings (attended
by various Directors) were held in relation to various matters including tender reviews and major projects.
Board
Audit and Risk
Committee
Remuneration
Committee
DirectorHeld
1
AttendedHeld
1
AttendedHeld
1
Attended
R M Harding2221––44
G A Fenn2222––––
S A Chaplain222077––
P S Garling
2
22217744
T G Handicott
3
22217744
N M Hollows1111––
E A Howell1212––––
C G Thorne
4
222177––
Zero Harm
Committee
Nominations and
Corporate Governance
Committee
DirectorHeld
1
AttendedHeld
1
Attended
R M Harding––33
G A Fenn54––
S A Chaplain5533
P S Garling
2
––––
T G Handicott
3
––33
N M Hollows––––
E A Howell55––
C G Thorne
4
55––
1 These columns indicate the number of meetings held during the period each person listed was a Director or member of the relevant Board Committee.
2 Mr Garling is also Chairman of the Rail Projects Committee.
3 Ms Handicott is also Chairman of the Disclosure Committee which meets on an unscheduled basis.
4 Dr Thorne is also Chairman of the Tender Risk Evaluation Committee which meets on an unscheduled basis.

20 Downer EDI Limited
Directors’ Report – continued
for the year ended 30 June 2018
Indemnification of officers and auditors
During the financial year, the Company paid a premium in
respect of a contract insuring the Directors of the Company, the
Company Secretary, and all officers of the Company and of any
related body corporate against a liability incurred as a Director,
secretary or executive officer to the extent permitted by the
Corporations Act 2001 (Cth).
The contract of insurance prohibits disclosure of the nature
of the liability and the amount of the premium.
Downer’s Constitution includes indemnities, to the extent
permitted by law, for each Director and Company Secretary
of Downer and its subsidiaries against liability incurred in the
performance of their roles as officers. The Directors and the
Company Secretaries listed on pages 2 to 4, individuals who act
as a Director or Company Secretary of Downer’s subsidiaries
and certain individuals who formerly held any of these roles
also have the benefit of the indemnity in the Constitution.
The Company has not otherwise, during or since the financial
year, indemnified or agreed to indemnify an officer or auditor of
the Company or of any related body corporate against a liability
incurred as such an officer or auditor.
Corporate Governance
In recognising the need for the highest standards of corporate
behaviour and accountability, the Board endorses the ASX
Corporate Governance Council’s Corporate Governance
Principles and Recommendations (ASX Principles). The Group’s
corporate governance statement is set out at pages 127 to 135
of this Annual Report.
Non-audit services
Downer is committed to audit independence. The Audit and
Risk Committee reviews the independence of the external
auditors on an annual basis. This process includes confirmation
from the auditors that, in their professional judgement, they are
independent of the Group. To ensure that there is no potential
conflict of interest in work undertaken by Downer’s external
auditors, KPMG, they may only provide services that are
consistent with the role of the Company’s auditor.
The Board has considered the position and, in accordance with
the advice from the Audit and Risk Committee, is satisfied that
the provision of non-audit services during the year is compatible
with the general standard of independence for auditors imposed
by the Corporations Act 2001 (Cth).
The Directors are of the opinion that the services as disclosed
below do not compromise the external auditor’s independence,
based on advice received from the Audit and Risk Committee,
for the following reasons:
–All non-audit services have been reviewed and approved
to ensure that they do not impact the integrity and
objectivity of the auditor; and
–None of the services undermine the general principles
relating to auditor independence as set out in the Institute
of Chartered Accountants in Australia and CPA Australia’s
Code of Conduct APES 110 Code of Ethics for Professional
Accountants issued by the Accounting Professional & Ethical
Standards Board, including reviewing or auditing the auditor’s
own work, acting in a management or decision-making
capacity for the Company, acting as advocate for the
Company or jointly sharing economic risks and rewards.
A copy of the auditor’s independence declaration is set out on
page 52 of this Annual Report.
During the year, details of the fees paid or payable for non-audit
services provided by the auditor of the parent entity, its related
practices and related audit firms were as follows:
Non-audit services
2018
$
2017
$
Tax services556,106719,955
Sustainability assurance278,634217,000
Due diligence and other
non-audit services950,4571,066,814
1,785,1972,003,769
Rounding of amounts
The Company is of a kind referred to in ASIC Corporations
(Rounding in Financial/Directors’ reports) Instrument 2016/191,
relating to the “rounding off” of amounts in the Directors’ Report
and consolidated financial statements. Unless otherwise stated,
amounts have been rounded off to the nearest whole number
of millions of dollars and one place of decimals representing
hundreds of thousands of dollars.

Annual Report 2018 21
Remuneration Report – AUDITED
Chairman’s letter
Dear Shareholders,
Downer’s 2018 Remuneration Report provides information about
the remuneration of its most senior executives and explains how
performance has been linked to reward outcomes at Downer for
the 2018 financial year.
At the last Annual General Meeting in November 2017,
93.2 percent of all votes cast by shareholders were in favour
of the 2017 Remuneration Report. The structure of the
2018 Remuneration Report has been prepared with the same
objective of providing readers with a transparent view of key
performance and outcomes using the report structure adopted
in previous years.
Strong financial and safety performance
Downer has once again delivered strong financial and
safety performance in 2018 and has continued to deliver
on its promises:
–Total Revenue was $12,620.2 million, an increase of
61.5 percent from 2017;
–Underlying Net Profit After Tax and before Amortisation
of acquired intangibles was $296.5 million, an increase
of $1.5 million over underlying guidance given at the
start of the year;
–Conversion of EBITDA (earnings before interest, tax,
depreciation and amortisation) to cash continued to be
strong at 90.6 percent;
–Work-in-hand is now $42.0 billion, up 7.1 percent from
December 2017; and
–Downer’s Total Shareholder Return over the three years to
30 June 2018 was 85.1 percent, 43.5 percent higher than the
ASX 100 median.
Downer’s Zero Harm performance continues to be industry
leading. Downer’s Lost Time Injury Frequency Rate was 0.78 and
the Total Recordable Injury Frequency Rate was 3.27. Many of the
activities that Downer’s people perform every day are inherently
dangerous and ensuring they remain safe is of paramount
importance. Zero Harm is central to Downer’s culture and our
commitment to continuous improvement in Zero Harm remains a
core strategic objective.
Key remuneration issues in 2018
Downer continued to invest in its future through strategic
acquisitions and capital investments that have enhanced the
geographic footprint of the existing business, grown capability
and created new market positions which will maximise long term
shareholder value. These include the acquisitions of Envista,
Integrated Services, UrbanGrid and Cabrini Linen Service.
Downer also divested the Freight Rail business. The restructuring
of Spotless and the integration of the Spotless business into the
Downer Group has also been a major activity during 2018.
The impact of these major transactions on executive
remuneration can be significant. The Board’s overarching
concern is to ensure executives:
–Are accountable for delivery of the annual budget and
business plan; and
–Consider potential acquisition or divestment
opportunities without the influence of their impact on
remuneration outcomes.
For these and other reasons, where a transaction is both material
and unbudgeted, the Board’s policy is that it should remove the
impact of the transaction when calculating the key performance
indicators on which executive performance is measured.
This ensures that executives are ‘no better or worse off’ as a
result of the transaction.
There were three significant items in 2018 which affected
statutory earnings being:
–A non-cash impairment of goodwill in the mining business;
–Major restructures to merge the Mining Division with the
Engineering, Construction and Maintenance Division to form
the new Mining, Energy and Industrial Services Division and
merger of the Rail Division into the Infrastructure Services
Division to form the Transport and Infrastructure Division to
ensure that our service offerings best align with the needs of
our customers; and
–Remediation of ground subsidence at the Auburn (Waratah)
Maintenance Centre.
The Board considers whether to adjust for the impact of
significant items (positive or negative) on a case by case basis,
having regard to the circumstances relevant to each item.
In 2018, adjustments were made in respect of the major
transactions in line with policy, major restructures and the Mining
goodwill impairment. No adjustment was made for the Auburn
Maintenance Centre remediation. The adjustments that were
made ensured that executives were rewarded for performance
against the operational performance targets set at the beginning
of the year absent the influence of remuneration outcomes.
The adjustments resulted in the Group gateway being met
which opened the Corporate scorecard and part achievement
of the Corporate Net Profit after Tax and Before Amortisation of
acquired intangibles measure but for other measures had no or
an immaterial impact on reward outcomes.
More information on the Board’s approach to the above activities
and their impact in 2018 can be found at sections 6.5 and 7.4 of
the Remuneration Report.

22 Downer EDI Limited
Directors’ Report – continued
for the year ended 30 June 2018
Link between Downer performance and reward outcomes
Downer is one of the few companies in its sector that provides
earnings guidance to the market each year. Downer has been
successful in meeting or exceeding this earnings guidance
for the last seven reporting periods. Downer’s remuneration
framework for key senior employees has been very successful
in aligning Downer’s strategy and the creation of alignment
between senior executives and shareholders. As set out in
this Remuneration Report, Downer’s remuneration strategy
continues to provide:
–A significant proportion of remuneration being at risk linked
to clear, objective measures;
–A profitability gateway as a precondition to any short term
incentive entitlement;
–For deferral of 50 percent of short term incentive payments
over a further two year period; and
– The delivery of a significant proportion of pay in equity.
To ensure that this framework continues to support the
achievement of Downer’s strategy, a review has commenced
with outcomes to be communicated in next year’s
Remuneration Report.
We trust that this overview and the accompanying detailed
analysis are helpful when forming your own views on Downer’s
remuneration arrangements.

R M Harding T G Handicott
Chairman Remuneration Committee Chairman

Annual Report 2018 23
The Remuneration Report provides information about the remuneration arrangements for key management personnel (KMP), which
means Non-executive Directors and the Group’s most senior executives, for the year to 30 June 2018. The term “executive” in this
Report means KMPs who are not Non-executive Directors.
The Report covers the following matters:
1. Year in review;
2. Details of Key Management Personnel;
3. Remuneration policy, principles and practices;
4. Relationship between remuneration policy and company performance;
5. The Board’s role in remuneration;
6. Description of executive remuneration;
7. Details of executive remuneration;
8. Executive equity ownership;
9. Key terms of employment contracts;
10. Related party information; and
11. Description of Non-executive Director remuneration.
1. Year in review
1.1 Summary of changes to remuneration policy
Downer has continued to refine its remuneration policy during the period. The Board considered Company strategy and reward plans
based on performance measurement, competitive position and stakeholder feedback. Changes to policy are noted in the relevant
sections of this Report and are summarised in the table below.
PolicyEnhancements since 2017
Short-term incentive (STI) plan –The Zero Harm measures for safety and environmental performance have been
further refined, building upon previous improvements to move with and support
growth in organisational maturity and ensure continual stretch and ongoing Zero Harm
improvement through:
–Requiring the completion of trend analysis on the outcomes of completed critical control
verifications to identify the existence of ineffective controls and escalation factors,
thereby further improving the understanding of the control environment; and
–Initiating a program of projects to improve the effectiveness of critical controls, informed
by the trend analysis on the outcomes of completed critical risk observations.
–The Financial measures for earnings have evolved from Net Profit After Tax (NPAT) to Net
Profit After Tax and Before Amortisation of acquired intangibles (NPATA) at the Group
level and Earnings Before Interest and Tax (EBIT) to Earnings Before Interest, Tax and
Amortisation of acquired intangibles (EBITA) at the Divisional level to ensure that reward
remains focused on the delivery of operational performance.
–As with 2017, the People measure is based on the outcomes of a Company-wide
employee engagement survey. In 2018, the targets were adjusted to create additional
stretch which reflects the Company’s increased maturity in this area and to ensure
continuous improvement.

