Half Yearly Report and Accounts

Half Year Results26 February 2023DOWIndustrials

Page 1 of 1

27 February 2023

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 2022;
2. Condensed Consolidated Half-year Financial Report dated 31 December 2022;
3. Market release dated 27 February 2023; 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 DOWNER
www.downergroup.com

Results for announcement to the market
for the half-year ended 31 December 2022
Appendix 4D
Restated
(i)
31 Dec 2022
31 Dec 2021
%
$'m
$'m
change
Revenue from ordinary activities5,693.1 5,438.7
Other income17.7 131.6
Total revenue and other income from ordinary activities5,710.8 5,570.3 2.5%
Total revenue including joint ventures and other income 6,144.7 5,970.3 2.9%
129.8 167.4 (22.5%)
Earnin
gs before interest and tax and amortisation of acquired intangible assets (EBITA)
142.9 181.6 (21.3%)
Profit from ordinar
y activities after tax attributable to members of the parent entity
68.1 85.4 (20.3%)
77.3 95.8 (19.3%)
Restated
(i)
31 Dec 2022
31 Dec 2021
%
cents cents change
Basic earnings per share9.3 11.9 (21.8%)
Diluted earnings per share
(ii)
9.3 11.8 (21.2%)
Net tangible asset backing per ordinary share22.6 27.5 (17.8%)
Dividend
31 Dec 2022
31 Dec 2021
Interim Interim
Dividend per share (cents)5.0 12.0
Franked amount per share (cents) - -
Conduit foreign income (CFI) (%)44% 29%
Dividend record date
13/3/2023 24/2/2022
Dividend payable date11/4/2023 24/3/2022
Redeemable Optionally Adjustable Distributing Securities (ROADS)
Dividend per ROADS (in Australian cents)2.66 1.51
New Zealand imputation credit percentage per ROADS 100% 100%
ROADS payment dateQuarter 1 Quarter 2
Instalment date FY2023
15/9/2022 15/12/2022
Instalment date FY202215/9/2021 15/12/2021
Downer EDI's Dividend Reinvestment Plan (DRP) has been suspended.
For commentary on the results for the period and review of operations, please refer to the Directors' Report and separate media release.
Profit from ordinary activities after tax and before amortisation of acquired intangible
assets
(NPATA)
Earnings before interest and tax
(ii) At 31 December 2022, the ROADS were deemed anti-dilutive and consequently, remained at 9.3 cents per share.
(i) Decenber 2021 results have been restated to reflect the impact of historical misreporting of revenue and contract assets in one of Downer’s maintenance contracts in its Australian Utilities business.
1

Downer EDI Limited
ABN: 97 003 872 848
Condensed Consolidated
Financial Report
for the half-year ended
31 December 2022

ContentsHalf-year Report 2023
Contents
Directors' Report
Page 2
Auditor’s Signed Reports
Page 14Auditor's Independence Declaration
Page 15Independent Auditor's Review Report
Financial Statements
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 statements
Page 21-23Page 24-29Page 30-37Page 38-48
A1B1C1D1
A2B2C2D2
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A4B4C4D4
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5B5C5D5
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6B6C6D6
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7B7C7D7
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8B8C8D8
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Directors' Declaration
Page 49
#N/A
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#N/A
#N/A
#N/A
Disposal group
held for sale
#N/AContingent
liabilities
Equity accounted
investments
Other financial
assets and
liabilities
Acquisition of
businesses
#N/ADisposal of
businesses
Trade payables
and contract
liabilities
Issued capitalProperty, plant
and equipment
ReservesIntangible assets
Revenue
Employee benefits
expense
Individually
significant items
Earnings per share
Subsequent
events
ABCD
________________________________________________________________________
Segment
information
Trade receivables
and contract
assets
#N/A
#N/A
#N/A
#N/A
Borrowings
Financing facilities
Dividends
#N/A
About this
report
Business
performance
Capital structure
and financing
Other
disclosures
1

2

DIRECTORS’ REPORT
For the half-year ended 31 December 2022

The Directors of Downer EDI Limited (Downer) submit the condensed consolidated financial report of the Company
for the half-year ended 31 December 2022. 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:

Mark Peter Chellew (Chairman, Independent Non-executive Director)
Mark John Menhinnitt (Deputy Chairman, Independent Non-executive Director)
Grant Anthony Fenn (Managing Director and Chief Executive Officer)
Peter John Tompkins (Executive Director) – appointed on 1 February 2023
Mark James Binns (Independent Non-executive Director) – retired on 31 January 2023
Teresa Gayle Handicott (Independent Non-executive Director)
Nicole Maree Hollows (Independent Non-executive Director)
Adelle Maree Howse (Independent Non-executive Director)
Peter Lawrence 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 approximately 33,000 people, mostly in Australia and New Zealand.

Downer operates in sectors that are closely connected to the investment that is being driven by population growth
and urbanisation. These sectors include roads, rail, light rail, other public transport, power, gas, water,
telecommunications, health, education, defence and other government sectors.

These sectors are served by Transport, Utilities and Facilities.

SUSTAINABILITY

At Downer, sustainability means sustainable and profitable growth, providing value to customers, delivering
services in a safe and environmentally responsible manner, helping its people to be better and advancing the
communities in which the Group operates.

Downer’s commitments to sustainability are outlined in its policies, which are accessible from the Downer website
(www.downergroup.com). The Group’s 2022 Sustainability Report detailing Downer’s sustainability-related
performance for the financial year ended 30 June 2022 can be found on the Company website
(www.downergroup.com/2022sustainabilityreport).

During the period, Downer also released its first Climate Change Report, which was developed to provide
information on Downer’s response to climate change, including the risks and the opportunities that addressing
climate change presents. It covers Downer’s decarbonisation journey to date and achievements, Downer’s
pathway to net zero, and the pivotal role Downer can play in the energy transition. A copy of the report is
available on the Company website
(www.downergroup.com/climate-change-report).

A core element of Downer’s sustainability approach is to focus on its customers’ success. The Group’s core
operating philosophy, ‘Relationships creating success’, encapsulates this theme. With Downer’s services
impacting millions of lives every day, the sustainability of the Group’s operations is paramount – for its people,

3
partners, shareholders, customers and their customers. Downer delivers these services, working collaboratively
with its supply chain while managing the impacts of its activities on people, the environment and communities in
which the Group operates. Downer’s extensive capability is well-placed for the decarbonisation effort that is
required to meet Australia and New Zealand’s Net Zero emissions target. The Group understands that its ability to
do this is fundamental to Downer’s long-term success.
GROUP FINANCIAL PERFORMANCE
The main features of the result for the six-months ended 31 December 2022 were:

Total revenue
1
of $6.1 billion, up 2.9%
Statutory EBITA
2
of $142.9 million, down 21.3%; from $181.6 million
Statutory EBITA margin of 2.3% down from 3.0% at 31 December 2021
Statutory earnings before interest and tax (EBIT) of $129.8 million, down 22.5%; from $167.4 million
Statutory net profit after tax and before amortisation of acquired intangible assets
(NPATA) of
$77.3 million,
down 19.3%; from $95.8 million
Statutory net profit after tax (NPAT) of $68.1 million, down 20.6%; from $85.8 million.
Total re
venue, exc
luding contribution from divested Mining and Hospitality businesses in 1H22, increased by 8.9%.
This was led by Government and Health & Education in the Facilities segment, together with Telecommunications
in the Utilities segment.
Despite the strong revenue growth, EBITA has been negatively impacted by unprecedented wet weather, labour
shortages and productivity including c
ontract and project losses in Utilities.
Cash conversion for the period was 8.5% mainly due to timing of supplier payments on the completion of the Sydney
Growth Trains (SGT) project, settlement of prior period project claims and timing of collections. Weak operating
cash flow performance was the primary driver for the increase in gearing, up 7% to 24.8% since June 2022.
Net finance costs decreased by $5.5 million or, 12.0%, to $40.3 million driven by lower line fees
from facilities
refinanced at lower margins in FY22, lower lease interest expense, partially offset by increase in average debt
drawn as a result of lower operating cashflows.
The effective tax rate of 23.9% is lower than the statutory corporate tax rate of 30.0% primarily due to the impact of
non-taxable distributions from joint ventures and lower tax
rates in overseas jurisdictions (e.g. New Zealand).
Individually Significant Items (ISIs) totalled $9.3 million after-tax and relate to the fair value movement of the Downer
Contingent Share Options (DCSO) issued in FY21 as part of the acquisition of the remaining 12.2% interest in
Spotless. Refer to Note B4 to the Financial Report for further details.
On 8 December 2022, Downer announced that it had identified the historical misreporting of revenues and work in
progress in one of its maintenance contracts in its Australian Utilities business.
The contract is for the supply and maintenance, new connections, faults and capital works services.
As a result of the historical misreporting, post-tax earnings were overstated by a total of $22.2 million between
April 2020 and 30 June 2022, of which $1.7 million relates to FY20, $8.8 million relates to FY21 and
$11.7 million relates to FY22. Post tax earnings for the contract for the six months to 31 December 2022 was
a loss of $12 million.
Downer is confident that the misreporting was
specific to the contract and not replicated elsewhere.
1
Total revenue is a non-statutory disclos
ure and includes revenue, other income and notional revenue from joint ventures and other alliances
not proportionately consolidated.
2
Earnings before interest, tax and amortisation of acquired intangibles (EBITA).

4

The table below provides a comparison of the underlying
1
earnings for HY23 versus the results for HY22 and a
reconciliation to statutory NPAT:

Underlying EBITA
1
(A$m)
Reporting
Segment
HY23 HY22
5

Variance
(%)
Transport
2
Transport 88.7 103.8 (14.5%)
Utilities
2
Utilities (5.2) 40.5 >(100%)
Facilities Facilities 99.0 89.1 11.1%
Urban Services Businesses 182.5 233.4 (21.8%)
Business disposed
3

Facilities /All other
segments
- (4.4) 100.0%
Corporate Unallocated (48.9) (52.0) 6.0%
Group Underlying EBITA
4
133.6 177.0 (24.5%)
Amortisation of acquired intangibles (pre-tax) (13.1) (14.2) 7.7%
Underlying EBIT 120.5 162.8 (26.0%)
Net interest expense (40.3) (45.8) 12.0%
Tax expense (21.4) (32.6) 34.4%
Underlying NPAT 58.8 84.4 (30.3%)
Amortisation of acquired intangibles (post tax) 9.2 10.0 (8.0%)
Underlying NPATA
4
68.0 94.4 (28.0%)
Items outside of underlying NPATA (net of tax) 9.3 4.6 >100%
Tax effect on items outside NPATA - (3.2) 100.0%
Statutory NPATA 77.3 95.8 (19.3%)
Amortisation of acquired intangibles (post tax) (9.2) (10.0) 8.0%
Statutory NPAT 68.1 85.8 (20.6%)

1 The underlying result is a non-IFRS measure that is used by Management to assess the performance of the business. Non-IFRS
measures have not been subject to audit or review.
2 HY22 Transport and Utilities contribution have been restated as a result of the change in operating segments (refer to Note B1).
3 Represents the contribution of Mining ($8.1 million) and Hospitality (loss $12.5 million) businesses disposed in prior period.
4 Downer calculates EBITA and NPATA by adjusting EBIT and NPAT to add back acquired intangible assets amortisation expense.
5 HY22 results have been restated (Refer to Note A for further details).

5

EXPENSES

Total expenses increased by 3.3%, or $178.2 million, compared to the prior corresponding period (pcp). The pcp
included $100.2 million of ISIs. Excluding the impact of ISIs, total expenses increased by 5.2%, or $278.4 million.

Downer’s cost base (including ISIs) by type of expense compared to the pcp is as follows:

Employee benefits expenses decreased by 7.2%, or $135.4 million, to $1.8 billion and represents 31.4% of
Downer's cost base. Subcontractor costs increased by 16.0%, or $341.1 million, to $2.4 billion and represents
43.0% of Downer's cost base (38.3% in the pcp). Labour market conditions have resulted in increased reliance on
subcontractor labour, increasing the mix in total personnel costs. Compounding this, was the exit of Mining and
Hospitality in the comparative period which had a relatively low reliance on subcontractor labour.

Raw materials and consumables costs increased by 12.8%, or $83.9 million, to $0.7 billion and represents 13.2%
of Downer's cost base. The increase is mainly due to mix of raw materials used in line with increased activities in
building activities (Facilities segment), and in water projects (Utilities segment) together with increase in Bitumen
prices impacting the Road businesses (Transport segment).

Plant and equipment costs decreased by 10.7%, or $26.7 million, to $0.2 billion and represents 4.0% of Downer's
cost base. Total depreciation and amortisation decreased by 19.7%, or $17.5 million, to $0.2 billion and represents
2.8% of Downer's cost base. The decrease in plant and equipment costs, along with depreciation and amortisation,
is largely a result of divesting Mining in the comparative period.

Other expenses from ordinary activities, which includes communication, travel, professional fees and occupancy
costs, decreased by 5.6%, or $18.4 million and represents 5.6% of Downer's cost base.

6

CASH FLOW

Operating Cash Flow

Net cash generated by operating activities before interest and tax of $23.9 million represents a cash conversion of
8.5% of earnings before interest, tax, depreciation and amortisation (EBITDA).

Operating cash outflow of $35.4 million was predominantly driven by timing of supplier payments on the completion
of the SGT project, settlement of prior period project claims and timing of collections.

Investing Cash Flow

Total investing cash outflow of $89.8 million is $207.8 million lower than pcp mainly driven by $247.6 million
proceeds from disposal activities during pcp.

Excluding payments for the purchase of and proceeds from the disposal of businesses in the pcp, investing cash
outflow decreased $16.9 million, or 15.8%, largely due to the comparative period including Mining, along with lower
IT spend.

DEBT AND BONDING

The Group’s performance bonding facilities totalled $1,971.4 million at 31 December 2022 with $581.3 million
undrawn. There is sufficient available capacity to support the ongoing operations of the Group.

As at 31 December 2022, the Group had liquidity of $1.6 billion comprising cash balances of $450.4 million and
undrawn committed debt facilities of $1.2 billion.

The only Group debt facility maturing in the 12 months to 31 December 2023 is a $50 million committed debt
facility.

During the period, a total of 3.85 million shares were purchased as part of the share buyback programme, for a
total consideration of $17.8 million.

The outlook on the Group’s BBB credit rating was revised from Stable to Negative by Fitch in December 2022.

7

BALANCE SHEET

The balance sheet remains in a strong position with net assets of $2.8 billion.

Since 30 June 2022, the net assets of the Group decreased by $24.6 million or 0.9% to $2.8 billion mainly driven
by the reduction in cash, offset by the increase in inventories and the reduction in trade payables and contract
liabilities as shown below:

Movement in Net Assets ($m)

Net debt is calculated as borrowings (excluding lease liabilities) less cash and cash equivalents. Net debt has
increased by $315.7 million mainly driven by $288.1 million lower cash position since 30 June 2022 as a result of
lower operating cashflows in the period.

Inventories increased by $62.5 million to $271.4 million largely due to an increase in Bitumen stock levels and
additional components and spares required for key projects.

Trade payables and contract liabilities have decreased by $254.1 million to $2.0 billion as a result of the settlement
of material supplier payments on the SGT project, reclassification of Transport Projects to Asset Held for Sale, wind
down of the Hospitality business in the comparative period, together with general working capital movements.

Total Equity decreased by $24.6 million as a result of the $17.8 million in shares bought back and $86.4 million
dividends paid during the period, which was partially offset by $68.1 million net profit after tax for the period ended
31 December 2022.

8

SEGMENT FINANCIAL PERFORMANCE

TRANSPORT

Transport comprises Downer’s Road Services, Rail and Transit Systems and Projects 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.
2 Downer calculates EBITA by adjusting EBIT to add back acquired intangibles amortisation expense. Due to rounding, divisional percentages
do not add up precisely to 100%.

Transport revenue increased by 1.2%, or $33.3 million, to $2.7 billion, while EBITA decreased by 14.5% to
$88.7 million. The Roads Services business continued to be heavily impacted by wet weather, labour market
challenges and increased transport and logistics costs. Strong revenue and margin performance on long term rail
maintenance contracts were impacted by bid costs.

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
28,000 kilometres of road in Australia and more than 25,000 kilometres in New Zealand.

Downer creates and delivers solutions to its 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.

Rail and Transit Systems

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 its 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.

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,
Adelaide Metro and an 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.

Projects

Downer delivers multi-disciplined infrastructure solutions to customers within the transport and power sector. The
services provided by Downer include the design and construction of light rail, heavy rail, signalling, track and station
works, rail safety technology, bridges and roads. Downer has a long history of delivering infrastructure projects
under a variety of contracting models. Downer’s integrated capabilities enable intelligent transport solutions, road
network management and maintenance.

