Preliminary Half Year Report & Half Year Report

Half Year Results11 February 2020DOWIndustrials

Page 1 of 1

12 February 2020

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

Dear Sir/Madam

Please find attached the following documents:
1. Appendix 4D – results for announcement to the market for the half-year ended
31 December 2019;
2. Condensed Consolidated Half-year Financial Report dated 31 December 2019;
3. Market release dated 12 February 2020; and
4. Investor Presentation.

Yours sincerely,
Downer EDI Limited

Robert Regan
Company Secretary

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

Results for announcement to the market
for the half-year ended 31 December 201
9
Appendix 4D
31 Dec 2019
31 Dec 2018
%
$'m
$'m
change
Revenue from ordinary activitie
s6,506.6 6,304.6
Other income2.3 19.9
Total revenue and other income from ordinary activitie
s6,508.9 6,324.5 2.9%
Total revenue including joint ventures and other income 6,838.5 6,623.0 3.3%
180.4 236.6 (23.8%)
214.8 268.0 (19.9%)
86.3 134.2 (35.7%)
115.5 163.4 (29.3%)
31 Dec 2019
31 Dec 2018
%
cents
cents
change
Basic earnings per share13.9 22.0 (36.8%)
Diluted earnings per share
(i)
13.9 21.7 (35.9%)
Net tangible asset backing per ordinary share(20.3)(17.7) (14.7%)
Dividend31 Dec 2019
31 Dec 2018
InterimInterim
Dividend per share (cents
)
14.0
14.0
Franked amount per share (cents)
0.0
7.0
Conduit foreign income (CFI
)
100%
50%
Dividend record dat
e26/02/2020 21/02/2019
Dividend payable dat
e25/03/2020 21/03/2019
Redeemable Optionally Adjustable Distributing Securities (ROADS
)
Dividend per ROADS (in Australian cents)1.87 2.06
New Zealand imputation credit percentage per ROADS 100%100%
ROADS payment dat
eQuarter 1 Quarter 2
Instalment date FY202016/09/2019 16/12/2019
Instalment date FY201917/09/2018 17/12/2018
For commentary on the results for the period 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 and 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
(i)
At 31 December 2019, the ROADS are deemed anti-dilutive and consequently, diluted EPS remained at 13.9 cents per
share.
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31 December 2019
for the half-year ended
Downer EDI Limited
ABN: 97 003 872 848
Condensed Consolidated
Financial Report

Condensed Consolidated Financial Report
for the half-year ended 31 December 2019
Contents
Directors' Report
Page 2
Auditor's signed reports
Page 14Auditor's Independence Declaration
Page 15Independent Auditor's Review Report
Financial Report
Page 17Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income
Page 18Condensed Consolidated Statement of Financial Position
Page 19Condensed Consolidated Statement of Changes in Equity
Page 20Condensed Consolidated Statement of Cash Flows
Notes to the condensed consolidated financial report
B1
Segment
information
C1
Borrowings
D1
Trade
receivables and
contract assets
E1
New
accounting
standards
B2
Profit from
ordinary
activities
C2
Financing
facilities
D2
Trade payables
and contract
liabilities
B3
Earnings per
share
C3
Lease liabilities
D3
Property, plant
and equipment
B4
Subsequent
events
C4
Issued capital
D4
Right-of-use
assets
C5
Non-controlling
interest (NCI)
D5
Intangible assets
C6
Reserves
D6
Other provisions
C7
Dividends
D7
Joint
arrangements
and associate
entities
D8
Acquisition of
businesses
D9
Contingent
liabilities
Page 43
Directors' Declaration
E
Other
Page 39 to 42Page 21
A
About this report
B
Business
performance
C
Capital structure
and financing
D
Other disclosures
Page 22 to 26Page 27 to 32Page 33 to 38
1

DIRECTORS’ REPORT
For the half-year ended 31 December 2019

The Directors of Downer EDI Limited (Downer) submit the condensed consolidated financial report of the
Company for the half-year ended 31 December 2019. In accordance with the provisions of the Corporations
Act 2001 (Cth), the Directors’ Report is set out below:

Directors

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

R M Harding (Chairman, Independent Non-executive Director)
G A Fenn (Managing Director and Chief Executive Officer)
S A Chaplain (Independent Non-executive Director) (retired 7 November 2019)
P S Garling (Independent Non-executive Director)
T G Handicott (Independent Non-executive Director)
N M Hollows (Independent Non-executive Director)
C G Thorne (Independent Non-executive Director)
P L Watson (Independent Non-executive Director)

REVIEW OF OPERATIONS

PRINCIPAL ACTIVITIES

Downer EDI Limited (Downer) is a leading provider of integrated services in Australia and New Zealand.
Downer employs more than 53,000 people, mostly in Australia and New Zealand but also in the Asia-Pacific
region, South America and Southern Africa.

Our Purpose is to create and sustain the modern environment by building trusted relationships with our
customers.

Our Promise is to work closely with our customers to help them succeed, using world leading insights and
solutions.

Our business is founded on four Pillars:
• Safety: Zero Harm is embedded in Downer’s culture and is fundamental to the company’s future
success;
• Delivery: we build trust by delivering on our promises with excellence while focusing on safety, value
for money and efficiency;
• Relationships: we collaborate to build and sustain enduring relationships based on trust and
integrity;
• Thought leadership: we remain at the forefront of our industry by employing the best people and
having the courage to challenge the status quo.

2

Downer reports its results under five service lines (Transport, Utilities, Facilities, Mining and Engineering,
Construction & Maintenance) and an outline of each service line is set out below.

TRANSPORT

Transport comprises Downer’s Road Services, Transport Projects, and Rollingstock Services businesses.

Transport

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

Road Services

Downer manages and maintains road networks across Australia and New Zealand and manufactures and
supplies products and services to create safe, efficient and reliable journeys. 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 creates and delivers solutions to our customers’ challenges through strategic asset management
and a leading portfolio of products and services. Downer is a leading manufacturer and supplier of bitumen-
based products and an innovator in the sustainable asphalt industry and circular economy, using recycled
products and environmentally sustainable methods to produce asphalt.

Downer’s road network solutions are underpinned by industry-leading research, development and
innovation, unique asset management tools and a commitment to safety, environment and sustainability
through industry awarded Zero Harm programs.

Downer has formed a number of strategic partnerships to meet the changing needs of our customers and
markets. Downer has long term asset stewardship and road management contracts through DM Roads in
Australia, and a number of alliances in New Zealand such as the Infrastructure Alliance in Hamilton,
Whanganui Alliance, Tararua Alliance, Waikato District Alliance and the Milford Road Alliance.

Downer works for all of Australia’s State road authorities, the New Zealand Transport Agency and a large
number of local government councils and authorities in both countries. Customers also include road owners
and businesses operating in industries including waste collection and management, mining, construction,
airports and motor racing tracks.

Transport Projects

Downer delivers multi-disciplined infrastructure solutions to customers within the transport sector. The
services provided by Downer include the design and construction of light rail, heavy rail, signalling and
systems, rail infrastructure maintenance, track and station works, rail safety technology, bridges and roads.

Downer has a long history of delivering transport infrastructure projects under a variety of contracting
models.
3

Rollingstock Services

Downer has over 100 years’ rail experience providing end-to-end, innovative transport solutions.

Downer is a leading provider of rollingstock asset management services in Australia, with expertise in
delivering whole of life asset management support to our customers. Downer’s capability spans all sectors,
from rollingstock to infrastructure, and every project phase, from design and manufacture to through-life-
support, fleet maintenance, operations and comprehensive overhaul of assets.

Downer sets industry best practice with forward-looking technology solutions like the TrainDNA data
analytics platform to deliver safe, efficient and reliable services for the public transport sector.

Downer has formed strategic joint ventures and relationships with leading technology and knowledge
providers including Keolis, CRRC, Hitachi and Bombardier.

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 New South Wales.
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 250 million passenger trips each
year.

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

UTILITIES

Downer offers a range of services to customers across the Power and Gas, Water, Renewable Energy and
Communications sectors.

Utilities

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

Power and Gas

Downer’s services include planning, designing, constructing, operating, maintaining, managing and
decommissioning power and gas network assets. A collaborative approach has made Downer a benchmark
end-to-end service provider to owners of utility assets.

Downer designs and constructs steel lattice transmission towers, designs and builds substations, constructs
and maintains electricity and gas networks, provides asset inspection and monitoring services, connects tens
of thousands of new power and gas customers each year and provides meter, energy and water efficiency
services for governments, utilities and corporations.

Our performance on the network is benchmarked at activity unit level, repeatedly demonstrable and
assessed against continually improving key performance indicators.

4

Water

Downer is dedicated to delivering complete water lifecycle solutions for municipal and industrial water users.
Downer’s expertise includes water treatment, wastewater treatment, water and wastewater network
construction and rehabilitation, desalination and biosolids treatment.

As a leading provider of asset management services, Downer supports its customers across the full asset
lifecycle from conceptual development through to design, construction, commissioning and into operations
and maintenance.

Downer collaborates with customers to manage their assets, so they create community benefits that are
sustainable, innovative, cost-effective and provide value to all stakeholders.

Renewable energy

Downer is one of Australia’s largest and most experienced providers in the renewable energy market,
delivering services to customers requiring both utility and commercial scale sustainable energy solutions.

Downer offers trusted services and integrated solutions required for the entire asset lifecycle including
procurement, assembly, design, construction, commissioning and maintenance for a range of renewable
assets specifically in the wind, solar and power systems storage sectors including transmission and
substations.

Downer offers flexible services like innovative energy systems that include self-generation and storage, grid
services such as frequency control ancillary services (FCAS), fast frequency response (FFR), grid stability
and transmission terminal congestion solutions.

Communications

Downer is a leading provider of end-to-end technology and communications service solutions, offering
integrated civil construction, electrical, fibre, copper and radio network deployment capability throughout
Australia and New Zealand. Key capabilities include:

• Design, engineering and network construction of fixed and wireless networks;
• Mobile deployment: site acquisition, environmental and design services;
• Network operations and help desk outsourcing;
• Network maintenance;
• Warehousing and logistics;
• Smart metering;
• Smart home power and technology solutions;
• Fleet management;
• Network security;
• Remedial works and proactive maintenance; and
• Customer connections, in-premise installations and service activations.

5

FACILITIES
The Facilities service line operates in Australia and New Zealand delivering facilities services to customers
across 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.
Facilities
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.
Facilities businesses includes Spotless, AE Smith, Alliance, Ensign, EPICURE, Hawkins, Mustard, Nuvo,
Skilltech, Taylors, UAM and Envar.
Spotless is the largest integrated facilities management services provider in Australia and New Zealand. It
delivers more than 100 integrated facilities services including providing critical security for patients and
clinical staff at hospitals, preparing nutritious meals at schools, delivering the optimum air-conditioned
climate at an airport, maintaining public housing that accommodates tens of thousands of people, laundering
uniforms for factory workers, and ensuring the elderly have clean rooms in an aged care residence.
Spotless’ key capabilities include:
•Air-conditioning, mechanical and electrical
•Asset maintenance and management
•Catering and hospitality
•Cleaning
•Facilities management
•Laundry management
•Security and electronic solutions
•Utility support.
The Facilities services line also includes Hawkins, New Zealand’s leading construction business. Hawkins
delivers unique transformational projects across a variety of sectors including education, health, airports,
commercial office buildings and heritage restorations. It leads the industry in civic projects including art
galleries, event centres, stadiums and community facilities.
Hawkins and Downer’s combined technical and construction management expertise provides proven, whole-
of-life solutions for customers’ assets using innovative technology to sustainably deliver outcomes.
6

ENGINEERING, CONSTRUCTION AND MAINTENANCE (EC&M)

Downer’s EC&M service line includes its Asset Services and Engineering & Construction businesses and
works with customers in the public and private sectors delivering services including design, engineering,
construction, maintenance and ongoing management of critical assets.

EC&M

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

In the Oil and Gas sector, Downer’s capabilities cover the full range of construction, maintenance,
shutdown/turnaround/outage delivery, sustaining capital program delivery and commissioning services.
Key capabilities include:

• Asset management;
• Shutdown management and services;
• Electrical instrumentation and controls;
• Structural and mechanical piping;
• Lagging and cladding;
• Insulation and coatings including painting and blasting services;
• Scaffold management and erection;
• Facilities maintenance;
• Project management, scheduling and resourcing;
• Technical writing and workpack development;
• Heavy lift studies;
• Specialist sub contract management;
• Procurement; and
• Integrated engineering.

Downer is also the leading provider of original equipment manufacturer (OEM) maintenance and shutdown
services essential in running Australia’s power stations, servicing customers that supply 80 per cent of the
National Electricity Market.

Downer operates across industries including petrochemical and refining, bulk materials handling and
processing, coal, iron ore, minerals and metals and power generation. Services include scoping, planning,
integration and support with engineering; and electrical and instrumentation, insulation and scaffold erection,
commissioning and decommissioning.

Downer is also an OEM specialist in the design, supply, construction, maintenance and overhaul of boilers,
turbines and generating plants.

Downer’s Mineral Technologies business is the world leader in mineral separation and mineral processing
solutions, as well as spiral technology. Mineral Technologies delivers innovative, cost effective process
solutions for iron ore, mineral sands, silica sands, coal, chromite, gold, tin, tungsten, tantalum and a wide
range of other fine materials.
7

Downer’s QCC business delivers solutions for customers across all stages of the project lifecycle from initial
concept, prefeasibility and feasibility studies, to Coal Handling and Preparation Plant (CHPP) design and
Engineering, Procurement and Construction (EPC) management delivery. QCC provides strategic consulting
services, working with customers to optimise financial returns and maintain efficient operations for their
projects.

MINING

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

Mining

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

Downer services coal and metalliferous mining customers at all stages of the mining lifecycle, specialising in
both surface and underground mining. Key capabilities include:
• Resource definition, exploration drilling and mine feasibility studies;
• Open cut mining services to Australian coal, iron ore and gold;
• Underground mining services to Australian, Papua New Guinea and South African copper and gold;
• Drilling, explosives manufacture and supply, blasting and crushing;
• Tyre management (through the subsidiary Otraco International); and
• Mine closure and rehabilitation.
In New South Wales, Downer provides mining services at Cobar Management Pty Ltd’s CSA underground
copper mine located in Cobar, Central Western NSW.
In Queensland, Downer has provided mining services at Stanwell Corporation’s Meandu mine in the South
Burnett region since 2013. Downer has also been working closely with the BHP Billiton Mitsubishi Alliance
(BMA) for many years, providing mining services at several mine sites in the Bowen Basin in Central
Queensland including Goonyella Riverside, Daunia, Peak Downs, Saraji, Blackwater, Caval Ridge and
Poitrel Mine.
In Western Australia, Downer has been providing mining services to Karara Mining Ltd at its Karara mine
since the magnetite operation commenced production in February 2012. Downer also provides mining
services at the Gruyere gold project in Laverton for joint venture partners Gold Road Resources Ltd and
Gold Fields Ltd.