24 Downer EDI Limited
Directors’ Report – continued
for the year ended 30 June 2018
1.2 Remuneration Framework Review
Downer’s current remuneration framework was established in 2008 and has been developed and refined over the subsequent years.
In recent years, Downer has undergone transformational change in becoming Australia’s largest integrated services provider, including
through the acquisitions of Tenix, Hawkins and Spotless as well as the divestment of the Century Drilling and Freight Rail businesses
and its revenue and market capitalisation have grown significantly.
Accordingly, the Board, with the support of management, determined that it was timely and appropriate to review whether the
framework currently in place continues to be ‘fit for purpose’ for today’s Downer.
Guerdon Associates has been engaged to assist the Board with this review. A summary of outcomes of the review and any changes to
the remuneration framework will be provided in the 2019 Remuneration Report.
2. Details of Key Management Personnel
The following persons acted as Directors of the Company during or since the end of the most recent financial year:
DirectorRole
R M HardingChairman, Independent Non-executive Director
G A FennManaging Director and Chief Executive Officer
S A ChaplainIndependent Non-executive Director
P S GarlingIndependent Non-executive Director
N M HollowsIndependent Non-executive Director, from 19 June 2018
T G Handicott Independent Non-executive Director
E A HowellIndependent Non-executive Director, to 2 November 2017
C G ThorneIndependent Non-executive Director
The named persons held their current executive position for the whole of the most recent financial year, except as noted:
ExecutiveRole
S CinerariChief Executive Officer – Infrastructure Services, to 6 March 2018
Chief Executive Officer – Transport and Infrastructure, from 7 March 2018
M J FergusonChief Financial Officer
S L KilleenChief Executive Officer – New Zealand
M J MillerChief Executive Officer – Rail, to 6 March 2018
D NelsonChief Executive Officer – Spotless, from 22 August 2017
D J OverallChief Executive Officer – Mining, to 19 February 2018
B C PetersenChief Executive Officer – Engineering, Construction & Maintenance, to 19 February 2018
Chief Executive Officer – Mining, Energy and Industrial Services, from 20 February 2018

Annual Report 2018 25
3. Remuneration policy, principles and pract
ices
3.1 Executive remuneration policy
Downer’s executive remuneration policy and practices are summarised in the table be
low.
PolicyPractices aligned with policy
Retain experienced, proven
performers, and those
considered to have high
potential for succession
–Provide remuneration that is internally fair;
–Ensure remuneration is competitive with the external market; and
–Defer a substantial part of pay contingent on continuing service and sustained performance.
Focus performance –Provide a substantial component of pay contingent on performance against targets;
–Focus attention on the most important drivers of value by linking pay to their achievement;
–Require profitability to reach a challenging level before any bonus payments can be made; and
–Provide a LTI plan component that rewards consistent Scorecard performance over multiple
years and over which executives have a clear line of sight.
Provide a Zero
Harm environment
–Incorporate measures that embody “Zero Harm” for Downer’s employees, contractors,
communities and the environment as a significant component of reward.
Manage risk –Encourage sustainability by balancing incentives for achieving both short-term and longer-term
results, and deferring equity based reward vesting after performance has been initially tested;
–Set stretch targets that finely balance returns with reasonable but not excessive risk taking and
cap maximum incentive payments;
–Do not provide excessive “cliff” reward vesting that may encourage excessive risk taking as a
performance threshold is approached;
–Diversify risk and limit the prospects of unintended consequences from focusing on just one
measure in both short-term and long-term incentive plans;
–Stagger vesting of deferred short term incentive payments to encourage retention and allow
forfeiture of rewards that are the result of misconduct or material adjustments;
–Retain full Board discretion to vary incentive payments, including in the event of excessive
risk taking; and
–Restrict trading of vested equity rewards to ensure compliance with the Company’s Securities
Trading Policy.
Align executive interests with
those of shareholders
–Provide that a significant proportion of pay is delivered as equity so part of executive reward is
linked to shareholder value performance;
–Provide a long-term incentive that is based on consistent Scorecard performance against
challenging targets set each year that reflect sector volatility and prevailing economic
conditions as well as relative TSR and earnings per share measures directly related to
shareholder value;
–Maintain a guideline minimum shareholding requirement for the Managing Director;
–Exclude the short-term impact of unbudgeted and opportunistic acquisitions and divestments
from performance assessment to encourage agility and responsiveness;
–Encourage holding of shares after vesting via a trading restriction for all executives and
payment of LTI components in shares; and
–Prohibit hedging of unvested equity and equity subject to a trading lock to ensure alignment
with shareholder outcomes.
Attract experienced,
proven performers
–Provide a total remuneration opportunity sufficient to attract proven and experienced
executives from secure positions in other companies and retain existing executives.

26 Downer EDI Limited
Directors’ Report – continued
for the year ended 30 June 2018
4. Relationship between remuneration policy
and company performance
4.1 Company strategy and remuneration
Downer’s business strategy includes:
–Maintaining focus on Zero Harm by continually improving
health, safety and environmental performance to achieve
Downer’s goal of zero work-related injuries and significant
environmental incidents;
–Driving growth in core markets through focusing on serving
existing customers better across multiple products and
service offerings, growing capabilities and investing in
innovation, research and development and community and
indigenous partnerships;
–Creating new strategic positions through enhanced value
add services that improve propositions for customers and
exporting established core competencies into new overseas
markets with current customers of the Company;
–Reducing risk and enhancing the Company’s capability
to withstand threats, take advantage of opportunities and
reduce cyclical volatility;
–Obtaining better utilisation of assets and improved margins
through simplifying and driving efficiency;
–Identifying opportunities to manage the Downer portfolio
through partnering, acquisition and divestment that deliver
long-term shareholder value; and
–Maintaining flexibility to be able to adapt to the changing
economic and competitive environment to ensure Downer
delivers shareholder value.
The Company’s remuneration policy complements
this strategy by:
–Incorporating Company-wide performance requirements
for both STI and LTI reward vesting for earnings (NPAT and
NPATA), Free Cash Flow (FFO) and People measures to
encourage cross-divisional collaboration;
–Incorporating performance metrics that focus on cash flow to
reduce working capital and debt exposure;
–Setting NPATA, EBITA and FFO STI performance and
gateway requirements based on effective application of funds
employed to run the business for better capital efficiency;
–Employing FFO as the cash measure for the STI to provide
more emphasis on control of capital expenditure;
–Excluding the short term impacts of opportunistic and
unbudgeted acquisitions and divestments on incentive
outcomes to encourage flexibility, responsiveness and
growth consistent with strategy;
–Deferring 50% of STI awards to encourage sustainable
performance and a longer-term focus;
–Incorporating consistent financial performance in the LTIP
Scorecard measure;
–Emphasis on Zero Harm measures in the STI to maintain the
Company’s position as a Zero Harm leader and employer
and service provider of choice, thereby delivering a
competitive advantage; and
–Encouraging engagement with and the development
and retention of its people to help maintain a sustainable
supply of talent.
4.2 Remuneration linked to performance
The link to performance is provided by:
–Requiring a significant portion of executive remuneration to
vary with short-term and long-term performance;
–Applying a profitability gateway to be achieved before an STI
calculation for executives is made;
–Applying further Zero Harm gateways to be achieved
before calculating any reward for safety or
environmental performance;
–Applying challenging financial and non-financial measures to
assess performance;
–Ensuring that these measures focus management
on strategic business objectives that create
shareholder value; and
–Delivering a significant proportion of payment in equity for
alignment with shareholder interests.
Downer measures performance on the following key
corporate measures:
–Earnings per share (EPS) growth;
–Total shareholder return (TSR) relative to other ASX100
companies (excluding ASX “Financials” sector companies);
–G r o u p N PATA ;
–Divisional EBITA;
–FFO;
–Engagement with Downer’s people; and
–“Zero Harm” measures of safety and environmental
sustainability.
Remuneration for all executives varies with performance on
these key measures.

Annual Report 2018 27
The following graph shows the Company’s performance compared to the median performance of the ASX100 over the three year
period to 30 June 2018.
The graphs below illustrate Downer’s performance against key financial and non-financial performance indicators over the
last five years.
0
50
100
150
200
250
300
216.0
210.2
180.6
181.5
247.8
1
$’m
Net profit after tax
2014
2015
2017
2016
2018
1 Adjusted for material unbudgeted transactions and individually significant items.
0
10
20
30
40
50
45.5
43.9
38.0
35.8
10.7
Cents per share
Basic earnings per share
3
2014
2015
2017
2016
2018
3 Historical basic earnings per share were restated as a result of 169.9 million
shares issued from the capital raising made as part of the Spotless takeover
offer announced on 21 March 2017. The weighted average number of shares
(WANOS) to calculate EPS was adjusted by an adjustment factor of 0.943.
0
100
200
300
400
304.6
344.3
242.3
203.0
2
178.3
2
$’m
Free cash flow
2014
2015
2017
2016
2018
2 Adjusted for material unbudgeted transactions, including payment for
Spotless shares.
0.0
0.2
0.4
0.6
0.8
1.0
1.2
Lost Time Injuries per 1,000,000 hours
Total Recordable Injuries per 1,000,000 hours
0
2
4
6
8
10
12
TRIFRLTIFR
Safety
0.70
1.08
0.87
0.66
0.55
0.78
2014
2015
2017
2016
2018
0
* S&P/ASX 100 companies as at 30/06/2015
Total Shareholder Return (Indexed to 100)
S&P/ASX 100 median TSR
Downer EDI TSR
Downer EDI TSR compared to S&P/ASX 100 median*
50
100
150
200
250
Jun
2015
Sep
2015
Dec
2015
Mar
2016
Jun
2016
Sep
2016
Dec
2016
Mar
2017
Jun
2017
Sep
2017
Dec
2017
Mar
2018
Jun
2018

28 Downer EDI Limited
Directors’ Report – continued
for the year ended 30 June 2018
5. The Board’s role in remuneration
The Board engages with shareholders, management and other stakeholders as required, to continuously refine and improve executive
and Director remuneration policies and practices.
Two Board Committees deal with remuneration matters. They are the Remuneration Committee and the Nominations and Corporate
Governance Committee.
The role of the Remuneration Committee is to review and make recommendations to the Board in relation to executives in respect of:
–Executive remuneration and incentive policy;
–Remuneration of senior executives of the Company;
–Executive reward and its impact on risk management;
–Executive incentive plans;
–Equity-based incentive plans;
–Superannuation arrangements;
–Recruitment, retention, performance measurement and termination policies and procedures for all Key Management Personnel
and senior executives reporting directly to the Managing Director;
–Disclosure of remuneration in the Company’s public materials including ASX filings and the Annual Report; and
–Retirement payments for all Key Management Personnel and senior executives reporting directly to the Managing Director.
The Nominations and Corporate Governance Committee is responsible for recommending and reviewing remuneration arrangements
for the Executive Director and Non-executive Directors of the Company.
Each Committee has the authority to engage external professional advisers without seeking approval of the Board or management.
During the reporting period, the Remuneration Committee retained Guerdon Associates Pty Ltd as its adviser. Guerdon Associates
Pty Ltd does not provide services to management and is considered to be independent.
Remuneration arrangements for executives of Spotless are set by the Board of Spotless. Spotless’ People and Remuneration Committee
is comprised of two independent Directors and one Director nominated by Downer.
Details of the remuneration structure and arrangements for 2018 for D Nelson in her role as Chief Executive Officer – Spotless, as
established by the Spotless Board, are outlined at section 6.7.

