2019 Annual Report

ATLAS ARTERIA ANNUAL REPORT 2019 ANNUAL REPORT 2019 ATLAS ARTERIA IS A GLOBAL OWNER, OPERATOR AND DEVELOPER OF TOLL ROADS, WITH A PORTFOLIO OF FOUR TOLL ROADS IN FRANCE, GERMANY AND THE UNITED STATES. WE ARE FOCUSED ON ENSURING OUR CUSTOMERS, AND THE COMMUNITIES IN WHICH WE OPERATE, ARE WELL SERVED BY THE TRANSPORT LINKS WE PROVIDE. Contents 2019 at a Glance 2 Sustainability 18 Chairpersons’ Review 3 Risk Management 28 From the CEO and Managing Director 5 Governance 29 The Atlas Arteria Business 8 Financial Report 33 Vision and Values 9 Securityholder Information 116 Portfolio and Performance 10 Corporate Directory IBC Stapling The Stapled Securities are issued on terms under which each holder who is Atlas Arteria comprises Atlas Arteria Limited (ACN 141 075 201) (ATLAX) and or becomes an Excluded US Person agrees to the above terms and irrevocably Atlas Arteria International Limited (Registration No. 43828) (ATLIX). In accordance appoints Atlas Arteria as that holder’s agent and attorney to do all acts and things with its requirements in respect of stapled securities, ASX reserves the right to and execute all documents which Atlas Arteria considers necessary, desirable remove either or both of ATLAX and ATLIX from the offi cial list of ASX if, while the or reasonably incidental to effect the above actions. stapling arrangements apply, the securities in one of the entities ceases to be Defi nitions: stapled to the securities in the other entity. An “Excluded US Person” means a holder of Stapled Securities (or a person who Takeover provisions seeks to be registered as a holder of Stapled Securities) whom the directors of Unlike ATLAX, ATLIX is not subject to takeover provisions of Chapters 6, 6A, 6B Atlas Arteria have determined is a US Person who is not a Qualifi ed Purchaser and 6C of the Corporations Act. However, as the takeover provisions of the or holds or will hold Stapled Securities for the account or benefi t of any US Person Corporations Act apply to ATLAX and its shareholders, by virtue of the stapling who is not a Qualifi ed Purchaser. arrangements, the takeover provisions will apply to the holders of Atlas Arteria A “Qualifi ed Purchaser” has the meaning given in Section 2(a)(51) of the stapled securities. This is notwithstanding that ATLIX and its shareholders are not US Investment Company Act of 1940 and the rules and regulations of the subject to the takeover provisions of the Corporations Act. US Securities and Exchange Commission. US ownership restrictions A “US Person” has the meaning given in Rule 902(k) of Regulation S under Atlas Arteria’s stapled securities (Stapled Securities) are subject to ownership the US Securities Act of 1933. restrictions applying to residents of the United States. Disclaimer The Stapled Securities have not been registered under the US Securities Act of Investments in Atlas Arteria are subject to investment risk, including possible 1933 or the securities laws of any state or other jurisdiction of the United States. delays in repayment and loss of income and capital invested. In addition, no Atlas Arteria entity has been registered under the US Investment Company Act of 1940 in reliance on an exemption from registration. Forward looking statements This report may contain forward-looking statements including statements with Accordingly, the Stapled Securities may not be offered or sold in the United States respect to Atlas Arteria’s future performance. Due care and attention have been or to, or for the account or benefi t of US Persons except in accordance with exercised in the preparation of forward-looking statements, however actual an available exemption from, or a transaction not subject to, the registration results may vary as a result of various factors. requirements of the US Securities Act, the US Investment Company Act and applicable US state securities laws. Advice warning In order to qualify for an exemption under the US Investment Company Act, The information in this annual report is given in good faith and derived from the provisions of the constitutions of the Atlas Arteria entities provide that where sources believed to be accurate at this date but no representation or warranty a holder is an Excluded US Person: of accuracy, completeness or reliability is given and no responsibility or liability arising in any other way, including by reason of fraud or negligence for errors − Atlas Arteria may refuse to register a transfer of Stapled Securities to that or omission herein, is accepted by Atlas Arteria or its offi cers. Excluded US Person; and This annual report is not an offer or invitation for subscription or purchase of, − the Excluded US Person may be requested to sell their Stapled Securities and or a recommendation of, securities. It does not take into account the investment be advised that, if the Excluded US Person fails to do so within 30 Business objectives, fi nancial situation and particular needs of the investor. Before making Days, they