8

GROUP FINANCIAL PERFORMANCE
For the six months ended 31 December 2019, Downer reported an increase in total revenue while earnings
before interest, tax and amortisation of acquired intangibles assets (EBITA) and statutory net profit after tax
(NPAT) were both lower.
The main features of the result for the six months ended 31 December 2019 were:
•Total revenue of $6.8 billion, up 3.3%;
•EBITA of $214.8 million, down 19.9%;
•Earnings before interest and tax (EBIT) of $180.4 million, down 23.8%;
•Statutory net profit after tax and before amortisation of acquired intangible assets (NPATA) of
$115.5 million, down 29.3%; and
•Statutory net profit after tax (NPAT) of $91.4 million, down 35.4%.
REVENUE
Total revenue for the Group increased by $215.5 million, or 3.3%, to $6.8 billion.
Transport revenue increased by 5.7%, or $117.0 million, to $2.2 billion. This growth has been driven by
continuing strong performance in the Road Services business in both Australia and New Zealand, increased
contributions from Transport Projects, particularly in New Zealand, and steady performance in the
Rollingstock Services business.
Utilities revenue increased by 16.8%, or $203.6 million, to $1.4 billion, due to new Renewables projects
commencing in the period, and strong growth in the Water and Defence businesses. This growth was
partially offset by reduced contribution from nbn
TM
contracts as the project winds down.
Facilities revenue increased by 5.4%, or $90.4 million, to $1.8 billion. Australian operations benefitted from
increased revenue from Government related contracts and contribution from the Envar acquisition made in
prior periods. New Zealand’s operations were softer than the prior period as a result of building projects
completions during the period.
EC&M revenue decreased by 25.3%, or $238.7 million. Revenue from new contracts and strong activities in
the Asset Services business were offset by the impact of project completions, particularly the Ichthys
contract.
Mining revenue increased by 8.8%, or $63.2 million, to $0.8 billion largely driven by higher activities at
Carrapateena, Cadia and Queens . These contracts offset the revenue impact from completed contracts
such as Roy Hill and Cloudbreak.
EXPENSES
Total expenses increased by 3.9%, which is materially consistent with the increase in revenue noted above.
Employee benefits expenses decreased by 5.3%, or $119.6 million, to $2.1 billion and represent 33.7% of
Downer’s cost base. This decrease is mainly due to a shift in the mix of labour, where subcontractors’ costs
as a percentage of revenue has increased as well as from the benefit of integration and restructuring
activities carried across the Group.
Subcontractor costs increased by 16.7% or $324.9 million to $2.3 billion and represent 35.8% of Downer’s
cost base. This increase is a result of higher contract activities and the change in the subcontractor mix on
some contracts during the period.
Raw materials and consumables costs increased by 1.5% to $1.1 billion and represent 16.9% of Downer’s
cost base. The increase is slightly lower than the increase in revenue, which is attributed to improvements in
the procurement and lower material requirements following completion of contracts.
9

Plant and equipment costs decreased by 1.5% to $334.1 million and represent 5.3% of Downer’s cost base.
This reduction is attributed to a less capital-intensive business, as well initiatives to drive efficient usage and
maintenance of plant and equipment.
Following the adoption of AASB 16 Leases from 1 July 2019, the depreciation charges in relation to the
Right-of-use assets is now recognised and disclosed separately. The depreciation charge against the Right-
of-use assets of $67.4 million represents 1.1% of Downer’s cost base.
Other depreciation and amortisation increased by 2.9% or $5.1 million to $181.5 million and represent 2.9%
of Downer’s cost base. This increase is driven by ongoing investment in business-critical equipment over
recent years.
Other expenses, which include communication, travel, occupancy and professional fees costs, decreased
14.9% or $48.9 million. This decrease is primarily as a result of the application of AASB 16 Leases, which
has resulted in the majority of the Group’s leases being brought on balance sheet, and therefore incurring
depreciation and interest charges rather than operating lease rental charges that had previously been
disclosed as part of Other expenses.
EARNINGS
The results of the Group have been adversely impacted by contract losses in the EC&M service line.
EBITA fell 19.9% to $214.8 million mainly driven by the $59.8 million lower contribution from EC&M. This
flowed on to Statutory EBIT of $180.4 million which was $56.2 million lower than the prior corresponding
period (pcp), and to NPAT which fell 35.4% to $91.4 million.
Transport EBITA increased by 28% to $112.5 million driven by continued strong performance in Transport
Projects in Australia as well as Road Services activities in Australia and New Zealand.
Utilities EBITA decreased by 2.6% to $63.0 million, as a result of project completions in New Zealand not
being fully replaced. The segment’s operations in Australia were higher than pcp, driven by increased
activities in the Renewables sector.
Facilities EBITA decreased by 6.6% to $75.9 million due to the completion of low margin legacy construction
contracts and decreased events in the various hospitality contracts, partially offset by strong results in the
Government and PPP portfolios, albeit on lower margin activity.
EC&M reported an EBITA loss of $37.4 million for the period, a $59.8 million decrease compared to the pcp.
This was primarily due to a small number of loss-making construction contracts as well as from the
completion of contracts in the pcp. The Asset Services business within EC&M continues to grow and
increased its contribution during the period.
Mining EBITA increased 18.4% to $43.7 million. This was driven by improved performance from existing
contracts, as well as from the contribution of new contracts during the period.
Corporate costs of $42.9 million is in line with the pcp.
Net finance costs, excluding $12.6 million of interest on lease liabilities arising from the changes in lease
accounting under AASB 16 Leases, decreased $1.2 million or 2.9% to $40.9 million as a result of downward
movement in interest rates.
The effective tax rate is 28.0% which is lower than the statutory rate of 30.0% due to the impact of non-
taxable distributions from joint ventures and lower overseas tax rates (e.g. New Zealand).
10

GROUP CASHFLOW AND FINANCING

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 for the period was an outflow of $4.5 million mainly driven by lower operating cashflows
in EC&M as a result of losses incurred on a small number of constructions contracts, the impact of project
completions in Utilities including Murra Warra; and in Transport, driven by Waratah bogie overhaul activities.

INVESTING CASH

Total investing cash flow was $222.0 million, $43.7 million lower than pcp as a result of lower payments for
property, plant and equipment made in the period, reflecting a less capital intensive business while cash
outflows for acquisitions decreased $26.7 million compared to the pcp as a result of no new business
acquisitions made in the period.

DEBT AND BONDING

The Group’s performance bonding facilities totalled $2,063.1 million at 31 December 2019 with
$700.7 million undrawn. There is sufficient available capacity to support the ongoing operations of the Group.

As at 31 December 2019, the Group had liquidity of $1,651.9 million comprising cash balances of $514.9
million and undrawn committed debt facilities of $1,137.0 million.

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

GROUP FINANCIAL POSITION

The net assets of Downer decreased $62.5 million or 2% to $2,987.7 million mainly due to the impact of the
adoption of AASB 16 Leases from 1 July 2019 which resulted in an adjustment to opening retained earnings
of $66.0 million. Adjusting for the impact of AASB 16, net assets increased by $3.5 million, reflecting the
profit and dividends paid during the period.

Net debt is calculated as borrowings (excluding lease liabilities) less the cash and cash equivalents. Net
debt has increased $375.6 million to $1,388.2 million as a result of $195.8 million lower cash and cash
equivalent balances and a lower operating cashflow during the period due to project completion activities as
explained above. Gearing at 31 December 2019 was 31.3% (calculated on a pre-AASB 16 basis) and is 6.4
percentage points higher than 30 June 2019, primarily driven by the additional working capital requirements.

Total trade receivables and contract assets have increased 12.9% or $266.7 million to $2,332.6 million as a
result of higher contracts assets balances in EC&M, in Transport as a result of project commencements and
bogie overhaul activities and from the nbn contract in Utilities.

Inventories have increased 5.3% or $16.1 million to $320.7 million driven by bogie overhaul activities in
Transport and higher stock levels in Utilities as a result of new contracts.

Current tax assets decreased $5.1 million to $52.6 million due to the timing of tax payments.

Interest in joint ventures and associates increased by $3.1 million to $111.9 million. This represents
Downer’s share of net profit from joint ventures of $12.6 million, offset by $9.5 million distributions being
received in the period.

Property, Plant and Equipment decreased by $4.0 million with $150.1 million of additions being offset by
depreciation and net disposals.

11

Right-of-use assets at 31 December 2019 were $589.0 million. This balance primarily arose as a result of
the adoption of AASB 16 Leases as at 1 July 2019 recognising an initial balance of $570.6 million. The
movement to 31 December 2019 relates to new leases entered since 1 July 2019.

Intangible assets decreased by $22.1 million reflecting $49.4 million amortisation in the period, mainly
related to Spotless acquired intangibles assets, offset by an additional $31.7 million investment in software.

Total trade payables and contract liabilities decreased by $124.0 million or 5.0% due to timing of payments
and conversion of contract liabilities as project work is delivered. Trade payables and contract liabilities
represents 41.2% of Downer’s total liabilities.

Other financial liabilities of $53.3 million decreased by $14.1 million and represents 0.9% of Downer’s total
liabilities. The decrease mainly reflects deferred consideration paid for acquisitions made in the prior year.

Lease liabilities at 31 December 2019 were $748.3 million, of which $727.8 million was recognised on
adoption of AASB 16 Leases as at 1 July 2019. The movement to 31 December 2019 relates to new leases
entered and principal payments made during the period and represents 13.2 % of Downer’s total liabilities.

The net deferred tax liability (net of deferred tax asset) increased $22.2 million to $66.3 million. This
increase is primarily as a result of changes in Contract assets and Contract liabilities. The resulting increase
was partially offset by the impact of AASB 16 Leases which on initial adoption resulted in a decrease of
$28.9 million of the net deferred tax balance.

Provisions of $484.2 million decreased by $92.9 million mainly driven by provision utilisation during the
period, particularly for Murra Warra and new Royal Adelaide Hospital, while the adoption of AASB 16 Leases
resulted in $37.1 million of onerous provisions related to leases being recognised against the Right-of-use
assets. Provisions represent 8.5% of Downer’s total liabilities. Employee related provisions (annual leave
and long service leave) made up 80.8% of this balance with the remainder covering contract provisions and
return conditions obligations for leased assets and property and warranty obligations.

Total equity decreased by $62.5 million, of which $66.0 million was due to the adoption of AASB 16 Leases.
Dividends of $87.0 million were paid during the period, which was offset by the NPAT of $91.4 million.

The Non-controlling interest share of the Total Equity increased $2.0 million to $157.9 million. The share of
results attributed to the non-controlling interest holders in Spotless and Otraco South Africa was $5.1 million,
which was offset by the $3.2 million post-tax impact arising from the adoption of AASB 16 Leases.

DIVIDENDS

The Downer Board resolved to pay an interim dividend of 14.0 cents per share, unfranked (14.0 cents per
share 50% franked in the prior corresponding period), payable on 25 March 2020 to shareholders on the
register at 26 February 2020. The unfranked dividend 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 2019 has a yield of 5.49% per annum payable quarterly in arrears, with the next
payment due on 16 March 2020. As this dividend is fully imputed (the New Zealand equivalent of being fully
franked), the actual cash yield paid by Downer will be 3.95% per annum until the next reset date.

Consistent with prior year, the Company’s Dividend Reinvestment Plan remains suspended.

12

ZERO HARM
Downer’s Lost Time Injury Frequency Rate (LTIFR) decreased from 0.68 to 0.60 and Total Recordable Injury
Frequency Rate (TRIFR) reduced from 3.09 to 2.82 per million hours worked.
1.Safety data excludes Hawkins and Spotless
2.Lost time injuries (LTIs) are defined as injuries that cause the injured person (employee or contractor) to be unfit to perform any
work duties for one whole day or shift, or more, after the shift on which the injury occurred, and any injury that results, directly or
indirectly, in the death of the person. The Lost Time Injury Frequency Rate (LTIFR) is the number of LTIs per million hours worked.
Total Recordable Injuries (TRIs) are the number of LTIs + medically treated injuries (MTIs) for employees and contractors. Total
Recordable Injury Frequency Rate (TRIFR) is the number of TRIs per million hours worked.
Regrettably, in July 2019, an employee of Otraco died as a result of an accident at our facility in Calama,
Chile. Otraco is a Downer business that delivers vehicle and off-the-road tyre management services across
more than 60 sites in Australia, South America and South Africa.
OUTLOOK
Downer issued revised guidance on 23 January 2020 and is targeting NPATA of around $300 million before
minority interests for the 2020 financial year.
Auditor’s independence declaration
The auditor’s independence declaration, as required under Section 307C of the Corporations Act 2001, is set
out on page 14.
Signed in accordance with a resolution of the Directors.
On behalf of the Directors
R M Harding
Chairman
Sydney, 12 February 2020
3.09
2.82
0.68
0.60
-
0.50
1.00
1.50
2.00
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
Dec-18
Jan-19
Feb-19
Mar-19
Apr-19
May-19
Jun-19
Jul-19
Aug-19Sep-19
Oct-19
Nov-19Dec-19
LTIFR
TRIFR
Downer Group Safety Performance
(12-month rolling frequency rates)
TRIFR
13

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.
Independent Auditor’s Review Report
To the Shareholders of Downer EDI Limited
Conclusion

