ACTEW Corporation
Objectives
ACTEW Corporation aims to prudently manage public assets to provide sustainable water and sewerage services in the ACT region to maximise the return on its investments in water, sewerage, energy and communication assets.
2005‑06 Highlights
Strategic and operational issues to be pursued in 2005‑06 include:
•	implementing decisions emanating from ACTEW’s Future Water Options for the ACT Region – Implementation Plan April 2005;
•	achieving greater reliability of supply and efficiency from ACTEW’s existing infrastructure;
•	working with the Government to achieve a reduction in per capita consumption of mains water of 12% by 2013 and 25% by 2023 consistent with the Think Water, Act Water strategy;
•	ensuring capital expenditure is delivered in an efficient and cost‑effective manner;
•	examining new business opportunities;
•	contributing to a satisfactory outcome for the Murray Darling Basin water cap;
•	contributing to the development of revised environmental flow guidelines for the ACT;
•	continuing to monitor the need and the appropriate level of water restrictions in the ACT;
•	resolving the ownership transfer of the Googong Dam to the ACT;
•	continuing to monitor the effects of climate change;
•	identifying opportunities to increase sustainable water recycling;
•	contributing to catchment management issues;
•	contributing to water and wastewater policy issues at local, regional and national levels;
•	consulting and educating customers about water and energy management, usage and quality; and
•	continuing to contribute to the community by supporting organisations, events and initiatives that benefit the Territory.

ACTEW Corporation	
Operating Statement	
  2004-05			  2004-05	   2005-06		  2006-07	  2007-08	  2008-09		
    Budget			Est.Outcome	   Budget	   Var	  Estimate	   Estimate	  Estimate		
    $'000			   $'000	   $'000	    %	   $'000	    $'000	   $'000		
		Income								
		Revenue								
120  541		User Charges - Non ACT Government	114  782	123  491	8	147  878	154  763	158  782		
27  679		User Charges - ACT Government	27  679	28  679	4	31  580	32  666	33  466		
2  244		Interest	3  150	1  508	-52	1  371	1  525	1  610		
22  065		Other Revenue	13  521	17  776	31	12  350	11  232	11  056		
172  529		Total Revenue	159  132	171  454	8	193  179	200  186	204  914		
		Gains								
0		Total Gains	0	0	-	0	0	0		
172  529		Total Income	159  132	171  454	8	193  179	200  186	204  914		
		Expenses								
2  619		Employee Expenses	2  787	2  654	-5	2  704	2  835	2  971		
176		Superannuation Expenses	154	162	5	170	178	187		
3  955		Supplies and Services	3  650	3  997	10	3  622	3  606	3  631		
22  239		Depreciation and Amortisation	21  039	23  318	11	24  246	25  001	25  618		
23  175		Borrowing Costs	23  175	24  214	4	22  842	22  339	21  174		
71  241		Cost of Goods Sold	72  113	77  285	7	82  008	83  447	86  341		
123  405		Total Ordinary Expenses	122  918	131  630	7	135  592	137  406	139  922		
46  961		Share of Operating Result from Joint Venture accounted for using the Equity Method	49  740	45  707	-8	46  055	50  096	52  126		
96  085		Operating Result From Ordinary Activities	85  954	85  531	..	103  642	112  876	117  118		
31  708		Income Tax Equivalent	28  365	28  225	..	34  202	37  249	38  648		