9

UTILITIES

Downer offers a range of services to customers across the power and gas, water, telecommunications and
renewables 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.
2 Downer calculates EBITA by adjusting EBIT to add back acquired intangibles amortisation expense. Due to rounding, divisional percentages
do not add up precisely to 100%.

Utilities revenue increased by 12.3%, or $124.3 million, to $1.1 billion, while EBITA decreased $45.7 million to a
loss of $5.2 million. Despite the Telecommunications business in both Australia and New Zealand performing well
(both revenue and EBITA), the Utilities segment EBITA was heavily impacted by losses in a Power Maintenance
contract, a Water construction project and in a renewable windfarm project in New Zealand together with losses in
the meter reading business associated with labour availability, productivity and weather related challenges.

Power and Gas

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

Downer 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.

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 design
construction, maintenance and rehabilitation, desalination and biosolids treatment.

As a 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.

Telecommunications

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 designing, engineering, consulting, maintenance, operations and smart metering.

10

FACILITIES

The Facilities service line operates in Australia and New Zealand across a range of industry sectors including
defence, education, health, government, power & energy and industrial & marine.

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.
2 Downer calculates EBITA by adjusting EBIT to add back acquired intangibles amortisation expense. Due to rounding, divisional percentages
do not add up precisely to 100%.

Facilities revenue increased by 11.8%, or $238.3 million, to $2.3 billion, with a strong increase in EBITA of 11.1%
to $99.0 million. This was primarily driven by Government and Health & Education (including the reset of the
reviewable services at Royal Adelaide Hospital and Bendigo Hospital on 1 July 2022), and a recovery in Power &
Energy post a period of projects delays during COVID-19.

Facilities

Downer is the largest integrated facilities management services provider in Australia and New Zealand, delivering
property and facilities management services to government departments, agencies and authorities at the Federal,
State and municipal level. With 21 Public Private Partnership projects across the defence, education, health and
leisure sectors, Downer provides innovative management of its customers’ assets across their lifecycle.

Downer has a 40-year history of supporting the daily operations of hospitals across Australia and New Zealand,
delivering a range of services that create a safe environment for hospital staff, patients and their guests. At leading
schools and tertiary institutions, Downer helps to create world-class learning environments through integrated
services such as catering, building and grounds maintenance, conserving energy with air-conditioning and lighting
solutions and ensuring a secure environment.

Power & Energy and Industrial & Marine

Downer is a leading provider of asset maintenance and specialist services to Australia's critical economic
infrastructure including the oil and gas, power generation and industrial sectors. As a trusted partner with a leading
safety record, Downer optimises the reliability, efficiency and whole-of-life costs of its customers’ assets through
long-term relationship-based contracts.

Mineral Technologies

Downer’s Mineral Technologies business is the world leader in fine physical mineral separation solutions, including
spiral gravity concentrators and magnetic and electrostatic separation technology. Mineral Technologies delivers
innovative process solutions for iron ore, mineral sands, silica sands, coal, chromite, gold, tin, tungsten, tantalum
and several other fine materials.

ALL OTHER SEGMENTS
All other segments reflect the contribution of divested business units of Mining and Hospitality in the pcp. As the
divestment program is complete, there was no contribution to the Group results during the period.

11
DIVIDENDS
The Downer Board resolved to pay an interim dividend of 5.0 cents per share, unfranked, payable on 11 April 2023
to shareholders on the register at 13 March 2023. The portion of the unfranked dividend amount that will be paid
out of Conduit Foreign Income (CFI) is
44.0%.
1

The Board also determined to continue to pay a fully imputed dividend on the ROADS security, which having been
reset on 15 June 2022 has a yield of 8.14% per annum payable quarterly in arrears, with the next payment due on
15 March 2023. As this dividend is fully imputed (the New Zealand equivalent of being fully franked), the actual
cash yield paid by Downer will be 5.86% per annum until the next reset date.
Consistent with the prior year, the Company’s Dividend Reinvestment Plan remains suspended.
ZERO HARM
Downer’s Lost Time Injury Frequency Rate (LTIFR) decreased to 0.72 from 0.97 and its Total Recordable Injury
Frequency Rate (TRIFR) decreased to 2.30 from 2.57 per million hours worked
2
.
Tragically, in December 2022, an employee from Downer's Utilities business was undertaking meter reading
duties for our customer, Energy Queensland, on a property in Greenbank, south of Brisbane, when fatally
attacked by dogs on the property.
Downer extends its sincerest condolences to the worker’s family
and colleagues and continue to support them
following this tragic incident.
Downer Group Safety Performance (12-month rolling frequency rates)
1
This is relevant only for non-resident shareholders. The effect is that the portion of the unfranked dividend paid out of CFI is not subject to
Australian dividend withholding tax.
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 plus medically treated injuries (MTIs) for employees and contractors. Total Recordable Injury Frequency Rate (TRIFR) is
the number of TRIs per million hours worked.

12
OUTLOOK
On 8 December 2022, Downer announced that it had revised its guidance for FY23 as trading for October and
November indicated that guidance was unlikely to be met. Guidance was restated as $210 million – $230 million
NPATA assuming no further material COVID-19, weather, labour shortages or other disruptions and excluding
any prior period impact from the Utilities revenue recognition issue.
Since 8 December, as part of the half year reporting process, Downer has conducted a detailed re-forecast
review and considers it appropriate to further adjust the guidance for the following items:
 Losses associated with the Utilities power maintenance contract. Whilst the contract is not considered
onerous, further losses will impact H2 until the contract reset and recovery plan take effect ($12 million
post tax);
 Heightened risk of Water project losses due to unrecoverable prolongation costs as storms and flooding
continue to impact completion ($12 million post tax);
 A slowdown in Government minor capital works based on recent customer feedback ($8 million post tax);
and
 The impact of recent floods and storms in the North Island of New Zealand have materially impacted
current operations and whilst we expect this to present opportunities in FY24, the 2H23 pipeline has been
impacted ($8 million post tax).
Downer now expects underlying FY23 NPATA to be between $170 million – $190 million assuming no further
material COVID-19, weather, labour shortages or other disruptions, and excluding restructuring costs.
SUBSEQUENT EVENTS

On 6 February 2023 it was announced that Downer had been selected as the preferred applicant to deliver
the Queensland Train Manufacturing Program (QTMP) which will include design, manufacture,
commissioning and maintenance of rollingstock fleet.
 On 22 February 2023, the Group announced it had entered into an agreement to sell its Australian
Transport Projects business to a wholly owned Australian subsidiary of Gamuda Berhad (Gamuda), a large
engineering and construction company listed in Malaysia. The sale price represents an enterprise value of
$212 million and Downer will receive cash proceeds at the completion of the transaction, which is subject
to Foreign Investment Review Board approval and other customary conditions, and is expected to occur
before 30 June 2023.
 On 24 February 2023 the Group entered into a Relief agreement in one of Downer’s maintenance
contracts in its Australian Utilities business.

Downer has not incurred any significant damage to its assets resulting from the floods and storms events
in the North Island of New Zealand in January and February 2023, however the events will materially
impact operational performance through the remainder of the financial year.
Apart from matters identified above, no other matters or circumstance has arisen since 31 December 2022 that has
significantly affected, or may significantly affect the Group’s operations in future financial years, the results of those
operations in future financial years, or the Group’s state of affairs in future financial years.

13
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
M P Chellew G A Fenn
Chairman Managing Director and Chief Executive Officer
Sydney, 27 February 2023

KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated
with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and
logo are trademarks used under license by the independent member firms of the KPMG global organisation. 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 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 Financial Report
of Downer EDI Limited does not comply
with the Corporations Act 2001, including:
•
giving a true and fair view of the
Group’s
financial position as at 31
December 2022 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 Financial Report
comprises:
•Condensed Consolidated Statement of Financial
Position as at 31 December 2022;
•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 D comprising a summary of significant
a
ccounting policies and other explanatory
information; and
•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.
Basis for Conclusion

We conducted our review in accordance with ASRE 2410 Review of a Financial Report Performed by
the Independent Auditor of the Entity. Our responsibilities are further described in the Auditor’s
Responsibilities for the Review of the Financial Report section of our report.
We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (the Code) that are relevant to our audit of the annual financial report in Australia. We
have also fulfilled our other ethical responsibilities in accordance with these requirements.
Emphasis of matter – restatement of comparative balances
Without modifying our review conclusion expressed above, we draw attention to Note A to the
Condensed Consolidated Financial Report, which states that amounts reported previously in the 30
J
une 2022 and 31 December 2021 financial reports have been restated for one maintenance contract.

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; and
•such internal control as the Directors determine is necessary to enable the preparation of the
Condensed Consolidated Half-year Financial Report that gives a true and fair view and is free
from material misstatement, whether due to fraud or error.
Auditor’s Responsibilities for the Review of the Half-year Financial Report

Our responsibility is to express a conclusion on the Half-year Financial Report based on our review.
ASRE 2410 requires us to conclude whether we have become aware of any matter that makes us
believe that the Condensed Consolidated Half-year Financial Report does not comply with the
Corporations Act 2001 including giving a true and fair view of the Group’s financial position as at 31
December 2022 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.
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.
KPMG
Nigel Virgo Stephen Isaac
Partner Partner
Sydney
27 February 2023

Condensed Consolidated Statement of Profit or Loss and Other Comprehensive IncomeHalf-year Report 2023
Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income
for the half-year ended 31 December 2022
Restated
(i)
DecDec
2022 2021
Note$'m$'m
5,693.1 5,438.7
17.7 131.6
B2 5,710.8 5,570.3
B3 (1,756.8)(1,892.2)
(2,405.6)(2,074.5)
(739.7)(655.8)
(222.3)(249.0)
(74.9)(83.9)
(85.9)(94.4)
B4
-(38.8)
(311.3)(329.7)
(5,596.5)(5,418.3)
D5 15.5 15.4
129.8 167.4
3.0 1.1
(10.8)(11.7)
(32.5)(35.2)
(40.3)(45.8)
89.5 121.6
(21.4)(35.8)
68.1 85.8
-0.4
68.1 85.4
68.1 85.8
0.2 -
17.6 1.9
1.1 1.6
(9.9)9.4
2.6 (3.2)
11.6 9.7
-(0.3)
11.6
10.0
11.6 9.7
79.7 95.5
B5 9.3 11.9
B5 9.3 11.8
- Net (loss)/gain on cross currency and interest rate swaps taken to equity
Other comprehensive income for the period
Total comprehensive income for the period
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
- Exchange differences arising on translation of foreign operations
- Net gain on foreign currency forward contracts taken to equity
Items that will not be reclassified subsequently to profit or loss
- Change in fair value of unquoted equity investments
Profit for the period is attributable to:
Income tax expense
- Non-controlling interest
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 48.
- Income tax effect of items above
Other comprehensive income for the period (net of tax)
Other comprehensive income for the period is attributable to:
- Non-controlling interest
- Members of the parent entity
Diluted earnings per share
(i) December 2021 results have been restated (Refer to Note A for further details).
Basic earnings per share
Other expenses from ordinary activities
Lease finance costs
Total expenses
Revenue
Other income
Total revenue and other income
Employee benefits expense
Subcontractor costs
Raw materials and consumables used
Plant and equipment costs
Depreciation on leased assets
Earnings per share (cents)
Other depreciation and amortisation
Impairment of non-current assets
Profit after income tax
Share of net profit of joint ventures and associates
Earnings before interest and tax
Finance income
Other finance costs
Net finance costs
Profit before income tax
- Members of the parent entity
Profit for the period
17

Condensed Consolidated Statement of Financial PositionHalf-year Report 2023
Condensed Consolidated Statement of Financial Position
as at 31 December 2022
Restated
(i)
Dec Jun
2022 2022
Note $'m $'m
ASSETS
Current assets
Cash and cash equivalents450.4 738.5
Trade receivables and contract assetsD1 1,911.2 1,921.2
Other financial assetsC6 9.0 28.2
Inventories271.4 208.9
Current tax assets40.8 40.1
Prepayments and other assets37.5 59.3
Assets held for saleD8 163.3 -
Total current assets2,883.6 2,996.2
Non-current assets
Trade receivables and contract assetsD1 122.7 121.6
Equity accounted investmentsD5 158.8 162.8
Property, plant and equipmentD3 916.6 924.4
Right-of-use assets437.5 436.2
Intangible assets
D4 2,701.5 2,741.4
Other financial assetsC6 50.4 32.7
Deferred tax assets4.0 3.8
Prepayments and other assets16.2 10.1
Total non-current assets4,407.7 4,433.0
Total assets7,291.3 7,429.2
LIABILITIES
Current liabilities
Trade payables and contract liabilitiesD2 1,951.1 2,208.1
BorrowingsC1 46.7 -
Lease liabilities134.0 132.4
Other financial liabilitiesC6 18.9 26.4
Employee benefits provision277.6 303.5
Other provisions56.4 54.5
Current tax liabilities0.7 5.2
Liabilities held for saleD8 145.4 -
Total current liabilities2,630.8 2,730.1
Non-current liabilities
Trade payables and contract liabilitiesD2 49.4 46.5
Borrowings
C1 1,342.6 1,361.7
Lease liabilities408.5 411.5
Other financial liabilitiesC6 2.7 5.0
Employee benefits provision16.4 18.7
Other provisions19.2 18.8
Deferred tax liabilities34.5 25.1
Total non-current liabilities1,873.3 1,887.3
Total liabilities4,504.1 4,617.4
Net assets2,787.2 2,811.8
EQUITY
Issued capitalC3 2,642.4 2,660.2
ReservesC4 23.6 12.1
Retained earnings121.2 139.5
Total equit
y2,787.2 2,811.8
The condensed consolidated statement of financial position should be read in conjunction with the accompanying notes on pages 21 to
48.
(i) Balances have been restated (Refer to Note A for further details).
18

Condensed Consolidated Statement of Changes in EquityHalf-year Report 2023
Condensed Consolidated Statement of Changes in Equity
for the half-year ended 31 December 2022
Dec 2022
$'m
Issued
capitalReserves
Retained
earningsTotal
Balance at 1 Jul
y 2022
2,660.2 12.1 161.7 2,834.0
Prior period restatement in relation to revenue
recognition
(i)
- - (22.2)(22.2)
Restated balance at 1 Jul
y 2022
2,660.2 12.1 139.5 2,811.8
Profit after income tax
- - 68.1 68.1
Other comprehensive income for the year (net of tax)
- 11.6 - 11.6
Total com
prehensive income for the period- 11.6 68.1 79.7
Share-based emplo
yee benefits expense
- (0.4)- (0.4)
Income tax relating to share-based transactions
- 0.3 - 0.3
Group on-market share bu
y-back
(17.8)- - (17.8)
Payment of dividends
(ii)
- - (86.4)(86.4)
Balance at 31 December 20222,642.4 23.6 121.2 2,787.2
Dec 2021
$'m
Issued
capitalReserves
Retained
earnings
Total
attributable
to owners
of the
parent
Non-
controlling
interestTotal
Balance at 1 Jul
y 20212,802.6 (31.2)181.5 2,952.9 4.5 2,957.4
Prior period restatement in relation to revenue
recognition
(i)
- - (10.6)(10.6)- (10.6)
Restated balance at 1 Jul
y 20212,802.6 (31.2)170.9 2,942.3 4.5 2,946.8
Profit after income tax
(i)
- - 85.4 85.4 0.4 85.8
Other comprehensive income for the year (net of tax)
- 10.0 - 10.0 (0.3)9.7
Total com
prehensive income for the period
- 10.0 85.4 95.4 0.1 95.5
Vested executive incentive share transactions0.2
(0.2)- - - -
Vested Downer Contin
gent Share Options
(iii)
- 16.0 - 16.0 - 16.0
Share-based emplo
yee benefits expense- 2.0 - 2.0 - 2.0
Group on-market share bu
y-back(99.0)- - (99.0)- (99.0)
Disposal of business- 7.2 - 7.2 (4.6)2.6
Payment of dividends
(iv)
- - (86.7)(86.7)- (86.7)
Restated balance at 31 December 2021
2,703.8 3.8 169.6 2,877.2 - 2,877.2
The condensed consolidated statement of changes in equity should be read in conjunction with the accompanying notes on pages 21 to
48.
(iii) On 24 August 2021, the Target Price Condition of the Tranche 1 Series Downer Contingent Share Option was satisfied resulting in 2,499,264 shares exercised at
$6.382 per share.
(iv) Relates to the 2021 final dividend and $3.0 million ROADS dividends paid during the financial period.
(ii) Relates to the 2022 final dividend and $5.3 million ROADS dividends paid during the financial period.
(i) Balances have been restated (Refer to Note A for further details).
19