Annual Report 2018 29
6. Description of executive remuneration
6.1 Executive remuneration structure
Executive remuneration has a fixed component and a component that varies with performance.
The variable component ensures that a proportion of pay varies with performance. Performance is assessed annually for performance
periods covering one year and three years. Payment for performance assessed over one year is an STI. Payment for performance over a
three-year period is an LTI.
In order for maximum STIs to be awarded, performance must achieve a stretch goal that is a clear margin above the planned budget for
the period. This enables the Company to attract and retain better performing executives, and ensures pay outcomes are aligned with
shareholder returns.
Target STIs are less than the maximum STI. Target STI is payable on achievement of planned objectives. For executives the target
STI is 75% of the maximum STI. The maximum total remuneration that can be earned by an executive is capped. The maximums are
determined as a percentage of fixed remuneration.
Executive position
Target
STI % of
fixed
remuneration
Maximum
STI % of
fixed
remuneration
Maximum
LTI % of
fixed
remuneration
Maximum total
performance
based pay as a % of
fixed remuneration
Managing Director75100100200
Executives appointed prior to 20117510075175
Executives appointed from 201156.257550125
The proportions of STI to LTI take into account:
–Market practice;
–The service period before executives can receive equity rewards;
–The behaviours that the Board seeks to encourage through direct key performance indicators; and
–The guideline for the Managing Director to maintain a shareholding as a multiple of pay after long-term incentive
rewards have vested.
6.2 Fixed remuneration
Fixed remuneration is the sum of salary and the direct cost of providing employee benefits, including superannuation, motor vehicles,
car parking, living away from home expenses and fringe benefits tax.
The level of remuneration is set to be able to retain proven performers and when necessary to attract the most suitable external
candidates from secure employment elsewhere.
Remuneration is benchmarked against a peer group of direct competitors and a sector peer group. While market levels of remuneration
are monitored on a regular basis, there is no contractual requirement or expectation that any adjustments will be made.
No adjustment has been made to remuneration for the Managing Director since July 2012.

30 Downer EDI Limited
Directors’ Report – continued
for the year ended 30 June 2018
6.3 Short-term incentive
6.3.1 STI tabular summary
The following table outlines the major features of the 2018 STI plan.
Purpose of STI plan –Focus performance on drivers of shareholder value over 12 month period;
–Improve “Zero Harm” and people related results; and
–Ensure a part of remuneration costs varies with the Company’s 12 month performance.
Minimum performance “gateway”
before any payments can be made
Achievement of a gateway based on budgeted Group NPATA for corporate executives and
Division EBITA for divisional heads.
Maximum STI that can be earned –KMP appointed pre 2011: up to 100% of fixed remuneration; and
–KMP appointed from 2011: up to 75% of fixed remuneration.
Percentage of STI that can
be earned on achieving
target expectations
75% of the maximum. For an executive to receive more, performance in excess of target
expectations will be required.
Individual Performance
Modifier (IPM)
–An IPM may be applied based on an executive’s individual key performance indicators and
relative performance;
–Moderate individual performance may result in an IPM of less than 1 or outstanding
performance may result in an IPM greater than 1. The IPM must average 1 across all
participants; and
–Application of an IPM cannot result in an award greater than the maximum STI% level set out
in section 6.1.
Discretion to vary paymentsThe Board, in its discretion, may vary STI payments by up to + or – 100% from the payment
applicable to the level of performance achieved, up to the maximum for that executive.
Performance period1 July 2017 to 30 June 2018.
Performance assessedAugust 2018, following audit of accounts.
Additional service period
after performance period for
payment to be made
50% of the award is deferred with the first tranche of 25% vesting one year following award and
the second tranche of 25% vesting two years following award.
Payment timingSeptember 2018 for the first cash payment of 50% of the award. The deferred components
of the STI payments will be paid one and two years following the award, in equal tranches of
25% of the award.
Form of paymentCash for initial payment.
The value of deferred components will be settled in cash or shares, net of personal tax. An
eligible leaver’s deferred components will be settled in shares or in cash in the sole and absolute
discretion of the Board.
Performance requirementsGroup NPATA and divisional EBITA, FFO, Zero Harm and people measures.
Board discretionThe Board may exercise discretion to:
–Reduce partly or fully the value of the deferred components that are due to vest in certain
circumstances, including where an executive has acted inappropriately or where the Board
considers that the financial results against which the STIP performance measures were tested
were incorrect in a material respect or have been reversed or restated; and
–Settle deferred components in shares or cash.
New recruitsNew executives (either new starts or promoted employees) are eligible to participate in the STI in
the year in which they commence in their position with a pro-rata entitlement.
Terminating executivesThere is no STI entitlement where an executive’s employment terminates prior to the end of
the financial year. Where an executive’s employment terminates prior to the vesting date, the
unvested deferred components will be forfeited. However, the Board has retained discretion to
vest deferred awards, in the form of shares or cash, in their ordinary course where the executive is
judged to be an eligible leaver.

Annual Report 2018 31
6.3.2 STI overview
The STI plan provides for an annual payment that varies with annual performance. This has been applied to performance measured
over the Company’s financial year to 30 June 2018.
The basis of the plan is designed to align STI outcomes with financial results. No STI is paid unless a minimum profit gateway is met.
For corporate executives, the gateway is based on the Group budgeted profit target. For divisional executives, the gateway is based
on the division budgeted profit target. Profit for this purpose is defined as NPATA for corporate executives and EBITA for divisional
executives. This minimum must be at a challenging level to justify the payment of STI to an executive, and deliver an acceptable
return for the funds employed in running the business. Positive and negative impacts from material but unbudgeted and opportunistic
transactions are excluded from gateway assessment. Whether to exclude the impact of significant items (positive or negative) is
considered on a case by case basis.
As noted in section 6.1, the maximum STI that can be earned is capped to minimise excessive risk taking.
Deferral is a key feature as part of the STI structure. Payment of 50% of the award is paid at the time of award in cash and the remaining
50% of the award earned is deferred over two years.
The first payment of 50% of the award will be in cash after finalisation of the annual audited results. The payment of the deferred
component of the award will be in the form of two tranches, each to the value of 25% of the award.
The deferred components represent an entitlement to cash or shares, subject to the satisfaction of a continued employment condition.
The first tranche will vest one year following award and the second tranche will vest two years following award, provided an executive
remains employed by the Group at the time of vesting.
The value of deferred components will generally be settled in shares, net of applicable personal tax. This is designed to encourage
executive share ownership, and not adversely impact executives who have to meet their taxation obligations arising from the vesting
of the deferred components. However, the Board retains the discretion to vest deferred awards, in the form of shares or cash, and will
generally have regard to an executive’s individual circumstances and existing level of equity ownership.
No dividend entitlements are attached to the deferred components during the vesting period.
Where an executive ceases employment with the Group prior to the vesting date, the deferred components will be forfeited.
However, the Board has retained the discretion to vest deferred awards, in the form of shares or cash, in their ordinary course where the
executive is judged to be an eligible leaver.
6.3.3 How STI payments are assessed
Target STI plan percentage of payAn individual’s target incentive under the STI plan is expressed as a percentage of fixed
remuneration. The STI plan percentage is set according to policy tabulated in section 6.1.
Organisational or divisional
scorecard result
As a principle, “target” achievement would be represented at budget. Thresholds and
maximums are also set.
Individual Performance
Modifier (IPM)

At the end of the plan year, eligible employees are provided with an IPM against their key
performance indicators and relative performance. Individual key performance indicators are set
between the individual and the Managing Director (if reporting to the Managing Director) or the
Board (if the Managing Director) at the start of the performance period. IPMs must average to 1.
STI plan incentive calculationFixed remuneration x maximum STI plan percent x scorecard result x IPM.

32 Downer EDI Limited
Directors’ Report – continued
for the year ended 30 June 2018
6.3.4 STI performance requirements
Overall performance is assessed on NPATA, EBITA, FFO, Zero Harm and a measure of employee engagement.
NPATA and EBITA include joint ventures and associates and include, inter alia, changes in accounting policy.
FFO is defined as net cash from operating activities (i.e. EBIT plus non-cash items in operating profit plus distributions received
from JVs or associates plus movements in working capital plus movements in operating assets less net interest less tax paid), less
investing cash flow.
Zero Harm reflects Downer’s commitment to safety and environmental, social and governance matters. The Zero Harm element
includes safety and environmental measures, underscoring Downer’s commitment to customers, employees, regulators and the
communities in which it operates.
The measures for the Zero Harm element of the scorecard are as follows:
MeasureTarget
Safety
TRIFR (total recordable injury
frequency rate)
LTIFR (lost time injury frequency rate)
Retain TRIFR and LTIFR below defined threshold levels for area of responsibility. TRIFR is
calculated as the number of recordable injuries x 1,000,000/the hours worked in
12 months. LTIFR is calculated as the number of lost time injuries x 1,000,000/the hours
worked in 12 months.
Environmental
Greenhouse gas emission reductionsReview of targets for greenhouse gas reduction and energy efficiency and the achievement of
energy efficiency targets for the area of control.
Critical risks
Continuation of critical control verification programs, trend analysis on critical control
verifications and the implementation of a program of initiatives to improve the resilience of
critical controls.
Zero Harm Leadership
Performance of a minimum number of cross-divisional critical risk observations by senior
executives within the relevant area of control in other areas of Downer.
Should a workplace fatality or serious environmental incident occur, the relevant safety or environmental portion of the STI is foregone.
Weightings applied to the 2018 STI scorecard measures for all executives, including the Managing Director, are set out in
the table below.
ExecutiveG r o u p N PATADivisional EBITAFree cash flowZero HarmPeople
Corporate30%–30%30%10%
Business unit7. 5%22.5%30%
(7.5% Group,
22.5% division)
30%10%
(3% Group,
7% division)
The Board has discretion to vary STI payments by up to + or – 100% from the payment applicable to the level of performance achieved,
up to the maximum for that executive.
Specific details of STI performance requirements are set out in section 7.3.
The Board retains the right to vary from policy in exceptional circumstances. However, any variation from policy and the reasons for it
will be disclosed.