64  377		Operating Result	57  589	57  306	..	69  440	75  627	78  470		

ACTEW Corporation	
Balance Sheet	
    Budget			Est.Outcome	   Planned		   Planned	   Planned	   Planned		
as at 30/6/05			as at 30/6/05	as at 30/6/06	   Var	as at 30/6/07	as at 30/6/08	as at 30/6/09		
   $'000			   $'000	    $'000	    %	    $'000	    $'000	    $'000		
		Current Assets								
1  000		Cash	1  000	1  000	-	1  000	1  000	1  000		
16  573		Receivables	20  096	20  600	3	21  114	21  641	22  184		
22  840		Investments	29  648	7  631	-74	9  813	10  788	11  997		
7  067		Other	7  473	7  473	-	7  473	7  473	7  473		
47  480		Total Current Assets	58  217	36  704	-37	39  400	40  902	42  654		
		Non Current Assets								
348  558		Investments	351  925	355  731	1	359  286	361  881	366  007		
929  513		Property, Plant and Equipment	915  845	931  893	2	934  812	937  643	936  477		
10  305		Capital Works in Progress	10  305	10  305	-	10  305	10  305	10  305		
12  585		Tax Assets	13  560	13  560	-	13  560	13  560	13  560		
10  404		Other	13  034	13  034	-	13  034	13  034	13  034		
1  311  365		Total Non Current Assets	1  304  669	1  324  523	2	1  330  997	1  336  423	1  339  383		
1  358  845		TOTAL ASSETS	1  362  886	1  361  227	..	1  370  397	1  377  325	1  382  037		
		Current Liabilities								
14  082		Payables	18  988	17  854	-6	19  605	20  695	21  408		
10  816		Interest Bearing Liabilities	10  250	11  677	14	12  272	13  556	14  906		
8  702		Employee Benefits	7  567	7  567	-	7  567	7  567	7  567		
22  692		Other Provisions	19  277	12  861	-33	15  288	16  525	17  094		
56  292		Total Current Liabilities	56  082	49  959	-11	54  732	58  343	60  975		
		Non Current Liabilities								
345  432		Interest Bearing Liabilities	347  840	336  163	-3	323  891	310  333	295  429		
12  810		Employee Benefits	12  976	12  976	-	12  976	12  976	12  976		
2  949		Other Provisions	2  467	2  467	-	2  467	2  467	2  467		
169  119		Non Current Income Tax Payable	171  277	187  418	9	204  087	220  962	237  946		
530  310		Total Non Current Liabilities	534  560	539  024	1	543  421	546  738	548  818		
586  602		TOTAL LIABILITIES	590  642	588  983	..	598  153	605  081	609  793		
772  243		NET ASSETS	772  244	772  244	-	772  244	772  244	772  244		
		REPRESENTED BY FUNDS EMPLOYED								
758  871		Accumulated Funds	758  872	758  872	-	758  872	758  872	758  872		
13  372		Reserves	13  372	13  372	-	13  372	13  372	13  372		
772  243		TOTAL FUNDS EMPLOYED	772  244	772  244	-	772  244	772  244	772  244		

ACTEW Corporation	
Cash Flow Statement	
  2004-05			  2004-05	   2005-06		  2006-07	  2007-08	  2008-09		
    Budget			Est.Outcome	   Budget	   Var	  Estimate	   Estimate	  Estimate		
    $'000			   $'000	   $'000	    %	   $'000	    $'000	   $'000		
		CASH FLOWS FROM OPERATING ACTIVITIES								
		Receipts								
149  761		User Charges	144  948	153  397	6	180  712	188  710	193  555		
2  244		Interest Received	3  150	1  508	-52	1  371	1  525	1  610		
44  898		Other Revenue	47  000	42  500	-10	42  500	47  500	48  000		
196  903		Operating Receipts	195  098	197  405	1	224  583	237  735	243  165		
		Payments								
2  731		Related to Employees	2  731	2  991	10	3  039	3  186	3  339		