Condensed Consolidated Statement of Cash FlowsHalf-year Report 2023
Condensed Consolidated Statement of Cash Flows
for the half-year ended 31 December 2022
Dec Dec
2022 2021
Note $'m $'m
6,099.6 6,349.8
(6,095.4)(6,067.3)
D5 19.7 11.6
23.9 294.1
2.5 1.0
(10.8)(11.7)
(31.9)(37.1)
(19.1)24.1
(35.4)270.4
15.7 44.6
(85.8)(117.9)
(14.4)(22.8)
D6 - (0.1)
D6 - (22.8)
D7 - 247.6
(6.9)(0.8)
1.6 (9.8)
(89.8)118.0
C3(17.8)(99.0)
7,029.0 5,214.8
(7,010.1)(5,468.5)
(81.9)(85.0)
(86.4)(86.7)
(167.2)(524.4)
(292.4)(136.0)
738.5 811.4
4.3 1.3
450.4 676.7
Payments for intangible assets
Payments for acquisition of businesses (net of cash acquired)
Cash flows from financing activities
Group on-market share buy-back
Advances from/(to) equity accounted investments
Proceeds from sale of business (net of cash disposed)
The condensed consolidated statement of cash flows should be read in conjunction with the accompanying notes on pages 21 to 48.
Repayments of borrowings
Dividends paid
Net cash used in financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Payment of principal of lease liabilities
Cash and cash equivalents at the end of the period
Effect of exchange rate changes
Net cash generated by operating activities before interest and tax
Payments for property, plant and equipment
Cash flows from operating activities
Receipts from customers
Distributions from equity accounted investees
Payments to suppliers and employees
Cash flows from investing activities
Proceeds from sale of property, plant and equipment
Interest paid on lease liabilities
Proceeds from borrowings
Interest received
Investment in equity accounted and other investments
Net cash (used in)/generated by investing activities
Income tax (paid)/received
Interest and other costs of finance paid
Net cash (used in)/generated by operating activities
Payments of deferred consideration on acquisition of businesses
20

Notes to the condensed consolidated financial statementsHalf-year Report 2023
Notes to the condensed consolidated financial statements
for the half-year ended 31 December 2022
(a) New and amended accounting standards and interpretations adopted by the Group
(b) New accounting standards and interpretations not yet adopted
- AASB 2020-3 Amendments to Australian Accounting Standards - Annual Improvements 2018-2020 and Other Amendments.
- AASB 2014-10 Amendments to Australian Accounting Standards - Sale or Contribution of Assets between an Investor and its
Associate or Joint Venture.
- Amendments to AASB 116 - Property, Plant and Equipment: Proceeds before Intended Use.
- AASB 2022-1 Amendments to Australian Accounting Standards - Initial Application of AASB 17 and AASB 9 - Comparative
Information.
- AASB 2020-5 Amendments to Australian Accounting Standards - Insurance Contracts.
- AASB 2020-1 and 2020-6 Classification of liabilities as current or non-current.
None of the above new and amended accounting standards have had a significant impact on the Group's consolidated financial report.
- Amendments to AASB 16 Leases - Lease Liability in a Sale and Leaseback.
- AASB 17 Insurance Contracts.
- Amendments to AASB 137 - Onerous Contracts - Cost of Fulfilling a Contract.
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.
The Financial Report was authorised for issue by the Directors on 27 February 2023.
New Accounting Standards
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.
During the 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 2022, as follows:
- Reference to the Conceptual Framework (Amendments to AASB 3).
- AASB 2021-2 Amendments to Australian Accounting Standards - Disclosure of Accounting Policies and Definition of Accounting
Estimates.
- AASB 2021-5 Amendments to Australian Accounting Standards - Deferred Tax related to Assets and Liabilities arising from a Single
Transaction.
Statement of compliance
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).
A
About this report
The Financial Report does not include all the information required for an annual financial report and should be read in conjunction with
the 2022 Annual Report.
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.
21

Notes to the condensed consolidated financial statementsHalf-year Report 2023
Notes to the condensed consolidated financial statements
for the half-year ended 31 December 2022
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 2022 Annual Report.
Accounting estimates and judgements
Rounding of amounts
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 condensed consolidated financial report. 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.
22

Notes to the condensed consolidated financial statementsHalf-year Report 2023
Notes to the condensed consolidated financial statements
for the half-year ended 31 December 2022
30-Jun-22 Adjustment30-Jun-22
ReportedRestated
Note$'m$'m$'m
Trade receivables and contract assets (Current)D1 1,953.0 (31.8)1,921.2
Other assets5,508.
0-
5,508.
0
T
otal assets7,461.0 (31.8)7,429.2
Deferred tax liabilities34.
7(
9.6)25.
1
O
ther liabilities4,592.
3-
4,592.
3
To
tal liabilities4,627.
0(
9.6)4,617.
4
Net
assets2,834.0 (22.2)2,811.8
Retained earnings161.7 (22.2)139.5
Other equity2,672.
3-
2,672.
3
T
otal equit
y2,834.0 (22.2)2,811.8
31-Dec-21 Adjustment31-Dec-21
ReportedRestated
Note$'m$'m$'m
Revenue5,443.
3(
4.6)5,438.
7
O
ther income131.
6-
131.
6
T
otal revenue and other incomeB2 5,574.
9(
4.6)5,570.
3
T
otal expenses(5,418.3)-
(
5,418.3)
Share of net profit of joint ventures and associates15.4 -15.
4
Earni
ngs before interest and tax172.0 (4.6)167.4
Net finance costs(45.8)-
(
45.8)
Profit before income tax126.
2(
4.6)121.
6
I
ncome tax expense(37.2)1.4 (35.8)
Profit after income tax89.0 (3.2)85.8
Other comprehensive income for the period9.7 -9.
7
T
otal comprehensive income for the period98.7 (3.2)95.5
31-Dec-21 Adjustment31-Dec-21
NoteReportedRestated
Basic earnings per share (cents)B5 12.4 (0.5)11.9
Diluted earnings per share (cents)B5 12.3 (0.5)11.8
i.
I
mpact on Condensed Consolidated Statement of Financial Position
ii. Impact on Condensed C
onsolidated Statement of Profit or Loss and Other Comprehensive Income
iii. Imp
act on total earnings per share
There is no impact on the condensed consolidated statement of cash flows resulting from the restatement.
Restatement of comparative balances
Downer has identified certain accounting adjustments in its Australian Utilities business involving historical misreporting of revenue and
contract assets in one of Downer's maintenance contracts. As a consequence, the Group identified accounting adjustments to prior
periods, including financial years 2020, 2021 and 2022 in relation to the measure of progress. The adjustments have been corrected by
restating each of the affected financial statement line items for prior periods.
Opening retained earnings has been restated. The following tables summarises the impacts on the Group’s Condensed Consolidated
financial statements.
Note: Opening Retained Earnings at 1 July 2021 has been adjusted by $10.6 million as a result of the restatement.
23

Notes to the condensed consolidated financial statementsHalf-year Report 2023
Notes to the condensed consolidated financial statements
for the half-year ended 31 December 2022
B1. Segment informationB4. Individually significant items
B2. RevenueB5. Earnings per share
B3. Employee benefits expenseB6. Subsequent events
Segment
Transport
Utilities
Facilities
All other
segments
B
Business performance
B1. Segment information
Identification of reportable segments
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 recurrin
g basis.
The reportable segments are based on a combination of operating segments determined by the similarity of the services provided, the
sources of the Group’s major risks that could therefore have the greatest effect on the rates of return and their quantitative contribution
to the Group's results. On 1 September 2022, the Power Systems business unit, transitioned to the Utilities Division to consolidate
Utilities work under a single division creating synergies and further opportunities in the Power, Water and Renewables sectors.
Consequently, Power Systems now forms part of the Utilities segment (previously reported as part of the Transport segment). As a
result, prior period comparative segment information has been restated.
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.
Segment description
Comprises the Group's road services, transport infrastructure and rail businesses. Downer’s road and transport
infrastructure services include: road network management; routine road maintenance; asset management systems;
spray sealing; asphalt laying; manufacture and supply of bitumen-based products and asphalt products; the use of
recycled products and environmentally sustainable methods to produce asphalt; landfill diversion solutions; intelligent
transport systems; design and construction of light rail and heavy rail networks; signalling; track and station works; rail
safety technology; and bridges. The Rail business spans all light rail and heavy rail sectors, from rollingstock to
infrastructure; from design and manufacture to through-life-support including fleet maintenance, operations and
comprehensive overhaul of assets.
Comprises the Group's power, gas, water and telecommunications businesses. This includes: planning, designing,
constructing, operating, maintaining, managing and decommissioning power and gas network assets; providing
complete water lifecycle solutions for municipal and industrial water users including water and wastewater treatment,
network construction and rehabilitation; and end-to-end technology and communications solutions including design, civil
construction, network construction, operations and maintenance across fibre, copper and radio networks.
Facilities operates in Australia and New Zealand and provides outsourced facility services to customers across a diverse
range of industry sectors including: defence; education; government; healthcare; resources; leisure; assets services and
hospitality. Facilities provides technical and engineering services; maintenance and asset management services
including shutdowns, turnaround and outage delivery; operations maintenance, refrigeration solutions and ongoing
management of strategic assets across a range of sectors. It also provides feasibility studies; engineering design;
procurement and construction; commissioning and decommissioning services; and design and manufacture of mineral
process equipment as well as building and construction solutions across a variety of sectors in New Zealand.
Prior period comprises of the Group's Mining operating segment. The Mining divestment was completed with Otraco and
Open Cut Mining East disposed of during the financial year ended 30 June 2022.
The reportable segments identified within the Group are outlined as follows:
24

Notes to the condensed consolidated financial statementsHalf-year Report 2023
Notes to the condensed consolidated financial statements
for the half-year ended 31 December 2022
Dec 2022
$'m
Transport Utilities Facilities
All other
segments
UnallocatedTotal
Segment revenue and other income2,308.5 1,136.2 2,250.9 - 15.2 5,710.8
389.6 - - - 44.3 433.9
2,698.1 1,136.2 2,250.9 - 59.5 6,144.7
88.7 (5.2)99.0 - (39.6)142.9
Amortisation of acquired intangibles
(1.9)(0.2)
(2.9)- (8.1)(13.1)
Total reported segment results (EBIT)86.8 (5.4)96.1 - (47.7)129.8
Dec 2021
Restated
(ii)
$'m
Transport Utilities Facilities
All other
segments
UnallocatedTotal
Segment revenue and other income2,295.6 1,011.9 2,012.3 242.8 7.7 5,570.3
369.2 - 0.3 - 30.5 400.0
2,664.8 1,011.9 2,012.6 242.8 38.2 5,970.3
103.8 40.5 76.6 8.1 (47.4)181.6
Amortisation of acquired intangibles
(2.2)(0.1)
(2.9)- (9.0)(14.2)
Total reported segment results (EBIT)101.6 40.4 73.7 8.1 (56.4)167.4
Restated
(i)
Dec Dec
2022 2021
Note $'m $'m
177.5 223.8
B4 9.3 (5.4)
B4 - (65.4)
B4 - (7.6)
B4 - (2.8)
B4 - 85.8
(8.1)(9.0)
(48.9)(52.0)
(47.7)(56.4)
129.8 167.4
(40.3)(45.8)
89.5 121.6
(21.4)(35.8)
68.1 85.8 Profit after income tax
The performance of the reportable segments identified within the Group is presented below:
Total unallocated
Gain on sale of property, plant and equipment
Profit before income tax
Income tax expense
(i) December 2021 results have been restated (Refer to Note A for further details).
Segment results
Reconciliation of segment EBIT to net profit/(loss) after tax:
(ii) Restated to reflect the changes in operating segments described above and to include the accounting adjustment as described in Note A.
Share of sales revenue from joint ventures and
associates
(i)
Total revenue including joint ventures and
other income
(i)
EBIT before amortisation of acquired
intangibles (EBITA)
Share of sales revenue from joint ventures and
associates
(i)
EBIT before amortisation of acquired
intangibles (EBITA)
Total revenue including joint ventures and
other income
(i)
(i) This is a non-statutory disclosure as it relates to Downer’s share of revenue from equity accounted joint ventures and associates.
Fair value movement on DCSO liability
Portfolio restructure costs
Earnings before interest and tax
Net finance costs
Segment EBIT
Unallocated:
Amortisation of Spotless and Tenix acquired intangible assets
Corporate costs
Divestments and exit costs
Bid costs
25

Notes to the condensed consolidated financial statementsHalf-year Report 2023
Notes to the condensed consolidated financial statements
for the half-year ended 31 December 2022
Dec 2022
$'m
Transport Utilities Facilities
All other
segments
Unallocated Total
1,401.9 918.7 1,783.6 - - 4,104.2
770.7 213.1 440.4 - - 1,424.2
125.
43.
7 26.
4
-- 155.
5
2,
298.0 1,135.5 2,250.4 - - 5,683.9
3.
3
- -
-
5.9 9.
2
2,301.3 1,135.5 2,250.4 -5.9 5,693.1
Government grants
(i)
0.30.40.2--0.9
G
ain on sale of property, plant and equipment7.
10.1
0.
3
--7.
5
O
ther(0.2)0.2
-
- 9.3 9.
3
7.20.7
0.
5
-9.3 17.
7
2,
308.5 1,136.2 2,250.9 -15.2 5,710.8
389.
6
- -
-
44.3 433.
9
2,
698.1 1,136.2 2,250.9 -59.5 6,144.7
Dec 2021
Restated
(iii)
$'m
Transport Utilities Facilities
All other
segments
Unallocated Total
1,245.6 507.8 1,565.5 240.9 -
3,
559.
8
835.2497.
8 419.
1
0.
3
-1,752.
4
93.71.
1 20.
5
0.
7
-116.
0
2,
174.5 1,006.7 2,005.1 241.9 -
5,
428.
2
3.0
-
0.11.55.
9 10.
5
2,
177.5 1,006.7 2,005.2 243.4 5.9 5,438.7
Government grants
(iv)
8.04.54.3-- 16.8
I
nsurance recoveries--
-
- 1.8 1.
8
G
ain on sale of property, plant and equipment104.8 - - - - 104.8
Other5.
30.7
2.
8
(0.6)-8.
2
Oth
er income118.
15.2
7.
1
(0.6)1.8 131.
6
T
otal revenue and other income2,295.6 1,011.9 2,012.3 242.8 7.7 5,570.3
369.
2-
0.
3
-30.5 400.
0
2,
664.8 1,011.9 2,012.6 242.8 38.2 5,970.3
Other revenue
Total revenue
(iv) Government grants represents incentives received under the New Zealand Government’s wage support scheme available to eligible businesses impacted
b
y the COVID-19 pandemic.
(iii) Revenue disclosures have been restated to reflect the changes in operating segments described in Note B1 and to include the accounting adjustment as described in
Note A.
Rendering of services
Rendering of services
Total revenue and other income
Other income
Sale of goods
(i) Government grants represents incentives received under the New Zealand Government’s COVID leave support scheme available to eligible businesses impacted
b
y the COVID-19 pandemic.
B2. Revenue
Revenue and other income
Construction contracts
Total revenue from contracts with customers
Share of sales revenue from joint ventures and
associates
(ii)
Total revenue including joint ventures and
other income
(ii)
Construction contracts
Sale of goods
Other revenue
Total revenue
Share of sales revenue from joint ventures and
associates
(ii)
Total revenue including joint ventures and
other income
(ii)
(ii) This is a non-statutory disclosure as it relates to Downer’s share of revenue from equity accounted joint ventures and associates.
Total revenue from contracts with customers
26

