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OUR VISION IS TO BE A WORLD-LEADING AIRPORT ENTERPRISE WHERE PEOPLE COME FIRST. WE EMBRACE OUR VISION AND COMMIT TO MEETING THE EXPECTATION OF EXCELLENCE.

VALUES / WE STRIVE TO ACHIEVE OUR VISION BY FOCUSING ON: PEOPLE: Consistently delivering outstanding customer service, fostering co-operation with all stakeholders and encouraging staff to achieve their full potential. SAFETY: Facilitating the safe and secure movement of all people, vehicles, aircraft and cargo on airport effectively and efficiently. ENVIRONMENT: Operating in a manner that minimises impact on our local community and physical environs. RETURNS: Working continually to achieve appropriate improvements in shareholder value.

COMMITMENT / IN SUPPORT OF OUR VISION WE WILL BE: PROACTIVE: Responding positively to challenge, being innovative and communicating effectively. RESPONSIBLE: Ensuring our actions and initiatives raise standards and improve performances through both individual and team efforts. ETHICAL: Engaging in sound practices, respecting others and accepting responsibility for our behaviour.

CONTENTS 2 RESULTS AT A GLANCE / 3 YEAR IN REVIEW / 5 DIRECTORS’ REPORT / 11 BOARD OF DIRECTORS / 12 SENIOR MANAGEMENT / 13 OPERATIONAL REVIEW /18AIRPORT OVERVIEW /20AREAS OF FOCUS: PASSENGERS / AIRCRAFT / RETAIL / PROPERTY / COMMUNITY / ENVIRONMENT / 32 ENVIRONMENTAL VALUES AND VISION / 33 FINANCIAL STATEMENTS

The Auckland International Airport Limited annual meeting will be held 10.30am Wednesday 19 November 2003, Newmarket Room, Ellerslie Convention Centre, Ellerslie Racecourse, Greenlane Road, Auckland, New Zealand. 23763_AIAL_Txt 24/09/20034:21PMPage1 CLOSELY ITWILLDOTHISBYWORKING WITHALLSTAKEHOLDERS. PARKING ANDPROPERTY. COMPANY’S FOURCOREBUSINESSES–AVIATION, RETAIL, CAR THEAIRPORTFOCUSED ONCONTINUINGTOADDVALUE TEAMIS BYGROWINGTHE OF AIRCRAFTANDPASSENGERS. TO ENSURINGTHESAFE,SECUREANDSEAMLESSMOVEMENT WEARECOMMITTED GATEWAY ANDPREMIERAIRPORT. AUCKLAND AIRPORT ISNEWZEALAND’SINTERNATIONAL PASSENGERS PROPERTY AIRCRAFT COMMUNITY ENJOY THEJOURNEY. RETAIL ENVIRONMENT

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RESULTS AT A GLANCE

2003 2002 Movement $000s $000s %

Financial performance Operating revenue 234,707 200,991 +16.8% Surplus before interest, taxation and depreciation 181,082 152,012 +19.1% Net interest 30,396 17,939 +69.4% Surplus before taxation 120,093 102,273 +17.4% Taxation 36,592 30,762 +19.0% 2 Surplus after taxation 83,501 71,511 +16.8% Dividends: Ordinary – cents per share 22.00c 13.50c +63.0% – amount 66,954 56,898 +17.7%

Financial position Shareholders’ equity 547,260 732,274 -25.3% Total assets 1,116,680 1,103,309 +1.2% Equity ratio 49.0% 66.4% -26.2% Earnings per share 27.44c 16.95c +61.9% Return on average equity 13.1% 11.2% +17.0% Shares on issue 304,354,619 422,000,000 -27.9% AUCKLAND INTERNATIONAL AIRPORT LIMITED AIRPORT AUCKLAND INTERNATIONAL

Operational performance Passenger movements 9,427,652 8,803,949 +7.1% Aircraft movements 144,531 142,620 +1.3% Aircraft tonnage 4,920,154 4,775,636 +3.0% 23763_AIAL_Txt 24/09/20034:21PMPage3 2003 YEARINREVIEW INTERNATIONAL EVENTS. DESPITEADVERSE PASSENGER GROWTH ANOTHER RECORDYEAR, International passengermovementsup3.9percentto5,370,989. International Positive outlookfor2003/04withincreasing passengerandaircraft movementsandstrong demand forproperty developments. Interest covered 4.9times.Standard &Poor’s credit ratingunchangedatA+/Stable/A-1. Interest costsincreased from $17.939millionto$30.396followingcapitalrestructuring. Capital repayment of$212.714millionmadeon25October2002,financedbyincreased borrowings. Total fullyimputeddividendsof22.0centspershare, amountingto$66.954million. Surplus aftertax$83.501million. Inclusive ofthevaluebridge,revenue amountedto$234.707million. and associatedroading independentlyvaluedat$6.667 million. Results furtherenhancedbythetransfertocompanyofPukakiBridge representing amargin of76.5percent. EBITDA from normaloperationsup14.7percentto$174.415million, largely asaresult terminal. ofthere-tendering ofconcessionsattheinternational Revenue from retail activitiesup30.5percentfrom $57.826millionto$75.472million, Surplus aftertaxationup7.4percentto$76.834million. Revenue from normaltradingoperationsup13.5percentto$228.040million. Domestic passengermovementsup11.6percentto4,056,663. Total passengermovementsincreased 7.1percentfrom 8,803,949to9,427,652. Sale byAucklandCityCouncilofhalfits25.6percentshareholding inthecompany. Equity ratioreduced from 66.4percentto49.0cent. Earnings pershare increasedEarnings from 16.95centsto27.44cents. WITH POSITIVE

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AUCKLAND INTERNATIONAL AIRPORT LIMITED 4 2003 YEARINREVIEW Source: StatisticsNewZealand 6 7 8 9 5 10 80 10 03 02 01 00 98 RETURN ONAVERAGE EQUITY 80 10 03 02 01 00 98 REVENUE 11 4 99 99 12 3 2 (%) 0 25 50 75 100 125 150 175 200 ($m) 2.5 5 7.5 10 0 15 12.5 1 2 Others 12. Canada 11. France 10. Taiwan 9. 8. Germany China 7. 6. Korea S 5. Japan 4. USA 3. UK Australia 2. NewZealand 1. PASSENGERS 2003(2002) NATIONALITY OFARRIVING 80 10 03 02 01 00 98 TAXATION ANDDEPRECIATION SURPLUS BEFOREINTEREST, 80 10 03 02 01 00 98 EARNINGS PERSHARE 99 99 14.0% 11.7% 37.9% 1.6% 1.8% 1.3% 1.9% 4.1% 4.4% 4.4% 7.3% 9.6% (14.3%) (11.8%) (38.7%) 0 25 50 75 100 125 150 175 200 ($m) (1.5%) (1.0%) (1.8%) (1.9%) (3.9%) (4.2%) (4.3%) (6.6%) (9.3%) 0 2.5 5 7.5 10 12.5 15 17.5 20 22.5 25 27.5 (¢) 80 10 03 02 01 00 98 SURPLUS AFTERTAXATION 80 10 03 02 01 00 98 PASSENGER MOVEMENTS 80 10 03 02 01 00 98 AIRCRAFT MOVEMENTS oetcInternational Domestic oetcInternational Domestic 99 99 99 (m) 0 10 20 30 40 50 60 70 80 ($m) 0 20 40 60 80 100 120 140 160 (000s) 1 2 3 4 5 6 7 8 9 10 23763_AIAL_Txt 24/09/20034:21PMPage5 the companyhavebeenofa international airports, international on Asiantravel. closely bytheSARSvirusandinparticularitssignificantimpact aviationandtravel,followed consequential effects oninternational Ansett Australiaonourmajorcustomer, AirNewZealand. September 112001andthefinancialeffects ofthedemise years. Theprevious financialyearwasnotablefortheeventsof eventshasbeenseverely testedinthepasttwo international AirportLimited’sAuckland International (AIAL)resilience toadverse in obtainingdirect ownership. and there are strategicandoperational benefitsforthecompany the year. Theseassetsare situatedwithintheairportboundaries assets, ownershipofwhichwaspassedtothecompanylatein being thevalueofPukakiBridgeandassociatedroading of $6.667millioninboththerevenue andsurplusaftertaxresults, the surplusaftertaxfrom normaloperationswas$76.834 million. with thefundingof$212.714millioncapitalrepayment meant year. Higheroperatingcostsandincreased interest costsassociated concessions asnewfive-yearcontractscameintoeffect earlyinthe the positiveeffects ofthere-tendering ofthemajorretail increased $27.049million,or13.5percent,to$228.040 million. revenue from normaloperationsforthe2002/03financialyear to achieverecord results. diversified revenue base,hasenabledthecompany tocontinue visitors.This,alongwithits over 70percentofallinternational to minimisenegativeeffects onNewZealand. and itscontinuedcleangreen image.Thesequalities continue for thislieinNewZealand’s relative isolationfrom suchevents with therecovery quickerandmore pronounced. Thereasons DIRECTORS’ REPORT WAYNE BOYD Both years,incomparisonwithothercountriesand This yearsawtheactofterrorism inBali,a warinIraqandits The year’s results havebeenenhancedbythenon-cashsum A significantportionoftheincrease, $17.646million,reflected difficulties andpressures,Despite theinternational thecompany’s Auckland AirportisNewZealand’s maingatewayhandling Chairman the adverseeffects onNewZealandand shorter durationandlesssevere, TO ACHIEVERECORDRESULTS. ENABLED THECOMPANY TOCONTINUE DIVERSIFIED REVENUEBASE,HAS VISITORS. THIS,ALONGWITHITS 70 PERCENTOFALLINTERNATIONAL MAIN GATEWAY HANDLINGOVER AUCKLAND AIRPORT ISNEWZEALAND’S year to27.44centspershare. pershare,increase upfrom inearnings 16.95centspershare last in thenumberofshares onissue,there hasbeenasignificant effects ofthecapitalrepayment andthecorresponding reduction million, whilethesurplusaftertaxwas$83.501million. assets, thecompany’s revenue fortheyearincreased to$234.707 company’s overallborrowings increased significantlyatyear-end, up following therevaluation lastyear. independent expertsoftheeconomiclivesrunwaypavements million, largely asaresult ofacomprehensive re-evaluation by margin of76.5percent. of theseassets,EBITDAtotalled$174.415million,representing a of thePukakiBridgeandassociatedroading. Excluding theimpact revenue gainof$6.667millionasa result ofthetransferownership (75.6 percent). $181.082 million,representing anEBITDAmargin of77.2percent depreciation (EBITDA)increased from $152.012millionto before interest,(2002: $48.979million).Earnings taxationand an increase of16.8percentoverlastyear’s $200.991million. Total reported revenue fortheyearcameto$234.707million, FINANCIAL RESULTS 32.3 percent(30.1cent). with thebridgeandroading, equatestoataxationcharge of after adjustmentforthenon-recurring tax-free gainassociated 17.4 percentincrease overlastyear’s $102.273million. charge fortheyearincreased from $17.939millionto$30.396million. $192.850 milliontoatotalof$542.850million.Asresult, theinterest As aconsequenceoftheincreased surplus fortheyear, andthe Inclusive oftheindependentvaluationbridgeandroading Funding thecapitalrepayment inOctober2002meant the Depreciation charges reduced from $31.800millionto$30.593 These results includetheeffects ofthenon-recurring, non-cash Operating expensesincreased 9.5percentto$53.625 million Taxation totalled$36.592million($30.762in2002)which, The resultant surplusbefore taxwas$120.093million,a

