ACTEW CORPORATION
Objectives
ACTEW Corporation aims to prudently manage public assets to provide sustainable water and wastewater services in the ACT region, to maximise the return on its investments, and to ensure a safe and reliable water supply to the ACT and region.
2010-11 Priorities
Strategic and operational issues to be pursued in 2010‑11 include:
•	continuing construction work associated with enlarging the Cotter Dam;
•	gaining approvals and commencing construction of the Murrumbidgee to Googong Water Transfer project;
•	finalising negotiations with Snowy Hydro Limited and the NSW Government for the Tantangara Transfer project, to secure additional water from a source not largely dependent on local rainfall;
•	investigating and developing appropriate carbon abatement strategies for ACTEW’s existing water and sewerage operations and completing implementation of a carbon abatement strategy for the water security projects;
•	working with stakeholders to achieve appropriate management of the water supply catchments;
•	working with the ACT Government to achieve an appropriate Sustainable Diversion Limit in the Murray Darling Basin Plan;
•	working with the ACT Government to review Think water, act water and developing suitable targets;
•	completing a strategic review of the sewerage system;
•	analysing trade waste practices to identify opportunities to improve the performance of the sewerage system;
•	continuing to develop appropriate ecological monitoring and protection programs for vulnerable species in the Cotter and Murrumbidgee Rivers and Burra Creek; 
•	liaising with the appropriate environment protection agencies to manage environmental flow requirements;
•	managing and reviewing the Permanent Water Conservation Measures and the Temporary Water Restrictions;
•	managing ACTEW’s investments in electricity, gas and telecommunications; and
•	continuing ACTEW’s contribution to the ACT community by supporting community organisations, events and initiatives.
Estimated Employment Level
2008‑09
Actual Outcome		2009-10
Budget
	2009-10
Est. Outcome	2010-11
Budget
	
35	Staffing (FTE)1 	35	43	43	
Note:
1.	The main reason for the increase in the 2009‑10 estimated outcome from the original budget is the engagement of personnel for the Water Security Major Projects.
Special Notes on ACTEW’s 2010-11 Budget
Included in the budget is capital expenditure for the following Water Security Major Projects:
•	Enlarged Cotter Dam;
•	Murrumbidgee to Googong Transfer; and
•	Tantangara Transfer.
The figures used are based on the final Target Outturn Costs for the projects.  There are a number of variations from the 2009‑10 Budget Papers as the final Target Outturn Costs were still under development at that time.
The 2010‑11 Budget includes the following borrowing estimates:
•	2009‑10 at $330 million;
•	2010‑11 at $300 million; and
•	2011‑12 at $160 million.
The final amount, timing and nature of borrowings is uncertain as they depend on the state of the financial markets and the actual timing of Water Security Major Projects expenditure.

Changes to Appropriation
Changes to Appropriation - Departmental						
 	2009-10	2010-11	2011-12	2012-13	2013-14	
Government Payment for Outputs	Est. Out.	Budget	Estimate	Estimate	Estimate	
 	$'000	$'000	$'000	$'000	$'000	
						
2009-10 Budget	 10,004	 10,195	 10,390	 10,650	 10,650	
						
2010-11 Budget Technical Adjustment						
Revised Indexation - Assistance for Water and 
Sewerage Services	 - 	 - 	 - 	(63)	138 	
						