Annual Report 2018 33
6.4 Long-term incentive
6.4.1 LTI tabular summary
The following table outlines the major features of the 2018 LTI plan.
Purpose of LTI plan –Focus performance on drivers of shareholder value over three-year period;
–Manage risk by countering any tendency to over-emphasise short-term performance to the
detriment of longer-term growth and sustainability; and
–Ensure a part of remuneration costs varies with the Company’s longer-term performance.
Maximum value of equity
that can be granted
–Managing Director: 100% of fixed remuneration;
–KMP appointed pre-2011: 75% of fixed remuneration; and
–KMP appointed from 2011: 50% of fixed remuneration.
Performance period1 July 2017 to 30 June 2020.
Performance assessedSeptember 2020.
Additional service period
after performance period
for shares to vest
Performance rights for which the relevant performance vesting condition is satisfied will not vest
unless executives remain employed with the Group on 30 June 2021.
Performance rights vest1 July 2021.
Form of award and paymentPerformance rights.
Performance conditionsThere are three performance conditions. Each applies to one-third of the performance rights granted to
each executive.
Relative TSR
The relative TSR performance condition is based on the Company’s TSR performance relative to the
TSR of companies comprising the ASX100 index, excluding financial services companies, at the start of
the performance period, measured over the three years to 30 June 2020.
The performance vesting scale that will apply to the performance rights subject to the relative TSR test
is shown in the table below:
Downer EDI Limited’s
TSR Ranking
Percentage of performance rights subject to TSR condition that
qualify for vesting
< 50th percentile0%
50th percentile30%
Above 50th and below
75th percentile
Pro rata so that 2.8% of the performance rights in the tranche will
vest for every 1 percentile increase between the 50th percentile and
75th percentile
75th percentile and above100%

34 Downer EDI Limited
Directors’ Report – continued
for the year ended 30 June 2018
EPS growth
The EPS growth performance condition is based on the Company’s compound annual EPS growth over
the three years to 30 June 2020.
The performance vesting scale that will apply to the performance rights subject to the EPS growth test
is shown in the table below:
Downer EDI Limited’s EPS
compound annual growth
Percentage of performance rights subject to EPS condition that
qualify for vesting
< 5%0%
5%30%
Above 5% to < 10%Pro rata so that 14% of the performance rights in the tranche will
vest for every 1% increase in EPS growth between 5% and 10%
10% or more100%
Scorecard
The Scorecard performance condition is based on the Group’s NPAT and FFO for each of the three years
to 30 June 2020.
The performance vesting scale that will apply to the performance rights subject to the Scorecard test is
shown in the table below:
Scorecard result
Percentage of performance rights subject to Scorecard condition
that qualify for vesting
< 90%0%
90%30%
Above 90% to < 110%Pro rata so that 3.5% of the performance rights in the tranche will vest
for every 1% increase in the Scorecard result between 90% and 110%
110% or more100%
How performance rights and
shares are acquired
The rights are issued by the Company and held by the participant subject to the satisfaction of
the vesting conditions. The number of rights held may be adjusted pro-rata, consistent with ASX
adjustment factors, for any capital re-structures.
If the rights vest, executives can exercise them to receive shares that are normally acquired on-market.
Treatment of dividends
and voting rights on
performance rights
Performance rights do not have voting rights or accrue dividends.
Restriction on hedgingHedging of entitlements under the plan by executives is not permitted.
Restriction on tradingVested shares arising from the rights may only be traded with the approval of the Remuneration
Committee. Approval requires that trading comply with the Company’s Securities Trading Policy.
New participantsNew executives (either new starts or promoted employees) are eligible to participate in the LTI on the
first grant date applicable to all executives after they commence in their position. An additional pro-
rata entitlement if their employment commenced after the grant date in the prior calendar year may be
made on a discretionary basis.
Terminating executivesWhere an executive ceases employment with the Group prior to the vesting date, the rights will
be forfeited. However, the Board will retain the discretion to retain executives in the plan in certain
circumstances including the death, total and permanent disability or retirement of an executive. In
these circumstances, the Board will also retain the discretion to vest awards in the form of cash.

Annual Report 2018 35
Change of controlOn the occurrence of a change of control event, and providing at least 12 months of the grants’
performance period have elapsed, unvested performance rights pro rated with the elapsed service
period are tested for vesting with performance against the relevant relative TSR, EPS growth or
Scorecard requirements for that relevant period. Vesting will occur to the extent the performance
conditions are met. Performance rights that have already been tested, have met performance
requirements and are subject to the completion of the service condition, fully vest.
6.4.2 LTI overview
Executives participate in a LTI plan. This is an equity-based plan that provides for a reward that varies with Company performance over
three-year measures of performance. Three-year measures of performance are considered to be the maximum reasonable time period
for setting incentive targets for earnings per share and are generally consistent with market practice in the Company’s sector.
The payment is in the form of performance rights. The performance rights do not have any dividend entitlements or voting rights. If all
the vesting requirements are satisfied, the performance rights will vest and the executives will receive shares in the Company or cash at
the discretion of the Board.
The 2018 LTI represents an entitlement to performance rights to ordinary shares exercisable subject to satisfaction of both a
performance condition and a continued employment condition. Grants will be in three equal tranches, with each tranche subject to an
independent performance requirement. The performance requirements for each tranche will share two common features:
–Once minimum performance conditions are met, the proportion of performance rights that qualify for vesting commences at
30% and gradually increases pro rata with performance. This approach provides a strong motivation for meeting minimum
performance, but avoids a large “cliff” which may encourage excessive risk taking; and
–The maximum reward is capped at a “stretch” performance level that is considered attainable without excessive risk taking.
Performance for the 2018 LTI grants will be measured over the three-year period to 30 June 2020.
The proportion of performance rights that can vest will be calculated in September 2020, but executives will be required to remain in
service until 30 June 2021 to be eligible to receive any shares.
Where an executive ceases employment with the Group prior to the vesting date, the rights will be forfeited. However, the Board will
retain the discretion to retain executives in the plan in certain circumstances such as the death, total and permanent disability or
retirement of an executive. In these circumstances, the Board will also retain the discretion to vest awards in the form of cash.
After vesting, any shares will remain subject to a trading restriction that is governed by the Company’s Securities Trading Policy.
All unvested performance rights will be forfeited if the Board determines that an executive has committed an act of fraud, defalcation or
gross misconduct or in other circumstances at the discretion of the Board.

36 Downer EDI Limited
Directors’ Report – continued
for the year ended 30 June 2018
6.4.3 Performance requirements
One tranche of performance rights in the 2018 LTI grant will
qualify for vesting subject to performance relative to other
companies, while the other two tranches of performance rights
will qualify for vesting subject to separate, independent absolute
performance requirements.
The relative performance requirement applicable to the first
tranche of performance rights is based on total shareholder
return (TSR). TSR is calculated as the difference in share
price over the performance period, plus the value of shares
earned from reinvesting dividends received over this period,
expressed as a percentage of the share price at the beginning
of the performance period. If the TSR for each company in the
comparator group is ranked from highest to lowest, the median
TSR is the percentage return to shareholders that exceeds the
TSR for half of the comparison companies. The 75th percentile
TSR is the percentage return required to exceed the TSR for
75% of the comparison companies.
Performance rights in the tranche to which the relative TSR
performance requirement applies will vest pro rata between the
median and 75th percentile. That is, 30% of the tranche vest at
the 50th percentile, 32.8% at the 51st percentile, 35.6% at the
52nd percentile and so on until 100% vest at the 75th percentile.
The comparator group for the 2018 LTI grants will be the
companies, excluding financial services companies, in the
ASX100 index as at the start of the performance period on
1 July 2017. Consideration has been given to using a smaller
group of direct competitors for comparison, however:
–Limiting the comparator group to a small number of direct
competitors could result in very volatile outcomes from
period to period; and
–Management’s strong focus on improving the Company’s
ranking among ASX100 companies has become embedded
in Company culture, so reinforcing this rather than trying to
dislodge it with another focus was considered desirable.
The absolute performance requirement applicable to the
second tranche of performance rights is based on Earnings per
Share (EPS) growth over the three year performance period
to 30 June 2020. The EPS measure is based on AASB 133
Earnings per Share.
The tranche of performance rights dependent on the EPS
performance condition will vest pro rata between 5% compound
annual EPS growth and 10% compound annual EPS growth.
Vesting applies on a pro rata basis from 30% upon meeting
the minimum compound annual EPS growth performance level
of 5% to 100% at 10% annual compound annual EPS growth.
Capping reduces the tendency for excessive risk taking and
volatility that may be encouraged if the annual compound EPS
growth bar is set above 10%.
The absolute performance requirement applicable to
the third tranche of performance rights is based on the
Scorecard condition over the three year performance period
to 30 June 2020.
The Scorecard condition is designed to:
–Strengthen retention through the setting of challenging
targets on an annual basis that reflect prevailing market
conditions, for a portion of LTI awards;
–Align with the STI plan to encourage a long-term approach to
achieving annual financial performance targets;
–Improve the line of sight for executives so as to increase
motivation and focus on consistent performance; and
–Focus on performance sustainability through reward of
consistent achievement of absolute performance targets
over the long term.
The Scorecard condition is comprised of two independent
absolute components of equal weighting. These components are
based on Group NPAT and Group FFO.
The performance of each component will be measured over the
three year period to 30 June 2020.
NPAT and FFO targets are set at the beginning of each of the
three financial years. The performance of each component will
be assessed each year relative to the targets. Performance of
each component will be determined as the average of the annual
performance assessments for the three years. The performance
rights will vest on a pro-rata basis from 30% upon meeting the
minimum three-year average component performance level
of 90% of target to 100% at the capped maximum three-year
average component performance level of 110% of target.
The processes and timing applicable for the Scorecard measure
are outlined below:
TimingActions
At the beginning
of the plan
Weighting of components is
determined. In 2018 the components are
equally weighted.
At the beginning of
each financial year
NPAT and FFO target performance
levels are set.
At the end of
each financial year
–Calculate actual performance; and
–Assess actual performance compared
to target to determine performance
percentage for the year.
At the end of
three years
–Calculate average annual performance
for each component; and
–Calculate award based on performance
against the vesting range.
At the end of
four years
Consider the continued service condition
and determine vesting.