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AUCKLAND INTERNATIONAL AIRPORT LIMITED 6 27.44 centspershare (16.95centspershare). per share, aftertakingintoaccountthecapitalrepayment, of shareholders’ fundsof13.1percent(11.2cent),andearnings to $83.501million($71.511million),represents onaverage areturn (deficit of$0.017million)from Waste Resources Limited. million) from HMSC-AIALLimitedandadeficitof$0.099million $0.465 million,representing asurplusof$0.564million($0.359 results ofourtwoassociatedcompanieswhichamountedto REPAYMENT OF$212.714MILLION. PROPOSED ASIGNIFICANTCAPITAL CAPITAL STRUCTURE,THEDIRECTORS CASH REQUIREMENTSANDOPTIMAL DIRECTION OFTHECOMPANY, ITSFUTURE SEPTEMBER 2002OFTHESTRATEGIC FOLLOWING ANEVALUATION IN from 6.1timestoastillverysatisfactory4.9times. interest costsmeantthat,onanEBITbasis,interest coverreduced further issuesofasimilaramount. $164.850 million.Itisproposed torefinance thesebondswith million to$178.000million. amount ofcommercial paperonissuereduced from $200.000 borrowings to$364.850million($150.000million),while the bond issuestotalling$214.850million,bringingtotal 32.4 percentto49.8cent. representing anincrease inthedebt/debtplusequityratiofrom 49.0 percent. $1,116.680 million,theequityratioreduced from 66.4percentto million and,withtotalassetsincreasing from $1,103.309millionto impact onanumberofthecompany’s keybalancesheetratios. As envisaged,thecapitalrepayment of$212.714million hadan FINANCIAL POSITION continue tobepaid. from corresponding taxcredits availabletothecompany, will 10 October2003.Thenormalsupplementarydividend,sourced 2003 toshareholders ontheregister atthecloseofbusinesson Pukaki Bridgeandroading. $6.667 millionassociatedwiththetransferofownership includes anelementattributabletothenon-recurring gainof for theyearto22.0centspershare, or$66.954million,which $38.044 million,hasalsobeendeclared, bringingtotaldividends was paidon28March 2003. per share whichamountedto$28.910million($25.248million)and The directors declared afullyimputedinterimdividendof9.5cents DIVIDENDS The surplusaftertaxation,whichincreased 16.8percent The company’s revenue includesthe50percentshare ofthe Capital expenditure onoperatingassetsamountedto$18.500 The higherlevelofborrowings andassociatedincreased The companyhasbondsduetomature in2004totalling The increased borrowing wassourced through twoadditional Borrowings increased from $350.000millionto$542.850million, Shareholders’ equityreduced from $732.274millionto$547.260 The 12.5centspershare finaldividendwillbepaidon24October A fullyimputedfinaldividendof12.5centspershare, totalling approximately $9.500millionpre-tax, or$6.365millionpost-tax. had theeffect ofincreasing theinterest charge fortheyearby was 304,354,619shares. were cancelled.Thecompany’s issuedcapitalasat30June2003 process toshareholders. envisaged bythedirectors andincludedintheexplanationof effects oftherepayment andhaveincreased invalue,ashadbeen market valueofthecompany’s shares adjustedforthefinancial for therepayment wasprovided bywayofincreased borrowings. involved thecancellationofseveninevery25shares. Finance the repayment wasmadeon25October2002.Therepayment by shareholders and,followingapproval bytheHighCourt, repayment of$212.714million.Therepayment wasapproved capital structure, thedirectors proposed asignificantcapital direction ofthecompany, itsfuture cashrequirements andoptimal Following anevaluationinSeptember2002ofthestrategic CAPITAL RESTRUCTURING by theairlinesandalsorecognises thecompany’s relatively lower terminalservicespreviouslyper annumrelating met tointernational forAviation SecurityandCivilAviationto theGovernment charges. under 12yearsofage,while$5thecharge continuestobepaid applied atNewZealand’s airports. othermajorinternational increased from $22to$25.Thischarge isthesameasthat Charge passengerswas (ADC)paidbydepartinginternational Following consultationwiththeairlines,AirportDevelopment AERONAUTICAL PRICING did notnegativelyimpactonthecompany’s ratings. The additionalborrowings associatedwiththecapital repayment confirmed thecompany’s A+/Stable/A-1corporatecredit rating. credit ratingagency,The international Standard &Poor’s, has CREDIT RATING of $3.078million. increased investmentsof$18.835millionandarevaluation gain increased from $98.811millionto$120.724million;thisrepresents The marketvalueofthecompany’s investmentproperty portfolio determined atbalancedatebyanindependentregistered valuer. The basisofvaluationtheseproperties ismarketvalueas properties heldforrental incomeasinvestmentproperties. $30.593 million. million fortheyear, withdepreciation charges amountingto As stated,theassociatedborrowings of$212.714 million has ofcapital,118,174,581sharesAs aconsequenceofthereturn Following therepayment andthecancellationofshares, the The increase willcovercostsofapproximately $2.500million The companycontinuestoprovide anexemptionfor children The directors havecontinuedthepolicyoftreating commercial 23763_AIAL_Txt 24/09/20034:21PMPage7 paid tributetoJohnGoulterforhissignificantcontributionthe to transferleadershipofthecompanynewmanagement. 62yearsofage,itwastheappropriatethe role time andinturning officer on1September2003.MrGoulterfeltthat,after 15yearsin advised hiswishtoretire asmanagingdirector andchiefexecutive The board announcedinJuly2002thatMrJohnGoulter had EXECUTIVEOFFICER /CHIEF MANAGING DIRECTOR withtheGovernment. concerns errors intheFinalReport.Thecompanycontinues to register these specialist runwayassetsandthedisregard ofanumberbasic to valuingtheairfieldland,useofhistoricalcostvaluationsfor future generations. that willencouragethemtoprotect capacityforfuture useand Airport,receive economicallyefficientInternational pricingsignals around 2007.Itiscriticalthatpublicfacilities,like Auckland development ofthesecondrunwaywhichisduetobecommenced base –thereby deducting$36.700millionforland heldforthe to includeonly“usedanduseful”assetsintheairfieldpricing with whichthecompanydoesnotagree. remain anumberofissuesintheCommerce Commission’s report small netbenefitstotheairlinesandindirectly airlinepassengers. given tothenegativenetpublicbenefitsofcontrol andtherelatively Commission wasaskedtoconsider. Particularconsiderationwas into accountawiderrangeofissuesthanthosetheCommerce Development, thatcontrols were notappropriate. Thedecisiontook the Commission’s report, andadvicefrom theMinistryofEconomic considering recommendations from theCommission,submissionson three majorairports.TheMinisteradvisedthatshehaddecided,after that nocontrols wouldbeimposedonairfieldactivitiesatanyofthe submissions accordingly totheMinisterofCommerce. with theCommission’s findingsandrecommendation, andmade of airfieldservicesatAuckland.Thecompanystrongly disagreed recommended, onthebasisofasplit3/2decision,pricecontrol issues ateachofNewZealand’s airports three majorinternational The Commerce Commission’s FinalReportonairfieldpricing COMMERCE COMMISSION level until2007. The companyhascommittedtoholdthesecharges atthesame which were lastincreased by5.0percenton1September2001. returns on,andincreased investmentin,terminal assets. At the2002annualmeeting,directors andshareholders overtheCommission’sThe companyalsohasconcerns approach One ofthemajorinconsistenciesisCommission’s decision While thecompanycommendedMinister’s decision,there In May, theHonLianneDalziel,MinisterofCommerce, announced There hasbeennoalterationtoaircraft landingcharges The increase wasapplicablefrom 1January2003. director laterintheyeartobringnumberofdirectors backtosix. will beconsidered bytheboard induecourse. chief executiveofficer. TheappointmentofMrHuseasadirector officer on11July2003andwassucceededbyMr Don Huseas being eligible,offer themselvesforre-election. Sir WilsonWhinerayandMrTony Frankhamretire byrotation and, In accordance withtheprovisions ofthecompany’s Constitution, DIRECTORS as significantshareholders inthecompany, holding12.8 percent investors. shareholding inthecompanytoinstitutionalandprofessional In December2002,AucklandCityCouncilsoldhalfits25.6percent SHAREHOLDERS and AustralianStockExchanges. The companymaintainsprimarylistingsonboththeNewZealand STOCK EXCHANGELISTINGS non-executive director. order toprovide remuneration fortheappointmentofafurther approval toincrease thisamountby$47,500, to$337,500, in shareholders is$290,000.Thedirectors are seekingshareholder The current annualquantumofdirectors’ feesapproved by DIRECTORS’ FEES director oflistedpubliccompany, TransAlta, from 1996to1999. with theCablePriceDownerGroup, andwasanon-executive career infinancialandgeneralmanagement,including11years A chartered accountantbyprofession, hehashadanextensive risk management,corporatestrategyandinformationtechnology. Airport includedtheoverallmanagementoffinance,treasury, AirportLimited.MrHuse’sInternational responsibilities atSydney appointment, hewaschiefexecutiveofficer ofWellington Corporation, apositionhehadassumedin1998.Priortothat new chiefexecutiveofficer tosucceedJohnGoulter. pleased toannouncetheappointmentofMrDonHuseas New ZealandTrust, andManukauCity, BusinessHallsofFame. ‘New ZealanderoftheYear’ andinductionintoboththeEnterprise Magazine number ofbusinessawards, includingtheDeloitte/ and chiefexecutiveofficer. development ofthecompanyduringhistermasmanagingdirector The directors willalsolooktoappointafurthernon-executive Mr JohnGoulterretired asmanagingdirector andchiefexecutive Auckland CityCouncilandManukaucontinue Mr Huse(56)wasthechieffinancialofficer forSydneyAirport executivesearch, theboardFollowing aninternational was As acknowledgementofhisachievements,hereceived a ‘Executive oftheYear’, the National BusinessReview Management

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FOLLOWING AN INTERNATIONAL EXECUTIVE SEARCH, THE BOARD WAS PLEASED TO ANNOUNCE THE APPOINTMENT OF MR DON HUSE AS THE NEW CHIEF EXECUTIVE OFFICER TO SUCCEED MR JOHN GOULTER.

and 9.6 per cent respectively. Institutional fund manager, the with which company employees conduct a very successful Commonwealth Bank of Australia Group, has increased its holding student-mentoring programme. to 16.2 per cent, while the Sydney-based fund manager, UBS The company continued as the major sponsor of the Auckland Nominees Pty Limited, holds 8.7 per cent. Airport – Regency Three Day Event, New Zealand’s largest Approximately 36.0 per cent of the company’s shares are equestrian event, which was again held at Manukau City’s Puhinui held outside of New Zealand. Shareholders in total number Reserve in December 2002. 51,648 (last year 53,328). The company also contributed financially as an associate sponsor of the Team New Zealand defence of the America’s Cup. SHARE OPTIONS To mark the centenary of the first flight by the Wright brothers A further 1,260,000 options were granted to 41 executives within in 2003 and the 75th anniversary of aviation at the Mangere site, 8 the company in September 2002. In accordance with the terms a book recording the history of Auckland International Airport has of the option plan, the options were issued at the market price been published. The book has been the subject of several excellent at the time of issue of $4.21 and will be adjusted over time for reviews and its publication has generated considerable interest. both movements in the NZSE 40 Gross Index and dividends paid. The options are exercisable only after three years and lapse ENVIRONMENT after six years. Following discussions with shareholders at the 2002 annual The total options issued under the current plan now number meeting, the company gave an undertakng to carry out an 4,560,000, leaving 440,000 available for subsequent issue. All international search for suitable technology to replace the options issued to date under this plan are subject to adjustment incineration of quarantine and other waste at the airport. This to offset the effects of the capital repayment made in October search has revealed a number of technologies that may provide 2002. The adjustment effectively reduced the number of options an effective alternative. Each of these technologies is being in direct proportion to the shares cancelled (seven out of 25) and evaluated, including acceptability of the processes with respect increases the exercise price by the amount of the repayment. to applicable New Zealand regulations and economic viability. During the year, executives exercised a total of 735,000 options

AUCKLAND INTERNATIONAL AIRPORT LIMITED AIRPORT AUCKLAND INTERNATIONAL which, after taking into account the capital repayment, resulted AIRPORT MARAE in the issue of 529,200 shares. The exercise price ranged from In March 2003, the company and the local indigenous people $3.10 to $3.30. – the tangata whenua (Tainui) – signed a Memorandum of In addition, 500,000 options have been issued (post-balance Understanding to build a marae at the airport to be completed by date) to Mr Don Huse as consideration for his appointment as the end of 2005. The marae (Maori centre) is to be built on airport chief executive officer. land adjacent to Tom Pearce Drive near the Aviation Country Club Following the issue of these options, there are 4,060,800 options and golf course, and will be managed by a trust which will be outstanding which, following exercise, would equate to a further responsible for the establishment and ongoing management 3,063,776 shares on issue in addition to the 304,354,619 shares of the marae. The company’s financial commitment to the on issue at 30 June 2003. establishment of the marae is $225,000 per annum for three years. With the number of options available under the initial plan now It is anticipated the marae will provide benefits to travellers, reduced to 440,000, the directors will be considering a new plan especially those visiting New Zealand for the first time – the marae for executives. will become a focal point where they can be introduced to our national heritage in a very professional manner. COMMUNITY The tangata whenua regard the development of this marae In addition to the obligations in respect of noise mitigation, the as a most significant move which will cater for many cultural, company continues to support a number of initiatives in the celebratory and community occasions within the rapidly growing surrounding community. airport community. In addition, the marae will provide a culturally Educational initiatives include the major sponsorship of two appropriate environment to receive the return of deceased Life Education Trust mobile classrooms offering a health-based indigenous persons from overseas locations. programme for children in their formative years in the neighbouring The marae will be available for people of all ethnic groups suburbs of Mangere, Papatoetoe and Otahuhu. representative of the multicultural make-up of Auckland, and The company also maintains direct links with Jean Batten by the wider tourism community. The opening of the marae is Primary School in Mangere which continues to operate an scheduled for November 2005, by which time it is envisaged educational airport tour programme, as well as with Aorere College that the meeting house will be fully adorned. 23763_AIAL_Txt 24/09/20034:21PMPage9 events duringthefinancialyear. relatively insulatedagainsttheeffects ofadverseinternational New Zealand’s statusasanattractivedestinationandremained Once again,thecompanyhasillustrateditsabilitytobenefitfrom OUTLOOK the excellentcontributionofallstaff members. have increased from 262to276. year asactivitylevelsincreased, andoperationalstaff numbers difficulties causedbySeptember11,wasdiscontinuedduringthe throughout theorganisation. Iraq warandSARS,placedaddedpressure onstaff atalllevels the firsthalfofyear, followedbytheadverseimpactof The effects ofincreased passengermovements,especiallyduring STAFF The company’s abilitytoproduce anotherrecord result reflects A ‘sinking-lid’policyadoptedlastyear, asaresult ofthe trans-Tasman serviceswithfourdailyflights. established carriersandVirgin Blue’s intentiontocommence Emirates, AsianaandRoyalBrunei–expandedservicesfrom seat capacity. Contributingtothisare three newentrants– in October, willresult inanincrease of36percentininternational winterschedule,commencing servicesforthenorthern international further encouragedbytherecent advicethatadditionalscheduled appears tohavereceded. Lookingforward, thecompanyis with lastyear’s $71.511million. surplus from normaloperationswas$76.834million,compared Bridge andassociatedroading. Adjustingforthis,thecompany’s relating tothetransferofownershipcompanyPukaki by theinclusionofnon-recurring revenue of$6.667million record overallsurplusaftertaxof$83.501millionwasenhanced despite thedifficulties experiencedduringthesecondhalf.The DON HUSE core aviation,retail, commercial andproperty businesses. with themincreased opportunitiestoinvestin,andgrow our be takenintoaccount,theseimproving circumstances willbring encouraging. Whiletheincreased volatilityofrecent yearsmust historical trends, prospects forthecompanyare seentobe has fared muchbetterthanmostduringthesedemandingtimes. Airport’sAuckland International businesshas meantthecompany worldwide. NewZealand’s placeintheworldandresilience of 2001, haveseverely testedtheaviationandtravelindustries delivered overtime.Thisapproach canbeexpectedtocontinue. such dedication,superiorshareholder valuehasclearlybeen amenity andastrong “peoplecomefirst”ethos.Through efficiency; customerservice;enterprise;environmental a businessthathasbeendedicatedtosafety, securityand the country’s mostimportantinfrastructuralassets.Itisalso reputationensure isfurtherenhanced. thiswell-earned is heldinhighregard byitsmanystakeholders.Mytaskisto acknowledged tobeaworld-classairportenterpriseandonethat AirportLimitediswidely With justification,AucklandInternational responsibilities andexpectationsthatcome withtheappointment. As theincomingchiefexecutiveofficer, Iamkeenlyaware ofthe NEW CHIEFEXECUTIVEOFFICER HUSE WELCOME DON Chief executiveofficer There iscertainlymuchtolookforward to. Now, traffic inlinewith volumesreturning withinternational The shocksofrecent years,inparticularsinceSeptember11 Airportis,withoutdoubt,oneof Auckland International Passenger movementsare improving astheimpactofSARS Growth inallareas ofthecompany’s businesswasevident

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WITH ADDED AIRLINE CAPACITY, INCREASING PASSENGER NUMBERS, AND CONTINUED DEMAND FOR PROPERTY DEVELOPMENTS, THE COMPANY IS CONFIDENTLY PROJECTING A FURTHER IMPROVEMENT TO THE SURPLUS ACHIEVED THIS YEAR.

While this projected increase in airline capacity can be accommodated within existing apron, airline gate and terminal AIRLINES SERVING AUCKLAND facilities, it will bring significantly increased operational pressures on the infrastructure. Sustained increases of this magnitude will require investment in expanded infrastructure, with appropriate INTERNATIONAL DOMESTIC investment returns. Aerolineas Argentinas Air New Zealand Link Auckland International Airport is New Zealand’s premier port Air Canada* Air New Zealand National of entry and international tourism gateway. With the strong Air New Zealand Origin Pacific Airways unprecedented rate of growth in international seat capacity and Air Pacific Qantas Airways passenger movements in prospect, the company will continue Air Tahiti Nui to invest in new and extended facilities and services to ensure Air Vanuatu COMMUTER 10 its world-class standards are fully maintained. Aircalin Air Coromandel Demand for developments utilising the company’s considerable American Airlines* Air National land bank also continues to gain momentum, with further projects British Airways* Air Wairarapa (Kapiti Air) approved for completion in the forthcoming year. A number of Cathay Pacific Airways Great Barrier Airlines major projects are under negotiation that will provide additional Emirates Mountain Air impetus to our property development strategy. EVA Air* The board has every confidence that the new chief executive Freedom Air CARGO officer, Don Huse, supported by the strength and quality of his Garuda Indonesia Air Freight NZ management team, will continue to deliver the excellent results Japan Airlines* Air Post shareholders have come to expect from an asset of the quality Korean Air Asian Express Airlines (DHL) of Auckland International Airport. Lan Chile Cargolux International The company is all too aware of the volatility and fragility of Lufthansa Airlines* Lufthansa Airlines international aviation markets which has been well-illustrated Malaysia Airlines Polar Air over the last two years. The recent terrorist bombing in Jakarta Mexicana* Singapore Airlines Polynesian Airlines AUCKLAND INTERNATIONAL AIRPORT LIMITED AIRPORT AUCKLAND INTERNATIONAL is a further reminder that significant hostilities in any of our key markets could result in rapid adverse effects on international Qantas Airways aviation activity and the company’s performance. Royal Tongan Airlines However, with the added airline capacity, increasing passenger Singapore Airlines movements, and continued demand for property developments, Thai Airways International the company is confidently projecting a further improvement United Airlines* to the $76.834 million surplus after tax from normal operations achieved this year. The extent of that improvement will largely depend not only on increased international seat capacity, but also on the actual increases in passenger movements achieved, *Code share especially over the peak summer months.