Notes to the condensed consolidated financial statementsHalf-year Report 2023
Notes to the condensed consolidated financial statements
for the half-year ended 31 December 2022
Dec 2022
$'m
Transport Utilities Facilities
All other
segments
Unallocated Total
Geographical location
(i)
1,656.0 869.6 1,620.0 - - 4,145.6
642.0 265.9 612.7 - - 1,520.6
- - 17.7 - - 17.7
2,298.0 1,135.5 2,250.4 - - 5,683.9
Dec 2021
Restated
(ii)
$'m
Transport Utilities Facilities
All other
segments
Unallocated Total
Geographical location
(i)
1,582.2 766.1 1,495.8 228.3 - 4,072.4
592.3 240.6 497.3 - - 1,330.2
- - 12.0 13.6 - 25.6
2,174.5 1,006.7 2,005.1 241.9 - 5,428.2
Dec Dec
2022 2021
$'m $'m
106.0 101.0
(0.4)2.0
1,651.2 1,789.2
1,756.8 1,892.2
Dec 2022
$'m
Fair value
movement
on DCSO
liability
9.3
Profit after interest and tax9.3
B3. Employee benefits expense
Defined contribution plans costs
The following material items of income, forming part of the unallocated segment are relevant to an understanding of the Group's
financial performance.
Total employee benefits expense
(ii) Revenue disclosures have been restated to reflect the changes in operating segments described in Note B1 and to include the accounting adjustment as described in
Note A.
Current period
As part of the consideration to acquire the shares in Spotless that it did not already own, the Group granted three tranches
of 2.5 million share options to the previous minority interest shareholders which are exercisable within four years of issue on
achievement of three prescribed share price targets (the Downer Contingent Share Options or DCSO). The fair value at issue date of
these options was recognised as a liability arising on the acquisition of the shares. The DCSO are classified as a liability, with
subsequent changes in the fair value recognised in the Condensed Consolidated Statement of Profit or Loss and Other Comprehensive
Income. Since 30 June 2022, the fair value of the DCSO has decreased by $9.3 million, which has been recognised through 'Other
income' in the Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income during the period. This income
is driven by the decrease in Downer’s share price from $5.05 at 30 June 2022 to $3.71 at 31 December 2022.
Fair value movement on Downer Contingent Share Options (DCSO) liability
Revenue from contracts with customers by geographical location
(i) Revenue is allocated based on the geographical location of the legal entity.
(i) Share-based payments net benefit for the period includes the reversal for the 2021 Long-term Incentive Plan performance rights due to forfeiture.
Share-based employee benefits expense
(i)
Other employee benefits
New Zealand and Pacific
Rest of the world
Total revenue from contracts with
customers
Total revenue from contracts with
customers
Other Income
New Zealand and Pacific
Rest of the world
Australia
Australia
B4. Individually significant items
27

Notes to the condensed consolidated financial statementsHalf-year Report 2023
Notes to the condensed consolidated financial statements
for the half-year ended 31 December 2022
Dec 2021
$'m
Fair value
movement
on DCSO
liability
Divestments
and exit
costs
Portfolio
restructure
costsBid costs
Gain on
sale of
PP&ETotal
Other income----(104.8)(104.8)
Loss on disposal of businesses-13.1---13.1
Impairment of non-current assets-38.8---38.8
Employee benefits expense-3.57.60.7-11.8
5.410.0-2.119.036.5
Loss/(profit) before interest and tax5.465.47.62.8(85.8)(4.6)
Income tax (benefit)/expense-(19.4)(2.3)(0.8)25.73.2
Loss/(profit) after interest and tax5.446.05.32.0(60.1)(1.4)
Fair value movement on Downer Contingent Share Option (DCSO) liability
The Group recognised the following items as individually significant as at 31 December 2021:
Prior period
Gain on sale of property, plant and equipment
Downer received notice from Sydney Metro of its intention to compulsorily acquire Downer’s land at 1A Unwin Street, Rosehill for the
purposes of the Sydney Metro West project.
The site was used to operate Downer’s primary Asphalt and recycling operations in Sydney.
Sydney Metro and Downer reached agreement under the Land Acquisition (Just Terms Compensation) Act on the compensation
payable to Downer for the acquisition.
The transaction has resulted in Sydney Metro reimbursing Downer, on a like for like basis, for the actual costs incurred on the
construction and commissioning of a replacement facility.
Downer completed the construction of replacement facility, also in Rosehill, without any disruptions to its operations.
The difference between the historical written-down book value of the existing facility, the reimbursement of costs for the replacement
facility and relocation costs has been recognised as a $60.1 million after tax gain for the period ended 31 December 2021.
Bid costs
In the process of tendering for Queensland Train Manufacturing Program, Downer incurred $2.8 million in bid costs.
Portfolio restructure costs
As a result of the divestment program, Downer has reduced management overhead with restructuring costs of $7.6 million expensed.
The divestment program was completed following the disposal of Otraco on 1 December 2021, the sale of Open Cut Mining East on 17
December 2021, and the exit from a number of Hospitality contracts. Assets previously utilised by those businesses are no longer
utilised by the Group and have been written-off. The material elements of divestment and exit costs include:
- $13.1 million net pre-tax loss (including disposal costs) from the disposal of Otraco and Open Cut East (OCE). Refer to Note D7.
- $52.3 million pre-tax exit costs, relating to impairments of IT infrastructure and applications ($25.5 million), impairment of
right-of-use assets and leasehold improvements for leased properties ($13.3 million); and inventory write-offs and other exit costs
totalling $13.5 million.
Divestments and exit costs
Since 30 June 2021, and primarily driven by the movement in Downer’s share price from $5.59 at 30 June 2021 to $5.96 at 31
December 2021, the fair value of the DCSO increased by $5.4 million, which has been expensed through 'Other expenses' in the
Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income.
Other expenses from ordinary
activities
28

Notes to the condensed consolidated financial statementsHalf-year Report 2023
Notes to the condensed consolidated financial statements
for the half-year ended 31 December 2022
Restated
(i)
DecDec
2022 2021
68.1 85.4
(5.3)(3.0)
62.8 82.4
672.6 690.8
9.3 11.9
Restated
(i)
DecDec
2022 2021
68.1 85.4
672.6 690.8
39.7 31.8
712.3 722.6
9.3 11.8
– Weighted average number of ordinary shares (WANOS) on issue (m’s)
(ii)

(iii)
– WANOS adjustment to reflect potential dilution for ROADS (m’s)
(iv)
Diluted earnings per share (cents)
(v)
WANOS used in the calculation of diluted EPS (m’s)
Weighted average number of ordinary shares (WANOS) on issue (m’s)
(ii)
Basic earnings per share (cents)
Basic earnings per share
Profit attributable to members of the parent entity ($’m)
Diluted earnings per share
The calculation of diluted earnings per share is based on the following 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.
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.
B6. Subsequent events
On 6 February 2023 it was announced that Downer had been selected as the preferred applicant to deliver the Queensland Train
Manufacturing Program (QTMP) which will include design, manufacture, commissioning and maintenance activities of rollingstock fleet.
On 22 February 2023, the Group announced it had entered into an agreement to sell its Australian Transport Projects business to a
wholly owned Australian subsidiary of Gamuda Berhad (Gamuda), a large engineering and construction company listed in Malaysia.
The sale price represents an enterprise value of $212 million. Downer will receive cash proceeds at the completion of the transaction,
which is subject to Foreign Investment Review Board approval and other customary conditions, which is expected to occur before 30
June 2023.
On 24 February 2023, the Group entered into a Relief agreement in one of Downer’s maintenance contracts in its Australian Utilities
business.
Downer has not incurred any significant damage to its assets resulting from the floods and storms events in the North Island of New
Zealand in January and February 2023, however the events will materially impact operational performance through the remainder of the
financial year.
Apart from the above matters identified in the financial statements or notes thereto, there has not been any matter or circumstance that
has arisen since 31 December 2022 that has significantly affected or may significantly affect the operations of the Group, the results of
those operations, or the state of affairs of Downer in the future.
B5. Earnings per share
Profit attributable to members of the parent entity ($’m)
Adjustment to reflect ROADS dividends paid ($’m)
Profit attributable to members of the parent entity used in calculating basic EPS ($’m)
(i) December 2021 results have been restated (Refer to Note A for further details).
(
ii) The WANOS on issue has been adjusted by the weighted average effect of the unvested executive incentive shares.
(iii) For diluted earnings per share, the WANOS has been further adjusted by the potential vesting of executive incentive shares.
(iv) 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 $187.3 million (December 2021: $188.4 million),
divided by the average market price of the Company’s or
dinary shares for the period 1 July 2022 to 31 December 2022 discounted by 2.5% according to the ROADS
contract terms, which was $4.72 (December 2021: $5.91).
(v) At 31 December 2022, the ROADS were deemed anti-dilutive and consequently, diluted EPS remained at 9.3 cents per share.
Weighted average number of ordinary shares
29

Notes to the condensed consolidated financial statementsHalf-year Report 2023
Notes to the condensed consolidated financial statements
for the half-year ended 31 December 2022
C1. BorrowingsC4. Reserves
C2. Financing facilitiesC5. Dividends
C3. Issued capitalC6. Other financial assets and liabilities
DecJun
2022 2022
$'
m$'m
50.
0 -
(3.3)-
46.7 -
552.0 582.0
147.5 145.2
30.0 30.0
507.5 508.6
110.9 106.4
(5.3)(10.5)
1,342.6 1,361.7
1,389.3 1,361.7
1,396.6 1,384.5
(i) Excludes lease liabilities.
– JPY medium term notes
– Def
erred finance charges
– AUD m
edium term notes
Total non-current borrowings
Fair value of total borrowings
(i)
Capital structure and financing
C1. Borrowings
C
– Bank loans
– USD private placement notes
– AUD pr
ivate placement notes
Current
Unsecured:
– Bank
loans
Total current borrowings
– Def
erred finance charges
Non-current
Unsecured:
Total borrowings
30

Notes to the condensed consolidated financial statementsHalf-year Report 2023
Notes to the condensed consolidated financial statements
for the half-year ended 31 December 2022
DecJun
2022 2022
$'
m$'m
1,
025.0 1,010.0
160.0 195.0
Total unutilised loan facilities1,185.0 1,205.0
75.8 61.7
505.5 530.1
581.3 591.8
Maturing in the period
$’m
Bilateral
Loan
Facilities
Syndicated
Loan
Facilities
USD Private
Placement
Notes
AUD Private
Placement
Notes
Medium
Term
NotesTotal
1 Jul
y 2023 to 30 June 2024
(i)
175.0- -- - 175.0
1 July 2024 to 30 June 2025
212.0 500.
0-
-
-
712.
0
1 Jul
y 2025 to 30 June 2026
- - 147.5 30.0 500.0 677.5
1 Jul
y 2026 to 30 June 2027
-600.
0-
-
-
600.
0
1 July
2027 to 30 June 2028
-300.
0-
-
-
300.
0
1 July
2032 to 30 June 2033
--
-
- 110.9 110.
9
T
otal387.0 1,400.0 147.5 30.0 610.9 2,575.4
– The car
rying value of the AUD MTN maturing April 2026 includes a premium of $7.5 million over the face value owing to t
he
dif
ferential between the coupon rate for that instrument and the prevailing market interest rate at the date of issue.
– The JPY denom
inated principal and interest amounts have been fully hedged against the Australian dollar through a cross-currency
interest rate swap.
The Group has a total of $387.0 million in bilateral loan facilities which are unsecured, committed facilities.
Syndicated loan facilities:
The Group has $1,400.0 million of syndicated bank loan facilities which are unsecured, committed facilities.
Summary of borrowing arrangements
Bank loan facilities
USD private placement notes
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.
AUD private placement notes
AUD unsecured private placement notes are on issue for a total amount of $30.0 million with a maturity date of July 2025.
Medium Term Notes (MTNs)
The Group has the following unsecured MTNs on issue:
The above loan facilities and note issuances are supported by guarantees from certain Group subsidiaries.
The maturity profile of the Group’s borrowing arrangements by financial year is represented in the below table by facility limit:
– $500.
0 million maturing April 2026
– JPY 10.
0 billion maturing May 2033
C2. Financing facilities
Syndicated loan facilities
Total unutilised bonding facilities
At reporting date, the Group had the following facilities that were unutilised:
The Group’s borrowing arrangements are as follows:
Syndicated bank guarantee facilities
Bilateral bank guarantees and insurance bonding facilities
Bilateral loan facilities:
(i) Includes $50.0 million bilateral debt facility maturing in November 2023.
Bilateral loan facilities
31

Notes to the condensed consolidated financial statementsHalf-year Report 2023
Notes to the condensed consolidated financial statements
for the half-year ended 31 December 2022
Refinancing requirements
Covenants on financing facilities
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 EBITA and Group Total Tangible Assets.
Bank guarantees and insurance bonds
The Group has $1,971.4 million of bank guarantee and insurance bond facilities to support its contracting activities. $1,066.6 million of
these facilities are provided to the Group on a committed basis and $904.8 million on an uncommitted basis.
The Group has 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 guarantee capacity.
The main financial covenants which the Group is subject to are Net Worth, Interest Service Coverage and Leverage.
Financial covenants testing is undertaken monthly and reported at the Downer Board meetings. Reporting of financial covenants to
financiers occurs semi-annually for the rolling 12-month periods to 30 June and 31 December. Downer Group was in compliance with
all its financial covenants as at 31 December 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 will negotiate with existing and, where required, new financiers to extend the maturity date or refinance facilities maturing
within the next 12 months. 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. As at 31 December 2022, the Group has $50.0 million bilateral debt facility maturing
in the next 12 months.
The Group’s facilities are provided by a number of banks and insurance companies on an unsecured and revolving basis.
$1,390.1 million (refer to Note D9) of these facilities were utilised as at 31 December 2022 with $581.3 million unutilised. These
facilities have varying maturity dates between financial years 2023, 2024 and 2025.
Credit ratings
In December 2022, the outlook on the Group’s external credit rating was revised by Fitch Ratings from BBB (Outlook Stable) to BBB
(Outlook Negative). The rating remains Investment Grade. 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.
32

Notes to the condensed consolidated financial statementsHalf-year Report 2023
Notes to the condensed consolidated financial statements
for the half-year ended 31 December 2022
Dec 2022 Jun 2022
$'m $'m
Ordinary shares
2,471.1
2,488.9
Unvested executive incentive shares
(7.3)
(7.3)
Redeemable Optionally Adjustable Distributing
Securities (ROADS)
178.6 178.6
Total2,642.4 2,660.2
(a) Fully paid ordinary share capital
Fully paid ordinary shares carry one vote per share and carry the right to dividends.
m's$'m m's$'m
675.4
2,488.9
696.9 2,631.5
(3.8)
(17.8)
(24.0)(142.6)
- - 2.5 -
671.6 2,471.1 675.4 2,488.9
m's$'m m's$'m
1.19
(7.3)
1.25 (7.5)
-
-
(0.06)0.2
1.19 (7.3)
1.19 (7.3)
671,573,679
No.
675,425,623
C3. Issued capital
(c) Redeemable Optionally Adjustable Distributing Securities (ROADS)
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 2022 is 8.14% per annum (2021: 4.42% per annum) which is equivalent to the
one year swap rate on 15 June 2022 of 4.09% per annum plus the step-up margin of 4.05% per annum.
1,193,978
200,000,000
Balance at the beginning of the financial period / year
Vested executive incentive share transactions
(ii)
Balance at the end of the financial period / year
Vested Downer Contingent Share Option
(i)
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. From the 2011 LTI plan onwards, no dividends will be 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.
(ii) June 2022 figures relate to the second deferred component of the 2019 STI award of 55,277 vested shares for a value of $252,571.
Jun 2022 Dec 2022
(b) Unvested executive incentive shares
Dec 2022
1,193,978
200,000,000
No.
Jun 2022
Fully paid ordinary share capital
Balance at the beginning of the financial period / year
Group on-market share buy-back
Balance at the end of the financial period / year
Unvested executive incentive shares
(i) On 24 August 2021, the Target Price Condition of the Tranche 1 Series Downer Contingent Share Option was satisfied resulting in 2,499,264 shares exercised at
$6.382 per share. Refer to Note C4.
33

Notes to the condensed consolidated financial statementsHalf-year Report 2023
Notes to the condensed consolidated financial statements
for the half-year ended 31 December 2022
Dec 2022
$'m
Hedge
reserve
Foreign
currency
translation
reserve
Employee
benefits
reserve
Equity
reserve
Fair value
through OCI
reserve
Total
attributable
to the
members of
the parent
Balance at 1 July 20227.4 (39.1)20.7 25.5 (2.4)12.1
Foreign currency translation difference-17.
6-
-
-
17.
6
Change in f
air value of cash flow hedges (net of
tax)
(6.2)- - - - (6.2)
Change in fair value of unquoted equity investments
-
- - - 0.2 0.2
Total comprehensive income for the period(6.2)17.6 - - 0.2 11.6
Share-based employee benefits expense
-
- (0.4)-- (0.4)
Income tax relating to share-based transactions
during the period
- - 0.3
-
- 0.3
Balance at 31 December 20221.2 (21.5)20.6 25.5 (2.2)23.6
Jun 2022
$'m
Hedge
reserve
Foreign
currency
translation
reserve
Employee
benefits
reserve
Equity
reserve
Fair value
through OCI
reserve
Total
attributable
to the
members of
the parent
Balance at 1 July 2021(23.1)(29.7)14.7 9.5 (2.6)(31.2)
Foreign currency translation difference-(16.6)- - - (16.6)
Actuarial movement on net defined benefit plan
obligations
- - 6.8
-
- 6.8
Income tax effect of actuarial movement on defined
benefit plan obligations
-
- (2.1)-- (2.1)
Change in fair value of cash flow hedges (net of
tax)
30.
5
- -
-
- 30.
5
Change in f
air value of unquoted equity investments- - - - 0.2 0.2
Total comprehensive income for the year30.5 (16.6)4.7 -0.
2
18.8
Vested executive incentive share transactions- - (0.2)--(0.2)
Vested Downer Contingent Share Options
---
16.0
-
16.0
Shar
e-based employee benefits expense- - 4.2 - - 4.
2
I
ncome tax relating to share-based transactions
during the year
-
- (2.7)-- (2.7)
Disposal of business-7.
2
- - - 7.
2
Bal
ance at 30 June 20227.4 (39.1)20.7 25.5 (2.4)12.1
C4. Reserves
34