Annual Report 2018 37
6.4.4 Post‑vesting shareholding guideline
The Managing Director is required to continue holding shares
after they have vested until the shareholding guideline has
been attained. This guideline requires that the Managing
Director holds vested long-term incentive shares equal in value
to 100% of his fixed remuneration. The Managing Director’s
shareholding is currently well in excess of the guideline.
The Remuneration Committee has discretion to allow
variations from this guideline requirement. The guideline
requirement has been developed to reinforce alignment with
shareholder interests.
The Board retains the right to vary from policy in exceptional
circumstances. However, any variation from policy and the
reasons for it will be disclosed.
6.5 Treatment of major transactions
Downer has delivered significant shareholder value through a
long history of strategic mergers, acquisitions and divestments.
On each occasion, the Board considers the impact of these
transactions. Where a transaction is both material and
unbudgeted, the Board considers whether it is appropriate
to adjust for its impact on the key performance indicators on
which executive performance is measured. The objective of any
adjustment is to ensure that opportunities to add value through
an opportunistic divestment or acquisition should not be
fettered by consideration of the impact on incentive payments.
That is, executives should be ‘no better or worse off’ as a result
of the transaction. No adjustments are made for market reactions
to a transaction as the Board believes that management is
accountable for those outcomes.
This Board considers this approach to be appropriate as it:
–Ensures that executives and the Board consider these
transactions solely based on the best interests of Downer;
–Means executives remain accountable for transaction
execution and post-transaction performance from the
next budget cycle;
–Ensures that executives complete opportunistic transactions
that are in the long-term interest of shareholders;
–Is consistent with the Board’s long-term view when
considering the value of major transactions to Downer’s
shareholders; and
–Ensures Downer remains agile and responsive in managing
its portfolio by pursuing opportunities as and when
they emerge rather than be constrained by the annual
budget process.
In assessing Zero Harm performance of executives, the results of
acquired businesses are excluded for a period of twelve months
post-acquisition to ensure that management is accountable for
the objectives set in the annual business planning process and
in recognition that an integration period during which Downer’s
Zero Harm framework (including systems, processes, definitions
and measurement and reporting methods) is implemented
through the acquired business is appropriate. Where this
transition to Downer’s framework takes place over a longer
period due to the complexity of the implementation or the
maturity profile of the acquired business, the Board will consider
an extension to a more appropriate period.
6.6 Treatment of significant items
From time to time, Downer’s performance is impacted by
significant items. Where these occur, the Board considers
whether to adjust for their impact (positive or negative) on
a case by case basis, having regard to the circumstances
relevant to each item.
The Board considers this approach to be appropriate as it
ensures that executives and the Board make decisions solely
based on the best interests of Downer.
6.7 Chief Executive Officer – Spotless
Downer has an interest of 87.8% in Spotless Group Holdings
Limited (Spotless), which remains listed on the Australian
Securities Exchange. Remuneration arrangements for executives
of Spotless are set by the Board of Spotless. Spotless’ People
and Remuneration Committee is comprised of two independent
Directors and one Director nominated by Downer.
Following is a summary of the remuneration structure
and arrangements for FY18 for D Nelson in her role as
Chief Executive Officer – Spotless as established by the
Spotless Board.
6.7.1 Remuneration structure
The remuneration for the CEO – Spotless has a fixed component
and a component that varies with performance.
Fixed remuneration is the sum of salary and the direct cost of
providing employee benefits, including superannuation and other
non-cash benefits.
Remuneration is benchmarked against a peer group of
competitors. While market levels of remuneration are monitored
on a regular basis, there is no contractual requirement or
expectation that any adjustments will be made.
The variable component ensures that a proportion of pay
varies with performance. Performance is assessed annually
for performance periods covering one year and three years.
Payment for performance assessed over one year is an STI.
Payment for performance assessed over three years is an LTI.
For 2018, the Spotless Board determined that it was
inappropriate to grant performance rights under the LTI, which
was based on EPS and TSR performance hurdles, due to the
low level of free float shares in Spotless and lack of trading
liquidity following the takeover by Downer. Accordingly, for 2018,
the maximum value of the STI was increased from 100% to
150% of fixed remuneration and STI deferral was introduced.
The Spotless Board will give consideration to a longer term
approach for 2019.

38 Downer EDI Limited
Directors’ Report – continued
for the year ended 30 June 2018
6.7.2 STI tabular summary
The following table outlines the major features of the Spotless 2018 STI plan.
Minimum performance “gateway”
before any payments can be made
Achievement of a gateway based on budgeted NPAT must be met before any STI payment can be
made. A further Zero Harm gateway must be met for an award for safety performance to be made.
Maximum STI that can be earned100% of fixed remuneration. This was increased to 150% for 2018 only as no LTI grant
was made for 2018.
Percentage of STI that can
be earned on achieving
target expectations
75% of the maximum. For an executive to receive more, performance in excess of target
expectations will be required.
Discretion to vary paymentsThe Board, in its discretion, may vary STI payments by up to + or – 100% from the payment
applicable to the level of performance achieved, up to the maximum for that executive.
Performance period1 July 2017 to 30 June 2018.
Performance assessedAugust 2018, following audit of accounts.
Additional service period
after performance period for
payment to be made
50% of the award is deferred with the first tranche of 25% vesting one year following award and
the second tranche of 25% vesting two years following award.
Payment timingSeptember 2018 for the first payment of 50% of the award. The deferred components of
the STI payments will be paid one and two years following the award, in equal tranches of
25% of the award.
Form of paymentPayments are made in cash.
Performance requirementsThe Spotless performance scorecard is comprised of the following measures:
Measure Weighting
N PAT 3 0 %
FFO 30%
Revenue 10%
Zero Harm – Recordable Injury Frequency Rate 20%
People – talent and succession planning, regrettable turnover 10%
Board discretionThe Board may exercise discretion to reduce partly or fully the value of the deferred
components that are due to vest in certain circumstances, including where an executive has
acted inappropriately or where the Board considers that the financial results against which
the STI performance measures were tested were incorrect in a material respect or have been
reversed or restated.
Terminating executivesThere is no STI entitlement where employment terminates prior to the end of the financial year.
Where employment terminates prior to the vesting date, the unvested deferred components will
be forfeited other than where the Spotless Board judges to be an eligible leaver.
These arrangements reflect changes from the previous Spotless remuneration framework and an intention of the Spotless Board to
align with the Downer framework as appropriate.
Further information on Spotless’ remuneration practices is contained in its Remuneration Report which can be found on the Spotless
website www. spotless.com.

Annual Report 2018 39
7. Details of executive remuneration
7.1 Remuneration received in relation to the 2018 financial year
Executives receive a mix of remuneration during the year, comprising fixed remuneration, an STI paid in cash and an LTI in the form of
performance rights that vest four years later, subject to meeting performance and continued employment conditions.
The table below lists the remuneration actually received in relation to the 2018 financial year, comprising fixed remuneration, cash STIs
relating to 2018, deferred STIs payable in 2018 in respect of prior years and the value of LTI grants that vested during the 2018 financial
year. This information differs to that provided in the statutory remuneration table at section 7.2 which shows the accounting expense
of LTIs and deferred STIs for 2018 determined in accordance with accounting standards rather than the value of LTI grants that vested
during the year.
Fixed
Remuneration
1
$
Cash Bonus paid
or payable in
respect of
current year
$
Deferred
Bonus paid
or payable in
respect of
prior years
$
To t a l
payments
$
Equity
that vested
during 2017
3
$
To t a l
remuneration
received
$
G A Fenn
2,4
2,060,323840,300804,4003,705,023–3,705,023
S Cinerari
2,4
1,082,745492,580485,7752,061,100–2,061,100
M J Ferguson
2,5
825,000267, 8 46135,5771,228,423–1,228,423
S L Killeen
2,5
829,185200,47634,3671,064,028–1,064,028
M J Miller
2,5
483,882156,576116,222756,680–756,680
D Nelson
2
948,731506,237–1,454,968–1,454,968
D J Overall
4
800,891–581,7451,382,636–1,382,636
B C Petersen
2,4
852,640283,146189,5531,325,339–1,325,339
7,883,3972 ,747,1612 , 347,63912,978,197–12,978,197
1 Fixed remuneration comprises salary and fees, payment of leave entitlements, non-monetary benefits and superannuation payments.
2 Cash Bonus paid or payable in respect of current year represents cash payments in relation to the 2018 financial year. These comprise the 50% cash component of the
award. The remaining 50% of the total award is deferred as described in section 6.3.
3 Represents the value of restricted shares granted in previous years that vested during the year, calculated as the number of restricted shares that vested multiplied by the
closing market prices of Downer shares on the vesting date.
4 Deferred Bonus represents the deferred cash bonus amount to be paid in September 2018, being the second deferred component of the 2016 award and the first deferred
component of the 2017 award, being 25% of each award.
5 Deferred Bonus represents the deferred cash bonus amount to be paid in September 2018, being the first deferred component of the 2017 award, being 25% of the award.

40 Downer EDI Limited
Directors’ Report – continued
for the year ended 30 June 2018
7.2 Remuneration of executive key management personnel required under the Corporations Act 2001 (Cth)
2018
Short-term
employee benefits
Post-employment
benefits
Salary
and fees
$
Cash Bonus
paid or
payable in
respect
of current
year
$
Deferred
Bonus paid
or payable
4
$
Non-
monetary
$
Super-
annuation
$
Other
benefits
$
Subtotal
$
Share-based
payment
transac-
tions
3
$
To t a l
$
G A Fenn
2,4
1,766,618840,300859,283273,65620,049–3,759,9061,373,2755,133,181
S Cinerari
2,4
1,038,284492,580491,05414,08430,377–2,066,379546,2502,612,629
M J Ferguson
2,4
792,549267, 8 46224,58312,40220,049–1,317,429211,2201,528,649
S L Killeen
2,4
750,268200,476109,8547,13071,787–1,139,51586,1001,225,615
M J Miller
1,2,4
450,420156,576192,51119,77313,689–832,969187,06 31,020,032
D Nelson
1,2,4
931,394506,237210,9322,30015,037–1,665,900–1,665,900
D J Overall
1,2,4
785,743–335,9842,31912,829–1,136,875161,5001,298,375
B C Petersen
2,4
821,267283,146260,14011,32420,049–1,395,926276,3511,672,277
7,336,5432 ,747,1612 ,684,341342,988203,866–13,314,8992 ,841,75916,156,658
1 Amounts represent the payments relating to the period during which the individuals were Key Management Personnel (KMP).
2 Cash Bonus paid or payable in respect of current year represents cash payments in relation to the 2018 financial year. These comprise the 50% cash component of
the award.
3 Represents the value of vested and unvested equity expensed during the period including reversal for forfeited equity incentives and the probability of the incentives
vesting, in accordance with AASB 2 Share-based Payment, related to grants made to the executive, as outlined in sections 8.2 and 8.3. Vesting of the majority of securities
remains subject to significant performance and service conditions as outlined in section 6.4.
4 Deferred Bonus represents the value of deferred components attributable to the 2018 financial year based on amortisation of deferred components over the period from the
commencement of the relevant performance year to the end of financial year to which payment of the relevant deferred component relates.
2017
Short-term
employee benefits
Post-employment
benefits
Salary
and fees
$
Cash Bonus
paid or
payable in
respect
of current
year
$
Deferred
Bonus paid
or payable
4
$
Non-
monetary
$
Super-
annuation
$
Other
benefits
$
Subtotal
$
Share-based
payment
transac-
tions
3
$
To t a l
$
G A Fenn
2,4
1,775,384964,100803,667288,05019,616–3,850,8171,656,7135,507,530
S Cinerari
2,4
980,384495,550467, 31319,91626,276–1,989,439593,4372,582,876
M J Ferguson
2,4
659,616271,153112,9808,26819,616–1,071,633119,4731,191,106
S L Killeen
1,2,4
289,64866,12928,6392,35110,792–397, 5 59–397, 5 59
M J Miller
2,4
638,762232,44496,85216,62219,616–1,004,296111,5071,115,803
D J Overall
2,4,5
1,326,197568,277584,9408,49519,616395,7082,903,233496,2083 , 3 99,4 41
B C Petersen
2,4
810,235315,913157,96120,14919,616–1,323,874184,6041, 508 ,478
6,480,2262,913,5662,252,352363,851135,148395,70812,540,8513,161,94215,702,793
1 Amounts represent the payments relating to the period during which the individuals were Key Management Personnel (KMP).
2 Cash Bonus paid or payable in respect of current year represents cash payments in relation to the 2017 financial year. These comprise the 50% cash component of
the award.
3 Represents the value of vested and unvested equity expensed during the period including reversal for forfeited equity incentives and the probability of the incentives
vesting, in accordance with AASB 2 Share-based Payment, related to grants made to the executive, as outlined in sections 8.2 and 8.3. Vesting of the majority of securities
remains subject to significant performance and service conditions as outlined in section 6.4.
4 Deferred Bonus represents the value of deferred components attributable to the 2017 financial year based on amortisation of deferred components over the period from the
commencement of the relevant performance year to the end of financial year to which payment of the relevant deferred component relates.
5 D J Overall: Other benefits represents the accrual of the cash retention benefit payable on 21 May 2017 ($395,708), being 12 months’ fixed remuneration.