On behalf of the board

WAYNE BOYD Chairman

28 August 2003 23763_AIAL_Txt 24/09/20034:21PMPage11 BOARD OFDIRECTORS From lefttoright:AnthonyFrankham,Wayne Boyd(chairman),JoanWithers,MichaelSmith,SirWilsonWhineray. Lion Foundation. in 1986.HeisnowchairmanofThe in 1972andwasappointedadirector Limited. HejoinedtheLionNathanGroup was anexecutivedirector ofLionNathan of thecompanyinJune1998.Michael Michael Smithwasappointedadirector MICHAEL SMITH of Chartered AccountantsofNewZealand. 1992. Heisapastpresident oftheInstitute his ownfinancialconsultingpracticein Deloitte Touche Tohmatsu, heestablished audit committee.Aformerpartnerin director in1994andchairstheboard’s Anthony Frankhamwasappointeda Arb,AAMINZ FCA, ACInst ANTHONY FRANKHAM MCom sport andbusiness. knighted inJune1998forservicesto of CarterHoltHarvey. SirWilsonwas in 1993,andrecently retired aschairman Group, retiring as deputymanagingdirector 1992. HeworkedintheCarterHoltHarvey Sir Wilsonwasappointedadirector in KNZM, OBE,MBA,BCom SIR WILSONWHINERAY as aprofessional director. a specialistadvisorybusinessandcareer in investmentbanking,Wayne established practising lawfor18yearsandfive after theannualmeetingthatyear. After of AIALin1996andelectedchairman Wayne Boydwas appointedadirector CHAIRMAN WAYNE BOYD L (Hons) LLB Guide toBusiness. and theauthorofbook Joan isaprofessional companydirector chief executiveofTheRadioNetwork. newspaper andradio.Sheisaformer management positionsinboth in themediaindustry, holdingsenior in 1997. Joanspent18yearsworking Joan Witherswasappointedadirector JOAN WITHERS B,MIs D MBA, MInst Girl’s A 11 ANNUAL REPORT 2003 23763_AIAL_Txt 24/09/2003 4:21 PM Page 12

SENIOR MANAGEMENT

12 AUCKLAND INTERNATIONAL AIRPORT LIMITED AIRPORT AUCKLAND INTERNATIONAL

DON HUSE BCA, CA CHRIS CURLEY BCom, ACA, FCIS DAVID HANSEN BE Mech CHIEF EXECUTIVE OFFICER GENERAL MANAGER / CORPORATE GENERAL MANAGER / OPERATIONS Don Huse was appointed chief executive AND CORPORATE SECRETARY David Hansen joined AIAL in 1990 and officer of AIAL in July 2003. Previously Chris Curley has been general manager has been general manager operations he was chief financial officer of Sydney corporate and corporate secretary since July since July 1997. David is responsible for Airport Corporation, chief executive of 1997. He is responsible for corporate business the day-to-day operations of the airport Wellington International Airport and a director activities including corporate governance, including public safety, quality assurance, of TransAlta New Zealand. He is a member legal, shareholder and investor relations, airfield operations, human resources and of both the Australian and New Zealand community relations, share registry, insurance customer services. Institutes of Company Directors. arrangements, and corporate and public affairs.

STEVE REINDLER BE (Hons), FIPENZ NICK ANSLEY BCom, (VPM) MPMINZ PAUL MENS BMS, CA, CTP GENERAL MANAGER / ENGINEERING GENERAL MANAGER / PROPERTY GENERAL MANAGER / FINANCE AND Steve Reindler joined AIAL in 1997. Steve Nick Ansley joined the company in July INFORMATION TECHNOLOGY is responsible for the planning, design, 1994. Appointed general manager property Paul Mens has been general manager finance construction and maintenance of airport in May 2003, he is responsible for the and information technology since August facilities, purchasing and inventory, and planning, development and management 1999, and is responsible for financial also the operations of joint-venture company of the company’s real estate assets, which accounting, budgeting, debt raising and Waste Resources Ltd. In 2003 Steve was includes leasing opportunities in the interest rate management, payroll functions appointed chairman of the Council of terminal buildings. and IT. Paul is also involved in regulatory Chartered Professional Engineers. issues including aeronautical charges and the Commerce Commission. 23763_AIAL_Txt 24/09/20034:21PMPage13 the yearended30June2003,totaloverseasvisitorarrivalsto recovery period.Inrespect ofNewZealandasadestination,for been illustratedthrough aminimalnegativeimpactandthequick customary levels. virus hassubsidedandgrowth tomore isnowappearingto return for the12monthsto5.1percent. second halfwasonlyaminimal0.6percent,reducing thegrowth were relatively unaffected. traditional markets,Australia,USAandtheUnitedKingdom, in thesemarketselectingnottotravel.Visitors from theairport’s especially astheimpactofSARStookhold,withmanyresidents China, Taiwan andSouthKorea allreversed inthesecond, experienced inthefirsthalffrom the AsianmarketssuchasJapan, especially inrespect ofAsianmarkets.Thepositivegrowth trends The compoundeffect oftheseeventsimpactednegatively, bombing inBali,theonsetofwarIraq,andSARSvirus. cent duringthissix-monthperiod. movements (excludingtransitsandtransfers)improved 9.8per minimal andtherecovery passenger relatively quick.International of NewZealand’s geographicisolation,thenegativeimpactwas a dramaticcontractioninworldwideaviationactivity. Because year wasdominatedbytheeventsofSeptember11whichsaw rebound activity. ininternational Thesameperiodintheprevious The firsthalf,July–December, wasnotableforthesignificant vernacular, theyearwasverymuch“agameoftwohalves”. to 5,050,503. passengersgrew 5.1percent and transfers,international increased 3.9percentto5,370,989(5,168,728).Excludingtransits attributable totransitandtransferpassengers–lastyear362,128) passengermovementsfortheyear(including320,486 International International (2002: 8,803,949). THE FIRSTTIME,INCREASING7.1PERCENTTO9,427,652 PASSENGER MOVEMENTSSURPASSED 9MILLIONFOR PASSENGERS PROVIDINGHIGHERREVENUE.TOTAL 40 PERCENTDOMESTIC,WITHTHEINTERNATIONAL DIVIDED PASSENGER MOVEMENTSHAVE TRADITIONALLY BEEN OPERATIONAL REVIEW Once again,thecountry’s, andthecompany’s, resilience has Post-30 June2003,thesetrends havereversed astheSARS As aresult, passengermovementsinthe growth ininternational The secondhalf,however, sawtheeffects oftheterrorist In respectpassengers,inthesporting ofinternational APPROXIMATELY 60 PERCENTINTERNATIONAL, Emirates istooperatedailyflightsthrough Sydney, Brisbaneand in somecases,expandedserviceshavebeenevident. seen alloftheseservicesrestored totheirprevious levelsand, Cathay PacificandSingapore Airlines.Thenewfinancial yearhas led toreduced servicesbyallthemajorcarriers,especially South Korea andJapan.Severe reductions inpassengerdemand with theAsianmarkets–China,HongKong,Singapore, Taiwan, profound aviationactivity. effect oninternational Iraq inMarch and,concurrently, theSARS epidemichadafurther significant rebound inaviationactivity. the firsthalfofcompany’s financialyear, being notablefora from theeffects ofSeptember11,withtheJuly–Decemberperiod, airlinesbeginningtorecover Calendar year2002sawinternational AIRLINE ACTIVITY extended throughout thesecondhalfofyear. success ofthisserviceinattractingincreased passengersalso Express Classserviceondomesticroutes. Encouragingly, the the company’s majorcarrier, AirNewZealand,ofitslowercost further buoyedbythepositiveeffects oftheintroduction by flow-on effect passengers.Itwas oftheincrease ininternational 11.6 percentto4,056,663fortheyear(3,635,221). unprecedented highlevelsthroughout theyear, increasing Growth indomesticpassengermovementscontinuedat Domestic by Tourism NewZealand. assisted inthisrecovery, ashasincreased promotional activities Lonely Planet the successof The continuedattractionofthecountry’s cleanandgreen image, country continuedtoimprove, increasing 4.8percentto2,050,294. In addition,three newairlinesare scheduled tocommenceservices. Activity levelsmostaffected atAucklandwere thoseassociated However, theterrorist bombinginBali,theadventofwar The growth was,inthefirsthalfofyear, drivenbythe magazine asthebestcountrytovisithaveall h LordoftheRings The , andtheaward by 13 ANNUAL REPORT 2003 23763_AIAL_Txt 24/09/20034:21PMPage14 14 AUCKLAND INTERNATIONAL AIRPORT LIMITED aircraft carryinganaverageof170passengers. passengers perflight,while22centrelates tolarger international relating tosmallerdomesticaircraft carryinganaverageof36 movements remains thesame,with78.0percentof movements reduced ofaircraft 1.0percentfrom 114,259to113,097.Thepattern increased 10.8percentfrom 28,361to31,434,domesticmovements with 142,620intheprevious year. movements Whileinternational Aircraft movementstotalled144,531fortheyear, compared Movements passengermovementsfortheairport. growth ininternational services from services from Brunei.Virgin Bluehasalsoadviseditintendstocommence from South Korea, andRoyalBruneiwilloperatefourflightsperweek whileAsianawillcommencefourflightsperweekfrom Melbourne, months –April,MayandJune.Theamountrebated forthesedays landing charges forthelastdayineachof three mostaffected through theeffects oftheSARSepidemic, thecompanyrebated from $53.568millionto$55.498million. to 4,920,154tonnes.Revenueaccordingly increased 3.6percent, MCTOW fortheyearincreased 3.0percentfrom 4,775,636tonnes maximum certificatedtake-off weights (MCTOW)ofaircraft. Total Rates forlandingcharges remain fixed andare basedonthe AIRFIELD Total operatingrevenue Total Non-recurring revenue Total non-aeronautical revenue Utilities andgeneral Car parkincome Rental income Retail income Non-aeronautical Total aeronautical revenue Terminal ServicesCharge Airport DevelopmentCharge 2003 Airfield income Aeronautical REVENUE ANALYSIS It isanticipatedthattheseincreased services willprovide further In recognition ofthefinancialpressures placedontheairlines Australia, withthedetailsyettobeconfirmed. 228,040 120,726 234,707 107,314 14,896 22,692 75,472 14,147 37,669 55,498 $000s 6,667 7,666 0,9 13.5 20.6 200,991 100,110 0,9 16.8 200,991 6.4 100,881 26317.5 4.9 30.5 12,673 21,640 57,826 14,768 -4.2 32,545 15.7 53,568 3.6 $000s ,7 -3.8 7,971 –– 2002 Movement % growth trends. growth inretail revenue will,therefore, belinkedtopassenger retailextent andmixofthecurrent offerings. international Further and confectionery)–were alsointroduced andalltradedstrongly. (children’s wear);BeachCulture (casual wear);WHSmith(books DFS, andtheforeign exchangeandbankingfacilityfrom theBank operators, beingthetwoduty-free operators,Regency DutyFree and the firsthalf,andanoverallincreased retail spendperpassenger. from increased passengerflowsovertheyear, especiallyduring increased Revenuealsobenefited guaranteedminimumreturns. effect earlyinthefinancialyearandcontainedsignificantly terminal.Newfive-yearcontractscameinto in theinternational positive effects ofthere-tendering ofthemajorretail concessions of totalrevenue. the company’s majorsource ofincomeamountingto33.1percent cent to$75.472million($57.826million)andcontinuesrepresent Revenue from retail concessionsincreased asignificant30.5per RETAIL previously charged undertheTSCagreement. designed tocoversomecostsrelated topassengerservices represents thefactthataportionofincrease intheADCwas year reduced from $14.768millionto$14.147million.Thedecrease terminal,forthe for theairlineoperationalareas intheinternational from $32.545millionto$37.669million. $22 to$25,meantrevenue from theADCforyearincreased in additiontotheincrease from 1January2003oftheADCfrom passengers. international as theAirportDevelopmentCharge (ADC)leviedondeparting through theTerminal ServicesCharge (TSC)toairlines,aswell Operational revenue from thecompany’s terminalsisprovided TERMINALS the company’s three terminalsandcargo servicingareas. investment properties, aswelloffice andoperatingareas within Rental incomerepresents revenue from thecompany’s stand-alone PROPERTY of NewZealand,alongwithbooksandconfectioneryfrom WHSmith. (1,550,638 tonnes). (3,224,988 tonnes),whiledomesticMCTOWwas1,584,528tonnes was approximately $420,000. The companyhasnoplanstosignificantlyalterorincrease the New concessionaires –Walker & Hall(jewellery);PumpkinPatch The tenderprocess sawacontinuationofthemajor retail Much ofthe$17.646millionincrease inrevenue reflects the Recoveries undertheTSC,whichreflect costs andrecoveries passengermovements, The 5.1percentincrease ininternational MCTOW for international aircraft totalled3,335,626tonnes MCTOW forinternational 23763_AIAL_Txt 24/09/20034:21PMPage15 Expenditure onthesecompletedprojects totalled$12.5million. projects completedprogressively through theyearwhichincluded: developments completedlastyear, from togetherwithreturns for theyear, compared with$21.640 millionlastyear. Park willseethis20-hectare area fully committedbytheendof however, theacceleratedrateofdevelopments intheCommercial 10 years’capacityinboththeBusinessParkandretail areas, At thecurrent rateofdevelopment,thecompanyhas fiveto immediate development: Currently thecompanyhasfollowingareas availablefor of separateareas dedicatedtospecificbusinessactivities. Butterfly Creek cafédevelopment. are extensionstotheMcDonald’s drive-through facilityandthe Also underconstructionbylesseesonground leasearrangements $25.0 million.Theseprojects include: has sixfurtherprojects underway, totallingapproximately continued intothenewfinancialyear. Thecompanycurrently revaluation reserve. has beenrecorded asanincrease inthe investmentproperty increase overtheprevious carryingvalueof$3.078millionwhich capitalisation rateof10.0percent.Thevaluationresulted inan registered valuers,SeagarandPartners,represent anaverage The totalled 37individualsites,withamarketvalueof$120.724million. TOTAL REVENUE. AMOUNTING TO33.1PERCENTOF COMPANY’S MAJORSOURCEOFINCOME AND CONTINUESTOREPRESENTTHE CENT TO$75.5MILLION($57.8MILLION) INCREASED ASIGNIFICANT30.5PER REVENUE FROMRETAIL CONCESSIONS At balancedate,thecompany’s investmentproperty portfolio Priority Fresh office/warehouse building. ARF rental carfacility; ACE rental carfacility; Office buildingintheAirportBusinessPark; Kiwibond office/warehouse building; The increase represents full-yearrentals received for Revenue from theseproperty sources totalled$22.692million ipr hpigCnr (10hectares) (16hectares) (5hectares) Airport ShoppingCentre Business Park–offices Commercial Park–office/warehouses The company’s property strategyinvolvesthedevelopment Food/beverage outletforSubway. Rental carfacilityforNationalCarRentals; Office/warehouse forduty-free operator, DFS; Office/warehouse forfreight forwarder, UTi; Office/warehouse forWilsonLogistics; Office/warehouse forExelLogistics; The momentumfornewproperty development projects has market valueshavebeendeterminedbytheindependent facilities intheAucklandmetropolitan area. by approximately 400parks. summer periodwillnecessitateafurtherexpansionofthisfacility bringing thetotalto1,339.Predicted demandinthe forthcoming the year, withtheadditionofafurther364uncovered spaces, 300 spacestobedevelopedinthe2003/04financialyear. bringing thetotaldomesticcarparksto1,646,withafurther 215 parkshavebeencreated inAugust2003(post-balance date), car parks,necessitatingfurtherexpansionofthefacility. Afurther traffic impactedpositivelyonoccupancylevelsatthe domestic to $14.896 passenger num staff. Asaresult oftheincreases indomesticandinternational passenger terminals,aswellproviding parkingfacilitiesforairport The companyoperatespubliccarparksateachofitsthree CAR PARKS investors andoperatorslaterintheyear. The intentionistorequest proposals from interested hotel and theeconomicsinvolvedinconstructionofanairporthotel. continues toexaminethedifferent businessmodelsavailable particular proposal hasnotbeenpursued.Thecompany and City’s commitmenttotheconstructionofaconventioncentre the possibilityofestablishingahotelatairport.DuetoSky The companyhadbeenexamining,inconjunctionwithSkyCity, HOTEL and othergeneralservices. water, andincomefrom thelicensingofpublictransportservices from thecompany’s supplyofutilities,includingelectricity, gasand sources totalled$7.666million($7.971million).This wasgenerated Revenue from thecompany’s utilityoperationsandothergeneral UTILITIES ANDGENERAL long-term tenants. benefits, are optimisedfrom qualitydevelopmentsforstrong market demandtoensure reflecting returns, theairport’s locational future developmentsinthisarea. for approximately 200hectares will,induecourse,beavailable to commenceduringthecomingsummermonths.Intotal, second runway, withroading andcontouringworkonthislikely looking toopenfurtherlandfordevelopmentnorthoftheproposed the 2004financialyear. Asaconsequence,thecompanywillbe Car parkratesare alignedwithhourlyratesforcomparable carparkwasalsoexpandedduring The long-terminternational The significant11.6percentincrease indomestic passenger The companycontinuestobalancetherateofdevelopment new hotelcomplexadjacenttoitsAucklandsite,this million ($12.673million). bers, revenue from carparksincreased 17.5percent 15 ANNUAL REPORT 2003 23763_AIAL_Txt 24/09/2003 4:22 PM Page 16