Notes to the condensed consolidated financial statementsHalf-year Report 2023
Notes to the condensed consolidated financial statements
for the half-year ended 31 December 2022
Hedge reserve
Forei
gn currency translation reserve
Emplo
yee benefits reserve
Equit
y reserve
Fair value throu
gh OCI reserve
2023 2022 2022 2021
Interim Final Interim Final
5.0 12.0 12.0 12.0
0%0%0%0%
33.6 81.1 81.8 83.7
13/3/23 31/8/22 24/2/22 26/8/21
11/4/23 28/9/22 24/3/22 23/9/21
Total
2023Quarter 1Quarter 2to date
1.29 1.37 2.66
100% 100% 100%
2.6 2.7 5.3
15/9/22 15/12/22
2022Quarter 1Quarter 2Quarter 3Quarter 4Total
0.76 0.75 0.74 0.72 2.97
100% 100% 100% 100% 100%
1.5 1.5 1.5 1.4 5.9
15/9/21 15/12/21 15/3/22 15/6/22
Dividend per ROADS (in Australian cents)
New Zealand imputation credit percentage
Cost (in A$'m)
Payment date
The interim 2023 dividend has not been declared as at reporting date and therefore is not reflected in the condensed consolidated
financial report.
Dividend per ROADS (in Australian cents)
New Zealand imputation credit percentage
Cost (in A$'m)
Payment date
Dividend per share (in Australian cents)
Franking percentage
Cost (in $'m)
Dividend record date
Payment date
(a) Ordinary shares
(b) Redeemable Optionally Adjustable Distributing Securities (ROADS)
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.
The equity reserve accounts for the difference between the fair value of, and the amounts paid or received for, equity transactions with
non-controlling interests including the fair value of vested DCSO.
C5. Dividends
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.
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. This reserve also includes the
actuarial gain/loss arisen on the defined benefit plan.
35

Notes to the condensed consolidated financial statementsHalf-year Report 2023
Notes to the condensed consolidated financial statements
for the half-year ended 31 December 2022
Current Non-current Current Non-current
At amortised cost:
4.1 17.
1-
-
0.
4-
5.
4-
- -
1.4-
4.517.1
6.
8
-
1.
80.72.8
-
2.7 15.
74.92.7
- -
4.4
-
4.516.412.1
2.
7
-
16.9
- -
-
16.9
- -
9.050.418.9
2.
7
Cur
rent Non-current Current Non-current
At amortised cost:
15.7 5.
6-
-
0.
3-
3.
6-
4.
5
-
0.21.3
20.55.63.81.3
2.20.43.60.3
5.
5 17.
05.33.4
- -
13.7
-
7.717.422.6
3.
7
-
9.7
- -
-
9.7
- -
28.232.726.4
5.
0To
tal
Reconciliation of Level 3 fair value measurements of financial assets
The fair value of Level 3 investments has increased by $7.2 million from prior year (June 2022: $7.7 million increase) due to the
$4.9 million investment in Evolution Rail (HCMT project), $2.1 million investment in a virtual reality technology company and
$0.2 million investment revaluation.
At fair value:
Level 2
Foreign currency forward contracts – Cash flow hedge
Cross-currency and interest rate swaps – Cash flow hedge
Downer Contingent Share Options (DCSO) financial instrument
Level 3
Unquoted equity investments – Fair value through OCI
Total
Jun 2022
$'m
Financial assetsFinancial liabilities
Current
Other financial assets
Advances to/from joint ventures and associates
Deferred consideration
At fair value:
Level 2
Foreign currency forward contracts – Cash flow hedge
Cross-currency and interest rate swaps – Cash flow hedge
Downer Contingent Share Options (DCSO) financial instrument
Level 3
Unquoted equity investments – Fair value through OCI
C6. Other financial assets and liabilities
Dec 2022
$'m
Financial assetsFinancial liabilities
Current
Other financial assets
Advances to/from joint ventures and associates
Deferred consideration
36

Notes to the condensed consolidated financial statementsHalf-year Report 2023
Notes to the condensed consolidated financial statements
for the half-year ended 31 December 2022
Type
Cross-currency and interest rate swaps
Foreign currency forward contracts
Unquoted equity investments
Calculated using forward exchange
rates prevailing at the balance sheet
date.
Not applicable.
Calculated based on the Group’s
interest in the net assets of the
unquoted entities.
Assumptions are made with regard to
future expected revenues and discount
rates. Changing the inputs to the
valuations to reasonably possible
alternative assumptions would not
significantly change the amounts
recognised in profit or loss, total assets
or total liabilities, or total equity.
– Level 1: fair value is calculated using quoted prices in active markets for identical assets or liabilities
– Level 2: fair value is estimated using inputs other than quoted prices included within Level 1 that are observable for the asset or
liability, either directly (as prices) or indirectly (derived from prices)
– Level 3: fair value is estimated using inputs for the asset or liability that are not based on observable market data.
During the year there were no transfers between Level 1, Level 2 and Level 3 fair value hierarchies.
The following table shows the valuation technique used in measuring Level 2 and 3 fair values, as well as significant unobservable
inputs used:
Valuation techniqueSignificant unobservable input
Calculated using the present value of
the estimated future cash flows based
on observable yield curves.
Not applicable.
Recognition and measurement
Fair value measurement
When a derivative is designated as the cash flow hedging instrument, the effective portion of changes in the fair value of the derivative
is recognised in Other comprehensive income and accumulated in the hedging reserve. Any ineffective portion of changes in the fair
value of the derivative is recognised immediately in profit or loss.
Valuation of financial instruments
For financial instruments measured and carried at fair value, the Group uses the following to categorise the methods used:
37

Notes to the condensed consolidated financial statementsHalf-year Report 2023
Notes to the condensed consolidated financial statements
for the half-year ended 31 December 2022
D1. Trade receivables and contract assetsD6. Acquisition of businesses
D2. Trade payables and contract liabilitiesD7. Disposal of businesses
D3. Property, plant and equipmentD8. Disposal group held for sale
D4. Intangible assetsD9. Contingent liabilities
D5. Equity accounted investments
Restated
(i)
Dec Jun
2022 2022
$'m $'m
648.7 682.9
1,349.8 1,351.8
1,998.5 2,034.7
66.7 40.5
(31.3)(32.4)
2,033.9 2,042.8
1,911.2 1,921.2
122.7 121.6
Dec Jun
2022 2022
$'m $'m
713.7 785.0
307.9 364.6
831.6 949.1
147.3 155.9
2,000.5 2,254.6
1,951.1 2,208.1
49.4 46.5
Non-current
Other payables
Total trade payables and contract liabilities
Trade payables
Contract liabilities
Accruals
Included in the financial statements as:
(i) Balances have been restated (Refer to Note A for further details).
D
Other disclosures
D1. Trade receivables and contract assets
Trade receivables
Included in the financial statements as:
Total trade receivables and contract assets
Contract assets
(ii)
Other receivables
Loss allowance on trade receivables and contract assets arising from contracts with
customers
Current
(i)
(ii) Current contract assets: $1,228.3 million (restated June 2022: $1,231.2 million).
D2. Trade payables and contract liabilities
Current
Non-current
38

Notes to the condensed consolidated financial statementsHalf-year Report 2023
Notes to the condensed consolidated financial statements
for the half-year ended 31 December 2022
Dec 2022
$'mNote
Freehold
land and
buildings
Plant,
equipment
and
leasehold
improve-
ments
Total
87.5 836.9 924.4
0.1 84.6 84.7
- (3.6)(3.6)
(1.1)(58.3)(59.4)
D8 (0.1)(36.2)(36.3)
- 6.8 6.8
86.4 830.2 916.6
118.8 1,745.0 1,863.8
(32.4)(914.8)(947.2)
Jun 2022
$'m
Freehold
land and
buildings
Plant,
equipment
and
leasehold
improve-
ments
Total
67.1 927.6 994.7
29.0 221.5 250.5
6.3 9.3 15.6
(12.3)(18.4)(30.7)
- (164.7)(164.7)
(2.2)(122.5)(124.7)
- (10.4)(10.4)
(0.4)(5.5)(5.9)
87.5 836.9 924.4
118.6 1,748.0 1,866.6
(31.1)(911.1)(942.2)
Item
Freehold land
Buildings
Leasehold improvements
Plant and equipment – power and gas
Plant and equipment – other
Balance as at 1 July 2022
D3. Property, plant and equipment
Based on hours of use
20 to 50 years
Useful life
No depreciation
Straight-line
Straight-line
Cost
Net foreign currency exchange differences at net book value
Acquisition of businesses
Disposals at net book value
The expected useful life and depreciation methods used are listed below:
Depreciation method
n/a
3 to 25 years
Disposal of businesses
Depreciation expense
Impairment charge
(i)
Net foreign currency exchange differences at net book value
Cost
Net book value as at 30 June 2022
Accumulated depreciation and impairment
(i) Impairment includes $7.2 million in relation to leasehold improvements write-off as a result of divestments (Note B4) and to assets damaged following the flooding/wet
weather events in Queensland.
Working hours
Straight-line
Additions
Disposals at net book value
Depreciation expense
Life of lease
Additions
Transferred to disposal group assets held for sale
Net book value as at 31 December 2022
Balance as at 1 July 2021
Accumulated depreciation and impairment
39

Notes to the condensed consolidated financial statementsHalf-year Report 2023
Notes to the condensed consolidated financial statements
for the half-year ended 31 December 2022
Dec 2022
$'mNoteGoodwill
Customer
contracts
and
relation-
ships
Brand
names on
acquisition
Intellectual
property on
acquisition
Software
and system
develop-
ment
Total
2,285.0 172.5 58.7 1.5 223.7 2,741.4
- -
-
- 23.1 23.
1
-(
11.1)(2.0)-(13.4)(26.5)
D8 (41.3)
- - -
- (41.3)
4.
2-
0.
5-
0.
1
4.
8
2,
247.9 161.4 57.2 1.5 233.5 2,701.5
Cost
2,565.3 515.3 79.1 2.4 530.0 3,692.1
Accumulated amortisation and impairment(317.4)(353.9)(21.9)(0.9)(296.5)(990.6)
Jun 2022
$'mGoodwill
Customer
contracts
and
relation-
ships
Brand
names on
acquisition
Intellectual
property on
acquisition
Software
and system
develop-
ment
Total
2,280.8 203.2 63.0 1.6 234.3 2,782.9
- -
-
- 36.5 36.
5
7
.8
- - -
- 7.8
-
(
30.7)(4.0)(0.1)(22.4)(57.2)
- - - - (24.6)(24.6)
(3.6)-
(0
.3)-(0.1)(4.0)
2,285.0 172.5 58.7 1.5 223.7 2,741.4
Cost
2,602.4 515.1 78.5 2.4 504.6 3,703.0
Accumulated amortisation and impairment(317.4)(342.6)(19.8)(0.9)(280.9)(961.6)
Impairment charge
(ii)
(ii) Impairment relates to ERP systems write-off as a result of divestments. Refer to Note B4.
Amortisation expense
Balance as at 1 July 2022
Additions
Balance as at 1 July 2021
Net book value as at 31 December 2022
Net foreign currency exchange
differences at net book value
Transferred to disposal group assets
held for sale
Amortisation expense
(i) This relates to goodwill on acquisition of Fowlers. Refer to Note D6.
Additions
Acquisition of businesses
(i)
Net book value as at 30 June 2022
Net foreign currency exchange differences
at net book value
D4. Intangible assets
40

Notes to the condensed consolidated financial statementsHalf-year Report 2023
Notes to the condensed consolidated financial statements
for the half-year ended 31 December 2022
Impairment of assets
Allocation of
goodwill to Groups of Cash-Generating units
Dec
2022
Jun
2022
$'m $'m
Transport Australia
(i)
241.6 435.8
Rail and Transit Systems 55.3 55.3
Utilities Australia
(ii)
447.3 294.4
New Zealand197.3 193.1
Facilities1,306.4 1,306.4
2,247.9 2,285.0
Recoverable amount testin
g
An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. For the
purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows that
are largely independent of the cash inflows from other assets or groups of assets (cash-generating units or CGUs). Non-financial
assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at each reporting date.
(i) The Transport Australia goodwill has reduced by $194.2 million of which $152.9 million reflects the internal reorganisation in the period and $41.3 million of goodwill
classified under Assets Held For Sale.
(ii) Utilities Australia CGU goodwill has increased by $152.9 million reflecting the internal reorganisation in the period.
Management have identified impairment indicators in relation to the increase in discount rates (WACC) and below budget performance
in a number of CGUs.
AASB 136 Impairment of Assets requires an entity to assess at each reporting date, whether there are any indicators that assets may
be impaired. If any indicators exist, the entity shall estimate the recoverable amount of the asset.
Goodwill and intangible assets that have an indefinite useful life are tested annually for impairment, or more frequently if events or
changes in circumstances indicate that they might be impaired.
Other assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be
recoverable.
Goodwill has been allocated for impairment testing purposes to Groups of CGUs that represent the lowest level within the Group at
which goodwill is monitored for internal management purposes.
The potential divestment of Transport Projects (presented as an Asset Held for Sale in Note D8) enabled an operational change
impacting the Group’s internal reporting structure and the level at which performance and goodwill is monitored for the Transport and
Utilities CGUs. This has resulted in $152.9 million of goodwill in relation to the Power Systems business unit to be reclassified from the
Transport to the Utilities Group of CGUs.
The goodwill allocation to each of the Groups of CGUs (hereafter ‘CGUs’) is presented below:
The recoverable amount of the identified CGUs has been assessed using the higher of 'value in use' (VIU) and 'fair value less cost of
disposal' (FVLCD). For each CGU, this has resulted in a VIU methodology being used.
No impairment has been identified in relation to any of the Group’s non-current assets, CGUs or Groups of CGUs, with further
disclosure provided below in relation to the impairment testing of goodwill.
Carrying value of
consolidated goodwill
41

Notes to the condensed consolidated financial statementsHalf-year Report 2023
Notes to the condensed consolidated financial statements
for the half-year ended 31 December 2022
Value in use calculation
Recoverable amount testin
g – Key assumptions
Dec 2022Jun 2022
Budgeted
Revenue
(i)
EBIT
margin
(ii)
Long-term
growth rate
Discount
rate (post-
tax)
Budgeted
Revenue
(iii)
EBIT
margin
(ii)
Long-term
growth rate
Discount
rate (post-
tax)
Transport Australia1.6% 6.3% 2.5% 9.0%
3.9%6.3%2.5%8.5%
Rail and Transit Systems 6.4% 5.4% 2.5% 9.1%
8.2%5.4%2.5%8.7%
Utilities Australia3.8% 5.1% 2.5% 9.2%
3.7%4.7%2.5%8.8%
New Zealand(1.0%)5.8% 2.5% 9.7%
2.1%5.7%2.5%8.9%
Facilities7.1% 5.9% 2.5% 9.1%
6.4%5.9%2.5%8.7%
(iii) Budgeted revenue for June 2022 is expressed as the compound annual growth rates (CAGR) from FY22 to terminal year forecast based on the CGUs business plan.
The table below summarises the key assumptions utilised in the VIU calculations.
In assessing VIU, the estimated future cash flows are discounted to their present value using a discount rate that uses current market
assessments of the time value of money and the risks specific to the CGU.
The Group determines the recoverable amount, using cash flow projections based on the Board approved forecast for the 6 months to
30 June 2023 and business plan for the years ending 30 June 2024 and 2025. For FY26 onwards, the Group assumes a long-term
growth rate of 2.5% to reflect the organic growth expectations of the industry.
(i) Budgeted revenue for December 2022 is expressed as the compound annual growth rates (CAGR) from FY23 to terminal year forecast based on the CGUs business plan.
(ii) EBIT margin represents the terminal year forecast margin based on the CGU's business plan. December 2022 EBIT margin for the Utilities CGU increased as a result of
Power Systems contribution to the CGU following its reallocation.
Cash flow projections are determined utilising budgeted Earnings Before Interest and Tax (EBIT) less tax, capital maintenance
spending and working capital changes, adjusted to exclude any uncommitted restructuring costs and future benefits to provide a ‘free
cash flow’ estimate. This calculated ‘free cash flow’ is then discounted to its present value using a post-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows
have not been adjusted.
42