We have reviewed the accompanying
Condensed Consolidated Half-year
Financial Report of Downer EDI Limited.
Based on our review, which is not an
audit, we have not become aware of any
matter that makes us believe that the
Condensed Consolidated Half-year
Financial Report of Downer EDI Limited is
not in accordance with the Corporations
Act 2001, including:
•
giving a true and fair view of the
Group’s financial position as at 31
December 2019 and of its
performance for the half -year ended
on that date; and
•
complying with Australian Accounting
Standard AASB 134 Interim Financial
Reporting and the Corporations
Regulations 2001.
The Condensed Consolidated Half-year Financial
Report comprises:
•
Condensed Consolidated Statement of Financial
Position as at 31 December 2019
•
Condensed Consolidated Statement of Profit or
Loss and Other Comprehensive Income, Condensed
Consolidated Statement of Changes in Equity and
Condensed Consolidated Statement of Cash Flows
for the half -year ended on that date
•
Notes A to E comprising a summary of significant
accounting policies and other explanatory
information
•
The Directors’ Declaration.
The Group comprises Downer EDI Limited (the
Company) and the entities it controlled at the half year’s
end or from time to time during the half -year.
Responsibilities of the Directors for the Condensed Consolidated Half-year Financial Report
The Directors of the Company are responsible for:
•
the preparation of the Condensed Consolidated Half-year Financial Report that gives a true and
fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
•
such
internal control as the Directors determine is necessary to enable the preparation of the
Condensed Consolidated Half-year Financial Report that is free from material misstatement,
whether due to fraud or error.
15

Auditor’s responsibility for the review of the Condensed Consolidated Half-year Financial
Report
Our responsibility is to express a conclusion on the Condensed Consolidated Half-year Financial
Report based on our review. We conducted our review in accordance with Auditing Standard on
Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent
Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have
become aware of any matter that makes us believe that the Condensed Consolidated Half-year
Financial Report is not in accordance with the Corporations Act 2001 including: giving a true and fair
view of the Group’s financial position as at 31 December 2019 and its performance for the half-year
ended on that date; and complying with Australian Accounting Standard AASB 134 Interim Financial
Reporting and the Corporations Regulations 2001. As auditor of Downer EDI Limited, ASRE 2410
requires that we comply with the ethical requirements relevant to the audit of the annual financial
report.
A review of a Condensed Consolidated Half-year Financial Report consists of making enquiries,
primarily of persons responsible for financial and accounting matters, and applying analytical and
other review procedures. A review is substantially less in scope than an audit conducted in
accordance with Australian Auditing Standards and consequently does not enable us to obtain
assurance that we would become aware of all significant matters that might be identified in an audit.
Accordingly, we do not express an audit opinion.
In conducting our review, we have complied with the independence requirements of the
Corporations Act 2001.
KPMG
Cam
eron Slapp
Partner
Sydn
ey
12 Februa
ry 2020
St
ephen Isaac
Partner
Syd
ney
12 February 2020
PAR_SIG_01 PAR_NAM_01 PAR_POS_01 PAR_DAT_01 PAR_CIT_01
16

Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income
for the half-year ended 31 December 2019
DecDec
2019
2018
Note
$'m
$'m
RevenueB2(a)6,506.6 6,304.6
Other incomeB2(a)2.3 19.9
Total revenue and other income6,508.9 6,324.5
Employee benefits expenseB2(b)(2,134.9)(2,254.5)
Subcontractor costs(2,270.0)(1,945.1)
Raw materials and consumables used(1,073.3)(1,057.5)
Plant and equipment costs(334.1)(339.1)
Depreciation on leased assetsD4(67.4) -
Other depreciation and amortisation D3, D5(181.5)(176.4)
Other expenses from ordinary activities (279.9)(328.8)
Total expenses(6,341.1)(6,101.4)
Share of net profit of joint ventures and associatesD712.6 13.5
Earnings before interest and tax180.4 236.6
Finance income3.9 4.1
Lease finance costs(12.6)-
Other finance costs(44.8)(46.2)
Net finance costs(53.5)(42.1)
Profit before income tax126.9 194.5
Income tax expense(35.5)(53.1)
Profit after income tax91.4 141.4
Profit for the period is attributable to:
-Non-controlling interest5.1 7.2
-Members of the parent entity86.3 134.2
Profit for the period91.4 141.4
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
-Exchange differences arising on translation of foreign operations1.2 7.8
-Net (loss) / gain on foreign currency forward contracts taken to equity(5.0)4.2
-Net (loss) / gain on cross currency and interest rate swaps taken to equity(1.3)1.3
-Income tax relating to components of other comprehensive income2.2 (1.7)
Other comprehensive (loss) / income for the period (net of tax)(2.9)11.6
Other comprehensive (loss) / income for the period is attributable to:
-Non-controlling interest0.1 (0.6)
-Members of the parent entity(3.0)12.2
Other comprehensive (loss) / income for the period(2.9)11.6
Total comprehensive income for the period88.5 153.0
Earnings per share (cents)
-Basic earnings per shareB313.9 22.0
-
Diluted earnings per share
(i)
B313.9 21.7
The condensed consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes on pages 21 to 42.
(i)
At 31 December 2019, the ROADS are deemed anti-dilutive and consequently, diluted EPS remained at 13.9 cents per share.
17

Condensed Consolidated Statement of Financial Position
as at 31 December 2019
DecJun
2019
2019
Note
$'m
$'m
ASSETS
Current assets
Cash and cash equivalents 514.9 710.7
Trade receivables and contract assetsD12,232.6 1,991.5
Other financial assets16.4 35.0
Inventories320.7 304.6
Finance lease receivables15.0 12.4
Current tax assets52.6 57.7
Prepayments and other assets48.4 52.8
Total current assets3,200.6 3,164.7
Non-current assets
Trade receivables and contract assetsD1100.0 74.4
Interest in joint ventures and associatesD7111.9 108.8
Property, plant and equipmentD31,369.3 1,373.3
Right-of-use assetsD4589.0 -
Intangible assetsD53,108.6 3,130.7
Other financial assets15.8 5.2
Finance lease receivables53.9 38.7
Deferred tax assets94.4 93.5
Prepayments and other assets12.3 18.7
Total non-current assets5,455.2 4,843.3
Total assets8,655.8 8,008.0
LIABILITIES
Current liabilities
Trade payables and contract liabilitiesD22,289.6 2,405.5
BorrowingsC1 - 14.6
Lease liabilitiesC3143.7 -
Other financial liabilities43.8 47.4
Employee benefits provision344.0 340.5
Other provisionsD652.0 107.0
Current tax liabilities8.0 15.4
Total current liabilities2,881.1 2,930.4
Non-current liabilities
Trade payables and contract liabilitiesD243.2 51.3
BorrowingsC11,880.8 1,688.9
Lease liabilitiesC3604.6 -
Other financial liabilities9.5 20.0
Employee benefits provision47.3 45.1
Other provisionsD640.9 84.5
Deferred tax liabilities160.7 137.6
Total non-current liabilities2,787.0 2,027.4
Total liabilities5,668.1 4,957.8
Net assets2,987.7 3,050.2
EQUITY
Issued capitalC42,429.7 2,425.1
ReservesC6(33.1)(27.5)
Retained earnings433.2 496.7
Parent interests2,829.8 2,894.3
Non-controlling interestC5157.9 155.9
Total equity2,987.7 3,050.2
The condensed consolidated statement of financial position should be read in conjunction with the accompanying notes on pages 21
to 42.
18

Condensed Consolidated Statement of Changes in Equity
for the half-year ended 31 December 2019
Dec 2019
$'m
Issued
capitalReserves
Retained
earnings
Total
attributable
to owners
of the
parent
Non-
controlling
interestTotal
Balance at 30 June 2019
2,425.1 (27.5)496.7 2,894.3 155.9 3,050.2
- - (62.8)(62.8)(3.2)(66.0)
Balance at 1 July 2019
2,425.1 (27.5)433.9 2,831.5 152.7 2,984.2
Profit after income tax
- - 86.3 86.3 5.1 91.4
Other comprehensive loss for the period (net
of tax)
- (3.0) - (3.0)0.1 (2.9)
Total comprehensive income for the period - (3.0)86.3 83.3 5.2 88.5
Vested executive incentive share transactions
4.6 (4.6) - - - -
Share-based employee benefits expense
- 1.0 - 1.0 - 1.0
Income tax relating to share-based
transactions during the period
- 1.0 - 1.0 - 1.0
Payment of dividends
(ii)
- - (87.0)(87.0) - (87.0)
Balance at 31 December 2019
2,429.7 (33.1)433.2 2,829.8 157.9 2,987.7
EQ-07
Dec 2018
$'m
Issued
capitalReserves
Retained
earnings
Total
attributable
to owners
of the
parent
Non-
controlling
interestTotal
Balance at 30 June 2018
2,421.9 (26.9)655.1 3,050.1 155.0 3,205.1
Opening balance adjustment on application of
AASB 15 (net of tax)
(ii)
- - (245.3)(245.3)(12.7)(258.0)
Balance at 1 July 20182,421.9 (26.9)409.8 2,804.8 142.3 2,947.1
Profit after income tax - - 134.2 134.2 7.2 141.4
Other comprehensive income / (loss) for the
period (net of tax)
- 12.2 - 12.2 (0.6)11.6
Total comprehensive income for the period - 12.2 134.2 146.4 6.6 153.0
Vested executive incentive share transactions3.2 (3.2) - - - -
Share-based employee benefits expense - 1.6 - 1.6 - 1.6
Income tax relating to share-based
transactions during the period
- 1.0 - 1.0 - 1.0
Payment of dividends
(i)
- - (87.4)(87.4) - (87.4)
Balance at 31 December 2018
2,425.1 (15.3)456.6 2,866.4 148.9 3,015.3
Opening balance adjustment on application of
AASB 16
(i)
(net of tax)
The condensed consolidated statement of changes in equity should be read in conjunction with the accompanying notes on pages 21 to
42.
(i)
Refer to Note E1 for details on opening balance adjustments made on application of AASB 16 Leases.
(ii)
Payment of dividend relates to the 2019 final dividend of $83.3 million and $3.7 million ROADS dividends paid during the financial
period.
(i)
Payment of dividend relates to the 2018 final dividend and $4.1 million ROADS dividends paid during the financial period.
(ii)
Refer to Annual Report as at 30 June 2019 for details on opening balance adjustments made on application of new accounting
standards.
19

Condensed Consolidated Statement of Cash Flows
for the half-year ended 31 December 2019
Dec
Dec
2019
2018
Note
$'m
$'m
Cash flows from operating activities
Receipts from customers6,991.2 7,260.7
Payments to suppliers and employees(6,981.2)(6,911.7)
Distributions from equity accounted investeesD79.5 10.1
Operating cash flow before interest and tax19.5 359.1
Interest received2.7 3.8
Interest paid on lease liabilities
(i)
(12.6) -
Interest and other costs of finance paid(41.1)(39.1)
Income tax received27.0 31.5
Net cash (used in) / generated by operating activities (4.5)355.3
Cash flows from investing activities
Proceeds from sale of property, plant and equipment11.0 7.7
Payments for property, plant and equipment(150.1)(183.1)
Payments for intangible assets(31.7)(14.5)
Payments for acquisition of businesses, net of cash acquiredD8(19.3)(46.0)
Divestment of Freight Rail - (6.9)
Advances to joint ventures(6.3)(8.3)
Payments for leased assets(25.6)(16.3)
Recovery on acquisition of business - 1.7
Net cash used in investing activities(222.0)(265.7)
Cash flows from financing activities
Proceeds from borrowings 3,772.3 1,008.3
Repayments of borrowings(3,586.6)(1,114.6)
Payment of lease liabilities principal
(i)
(67.1) -
Dividends paid(87.0)(87.4)
Net cash generated by / (used in) financing activities31.6 (193.7)
Net decrease in cash and cash equivalents(194.9)(104.1)
Cash and cash equivalents at the beginning of the period710.7 606.2
Effect of exchange rate changes(0.9)3.2
Cash and cash equivalents at the end of the period514.9 505.3
The condensed consolidated statement of cash flows should be read in conjunction with the accompanying notes on pages 21 to
42.
(i)
The Group has classified:
- cash payments for the principal portion of lease payments as financing activities;
- cash payments for the interest portion of lease payments as operating activities consistent with the presentation of other
interest payments; and
- short-term lease payments and payments for leases of low-value assets as operating activities.
20

Notes to the condensed consolidated financial report
for the half-year ended 31 December 2019
A. About this report
Statement of compliance and basis of preparation
Rounding of amounts
Accounting estimates and judgements
Significant judgement, estimates and assumptions about future events are made by management when applying accounting
policies and preparing the Financial Report which are consistent with those described in the 2019 Annual Report except for
the new significant judgements and key sources of estimation uncertainty related to the adoption of the new lease standard
AASB 16 Leases during the six months to 31 December 2019, which is described in Note E1.
The condensed consolidated half-year Financial Report (Financial Report) represents the consolidated results of Downer
EDI Limited (ABN 97 003 872 848). The Financial Report is a general purpose financial statement which has been prepared
in accordance with AASB 134 Interim Financial Reporting and the Corporations Act 2001 (Cth), and with
IAS 34 Interim Financial Reporting.
The Financial Report does not include all the information required for an annual financial report and should be read in
conjunction with the 2019 Annual Report.
The Financial Report was authorised for issue by the Directors on 12 February 2020.
Downer is a company of the 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 expressly 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 in accordance with that Instrument. Amounts shown as $-
represent amounts less than $50,000 which have been rounded down.
The Group has adopted this accounting standard effective from 1 July 2019 and its impact is disclosed in Note E1. In
accordance with elections available under the accounting standard comparative information is not restated and continues to
be prepared under policies disclosed in the 30 June 2019 Financial Report. Opening retained earnings have been restated
to reflect the impact of the new standard, as at 1 July 2019.
Amounts in the Financial Report are presented in Australian dollars unless otherwise noted and has been prepared on a
historical cost basis, except for revaluation of certain financial instruments.
Accounting policies are selected and applied in a manner that ensures the resulting financial information satisfies the
concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactions or other events is
reported. The accounting policies and methods of computation applied in the Financial Report are consistent with those of
the previous financial year and corresponding interim period except for the adoption of the new lease standard
AASB 16 Leases during the six months to 31 December 2019.
21