OPERATING EXPENSES non-jet aircraft will be required by 2010. Operating expenses, which had been reduced in the previous year Approval for the second runway included a number of reflecting the downturn in activity at that time, necessarily increased obligations on the company to mitigate the impacts of aircraft this year in order to meet the higher level of demand. In addition, noise on the community. a number of unavoidable significant cost increases were also From 21 October 2003, the company is obliged to contribute experienced in areas such as insurance, local body rates and noise $250,000 per annum to a noise mitigation trust fund which is to appeal issues. be administered by the community and the company for the Staff numbers, reduced by 20 last year to 262 employees, were benefit of the local communities. increased to 276 at year-end. The higher staff numbers, coupled In addition, the company is obliged to fund acoustic treatment with increased overtime and remuneration, contributed to higher to new buildings at existing schools in the main noise impact staff costs in the year. areas. To date, the company has been advised of the proposed 16 construction of two new school buildings. From 2005, the company is also required to start offering OPERATING 2003 2002 Movement financial assistance for acoustic treatment of existing homes EXPENSE ANALYSIS $000s $000s % and schools in the existing high noise impact areas. While a

Staff 22,886 20,222 13.2 survey of the affected homes and schools is not yet complete, Repairs and maintenance 16,549 16,168 2.4 it is estimated that, initially, approximately 1,200 homes and four General 11,584 10,618 9.1 schools may need to be offered assistance. As aircraft activity Rates and insurance 2,606 1,971 32.2 increases on the existing runway, the high impact noise area will expand and further offers will be required to be made. It is Total operating expenses 53,625 48,979 9.5 anticipated that three schools will be involved plus a further 150 homes each year for the next 10 years. While the survey is as yet incomplete and the offers of financial assistance yet to be made, the company currently estimates that approximately $15 million PUKAKI BRIDGE AND ROADING may be involved over the next five years. The company would,

AUCKLAND INTERNATIONAL AIRPORT LIMITED AIRPORT AUCKLAND INTERNATIONAL As part of a review of the National State Highway network, however, look to recover these costs from airport users. Transit New Zealand and Manukau City Council determined that There is no obligation on the company in respect of new homes the Puhinui Road access to the airport should be deemed a State as, since 2001, developers have been required to incorporate Highway. As part of the review, the company, which owns and acoustic insulation into new homes in the affected areas. maintains all the roads within its boundaries, expressed concern In order that the public can also gauge the extent of that the portion of the Puhinui Road (one kilometre) including the increases in aircraft noise levels, the company is required, from bridge over the Pukaki Creek, situated within the airport October 2003, to publish annually the exact noise contours for boundaries, formed an integral part of the airport roading network. the airport. Recognising these concerns, Transit New Zealand and Manukau City Council agreed that ownership of, and future maintenance WHENUAPAI and development responsibility for that portion of the road and There is continuing publicity of a project examining the possible the bridge situated within the airport boundaries should be passed establishment of a second commercial airport for Auckland at to the company. Whenuapai (West Auckland) Air Force Base which is currently In accordance with applicable Financial Reporting Standards owned by the Government. (FRS3), the fair value of the road, the bridge and associated services Auckland International Airport Limited’s long-term development ($6.667 million), ownership of which has been transferred to the plan, incorporating an approved second runway, will meet the city’s company, has been recognised during the year as non-recurring, aviation needs until at least 2050 in an environmentally sustainable non-cash income and as an asset. manner. Completion of the city’s roading developments will ensure efficient access to Auckland Airport’s Mangere site. SECOND RUNWAY AND AIRCRAFT NOISE In late 2001, the company received approval under the Manukau ASSOCIATED COMPANIES District Plan for the future construction of a second runway. The company continues to hold 50 per cent shareholdings in Timing of construction will be demand-driven and, at this stage, two associated companies – HMSC-AIAL Limited and Waste it is envisaged that a 1,200 metre single strip to accommodate Resources Limited. 23763_AIAL_Txt 24/09/20034:22PMPage17 stringent consentconditions. at theplantduringyeartoensure thatitoperateswithinits the year, thejoint-venture recorded adeficitof$0.099million. aircraft andbyarrivingpassengers.During inbound international responsibility todisposeofallthequarantinewastebrought inon Communicator award formarketleaders. paramount tothesuccessofthisproject. partners, especiallyAirwaysCorporationandtheairlines,was recognises thatthesupportandco-operationofallitsaviation during therehabilitation ofthemainsinglerunway. Thecompany main taxiwayintoafullycapablestand-byrunwayanditsuse recognition oftheworkcarriedoutduringupgrading Authority Director’s Award foroperationalsafety. Thiswasin and thecompanywashonoured toreceive theCivilAviation Operational safetyisalwaysaprimaryfocusatAucklandAirport AWARDS total airportcomplex. maintenance ofaclean,green andtidyimagethroughout the control, wastemanagement,energy conservation,and the areas, includingnoisemitigation,stormwaterand groundwater the effect ofoperationsonthelocalenvironment inmany The companymanagesaproactive programme tominimise ENVIRONMENT acquisition byanotherFrench company, Se company, Tredi SA,changedduringtheyearfollowingits New ZealandLimited.OwnershipofTredi’s French parent The Waste Resources operationisajoint-venture withTredi Waste Resources Limited to $0.750million. received afullyimputeddividendfrom thejoint-venture amounting profit fortheyearwas$0.564million;duringyear, AIALalso result fortheyear. AIAL’s share ofthiswell-managedoperation’s passengers, thejoint-venture produced anotherexcellentfinancial terminal. international States, provides themainfoodandbeverageservicesat This operation,ajoint-venture withHMSHostIncoftheUnited HMSC-AIAL Limited LOCAL ENVIRONMENT. OF OPERATIONS ONTHE TO MINIMISETHEEFFECT A PROACTIVEPROGRAMME THE COMPANY MANAGES 10 bestairports. readers’ pollnominatedAucklandAirportoneoftheworld’s Modifications andimprovements were successfullyundertaken The joint-venture carriesoutthecompany’s statutory Additionally, in2002, The companyalsoreceived theINFINZBestCorporate Taking advantageoftheincreased numberofinternational Business Traveler AsiaPacific ´che SA. ´ magazine financed bywayofincreased borrowings onfavourableterms. will continuetoensure thatthisadditionalexpenditure canbe expenditure. However, thestrength ofthecompany’s balancesheet brings withitrequirements for, attimes,“lumpy”amountsofcapital by $20million. additional borrowings which,fortheyear, are projected toincrease through acombinationofdepreciation, retained profits and for newproperty projects on-airport. which couldwellbeexceeded,giventhecurrent buoyant demand works and$33millionforcommercial property developments to amount$66million,inclusiveofthe$11millionforrunway expenditure forthe2003/04financialyeariscurrently projected will againnecessitateuseofthestand-byrunway. rehabilitation overthesummerperiod.This$11millionproject on businesscasesconfirminganappropriate rateof return. related capitalexpenditure, suchexpenditure wouldbebased the baggage-handlingarea. require thedevelopmentofsignificantlyexpandedfacilitieswithin countries toscreen holdstowbaggagebytheend of 2005will expenditurethe terminalduring2003/04financialyear.within this cannotcontinue.Thischangewillnecessitatecapital that has indicated,inthelightofworldwidesecurityconcerns, been waivedsincetheoriginalterminalconstruction.TheCAA passengershas separate arrivinganddepartinginternational issues thatwillbeaddressed duringthecomingyear. for theprovision ofadditionalpierspaceandfurtheraircraft gates. increased numbers,considerationmustnowbegiventoplanning However, whileterminalfacilitiesare projected tocopewiththe for expandedserviceshavebeenabletobeaccommodated. utilisation offacilitiesoverwidertimeframes.To datemostrequests the airlinesacceptingavailableslotorarrivaltimesthatextend stands willbeconstructedtohelphandlethisincreased activity. increased numberofbussingoperations.Afurthertworemote aircraft there willbepressure onairbridgestands,resulting inaneedforan at capacity, are projected tocopewiththeincreased numbersand terminal.Current check-infacilities,whileoperating international will create additionaloperationalpressures withinandaboutthe winter(NewZealandsummer)period seat capacityinthenorthern The projected increase of36percentinscheduledinternational OPERATIONAL OUTLOOK It mustberecognised that,aswithallairports,increased activity Funding fortheexpenditure of$66millionwillbefinanced terminalprojects, capital Exclusive oftheinternational Additionally, afurtherportionoftherunwayrequires full Where thecompanyisobligedtoundertakesuchsecurity- CivilAviation OrganisationAn International requirement forall A CivilAviation Authority(CAA)securityrequirement to The companyalsohasanumberofsignificantcore business The airlinesandtheairporthaveworkedcloselytogether, with 17 ANNUAL REPORT 2003 23763_AIAL_Txt 24/09/20034:22PMPage18 18 AUCKLAND INTERNATIONAL AIRPORT LIMITED 365 days Operational 24hours No curfew Operational 35 minutesbyvehicle business district–approximately from Auckland’s central The airportis21kilometres Location AIRPORT OVERVIEW used asataxiway Stand-by runwayisusually Width 45metres Length 3635metres Direction 051/231magnetic Longitude 174°47’30”east Latitude 37°00’29”south associated taxiwaysandaprons Single runway(23L/05R)and Runway International TerminalInternational 77 intheJeanBatten 94 inthepassengerterminals Retail outlets 1,497 hectares Total freehold land Land area (Approx 8,000employedonairport) 276 employedbyAIAL Employees Qantas DomesticTerminal Air NewZealandDomesticTerminal TerminalJean BattenInternational Terminals 23763_AIAL_Txt 24/09/20034:23PMPage19 AUCKLAND INTERNATIONAL AIRPORT /EASTERNAPPROACH 19 ANNUAL REPORT 2003 23763_AIAL_Txt 24/09/20034:23PMPage20 20 AUCKLAND INTERNATIONAL AIRPORT LIMITED THIS COUNTRY HAS TOOFFER. HAS ALSOHIGHLIGHTED,INTERNATIONALLY, THEWONDERFULOPPORTUNITIES COUNTRIES TOVISIT. THEWORLDWIDE SUCCESSOF GUIDE PASSENGER MOVEMENTS.STRONGPROMOTIONOFNEWZEALANDBYTOURIST 5 MILLIONINTERNATIONAL PASSENGER MOVEMENTSAND4MILLIONDOMESTIC OF THEIRINTERACTIONWITHUS.THISYEARSAW ARECORDOFMORETHAN EXPECT SERVICE ANDEXCELLENCE–WEAIMTODELIVERTHAT AT ALLSTAGES PASSENGERS / LONELY PLANET PEOPLE COMEFIRSTAT AUCKLANDAIRPORT. OURCUSTOMERS IDENTIFIED NEWZEALANDASONEOFTHEBEST THE LORDOFRINGS 23763_AIAL_Txt 24/09/20034:23PMPage21 21 ANNUAL REPORT 2003 23763_AIAL_Txt 24/09/2003 4:23 PM Page 22

AIRCRAFT / THE COMPANY’S SINGLE RUNWAY IS THE CORE OF THE AIRPORT’S OPERATIONS. REGULATORY APPROVALS FOR A FUTURE SECOND RUNWAY HAVE BEEN RECEIVED. IT IS LIKELY TO BE OPERATIONAL BY 2010. OVER 30 INTERNATIONAL CARRIERS SERVE AUCKLAND. EVERY DAY ON AVERAGE THE AIRPORT HANDLES SOME 86 INTERNATIONAL AND 310 DOMESTIC AIRCRAFT MOVEMENTS. INTERNATIONAL AIRCRAFT MOVEMENTS INCREASED 10.8 PER CENT THIS YEAR. THIS MOMENTUM IS EXPECTED TO BE SUSTAINED WITH NEW AIRLINES BEGINNING OPERATIONS AND EXISTING CARRIERS EXTENDING THEIR SERVICES.

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RETAIL / DUTY AND TAX-FREE PERFUME, LIQUOR, ELECTRONICS, CONFECTIONERY, CLOTHING, BOOKS, JEWELLERY… LEISURELY SHOPPING IN STORES WITH A WIDE SELECTION OF GOODS AND HELPFUL SERVICE IS ONE OF THE ANTICIPATED PLEASURES OF TRAVEL. THE LATEST RETAIL ADDITIONS INCLUDE WALKER & HALL, PUMPKIN PATCH, BEACH CULTURE AND MERINO DISCOVERY. REVENUE FROM RETAIL CONCESSIONS INCREASED BY 30.5 PER CENT THIS YEAR AND IT CONTINUES TO BE OUR LARGEST SINGLE SOURCE OF INCOME.

24 AUCKLAND INTERNATIONAL AIRPORT LIMITED AIRPORT AUCKLAND INTERNATIONAL 1. Bank of New Zealand 2. Walker & Hall 3. Merino Discovery 4. Elle Macpherson Intimates 5. Duty-free retailers

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PROPERTY / STRONG DEMAND FOR PROPERTY DEVELOPMENT CONTINUES. OUR STRATEGY INVOLVES DEVELOPING AREAS DEDICATED TO SPECIFIC ACTIVITIES. THESE ARE THE COMMERCIAL PARK, THE BUSINESS PARK AND THE SHOPPING CENTRE. THERE ARE SIX PROJECTS CURRENTLY UNDERWAY TOTALLING APPROXIMATELY $25 MILLION. WITH THE ACCELERATED RATE OF DEVELOPMENTS, THE COMMERCIAL PARK WILL BE FULLY COMMITTED BY THE END OF THE 2003/04 FINANCIAL YEAR AND NEW AREAS NORTH OF THE PROPOSED SECOND RUNWAY ARE NEXT TO BE DEVELOPED.

AUCKLAND INTERNATIONAL AIRPORT LIMITED AIRPORT AUCKLAND INTERNATIONAL 1. Foodtown 2. Treasure Island Adventure Golf and Butterfly Creek 3. UTi office/warehouse 4. No. 1 Leonard Isitt Drive 5. DFS office/warehouse

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COMMUNITY / THE LOCAL COMMUNITY IS OUR COMPANION ON THIS JOURNEY. IT’S A RELATIONSHIP THAT CONTINUES TO GROW AND EVOLVE. WE ARE INVOLVED WITH LOCAL IWI IN BUILDING A MARAE ON-AIRPORT WHERE INTERNATIONAL VISITORS WILL SEE AND LEARN ABOUT NEW ZEALAND’S UNIQUE CULTURAL HERITAGE. WE SPONSOR TWO LIFE EDUCATION TRUST MOBILE CLASSROOMS OFFERING A HEALTH-BASED PROGRAMME FOR YOUNG STUDENTS IN NEIGHBOURING COMMUNITIES. AIRPORT COMPANY STAFF MENTOR STUDENTS AT AORERE COLLEGE. JEAN BATTEN PRIMARY SCHOOL MANAGES AN AIRPORT TOUR PROGRAMME FOR SCHOOLS.

28 AUCKLAND INTERNATIONAL AIRPORT LIMITED AIRPORT AUCKLAND INTERNATIONAL 1. Maori carving greets arriving international passengers 2. Local schools’ artwork exhibition in the international terminal 3. Volunteer hospitality ambassadors – the Bluecoats 4. Maori artwork presented to the company by Te Arikinui Dame Te Atairangikaahu 5. Koru Primary School students attend the Life Education Trust mobile classroom 6. (Opposite) Students at Southern Cross Primary School, Manukau City

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ENVIRONMENT / ENDURING MEMORIES ARE THE HALLMARK OF ANY TRIP. THE MAINTENANCE OF A CLEAN, GREEN AND TIDY IMAGE THROUGHOUT THE AIRPORT FACILITY IS A HIGH PRIORITY. WE MANAGE A PROACTIVE PROGRAMME TO MINIMISE THE EFFECT OF OPERATIONS ON THE LOCAL ENVIRONMENT INCLUDING NOISE MITIGATION AND STORMWATER AND GROUNDWATER CONTROL. STAFF AT ALL LEVELS ARE AWARE OF, AND COMMITTED TO, ENVIRONMENTAL ISSUES – THE WELL-BEING OF OUR COMPANY IS INEXTRICABLY CONNECTED TO THE WELL-BEING OF OUR ENVIRONMENT.