Notes to the condensed consolidated financial statementsHalf-year Report 2023
Notes to the condensed consolidated financial statements
for the half-year ended 31 December 2022
(i) Projected cash flows – including budgeted revenue and EBIT margin and the impact of COVID-19
Cash flow forecasts
Inflation and price escalation
The Group’s exposure to inflationary pressures in labour and other costs in its contracts is mitigated with contractual mechanisms and
allowances for price movements.
– Utilities Australia has been negatively impacted in the period by contract performance in a Power maintenance contract, a water
construction project, deferral of transmission line contract awards and productivity challenges arising from weather, absenteeism and
labour shortages. Benefits are anticipated from FY24 onwards from an increase in activities in wireless programs, in the water sector
and pricing in maintenance work contracts.
– New Zealand has been negatively impacted in the period by wet weather and a project loss on a renewable windfarm project. The
cashflow forecast reflects the expected benefit from increased investment in infrastructure, particularly in the transport and utilities
sectors and an increase on maintenance contracts.
Specifically, for each CGU:
In preparing the impairment models at 31 December 2022, the Group considered the experience in the last 6-months results in
developing the cash flow forecasts.
The cash flow projections through to the terminal year are based on the Group’s past experience and assessment of economic and
regulatory factors affecting the business in which the Downer businesses operate.
– Transport Australia has been negatively impacted in the first 6 months of the year by persistent wet weather resulting in a below
budget performance. With the assumption that climatic conditions improve it is expected to benefit from activity/volume growth in road
infrastructure as a result of the wet weather (e.g. from flood recovery work) and from increased Government investment in regional
Australia.
– Rail and Transit Systems performance in the first 6 months has been impacted by unbudgeted bid costs for the Queensland Train
Manufacturing Program (QTMP). The outlook is expected to benefit from new opportunities on rail fleet extensions and maintenance
contracts, increased work opportunities in Queensland (including the anticipated award of the QTMP contract announced on 6
February 2023) and from regional rolling stock maintenance contracts opportunities.
– Facilities performance in the period has been above budget with strong performance supported by volumes of work in government
backed contracts and asset services work in the Power and Energy sector. Ongoing performance is expected to benefit from a pipeline
of opportunities across its operations including:
- Health & Education has a favourable market outlook with increased Government spend to fulfil growing structural demand for
these services as well as from contract renewals/ extensions
- Government sector has significant growth opportunities to service an increasing public sector asset base, leveraging its assets
and management expertise
- Power & Energy sector has opportunities from the decarbonisation of energy generators as well as a strong rebound in
activity following deferrals of plant shutdowns and maintenance stemming from COVID-19 related disruptions
- Defence will benefit from increased Government investment on new military capability, upgrades to base infrastructure
and estate management services.
The Group has assumed a return to historical labour availability and productivity.
43

Notes to the condensed consolidated financial statementsHalf-year Report 2023
Notes to the condensed consolidated financial statements
for the half-year ended 31 December 2022
(ii)Long-term growth rates
(iii)Discount rates
(iv)Budgeted capital expenditure
(v)Budgeted working capital
Sensitivities
Management believes that for all other CGUs, any reasonably possible change in the key assumptions would not cause the carrying
value of the CGUs to exceed their recoverable amounts.
Management has sensitised the impacts of potential further increases in WACC for each CGU and EBIT forecast deterioration and
concluded that despite a decline in headroom, sufficient headroom will remain for all CGUs.
The long-term annual growth rates, applicable for the periods after which detailed forecasts have been prepared, are based on the long
-
term expected GDP rates for the country of operation, adjusted as necessary to reflect industry-specific considerations. The Group
assumes a long-term growth rate of 2.50% (FY22: 2.50%) to allow for organic growth on the existing asset base.
Discount rates reflect the Group’s estimate of the time value of money and risks associated with each CGU. In determining the
appropriate discount rate for each CGU, consideration has been given to the estimated weighted average cost of capital (WACC) for
the Group adjusted for country and business risks specific to that CGU. The post-tax discount rate is applied to post-tax cash flows that
include an allowance for tax based on the respective jurisdiction's tax rate. This method is used to approximate the requirement of the
accounting standards to apply a pre-tax discount rate to pre-tax cash flows.
Compared to 30 June 2022, WACCs have increased by 44 basis points for the Australian CGUs and 73 basis points for the New
Zealand group of CGUs. This resulted in post-tax discount rates at December 2022 to be between 9.0% and 9.7% (June 2022:
between 8.5% and 8.9%). The increase reflects the inflationary Australian / New Zealand environment of the last 6-months.
The expected cash flows for capital expenditure are based on past experience and the amounts included in the terminal year
calculation are for maintenance capital used for existing plant and replacement of plant as it is retired from service. The resulting
expenditure has been compared against the annual depreciation charge to ensure that it is reasonable.
Working capital has been maintained at a level required to support the business activities of each CGU, taking into account changes in
the business cycle. It has been assumed to be in line with historic trends given the level of operating activity.
Management has identified that an unfavourable change in the EBIT margin or revenue assumption of 15.6% per year in the Utilities
CGU would give rise to nil headroom.
The recoverable amount of the Utilities CGU currently exceeds its carrying value by $144 million. Based on the modelling and analysis
performed utilising a “value in use” model, the recoverable amount of the Utilities CGU is expected to be greater than its carrying value.
44

Notes to the condensed consolidated financial statementsHalf-year Report 2023
Notes to the condensed consolidated financial statements
for the half-year ended 31 December 2022
DecJun
20222022
$'m$'m
31.
9 24.1
9.9 21.5
(2.5)(13.6)
0.2 (0.1)
39.5 31.9
130.9 131.0
5.6 8.2
(17.2)(8.3)
119.3 130.9
158.8 162.8
DecJun
Count
ry o
f
20222022
Nam
e of arrangementoperation%
%
Joi
nt ventures
New Zealand
50
50
Australia
50
50
Australia
50
50
Australia
50
50
New Zealand
50
50
New Zealand
50
50
Australia
45
45
Associates
Australia
49
49
Australia
30
30
Share of distributions
The Group's equity accounted investments relate to the interest in the following joint ventures and associates:
Principal activit
y
Asphalt plant
Bitumen importer
Bitumen importer
Sale and maintenance of railway
rollingstock
Emulsion plant
D5. Equity accounted investments
Interest in joint ventures at the beginning of the financial period / year
Interest in joint ventures at the end of the financial period / year
Share of net profit
Keolis Downer Pty Ltd
HT HoldCo Pty Ltd
During the period, no deferred consideration payments were made (2022: $0.1 million) in relation to acquisitions completed in previous
periods.
Interest in associates at the beginning of the financial period / year
Share of net profit
Share of distributions
Emulco Limited
Isaac Asphalt Limited
Total equity accounted investments
Manufacture and supply of asphalt
Waste recycling
Repurpose It Holdings Pty Ltd
Current period
Bitumen Importers Australia Pty Ltd
EDI Rail-Alstom Transport Pty Limited
(i)
Allied Asphalt Limited
Laundries services
D6. Acquisition of businesses
The Group has concluded the acquisition accounting process for this acquisition and there was no material change arising from
finalisation.
Fowlers
Interest in associates at the end of the financial period / year
Ownership interest
(i) EDI Rail-Bombardier Transportation Pty Ltd changed its name to EDI Rail-Alstom Transport Pty Limited during the period ended 31 December 2022.
Operation and maintenance of Gold
Coast light rail, Melbourne tram
network, Adelaide metro and bus
operation
Bitumen Importers Australia Joint Venture
Prior period
There have been no acquisitions during the period ended 31 December 2022.
On 30 November 2021, the Group acquired 100% of Fowlers Asphalting Pty. Limited, Gippsland Asphalt Pty. Ltd. and Tarmac
Linemarking Pty Ltd (“Fowlers”) for total consideration of $24.9 million. Total consideration for this acquisition comprised
$22.8 million cash paid (net of $0.8 million cash balances acquired) and $1.3 million deferred consideration. The fair value of the
acquired net assets amounts to $18.1 million resulting in goodwill of $7.8 million being recognised. Fowlers is an asphalting and civil
construction business operating in the Gippsland area of Victoria.
Foreign currency exchange differences
45

Notes to the condensed consolidated financial statementsHalf-year Report 2023
Notes to the condensed consolidated financial statements
for the half-year ended 31 December 2022
Dec 2021
$'mNote
Mining
Divestments
Proceeds on disposal (net of transaction costs)229.5
(15.7)
213.8
229.5
15.7
43.9
174.1
41.7
0.5
40.3
1.7
9.2
0.7
327.8
5.9
43.2
38.5
0.2
87.8
240.0
4.6
7.2
B4 (13.1)
(v) A further $2.4 million of Otraco lease liabilities classified as Liabilities Held for Sale at 30 June 2021 were also disposed. Refer to Annual Report 2021.
(iv) $0.5 million of Otraco intangible assets classified as Assets Held for Sale at 30 June 2021 were also disposed. Refer to Annual Report 2021.
(iii) A further $2.2 million of Otraco assets classified as Assets Held for Sale at 30 June 2021 were also disposed. Refer to Annual Report 2021.
(ii) A further $9.4 million of Otraco assets classified as Assets Held for Sale at 30 June 2021 were also disposed. Refer to Annual Report 2021.
Lease Liabilities
(v)
Current period
D7. Disposal of businesses
Trade receivables and contract assets
Less FCTR held on businesses disposed
Assets disposed
Right-of-use assets
(iii)
Intangible assets
(iv)
Inventories
(i) A further $33.8 million proceeds in relation to Open Cut Mining West and Blasting businesses disposed during FY21 have been received during the period. Total
divestment proceeds received as at 31 December 2021 amounts to $247.6 million.
Proceeds net of disposal costs
(i)
Loss on disposal before tax
There have been no disposals during the period ended 31 December 2022.
Proceeds on disposal (net of transaction costs)
Employee benefits provision
Other provisions
Trade payables and contract liabilities
Less cash disposed
Disposal of Mining businesses
Cash and cash equivalents
On 11 October 2021, Downer entered into an agreement to sell its Open Cut Mining East business to an Australian subsidiary of PT
Bukit Makmur Mandiri Utama (BUMA), a large Mining services provider in Indonesia, for gross proceeds of $150 million. The sale
included the transfer of assets (including fleet and inventory) and liabilities; and the novation of the existing contracts to BUMA. Downer
received an initial deposit of $16 million at that date. On 17 December 2021, the sale of Open Cut Mining East was completed and
Downer received the remaining purchase price. As at 31 December 2021, net proceeds (after transaction costs) of $137.6 million had
been received with a $60.5 million pre-tax loss on disposal recognised.
Otraco business
The table below summarises the impact on divestment during the financial period ended 31 December 2021:
On 26 April 2021, an agreement was reached for the sale of Mining’s tyre management business (Otraco) to Bridgestone Corporation
(Bridgestone). Otraco was disclosed as a disposal group held for sale in the Group's 2021 Annual Report. On 1 December 2021, the
sale of Otraco was completed and Downer received net proceeds (after transaction costs) of $76.2 million and recorded a net pre-tax
gain on disposal of $47.4 million.
Prior period
Property, plant and equipment
(ii)
Current tax assets
Deferred tax assets
Prepayments and other assets
Liabilities disposed
Net assets disposed
Add non-controlling interest disposed
Open Cut Mining East business
46

Notes to the condensed consolidated financial statementsHalf-year Report 2023
Notes to the condensed consolidated financial statements
for the half-year ended 31 December 2022
Transport Projects
Dec 2022
$'mNote
Transport
Projects
Trade receivables and contract assets75.6
Inventories1.1
Prepayments and other assets1.0
Property, plant and equipmentD3 36.3
Right-of-use assets3.7
GoodwillD4 41.3
Deferred tax assets4.3
Assets held for sale163.3
Trade payables and contract liabilities127.0
Lease liabilities3.8
Employee benefits provision14.3
Other provisions0.3
Liabilities held for sale145.4
Recognition and measurement
At 31 December 2022, the disposal group was stated at the lower of its carrying amount and fair value less costs of disposal, and
consisted of the following assets and liabilities:
Disposal groups are recognised when a sale is considered highly probable. The assets and liabilities of this disposal groups are
disclosed separately on the basis that their value is expected to be realised through a sale event rather than continued use. Disposal
group assets are presented at the lower of their carrying value or the value expected to be realised through the sale. Any impairment to
the carrying value of the assets is recognised through the Condensed Consolidated Statement of Profit or Loss and Other
Comprehensive Income.
The Assets held for sale do not include any recognition of divestment and exit costs. There is no impairment to the Assets Held For
Sale of the Transport Projects business.
D8. Disposal group held for sale
The Group has performed a strategic review of the Australian Transport Projects business and is seeking to dispose of the business.
On 22 February 2023, Downer entered an agreement to sell its Transport Projects Business to a wholly owned Australian subsidiary of
Gamuda Berhad (Gamuda), a large engineering and construction company listed in Malaysia for $212 million, subject to customary
completion adjustments.
The transaction, which is subject to Foreign Investment Review Board approval and other customary conditions, is expected to occur
before 30 June 2023. The assets and liabilities to be divested have been reclassified as current assets and liabilities held for sale at 31
December 2022.
47

Notes to the condensed consolidated financial statementsHalf-year Report 2023
Notes to the condensed consolidated financial statements
for the half-year ended 31 December 2022
Dec Jun
2022 2022
BondingNote $'m $'m
C2 1,390.1 1,372.9
(iv) 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.
(v) Downer New Zealand, an entity in the Group, has been named as co-defendant in a ‘leaky building’ claim. The leaky building claim
where the Group entity is co-defendant relates to water damage arising from historical design and construction methodologies (and
certification) for residential and other buildings in New Zealand during the early to mid 2000s. The Directors are of the opinion that
disclosure of any further information relating to the leaky building claim would be prejudicial to the interests of the Group.
(vi) In December 2022, Downer received correspondence notifying an alleged stray current defect in the depot constructed by Downer
for the High Capacity Metro Trains Project, requiring Downer to advise how it will address the rectification of that issue and alleging that
Downer is responsible for the costs of rectification. The Group does not consider it has a present obligation in relation to this matter as,
to date, the root cause has not been identified and agreed between the parties. No provision has therefore been recognised in relation
to this matter at 31 December 2022. 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.
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 has bid bonds and performance bonds issued in respect of contract performance
in the normal course of business for controlled entities
(ii) 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.
(i) 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.
Other contingent liabilities
(iii) 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.
D9. Contingent liabilities
48

Directors’ DeclarationHalf-year Report 2023
Directors’ Declaration
for the half-year ended 31 December 2022
M P ChellewG A Fenn
ChairmanManaging Director and Chief Executive Officer
Sydney, 27 February 2023
In the opinion of the Directors of Downer EDI Limited:
(a) The condensed consolidated half-year financial statements and notes set out on pages 17 to 48 are in accordance with the
(i) Complying with Accounting Standard AASB134
Interim Financial Reporting, the Corporations Regulations 2001; and
(ii) The financial statements and notes thereto give a true and fair view of the Group's financial position as at 31 December 2022 and
of its performance for the six-month period ended on that date; and
(b) There are reasonable grounds to believe that Downer EDI Limited will be able to pay its debts as and when they become due and
payable.
Corporations Act 2001(Cth), including:
Signed in accordance with a resolution of the Directors:
On behalf of the Directors
49

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

Media/ASX and NZX Release
27 February 2023

DOWNER REPORTS UNDERLYING NPATA OF $68.0 MILLION
AND STATUTORY NPATA OF $77.3 MILLION
Downer EDI Limited (Downer) today announced its financial results for the 6 months to 31 December 2022.
The main features of the results are:

 Urban Services revenue of $6.1 billion, up 8.9% from the prior corresponding period (pcp). Total
Group revenue of $6.1 billion, up 2.9% on the pcp.

 Statutory EBIT (earnings before interest and tax) of $129.8 million and statutory NPAT (net profit after
tax) of $68.1 million.

 Underlying EBITA (earnings before interest, tax and amortisation of acquired intangible assets) of
$133.6 million, down 24.5% from the pcp; statutory EBITA of $142.9 million.

 Underlying NPATA (net profit after tax and before amortisation of acquired intangible assets) of
$68.0 million, down 28.0% from the pcp; statutory NPATA of $77.3 million.