Notes to the condensed consolidated financial report - continued
for the half-year ended 31 December 2019
B. Business performance
B1. Segment informationB3. Earnings per share
B2. Profit from ordinary activitiesB4. Subsequent events
B1. Segment information
Identification of reportable segments
Dec 2019
$'mTransportUtilities
Facilities
EC&MMining Total
1,876.6 1,416.1 1,752.8 706.4 753.8 3.2 6,508.9
301.4 - 4.6 - 23.6 - 329.6
2,178.0 1,416.1 1,757.4 706.4 777.4 3.2 6,838.5
112.5 63.0 75.9 (37.4)43.7 (42.9)214.8
(4.5)(1.1)(4.9) - - (23.9)(34.4)
108.0 61.9 71.0 (37.4)43.7 (66.8)180.4
Segment assets
(ii)
2,325.7 1,240.3 2,863.1 629.6 864.2 732.9 8,655.8
Segment liabilities
(ii)
1,091.7 481.5 1,642.4 438.2 298.1 1,716.2 5,668.1
Dec 2018
$'mTransportUtilities
Facilities
EC&MMining Total
1,792.6 1,212.5
1,663.0 945.1 688.1 23.2
6,324.5
268.4 - 4.0 - 26.1
- 298.5
2,061.0 1,212.5 1,667.0 945.1 714.2
23.2
6,623.0
87.9 64.7 81.3 22.4 36.9 (25.2)
268.0
Amortisation of acquired intangibles
(0.4)(1.6)(5.9) - -
(23.5)(31.4)
87.5 63.1 75.4 22.4 36.9
(48.7)236.6
An operating segment is a component of an entity that engages in business activities from which it may earn revenue and
incur expenses, whose operating results are regularly reviewed by the Group's chief operating decision maker in order to
effectively allocate Group resources and assess performance.
The Group has identified its operating segments based on the internal reports that are reviewed and used by the Group
CEO in assessing performance and in determining the allocation of resources. The operating segments are identified by
the Group based on the nature of the services provided. Discrete financial information about each of these operating
businesses is reported to the Group CEO on a recurring basis.
There have been no changes to the composition of the Group's reportable segments since last reported in the 2019
Annual Report. The reportable segments identified within the Group are outlined below:
Un-
allocated
Total revenue including joint
ventures and other income
(i)
Segment revenue and other
income
EBIT before amortisation of
acquired intangibles (EBITA)
Total reported segment results
(EBIT)
Share of sales revenue from joint
ventures and associates
Amortisation of acquired intangibles
Un-
allocated
Segment revenue and other
income
Share of sales revenue from joint
ventures and associates
Total revenue including joint
ventures and other income
(i)
EBIT before amortisation of
acquired intangibles (EBITA)
Total reported segment results
(EBIT)
(ii)
Segment assets and liabilities are disclosed to present the impact that the recognition of Right-of-use assets and lease liabilities
have on each segment following adoption of AASB16 Leases. Refer to 30 June 2019 Annual Report for comparatives.
(i)
This is a non-statutory disclosure as it relates to Downer's share of revenue from equity accounted joint ventures and associates.
22

Notes to the condensed consolidated financial report - continued
for the half-year ended 31 December 2019
B1. Segment information - continued
Reconciliation of segment EBIT to Profit after income tax:
Dec
Dec
2019
2018
$'m
$'m
Segment EBIT247.2 285.3
Unallocated:
Amortisation of Spotless and Tenix acquired intangible assets(23.9)(23.5)
Fair value gain on revaluation of existing interest in Downer Mouchel Joint Venture - 17.0
Corporate costs(42.9)(42.2)
Total unallocated (66.8)(48.7)
Earnings before interest and tax180.4 236.6
Net finance costs(53.5)(42.1)
Profit before income tax126.9 194.5
Income tax expense(35.5)(53.1)
Profit after income tax91.4 141.4
Segment results
23

Notes to the condensed consolidated financial report - continued
for the half-year ended 31 December 2019
B2. Profit from ordinary activities
a) Revenue and other income
Dec 2019
$'mTransportUtilities
Facilities
EC&MMining Total
Service revenue1,269.4 828.2 1,229.0 505.1 720.9 - 4,552.6
Construction contracts507.2 587.9 430.8 192.4 - - 1,718.3
Sale of goods97.2 - 93.4 8.2 30.8 - 229.6
1,873.8 1,416.1 1,753.2 705.7 751.7 - 6,500.5
Other revenue1.5 - - 0.5 0.9 3.2 6.1
1,875.3 1,416.1 1,753.2 706.2 752.6 3.2 6,506.6
Other income / (loss)1.3 - (0.4)0.2 1.2 - 2.3
Total revenue and other income1,876.6 1,416.1 1,752.8 706.4 753.8 3.2 6,508.9
301.4 - 4.6 - 23.6 - 329.6
2,178.0 1,416.1 1,757.4 706.4 777.4 3.2 6,838.5
Dec 2018
$'mTransportUtilities
Facilities
EC&MMining Total
Service revenue1,251.9 683.4 1,150.4 457.0 684.5 (2.2)4,225.0
Construction contracts435.9 528.5 416.5 475.8 - - 1,856.7
Sale of goods100.6 0.5 96.1 7.2 2.2 - 206.6
1,788.4 1,212.4 1,663.0 940.0 686.7 (2.2)6,288.3
Other revenue3.8 - - 4.7 0.2 7.6 16.3
1,792.2 1,212.4 1,663.0 944.7 686.9 5.4 6,304.6
Other income0.4 0.1 - 0.4 1.2 17.8 19.9
Total revenue and other income1,792.6 1,212.5 1,663.0 945.1 688.1 23.2 6,324.5
268.4 - 4.0 - 26.1 - 298.5
2,061.0 1,212.5 1,667.0 945.1 714.2 23.2 6,623.0
(i)
This is a non-statutory disclosure as it relates to Downer's share of revenue from equity accounted joint ventures and associates.
Total revenue including joint
ventures and other income
(i)
Un-
allocated
Total revenue including joint
ventures and other income
(i)
Un-
allocated
Total revenue from contracts
with customers
Total revenue from ordinary
activities
Share of sales revenue from joint
ventures and associates
(i)
Total revenue from contracts
with customers
Total revenue from ordinary
activities
Share of sales revenue from joint
ventures and associates
(i)
24

Notes to the condensed consolidated financial report - continued
for the half-year ended 31 December 2019
B2. Profit from ordinary activities - continued
Revenue from contracts with customers by geographical location:
Dec 2019
$'mTransportUtilities
Facilities
EC&MMining Total
Australia1,315.1 1,120.8 1,330.5 680.6 719.1 - 5,166.1
New Zealand and Pacific558.6 295.3 422.7 - - - 1,276.6
Rest of the world0.1 - - 25.1 32.6 - 57.8
1,873.8 1,416.1 1,753.2 705.7 751.7 - 6,500.5
Dec 2018
$'m
TransportUtilities
Facilities
EC&MMining Total
Australia1,288.8 982.5 1,185.8 928.5 660.5 (2.2)5,043.9
New Zealand and Pacific499.6 229.9 477.2 - - - 1,206.7
Rest of the world - - - 11.5 26.2 - 37.7
1,788.4 1,212.4 1,663.0 940.0 686.7 (2.2)6,288.3
(i)
Revenue is allocated based on the geographical location of the legal entity.
b) Operating expenses
Dec
Dec
2019
2018
$'m
$'m
Employee benefits expense:
- Defined contribution plans
129.6 115.0
- Share-based employee benefits
1.0 1.6
- Other employee benefits2,004.3 2,137.9
Total employee benefits expense
2,134.9 2,254.5
Included within other expenses is:
Operating lease expenses relating to land and building0.9 39.1
Operating lease expenses relating to plant and equipment28.3 58.9
Total operating lease expense
(i)
29.2 98.0
Geographic location
(i)
Geographic location
(i)
Un-
allocated
Un-
allocated
Total revenue from contracts
with customers
Total revenue from contracts
with customers
(i)
The operating leases as at 31 December 2019 represent leases that met the short term and low value exemptions available under
AASB 16 Leases.
25

Notes to the condensed consolidated financial report - continued
for the half-year ended 31 December 2019
B3. Earnings per share
Basic earnings per share
Dec
Dec
20192018
Profit attributable to members of the parent entity ($'m)86.3 134.2
Adjustment to reflect ROADS dividends paid ($'m)(3.7)(4.1)
Profit attributable to members of the parent entity used in calculating EPS ($'m)82.6 130.1
Weighted average number of ordinary shares (WANOS) on issue (m's)
(i)
592.2 591.1
Basic earnings per share (cents per share)13.9 22.0
Diluted earnings per share
Dec
Dec
20192018
Profit attributable to members of the parent entity used in calculating basic EPS ($'m)86.3 134.2
Weighted average number of ordinary shares:
- Weighted average number of ordinary shares (WANOS) on issue (m's)
(i) (ii)
592.8 591.9
- WANOS adjustment to reflect potential dilution for ROADS (m's)
(iii)
25.4 27.2
WANOS used in the calculation of diluted EPS (m's)618.2 619.1
Diluted earnings per share (cents per share)
(iv)
13.9 21.7
(i)
(ii)
(iii)
(iv)
B4. Subsequent events
a)The Group’s operations in future financial periods;
b)The results of those operations in future financial periods; or
c)The Group’s state of affairs in future financial periods.
At the date of this report there is no matter or circumstance that has arisen since the end of the period that has
significantly affected, or may significantly affect:
The calculation of basic earnings per share (EPS) is based on the profit attributable to ordinary shareholders and the
weighted average number of ordinary shares outstanding.
The WANOS on issue has been adjusted by the weighted average effect of the unvested executive incentive shares.
The WANOS adjustment is the value of ROADS that could potentially be converted into ordinary shares at the reporting date. It is
calculated based on the issued value of ROADS in New Zealand dollars converted to Australian dollars at the spot rate prevailing
at the reporting date, which was $192.1 million (December 2018: $190.3 million), divided by the average market price of the
Company's ordinary shares for the period 1 July 2019 to 31 December 2019 discounted by 2.5% according to the ROADS
contract terms, which was $7.58 (December 2018: $6.99).
The calculation of diluted EPS is based on the profit attributable to ordinary shareholders and the weighted average
number of ordinary shares outstanding after adjustments for the effects of all dilutive potential ordinary shares.
For diluted earnings per share, the WANOS has been further adjusted by the potential vesting of executive incentive shares.
At 31 December 2019, the ROADS are deemed anti-dilutive and consequently, diluted EPS remained at 13.9 cents per share.
26

Notes to the condensed consolidated financial report - continued
for the half-year ended 31 December 2019
C.Capital structure and financing
C1. BorrowingsC4. Issued capital
C2. Financing facilitiesC5. Non-controlling interest (NCI)
C3. Lease liabilitiesC6. Reserves
C7. Dividends
C1. Borrowings
DecJun
2019
2019
$'m
$'m
Current
Secured:
-
Lease liabilities
(i)
- 2.8
Unsecured:
-Bank loans - 6.1
-USD private placement notes - 10.0
-Deferred finance charges - (4.3)
- 11.8
Total current borrowings - 14.6
Non-current
Secured:
-
Lease liabilities
(i)
- 7.4
Unsecured:
-Bank loans 824.1 833.4
-USD private placement notes142.7 142.6
-AUD private placement notes30.0 30.0
-AUD medium term notes763.8 550.0
-JPY medium term notes131.3 132.4
-Deferred finance charges(11.1)(6.9)
1,880.8 1,681.5
Total non-current borrowings1,880.8 1,688.9
Total borrowings1,880.8 1,703.5
Fair value of total borrowings
(ii)
2,050.6 1,798.4
(i)
(ii)
Excludes finance lease and hire purchase liabilities.
Upon adoption of AASB 16 Leases, the 30 June 2019 lease liabilities that were disclosed as part of borrowings in the comparative
figures above, have now been presented as part of the lease liability balances in Note C3.
27

Notes to the condensed consolidated financial report - continued
for the half-year ended 31 December 2019
C2. Financing facilities
DecJun
2019
2019
$'m
$'m
Syndicated loan facilities710.0 770.0
Bilateral loan facilities427.0 297.0
Total unutilised loan facilities1,137.0 1,067.0
Syndicated bank guarantee facilities197.2 314.9
Bilateral bank guarantees and insurance bonding facilities503.5 505.0
Total unutilised bonding facilities700.7 819.9
Summary of borrowing arrangements
Bank loan facilities
Bilateral loan facilities:
Syndicated loan facilities:
USD private placement notes
AUD private placement notes
Medium Term Notes (MTNs)
The Group has the following unsecured MTNs on issue:
- $250.0 million maturing March 2022;
- $500.0 million maturing April 2026; and
- JPY10.0 billion maturing May 2033.
The syndicated loan facilities are unsecured, committed facilities and comprised of Australian Dollar and New Zealand
Dollar tranches as follows:
At reporting date, the Group had the following facilities that were unutilised:
AUD unsecured private placement notes are on issue for a total amount of $30.0 million with a maturity date of July 2025.
- $200 million revolving tranche maturing in May 2022;
- $280 million and NZ$75 million revolving tranches maturing in July 2022;
A total of $477.0 million in bilateral loan facilities are committed unsecured facilities with maturities in calendar years
2020, 2021 and 2022.
The carrying value of the AUD MTN maturing April 2026 includes a premium of $13.8 million over the $200 million face
value owing to the differential between the coupon rate for that instrument and the prevailing market interest rate at the
date of issue.
The JPY denominated principal and interest amounts have been fully hedged against the Australian dollar through a
cross-currency interest rate swap.
The above loan facilities and note issuances are supported by certain Group guarantees.
- $200 million revolving tranche maturing in April 2021;
USD unsecured private placement notes are on issue for a total amount of US$100.0 million with a maturity date of July
2025. The USD denominated principal and interest amounts have been fully hedged against the Australian dollar through
cross-currency interest rate swaps.
- NZ$75 million term tranche maturing in July 2022;
- $280 million revolving tranche maturing in July 2023;
- $180 million term tranche maturing in July 2023; and
- $200 million revolving tranche maturing in May 2023.
28