1. Environmental management

AUCKLAND INTERNATIONAL AIRPORT LIMITED AIRPORT AUCKLAND INTERNATIONAL 2. Noise monitoring equipment at Puhinui Primary School 3. Truck wash 4. Spill management training 5. Airport landscaping and beautification 6. Stormwater controls 7. (Opposite) Students at Puhinui Primary School, Manukau City

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456 23763_AIAL_Txt 24/09/20034:25PMPage31 31 ANNUAL REPORT 2003 23763_AIAL_Txt 24/09/20034:25PMPage32 32 AUCKLAND INTERNATIONAL AIRPORT LIMITED IN HARMONYWITHOURENVIRONMENT ENVIRONMENTAL VALUES AND VISION/ OPERATION INHARMONYWITHITSSURROUNDINGENVIRONMENTBY: INITIATIVES AREIMPORTANT: IN WORKINGTOWARDS THESEOBJECTIVES,THEFOLLOWING FORMULATED AN AUCKLANDINTERNATIONAL AIRPORT LIMITED IN THELATE 1990s Ensuring airportstormwaterdoesnotcontaminatetheManukauHarbour. be impactedbyaircraft noiseintheyearstocome. acoustic treatment offered tosome3,500homeownerslocatedinareas around theairportwhichmay In thecomingyearcompanywillinitiateaNoiseMitigationProgramme thatwillultimatelysee Aircraft Noise CommunityConsultativeGroup todevelopaNoiseManagementPlanfortheairport. During theyearcompanyinstalledastate-of-the-artnoisemonitoringsystemandworkedwith sophisticated systemwillalsomonitortheunderground fuellinefrom theWiristoragedepot. the existingleakdetectionsystemthatmonitorsunderground fuellinesaround theairport.Thenew, During thecomingfinancialyearcompany, inconjunctionwithon-airportfuelsuppliers,willreplace Such pondsare keyinminimisingcontaminationoftheManukauHarbour. After this,almostallofthecurrent airportoperationalarea willbeservedbystormwaterdetentionponds. In late-2003thecompanywillconstructsixthofitsprogrammed stormwaterdetentionponds. and specialisedtrainingcoursesforkeystaff. The companyconductsenvironmental modulesininductioncoursesforallnewemployees Management andSpillhandbook. The companyhaspublishedanddistributedtoallorganisations thatoperateon-airportaStormwater The companyhasanEnvironmental standard ManagementSystembasedaround ISO14001. theinternational Continuing tolandscapetheairportpromote NewZealand’s unspoiledenvironment. Striving toachieveabalancebetweensurrounding landusesandaircraft noise. Ensuring airportactivitiesdonotcontaminategroundwater. Conserving resources andpromoting recycling. Striving tomaintaingoodairqualityattheairport. ENVIRONMENTAL VISION TO CREATE ANAIRPORT 23763_AIAL_Txt 24/09/20034:25PMPage33 FINANCIAL STATEMENTS 55 50 FINANCIAL POSITION 34 CONTENTS SUBSTANTIAL SECURITYHOLDERS CORPORATE GOVERNANCE STATEMENT OFFINANCIALPERFORMANCE/STATEMENT OFMOVEMENTSINEQUITY / 36 STATEMENT OFCASHFLOWS / 51 SHAREHOLDER INFORMATION / 56 INVESTOR INFORMATION FOR THEYEARENDEDJUNE2OO3 / 37 NOTES ANDACCOUNTINGPOLICIES / 53 / 57 DISCLOSURES CORPORATE DIRECTORY / 54 / 35 REMUNERATION STATEMENT OF / 49 AUDIT REPORT / / 33 ANNUAL REPORT 2003 FINANCIAL STATEMENTS 23763_AIAL_Txt 24/09/20034:25PMPage34 34 AUCKLAND INTERNATIONAL AIRPORT LIMITED FINANCIAL STATEMENTS Taxation expense Surplus before taxation Net interest Depreciation Operating expenses Expenses Non-recurring Recurring Operating revenue STATEMENT OFFINANCIALPERFORMANCE STATEMENT OFMOVEMENTS INEQUITY Surplus aftertaxation The notesandaccountingpoliciesonpages37to48formpartofare toberead inconjunctionwiththesefinancialstateme Equity atendofyear Equity atbeginningofyear Movements inequityfortheperiod ofcapital Return Dividends paid Distributions toowners Increase inshare capital Contribution from owners Increase invalueofinvestmentproperty Increase invalueofproperty, plantandequipment Net surplusfortheyear Total recognised revenues andexpenses Notes Notes 20 19 14 13 6 5 4 3 8 FOR THEYEARENDED30JUNE2003 FOR THEYEARENDED30JUNE2003 (185,014) (273,274) (212,714) 120,093 114,614 234,707 228,040 547,260 732,274 (60,560) 83,501 36,592 53,625 30,396 30,593 86,579 83,501 3,078 6,667 1,681 1,681 $000s $000s 2003 2003 - 163,978 192,106 102,273 200,991 200,991 732,274 540,168 240,654 (51,548) (51,548) 71,511 30,762 48,979 98,718 17,939 31,800 71,511 nts. 5,165 3,000 3,000 $000s $000s 2002 2002 – - 23763_AIAL_Txt 24/09/20034:25PMPage35 Wayne Boyd, Signed onbehalfoftheboard These financialstatementswere approved andadoptedbytheboard on28August2003. The notesandaccountingpoliciesonpages37to48formpartofare toberead inconjunctionwiththesefinancialstateme Total equityandliabilities Short-term borrowings Accounts payable Current liabilities Other termliabilities Term borrowings Non-current liabilities Investment property revaluation reserve Property, plantandequipmentrevaluation reserve Retained earnings Cancelled share reserve Issued andpaid-upcapital Shareholders' equity Total assets Taxation receivable Accounts receivable Prepayments Inventories Bank Current assets Investment inassociatedcompanies Investment properties Property, plantandequipment Non-current assets STATEMENT OFFINANCIALPOSITION DIRECTOR/CHAIRMAN OFTHEBOARD Anthony Frankham, DIRECTOR/CHAIRMAN OFTHEAUDITCOMMITTEE Notes 15 20 19 14 13 12 11 10 15 16 7 9 1,116,680 1,102,520 1,116,680 (153,627) 200,621 200,000 547,260 422,523 157,594 120,724 979,790 368,799 342,850 33,676 14,160 25,949 87,094 6,668 2,029 4,155 2,006 $000s 2003 621 769 539 AS AT 30JUNE2003 1,103,309 1,087,172 1,103,309 150,683 150,000 732,274 422,523 215,000 986,270 220,352 200,000 30,598 16,137 20,352 64,153 98,811 nts. 5,971 2,227 6,665 2,091 $000s 2002 683 730 544 - 35 ANNUAL REPORT 2003 FINANCIAL STATEMENTS 23763_AIAL_Txt 24/09/20034:25PMPage36 36 AUCKLAND INTERNATIONAL AIRPORT LIMITED FINANCIAL STATEMENTS Net cashflowfrom/(applied to)operatingactivities GST paid Interest paid Other taxespaid Income taxpaid Payments tosuppliersandemployees Cash wasappliedto: Dividends from associatedcompanies Interest received Receipts from customers Cash wasprovided from: Cash flowfrom operatingactivities STATEMENT OFCASHFLOWS e ahfo rm(ple o iacn ciiis(78,743) The notesandaccountingpoliciesonpages37to48formpartofare toberead inconjunctionwiththesefinancialstateme Ending cashcarriedforward Opening cashbrought forward Net increase/(decrease) incashheld Net cashflowfrom/(applied to)financingactivities Dividends paid ofcapital Return (37,844) Decrease inborrowings Cash wasappliedto: Increase inborrowings Increase inshare capital Cash wasprovided from: Cash flowfrom financingactivities Net cashfrom/(applied to)investingactivities Shares inandadvancestoassociatedcompanies Interest paid–capitalised Purchase ofproperty, plantandequipmentexpenditure oninvestmentproperties Cash wasappliedto: Proceeds from saleofassets Cash wasprovided from: Cash flowfrom investingactivities Notes 13 17 11 14 7 8 FOR THEYEARENDED30JUNE2003 114,077 114,836 228,913 912,174 212,714 833,431 226,396 638,900 831,750 37,854 37,340 60,560 19,486 28,090 36,631 30,282 (2,510) 1,767 1,681 4,155 6,665 $000s 2003 347 200 314 750 10 10 109,639 208,488 400,748 380,900 207,128 349,200 377,900 (19,848) (82,990) 85,098 82,125 98,849 51,548 10,290 20,880 31,888 35,457 nts. 6,801 3,000 2,108 6,665 1,100 1,873 2,108 $000s 2002 (136) 334 500 860 – 23763_AIAL_Txt 24/09/20034:25PMPage37 treated asinvestmentproperties. purposes ofobtainingthebenefitsrental income. The directors havedeterminedthattheseproperties shouldbe The directors haveidentifiedthatcertaincommercial properties ownedbythecompanyare heldprimarilyforthe (iii) Investmentproperties The estimatedusefullivesofproperty, plantandequipmentare asfollows: residual value,overitsestimatedusefullife. Depreciation iscalculatedonastraight-linebasistoallocate thecostorrevalued amountofanasset, lessany as thedifference betweenthenetsalepriceandcarryingamountofasset. Where anassetisdisposedof,thegainorlossrecognised inthestatementoffinancialperformanceiscalculated Property, plantandequipmentunderconstructionare statedatcost. of financialperformance. is recognised inequityunlessitexceedsanyprevious revaluation, inwhichcaseitisrecognised inthestatement recognised inthestatementoffinancialperformance. Anydecrease invaluerelating toaclassofrevalued assets decrease invaluewhichhadbeenrecognised inthestatementoffinancialperformance,whichcaseitis Any increase invalueofaclassrevalued assetsisrecognised directly inequityunlessitoffsets aprevious for Property, PlantandEquipment a cyclicalbasisatminimumeveryfiveyearsasrequired underFinancialReporting Standard 3(FRS3), valuers haveusedaDepreciated ReplacementCost(DRC)approach tovaluation.Revaluationsare carriedouton to fairvalueasdeterminedbyanindependentregistered valuer. Inassessingthefairvalueofreclaimed landthe It isthecompany’s policytore-state landandbuildings,runway, taxiwaysandaprons andinfrastructuralassets the locationandconditionforitsintendeduseare complete. are capitalised.Costsceasetobecapitalisedwhensubstantiallyalltheactivitiesnecessarybringanasset Borrowing coststhatare directly attributabletotheacquisitionorconstructionofproperty, plantandequipment intended use. plant andequipmentincludesallcostsdirectly attributabletobringingtheitemworkingconditionforits Property, plantandequipmentare initiallystatedatcostanddepreciated asoutlinedbelow. Thecostofproperty, (ii) Property, plantandequipment received from associatesare credited tothecarryingamountof investmentinassociates. as acomponentoftotalrecognised revenues andexpensesinthestatementofmovementsequity. Dividends statement offinancialperformance.Thecompany’s share ofothergainsandlossesassociatesisrecognised The company’s share ofthenetsurplusassociatesisrecognised asacomponentofoperatingrevenue inthe controlling interests. The equitymethodofaccountinghasbeenusedforassociatedcompaniesinwhichthere are significant,butnot (i) Accountingforassociates financial positionhavebeenapplied: The followingspecificaccountingpolicieswhichmateriallyaffect themeasurement offinancialperformanceand Specific accountingpolicies buildings, runway, taxiwaysandaprons andinfrastructuralassetsare statedatvaluation. The financialstatementsare prepared onthebasisofhistoricalcost,exceptinvestmentproperties, landand Basis ofpreparation accordance withtheFinancialReportingAct1993. These financialstatementsare presented asrequired bytheCompaniesAct1993andhavebeenprepared in 2. Statementofaccountingpolicies under theCompaniesAct1993on6June1997. Thecompanycommencedtradingon1April1988.wasre-registeredNew ZealandGovernment. Airportwere vestedinthecompanyon1April1988byanOrderthe AucklandInternational inCouncilofthe 1987 andwasincorporatedon20January1988undertheCompaniesAct1955.Mostoforiginalassets AirportLimited(“thecompany”)isacompanyestablishedundertheAucklandAct Auckland International 1. Establishment NOTES ANDACCOUNTINGPOLICIES • • • • • nrsrcua ses55 years 5–50 years 5–33 years 16–40 years 3–10 Indefinite Vehicles, plantandoffice equipment Runway, taxiwaysandaprons Infrastructural assets Buildings andservices Land (includesreclaimed land) . Whenapplied,revaluations are undertakenforallassetsofaparticularclass. FOR THEYEARENDED30JUNE2003 Accounting 37 ANNUAL REPORT 2003 FINANCIAL STATEMENTS 23763_AIAL_Txt 24/09/20034:25PMPage38 38 AUCKLAND INTERNATIONAL AIRPORT LIMITED FINANCIAL STATEMENTS NOTES ANDACCOUNTINGPOLICIES with FRS38, In thecurrent periodthecompanychangeditspolicy ofaccountingforitsinvestmentsinassociatesaccordance (xii) Changesinaccountingpolicies cost basis. All inventoriesare valuedatthelowerofcostandnet realisable value.Costiscalculatedonweighted average (xi) Inventories exception ofreceivables andpayableswhichinclude GST. are statedexclusiveofGST. Allitemsinthestatementoffinancialpositionare statednetofGST, withthe The statementoffinancialperformanceandcashflowshavebeenprepared sothatallcomponents (x) GoodsandServicesTax (GST) Financingactivitiesincludethatchangetheequityanddebtcapitalstructure. Dividendspaidin (d) Investingactivitiesare those activitiesrelating toacquisitionanddisposalofnon-current assets. (c) Operatingactivitiesincludecashreceived from allincomesources andcashpaymentsmadeforthesupply (b) Cashisconsidered tobecashonhandandcurrent accountsinbanks,netof bankoverdrafts. (a) The followingare thedefinitionsoftermsusedinstatementcashflows: (ix) Statementofcashflows at thedateoftransaction. Transactions denominatedinforeign currency are convertedtoNewZealanddollarsattheexchangeratesineffect (viii) Foreign currency statement offinancialperformanceoverthelifehedgeditemorperiodhedged. revenue overtheperiodofagreement. Netsettlementsonforward rateagreements are amortisedtothe differential, paidorreceived, onfinancialinstrumentsisrecognised asacomponentofinterest expenseorinterest The companyusesinterest rateswaps,forward rateagreements andoptionstomanageinterest raterisk.Thenet associated witheachitem. and borrowings. Theparticularrecognition methodsadoptedare disclosedintheindividualpolicystatement Financial instrumentsinthestatementoffinancialpositionincludebank,investments,receivables, tradepayables (vii) Financialinstruments crystallise intheforeseeable future. the financialstatementsonlywhere there isvirtualcertaintythatthebenefitoftimingdifferences orlosses will Any deferred taxliabilityorassetattributabletotimingdifferences orlossescarriedforward isrecognised in Deferred taxationisdeterminedonapartialbasisusingtheliabilitymethod. non-assessable incomeandnon-deductiblecosts. The incometaxexpensechargedtothestatementoffinancialperformanceiscalculatedafterallowingfor (vi) Taxation Receivables are statedattheirestimatedrealisable value. (v) Accountsreceivable These are recorded atthelowerofcostandnetrealisable value. (iv) Bankandmarketablesecurities Investment properties are notdepreciated. Investment properties underconstructionare statedatcost. the increase previously recognised inequity. performance. Adecrease inthevalueisrecognised inthestatementoffinancialperformancewhere itexceeds recognised inthestatementoffinancialperformance,whichcaseitisrecognised inthestatementoffinancial best use.Anyincrease onrevaluation isrecognised directly inequityunlessitoffsets aprevious decrease invalue The basisofvaluationismarketvaluelesstheestimatedcostdisposal,basedoneachproperty’s highestand Investment properties are statedatvaluation,asdeterminedeveryyearbyanindependentregistered valuer. for thecurrent period. Where applicablecertaincomparativeshavebeenre-stated tocomplywiththeaccountingpresentation adopted (xiii) Changesincomparatives All otheraccountingpolicieshavebeenappliedonabasisconsistentwiththosereported inprevious periods. increased theoperatingrevenue by$465,000(2002:$342,000). had amaterialimpactontheconsolidatedfinancialstatementsincurrent period.Theeffect ofthischangehas relation tothecapitalstructure are includedinfinancingactivities. of goodsandservicesthatare notinvestingorfinancing activities. Accounting forInvestmentsinAssociates . Theimplementationofthenewaccountingpolicyhasnot FOR THEYEARENDED30JUNE2003 23763_AIAL_Txt 24/09/20034:25PMPage39 company’s depreciation charge onproperty, plantandequipment hasreduced by$1,572,000. As aconsequenceoftherevaluation ofproperty, plantandequipmentcompletedasat30June2002,the Vehicles, plantandequipment Runway, taxiwaysandaprons Infrastructure Buildings andservices Depreciation byassetclass: Loss onsaleofproperty, plantandequipment Repairs andmaintenance Doubtful debts–changeinprovision Doubtful debtswrittenoff Donations Directors’ fees Auditors’ otherfees Auditors’ otherattestationfees Audit fees Operating expensesinclude: 5. Expenses assets were independentlyvaluedtofairvaluebyBecaValuations Limited,registered valuers,asat30June2003. financial performancefortheyearended30June2003atavalueof$6,667,000.Thebridgeandassociated of associated services,whichhavebeenpassedtothecompany, hasbeenrecognised inthecompany’s statement In accordance withapplicableFinancialReportingStandards (FRS3),thefairvalueofroad, thebridgeand was situatedwithintheairportboundaries,includingbridgeoverPukakiCreek, shouldbepassedtothecompany. Road aStateHighway, thatownershipofandfuture maintenanceanddevelopmentresponsibility fortheportionthat TransitRecognising theseconcerns, NewZealandandManukauCityCouncilagreed, whendeclaringPuhinui Creek, situatedwithintheairportboundaries,formedanintegralpartofairport’s emergencyroading network. inthattheportionofPuhinuiRoad(1kilometre),expressed includingthebridgeoverPukaki itsconcerns thereview,Within AirportLimited,whichownsandmaintainsalltheroads withinitsboundaries, AucklandInternational to bedeclared aStateHighway. Airportneeded increased