 Included in the result was a post-tax loss of $12 million in relation to the Utilities maintenance
contract described in today’s ASX Release: Update on Downer’s Utilities contract.

 Net Debt to EBITDA of 2.3x and Gearing of 24.8% (1 7.8% at 30 June 2022).

 Interim dividend of 5 cents per share (unfranked).

The Chief Executive Officer of Downer, Grant Fenn, said it had been a challenging period for the
business in the first half of the 2023 financial year.
“Significant parts of our business have been heavily impacted by rain, storms and flooding whilst labour
mix and productivity remain an issue. Our cash conversion at 8.5% was way off our normal half end
position due to some meaty subcontractor payments on completion of our Sydney Growth Train Project
and a few large customer receipts expected in late H1 that were received in H2,” Mr Fenn said.
“The market outlook in our Transport, Utilities and Facilities businesses remains strong, which is evident
in the 9% growth in Urban Services revenue delivered in the half. Whilst we are in the right markets and
we have the right capabilities, economic conditions, particularly around labour and productivity, continue
to impact the business and the recovery from the economic effects of COVID-19 has been difficult and
continues.
“We have won a number of important contracts during the period and we are preferred on the very
significant multi-billion dollar Queensland Train Manufacturing Project, underpinning the strength of our
Rail and Transit Systems business over the next decade and beyond.”

Page 2 of 3

As announced on 1 December, Mr Fenn will today officially hand over leadership of Downer to Peter
Tompkins.
“Downer is in very capable hands with Peter stepping into the CEO role,” Mr Fenn said. “He has a deep
knowledge of the organisation and our customers, and his leadership experience across the Group, key
focus on risk management and strong resolve will be an asset to Downer going forward.
“D owner has a very bright future under Peter’s leadership, and I look forward to watching it thrive.”

Dividend
The Downer Board has declared an interim dividend of 5 cents per share, unfranked, payable on
11 April 2023 to shareholders on the register at 13 March 2023. The portion of the unfranked dividend
amount that will be paid out of Conduit Foreign Income (CFI) is 44%. The Company’s Dividend
Reinvestment Plan (DRP) remains suspended and will not operate for this dividend.

Safety
Downer’s Lost Time Injury Frequency Rate decreased to 0.72 from 0.97 in the prior period and its Total
Recordable Injury Frequency Rate decreased to 2.30 from 2.57 per million hours worked.
Tragically, in December 2022, an employee from Downer's Utilities business was undertaking meter
reading duties for our customer, Energy Queensland, on a property in Greenbank, south of Brisbane,
when fatally attacked by dogs on the property.
Downer extends its sincerest condolences to the worker’s family and colleagues, and we continue to
support them following this tragic incident.

Outlook
On 8 December 2022, Downer announced that it had revised its guidance for FY23 as trading for
October and November indicated that guidance was unlikely to be met. Guidance was restated as
$210 million – $230 million NPATA assuming no further material COVID-19, weather, labour shortages
or other disruptions and excluding any prior period impact from the Utilities revenue recognition issue.
Since 8 December, as part of the half year reporting process, Downer has conducted a detailed re-
forecast review and considers it appropriate to further adjust the guidance for the following items:
 Losses associated with the Utilities power maintenance contract. Whilst the contract is not
considered onerous, further losses will impact H2 until the contract reset and recovery plan take
effect ($12 million post tax);
 Heightened risk of Water project losses due to unrecoverable prolongation costs as storms and
flooding continue to impact completion ($12 million post tax);
 A slowdown in Government minor capital works based on recent customer feedback ($8 million post
tax); and
 The recent floods and storms in the North Island of New Zealand, which have materially impacted
current operations and whilst we expect this to present opportunities in FY24, the 2H23 pipeline has
been impacted ($8 million post tax).
Downer now expects underlying FY23 NPATA to be between $170 million – $190 million assuming no
further material COVID-19, weather, labour shortages or other disruptions, and excluding restructuring
costs.

Page 3 of 3

For further information please contact:
Media: Mitchell Dale, Group General Manager Corporate Affairs +61 448 362 198
Investors: Adam Halmarick, Group Head of Investor Relations and Strategic Planning +61 413 437 487

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. For more information visit downergroup.com

Grant Fenn (CEO)
▪Update on Downer’s Utilities contract
▪Results summary
▪Outlook
Michael Ferguson (CFO)
▪Financial results
Peter Tompkins (incoming CEO)
▪Strategies to realise value for shareholders
▪Queensland Train Manufacturing Program (QTMP) update
▪Immediate priorities
2

Update on Downer’s Utilities contract
3
▪External lawyers and forensic accountants have now completed a confidential and privileged investigation
▪Downer has determined
̶“root cause” and contributing factors
̶through broader workbook review that the issue is isolated to one contract
▪Post tax earnings were overstated by approximately $1.7m in FY20, $8.8m in FY21 and $11.7m in FY22.Comparative
financial information has been restated to incorporate the correction in the financial results. Post tax earnings impact
in 1H23 period was a loss of $12m
▪A detailed contract recovery plan is being actioned. In addition, negotiations with the customer have resulted in a
commercial reset of the contract. The contract is not considered onerous
▪New contract and executive management team in place
▪Additional control measures have been implemented across the Group

Results summary
Grant Fenn

Summary of HY23 financial results
5
$133.6m
Underlying
NPATA
1,3
2.3x
28.0%
3.9 cps
9.3 cps statutory Basic EPS
17.8% at June 2022
1.7x at June 2022
2.9%
20.6%
12cps HY22
8.5% conversion
24.5%
1H22 results have been restated to reflect the impact of historical misreporting of revenue and contract assets in one of Downer’s maintenance contracts in its Australian Utilities business ($4.6m, $3.2m after-tax)
1
Downer calculates EBITA and NPATA by adjusting EBIT and NPAT to add back acquired intangible assets amortisation expense. GroupHY23: $13.1m, $9.2m after-tax. (HY22: $14.2m, $10.0m after-tax)
2
Total rev enue is a non-statutory disclosure and includes revenue from joint ventures, other alliances and other income
3
The underly ing result is a non-IFRS measure that is used by Management to assess the performance of the business. Non-IFRS measures have not been subject to audit or review. Refer slide 15 for reconciliation to statutory results
4
Net debt to EBITDA ratio includes lease liabilities in Net Debt and is on a post-AASB 16 basis. Gearing ratio does not include lease liabilities in Net Debt and is on a pre-AASB16 basis
5
EPSA is calculated based on underlying NPATA adjusted by contributions from minority interests and ROADs dividends paid; divided by WANOS
Profit after tax and EPSBalance sheet and dividendOperational performance
$68.0m
Underlying
EBITA
1,3
Net Debt to EBITDA
4
$23.9m
Statutory
NPAT
24.8%
$68.1m
Adjusted
Operating cash
Gearing
4
$6.1bn
Underlying
EPSA
3,5
5 cps9.3 cps
Revenue
2
Interim ordinary
dividend (unfranked)
Statutory EBIT of $129.8m
Statutory EBITA $142.9m

1H23 has been very challenging
6
Unprecedented
weather impacts
Labour
challenges
▪40% increase in lost shifts and reduced product volumes within Road Services (Transport)
▪Site closures, delays and productivity impacts in Water projects
▪Lower worker utilisation across all outdoor activities (e.g. Metering Services)
▪Reliant on increased use of outsourced labour (subcontractors and agency hire) to fulfill
service obligations
▪Increased overtime used to fill resource gaps
▪Offshore recruiting initiatives for specific skilled roles
▪EBA renewals all within expected range, and well within CPI escalators
▪Downer continues to be ranked highly (#7) in top 10 employers by Randstad’s Employer
Brand Research
IssueImpact and experience

`
0
100
200
300
400
500
600
CY20CY21CY22
Weather & labour pressures impacting costs and productivity
7
▪Road Services in both Australia and New Zealand heavily impacted –
bituminous products cannot be laid when it is raining (product
specifications, structural issues and safety risks)
▪Lost work shifts have reduced in Australia in calendar 2023 but are
expected to further deteriorate in New Zealand
Sydney and Brisbane lost shifts –Road Services
>40% increase
in lost shifts on
2020/2021 avg
Lost shifts
Outsourced labour usage elevated
1
1
Trailing 12-months subcontractor and temporary staff costs as a percentage of total payroll and subcontractor costs,
(excludes unallocated costs and divested businesses).
▪Increased use of outsourced labour (subcontractors and agency hire) to
fulfill contractual obligations
▪Outsourced labour is more expensive resulting in an impact on margins
–typically labour hire can be up to 15% more expensive
▪Conditions persisting into 2H23
54%
55%
56%
57%
58%
59%
60%
61%
62%
2H201H212H211H222H221H23

▪Preferred applicant for multi-billion dollar
Queensland Train Manufacturing Program
(QTMP)
▪Continued wet weather materially impacted the
performance of the Roads business in 1H23
▪Contracts signed for the sale of Transport
Projects Australia ($212m enterprise value), with
completion expected pre 30 June 2023
▪Renewed key Roads contract in Victoria,
maintaining 8,500 lane km in the Hume region
for up to 7 ½ years (~$490m)
▪Extensive road rehabilitation opportunities are
starting to present in Australia and a significant
effort will be required in New Zealand, across our
suite of services, to recover from recent floods
and storms
Transport
8
44% of
HY23 revenue
51%
21%
28%
Roads
Rail & Transit Systems
Projects

Utilities
9
▪Disappointing result for the half, impacted by:
̶Power maintenance contract (8 Dec ASX
release) ($17m)
̶NSW Water construction project ($12m)
̶NZ renewable wind farm project ($6m)
̶Meter reading productivity and labour
availability impact ($4m)
▪On the positive:
̶Entry into NZ transmission market with
Transpower contract (Aug-22)
̶10-year City of Gold Coast ~$250m water
and sewerage network
̶Revenue growth led by Telco, particularly
nbnand Telstra
18% of
HY23 revenue
44%
29%
27%
Power & Gas
Water
Telco

▪Performance above expectations
▪Royal Adelaide Hospital and Bendigo Hospital
performing to plan
▪Contract win –South Australian Housing
Authority Maintenance Contract (~27,000 social
and public housing dwellings) ~$630m over 7 ½
years
▪On-going involvement in two of Australia’s
largest carbon capture and storage projects
Facilities
10
1
P&E / I&M is the abbrev iation of Power & Energy and Industrial & Marine businesses and also includes Mineral Technologies.
H&E is the abbreviation of Health & Education
38% of
HY23 revenue
1
37%
20%
23%
20%
Govt / H&E
Defence
P&E / I&M
Building

$38.8bn of work-in-hand
11
Work-in-hand by segment
1
($38.8bn)Work-in-hand profile
1
($bn)
Long-datedDiversified by industry
~90% Government /
Government related
1
Work-in-hand figure at Dec-22 adjusted to include expected contract value for the Queensland Train Manuf acturing Program (QTMP)f ollowing the announced preferred applicant status (announced on 6 February 2023) and excludes WIH associated with the Transport Projects
Australia divestment (assuming 30 June 2023 completion)
2
Remaining balance, Construction, comprises the Projects businesses in Australia (until 30 June 2023) and New Zealand (Transport), a portion of Power & Gas (Utilities), Building in New Zealand (Facilities) and construction component of QTMP.
85% Services
2
✓✓✓✓
Transport
$18.1bn
47%
Utilities
$4.7bn
12%
Facilities
$16.0bn
41%
0
2
4
6
8
10
12
14
2H23FY24FY25FY26FY27FY28+
TransportUtilitiesFacilities

Group financials
Michael Ferguson

1
The underly ing result is a non-IFRS measure that is used by Management to assess the performance of the business. Non-IFRS measures have not been subject to audit or review. Refer slide 15 for reconciliation to statutory results
2
1H22 results have been restated to reflect the impact of historical misreporting of revenue and contract assets in one of Downer’s maintenance contracts in its Australian Utilities business ($4.6m, $3.2m after-tax)
3
Total rev enue is a non-statutory disclosure and includes revenue from joint ventures, other alliances and other income
4
Downer calculates EBITA and NPATA by adjusting EBIT and NPAT to add back acquired intangible assets amortisation expense. Group HY23: $13.1m, $9.2m after-tax. (HY22: $14.2m, $10.0m after-tax)
5
ROFE = 12 month rolling underlying EBITA divided by average funds employed (AFE); AFE = Av erage Opening and Closing Net Debt (excludes lease liability) + Equity
Group underlying financial performance
▪Total revenue
3
2.9% higher to $6.1bn
▪Group underlying EBITA margin 2.2%, impacted by:
̶Unprecedented weather impact
̶Labour shortages
̶Productivity
̶Project and contract losses in Utilities
▪Net interest expense decreased by $5.5m
▪Underlying effective tax rate of 26.7%
▪Interim dividend of 5 cps declared (unfranked)
13
$m
1
HY23HY22
2
Change
Totalrevenue
3
6,144.75,970.3
2.9%
EBITDA
281.3341.1
(17.5%)
Depreciation and amortisation
(147.7)(164.1)
10.0%
EBITA
4
133.6177.0
(24.5%)
Amortisation of acquired intangibles
(13.1)(14.2)
7.7%
EBIT
120.5162.8
(26.0%)
Netinterestexpense
(40.3)(45.8)
12.0%
Profit before tax
80.2117.0
(31.5%)
Taxexpense
(21.4)(32.6)
34.4%
Netprofitaftertax
58.884.4
(30.3%)
NPATA
4
68.094.4
(28.0%)
EBITAmargin
2.2%3.0%
(0.8pp)
Effectivetaxrate
26.7%27.9%
(1.2pp)
ROFE
5
9.4%11.1%
(1.7pp)
Dividenddeclared(cps)
5.012.0
(7.0 cps)

Segment underlying performance overview
1H22 results have been restated to reflect the impact of historical misreporting of revenue and contract assets in one of Downer’s maintenance contracts in its Australian Utilities business($4.6m, $3.2m after-tax), and to reflect the change in operating segment of Power Systems
f rom the Transport segment to the Utilities segment
1
Comparatives exclude Hospitality and Laundries
14
Transport
Facilities
1
Utilities
▪Revenue of $2.7bn (1.2%)
▪EBITA of $88.7m (14.5%)
▪EBITA margin of 3.3% (0.6pp)
▪Deterioration in margins relative to
1H22
▪Wet weather, labourmarket
challenges and increased transport
and logistics costs
▪Revenue and margin performance on
long term rail maintenance contracts
driving strong rail performance, offset
by residual QTMP bid costs
▪Revenue of $1.1bn (12.3%)
▪EBITA of ($5.2m) (>100%)
▪EBITA margin of (0.5%) (4.5pp)
▪Contract and project losses
‒Power maintenance contract ($17m)
‒NSW Water construction project ($12m)
‒NZ renewable wind farm project ($6m)
▪Losses in Meter reading associated
with labour availability, productivity and
weather related challenges ($4m)
▪Revenue growth driven by nbnand
Telstra work (Telco)
▪Revenue of $2.3bn (16.6%)
▪EBITA of $99.0m (11.1%)
▪EBITA margin of 4.4% (0.2pp)
▪Government (State Housing and NSW
WoGcontracts) and H&E (nRAHand
Bendigo post reviewable services)
performing well
▪Power & Energy is seeing growth
through new contracts, including with
Santos and CS Energy (Kogan Creek)

Reconciliation of underlying to statutory results
1
Downer calculates EBITA and NPATA by adjusting EBIT and NPAT to add back acquired intangible assets amortisation expense. Group HY23: $13.1m, $9.2m after-tax. (HY22: $14.2m, $10.0m after-tax)
2
Tax of $25.3m is calculated by adjusting underlying tax of $21.4m with $3.9m tax on amortisation of acquired intangible assets
3
The underly ing result is a non-IFRS measure that is used by Management to assess the performance of the business. Non-IFRS measures have not been subject to audit or review
4
The fair value of the Downer Contingent Share Options (DCSO) have decreased primarily driven by the movement in Downer’s share price from $5.05 at 30 June 2022 to $3.71 at 31 December 2022
15
$mEBITA
1
Net interest
expense
Tax expense
2
NPATA
1
Amortisation of
acquired
intangibles
(post-tax)
NPAT
Underlying
3
results133.6 (40.3)(25.3)68.0 (9.2)58.8
Fair value on Downer Contingent Share Options
(DCSO)
4
9.3--9.3-9.3
Total items outside underlying result
9.3--9.3-9.3
Statutory results
142.9(40.3)(25.3)77.3(9.2)68.1