Notes to the condensed consolidated financial report - continued
for the half-year ended 31 December 2019
C2. Financing facilities - continued
Covenants on financing facilities
Bank guarantees and insurance bonds
Refinancing requirements
Credit ratings
C3. Lease liabilitiesDec
2019
Contractual undiscounted cash flows
$'m
Less than one year
158.8
One to five years
378.0
More than five years
358.4
Total undiscounted lease liabilities
895.2
Current
143.7
Non-current
604.6
Total lease liabilities
748.3
Included in the lease liabilities as at 31 December 2019 is $2.8 million of current and $7.4 million of non-current lease
liabilities that have previously been disclosed as part of Secured Borrowings (Refer to Note C1).
For the basis of recognition, and other disclosures in relation to Lease liabilities resulting from the adoption of AASB 16
Leases, refer to Note E1.
The Group’s facilities are provided by a number of banks and insurance companies on an unsecured and revolving basis.
$1,362.4 million (refer to Note D9) of these facilities were utilised as at 31 December 2019 with $700.7 million unutilised.
These facilities have varying maturity dates between calendar years 2020 and 2022.
The underlying risk being assumed by the relevant financier under all bank guarantees and insurance bonds is corporate
credit risk rather than project specific risk.
The Group has the flexibility in respect of certain committed facility amounts (shown as part of the unutilised bilateral loan
facilities) which can at the election of the Group be utilised to provide additional bank guarantees capacity.
Where existing facilities approach maturity, the Group will negotiate with existing and, where required, with new financiers
to extend the maturity date or refinance these facilities. The Group’s financial metrics and credit rating as well as
conditions in financial markets and other factors may influence the outcome of these negotiations.
The Group has an Investment Grade credit rating of BBB (Outlook Stable) from Fitch Ratings. Where the credit rating is
lowered or placed on negative watch, customers and suppliers may be less willing to contract with the Group.
Furthermore, banks and other lending institutions may demand more stringent terms (including increased pricing, reduced
tenors and lower facility limits) on all financing facilities, to reflect the weaker credit risk profile.
The Group has $2,063.1 million of bank guarantee and insurance bond facilities to support its contracting activities.
$1,125.5 million of these facilities are provided to the Group on a committed basis and $937.6 million on an uncommitted
basis.
The main financial covenants which the Group is subject to are Net Worth, Interest Service Coverage and Leverage.
Downer Group’s financing facilities contain undertakings to comply with financial covenants and ensure that Group
guarantors of these facilities collectively meet certain minimum threshold amounts of Group EBIT and Group Total
Tangible Assets (for Downer) and Group EBITDA and Group Total Assets (for Spotless).
Financial covenants testing is undertaken and reported to the Downer and Spotless Boards monthly. Reporting of
financial covenants to financiers occurs semi-annually for the rolling 12-month periods to 30 June and 31 December. Both
Downer Group and Spotless were in compliance with all their financial covenants as at 31 December 2019.
29

Notes to the condensed consolidated financial report - continued
for the half-year ended 31 December 2019
C4. Issued capital

No. $'m
No. $'m
Ordinary shares594,702,512 2,263.1 594,702,512 2,263.1
Unvested executive incentive shares2,231,632 (12.0)3,385,446 (16.6)
Distributing Securities (ROADS) 200,000,000 178.6 200,000,000 178.6
2,429.7 2,425.1
a) Fully paid ordinary share capital
Fully paid ordinary shares carry one vote per share and carry the right to dividends.
m's $'m
m's $'m
Fully paid ordinary share capital
Balance at the beginning of the financial year / period594.7 2,263.1 594.7 2,263.1
Capital raising costs net of tax - - - -
Balance at the end of the financial year / period594.7 2,263.1 594.7 2,263.1
b) Unvested executive incentive shares
Balance at the beginning of the financial year / period3.4 (16.6)4.2 (19.8)
Vested executive incentive share transactions
(i)
(1.2)4.6 (0.8)3.2
Balance at the end of the financial year / period2.2 (12.0)3.4 (16.6)
(i)
c) Redeemable Optionally Adjustable Distributing Securities (ROADS)
m's $'m
m's $'m
Balance at the beginning and at the end of the period200.0 178.6 200.0 178.6
DecJun
DecJun
2019
2019
2019
2019
December 2019 figures are referable to the 2016 LTI plan, second deferred component of the 2017 STI award and first deferred
component of the 2018 STI award totalling 1,153,814 vested shares for a value of $4,608,778.
June 2019 figures are referable to the 2015 LTI plan, second deferred component of the 2016 STI award and first deferred
component of the 2017 STI award totalling 821,912 vested shares for a value of $3,166,042.
Unvested executive incentive shares are stock market purchases and are held by the Executive Employee Share Plan
Trust under the Long Term Incentive (LTI) plan. No dividends are distributed on shares held in trust during the
performance measurement and service periods. Accumulated dividends will be paid out to executives after all vesting
conditions have been met. Otherwise, excess net dividends are retained in the trust to be used by the Company to
acquire additional shares on the market for employee equity plans.
Dec
2019
Jun
2019
ROADS are perpetual, redeemable, exchangeable preference shares. In accordance with the terms of the ROADS
preference shares, the dividend rate for the one year commencing 15 June 2019 is 5.49% per annum (2018: 6.15% per
annum) which is equivalent to the one year swap rate on 17 June 2019 of 1.44% per annum plus the Step-up Margin of
4.05% per annum.
30

Notes to the condensed consolidated financial report - continued
for the half-year ended 31 December 2019
C5. Non-controlling interest (NCI)
The following table summarises the NCI in relation to the Group’s subsidiaries:
SpotlessOtherTotalSpotlessOtherTotal
$'m$'m$'m
$'m$'m$'m
Current assets515.4 23.0 538.4
566.6 22.3 588.9
Non-current assets2,405.1 3.5 2,408.6
2,283.3 1.2 2,284.5
Current liabilities(562.0)(7.4)(569.4)
(602.5)(7.0)(609.5)
Non-current liabilities(1,104.6)(0.1)(1,104.7)
(1,004.5)(0.1)(1,004.6)
Net assets 1,253.9 19.0 1,272.9
1,242.9 16.4 1,259.3
NCI percentage12.198%26.000%
12.198%26.000%
Net assets attributable to NCI
153.0 4.9 157.9
151.6 4.3 155.9
C6. Reserves
Hedge
reserve
Foreign
currency
translation
reserve
Employee
benefits
reserve
Fair value
through OCI
reserve
Balance at 1 July 2019(24.0)(16.7)15.8 (2.6)(27.5)
Foreign currency translation difference - 1.2 - - 1.2
(4.2) - - - (4.2)
Total comprehensive income for the period(4.2)1.2 - - (3.0)
Vested executive incentive share transactions - - (4.6) - (4.6)
Share-based employee benefits expense - - 1.0 - 1.0
Balance at 31 December 2019(28.2)(15.5)13.2 (2.6)(33.1)
Balance at 1 July 2018(13.0)(26.8)15.5 (2.6)(26.9)
Foreign currency translation difference - 8.3 - - 8.3
3.9 - - - 3.9
Total comprehensive income for the period3.9 8.3 - - 12.2
Vested executive incentive share transactions - - (3.2) - (3.2)
Share-based employee benefits expense - - 1.6 - 1.6
Balance at 31 December 2018(9.1)(18.5)14.9 (2.6)(15.3)
Hedge reserve
Foreign currency translation reserve
Employee benefit reserve
Fair value through OCI reserve
Change in fair value of cash flow hedges (net of
tax)
The hedge reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging
instruments relating to future transactions.
2018
-
1.0
Income tax relating to share-based
transactions during the period - - 1.0 -
Jun 2019
2019
1.0
Change in fair value of cash flow hedges (net of
tax)
1.0 -
Income tax relating to share-based
transactions during the period
$'m
-
The foreign currency translation reserve comprises foreign exchange differences arising from the translation of the
financial statements of operations where their functional currency is different to the presentation currency of the Group.
The employee benefit reserve is used to recognise the fair value of share-based payments issued to employees over the
vesting period, and to recognise the value attributable to the share-based payments during the reporting period.
The fair value through OCI reserve comprises the cumulative net change in the fair value of equity investments
designated as FVOCI. Until the assets are derecognised or reclassified, this amount is reduced by the amount of loss
allowance.
Total
attributable
to the
members of
the Parent
Dec 2019
31

Notes to the condensed consolidated financial report - continued
for the half-year ended 31 December 2019
C7. Dividends
a) Ordinary shares
Dividend per share (in Australian cents)14.014.014.0 14.0
Franking percentage0%50%50%50%
Cost (in $'m)83.3 83.3 83.3 83.3
Dividend record date26/2/204/9/1921/2/1930/8/18
Payment date25/3/202/10/1921/3/1927/9/18
b) Redeemable Optionally Adjustable Distributing Securities (ROADS)
Quarter 1Quarter 2Total
Dividend per ROADS (in Australian cents)0.92 0.95 1.87
New Zealand imputation credit percentage100%100%100%
Cost (in A$'m)1.8 1.9 3.7
Payment date16/9/1916/12/19
Quarter 1Quarter 2Quarter 3Quarter 4Total
Dividend per ROADS (in Australian cents)1.01 1.05 1.06 1.06 4.18
New Zealand imputation credit percentage100%100%100%100%100%
Cost (in A$'m)2.0 2.1 2.1 2.1 8.3
Payment date17/9/1817/12/1815/3/1917/6/19
2020
Interim
2019
Final
2019
Interim
2018
Final
2020
2019
The interim 2020 dividend has not been declared as at reporting date and therefore is not reflected in the condensed
consolidated financial report.
32

Notes to the condensed consolidated financial report - continued
for the half-year ended 31 December 2019
D.Other disclosures
D1. Trade receivables and contract assetsD5. Intangible assets
D2. Trade payables and contract liabilitiesD6. Other provisions
D3. Property, plant and equipmentD7. Joint arrangements and associate entities
D4. Right-of-use assetsD8. Acquisition of businesses
D9. Contingent liabilities
D1. Trade receivables and contract assets
Dec
Jun
2019
2019
$'m
$'m
Trade receivables
781.3
888.0
Loss allowance
(17.1)
(17.5)
764.2
870.5

Contract assets
1,503.9
1,084.4
Other receivables
64.5
111.0
Total trade receivables and contract assets2,332.6
2,065.9
Included in the financial statements as:
Current
2,232.6
1,991.5
Non-current
100.0
74.4
Contract asset balances
Contract assets
1,466.1
1,050.3
Retentions
37.8
34.1
Total contract assets1,503.9
1,084.4
D2. Trade payables and contract liabilities
Dec
Jun
2019
2019
$'m
$'m
Trade payables
814.9
810.6
Contract liabilities
465.1
501.5
Accruals
937.6
1,007.2
Other
115.2
137.5
2,332.8
2,456.8
Included in the financial statements as:
Current
2,289.6
2,405.5
Non-current
43.2
51.3
33

Notes to the condensed consolidated financial report - continued
for the half-year ended 31 December 2019
D3. Property, plant and equipment
$'mTotal
Balance at 30 June 2019
124.0 1,196.2 9.0 44.1 1,373.3
- - (9.0) - (9.0)
Balance at 1 July 2019124.0 1,196.2 - 44.1 1,364.3
Additions
3.4 129.6 - 17.1 150.1
Disposals at net book value
- (13.6) - - (13.6)
Depreciation expense
(2.7)(111.8) - (17.6)(132.1)
Reclassifications at net book value
20.4 (20.4) - - -
- 0.6 - - 0.6
145.1 1,180.6 - 43.6 1,369.3
Cost
176.0 2,709.3 - 123.1 3,008.4
Accumulated depreciation
(30.9)(1,528.7) - (79.5)(1,639.1)
Carrying amount as at 1 July 2018118.8 1,106.3 14.1 41.2 1,280.4
Additions10.5 305.3 2.3 35.2 353.3
Disposals at net book value(3.0)(8.5)(2.3) - (13.8)
Acquisition of businesses0.1 12.0 - - 12.1
Depreciation expense(2.9)(219.8)(4.8)(32.5)(260.0)
Reclassifications at net book value - 0.4 (0.4) - -
Reclassified as intangible assets
(i)
- (0.8) - - (0.8)
0.5 1.3 0.1 0.2 2.1
Net book value as at 30 June 2019124.0 1,196.2 9.0 44.1 1,373.3
Cost152.8 2,722.1 24.5 105.9 3,005.3
Accumulated depreciation(28.8)(1,525.9)(15.5)(61.8)(1,632.0)
(i)
Refers to the reclassification of software from Capital work in progress to Intangible assets.
(ii)
ItemUseful lifeDepreciation method
Freehold land
Buildings
Leasehold improvements
Plant and equipment - mining, power and gas
Plant and equipment - other
Laundries rental stock
Opening balance adjustment on application of
AASB 16
Laundries
rental stock
Straight-line
Working hours
Jun 2019
These assets, previously disclosed as Property, plant and equipment have been derecognised on application of AASB 16 and now
presented separately within Right-of-use assets (Refer to Note D4).
Straight-line
Based on hours of use
3-25 years Straight-line
The expected useful life and depreciation methods used are listed below:
n/aNo depreciation
20-50 yearsStraight-line
Life of lease
Equipment
under
finance
lease
(ii)
Freehold
land and
buildings
Net foreign currency exchange
differences at net book value
Plant,
equipment
and
leasehold
improve-
ments
Dec 2019
Net foreign currency exchange
differences at net book value
Net book value as at 31 December 2019
18 months-5 years
34

Notes to the condensed consolidated financial report - continued
for the half-year ended 31 December 2019
D4. Right-of-use assets
Leasehold
$'mPropertyTotal
Balance recognised on adoption of AASB 16
385.5 101.7 83.4 570.6
Additions
48.9 26.9 9.6 85.4
Remeasure
1.3 0.7 0.5 2.5
Depreciation charge for the period
(29.4)(25.1)(12.9)(67.4)
Disposals at net book value
(0.2)(0.4)(1.0)(1.6)
Net foreign currency exchange differences at net book value
(0.2)(0.2)(0.1)(0.5)
Net book value as at 31 December 2019
405.9 103.6 79.5 589.0
Cost
435.3 128.7 92.4 656.4
Accumulated depreciation
(29.4)(25.1)(12.9)(67.4)
The Right-of-use assets above serve as security against the lease liabilities presented in Note C3.
D5. Intangible assets
$'m
GoodwillTotal
2,454.5 345.0 71.3 2.0 257.9 3,130.7
Additions
- - - - 31.7 31.7
Business acquisition adjustments
(5.5) - - - - (5.5)
Amortisation expense
- (32.3)(2.1) - (15.0)(49.4)
0.9 - 0.1 - 0.1 1.1
2,449.9 312.7 69.3 2.0 274.7 3,108.6
Cost
2,602.3 494.2 79.4 2.4 451.2 3,629.5
(152.4)(181.5)(10.1)(0.4)(176.5)(520.9)
2,351.5 381.1 74.7 2.2 241.2 3,050.7
Additions - - - - 45.3 45.3
Disposals at net book value - - - - (0.3)(0.3)
Acquisition of businesses98.2 30.2 - - - 128.4
- - - - 0.8 0.8
Amortisation expense - (66.3)(3.9)(0.2)(29.6)(100.0)
4.8 - 0.5 - 0.5 5.8
2,454.5 345.0 71.3 2.0 257.9 3,130.7
Cost2,606.9 494.1 79.4 2.4 419.3 3,602.1
(152.4)(149.1)(8.1)(0.4)(161.4)(471.4)
(i)
Reclassifications at net book
value
(i)
Net book value as at 31
December 2019
Carrying amount as at 1 July
2019
Customer
contracts
and relation-
ships
Dec 2019
The Group leases many assets including property, motor vehicles and plant and equipment. Information about leased
assets for which the Group is a lessee is presented below:
Dec 2019
Refers to the reclassification of software from Capital work in progress to Intangible assets.
Net foreign currency exchange
differences at net book value
Net book value as at 30 June
2019
Accumulated amortisation and
impairment
Motor
Vehicles
Plant and
Equipment
Carrying amount as at 1 July
2018
Net foreign currency exchange
differences at net book value
Accumulated amortisation and
impairment
Other
intellectual
property on
acquisition
Brand
names on
acquisition
Software
and system
develop-
ment
Jun 2019
35