Annual Report 2018 41
7.3 Performance related remuneration
7.3.1 Performance outcomes required under the Corporations Act 2001 (Cth)
The table below lists the proportions of remuneration paid during the year ended 30 June 2018 that are performance and non-
performance related and the proportion of STIs that were earned during the year ended 30 June 2018 due to the achievement of the
relevant performance targets.
Proportion of
2018 remuneration
2018
Short-term incentive
Performance
Related
%
Non-
performance
Related
%
Paid
%
Forfeited
%
G A Fenn
1
60408416
S Cinerari
1
59419010
M J Ferguson46548416
S L Killeen32687624
D Nelson43576139
B C Petersen49518911
1 Performance related portion includes the reversal of expense for forfeited equity incentives described in section 6.4.
7.3.2 STI performance outcomes
Specific STI financial and commercial targets remain commercially sensitive and so have not been reported.
In order for an STI to be paid, a minimum of 90% of the budgeted profit target must be met. For corporate executives, the hurdle is
90% of the Group budgeted profit target. Profit for this purpose is defined as NPATA. For divisional executives, the hurdle is 90% of the
division budgeted profit target. Profit for this purpose is defined as EBITA.
The following table summarises the average performance achieved by the KMP across each element of the scorecard.
Group
N PATA
Divisional
E B I TA
Group
FFO
Divisional
FFO
Zero
HarmPeople
Weighting of scorecard elementCorporate30.030.030.010.0
Division7. 522.57. 522.530.010.0
Percentage of the element achievedCorporate58.4100.0100.065.0
Division
1
58.466.7100.095.296.048.6
1 Performance includes the results for each Division for each element, even if the EBITA gateway was not achieved.

42 Downer EDI Limited
Directors’ Report – continued
for the year ended 30 June 2018
The following table sets out the performance achieved by each KMP across each element of the scorecard.
G A Fenn and M J Ferguson
ElementMeasureThresholdTargetMaximum
Zero HarmSafety and Environmental
PeopleEmployee engagement•
FinancialP r o f i t ( N PATA )
FFO
S Cinerari
ElementMeasureThresholdTargetMaximum
Zero HarmSafety and Environmental
PeopleEmployee engagement
FinancialP r o f i t ( N PATA / E B I TA )
FFO•
S L Killeen
ElementMeasureThresholdTargetMaximum
Zero HarmSafety and Environmental
PeopleEmployee engagement
FinancialP r o f i t ( N PATA / E B I TA )
FFO
D Nelson
ElementMeasureThresholdTargetMaximum
Zero HarmSafety•
PeopleTalent and succession•
FinancialProfit (NPAT)
FFO
Revenue
B C Petersen
ElementMeasureThresholdTargetMaximum
Zero HarmSafety and Environmental•
PeopleEmployee engagement•
FinancialP r o f i t ( N PATA / E B I TA )
FFO•
For 2018, the IPM applied to each member of the KMP ranged from 0.9 to 1.

Annual Report 2018 43
7.3.3 LTI performance outcomes
The table below summarises LTI performance measures tested and the outcomes for each executive.
Relevant
executives
Relevant
LT I m e a s u r e
Performance
outcome
% LTI tranche
that vested
G A Fenn,
S Cinerari,
D J Overall
2015 plan
TSR tranche – percentile ranking of
Downer’s TSR relative to the constituents
of the ASX100 over a three-year period.
Actual performance ranked at
the 76th percentile.
100% became
provisionally qualified.
EPS tranche – compound annual
earnings per share growth against
absolute targets over a three-year period.
Actual performance was
–4.95%.
0% became provisionally qualified.
100% were forfeited.
Scorecard tranche – sustained NPAT and
FFO performance against budget over a
three-year period.
Actual performance was 102.6%
for NPAT and 170.5% for FFO.
87.1% became
provisionally qualified.
12.9% were forfeited.
7.4 Major transactions and significant items
7.4.1 Major transactions
In 2018 Downer continued to optimise its portfolio in keeping with its strategy of creating efficient market positions to deliver long-term
shareholder value through restructuring, partnering, acquisition and divestment.
Downer undertook five M&A transactions and a significant restructure of existing businesses during 2018. These transactions were the
acquisition of Cabrini Linen Service, Envista, Integrated Services and UrbanGrid and the divestment of the Freight Rail business.
The acquisition and integration of Spotless continued during 2018 which was also restructured in order to align its service offerings
with its core markets. Downer achieved majority ownership of Spotless on 27 June 2017, with Downer nominated Directors appointed
to the Spotless Board on 19 July 2017. In setting the 2018 financial targets at the beginning of the performance period, the mid-point
of 2018 underlying earnings guidance provided by the pre-acquisition Spotless Board was adopted by Downer and management has
been measured against these operational performance targets. Several unbudgeted non-operational items were incurred for integration
costs, redundancy costs and costs associated with completion of the Strategy Reset program established by the pre-acquisition
Spotless Board.
In accordance with its policy, the Board considered the impact of each major transaction on incentive outcomes and determined that:
–The performance of the Cabrini Linen Service business was reflected in the budget and accordingly no adjustment would be made
to incentive outcomes;
–The Integrated Services acquisition was immaterial and accordingly no adjustment would be made to incentive outcomes;
–The UrbanGrid acquisition was immaterial and accordingly no adjustment would be made to incentive outcomes;
–The divestment of the Freight Rail business was a material, unbudgeted transaction for which it was appropriate to adjust
incentive outcomes;
–The acquisition of Envista was a material, unbudgeted transaction for which it was appropriate to adjust incentive outcomes; and
–Costs related to the Spotless acquisition for integration, senior management redundancy and completion of Strategy Reset were
material and unbudgeted and it was appropriate to adjust incentive outcomes.

44 Downer EDI Limited
Directors’ Report – continued
for the year ended 30 June 2018
7.4.2 Significant items
During the year there were three significant one-off items. The Board considers such items at the end of each performance period and
whether it is appropriate to adjust for their impact on incentive outcomes. In forming its views, the Board noted the robust operational
performance of the Company and strong returns to shareholders through TSR returns of 11.1% and 85.1% over one and three years
respectively, share price growth and increase in the dividend rate.
The Board considered it was appropriate to adjust incentive outcomes for the following items:
ItemDescription
Mining goodwill impairmentIn February 2018, a $76.4 million non-cash impairment of goodwill in the Mining
business was made.
The earnings of the Mining division in 2018 (excluding the impairment) were below target
threshold levels and accordingly the Mining Division did not meet its 2018 earnings gate for STI
purposes. The negative impact of the lower earnings have also been reflected in the 2018 Group
earnings for STI and LTI purposes.
The Mining division has subsequently won contracts including at the Blackwater, Carrapateena,
Century and CSA mines.
The Board noted the negative impact on the STI outcomes from reduced Mining earnings
(excluding the impairment) and that there had been no noticeable negative impact on the share
price from the impairment and that shareholder returns continued to be strong, with TSR of 11.1%
over one year and 85.1% over three years, share price growth and an increase in the dividend rate
recorded for FY18.
Accordingly, the Board determined that it was appropriate to adjust incentive outcomes for
the impairment.
Organisational restructuring costsIn 2018, the following management restructures were implemented:
–The Mining Division was merged with the Engineering, Construction and Maintenance
Division to form a new Division: Mining, Energy and Industrial Services; and
–The Rail Division was merged into the Infrastructure Services Division to form the Transport
and Infrastructure Division.
The Board believes that maintaining flexibility in adapting to changing markets is important to the
achievement of Downer’s objectives, including creating shareholder wealth and that management
should be encouraged to make decisions in the best interests of the Company without the
influence of incentive outcomes. The restructures will also deliver significant synergies.
Implementation of these restructures in 2018, rather than in a future reporting period was
considered to be in the best interest of Downer, notwithstanding that allowance for restructuring
costs was not made in the budget.
Accordingly, it was determined that it was appropriate to adjust incentive outcomes for this item.
Auburn Maintenance
Centre remediation
Ground subsidence at the Auburn (Waratah) Train Maintenance Centre was identified in 2014.
Downer has since completed rectification work and pursued associated legal claims.
In March 2018, Downer was unsuccessful in respect of the contractual claims related to the
ground subsidence and as a result expensed unbudgeted remediation and legal costs of
approximately $25 million which it had expected to recover.
The Board noted that this was a legacy issue and that current management had appropriately
overseen the remediation work and the legal claim.
Notwithstanding, no adjustment was made to incentive outcomes for this item.

Annual Report 2018 45
7.4.3 Adjustments made to incentive calculations for major transactions and significant items
The Board determined that the following adjustments be made to KPI calculations for the impact of major transactions and significant
items. The adjustments mean that executives are ‘no better or worse off’ as a result of the transactions and significant items so that
performance is measured against delivery of the Company’s budget and business plan.
MeasureAdjustmentImpact on STIImpact on LTI
N PATA ( S T I )
N PAT ( LT I )
Net increase of $159.2 million comprised of:
–Exclusion of loss on divestment of Freight Rail
of $40.6 million;
–Exclusion of Mining goodwill impairment
of $76.4 million;
–Exclusion of Divisional merger costs
of $20.0 million;
–Exclusion of Spotless related costs (management
redundancies, integration and residual strategy
reset costs) of $24.1 million; and
–Exclusion of operating earnings of Envista (net of
transaction costs) of $1.9 million.
For Corporate
scorecard participants:
–the gateway was
met; and
–58.4% of the NPATA
measure was achieved.
For Mining scorecard
participants, the gateway was
not met and no STI was paid.
An increase from nil to
52.4% of rights in the NPAT
tranche met the performance
condition. This equates to
8.7% of the total number of
rights in the grant.