3  676		Related to Supplies and Services	5  626	4  060	-28	3  084	3  053	3  061		
23  175		Borrowing Costs	23  175	24  214	4	22  842	22  339	21  174		
84  277		Other	86  443	90  865	5	98  162	103  110	107  683		
113  859		Operating Payments	117  975	122  130	4	127  127	131  688	135  257		
83  044		NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES	77  123	75  275	-2	97  456	106  047	107  908		
		CASH FLOWS FROM INVESTING ACTIVITIES								
		Receipts								
770		Proceeds from Sale/Maturities of Investments	18  136	770	-96	770	770	770		
770		Investing Receipts	18  136	770	-96	770	770	770		
		Payments								
40  824		Purchase of Property, Plant and Equipment	57  559	24  090	-58	17  353	19  180	16  013		
40  824		Investing Payments	57  559	24  090	-58	17  353	19  180	16  013		
-40  054		NET CASH INFLOW/(OUTFLOW) FROM INVESTING ACTIVITIES	-39  423	-23  320	41	-16  583	-18  410	-15  243		
		CASH FLOWS FROM FINANCING ACTIVITIES								
		Receipts								
24  768		Borrowings Received	25  000	0	-100	0	0	0		
24  768		Financing Receipts	25  000	0	-100	0	0	0		
		Payments								
76  297		Dividends to Government	71  509	63  722	-11	67  014	74  389	77  900		
9  529		Repayment of Borrowings	9  176	10  250	12	11  677	12  273	13  556		
85  826		Financing Payments	80  685	73  972	-8	78  691	86  662	91  456		
-61  058		NET CASH INFLOW/(OUTFLOW) FROM FINANCING ACTIVITIES	-55  685	-73  972	-33	-78  691	-86  662	-91  456		
-18  068		NET INCREASE/(DECREASE) IN CASH HELD	-17  985	-22  017	-22	2  182	975	1  209		
41  908		CASH AT BEGINNING OF REPORTING PERIOD	48  633	30  648	-37	8  631	10  813	11  788		
23  840		CASH AT THE END OF THE REPORTING PERIOD	30  648	8  631	-72	10  813	11  788	12  997		

ACTEW Corporation	
Statement of Changes in Equity	
    Budget			Est.Outcome	   Planned		   Planned	   Planned	   Planned		
as at 30/6/05			as at 30/6/05	as at 30/6/06	   Var	as at 30/6/07	as at 30/6/08	as at 30/6/09		
   $'000			   $'000	    $'000	    %	    $'000	    $'000	    $'000		
803  237		Opening Balance	804  042	772  244	-4	772  244	772  244	772  244		
		Accumulated Funds								
64  377		Operating Result for the Period	57  589	57  306	..	69  440	75  627	78  470		
		Reserves								
0		Increase/(Decrease) in asset revaluation reserve	-1	0	-100	0	0	0		
64  377		Total Income And Expense For The Period	57  588	57  306	..	69  440	75  627	78  470		
		Transactions Involving Equity Holders Affecting Accumulated Funds								
-95  371		Dividend Approved	-89  386	-57  306	36	-69  440	-75  627	-78  470		
772  243		Closing Balance	772  244	772  244	-	772  244	772  244	772  244		
Notes to Budget Statements
ACTEW’s 2005‑06 budget cycle is not complete until end of May 2005 and therefore figures supplied for 2005‑06 to 2008‑09 are based on the best information available at the time of preparation of the Budget statements.  The figures supplied have a high level of uncertainty due to the fact that a number of significant decisions may arise from ACTEW’s ‘Future Water Options for the ACT Region – Implementation Plan’ of April 2005.  These decisions could have a significant impact on operational and capital expenditure, as well as revenue.
The continuing drought and climatic conditions may also have a significant effect on the estimates.