Notes to the condensed consolidated financial report - continued
for the half-year ended 31 December 2019
D6. Other provisions
Note
Total
Balance at 30 June 2019
28.1 23.7 139.7
191.5
E1 - - (37.1)
(37.1)
Balance at 1 July 201928.1 23.7 102.6 154.4
Additional provisions recognised
0.6 (4.2)3.8 0.2
Unused provisions reversed
- (0.6)(9.9)(10.5)
Utilisation of provisions
(0.6)(4.9)(47.2)(52.7)
Business acquisition adjustments
0.5 - 1.0 1.5
Balance at 31 December 201928.6 14.0 50.3 92.9
Current
5.2 13.3 33.5 52.0
Non-current
23.4 0.7 16.8 40.9
D7. Joint arrangements and associate entities
Dec
Jun
2019
2019
Interest in joint ventures and associates$'m
$'m
Interest in joint ventures at the beginning of the period
31.5
21.2
Share of net profit
8.2
17.1
Share of distributions
(9.5)
(15.6)
Interest in Joint Ventures acquired
-
8.5
Net foreign currency exchange differences
-
0.3
Interest in joint ventures at the end of the period30.2
31.5
Interest in associates at the beginning of the financial year
77.3
74.8
Share of net profit
4.4
13.3
Share of distributions
-
(6.8)
Acquisition of MHPS Plant Services Pty Ltd
-
(4.0)
Interest in associates at the end of the period81.7
77.3
Interest in joint ventures and associates111.9
108.8
Decomm-
issioning and
restoration
Warranties
and contract
claims
Onerous
contracts
and other
$'m
Opening balance adjustment on application
of AASB 16
36

Notes to the condensed consolidated financial report - continued
for the half-year ended 31 December 2019
D7. Joint arrangements and associate entities - continued
Dec
Jun
2019
2019
Principal activity%
%
Joint ventures
Allied Asphalt LimitedAsphalt plantNew Zealand
50
50
Australia
50
50
Bitumen Importers Australia Pty LtdBitumen importerAustralia
50
50
Australia
50
-
New Zealand
50
50
Australia
50
50
Emulco LimitedEmulsion plantNew Zealand
50
50
Isaac Asphalt Limited New Zealand
50
50
Australia
50
-
Repurpose It Holdings Pty Ltd
(i)
Australia
50
50
RTL Mining and Earthworks Pty Ltd Australia
44
44
Waanyi Downer JV Pty Ltd Australia
50
50
ZFS Functions (Pty) LtdAustralia
50
50
Associates
Keolis Downer Pty LtdAustralia
49
49
(i)
JV acquired during the financial year ended 30 June 2019.
(ii)
JV entered into during the financial half-year ended 31 December 2019.
D8. Acquisition of businesses
December 2019
Update on previous acquisitions
The Group has interests in the following joint ventures and associates which are equity accounted:
Country of
operation
Name of arrangement
EDI Rail-Bombardier
Transportation Pty Ltd
Construction of bitumen storage
facility
Ownership interest
Bitumen Importers Australia
Joint Venture
Catering for functions at
Eden Park
Eden Park Catering Limited
Civil Infrastructure design and/or
construction activities
Bama Civil Pty Ltd & Downer EDI Works
Pty Ltd
(ii)
There have been no acquisitions during the half-year period ended 31 December 2019.
The provisional accounting for MHPS Plant Services; Rock N Road; KHSA Limited and Boleh Consulting acquisitions
have now been finalised, with minor adjustments to the initial fair value assigned to the identifiable net assets. The impact
on the Goodwill is presented in Note D5.
Deferred consideration of $19.3 million was paid during the period, with no resulting impact on the acquisition accounting.
Acquisitions related consideration paid for the period ended 31 December 2018 was $46.0 million.
Contract mining; civil works and
plant hire
Sale and maintenance of railway
rolling stock
Manufacture and supply of
asphalt
Contract mining services
Waste recycling
Catering for functions at
Federation Square
Operation and maintenance of
Gold Coast light rail, Melbourne
tram network and bus operation
Downer EDI Works Pty Ltd & CPB
Contractors Pty Limited
(ii)
Construction activities as part of
Perth's METRONET program
37

Notes to the condensed consolidated financial report - continued
for the half-year ended 31 December 2019
D9. Contingent liabilities
Dec
Jun
2019
2019
Bonding$'m
$'m
1,362.4
1,323.2
Guarantees
Other contingent liabilities
i)
ii)
iii)
iv)
v)
vi)
vii)
viii)
Spotless engages around 30,000 employees under a variety of Enterprise Agreements (EAs) and Modern Awards.
During the half year, Spotless commenced a review of the applicable EAs and Modern Awards, together with the
assumptions regarding their interpretation and application in its payroll systems in order to validate the correct
application of pay rates to employees as well as any instances of historical underpayments or overpayments. This
process is ongoing.
The Group is called upon to give guarantees and indemnities to counterparties, relating to the performance of contractual
and financial obligations (including for controlled entities and related parties). Other than as noted above, these
guarantees and indemnities are indeterminable in amount.
The Group is subject to design liability in relation to completed design and construction projects. The Directors are of
the opinion that there is adequate insurance to cover this area and accordingly, no amounts are recognised in the
financial statements.
The Group is subject to product liability claims. Provision is made for the potential costs of carrying out rectification
works based on known claims and previous claims history. However, as the ultimate outcome of these claims cannot
be reliably determined at the date of this report, contingent liability may exist for any amounts that ultimately become
payable in excess of current provisioning levels.
Controlled entities have entered into various joint arrangements under which the controlled entity is jointly and
severally liable for the obligations of the relevant joint arrangements.
The Group carries the normal contractors and consultants liability in relation to services, supply and construction
contracts (for example, liability relating to professional advice, design, completion, workmanship, and damage), as
well as liability for personal injury / property damage during the course of a project. Potential liability may arise from
claims, disputes and / or litigation / arbitration by or against Group companies and / or joint venture arrangements in
which the Group has an interest. The Group is currently managing a number of claims, arbitration and litigation
processes in relation to services, supply and construction contracts as well as in relation to personal injury and
property damage claims arising from project delivery.
On 25 May 2017, Alison Court, as applicant, filed a representative proceeding in the Federal Court of Australia on
behalf of shareholders who acquired Spotless shares from 25 August 2015 to 1 December 2015. The applicant under
this proceeding alleges that Spotless engaged in misleading or deceptive conduct and/or breached its continuous
disclosure obligations in relation to Spotless' financial results for the financial year ended 30 June 2015 and in its
conduct following the release of those financial results until Spotless issued its trading update of 2 December 2015.
The applicant seeks damages, declarations, interest and costs. Spotless is vigorously defending the proceeding.
The Group has bid bonds and performance bonds issued in respect of
contract performance in the normal course of business for controlled entities
Several New Zealand entities in the Group have been named as co-defendants in “leaky building” claims. The leaky
building claims where Group entities are co-defendants generally relate to water damage arising from historical design
and construction methodologies (and certification) for residential and other buildings in New Zealand during the early-
mid 2000s. The Directors are of the opinion that disclosure of any further information relating to the leaky building
claims would be prejudicial to the interests of the Group.
On 16 September 2015, the Group announced that it had terminated a contract with Tecnicas Reunidas S.A. (“TR”)
following TR’s failure to remedy a substantial breach of the contract and that the Group is pursuing a claim against TR
in the order of $65 million. Downer has since demobilised from the site and has commenced a claim that will be
determined via an arbitration process, with a hearing date currently expected to occur in April 2020. TR has initiated a
counter-claim, which is being defended by Downer. The Directors are of the opinion that disclosure of any further
information relating to this matter would be prejudicial to the interests of the Group.
As identified in the review so far, five matters that give rise to an obligation to make good any shortfall in payment and
quantified, have been expensed in full in the period. As the review is only part complete, it is not possible to reliably
determine what other instances or quantum of any other underpayments may exist. No further provision has been
recognised at 31 December 2019 as no other instances have been identified at this stage of the review.
38

Notes to the condensed consolidated financial report - continued
for the half-year ended 31 December 2019
EOther
E1.New accounting standards
E1. New accounting standards
a) New and amended accounting standards adopted by the Group
Changes in significant accounting policies
AASB 16 - Leases
$'mAs reported
30 June
2019
AASB 16
Transition
adjustments
Opening
balance
1 July 2019
Property, plant and equipment1,373.3
(9.0)1,364.3
Right-of-use assets -
570.6 570.6
Borrowings(1,703.5)
10.2 (1,693.3)
Lease liabilities (current and non-current) -
(727.8)(727.8)
Other provisions(191.5)
37.1 (154.4)
Trade payables and contract liabilities(2,456.8)
24.0 (2,432.8)
Deferred tax balances(44.1)
28.9 (15.2)
Non-controlling interest(155.9)
3.2 (152.7)
Retained earnings
(496.7)
62.8 (433.9)
- AASB 2018-1 Annual Improvements 2015-2017 Cycle
- AASB 2018-2 Amendments to Australian Accounting Standards – Plan Amendment, Curtailment or Settlement
- AASB 2017-7 Amendments to Australian Accounting Standards – Long Term Interest in Associates and Joint Ventures
- Interpretation 23 Uncertainty Over Income Tax Treatments
- AASB 16 Leases
- AASB 2017-4 Amendments to Australian Accounting Standards – Uncertainty over Income Tax Treatments
- AASB 2017-6 Amendments to Australian Accounting Standards – Prepayment Features with Negative Compensation
In the current period, the Group has applied a number of new and revised accounting standards issued by the Australian
Accounting Standards Board (AASB) that are mandatorily effective for an accounting period that begins on or after
1 July 2019, as follows:
The impact of the adoption of AASB 16 Leases (AASB16) which resulted in a change in accounting policies is discussed
in detail below. The other amendments listed above did not have an impact on the amounts recognised in prior periods
and are not expected to significantly impact current or future periods.
The Group has adopted AASB 16 using the ‘modified retrospective approach’ from 1 July 2019 and therefore the
comparative information has not been restated as permitted under the specific transition provisions in the standard.
Upon transition to AASB 16, the Group recognised Right-of-use assets of $570.6 million and Lease liabilities of
$727.8 million as at 1 July 2019. The subsequent movements in the Right-of-use assets as reflected in Note D4 has
resulted in $67.4 million depreciation charges for the period. The resulting finance lease liabilities (Note C3) gave rise to
finance costs of $12.6 million for the period.
For the impact of AASB16 on segment assets and segment liabilities refer to Note B1.
The table below presents the impact of the adoption on the balance sheet as at 1 July 2019:
39

Notes to the condensed consolidated financial report - continued
for the half-year ended 31 December 2019
E1. New accounting standards - continued
Changes in significant accounting policies - continued
-
applying a single discount rate to a portfolio of leases with reasonably similar characteristics;
-
relying on previous assessments on whether leases are onerous as an alternative to performing an impairment review;
-
-
excluding initial direct costs for the measurement of the right-of-use asset at the date of initial application; and
-
using hindsight in determining the lease term where the contract contains options to extend or terminate the lease.
$'m 1 July 2019
Disclosed operating lease commitments at 30 June 2019
795.6
Lease commitments for which lease liability arises after 1 July 2019
(42.1)
Recognition exemption for:
Short-term leases
(11.1)
Low value leases
(5.5)
Recognition of leases embedded in customer contracts
0.7
Extension options reasonably certain to be exercised
119.0
Discounting using the incremental borrowing rate at 1 July 2019
(139.0)
Lease liabilities already recognised at 30 June 2019
10.2
Lease liabilities recognised at 1 July 2019
727.8
On adoption of AASB 16, the Group:
-
-
-
-
-
Impact of new definition of a lease
Recognised the associated Right-of-use asset at its carrying amount as if AASB 16 had always been applied,
discounted using the incremental borrowing rates at the date of initial application.
Payments made before the commencement date and incentives received from the lessor are included in the carrying
amount of the of the Right-of-use asset.
Recognised depreciation on Right-of-use assets and interest on lease liabilities in the Consolidated Statement of Profit
or Loss and Other Comprehensive Income.
Recognised the principal portion of the lease payment as a financing cash flow and the interest portion of the lease
payment as an operating cash flow in the Consolidated Statement of Cash Flows.
The total adjustment to equity upon transition to AASB16 was $66.0 million after including non-controlling interests.
AASB 16 replaces existing lease accounting guidance and contains significant changes to the accounting treatment
applied to leases. It requires a single accounting model to be applied to all types of leases, with the primary change being
a requirement for lessees to recognise assets and liabilities for all leases, with the exception of short-term leases (with a
duration of less than twelve months) and leases of low-value assets.
At transition, for leases classified as operating leases under the superseded standard (AASB 117), lease liabilities were
measured and recognised at the present value of the remaining lease payments, discounted at the Group’s incremental
borrowing rate as at 1 July 2019.
In applying AASB 16 for the first time, the Group has used the following practical expedients permitted by the standard:
accounting for operating leases with a remaining lease term of less than 12 months as at 1 July 2019 as short-term
leases;
The reconciliation between the operating lease commitments presented in the 30 June 2019 financial statements and the
lease liability recognised as at 1 July 2019 is as follows:
Recognised Lease liabilities measured at the present value of future minimum lease payments, discounted using the
incremental borrowing rate. The weighted average rate was 3.5%.
The Group assesses whether a contract is or contains a lease, at the inception of the contract. The Group recognises a
right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee,
except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets.
For these leases, the Group recognises the lease payments as an operating expense on a straight-line basis over the
term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits
from the leased assets are consumed.
The Group has also elected not to reassess whether a contract is or contains a lease at the date of initial application of
AASB16. Instead, for contracts entered into before the transition date, the Group relied on its assessment made applying
AASB117 and Interpretation 4 Determining whether an arrangement contains Lease.
40