FFONet decrease of $67.2 million comprised of:
–Exclusion of the net proceed on divestment of
Freight Rail of $109.0 million; and
–Exclusion of the cash flow impact on Envista
acquisition (transaction costs, net interest
expense, operating cash and payment for business
acquisition) of $41.8 million.
No change.No change.
Zero HarmThe Zero Harm performance of acquired businesses
has been excluded.
Not applicable as acquired
businesses historical
performance has been
measured on a different basis.
Not applicable.
EPS –The use of NPAT adjusted as set out above; and
–Exclusion of shares issued under the capital
raising from the weighted average number of
shares calculation.
Not applicable.No change.
TSRNo adjustments were made.Not applicable.No change.
7.4.4 Future periods
For major transactions completed in 2018, the impact on operational performance is included in the 2019 budget and accordingly no
adjustments are expected in respect of FY19 operational performance.
7.5 Variance from policy
There were no variances from policy during the year.

46 Downer EDI Limited
Directors’ Report – continued
for the year ended 30 June 2018
8. Executive equity ownership
8.1 Ordinary shares
KMP equity holdings in fully paid ordinary shares and performance rights issued by Downer EDI Limited are as follows:
Ordinary sharesPerformance rights
Balance at
1 July 2017
Net
change
Balance at
30 June 2018
Balance at
1 July 2017
Net
change
Balance at
30 June 2018
No.No.No.No.No.No.
G A Fenn826,226–826,2261,757,163128,2171,885,380
S Cinerari10,407–10,407626,42172,7 74699,195
M J Ferguson–––94,41170,584164,995
S L Killeen1,000–1,000–66,24066,240
D Nelson––––––
B C Petersen–2,5102,510170,01670,584240,600
KMP equity holdings in fully paid ordinary shares issued by Spotless Group Holdings Limited are as follows:
Ordinary shares
Balance at
1 July 2017
Net
change
Balance at
30 June 2018
No.No.No.
D Nelson634,377(634,377)–
8.2 Preference shares
KMP equity holdings in fully paid preference shares issued by Works Finance (NZ) Limited, a wholly owned subsidiary of Downer EDI
Limited, are as follows:
Preference shares
Balance at
1 July 2017
Net
change
Balance at
30 June 2018
No.No.No.
S L Killeen3,000–3,000

Annual Report 2018 47
8.3 Options and rights
No performance options were granted by Downer EDI Limited or exercised during the 2018 financial year.
As outlined in section 6.4.1, the LTI plan for the 2018 financial year is in the form of performance rights. Relief from certain regulatory
requirements was applied for and has been received from the Australian Securities and Investments Commission. During the year,
grants of performance rights were made to KMP in respect of the 2018 financial year.
The following table shows the number of performance rights granted by Downer EDI Limited and percentage of performance rights
that vested or were forfeited during the year for each grant that affects compensation in this or future reporting periods.
2015 Plan2016 Plan2017 Plan2018 Plan
Number
of per-
formance
rights
1
Vested
%
Forfeited
%
Number
of per-
formance
rights
2
Vested
%
Forfeited
%
Number
of per-
formance
rights
3
Vested
%
Forfeited
%
Number
of per-
formance
rights
4
Vested
%
Forfeited
%
G A Fenn5 41, 920–37.6711,717––503,526––332,160––
S Cinerari170,705–37.6266,894––188,822––137,016––
M J Ferguson––––––94,411––70,584––
S L Killeen–––––––––66,240––
D Nelson––––––––––––
B C Petersen–––63,017––106,999––70,584––
1 Grant date 2 June 2015. The fair value of shares granted was $4.23 per share for the EPS and Scorecard tranches and $1.70 per share for the TSR tranche.
2 Grant date 30 June 2016. The fair value of shares granted was $3.24 per share for the EPS and Scorecard tranches and $0.97 per share for the TSR tranche.
3 Grant date 21 June 2017. The fair value of shares granted was $5.29 per share for the EPS and Scorecard tranches and $4.61 per share for the TSR tranche.
4 Grant date 21 June 2018. The fair value of shares granted was $6.12 per share for the EPS and Scorecard tranches and $3.38 per share for the TSR tranche.
KMP equity holdings in options and rights issued by Spotless Group Holdings Limited are as follows:
OptionsRights
Balance at
1 July 2017
Net
change
Balance at
30 June 2018
Balance at
1 July 2017
Net
change
Balance at
30 June 2018
No.No.No.No.No.No.
D Nelson1,484,089(272,177)1,211,912348,838(348,838)–
The following table shows the number of options and rights granted by Spotless Group Holdings Limited and percentage of
performance rights that vested or lapsed during the year for each grant that affects compensation in this or future reporting periods.
2014 Options2015 Options2016 Rights
Number
of per-
formance
rights
1
Vested
%
Forfeited
%
Number
of per-
formance
rights
2
Vested
%
Forfeited
%
Number
of per-
formance
rights
3
Vested
%
Forfeited
%
D Nelson272,177–1001,211,912––348,838100–
1 Grant date 23 May 2014. The fair value of options granted was $0.213 per option for the EPS tranche and $0.209 per option for the TSR tranche. The exercise price was
$1.60 per option.
2 Grant date 28 September 2015. The fair value of options granted was $0.251 per option for the EPS tranche and $0.238 per option for the TSR tranche. The exercise price
was $2.07 per option.
3 Grant date 24 November 2016. The fair value of rights granted was $0.744 per right for the EPS tranche and $0.496 per right for the TSR tranche.

48 Downer EDI Limited
Directors’ Report – continued
for the year ended 30 June 2018
The maximum number of performance options and rights that may vest in future years that will be recognised as share-based
payments in future years is set out in the table below:
Maximum number of shares
for the vesting year
2019202020212022
G A Fenn3 37,97 7711,717503,526332,160
S Cinerari106,463266,894188,822137,016
M J Ferguson––94,41170,584
S L Killeen–––66,240
D Nelson
1
1,211,912–––
B C Petersen–63,017106,99970,584
1 Options granted to D Nelson that may vest in future years relate to shares in Spotless Group Holdings Limited.
The maximum value of performance options and rights that may vest in future years that will be recognised as share-based payments
in future years is set out in the table below. The amount reported is the value of share-based payments calculated in accordance with
AASB 2 Share-based Payment over the vesting period.
201920202021
G A Fenn1,625,8311,070,144432,953
S Cinerari625,922417, 5 3 9178,593
M J Ferguson211,475211,47592,002
S L Killeen86,34086,34086,340
D Nelson
1
–––
B C Petersen276,607227,40592,002
1 Options granted to D Nelson that may vest in future years relate to shares in Spotless Group Holdings Limited.
8.4 Remuneration consultants
Guerdon Associates Pty Ltd was engaged by the Board Remuneration Committee to provide remuneration advice in relation to KMP,
but did not provide the Board Remuneration Committee with remuneration recommendations as defined under Division 1, Part 1.2,
9B (1) of the Corporations Act 2001 (Cth).
The Board was satisfied that advice received was free from any undue influence by Key Management Personnel to whom the advice
may relate, because strict protocols were observed and complied with regarding any interaction between Guerdon Associates Pty Ltd
and management, and because all remuneration advice was provided to the Board Remuneration Committee chair.
9. Key terms of employment contracts
9.1 Notice and termination payments
Executives are on contracts with no fixed end date.
The following table captures the notice periods applicable to termination of the employment of executives.
Termination notice
period by Downer
Termination notice
period by employee
Termination payments
payable under contract
Managing Director12 months6 months12 months
Other Executives12 months6 months12 months
Termination payments are calculated based upon total fixed remuneration at the date of termination. No payment is made for
termination due to gross misconduct.

Annual Report 2018 49
9.2 Managing Director and Chief Executive Officer of Downer’s employment agreement
Mr Fenn was appointed as the Managing Director of Downer commencing on 30 July 2010. The following table sets out the key terms
of the Managing Director’s employment agreement.
Te r mUntil terminated by either party.
Fixed remuneration$2.0 million per annum. This has remained unchanged since July 2012.
Fixed remuneration includes superannuation and non-cash benefits but excludes entitlements to
reimbursement for Mr Fenn’s home telephone rental and call costs, home internet costs and medical, life and
salary continuance insurance. Mr Fenn may also be accompanied by his wife when travelling on business, at the
Chairman’s discretion. There was no such travel during the year.
STI opportunityMr Fenn is eligible to receive an annual STI and the maximum STI opportunity is 100% of fixed remuneration.
Any entitlement to an STI is at the discretion of the Board, having regard to performance measures and targets
developed in consultation with Mr Fenn including Downer’s financial performance, safety, people, environmental
and sustainability targets and adherence to risk management policies and practices. The Board also retains
the right to vary the STI by + or – 100% (up to the 100% maximum) based on its assessment of performance.
The STI deferral arrangements in place for KMP apply to Mr Fenn.
There is no STI entitlement where the Managing Director’s employment terminates prior to the end of the
financial year, other than in the event of a change in control or by mutual agreement.
LTI opportunityMr Fenn is eligible to participate in the annual LTI plan and the value of the award is 100% of fixed remuneration
calculated using the volume weighted average price after each year’s half yearly results announcement.
Mr Fenn’s performance requirements have been described in section 6.4.
In the event of a change of control, providing at least 12 months of a grant’s performance period have elapsed,
unvested shares and performance rights pro rated with the elapsed service period are tested for vesting with
performance against the relevant hurdles for that period and vest, as appropriate. Shares that have already been
tested, have met performance requirements and are subject to the completion of the service condition, fully vest.
Te r m i n a t i o nMr Fenn can resign:
a) By providing six months’ written notice; or
b) Immediately in circumstances where there is a fundamental change in his role or responsibilities. In these
circumstances, Mr Fenn is entitled to a payment in lieu of 12 months’ notice.
Downer can terminate Mr Fenn’s employment:
c) Immediately for misconduct or other circumstances justifying summary dismissal; or
d) By providing 12 months’ written notice.
When notice is required, Downer can make a payment in lieu of notice of all or part of any notice period
(calculated based on Mr Fenn’s fixed annual remuneration).
If Mr Fenn resigns because ill health prevents him from continuing his duties, he will receive a payment in
recognition of his past services equivalent to 12 months’ fixed remuneration. At the discretion of the Board, his
shares under the LTI plan may also vest.
If Downer terminates Mr Fenn’s employment on account of redundancy, in addition to the notice (or payment in
lieu of notice) required to be given by Downer, Mr Fenn will receive a payment in recognition of his past services
equivalent to 12 months’ fixed remuneration.
If Mr Fenn resigns he will be subject to a six-month post-employment restraint in certain areas where the Downer
Group operates, where he is restricted from working for competitive businesses.
OtherThe agreement contains provisions regarding leave entitlements, duties, confidentiality, intellectual property,
moral rights and other facilitative and ancillary clauses. It also contains provisions regarding corporate
governance and a provision dealing with the Corporations Act 2001 (Cth) limits on termination benefits to be
made to Mr Fenn.