Significant variations are as follows:
Operating Statement
•	user charges – non ACT Government:  the decrease of $5.759m in the 2004‑05 estimated outcome from the original budget is due to mandatory Stage 2 and 3 water restrictions being in place as a result of decreasing water levels.  Revenue for 2005‑06 takes into account water restrictions and therefore similar water consumption to 2004‑05.  The increase of $8.709m in the 2005‑06 Budget from the 2004‑05 estimated outcome is due to an increase in water prices, customer growth and some recovery of lost revenue through assumed ICRC pricing determinations.  It is also assumed that there is a return to normal water consumption from 2006-07 onwards and additional recovery of lost water revenue in 2006-07 and 2007-08.  This, combined with higher prices, has led to a significant increase in water revenue from 2006-07 onwards;
•	interest revenue:  variations in interest revenue are directly correlated to the level of cash and cash equivalent investments held by ACTEW;
•	other revenue:  the decrease of $8.544m in the 2004‑05 estimated outcome from the original budget is due to a reduced level of gifted asset transfers from the Land Development Agency (LDA).  The level of gifted assets transferred to ACTEW is determined by the LDA’s land release program.  The increase of $4.255m in the 2005‑06 Budget from the 2004‑05 estimated outcome is due to a higher level of gifted asset transfers;
•	employee expenses:  the increase of $0.168m in the 2004‑05 estimated outcome from the original budget is due to the drought taskforce team continuing at a higher level of activity than previously anticipated.  The taskforce is expected to continue at this level in 2005‑06, and alter its purpose to water conservation in later years;
•	supplies and services:  the decrease of $0.305m in the 2004‑05 estimated outcome from the original budget is due to the capitalisation of expenses relating to the ACTEW Asset Data Capture project;
•	depreciation and amortisation:  the decrease of $1.2m in the 2004‑05 estimated outcome from the original budget is due to a lower level of gifted asset transfers in both 2003‑04 and 2004‑05 and lower 2003‑04 capital expenditure than anticipated.  The increase in the 2005‑06 Budget and outyears is due to depreciation for the new Stromlo and Googong water treatment plant expansions;
•	cost of goods sold:  the increase of $0.872m in the 2004‑05 estimated outcome from the original budget is mainly due to unbudgeted pumping costs from the Cotter Dam and the Murrumbidgee River and higher fixed expenses for the water and sewerage businesses than initially budgeted.  This is partially offset by lower water abstraction charge revenue resulting from water restrictions.  The increase of $5.172m in the 2005‑06 Budget from the 2004‑05 estimated outcome is mainly due to the increase in the water abstraction charge revenue and pumping costs, which is consistent with the expectation that water consumption will return to normal levels in 2006‑07; 
•	share of operating result from joint venture:  the increase of $2.779m in the 2004‑05 estimated outcome from the original budget is due to favourable weather conditions, fewer customers than budgeted changing to other providers, and improved operational performance of the ActewAGL joint venture (JV).  In 2005‑06, a number of the JV’s favourable electricity purchasing contracts expire resulting in lower dividends to ACTEW from the JV; and
•	income tax equivalent:  the decrease of $3.343m in the 2004‑05 estimated outcome from the original budget is due to lower profit.
Balance Sheet
•	current receivables:  the increase of $3.523m in the 2004‑05 estimated outcome from the original budget reflects an increase in water and sewerage prices;
•	current and non current investments:  the increase of $10.175m in the 2004‑05 estimated outcome from the original budget is mainly due to greater distributions received from the JV.  The decrease of $22.017m in current investments in the 2005‑06 Budget from the 2004‑05 estimated outcome is due to the range of payments expected by ACTEW in that period;
•	property, plant and equipment:  the decrease of $13.668m in the 2004‑05 estimated outcome compared to the original budget is mainly due to lower gifted asset transfers;
•	current and non current interest bearing liabilities:  the increase of $1.8m in the 2004‑05 estimated outcome from the original budget is due to higher levels of inflation on the indexed annuity bond debt.  The increase of $1.427m in current interest bearing liabilities in the 2005‑06 Budget from the 2004‑05 estimated outcome is due to interest liabilities related to an expected additional $25m borrowing by ACTEW in 2004‑05; and
•	current other provisions:  the decrease of $3.4m in the 2004‑05 estimated outcome from the original budget is mainly due to a lower estimated 2004‑05 operating result leading to a lower final declared dividend.  The decrease of $6.416m in the 2005‑06 Budget from the 2004‑05 estimated outcome is due to a lower final declared dividend (see below under Statement of Changes in Equity).
Statement of Changes in Equity
•	dividend approved:  the decrease of $5.985m in the 2004‑05 estimated outcome from the original budget is mainly due to a decrease in revenue as a result of water restrictions and less than budgeted gifted assets.  This is partially offset by a lower tax expense, higher sewerage revenue and JV profits.  The 2004‑05 dividend is estimated to be $89.386m, which comprises the total 2004‑05 forecast profit ($57.589m) and the 2003‑04 retained profits ($31.797m).  The payment of the retained profits amount largely reflects an agreed deferral of past years dividend payments to assist ACTEW in funding urgent water filtration infrastructure.  The decrease of $32.080m in the 2005‑06 Budget from the 2004‑05 estimated outcome reflects the dividend being restricted to the usual 100% of operating profit.