Operating cash flow
16
1
1H22 results have been restated to reflect the impact of historical misreporting of revenue and contract assets in one of Downer’s maintenance contracts in its Australian Utilities business ($4.6m, $3.2m after-tax)
2
The underly ing result is a non-IFRS measure that is used by Management to assess the performance of the business. Non-IFRS measures have not been subject to audit or review
▪Operating cash conversion of 8.5%. Key variances
explained by:
1.$78m –supplier payments on completion of SGT
project (timing, with inflow accumulated over prior
years)
2.$22m –settlement of two project claims (provided
in prior year)
3.$40m –change in timing of collection from two
key customers
4.$40m –claim positions agreed and expected to
be paid in H1, delayed collection to H2 (Transport
Projects and Transmission)
▪Working capital increased through the period, due to
inventory (specifically bitumen in Roads and spares in
Rail) and contract assets
$mHY23HY22
1
Change
Underlying
2
EBIT
120.5162.8
(26.0%)
Add: Amortisation of acquired intangibles
13.114.2
(7.7%)
Add: Depreciation and amortisation
147.7164.1
(10.0%)
Underlying
2
EBITDA
281.3341.1
(17.5%)
Operating cash flow
(35.4)270.4
(>100.0%)
Add: Net interest paid
40.247.8
(15.9%)
Add: Tax paid / (received)
19.1(24.1)
>100.0%
Adjusted operating cash flow
23.9294.1
(91.9%)
EBITDA conversion
8.5%86.2%
(77.7pp)
Adjust for items booked in FY20-21.1
(100.0%)
Underlying
2
adjusted operating
cash flow
23.9315.2(92.4%)
Underlying
2
EBITDA conversion8.5%92.4%
(83.9pp)

▪Cash balance of $450.4m and total liquidity of
$1,635.4m
▪Strong focus in 2H23 to return to traditional
operating cash flow conversion
▪Capex consistent with prior periods
Cash flow
17
$mHY23HY22Change
Total operating cash flow(35.4)270.4
(>100.0%)
Net Capex (Core)(70.1)(65.2)
7.5%
Net Capex (Non-Core)-(8.1)
100.0%
Payment of principal lease liabilities (Core)(81.9)(75.4)
(8.6%)
Payment of principal lease liabilities (Non-Core)-(9.6)
100.0%
IT (14.4)(22.8)
36.8%
Advances to JVs and Other(5.3)(10.6)
50.0%
Funds from operations(207.1)78.7
(>100.0%)
Dividends paid(86.4)(86.7)
0.3%
Divestments-247.6
(100.0%)
Acquisitions-(22.9)
100.0%
Share buyback(17.8)(99.0)
82.0%
Net proceeds / (repayment) of borrowings18.9(253.7)
>100.0%
Net decrease in cash(292.4)(136.0)
(>100.0%)
Cash at the end of the period450.4676.7
(33.4%)
Total liquidity
1,635.42,103.7
(22.3%)

Group debt profile
▪Weighted average debt duration of 3.4 years
1
(3.9 years at 30 June 2022)
▪Net Debt to EBITDA
2
of 2.3x, within the capital
allocation framework target range of
2-2.5x, but above current optimal level
▪Downer remains in compliance with all financial
covenants
▪Proceeds from sale of Transport Projects
Australia will be used to repay debt
18
Debt maturity profile (A$m)
1
Based on the weighted average life of debt facilities (by A$mlimit)
2
Net debt to EBITDA ratio includes lease liabilities in Net Debt and is on a post-AASB 16 basis
3
Excludes lease liabilities
Debt facilities $mDec-22Jun-22Dec-21
Total limit
3
2,572.12,563.42,686.2
Drawn
3
1,387.11,358.41,259.2
Available1,185.01,205.01,427.0
Cash450.4738.5676.7
Total liquidity1,635.41,943.52,103.7
Net debt
3
936.7619.9582.5
0
200
400
600
800
Jun-23Jun-24Jun-25Jun-26Jun-27Jun-28Jun-29Jun-30Jun-31Jun-32Jun-33
A$m
Bilateral bank facilities
A$ MTN
JPY MTN
USPP
Syndicated bank facilities

Outlook
Grant Fenn

FY23 has proven difficult to provide
accurate guidance given weather and
changing economic conditions:
▪17 August 2022 –Guidance for FY23
̶10-20% underlying NPATA growth
subject to COVID-19, weather,
labour, and other disruptions
▪3 November 2022 –AGM
̶Forecasts continue to support
guidance
▪8 December 2022 –Trading Update
̶Trading for October and November
indicates that guidance is unlikely to
be met
̶Guidance reset to $210m -$230m
NPATA (excluding impact of Utilities
contract issue)
Outlook
20

Change in guidance
21
8 December
2022
Excluding any prior period impact of the accounting irregularities, Downer now expects underlying FY23
NPATA to be between $210 million –$230 million assuming no further material COVID-19, weather, labour
shortages or other disruptions
Other Utilities project
risks ($12m)
▪Heightened risk of Water project loss from unrecoverable prolongation costs as storms and flooding
continue to impact completion
▪Risks have materialised since 8 December
Expected slowdown in
Govt minor capital
works ($8m)
▪Slowdown in Government minor capital works based on recent customer feedback
NZ storm impact
($8m)
▪Recent floods and storms in the North Island have materially impacted the New Zealand business
▪We expect this to present opportunities in FY24, however 2H23 pipeline has been impacted
27 February
2023
$210-230m
$170-190m
($40m)
Downer now expects underlying FY23 NPATA to be between $170 million –$190 million assuming no further
material COVID-19, weather, labour shortages or other disruptions, and excluding restructuring costs
Utilities Power
Maintenance contract
($12m)
▪Losses associated with the power maintenance contract not included in the 8 December guidance
▪Whilst not onerous, further losses will impact H2 until the contract reset and recovery plan take effect

Strategic priorities
Peter Tompkins

Continue to simplify
current portfolio
Maximise divestment
value for assets to be
exited
Operational
excellence and risk
management
Management
accountability and
application of The Downer
Standard to drive
improved contract
margins & risk
management
Strategies to realise value for shareholders
23
Reset operating
model and cost base
Merge AU & NZ
operations to be sector led
to realise growth potential
and reset cost base

Reset operating model and cost base
A further update will be provided at
Downer’s Investor Day in April 2023
Targeting
benefits of
at least
$100m per
annum in
FY25
Project leader and team appointed,
with scope & focus areas:
▪Merge AU & NZ operating units to
establish sector led, stand-alone,
Trans-Tasman businesses
▪Operating model optimisation,
systems, fleet & property
rationalisation and other cost-out
initiatives
Improves scale,
technical
capability &
growth potential
Improves
customer
innovation and
solutions
Improves risk
management
through
standardisation
Reduces
corporate and
business
overheads
Merger of AU & NZ operating units
24

Continue to simplify current portfolio
Wehave a portfolio of outstanding assets,
and the Australian Transport Projects
divestment proves that
Divestment
program
progressed
Transport Projects signed
▪Announced 22 February 2023 with an
enterprise value of $212m
▪Completion expected before 30 June
2023, subject to FIRB approval and
other customary conditions
Repurpose It underway
▪Very attractive waste industry asset
▪45% ownership (equity accounted)
Merger of
Australian and
New Zealand
operations
provides portfolio
optionality
Decisions on asset
sales dependent
upon economic
conditions & value
25
Ongoing strategic review

Operational excellence and risk management
Targeting
>4.5%
EBITA
margin
(FY25)
26
Downer has exceptional businesses,
market leading positions with scale and
exposure to energy transition,
industrialisation, defence and government
outsourcing driving high growth potential
Higher level of
accountability and focus of
senior leaders to deliver
New sector led businesses
have scale, specialisation
and accountability for
performance and operational
assurance/front line risk
management
The Downer Standard
defines the risk
management standards in
functional and operational
areas
Risk appetite in current
climate is lower and tightly
managed
Risk management
▪The Downer Standard to drive
better project execution
▪Business unit accountability
through new operating structure
▪Delivery of the transformation
program (targeting at least
$100m p.abenefits)
▪Exiting lower margin operations
▪Adjustment of terms and
conditions and contract forms to
reflect new market dynamics
and industry supply constraints

Sector led operating model and transformation program
Continue to simplify current portfolio
Operational excellence and risk management
Transformation
be nefits
Target period for delivery of
$100m p.aof benefits in
FY25
1 February 2023
Transformation Management
Office established
Timeline and what to expect from here
27
22 February 2023
Transport Projects divestment
Portfolio review
Announced process
underway for Repurpose It
1 July 2023
Ne w ope rating model
Targeting the new operating model
to be effective at the beginning of
FY24
20 February 2023
Trans-Tasman integration
Announced the merged Australian
and New Zealand operating model
and the new Executive team
27 February 2023
FY23 Half-year results
10 August 2023
FY23 Full-year results
27 April 2023
Inv estor Day 2023
Additional market
communication on progress of
delivering shareholder value
EBITA % initiatives delivered
Target date to have executed key
steps required to deliver targeted
FY25 EBITA margins
FY23FY24

Preferred applicant for QTMP
28
▪Preferred applicant on Queensland Train Manufacturing Program
(QTMP) –announced 6 February 2023
▪Largest investment in new rollingstock in Queensland history
▪Target contract close and mobilisation in Q4 FY23
▪Downer will deliver:
̶65 six-car passenger trains
̶two training simulators
̶purpose built train manufacturing facility at Torbanlea
̶maintenance facility at Ormeau
̶passenger train maintenance
▪Downer is a leading provider of rollingstock asset management services
in Australia, with expertise across every project phase from design and
manufacture to through life support, fleet maintenance and overhaul
ComponentRev %Delivery Profile
Manufacturing & maintenance facilities~35%
Fleet delivery~45%
Maintenance (through life support)~20%Transition inFull fleet
FY23FY27FY33
Indicative revenue profile

▪Particular focus on:
̶value for shareholders
̶risk management
̶mobilisation of QTMP
̶target EBITA margin
̶new structures and leadership
team for success
▪The Transformation Program is
mobilised and restructuring costs to be
incurred from 2H
▪Update at Investor Day in April 2023
Immediate priorities
29

Supplementary information

Total WIH of $16.1bn
96% government WIH
1
31
Top 5 Contracts Remaining (ex QTMP)
1. Maintaining Waratah trains until 2044
2. Maintaining HCMTs until 2053
3. Maintaining Sydney Growth Trains until 2044
4. Operating Yarra Trams until 2024 (Keolis Downer)
5. Operating Adelaide Passenger Rail Network until
2033 (Keolis Downer)
1
Work-in-hand figure at Dec-22 adjusted to include expected contract value for the Queensland Train Manufacturing Program (QTMP) f ollowing the announced preferred applicant status
(announced on 6 February 2023) and excludes WIH associated with the Transport Projects Australia divestment (assuming 30 June2023 completion)
2
WIH Government includes direct Government and Government related projects
3
1H22 restated to reflect the change in operating segment of Power Systems from the Transport segment to the Utilities segment
▪Total WIH of $18.1bn
▪98% government WIH
2
Transport
Road Services
Rail & Transit Systems
Projects
14.5% v HY22
99.7
103.8
88.7
0
20
40
60
80
100
120
1H211H221H23
EBITA
3
$m
0.6pp v HY22
4.0%
3.9%
3.3%
0%
1%
2%
3%
4%
5%
1H211H221H23
EBITA
3
margin
1.2% v HY22
Revenue
3
$m
2,462.1
2,664.8
2,698.1
0
500
1,000
1,500
2,000
2,500
3,000
1H211H221H23
0.0
1.0
2.0
3.0
4.0
5.0
6.0
2H23FY24FY25FY26FY27FY28+
WIH profile
1
($bn)

32
Top 5 Contracts Remaining
1. Sydney Water until 2030 (Confluence Water JV)
2. AusNet (power) until 2024 (plus two 3-year
extensions)
3. City of Gold Coast (water) until 2032
4. AusNet (gas) until 2026
5. Logan City Council until 2025 (plus two 2-year
extensions)
1
WIH Government includes direct Government and Government related projects
2
1H21 and 1H22 results have been restated to reflect the impact of historical misreporting of revenue and contract assets in oneof Downer’s maintenance contracts in its Australian Utilities
business. 1H22 also restated to reflect the change in operating segment of Power Systems from the Transport segment to the Utilities segment
▪Total WIH of $4.7bn
▪81% government WIH
1
Utilities
Telecommunications
Water
Power and Gas
0.0
0.5
1.0
1.5
2.0
2H23FY24FY25FY26FY27FY28+
WIH profile ($bn)
Revenue
2
$m
12.3% v HY22
902.1
1,011.9
1,136.2
0
200
400
600
800
1,000
1,200
1H211H221H23
EBITA
2
$m
>100% v HY22
36.4
40.5
(5.2)
-10
0
10
20
30
40
50
1H211H221H23
EBITA
2
margin
4.5pp v HY22
4.0%
4.0%
(0.5%)
-1%
0%
1%
2%
3%
4%
5%
1H211H221H23

33
Top 5 Contracts Remaining
1. New Royal Adelaide Hospital PPP until 2046
(contract reset 30 June 2022)
2. Bendigo Hospital PPP until 2042
(contract reset 30 June 2022)
3. Sunshine Coast University Hospital PPP until 2042
4. Dept of Defence Estate Maintenance and
Operations until August 2024
5. Orange Hospital PPP until 2036
1
WIH Government includes direct Government and Government related projects
2
Excludes Hospitality and Laundries in prior periods
▪Total WIH of $16.0bn
▪85% government WIH
1
Facilities
Government
Health & Education
Defence
Power & Energy
Industrial & Marine
Building
EBITA
2
margin
0.2pp v HY22
5.3%
4.6%
4.4%
0%
1%
2%
3%
4%
5%
6%
1H211H221H23
Revenue
2
$m
16.6% v HY22
1,578.7
1,929.9
2,250.9
0
500
1,000
1,500
2,000
2,500
1H211H221H23
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
2H23FY24FY25FY26FY27FY28+
WIH profile ($bn)
EBITA
2
$m
11.1% v HY22
82.9
89.1
99.0
0
20
40
60
80
100
120
1H211H221H23

HY23 revenue composition
34
Revenue diversified
across Transport,
Utilities and Facilities
markets
1
P&E / I&M is the abbrev iation of Power & Energy and Industrial & Marine businesses and also includes Mineral Technologies. H&E is the abbreviation of Health & Education
Revenue growth of 3%
on prior period
(9% excluding Mining and Hospitality
in comparative period)

$mHY23HY22
1
Change
Transport
88.7103.8
(14.5%)
Utilities
(5.2)40.5
(>100.0%)
Facilities
99.089.1
11.1%
Urban Services Businesses
182.5233.4
(21.8%)
Mining
-8.1
(100.0%)
Hospitality
-(12.5)
100.0%
Non-core businesses
-(4.4)
100.0%
Corporate
(48.9)(52.0)
6.0%
Underlying EBITA
2,3
133.6177.0
(24.5%)
Items outside of underlying EBITA
9.34.6
>100%
Statutory EBITA
2
142.9181.6
(21.3%)
Underlying NPATA
2,3
68.094.4
(28.0%)
Statutory NPAT
68.185.8
(20.6%)
Business unit performance
1
1H22 results have been restated to reflect the impact of historical misreporting of revenue and contract assets in one of Downer’s maintenance contracts in its Australian Utilities business($4.6m, $3.2m after-tax), and to reflect the change in operating segment of Power
Sy stems from the Transport segment to the Utilities segment
2
Downer calculates EBITA and NPATA by adjusting EBIT and NPAT to add back acquired intangible assets amortisation expense. Group HY23: $13.1m, $9.2m after-tax. (HY22: $14.2m, $10.0m after-tax)
3
The underly ing result is a non-IFRS measure that is used by Management to assess the performance of the business. Non-IFRS measures have not been subject to audit or review
35
▪Refer to slide 14 for commentary on segment
performance

$mHY23HY22Change
Net Capital expenditure –core70.165.2
7.5%
Net Capital expenditure –non-core-8.1
(100.0%)
IT14.422.8
(36.8%)
Capital expenditure / IT84.596.1
(12.1%)
$mHY23
1
HY22
1
Change
Depreciation of PP&E –core59.454.49.2%
Depreciation of PP&E –non-core-13.6(100.0%)
IT amortisation13.412.29.8%
Depreciation of RouA –core74.976.2(1.7%)
Depreciation of RouA –non-core-7.7(100.0%)
Total depreciation & amortisation147.7164.1(10.0%)
Capital expenditure and D&A
▪Maintenance capex broadly in-line with PP&E
depreciation and IT amortisation expense
36
1
Total depreciation & amortisation excludes acquired intangible assets amortisation expense (HY23: $13.1m, HY22: $14.2m)

Notice of change of interests of substantial holder Final Director’s Interest Notice

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