2010-11 Budget	 10,004	 10,195	 10,390	 10,587	 10,788	

ACTEW Corporation
Operating Statement
  2009-10			  2009-10	   2010-11		  2011-12	    2012-13	  2013-14		
    Budget			Est.Outcome	   Budget	     Var	  Estimate	    Estimate	  Estimate		
    $'000			    $'000	   $'000	      %	    $'000	     $'000	   $'000		
		Income								
		Revenue								
10,004		Government Payment for Outputs	10,004	10,195	2	10,390	10,587	10,788		
186,735		User Charges - Non ACT Government	193,981	203,946	5	235,445	266,465	297,640		
30,088		User Charges - ACT Government	30,239	32,207	7	36,452	40,108	43,445		
3,262		Interest	7,535	8,750	16	5,057	7,774	5,861		
3,575		Other Revenue	3,522	3,043	-14	3,102	3,163	3,225		
233,664		Total Revenue	245,281	258,141	5	290,446	328,097	360,959		
		Gains								
0		Other Gains	12,426	0	-100	0	0	0		
0		Total Gains	12,426	0	-100	0	0	0		
233,664		Total Income	257,707	258,141	..	290,446	328,097	360,959		
		Expenses								
4,815		Employee Expenses	5,383	5,306	-1	5,550	5,803	6,054		
409		Superannuation Expenses	639	651	2	681	711	743		
5,907		Supplies and Services	7,493	7,255	-3	7,087	7,172	6,912		
37,118		Depreciation and Amortisation	32,677	37,358	14	40,721	43,264	44,316		
45,486		Borrowing Costs	42,659	62,821	47	78,222	85,627	84,627		
116,154		Cost of Goods Sold	123,149	125,799	2	135,629	140,457	149,854		
5,480		Other Expenses	5,354	5,622	5	5,903	6,198	6,508		
215,369		Total Ordinary Expenses	217,354	244,812	13	273,793	289,232	299,014		
64,168		Share of Operating Result from Joint Venture accounted for using the Equity Method	76,436	74,161	-3	74,523	74,722	78,791		
82,463		Operating Result From Ordinary Activities	116,789	87,490	-25	91,176	113,587	140,736		
27,213		Income Tax Equivalent	28,909	27,107	-6	28,261	35,221	43,649		
55,250		Operating Result	87,880	60,383	-31	62,915	78,366	97,087		
54,599		Increase/(Decrease) in Asset Revaluation Reserve Surpluses	67,747	8,984	-87	73,604	10,587	88,099		
54,599		Total Other Comprehensive Income	67,747	8,984	-87	73,604	10,587	88,099		
109,849		Total Comprehensive Income	155,627	69,367	-55	136,519	88,953	185,186		

ACTEW Corporation
Balance Sheet
    Budget			Est.Outcome	    Planned		   Planned	   Planned	   Planned		
as at 30/6/10			as at 30/6/10	as at 30/6/11	   Var	as at 30/6/12	as at 30/6/13	as at 30/6/14		
   $'000			   $'000	     $'000	    %	    $'000	    $'000	    $'000		
		Current Assets								
190,315		Cash and Cash Equivalents	307,962	239,781	-22	129,536	85,492	49,514		
42,171		Receivables	39,072	41,808	7	44,734	47,865	51,216		
17,149		Other	18,459	18,459	-	18,459	18,459	18,459		
249,635		Total Current Assets	365,493	300,048	-18	192,729	151,816	119,189		
		Non Current Assets								
517,855		Investments	507,816	555,658	9	601,184	638,036	670,597		
1,417,119		Property, Plant and Equipment	1,399,900	1,453,185	4	1,926,261	2,115,335	2,232,521		
34,456		Intangibles	31,507	31,507	-	31,507	31,507	31,507		
343,613		Capital Works in Progress	239,817	503,142	110	237,473	62,105	62,105		
19,760		Tax Assets	21,117	21,117	-	21,117	21,117	21,117		
1,375		Other	0	0	-	0	0	0		
2,334,178		Total Non Current Assets	2,200,157	2,564,609	17	2,817,542	2,868,100	3,017,847		
2,583,813		TOTAL ASSETS	2,565,650	2,864,657	12	3,010,271	3,019,916	3,137,036		
		Current Liabilities								
29,187		Payables	64,457	68,419	6	28,142	29,381	28,627		
6,634		Interest Bearing Liabilities	12,961	13,372	3	15,128	16,663	18,696		
17,597		Employee Benefits	19,156	19,156	-	19,156	19,156	19,156		
11,050		Other Provisions	17,576	12,077	-31	12,583	15,673	19,417		
5,341		Income Tax Payable	6,148	5,546	-10	6,000	7,079	9,097		
1,694		Other	5,536	5,536	-	5,536	5,536	5,536		
71,503		Total Current Liabilities	125,834	124,106	-1	86,545	93,488	100,529		
		Non Current Liabilities								
1,067,742		Interest Bearing Liabilities	994,713	1,283,725	29	1,357,589	1,337,972	1,314,305		
324		Employee Benefits	34	34	-	34	34	34		
1,506		Other Provisions	1,579	1,579	-	1,579	1,579	1,579		
370,384		Non Current Income Tax Payable	376,986	379,725	1	415,432	427,164	472,811		
1,439,956		Total Non Current Liabilities	1,373,312	1,665,063	21	1,774,634	1,766,749	1,788,729		
1,511,459		TOTAL LIABILITIES	1,499,146	1,789,169	19	1,861,179	1,860,237	1,889,258		
1,072,354		NET ASSETS	1,066,504	1,075,488	1	1,149,092	1,159,679	1,247,778		
		REPRESENTED BY FUNDS EMPLOYED								
766,672		Accumulated Funds	766,670	766,670	-	766,670	766,670	766,670		
305,682		Reserves	299,834	308,818	3	382,422	393,009	481,108		
1,072,354		TOTAL FUNDS EMPLOYED	1,066,504	1,075,488	1	1,149,092	1,159,679	1,247,778		