Notes to the condensed consolidated financial report - continued
for the half-year ended 31 December 2019
E1. New accounting standards - continued
Significant accounting policies
Where the Group is a lessee:
Right-of-use assets
The right-of-use assets are initially measured at cost, which comprises:
-
the amount of the initial measurement of the lease liability,
-
-
an estimate of the costs to dismantle and remove the underlying asset or to restore the underlying asset.
Lease liabilities
-
fixed payments (including in-substance fixed payments), less any lease incentives receivable;
-
variable lease payments that depend on an index or a rate;
-
the exercise price of a purchase option if the lessee is reasonably certain to exercise that option;
-
the amount expected to be payable under a residual value guarantee;
-
-
-
-
Where the Group as a lessor:
The Group has applied AASB 16 as of 1 July 2019. As a result, the Group has changed its accounting policy for leases as
detailed below.
any lease payments made at or before the commencement date, less any lease incentives and any initial direct costs
incurred by the lessee, and
The lease liability is initially measured at the present value of future lease payments that are not paid at the
commencement date, discounted using the interest rate implicit in the lease or if this rate cannot be readily determined the
Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.
Lease payments included in the measurement of the lease liability comprise:
The accounting policies applicable to the Group as a lessor are not different from those under AASB 117, and as such the
Group is not required to make any adjustments on transition to AASB 16 for leases in which it acts as lessor. However
the Group has applied AASB 15 Revenue from Contracts with Customers to allocate consideration in the contract to each
lease and non-lease component. Revenue from lease components has been classified within Other Revenue (refer to
Note B2).
the lease payments change due to changes in an index or rate or a change in the amount expected to be payable
under a residual value guarantee;
a lease contract is modified, and the lease modification is not accounted for as a separate lease, in which case the
lease liability is remeasured based on the lease term of the modified lease by discounting the revised lease payments
using a revised discount rate at the effective date of the modification.
Subsequently the right of use asset is measured at cost less any accumulated depreciation and impairment losses and
adjusted for certain remeasurements of the lease liability.
The right-of-use asset is depreciated over the shorter period of the lease term and the useful life of the underlying asset. If
a lease transfers ownership of the underlying asset or the costs of the right of use asset reflects that the Group will
exercise a purchase option, the asset will be depreciated from the commencement date to the end of the useful life of the
underlying asset. The depreciation starts at the commencement date of the lease.
Variable lease payments not included in the initial measurement of the lease liability are recognised directly in profit or
loss.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability
(using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.
The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset)
whenever:
the lease term has changed or there is a significant event or change in circumstances resulting in a change in the
assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the
revised lease payments using a revised discount rate;
payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate
the lease.
41

Notes to the condensed consolidated financial report - continued
for the half-year ended 31 December 2019
E1. New accounting standards - continued
Key estimates and judgements made:
(i)Extension option
(ii)Incremental borrowing rate
(iii)Residual value guarantees
b) New accounting standards and interpretations not yet adopted
In determining the present value of the future lease payments, the Group discounts the lease payments using an
incremental borrowing rate (IBR). The IBR reflects the financing characteristics and duration of the underlying lease. Once
a discount rate has been set for a leased asset (or portfolio of assets with similar characteristics), this rate will remain
unchanged for the term of that lease. When a lease modification occurs, and it is not accounted for as a separate lease, a
new IBR will be assigned to reflect the new characteristics of the lease.
The Group initially estimates and recognises amounts expected to be payable under residual value guarantees as part of
the lease liability. Typically, the expected residual value at lease commencement is equal to or higher than the guaranteed
amount, and so the Group does not expect to pay anything under the guarantees.
At the end of each reporting period, the expected residual values are reviewed to reflect actual residual values achieved
on comparable assets and expectations about future prices.
In determining the lease term, the Group considers all facts and circumstances that create an economic incentive to
exercise an extension option, or not exercise a termination option. Extension options (or periods after termination options)
are only included in the lease term if the lease is reasonably certain to be extended (or not terminated).
- Definition of Material (Amendments to IAS 1 and IAS 8).
The following standards, amendments to standards and interpretations are relevant to current operations. They are
available for early adoption but have not been applied by the Group in this Financial Report.
The following new or amended standards are not expected to have a significant impact on the Group’s consolidated
financial statements:
- Definition of Business (Amendments to IFRS 3).
- Amendments to References to Conceptual Framework in IFRS Standards.
42

Directors' Declaration
for the half-year ended 31 December 2019
In the opinion of the Directors of Downer EDI Limited:
(a)
(i)
(ii)
(b)
On behalf of the Directors
R M Harding
Chairman
Sydney, 12 February 2020
Signed in accordance with a resolution of the Directors:
The condensed consolidated half-year financial statementsandnotes setout on pages 17to42arein
accordance with the Australian Corporations Act 2001 (Cth), including:
Complying with Australian Accounting Standard AASB134Interim Financial Reportingandthe Corporations
Regulations 2001; and
The financial statementsandnotes thereto give a trueandfair viewofthe Group's financial positionas at 31
December 2019 and of its performance for the six-month period ended on that date; and
There are reasonable groundstobelieve that Downer EDI Limited willbe abletopayits debtsas andwhen they
become due and payable;
43

Page 1 of 2

Media/ASX and NZX Release
12 February 2020

DOWNER REPORTS NPATA OF $115.5 MILLION
Downer EDI Limited (Downer) today announced its financial results for the six months to 31 December 2019.
The main features of the results are:
 Total revenue of $6.8 billion, up 3.3% from the prior corresponding period (pcp).

 EBIT (earnings before interest and tax) of $180.4 million, down 23.8% from the pcp.

 NPATA (net profit after tax and before amortisation of acquired intangible assets) of $115.5 million.

 Statutory net profit after tax of $91.4 million, down 35.4%.

 Work-in-hand of $46.4 billion, up from $44.3 billion at 30 June 2019.

 Interim dividend of 14 cents per share (unfranked).

All the figures above include 100% contribution from Spotless, before minority interests.

The Chief Executive Officer of Downer, Grant Fenn, said despite Downer’s services businesses performing
well, construction losses had driven a disappointing result for the first half of the 2020 financial year. On
23 January Downer revised down its full year profit guidance to NPATA of $300 million.

“Downer’s Transport, Utilities, Facilities and Mining service lines, as well as the Asset Services business
within Engineering, Construction and Maintenance, performed well during the period,” Mr Fenn said. “We will
continue to grow our services businesses which require relatively low levels of capital, deliver more
predictable revenue in the long term and are able to improve margins over time.

“The strong pipeline of opportunities in our favoured markets continues to drive Downer’s work-in-hand,
which has risen to $46.4 billion at 31 December 2019. Construction work-in-hand is just 12% of total Group
work-in-hand and half of it relates to projects valued at less than $50 million. Downer will continue to reduce
its exposure to risky construction work.”

Downer reports its financial results under five service lines and the performance of each service line,
compared with the prior corresponding period, is summarised below.
Urban Services
Transport Utilities
Total revenue of $2.2 billion, up 5.7% Total revenue of $1.4 billion, up 16.8%
EBITA of $112.5 million, up 28.0% EBITA of $63.0 million, down 2.6%
Work-in-hand of $18.0 billion Work-in-hand of $7.0 billion

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

Page 2 of 2

Facilities
Total revenue of $1.8 billion, up 5.4%
EBITA of $75.9 million, down 6.6%
Work-in-hand of $16.5 billion

Mining, Energy and Industrials
Mining Engineering, Construction & Maintenance
Total revenue of $777.4 million, up 8.8% Total revenue of $706.4 million, down 25.3%
EBITA of $43.7 million, up 18.4% EBITA loss of $37.4 million
Work-in-hand of $2.8 billion Work-in-hand of $2.1 billion
Portfolio review
Downer announced at its 2019 full year results that it was undertaking a review into its Mining and Laundries
businesses to be completed in the first half of the 2020 financial year. The review concluded that Downer
should exit both the Mining and Laundries businesses, and this would provide an opportunity to increase
returns to shareholders and reduce debt.

The exit process for Mining continues with a number of bids being received last week, ranging in price and
conditionality. These bids are being assessed along with other exit alternatives including a demerger.
The exit process for Laundries also continues with a range of indicative bids being recently received.
Safety
Downer reported a Lost Time Injury Frequency Rate of 0.60 per million hours worked for the six months to
31 December 2019 and a Total Recordable Injury Frequency Rate of 2.82 per million hours worked.
Regrettably,
in July 2019, an employee of Otraco died as a result of an accident at our facility in Calama,
Chile. Otraco is a Downer business that delivers vehicle and off-the-road tyre management services across
more than 60 sites in Australia, South America and South Africa.
Dividend
The Downer Board resolved to pay an interim dividend of 14 cents per share, unfranked, payable on 25
March 2020 to shareholders on the register at 26 February 2020. The unfranked dividend will be paid out of
Conduit Foreign Income. The company’s Dividend Reinvestment Plan (DRP) remains suspended and will not
operate for this dividend.
Outlook
Downer is targeting NPATA of around $300 million before minority interests for the 2020 financial year.
For further information please contact:
Michael Sharp, Group Head of Corporate Affairs and Investor Relations +61 439 470 145

About Downer
Downer is the leading provider of integrated services in Australia and New Zealand and customers are at the heart of
everything it does. It exists to create and sustain the modern environment and its promise is to work closely with its
customers to help them succeed, using world-leading insights and solutions to design, build and sustain assets,
infrastructure and facilities. Downer employs more than 53,000 people across more than 300 sites, primarily in Australia
and New Zealand, but also in the Asia-Pacific region, South America and Southern Africa. It also owns 88 per cent of
Spotless Group Holdings Limited. For more information visit www.downergroup.com

12 February 2020
Downer Group
Investor Presentation
Half Year Results
12 February 2020

2
Outlook
EarningsCash flow
Margin
HY cash conversion 4.5%
Significantly impacted by
MurraWarraand timing
of cash flows from large
projects
Interim dividend of 14cps
Group EBITA
1
margin of
3.1%, down 0.7pp v HY19
2
ROFE
4
of 12.6% up from
12.4% in pcp
Total revenue
3
$m
NPATA
1
$m
ROFE %
1.Downer’s statutory results are reported under International Financial Reporting Standards (IFRS). NPATA and EBITA are non-IFRS. Downer’s amortisation of acquired intangibles has a material impact on reported earnings.
Amortisation is a non-cash charge and management believe that the exclusion of the amortisation of acquired intangibles from NPAT and EBIT better reflects the underlying performanc e of Downer. Group HY20: $34.4m, $24.1m
after-tax. (HY19: $31.4m, $22.0m after-tax).
2.Results for the period ended 31 December 2018 exclude the fair value gain on revaluation of the existing interest in the Downer Mouchel JV ($17m after tax).
3.Total revenue is a non-statutory disclosure and includes Downer’s share of revenue from joint ventures, other allianc es and other income.
4.ROFE = 12 month rolling underlying EBITA divided by average funds employed (AFE); AFE = Average Opening and Closing Net Debt (excludes lease liabilities) + Equity
$300 million NPATA
1
for
2020 financial year
115.5
146.4
-
50.0
100.0
150.0
200.0
HY20HY19
12.6%
12.4%
0%
5%
10%
15%
20%
HY20HY19
6,838.5
6,623.0
0
2,000
4,000
6,000
8,000
HY20HY19
3.3% v HY19
(21.1%) v HY19
2
0.2pp v HY19
2
Construction losses drive disappointing HY20 result
Total revenue
3
of $6.8bn,
up $215.5m
NPATA
1
of $115.5m down
from $146.4m in HY19
EBITA
1
margin
(0.7pp) v HY19
2
3.1%
3.8%
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
HY20HY19

Work-in-hand (WIH) increased to $46.4 billion
89% Urban Services
11% Mining, Energy & Industrials
6.0%
4.6%
35.5%
15.1%
38.8%
Transport
Mining
EC&M
Facilities
Utilities
46.4
44.3
43.5
42.0
Dec-19Jun-19Dec-18Jun-18
Work-in -hand $bn
3
{
6% Mining
4% Asset Services
1% Engineering & Construction

Group work-in-hand ($46.4bn) by Service Line
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
11,000
AUD Million
Financial Years
ECM
Mining
Utilities
Transport
Facilities
4

Construction WIH $5.7bn, 12% of Group WIH ($46.4bn)
5
$2.1 billion (37%)
Schedule of Rates
Design and Construct
EPC
•$580m of <$15m projects
•$1bn of <$50m projects
Two projects >$200m
•Parramatta Light Rail
•Warrnambool Line Upgrade
$3.6 billion (63%)
Alliances
Cost Reimbursable
Fee Based
Long Term Panels

Urban Services
Mining, Energy and Industrial Services
Mining
Utilities
Transport
Services businesses continue to perform well
EC&M
Transport
Mining
EC&M
Utilities
6
Facilities

Opportunity pipeline: >$200bn over next decade
7
0.0
10.0
20.0
30.0
40.0
50.0
60.0
FY20FY21FY22FY23FY24FY25FY26FY27FY28FY29FY30
$ billion
Mining
ECM
Facilities
Utilities
Transport

Group
financials
8

9
Financial performance
$m
HY20
reported
AASB 16
impact
Pro forma
Pre
AASB16
HY19
2
Change
(%)
Total revenue
6,838.5-6,838.56,623.03.3
EBITDA
429.3
(77.9)
351.4
396.0
(11.3)
Depreciation and amortisation
(214.5)
67.4(147.1)
(145.0)
(1.4)
EBITA
1
214.8
(10.5)204.3
251.0
(18.6)
Amortisation of acquired
intangibles
(34.4)
-(34.4)
(31.4)
(9.6)
EBIT
180.4(10.5)169.9
219.6
(22.6)
Netinterestexpense
(53.5)
12.6(40.9)
(42.1)
2.9
Profit before tax
126.9
2.1129.0
177.5
(27.3)
Taxexpense
(35.5)(0.6)(36.1)
(53.1)
32.0
Netprofitaftertax
91.41.592.9
124.4
(25.3)
N PATA
1
115.5
1.5117.0
146.4
(20.1)
EBITA margin
3.1%
3.8%
(0.7pp)
Effective taxrate
28.0%
29.9%
(1.9pp)
ROFE
3
12.6%12.4%0.2pp
Dividenddeclared(cps)
14.014.0
-
HY20 includes adoption of
AASB16 – no material impact on
NPATA
Revenue up 3.3% to $6.8bn
driven by Transport and Utilities
Group EBITA margin 3.1%, down
0.7pp:
̶loss making construction
contracts in EC&M
̶completion of MurraWarraand
Renewables contracts
Interim dividend of 14cps
(unfranked)
1
Downer calculates EBITA and NPATA by adjusting EBIT and NPAT to add back acquired intangible assets amortisation expense. Group HY20: $34.4m, $24.1m after-tax. (HY19: $31.4m, $22.0m after-tax)
2
Results for the period ended 31 December 2018 exclude the fair value gain on revaluation of the existing interest in the Downer Mouchel JV ($17m after tax).
3
ROFE = 12 month rolling underlying EBITA divided by average funds employed (AFE); AFE = Average Opening and Closing Net Debt (excludes lease liability) + Equity