demandinthemedium-to-long-term,PuhinuiRoadaccesstoAucklandInternational reviewed therequirements forStateHighwaysinManukauCity. Thereview recognised that,inorder tomeet As partofareview oftheNationalStateHighwaynetwork,Transit NewZealandandManukauCityCouncil 4. Non-recurring revenue: PukakiBridgeandroad Other Car parkincome Rental income Retail income Terminal ServicesCharge Airport DevelopmentCharge Airfield income Recurring revenue includes: 3. Recurringrevenue NOTES ANDACCOUNTINGPOLICIES FOR THEYEARENDED30JUNE2003 228,040 30,593 17,517 16,549 14,896 22,692 75,472 14,147 37,669 55,498 2,913 4,855 5,308 7,666 $000s $000s (196) 2003 2003 148 290 133 100 13 59 7 200,991 31,800 18,881 16,168 12,673 21,640 57,826 14,768 32,545 53,568 3,375 4,335 5,209 7,971 $000s $000s 2002 2002 (975) 245 10 63 24 56 47 45 39 ANNUAL REPORT 2003 FINANCIAL STATEMENTS 23763_AIAL_Txt 24/09/20034:25PMPage40 40 AUCKLAND INTERNATIONAL AIRPORT LIMITED FINANCIAL STATEMENTS a Taxation expense (a) 6. Taxation Interest revenue Interest capitalised Interest onborrowings Net interest comprises: NOTES ANDACCOUNTINGPOLICIES b Imputationcredits (b) are unlikelytocrystalliseintheforeseeable future, havenotbeenrecognised. if theassetswere soldattherevalued carryingamounts.Thisliability, andthetaxeffects ontimingdifferences that Included intheunrecognised deferred taxliabilityistheeffect oftherevaluation ofassets,whichmaycrystallise Total unrecognised deferred taxliabilityatbalancedateis$15,360,346(2002:$14,042,000). Taxation effect oftimingdifferences notrecognised Taxation effect ofshare ofassociates’tax-paidearnings Taxation effect ofnon-assessablebridgeincome Taxation effect ofpermanentdifferences Adjustments: Prima facietaxationat33% Surplus before taxation aac tedo er32,140 36,592 Balance atendofyear Transfer toEmployeeShare Purchase Plan Credits attachedtodividendsreceived Credits attachedtodividendspaid Income taxrefund Income taxpaid Balance atbeginningofyear Taxation expense Imputation credits Taxation adjustmentrelating toprevious years FOR THEYEARENDED30JUNE2003 120,093 (26,432) 39,631 33,350 24,900 30,396 32,548 (1,759) (2,200) (1,838) 1,202 $000s (314) (153) (369) 2003 369 240 (47) – 102,273 (22,887) 33,750 31,900 18,334 17,939 20,706 24,900 30,762 (1,873) (1,979) (2,693) (1,825) 1,010 $000s 2002 (894) (246) 246 52 – – 23763_AIAL_Txt 24/09/20034:25PMPage41 oa iied nto upeetr iied)60,560 (12.50 centspershare) tobepaidon24October2003. On 28August2003,thedirectors approved thepaymentofa2003fullyimputedfinaldividend$38,044,327 company receives anequivalenttaxcredit from the InlandRevenueDepartment. Supplementary dividendspaidof$3.4million(2002:$2.5million)are notincludedintheabovedividendsas 304.3 millionshares onissueatthetimeof2003 interimdividendpayment. 2,006 Dividends paidwere basedon422.0millionshares onissueatthetimeof2002finaldividend paymentand Total dividends(netofsupplementarydividends) (2002: 6.00cents) 2003 interimdividendof9.50centspershare paidon28March 2003 (2001: 6.25cents) 2002 finaldividendof7.50centspershare paidon25October2002 8. Dividendstoshareholders Equity accountedvalueofinvestments Cost ofinvestmentinassociatedcompanies Total share ofincrease/(decrease) inassociatedcompanies’equitysinceacquisition Share ofassociatedcompanies’equityatbeginningtheyear Net addition/(reduction) inequitycarryingvalue Less share ofdividendsreceived byAIAL Share ofsurplusaftertaxassociatedcompanies Taxation expense Share ofsurplusassociatedcompanies Carrying amountofassociatedcompanies balance dateof31December. DuringtheyearAIALadvanced$200,000toWaste Resources Limited. Waste Resources LimitedoperatesthequarantineincineratoroperationbasedatAucklandAirportandhasa Waste Resources Limited (50%) dividends of$750,000(2002:$500,000). Airport andhasabalancedateof31December. Duringtheyearcompanyreceived from HMSC-AIALLimited terminalofAucklandInternational HMSC-AIAL Limitedoperatesfoodandbeveragefacilitiesattheinternational HMSC-AIAL Limited(50%) Waste Resources Limited HMSC-AIAL Limited 7. Associatedcompanies NOTES ANDACCOUNTINGPOLICIES 2003 50 50 % odn CarryingAmount Holding 2002 50 50 % FOR THEYEARENDED30JUNE2003 28,910 31,650 1,858 2,006 1,769 $000s $000s $000s (285) (750) (228) 2003 2003 2003 148 433 465 693 237 51,548 25,248 26,300 2,091 1,658 2,091 1,955 $000s $000s $000s (158) 2002 2002 2002 (500) (169) 433 591 342 511 136 41 ANNUAL REPORT 2003 FINANCIAL STATEMENTS 23763_AIAL_Txt 24/09/20034:25PMPage42 42 AUCKLAND INTERNATIONAL AIRPORT LIMITED FINANCIAL STATEMENTS Infrastructure Accumulated depreciation Work inprogress atcost At cost At valuation Buildings andservices Work inprogress atcost Reclassification toinvestmentproperties At cost At valuation Freehold land 9. Property, plantandequipment NOTES ANDACCOUNTINGPOLICIES oa rpry ln n qimn 979,790 35,855 Additions fortheyearended30June2003includecapitalisedinterest of$313,717(2002:$1,873,000). a Depreciated ReplacementCost(DRC)approach tovaluation. Limited, registered valuers,asat30June2002.Inassessingthefairvalueoftheseassetsvaluers haveused Buildings, infrastructuralassetsandrunway, taxiwaysandaprons were independently valuedbyBecaValuations to fairvalueasoutlinedinFRS3andapplicablevaluationstandards. Land wasindependentlyvaluedbySeagar&Partners(Auckland)Limited,registered valuers,as at 30June2002 Asset valuation: Total property, plantandequipment Accumulated depreciation Work inprogress atcost Vehicles, plantandequipmentatcost Accumulated depreciation Work inprogress atcost At cost At valuation Runway, taxiwaysandaprons Accumulated depreciation Work inprogress atcost At cost At valuation FOR THEYEARENDED30JUNE2003 114,221 119,851 273,932 461,689 284,254 461,796 116,900 118,309 (17,517) (25,767) 10,097 (1,041) (4,786) (5,308) 1,301 5,894 2,107 6,116 $000s 2003 164 770 734 9 – 117,038 111,945 285,157 461,896 284,254 461,796 986,270 117,017 111,642 (23,068) 10,234 33,173 $000s 2002 100 303 903 129 21 – – – – – – – – 23763_AIAL_Txt 24/09/20034:25PMPage43 b Options (b) of shares cancelledduringtheyearwas118,174,581 (2002:nil). The numberofissuedandpaid-upshares asat30June2003was304,354,619(2002:422,000,000).Thenumber company’s availablesubscribedcapitalis$3,967,031 (2002:$215,000,000). to $59,087,291, andthebalanceof$153,626,955appliedtocancelled share reserve. Asat30June2003the ofcapital$212,714,246wasappliedagainstshareThe return capitalat$0.50pershare cancelled,amounting held bytheshareholders. On 25October2002,thecompanyreturnedcapitaltoshareholders andcancelledsevenshares inevery25shares 14. Generalreserves Ordinary shares (a) 13. Share capitalasat30June2003 Less provision fordoubtfuldebts Receivables 12. Accountsreceivable During theyearsurplusfundswere deposited ontheNewZealandmoneymarketatratesof5.25%–5.75%. Cash andbankbalances 11. Bankbalances Investment properties underconstructionatcost Investment properties atvaluation 10. Investmentproperties NOTES ANDACCOUNTINGPOLICIES been recorded asanincrease intheinvestmentproperty revaluation reserve. The valuationresulted inanincreased marketvalueoverbookof$3,077,621(2002:$5,165,000)which has highest andbestuse.Thisvaluationbasisisconsistentwiththeprevious year. valuers. Thebasisofvaluationwasmarketvaluelesstheestimatedcostsdisposal,basedoneachproperty’s The identifiedinvestmentproperties were valuedatyear-end bySeagar&Partners(Auckland)Limited,registered are disclosedinNote25. Options havebeenissuedandexercised pursuantto theExecutiveShare OptionPlan.Detailsoftheseoptions Total share capital Add optionsexercised duringtheyear Less shares cancelled Issued andpaid-upcapitalatthebeginningofyear FOR THEYEARENDED30JUNE2003 157,594 215,000 155,913 120,724 111,020 (59,087) 6,668 6,836 4,155 9,704 1,681 $000s (168) 2003 215,000 212,000 212,000 98,811 95,649 5,971 6,335 6,665 3,162 3,000 $000s 2002 (364) – 43 ANNUAL REPORT 2003 FINANCIAL STATEMENTS 23763_AIAL_Txt 24/09/20034:25PMPage44 44 AUCKLAND INTERNATIONAL AIRPORT LIMITED FINANCIAL STATEMENTS od auig1 pi 04Floating 7.50% Floating Floating 7.50% Short-term borrowings Bonds maturing15April2004 Bonds maturing15April2004 7.50% Commercial papermaturingAugust–September2003 8.00% Short-term borrowings Term borrowings Bonds maturing16July2007 Bonds maturing16July2007 Bonds maturing15April2004 Bonds maturing15November2008 Bonds maturing15November2006 Term borrowings At balancedatethefollowingborrowing facilitieswere inplace: 15. Borrowings NOTES ANDACCOUNTINGPOLICIES oa orwns542,850 Other payablesandprovisions Trade payables Property, plantandequipmentretentions andpayables GST payable Employee entitlements 16. Accountspayable pledge deed. Borrowings underthebondprogramme, commercial paperandstand-byfacilitiesare supportedbyanegative of AustraliaGroup. liquidity supportforthecommercial paperfacility. Thisstand-byfacilityisunderwrittenbytheCommonwealthBank The companyhasacommercial paperfacilityof$250million.Inadditiona$75millionstand-byactsas that short-termborrowings willberefinanced atmaturity. requirements. Itroutinely rolls overmaturingbondsandcommercial paperatmaturity. Thecompanyisconfident The companyutilisesmedium-termbondsandcommercial paperprogrammes toprovide itsongoingdebt Total borrowings Coupon FOR THEYEARENDED30JUNE2003 342,850 109,000 178,000 200,000 25,949 55,850 41,000 59,000 50,000 50,000 12,769 5,617 1,419 5,627 $000s $000s 2003 2003 517 – 200,000 200,000 150,000 350,000 20,352 50,000 50,000 50,000 7,995 6,831 1,332 3,556 $000s $000s 2002 2002 638 – – – – 23763_AIAL_Txt 24/09/20034:25PMPage45 balance date. The fairvalueoftheabovefinancialinstrumentsisbasedonquoted marketpricesfortheseinstrumentsat Bonds Forward rateagreements Interest rateswaps The estimatedfairvaluesoftheremaining financialinstrumentsatbalancedatewere: The carryingvalueoftheseitemsisequivalenttotheirfairandtherefore excludedfrom thetablebelow. Bank, investments,receivables, tradepayablesandcommercial paper: Fair value or historyindicatesthatthiswouldbeprudentlyrequired. There are nosignificantconcentrationsofcredit risk. policy thatmanagesexposure tocredit riskbywayofrequiring collateralforsomecustomerswhere credit rating Accounts receivable principallycompriseamountsdue from airlines,tenantsandlicensees.Thecompany hasa credit rating.Thecompanyminimisesitscredit riskbyspreading suchexposures across arangeofinstitutions. oraNewZealand-registeredwhich willbeeithertheNewZealandGovernment bankwithanappropriate international Cash depositsandmarketablesecuritiesare restricted bytheamountwhichcanbeplacedwith any oneinstitution Credit risk At balancedatethecompanyhadnodirect foreign currency exposure. Foreign currency risk Forward rateagreements 114,077 Interest rateswaps The contractamountsofderivativefinancialinstrumentsoutstandingatbalancedatewere: subject tofixedinterest rates,whichare definedasborrowings withaninterest reset dategreater thanoneyear. The company’s policyistomanageitsinterest raterisk.Atyear-end 28%(2002:39%)oftheborrowings were Interest raterisk credit risk. The companyhasatreasury riskmanagementpolicywhichlimitsexposure tointerest rateandcounter-party Interest rateandcredit management 18. Financialinstruments Net cashflowfrom operatingactivities Increase/(decrease) inothertermliabilities Increase/(decrease) inaccountspayable (Increase)/decrease intaxationreceivable (Increase)/decrease incurrent assets Movement inworkingcapital: (Increase)/decrease inproperty, plantandequipmentretentions andpayables Asset disposals Items notclassifiedasoperatingactivities: Non-recurring revenue (Note4) from associates Equity accountedearnings Bad anddoubtfuldebts Depreciation Non-cash items: Surplus aftertaxation Reconciliationofsurplusaftertaxation 17. NOTES ANDACCOUNTINGPOLICIES with cashflowfrom operatingactivities arigvleFairvalue Carrying value 6,5 383,500 364,850 00 $000s $000s 032003 2003 (2,922) 5,832 – – arigvleFairvalue Carrying value FOR THEYEARENDED30JUNE2003 5,0 155,000 150,000 134,000 166,000 30,593 83,501 (6,667) 5,598 1,214 $000s 00 $000s $000s (305) (189) 2003 022002 2002 148 285 (62) (39) 421 –– – 135,000 109,639 31,800 71,511 (1,126) (1,386) 6,658 2,794 $000s 2002 (975) 132 158 73 – – 45 ANNUAL REPORT 2003 FINANCIAL STATEMENTS 23763_AIAL_Txt 24/09/20034:25PMPage46 46 AUCKLAND INTERNATIONAL AIRPORT LIMITED FINANCIAL STATEMENTS Investment properties netrevaluations Balance atbeginningofyear 20. Investmentproperty revaluation reserve Runway, taxiwaysandapron Infrastructure Buildings andservices Freehold land By assetclass: Balance atendofyear Property, plantandequipmentnet revaluations Balance atbeginningofyear Property, 19. plantandequipmentrevaluation reserve NOTES ANDACCOUNTINGPOLICIES Tourism HoldingsLimitedinwhichthere are commondirectorships. The companyhasatenancyorlicenceagreement with TheWarehouse Group Limited,Vector Limitedand $6,667,000. recognised inthecompany’s statementoffinancialperformancefortheyearended30 June2003atavalueof The fairvalueoftheroad, thebridgeandassociated services, whichhavebeenpassedtothecompany, hasbeen Road thatwassituatedwithintheairportboundaries,includingbridgeoverPukakiCreek, tothecompany. passed ontheownershipofandfuture maintenance anddevelopmentresponsibility fortheportionofPuhinui During theyearManukauCityCouncilandTransit NewZealand,whendeclaringPuhinuiRoadaStateHighway, Waste Resources Limitedleasesthe buildingitoccupiesfrom thecompany. AIAL LimitedtoAIAL)and$32,000wasowedWaste Resources Limited(2002:$28,000). (2002: $422,000).Asat30June2003$1,000wasowedtoHMSC-AIALLimited$4,000byHMSC- HMSC-AIAL Limitedtotalled$551,000(2002:$450,000)andwithWaste Resources Limitedtotalled$413,000 been onacommercial basiswithoutspecialprivileges. Duringtheyearended30June2003transactionswith All tradingwithrelated parties,includingandnotlimitedtolicencefees,rentals andothersundrycharges,has 23. Relatedpartytransactions There were noothercontingentliabilitiesoutstandingat30June2003(2002:Nil). through neworadditionalusercharges. berecoveredThe companybelievesthat,inrespect oftheseinsulation costs,asignificantportionwill,inturn, to accuratelyquantify, thecompanyestimatesapproximately $15millionmaybeinvolvedoverthenextfiveyears. to existinghomesandschoolswithindefinedareas. Whilethepotentialliabilityforinsulationobligationsisdifficult As partoftheManukauCityDistrictPlan,companywill,overtime,offer certainacoustictreatment packages runway of1,200metres whichcanbeincreased to2,150metres inthefuture. the existingrunway. Thefirststage,expectedtobeoperationalsometimebefore theyear2010,willprovide a Council, thecompanyandotherinterested partiesonthelocationofasecondrunwaytonorthandparallel In December2001,theEnvironment Courtratifiedanagreement thathadbeenreached betweenManukauCity Noise insulation 22. Contingentliabilities relate toairportdevelopmentprojects. Capital commitmentsentered intobutnotaccruedatbalancedatewere $15,770,879(2002:$7,684,699). These 21. Capitalcommitments Balance atendofyear FOR THEYEARENDED30JUNE2003 422,523 289,181 422,523 422,523 30,598 12,044 44,412 76,886 33,676 3,078 $000s 2003 – 422,523 289,181 422,523 258,545 163,978 25,433 12,044 44,412 76,886 30,598 5,165 $000s 2002 23763_AIAL_Txt 24/09/20034:25PMPage47 of theissue.Issuepriceaftercapitalrepayment adjustmentis$2.33. Shares were issuedatapriceof$2.18being20%discounttothemarketrateon19November1999, date of theissue.Issuepriceaftercapitalrepayment adjustment is$2.55. Shares were issuedatapriceof$2.34being20%discounttothemarketrateon21November2000,date nloae hrshl ytepa 22,896 41,760 on issue. Shares heldbythepurchase planrepresent approximately 0.014%(2002:0.043%)ofthetotalcompany’s shares The shares were acquired bythetrusteesatanaveragepriceof$2.93eachon28September1999. Total ordinary shares allocatedandheldat30June Unallocated shares heldbytheplan Shares cancelledaspartofthecapitalrepayment Shares forfeitedduringtheyear Opening balance Allocation –November2000 Shares fullypaidduringtheyear Shares cancelledaspartofthecapitalrepayment Shares forfeitedduringtheyear Opening balance Allocation –November1999 The followingordinary shares were allocatedandheldunderthepurchase plan: removed bythecompany. The purchase plan’s trusteesare CJCurley, DTHansenandCFSpillane.Theyare appointedand canbe by thecompanyinrelation totheacquisitionofshares. restrictive period.Therestrictive periodisthelongerofthree yearsortheperiodofrepayment oftheloanmade plan duringtherestrictive period.Thevotingrightsare exercised bythetrusteesofpurchase planduringthe The shares allocatedunderthepurchase planare