50 Downer EDI Limited
Directors’ Report – continued
for the year ended 30 June 2018
10. Related party information
10.1 Transactions with other related parties
Transactions entered into during the year with Directors of Downer EDI Limited and the Group are within normal employee, customer
or supplier relationships on terms and conditions no more favourable than dealings in the same circumstances on an arm’s length
basis and included;
–the receipt of dividends from Downer EDI Limited;
–participation in the Long Term Incentive Plan;
–terms and conditions of employment; and
–reimbursement of expenses.
A number of Directors of the Company hold directorships in other entities. Several of these entities transacted with the Group on terms
and conditions no more favourable than those available on an arm’s length basis.
11. Description of Non-executive Director remuneration
11.1 Non-executive Director remuneration policy
Downer’s Non-executive Director remuneration policy is to provide fair remuneration that is sufficient to attract and retain Directors
with the experience, knowledge, skills and judgment to steward the Company.
There has been no change to the level of Non-executive Director fees since the prior reporting period and there will be no changes in
the 2019 financial year.
Fees for Non-executive Directors are fixed and are not linked to the financial performance of the Company. The Board believes this is
necessary for Non-executive Directors to maintain their independence.
Shareholders approved an annual aggregate cap of $2.0 million for Non-executive Director fees at the 2008 AGM. The allocation of
fees to Non-executive Directors within this cap has been determined after consideration of a number of factors, including the time
commitment of Directors, the size and scale of the Company’s operations, the skill sets of Board members, the quantum of fees paid to
Non-executive Directors of comparable companies and participation in Board Committee work.
The basis of fees and the fee pool are reviewed when new Directors are appointed to the Board, when the structure of the Board
changes, or at least every three years. Reference is made to individual Non-executive Director fee levels and workload (i.e. number of
meetings and the number of Directors) at comparably sized companies from all industries other than the financial services sector, and
the fee pools at these companies. In addition, an assessment is made on the extent of flexibility provided by the fee pool to recruit any
additional Directors for planned succession after allocation of fees to existing Directors.
The Chairman receives a base fee of $375,000 per annum (inclusive of all Committee fees) plus superannuation. The other Non-
executive Directors each receive a base fee of $150,000 per annum plus superannuation. Additional fees are paid for Committee duties:
$35,000 for the chair of the Audit & Risk Committee; and $15,000 for the chair of each of the Zero Harm Committee, Remuneration
Committee, Rail Projects Committee and Tender Risk Evaluation Committee.
Non-executive Directors are not entitled to retirement benefits. All Non-executive Directors are entitled to payment of statutory
superannuation entitlements in addition to Directors’ fees.

Annual Report 2018 51
11.2 Non-executive Directors’ remuneration
The table below sets out the remuneration paid to Non-executive Directors for the 2018 and 2017 financial years.
Short-term benefitsPost-employment benefits
Ye a r
Board fee
$
Chair fee
$
Total fees
$
Superannuation
$
Termination
benefits
$
To t a l
$
R M Harding2018375,000–375,00035,625–410,625
2017375,000–375,00035,625–410,625
S A Chaplain2018150,00035,000185,00017, 575–202,575
2017150,00035,000185,00017, 575–202,575
P S Garling2018150,00015,000165,00015,675–180,675
2017150,00015,000165,00015,675–180,675
T G Handicott2018150,00015,000165,00015,675–180,675
2017114,45411,250125,70411,942–137,6 46
N M Hollows20184,566–4,566434–5,000
2017––––––
E A Howell201850,833–50,8334,829–55,662
2017150,00011,250161,25015,319–176,569
C G Thorne2018150,00030,000180,00017,100–197,100
2017150,00018,750168,75016,031–184,781
11.3 Equity held by Non-executive Directors
The table below sets out the equity in Downer held by Non-executive Directors for the 2018 and 2017 financial years.
20182017
Balance at
1 July 2017
Net
change
Balance at
30 June 2018
Balance at
1 July 2016
Net
change
Balance at
30 June 2017
R M Harding14,210–14,21010,1504,06014,210
S A Chaplain103,799–103,79974,14229,657103,799
P S Garling16,940–16,94012,1004,84016,940
T G Handicott14,000–14,000–14,00014,000
N M Hollows––––––
C G Thorne82,922–82,92259,23023,69282,922
Signed in accordance with a resolution of the Directors made pursuant to section 298(2) of the Corporations Act 2001 (Cth).
On behalf of the Directors
R M Harding
Chairman
Sydney, 16 August 2018

52 Downer EDI Limited
Auditor’s Independence Declaration

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
ProfessionalStandards 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 audit of Downer EDI Limited for
the year ended 30 June 2018 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 audit.

KPM_INI_01
PAR_SIG_01 PAR_NAM_01 PAR_POS_01 PAR_DAT_01 PAR_CIT_01
KPMG





John Teer
Partner

Sydney
16 August 2018

Annual Report 2018 53
Independent Auditor’s Report
for the year ended 30 June 2018
Independent Auditor’s Report
To the shareholders of Downer EDI Limited
Report on the audit of the Financial Report
Opinion
We have audited the Financial Report of
Downer EDI Limited (the Company).
In our opinion, the accompanying Financial
Report of the Company is in accordance
with the Corporations Act 2001, including:
•
giving a true and fair view of the
Group’s financial position as at 30
June 2018 and of its financial
performance for the year ended on
that date; and
•
complying with Australian Accounting
Standards and the Corporations
Regulations 2001.
The Financial Report comprises:
•
Consolidated Statement of financial position as
at 30 June 2018
•
Consolidated Statement of profit or loss and
other comprehensive income, Consolidated
Statement of changes in equity, and
Consolidated Statement of cash flows for the
year then ended
•
Notes including a summary of significant
accounting policies
•
Directors’ Declaration.
The Group consists of the Company and the entities
it controlled at the year-end or from time to time
during the financial year.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for
the audit of the Financial Report section of our report.
We are independent of the Group in accordance with the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics
for Professional Accountants (the Code) that are relevant to our audit of the Financial Report in
Australia. We have fulfilled our other ethical responsibilities in accordance with the Code.
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.

54 Downer EDI Limited
Key Audit Matters
The Key Audit Matters we identified are:
•
Recognition of revenue and
transitional adjustment to AASB 15
Revenue from Contracts with
Customers
•
Value of goodwill
•
Acquisition of controlled entities
Key Audit Matters are those matters that, in our
professional judgement, were of most significance in
our audit of the Financial Report of the current period.
These matters were addressed in the context of our
audit of the Financial Report as a whole, and in forming
our opinion thereon, and we do not provide a separate
opinion on these matters.

Recognition of revenue and transitional adjustments to AASB 15 Revenue from Contracts with
Customers
Refer to Note B2 ‘Revenue and other income’ ($12,620.2m) and Note G1(b) New accounting
standards and interpretations not yet adopted.
The key audit matter How the matter was addressed in our audit
A substantial amount of the Group’s revenue
relates to revenue from the rendering of
services and construction contracts. Where
these services and/or contracts have a long-
term duration, revenue and margin are
recognised based on the stage of completion of
individual contracts. This is predominantly
calculated on the proportion of total costs
incurred at the reporting date compared to the
Group’s estimation of total costs of the
contract. We focussed on these types of
contracts due to the high level of estimation
involved, in particular relating to:
•
Forecasting total cost to complete at
initiation of the contract, including the
estimation of cost contingencies for
contracting risks;
•
Revisions to total forecast costs for certain
events or conditions that occur during the
performance of the contract, or are
expected to occur to complete the
contract; and
•
The recognition of variations and claims,
based on an assessment by the Group as
to the probability the amount will be
approved by the customer and therefore
recovered.
We focused on this area as a key audit matter
due to the number and type of estimation
events that may occur over the course of the
Our procedures included:
•
We evaluated the Group’s process regarding
accounting for the Group’s contract revenues.
We tested controls such as:
‒
the authorisation of monthly project
valuations, which involves management
review and approval of key contract KPIs,
including cashflows;
‒
management’s review assessment and
approval of significant changes in work in
progress balances;
‒
management’s review assessment of
project unapproved variations and claims,
and responses to project risk ratings;
‒
management’s review and approval of bid
information including estimated project
milestones, projected Earnings Before
Interest and Tax (EBIT), Net Present Value
(NPV), Return On Funds Employed (ROFE)
and potential legal risks identified by the
Group risk and legal team, as prescribed in
the Group’s risk management process;
•
We undertook a sample of site visits (to both
contract sites and commercial offices) across
the Group’s major divisions and geographies
to obtain a detailed understanding of the
Group’s contract processes, their consistent
application, and to understand the variety of
Independent Auditor’s Report – continued
for the year ended 30 June 2018

Annual Report 2018 55
contract life, leading to complex and
judgemental revenue recognition from
contracts.
In addition to the above, the transition to the
new accounting standard AASB15 Revenue
from contracts with customers (AASB 15) (with
effect from 1 July 2018 for the Group) has
resulted in additional disclosure of the expected
transition adjustments. We focussed on this as
a key audit matter due to the audit effort
required from:
•
the complex nature of the changes to the
accounting standard and the impact on
services and construction contract
accounting requiring senior team
involvement; and
•
the need to consider consistency in
application of AASB 15 across the
components of the Group.
risk elements of the contracts;
•
We used data analytic routines to select a
sample of contracts for testing based on a
number of quantitative and qualitative factors.
These factors included contracts with
significant deterioration in margin, significant
variations and claims, and factors which
indicated to us a greater level of judgement
was required by the Group when assessing
the revenue recognition based on the
estimates developed for current and forecast
contract performance. For the sample
selected, where relevant:
‒
we read the contract terms and conditions
to evaluate the individual characteristics of
each contract reflected in the Group’s
estimate;
‒
we assessed the estimation of costs to
complete by checking key forecast cost
assumptions to underlying documentation
such as Enterprise Bargaining Agreements
for wage rates, previous purchase invoices
for parts, and agreements with
subcontractors;
‒
we assessed the Group’s ability to forecast
margins on contracts by analysing the
accuracy of previous margin forecasts to
actual outcomes;
‒
we tested the variations and claims both
within contract revenue and contract costs
to underlying documentation, such as
timesheets, correspondence with
customers and objective time and cost
claim experts (where applicable) for
consistency and appropriateness with
contract terms;
‒
we evaluated the Group’s legal and external
experts’ reports received on contentious
matters to identify conditions indicating the
inappropriate recognition of variations and
claims. We checked the consistency of this
to the inclusion or not of an amount in the
estimates used for revenue recognition;
‒
for contracts with significant variation and
claim elements, we used our project
management specialists to evaluate the
claim elements for risk of non-recovery; and
‒
we evaluated significant exposures to
liquidated damages for late delivery of