Summary of earnings
10
$mTransportUtilities
Facilities
EC&MMiningUnallocatedTotal
EBITA
1
112.563.075.9(37.4)43.7(42.9)214.8
Spotless legacy issues
-
-(10.9)---
(10.9)
Restructuring costs
-
-2.7---
2.7
Portfolio review costs
-
-2.7--3.2
5.9
-
-(5.5)--3.2
(2.3)
Adjusted EBITA
112.5
63.070.4(37.4)43.7(39.7)
212.5
1. Downer calculates EBITA by adjusting EBIT to add back acquired intangible assets amortisation expense. Group HY20 $34.4m (HY19: $31.4m)

Unallocated Costs (Corporate Costs)
11
$mHY20HY19
Corporate costs(42.9)(42.2)
Amortisation of acquired intangible assets(23.9)(23.5)
FV gain on revaluation of existing interests in Downer Mouchel JV-17.0
Total unallocated(66.8)(48.7)

Operating cash flow
12
$mHY20
1
HY19Change (%)
EBIT
180.4219.6(17.9)
Add: depreciation and
amortisation
2
248.9176.441.1
EBITDA
429.3396.08.4
Operating cash flow
(4.5)355.3(101.3)
Add: Net interest paid
3
51.035.344.5
Less: Tax received
(27.0)(31.5)(14.3)
Adjusted operating cash
flow
19.5359.1(94.6)
EBITDA conversion
4.5%90.7%(86.2pp)
Adjusted EBITDA
Conversion
79.9%90.7%(10.8pp)
A number of significant items affected operating
cash flow performance in HY20:
̶MurraWarra wind farm: $71.7m
̶prior period losses and outstanding claims:
$36.7m
̶Renewables losses recognised in FY19:
$28.9m
̶timing of cash payments for Waratah bogie
overhaul: $30.2m
̶timing of cash flow from Major Rail Projects:
$57.1m
̶timing of cash flows from nbnwinding down:
$99.0m
HY20 includes benefit of $67.1m arising from
lease payment reclassification
Cash flow conversion for Downer’s Services
businesses remained strong
Factoring at 31 December 2019 was $113.7m
(c. $90m at 30 June 2019)
No reverse factoring of payables
1.Cash conversion for HY20 has been calculated following the adoption of AASB16 from 1 July 2019 (comparatives have not been restated)
2.Includes $67.4m depreciation of Right-of-us e (ROU) assets following the adoption of AASB 16.
3.Interest, including AASB 16 finance leases of $12.6m and other costs of finance paid less interest received.

Cash flow
13
$mHY20HY19
Change
(%)
Total operating
(4.5)355.3
(101.3)
Net capital expenditure
1
(164.7)(191.7)
14.1
Other acquisitions
(19.3)(46.0)
58.0
IT systems upgrade
(31.7)(14.5)
(118.6)
Loans to JVs and other
(6.3)(13.5)
53.3
Total investing
(222.0)(265.7)
16.4
Net proceeds / (repayment) of
borrowings
185.7(106.3)
274.7
Dividends paid
(87.0)(87.4)
0.5
Lease liabilities payments
(67.1)-
(100.0)
Total financing
31.6(193.7)
116.3
Net decrease in cash
(194.9)(104.1)
(87.2)
Cash at 31 December
514.9505.3
1.9
Total liquidity1,651.9
1,360.3
21.4
Net capital expenditure reduction of
14.1%
Mining and Laundries represent
59.3% of total capital expenditure
Other acquisitions represent
deferred purchase consideration
Continued technology investment in
data centres and network
infrastructure
1.Includes payments for leased assets $25.6m (1H19: $16.3m)

Balance sheet and capital management
14
Gearing increase due to lower
operating cash flow
Reduction in net assets a result of
adoption of AASB 16 Leases
Focus on debt reduction and reduced
gearing
$mDec-19Jun-19
Current assets
3,200.63,164.7
Non-current assets
5,455.24,843.3
- Goodwill
2,449.92,454.5
- Acquired intangible assets
384.0418.3
- PP&E, Software and other
2,032.31,970.5
- Right-of-use assets
589.0-
Liabilities
(5,668.1)(4,957.8)
- Lease liabilities
(748.3)-
- Other liabilities
(4,919.8)(4,957.8)
Net Assets
2,987.73,050.2
Net Debt
1
(1,388.2)(1,012.6)
Gearing: net debt / net debt plus
equity
2
31.3%24.9%
Net debt / 12 month rolling EBITDA1.71.2
1
Adjusted for the marked-to-market derivatives and deferred finance charges and excludes
the lease liabilities of $748.3m at 31 December 2019
2
Equity adjusted to exclude the impact of AASB 16 of $66.0m

Group debt profile
Weighted average debt duration
of 3.7 years
1
(3.6 years at 30
June 19)
Maturity profile and diversification
enhanced by refinance of
Spotless Syndicated Facilities
and Downer MTN issuance
15
0
100
200
300
400
500
600
700
800
Jun-20Jun-21Jun-22Jun-23Jun-24Jun-25Jun-26Jun-27Jun-28Jun-29Jun-30Jun-31Jun-32Jun-33
A$m
Syndicated bank facilitiesUSPPJPY MTNA $ M TNBilateral bank f acilities
30%TRMP
Debt facilities
$m
DOWSPOGroup
Total limit
2
2,002.51,037.63,040.1
Drawn
2
(1,125.5)(777.6)(1,903.1)
Available877.0260.01,137.0
Cash423.091.9514.9
Total liquidity1,300.0351.91,651.9
Net debt
2
702.5685.71,388.2
1
Based on the weighted average life of debt facilities (by A$mlimit).
2
Exclude lease liabilities

Grant Fenn
16

Portfolio review
Portfolio review announced in August 2019.
Review concluded Downer should exit both Mining and Laundries to increase returns to shareholders
and reduce debt.
A number of bids for Mining received last week, ranging in price and conditionality. These bids will be
assessed along with a demerger.
A range of indicative bids for Laundries have been received and are being progressed.
Downer will update the market as appropriate.
17

Focus on lifecycle asset services
18
2 years5 years10 years15 years20 years
Engineering
Procurement
Construction
Maintenance
Operating
Supply
Revenue
Margin
Downer is focused on winning and delivering secure, long term contractual service revenue
and leveraging its expertise to drive margin expansion over time
Long term, predictable revenue with opportunities for top-line growth
Ability to improve margin through operational efficiencies and innovation over time
Lower risk to margin compared to construction
Servicing
Selective participation
Focus on O&M markets

Driving value for shareholders
19
Aligned to growing
markets and serving
quality customers
Strategic capital
allocation, cost and
capital efficiency
Consistently growing
EPS and DPS
Increasing EPS and
maintaining a 50% -
60% payout ratio
Business
growth
Efficient use
of capital
Shareholder
value
TSR growth through
continued delivery
Maintaining a strong
balance sheet and
credit rating
Continue strong
operating cash flow
discipline
Increased exposure to
low capital, service
oriented businesses
Strategic acquisitions
Portfolio Review –
Mining and Laundries
Reduce debt, strengthen
balance sheet
Improve operating margins
and ROFE
Leveraged to buoyant
economicand social
infrastructure markets
Growing exposure to
Urban Services
Selective acquisitions in
Urban Services
Sustainable
operations
Safety – Zero Harm is
embedded in
Downer’s culture
Environmentally
responsible
operations
Supporting our
communities
Continue to improvesafety
performance and employee
wellbeing
Provide environmentally
responsible and sustainable
solutions for our customers
Actively support our people
and the success of our
communities

Outlook
Downer issued revised guidance on 23 January 2020 and is targeting NPATA of
around $300 million before minority interests for the 2020 financial year.
20

Supplementary
information
21

22
Revenue $mEBITA $mEBITA marginROFE
5.7% v HY1928.0% v HY190.9pp v HY194.5pp v HY19
5.2%
5.6%
4.3%
0%
1%
2%
3%
4%
5%
6%
7%
HY20FY19HY19
26.4%
21.9%
0%
5%
10%
15%
20%
25%
30%
HY20HY19
2,178.0
2,061.0
0
500
1,000
1,500
2,000
2,500
HY20HY19
112.5
87.9
0
20
40
60
80
100
120
HY20HY19
Transport
Revenue $mROFE
16.8% v HY19(2.6%) v HY19(0.8pp) v HY19(5.7pp) v HY19
4.5%
5.4%
5.3%
0%
1%
2%
3%
4%
5%
6%
HY20FY19HY19
23.1%
28.8%
0%
5%
10%
15%
20%
25%
30%
35%
HY20HY19
1,416.1
1,212.5
0
500
1,000
1,500
HY20HY19
63.0
64.7
0
10
20
30
40
50
60
70
HY20HY19
EBITA $m
Utilities
EBITA margin

23
Facilities
Revenue $mEBITA $mEBITA marginROFE
5.4% v HY19(6.6%) v HY19(0.6pp) v HY19(0.2pp) v HY19
4.3%
5.0%4.9%
0%
1%
2%
3%
4%
5%
HY20FY19HY19
14.8%
15.0%
0%
2%
4%
6%
8%
10%
12%
14%
16%
HY20HY19
1,757.4
1,667.0
0
500
1,000
1,500
2,000
HY20HY19
75.9
81.3
0
20
40
60
80
100
HY20HY19
Revenue $mEBITA $mEBITA marginROFE
8.8% v HY1918.4% v HY190.4pp v HY194.6pp v HY19
Mining
5.6%
5.2%5.2%
0%
1%
2%
3%
4%
5%
6%
HY20FY19HY19
15.7%
11.1%
0%
5%
10%
15%
20%
HY20HY19
777.4
714.2
0
200
400
600
800
1000
HY20HY19
43.7
36.9
0
10
20
30
40
50
HY20HY19

24
EC&M
Revenue $mEBITA $mEBITA marginROFE
(25.3%) v HY19(>100%) v HY19(7.7pp) v HY19(31.3pp) v HY19
(5.3%)
2.0%
2.4%
-6%
-5%
-4%
-3%
-2%
-1%
0%
1%
2%
3%
4%
HY20FY19HY19
(9.9%)
21.4%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
HY20HY19
706.4
945.1
0
200
400
600
800
1,000
HY20HY19
(37.4)
22.4
-50
-40
-30
-20
-10
0
10
20
30
HY20HY19

25
Segment reporting
HY20
$m
TransportUtilities
Facilities
EC&MMiningUnallocatedTotal
Segment revenue1,876.61,416.11,752.8706.4753.83.26,508.9
Share of sales from JVs and
Associates
301.4-4.6-23.6-329.6
Total revenue
1
2,178.01,416.11,757.4706.4777.43.26,838.5
EBITDA175.378.6126.0(29.3)100.6(21.9)429.3
EBITA
2
112.563.075.9(37.4)43.7(42.9)214.8
Statutory EBIT108.061.971.0(37.4)43.7(66.8)180.4
EBITA margin5.2%4.5%4.3%(5.3%)5.6%3.1%
Net interest expense(53.5)
Tax expense(35.5)
Statutory Net profit after tax91.4
NPATA
2
115.5
1.Total revenue is a non-statutory disclosure and includes revenue from joint ventures, other allianc es and other income.
2.Downer calculates EBITA and NPATA by adjusting EBIT and NPAT to add back acquired intangible assets amortisation expense. Group HY20 $34.4m, $24.1m after-tax. (HY19: $31.4m, $22.0m after-tax)

Reconciliation of Facilities to Spotless result
26
HY20
$m
Facilities
segment
Less:
Hawkins
Building
Add:
Spotless
Utilities
Spotless
3
HY19
Spotless
Total Revenue
1
1,757.4(247.6)81.41,591.21,461.3
EBITA
2
75.9(6.3)6.375.982.2
EBIT71.0(5.7)6.371.676.8
Net Interest
Expense
(19.6)(20.3)
Tax Expense(15.6)(17.5)
NPAT36.439.0
NPATA
2
39.442.9
1.Total revenue is a non-statutory disclosure and includes revenue from joint ventures and other alliances and other income.
2.Downer calculates EBITA and NPATA by adjusting EBIT and NPAT to add back acquired intangible assets amortisation expense. Spotle ss HY20 $4.3m, $3.0m after-tax (HY19: $5.4m, $3.9m after-tax).
3.Spotless delisted on 30 August 2019. The Spotless Group Holdings Half Year Financial Statements are available on the Spotlesswebsite.

AASB 16 – Leases
27
Adopted from 1 July 2019
Significant impact on balance sheet with
$589.0m ROU asset and $748.3m lease
liability at 31 December 2019
Opening retained earnings decreased by
$66.0m
EBITDA improved as a result of $77.9m
lease rentals replaced by depreciation and
interest charges
Impact on NPATA is not material
Balance sheet
$m
Adoption
at
1 Jul 19
As at
31 Dec19
Right-of-use asset570.6589.0
Lease liabilities(727.8)(748.3)
Other balances
1
91.2
Equity (66.0)
1.Includes onerous lease provisions, lease incentives, and deferred tax impacts
2.Operating lease expens e that would have been recognis ed
Profit and loss
$m
Pro forma
pre AASB 16
AASB 16
impact
Reported
results
EBITDA351.477.9
2
429.3
Depreciation and
amortisation
(147.1)(67.4)(214.5)
EBITA204.310.5214.8
Amortisation of acquired
intangibles
(34.4)-(34.4)
Net interest expense(40.9)(12.6)(53.5)
Profit before tax129.0(2.1)126.9
Profit after tax92.9(1.5)91.4
NPATA117.0(1.5)115.5

Trading update with revised guidance for FY20 Downer suspends review of Mining business

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