heldintrustfortheemployeesbytrusteesofpurchase is $66,300(2002:$22,600payabletothecompanybypurchase plan).Theseadvancesare interest free. loans are determinedbythecompany. Theamountpayablebythecompanytopurchase planatbalancedate The advancesare repayable bywayofdeductionfrom theemployees’regular remuneration. Thetermsofsuch The companyadvancedtothetrustallmoniesnecessarypurchase theshares underthepurchase plan. by thecompany. employees whohaveaminimumofoneyear’s service.Considerationpayablefortheshares wasdetermined The purchase planwasopentoallfull-timeandpart-time(thoseworkingmore than15hoursperweek) operation ofthepurchase plan. assist employeestobecomeequityholdersinthecompany. the Atrustdeeddated19November1999governs following aresolution ofshareholders attheannualgeneralmeetingofcompanyon16November1999 to AirportLimitedShare PurchaseThe companyestablishedtheAucklandInternational Plan(“purchase plan”) 24. EmployeeShare Purchase Plan NOTES ANDACCOUNTINGPOLICIES FOR THEYEARENDED30JUNE2003 129,000 (90,000) (36,000) 18,864 25,200 (6,336) (3,000) 2003 – – 129,000 183,000 133,000 25,200 28,800 28,200 (3,000) (2,000) (2,000) 2002 – – 47 ANNUAL REPORT 2003 FINANCIAL STATEMENTS 23763_AIAL_Txt 24/09/20034:25PMPage48 48 AUCKLAND INTERNATIONAL AIRPORT LIMITED FINANCIAL STATEMENTS exercise date.Black&Scholesmethodologyhasbeen adoptedtoestablishthenumberofoptionsgranted. The annualvalueofoptionsgrantedhasbeencalculatedoverthetermrespective issuesuptotheirearliest Details ofoptionsissuedundertheschemeat30June2003are asfollows: of anyoptionsissued. company. Theboard hasdiscretion overthenumberofoptionsissuedtoanyemployeeandspecificterms Options are issuedtoexecutiveemployeesofthecompanyatdiscretion oftheboard ofdirectors ofthe with thecompanyotherthanthrough retirement. issue thentheyare deemedtohavelapsed.Optionsmaylapsewhenanemployeeterminatestheiremployment after thethird anniversaryofissuetheoptionandifoptionsare notexercised before thesixthanniversaryof The firstissueofoptionsunderthisoptionplanwasmadeon15December1999.Noare exercisable until number ofoptionsgrantedare subjecttoreduction forthecapitalrepayment ofseveninevery25shares. the option,lessanydividendsandcapitalrepayment whichthecompanyhaspaidduringthisperiod.The adjusted toreflect movementsintheNZX40Gross Indexbetweenthedateofissueandexercise of each option.Theexercise priceisdetermined basedonthecompany’s share priceatthedateofissueoption terms oftheoptionplanduringyear. Theholderofanoptionisentitledtosubscribeforonefully-paidshare for company are aligned.Thecompanyhasissuedoptionsforshares inthecompanytocertainemployeesunder to assistinattractingandretaining keyexecutivesandensuringthattheinterests ofthoseexecutivesand the As partofexecutiveremuneration, thecompany hasestablishedtheExecutiveShare OptionPlan(“optionplan”) 25. ExecutiveShare OptionPlan NOTES ANDACCOUNTINGPOLICIES a On28August2003,thedirectors approved thepaymentofa2003fully-imputedfinaldividend$38,044,327 (a) 27. Subsequentevents operating anairport. industry. revenue from Thecompanyearns aeronautical activitiesandotherchargesrents associatedwith The companyislocatedinonegeographicsegmentAuckland,NewZealandandoperatestheairport 26. Segmentalreporting 415 Number ofoptionsoutstandingat30June2003 $4.21 Options outstanding 285 Options lapsed Number ofoptionsissuedon9September2002 $3.86 Options outstanding 277 Options lapsed Number ofoptionsissuedon6September2001 $2.95 Options outstanding Options lapsed 230 Number ofoptionsissuedon8September2000 Options outstanding Options exercised $3.00 Options lapsed Number ofoptionsissuedon15December1999 (12.50 centspershare) tobepaidon24October2003. su Annualvalue Issue rc $000s Price FOR THEYEARENDED30JUNE2003 3,560,800 1,150,000 1,260,000 1,060,000 1,035,000 1,195,000 1,045,000 (110,000) (125,000) (160,000) (735,000) 935,000 235,000 (75,000) 2003 3,110,000 1,060,000 1,125,000 1,195,000 1,045,000 1,015,000 970,000 (45,000) (70,000) (75,000) 2002 – – – – 23763_AIAL_Txt 24/09/20034:25PMPage49 HREE CONAT AUCKLAND,NEWZEALAND CHARTERED ACCOUNTANTS Our auditwascompletedon28August2003andourunqualifiedopinionisexpressed asatthatdate. In ouropinion, We haveobtainedalltheinformationandexplanationswerequired. Unqualified Opinion relationship AirportLimited. withorinterests inAucklandInternational Other thaninourcapacityasauditorandtheprovision ofotherassuranceandtaxationadvice,wehaveno overall adequacyofthepresentation ofinformationinthefinancialstatements. from materialmisstatements,whethercausedbyfraudorerror. Informingouropinionwealsoevaluatedthe order toprovide uswithsufficient evidencetoobtainreasonable assurancethatthefinancialstatementsare free and performedourauditsoastoobtainalltheinformationexplanationswhichweconsidered necessaryin We conductedourauditinaccordance withgenerallyacceptedauditingstandards inNewZealand.We planned financial statements.Italsoincludesassessing: An auditincludesexamining,onatestbasis,evidencerelevant totheamountsanddisclosures inthedisclosure Basis ofOpinion Directors andreport ouropiniontoyou. It isourresponsibility toexpress anindependentopiniononthefinancialstatementspresented bytheBoard of Auditors’ Responsibilities for theyearended30June2003. AirportLimitedasat30June2003andoftheresults ofitsoperationsandcashflows of AucklandInternational accepted accountingpractice,offinancialstatementswhichgiveatrueandfairviewtheposition The Board ofDirectors isresponsible forthepreparation, inaccordance withNewZealandlawandgenerally Board ofDirectors’ Responsibilities 2003. Thisinformationisstatedinaccordance withtheaccountingpoliciessetoutonpages37and38. AirportLimitedanditsfinancialpositionasat30June the pastfinancialperformanceofAucklandInternational We haveauditedthefinancialstatementsonpages34to48.Theprovide informationabout AirportLimited Auckland International Audit report totheshareholders of AUDIT REPORT our examinationofthoserecords; and proper accountingrecords AirportLimitedasfarappearsfrom havebeenkeptbyAucklandInternational adequately disclosed. whether theaccountingpoliciesare appropriate tothecompany’s circumstances, consistentlyappliedand statements; and the significantestimatesandjudgementsmadebyBoard ofDirectors inthepreparation ofthefinancial giveatrueandfairviewofthefinancialpositioncompanyasat30June2003results of - complywith generallyacceptedaccountingpracticeinNewZealand; - the financialstatementsonpages34to48; its operationandcashflowsfortheyearendedonthatdate. 49 ANNUAL REPORT 2003 FINANCIAL STATEMENTS 23763_AIAL_Txt 24/09/20034:25PMPage50 50 AUCKLAND INTERNATIONAL AIRPORT LIMITED FINANCIAL STATEMENTS Ad hoccommitteesare establishedonthebasisofneed. The board hastwoformallyconstitutedcommittees–theauditcommitteeandremuneration committee. has expired, orthosewhohavebeenthelongestinoffice sincelastbeingelected. directors retire byrotation. Thedirectors toretire are thosewhowishtoretire, thosewhosetermofappointment The board iselectedbytheshareholders ofthecompany. Ateachannualmeeting,atleastone-third ofthe auditsystemformonitoringthecompany’sin placeaninternal operationalpoliciesandpractices. in place,alongwithoperationalandadministrativepoliciesrelative tothecompany’s business.Thecompanyhas Delegations offinancialoperatingauthoritiestothechiefexecutiveofficer andothermanagementexecutivesare Responsibility fortheday-to-daymanagementofcompanyhasbeendelegatedtochiefexecutiveofficer. regulatory compliance,includingtheenvironment andhealthsafety. monitoring oftheperformancecompanyonbehalfshareholders. Theboard alsoplacesemphasis on The board isresponsible forthedirection andsupervisionofthebusinessaffairs ofthecompany, andalsothe During the2003financialyear, theboard meteighttimes. chief executiveofficer toreplace JohnGoulter, managingdirector, whoretired. InJuly2003,theboard appointedDonHuseas WhinerayandJoanWithers). Michael Smith,SirWilson The board currently comprisesfivenon-executivedirectors (thechairman,Wayne Boyd,AnthonyFrankham, The board board throughout theyear. policies,practicesandprocesses adoptedorfollowedbythe This statementsetsoutthecorporategovernance laws andstandards. of directors toshareholders andothers,fortheperformanceofcompanycomplianceby with isgenerallyunderstoodtomeanthecontrol ofthebusinessbydirectors,governance” andtheaccountability The board ofdirectors ofthecompany. isresponsible forthecorporategovernance Theterm“corporate CORPORATE GOVERNANCE Reports are submittedtoeachboard meetinginrespect ofallhealth,safety, securityandenvironmental matters. The companyoperatesteamstomonitorandreview occupationalhealthandsafetyaspectsoftheoperations. Health andsafety “windows” immediatelyfollowingtheannouncementofyearlyandhalf-yearlyresults. at anytime.Directors, managementandcorporatestaff mayonlybuyorsellshares inthecompanyduringtwo Directors andexecutivestaff atthecompanyare notpermittedtoengageinshort-termtradingofcompanyshares Share trading generally meetstwiceayear. executive officer andthemanagementexecutive,whoreport directly tothechiefexecutiveofficer. The committee on thebasisofindependentadvice,remuneration arrangements,includingtheissueofoptions,forchief withWayneJoan Withers, Boydanex-officio member. Thecommitteereviews andrecommends totheboard, The remuneration Whineray, committeecomprisestwonon-executive directors –SirWilson chairman;and Remuneration committee During the2003financialyear, theauditcommitteemetthree times. results. New ZealandExchangeLimited(NZX)andtheAustralianStock(ASX)concerning recommendations onthecompany’s accountingpolicies,financialstatements,andannouncementstothe controls, auditors,andreviewing reviewinginternal andmaking theperformanceandfindingsofexternal financial reporting. Thecommitteeisresponsible forreviewing theadequacyandeffectiveness ofthecompany’s The committeeassiststheboard infulfillingitsresponsibilities forcompanyfinancialstatementsandexternal board, Wayne Boyd;andMichaelSmith. The auditcommitteecomprisesthree non-executivedirectors –AnthonyFrankham,chairman;thechairman ofthe Audit committee 23763_AIAL_Txt 24/09/20034:25PMPage51 (iv) Joan Withers isadirector ofTourism JoanWithers HoldingsLimited,whichhas“arm’s length”dealingswiththecompany (iv) isadirector ofTheWarehouse JoanWithers Group Limited,whichhas“arm’s length”dealingswiththe (iii) JohnGoulterwasadirector ofthejoint-venture company, HMSC-AIALLimited,whichhas“arm’s length” (ii) Whinerayisadirector ofTheNationalBankNewZealandLimited,whichisoneanumber SirWilson (i) Specific disclosures undersection140(1)oftheCompanies Act1993fortheyearinreview are: (a) Directors’ interests intransactions the CompaniesAct1993are asfollows: Entries intheInterests Registermadeduringtheyear, anddisclosedpursuanttosections211(1)(e)140(1)of Entries recorded intheInterests Register not coverliabilitiesarisingfrom criminalactions. company orarelated partytothecompany)thatmay arisefrom theirpositionasdirectors. Theinsurancedoes has continuedtoindemnifyandinsure itsdirectors andofficers againstliabilitytootherparties(exceptthe In accordance withsection162oftheCompaniesAct 1993andtheConstitutionofcompany, thecompany Indemnity andinsurance financial statementsforthe30June2003year. Deloitte Touche Tohmatsu havecontinuedtoactasauditorsofthecompany, andhaveundertakentheauditof Auditors financial statementsrequired tobepublishedinNovembereachyear. The companyisobligedtocomplywiththeAirportAuthorities(InformationDisclosure) Regulations,withdisclosure has consultationanddisclosure obligationsundertheAirportAuthoritiesAct1966. 1990. Thecompanyisan“airportcompany”forthepurposesofAirportAuthoritiesAct1966. The companyisregulated by, amongst otherthings,theAirportAuthoritiesAct1966andCivilAviation Act Regulatory environment Neither theNZXnorASXhastakenanydisciplinaryactionagainstcompanyinperiodunderreview. Disciplinary actiontakenbytheNZXorASX the NZXListingRules. The companyhasnotsoughtorobtainedanywaiversduringtheyearfrom theNZXinrespect ofcompliancewith Waivers grantedbytheNZX Australian CorporationsActdealingwiththeacquisitionofshares (ie,substantialholdingsandtakeovers). There isnocurrent on-marketbuy-back.Thecompanyisnotsubjecttochapters6,6A,6Band6Cofthe effective 1July2002. The company’s shares were quotedontheNZX28July1998.Thecompany’s shares were quotedontheASX Stock exchangelistings (ARBN 085819156). The companywasregistered inAustraliaasaforeign companyundertheCorporationsLawon22January1999 NZX andASXListingRulerequirements respectively. revisions oftheConstitutionwere adoptedon21November2000and182002inorder tocomplywith the companyadoptedarevised Constitution,approved asappropriate forapubliclylistedcompany. Further 1 April1988.Thecompanywasre-registered undertheCompaniesAct1993on6June1997.On251998, The companywasincorporatedon20January1988,undertheCompaniesAct1955,andcommencedtrading Reporting entity SHAREHOLDER INFORMATION in respect ofrental vehicleservices. company inrespect ofaproperty lease. dealings withthecompanyinrespect offoodandbeverageconcessions. of banksthatare partytothecompany’s commercial paperprogramme. 51 ANNUAL REPORT 2003 FINANCIAL STATEMENTS 23763_AIAL_Txt 24/09/20034:25PMPage52 52 AUCKLAND INTERNATIONAL AIRPORT LIMITED FINANCIAL STATEMENTS $13,000 tovariouscharitiesduringtheyear. In accordance withsection211(1)(h)oftheCompaniesAct1993,companyrecords thatitdonatedatotalof Donations of theCompaniesAct1993. There were noentriesintheInterests Registerastotheuseofcompanyinformationundersection145(3) (d) Useofcompanyinformation There are noloanstodirectors. (c) Loanstodirectors On10March 2003,JohnGoulterexercised 200,000optionstoacquire 144,000shares inthecompany (ii) Theshareholdings ofalldirectors were reduced followingthecapitalrepayment on24October2002and (i) Pursuant tosection148oftheCompaniesAct1993,directors disclosedthefollowingtransactionsofcompanyshares: (b) Share dealingsbydirectors Wayne Boydisadirector ofVector Limited,whichhas“arm’s length”dealingswiththecompanyinrespect of (v) SHAREHOLDER INFORMATION debt ratingwasA-1. As at28August2003,theStandard &Poor’s long-termdebtratingforthecompanywasA+andshort-term Credit rating cents in2001. incentsperordinary sharesEarnings were 27.47centsin2003compared with16.95centsin2002and14.05 pershare Earnings at apriceof$3.20pershare. Theseshares were soldonthemarketsamedayfor$5.30pershare. the cancellationofseveninevery25shares held. electricity lines. FOR THEYEARENDED30JUNE2003 23763_AIAL_Txt 24/09/20034:25PMPage53 Director, Tru-Test Limited Director, ParamountProperty Trust ManagementLimited Director, JBWere NewZealandPrivateEquityNo.1Fund Director, Fisher&PaykelHealthcare CorporationLimited Chairman, BrainZInstrumentsLimited Chairman andTrustee, TheLionFoundation Michael Smith Member, Takeovers Panel Trustee, SpiritofAdventure Trust Director, ProCare HealthLimited Director, FrankhamLyne Limited Chairman, NewZealandExperienceLimited Anthony Frankham Director, Vector Limited Director, Tru-Test CorporationLimited Director, ForsythBarrGroup Limited Chairman, ShotoverJetLimited Chairman, NgaiTahu HoldingsCorporationLimited Chairman, Freightways Limited Wayne Boyd Companies Act1993: The followinggeneraldisclosures ofinterests were madebythedirectors intermsofsection140(2)the Disclosure ofinterests bydirectors Executive Share OptionPlan(Note24). Mr Goulterhasalsobeengrantedatotalof725,000optionsonordinary shares issuedinaccordance withthe Joan Withers Sir WilsonWhineray Michael Smith John Goulter Anthony Frankham Wayne Boyd Directors heldinterests inthefollowingshares inthecompanyasat30June2003: DIRECTORS’ HOLDINGSANDDISCLOSUREOFINTERESTS edb soitdpros14,000 Held byassociatedpersons 4,000 8,000 Held byassociatedpersons Non-beneficial interest eeiilyond5,999 14,000 36,000 306,000 Beneficially owned Beneficially owned 36,000 Beneficially owned Beneficially owned 10,000 Beneficially owned Beneficially owned Trustee, NewZealandBusinessandParliamentTrust Trustee, AirportLifeEducationTrust AucklandInternational Director, TheReserveBankofNew Zealand Director, HMSC-AIALLimited John Goulter Trustee, RoyalNewZealandBallet Trustee, CountiesManukauPacificTrust Director, Tourism HoldingsLimited Director, TheWarehouse Group Limited Director, MeridianEnergyLimited Practice Foundation Chairman, ClinicalResearch &Effective Joan Withers Director, NestléNewZealandLimited Director, APNNews&MediaLimited Chairman, TheNationalBankofNewZealandLimited Sir WilsonWhineray 53 ANNUAL REPORT 2003 FINANCIAL STATEMENTS 23763_AIAL_Txt 24/09/2003 4:25 PM Page 54