will be divested of such Stapled Securities and receive the proceeds an investment in Atlas Arteria, the investor or prospective investor should of sale (net of transaction costs including any applicable brokerage, taxes and consider whether such an investment is appropriate to their particular charges) as soon as practicable after the sale. investment needs, objectives and fi nancial circumstances and consult an In addition, the provisions in the constitutions provide that a holder may be investment adviser if appropriate. required to complete a statutory declaration in relation to whether they (or any Atlas Arteria’s ongoing commitment to your privacy person on whose account or benefi t it holds Atlas Arteria securities) are an Excluded US Person. Any holder who does not comply with such a request will We understand the importance you place on your privacy and are committed be deemed to be an Excluded US Person. to protecting and maintaining the confi dentiality of the personal information you provide to us. Atlas Arteria’s privacy policy is available on the Atlas Arteria website at www.atlasarteria.com, or you can contact our investor relations team on 1800 621 694. SAVING TIME FOR THE THINGS IN LIFE THAT MATTER MOST ATLAS ARTERIA ANNUAL REPORT 2019 | 1 2019 AT A GLANCE THE YEAR 2019 WAS A YEAR OF SIGNIFICANT ACHIEVEMENT. 2019 highlights − Successful internalisation of management on 1 April − Executed a transaction to: − acquire a further 6.14% interest in APRR, increasing our total interest to 31.14%; and − remove Macquarie as manager, resulting in Atlas Arteria becoming a truly independent toll road owner and operator − Lodged the SCC rate case for the Dulles Greenway in December 0.7% 3.1% increase in weighted increase in weighted average traffic average EBITDA 2.5% A$67m increase in weighted saving in management costs average revenue No.1 APRR voted “best employer” five years in a row 2 | ATLAS ARTERIA ANNUAL REPORT 2019 CHAIRPERSONS’ REVIEW 2019 A GLANCE AT REVIEW CHAIRPERSONS’ FROM THE CEO AND Dear shareholder DIRECTOR MANAGING At the time of writing this report, the world is undergoing As announced on 23 March 2020, the COVID-19 pandemic is substantial disruption as a result of the COVID-19 pandemic. impacting traffic due to lockdowns. We remain in a strong While as a business we are not impervious to the impacts of position, but given the uncertainty, the Atlas Arteria Boards this crisis, we believe that our achievements during 2019 have resolved to defer any announcement of a distribution reflecting BUSINESS positioned Atlas Arteria well to face the challenges of the coming the performance in the second half of 2019, and to suspend the months and to stay focused on our key strategic priorities. guidance for any distribution reflecting the performance of the THE ATLAS ARTERIA first half of 2020. To recap on 2019, we seamlessly achieved the full internalisation of management at Atlas Arteria, first at a corporate level and, Depending on the duration of the lockdowns, stay-at-home more recently, by taking over from Macquarie as manager and reduced public gathering orders across Europe, the Boards of our interest in APRR and ADELAC. The APRR transaction, will consider using the funds that would have been distributed VALUES which completed early in 2020, also increased our ownership to shareholders, to either repay debt or alternatively to pay VISION AND to 31.14% of APRR and 31.17% of ADELAC. At the same time, the second half 2019 distribution at a later time in 2020. We we continued our focus on sound, active day-to-day operational wish to reiterate that Atlas Arteria remains in a strong position management, which delivered a strong financial performance with significant cash on hand following receipt of a second for the year. half 2019 dividend from APRR and funds remaining from the recent capital raising for the APRR transaction. Our underlying Delivery of internalisation businesses also hold strong liquidity positions to support them Our CEO and Managing Director, Graeme Bevans, an through the coming months. This is a time to be prudent and international infrastructure specialist with a strong track record we remain focused on the continued development of a strong PERFORMANCE in managing complex businesses, has established a team of and sustainable business with an appropriate capital structure AND PORTFOLIO highly experienced executives who are all driven to successfully that brings long-term value to shareholders. develop the business in a sustainable way. They bring a diverse and complementary set of operational and financial capabilities Culture and values driving good governance and are strongly aligned to the interests of shareholders. Atlas Arteria’s values of safety, transparency, engagement, environmental responsibility and respect are more important The internalisation of management has lowered our cost than ever during the COVID-19 pandemic.

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