REMUNERATION AND DISTRIBUTION OF ORDINARY SHARES

Directors’ remuneration and other benefits Remuneration and other benefits required to be disclosed pursuant to section 211(1)(f) of the Companies Act 1993, for the year ended 30 June 2003, were as follows: Wayne Boyd Fees $95,000 Anthony Frankham Fees $52,500 John Goulter Fees – Remuneration1 $1,253,724 Michael Smith Fees $47,500 Sir Wilson Whineray Fees $47,500 Joan Withers Fees $47,500

1. Mr Goulter did not receive director’s fees. Remuneration includes salary and all benefits, including a performance bonus and the benefits of share options exercisable during the financial year.

Remuneration of employees Grouped below, in accordance with section 211(1)(g) of the Companies Act 1993, are the number of employees or former employees of the company, excluding directors of the company, who received remuneration and other benefits in their capacity as employees, totalling $100,000 or more, during the year:

Remuneration Number of employees Remuneration Number of employees FINANCIAL STATEMENTS $100,000 to $110,000 4 $180,001 to $190,000 2 54 $110,001 to $120,000 1 $190,001 to $200,000 2 $120,001 to $130,000 2 $200,001 to $210,000 1 $130,001 to $140,000 1 $250,001 to $260,000 1 $140,001 to $150,000 4 $540,001 to $550,000 1 $150,001 to $160,000 1 $550,001 to $560,000 1 $160,001 to $170,000 2 $560,001 to $570,000 2 $170,001 to $180,000 3 $720,001 to $730,000 1

Remuneration includes salary and all benefits, including a performance bonus and the benefits of share options, exercisable during the financial year.

Distribution of ordinary shares and shareholders as at 20 August 2003 AUCKLAND INTERNATIONAL AIRPORT LIMITED AIRPORT AUCKLAND INTERNATIONAL Size of holding Number of shareholders % Number of shares % 1–99 256 0.50 16,569 0.01 100–499 31,464 60.92 12,321,438 4.05 500–999 4,755 9.21 3,504,214 1.15 1,000–1,999 5,553 10.75 7,681,130 2.52 2,000–4,999 6,459 12.50 19,253,569 6.33 5,000–9,999 2,015 3.90 13,462,859 4.42 10,000–49,999 1,049 2.03 17,651,006 5.80 50,000–99,999 48 0.09 3,261,690 1.07 100,000–499,999 28 0.05 5,527,904 1.82 500,000–999,999 8 0.02 5,006,022 1.64 1,000,000 and over 13 0.03 216,668,218 71.19 Total 51,648 100.00 304,354,619 100.00 23763_AIAL_Txt 24/09/20034:25PMPage55 etFnsMngmn iie 2,0 0.10 0.09 0.09 0.13 0.17 0.17 0.34 325,000 296,106 0.16 0.29 288,000 416,009 526,956 0.67 0.18 526,001 0.42 1.20 1,069,803 9.58 501,981 910,538 0.86 2,095,472 2.20 12.79 John Packard GoulterandDeanAlanEllwood 574,000 4.25 12.51 1,306,451 Investment CustodialServicesLimited 3,679,935 Rect FundsManagementLimited First NZCapitalCustodiansLimited 29,178,164 Percentage ofcapital UBS PrivateClientsAustraliaNomineesPtyLimited 2,635,228 Asset CustodianNomineesLimited 38,941,560 6,713,593 Eltub NomineesLimited Numberofshares 38,193,847 12,950,403 Peter HanburyMasfenandJoannaAlison 14.09.98 27.43 NZ Guardian Trust CompanyLimited Forbar CustodiansLimited Westpac CustodianNomineesLimited Custodial ServicesLimited Commonwealth CustodialServicesLimited 29,178,164 National NomineesLimited 83,503,774 RBC GlobalServicesAustraliaNominees J PMorganNomineesAustraliaLimited Manukau CityCouncil 28.05.03 Citicorp NomineesPtyLimited Auckland CityCouncil 28.05.03 New ZealandCentralSecuritiesDepositoryLimited 06.12.02 Shareholder Numberofshares inwhich Twenty largestshareholders 49,340,326 The totalnumberofvotingsecuritiesonissueasat28August2003was304,354,619 26,515,790 38,941,560 Manukau CityCouncil Commonwealth BankofAustraliaandSubsidiaries UBS NomineesPtyLimited Auckland CityCouncil Substantial securityholder number ofordinary shares shownbelow: 28 August2003thattheywere substantialsecurity holdersinthecompanyandhelda“relevant interest” inthe Pursuant tosection26oftheSecuritiesAmendmentAct1988,followingpersonshadgivennoticeasat Substantial securityholders SUBSTANTIAL SECURITYHOLDERSANDLARGESTSHAREHOLDERS through NZCSDwere: trading ofsecuritiestomembers.Asat20August2003,the10largestshareholdings inthecompanyheld New ZealandCentralSecuritiesDepositoryLimited(NZCSD)isadepositorysystemwhichallowselectronic M ieLmtd3,003,843 1,640,611 8,077,375 2,925,522 5,226,419 8,281,069 1,838,143 Premier NomineesLimited-Armstrong JonesNewZealandShare Fund AMP SuperannuationTracker Fund 11,056,766 Guardian Trust Limited InvestmentNominees(RWT) Custody andInvestmentNomineesLimited 24,580,415 AMP LifeLimited Accident CompensationCorporation ANZ NomineesLimited Westpac BankingCorporation Citibank Nominees(NewZealand)Limited National NomineesLimited–AucklandBranch as at20August2003 rlvn neet shl Dateofnotice “relevant interest” isheld 1,638,103 55 ANNUAL REPORT 2003 FINANCIAL STATEMENTS 23763_AIAL_Txt 24/09/20034:25PMPage56 56 AUCKLAND INTERNATIONAL AIRPORT LIMITED FINANCIAL STATEMENTS nulmeig–November October – and theASX. November September disqualified byvirtueoftherestrictions containedinthecompany’s ConstitutionandtheListingRulesofNZX August entitled toonevote.Onapoll,voteiscountedforeveryordinary March share. Apersonisnotentitledtovote when entitled tovoteatanyannualmeetingofshareholders. Onashowofhands,eachholderordinary shares is The votingrightsofshareholders are setoutinthecompany’s – Constitution.Eachholderofordinary shares is March Voting rights March Annual meeting Disclosure financialstatements Dividends paid Reports published Results announced Financial calendar (with NoticeofMeeting)andanInterimReport. The companyinformsinvestorsofthecompany’s businessandoperationsbyissuinganAnnualReport Company publications INVESTOR INFORMATION Facsimile +6494888787 Telephone +6494888700 New Zealand Auckland 1020 Auckland MailCentre Private Bag92119 New Zealand Auckland 1309 North Shore City Takapuna 159 Hurstmere Road Level 2 Computershare InvestorServicesLimited New Zealand Share registrars Shareholders mayelecttohavetheirdividendsdirect credited totheirbankaccount. Dividends is 50shares andinAustraliaa“marketableparcel” isaparcel ofsecuritiesmore thanAU$500. The company’s ordinary shares tradeontheNZXandASX.Theminimummarketableparcel ontheNZX Stock exchange company’s corporatesecretary attheregistered office. Computershare InvestorServicesLimitedon+6494888700.Otherquestionsshouldbedirected tothe Shareholders withenquiriesabouttransactions,changesofaddress ordividendpaymentsshouldcontact Enquiries afya Year Half year Facsimile +61282345050 Telephone +61282345000 Australia New SouthWales 1115 Sydney GPO Box7045 Australia New SouthWales 2000 Sydney 60 CarringtonStreet Level 3 Computershare InvestorServicesPtyLimited Australia 23763_AIAL_Txt 24/09/2003 4:25 PM Page 57

CORPORATE DIRECTORY

Directors Wayne Boyd, chairman; Anthony Frankham; Michael Smith; Sir Wilson Whineray; Joan Withers. Senior management Don Huse, chief executive officer; Nick Ansley, general manager property; Chris Curley, general manager corporate and corporate secretary; David Hansen, general manager operations; Paul Mens, general manager finance and information technology; Steve Reindler, general manager engineering. Registered office New Zealand First Floor Jean Batten International Terminal Auckland Airport New Zealand Telephone +64 9 275 0789, 0800 AIRPORT (0800 247 7678) Facsimile +64 9 275 4927 Email [email protected] Website www.auckland-airport.co.nz Registered office Australia c/o KPMG 161 Collins Street Melbourne Victoria 3000 Australia Telephone +61 3 9288 5555 Facsimile +61 3 9288 6666 Website www.kpmg.com.au Mailing address Auckland International Airport Limited P O Box 73 020 Auckland Airport Auckland New Zealand Solicitors Russell McVeagh Auditors Deloitte Touche Tohmatsu Principal bankers Bank of New Zealand

This Annual Report is dated 28 August 2003 and is signed on behalf of the board by:

Wayne Boyd, CHAIRMAN OF THE BOARD Anthony Frankham, DIRECTOR Document1 24/09/2003 3:56 PM Page 1

RECYCLE ME / THIS REPORT HAS USED THE FOLLOWING PAPER STOCKS:

COVER 300GSM AMBASSADOR RECYCLED MATT (50% RECYCLED FIBRE; 35% PRE-CONSUMER WASTE; 15% POST-CONSUMER WASTE; 50% ELEMENTAL CHLORINE FREE FIBRE).

EDITORIAL 130GSM AMBASSADOR RECYCLED MATT (50% RECYCLED FIBRE; 35% PRE-CONSUMER WASTE; 15% POST-CONSUMER WASTE; 50% ELEMENTAL CHLORINE FREE FIBRE).

FINANCIAL STATEMENTS 110GSM WORKS OFFSET 100% RECYCLED (100% ELEMENTAL CHLORINE FREE FIBRE).

THIS PRODUCT IS COMPLETELY RECYCLABLE AND BIODEGRADABLE.