ACTEW Corporation
Cash Flow Statement
  2009-10			  2009-10	   2010-11		  2011-12	    2012-13	  2013-14		
    Budget			Est.Outcome	   Budget	     Var	  Estimate	    Estimate	  Estimate		
    $'000			    $'000	   $'000	      %	    $'000	     $'000	   $'000		
		CASH FLOWS FROM OPERATING ACTIVITIES								
		Receipts								
10,004		Cash from Government for Outputs	10,004	10,195	2	10,390	10,587	10,788		
217,640		User Charges	225,186	236,462	5	272,072	306,605	340,959		
3,262		Interest Received	7,535	8,750	16	5,057	7,774	5,861		
74,309		Other Revenue	43,045	39,154	-9	43,121	52,995	62,198		
305,215		Operating Receipts	285,770	294,561	3	330,640	377,961	419,806		
		Payments								
4,386		Related to Employees	5,942	5,787	-3	6,054	6,328	6,603		
409		Related to Superannuation	639	651	2	681	711	743		
5,907		Related to Supplies and Services	8,824	8,276	-6	5,187	5,153	4,762		
45,486		Borrowing Costs	39,057	62,848	61	78,258	85,673	84,684		
140,588		Other	138,161	160,241	16	165,176	173,604	190,102		
196,776		Operating Payments	192,623	237,803	23	255,356	271,469	286,894		
108,439		NET CASH INFLOW/ (OUTFLOW) FROM OPERATING ACTIVITIES	93,147	56,758	-39	75,284	106,492	132,912		
		CASH FLOWS FROM INVESTING ACTIVITIES								
		Receipts								
0		Proceeds from Sale of Property, Plant and Equipment	20,905	0	-100	0	0	0		
0		Proceeds from Sale/Maturities of Investments	7,000	0	-100	0	0	0		
0		Investing Receipts	27,905	0	-100	0	0	0		
		Payments								
300,222		Purchase of Property, Plant and Equipment and Capital Works	203,245	348,479	71	198,740	57,179	53,914		
0		Purchase of Land and Intangibles	13,799	0	-100	0	0	0		
300,222		Investing Payments	217,044	348,479	61	198,740	57,179	53,914		
-300,222		NET CASH INFLOW/ (OUTFLOW) FROM INVESTING ACTIVITIES	-189,139	-348,479	-84	-198,740	-57,179	-53,914		
		CASH FLOWS FROM FINANCING ACTIVITIES								
		Receipts								
250,000		Borrowings Received	330,000	300,000	-9	160,000	0	0		
250,000		Financing Receipts	330,000	300,000	-9	160,000	0	0		
		Payments								
58,112		Dividends to Government	87,448	65,883	-25	62,409	75,275	93,343		
11,027		Repayment of Borrowings	12,503	10,577	-15	84,380	18,082	21,633		
69,139		Financing Payments	99,951	76,460	-24	146,789	93,357	114,976		
180,861		NET CASH INFLOW/ (OUTFLOW) FROM FINANCING ACTIVITIES	230,049	223,540	-3	13,211	-93,357	-114,976		
-10,922		NET INCREASE/ (DECREASE) IN CASH HELD	134,057	-68,181	-151	-110,245	-44,044	-35,978		
201,237		CASH AT BEGINNING OF REPORTING PERIOD	173,905	307,962	77	239,781	129,536	85,492		
190,315		CASH AT THE END OF THE REPORTING PERIOD	307,962	239,781	-22	129,536	85,492	49,514		

 ACTEW Corporation
Statement of Changes in Equity
    Budget			Est.Outcome	    Planned		   Planned	   Planned	   Planned		
as at 30/6/10			as at 30/6/10	as at 30/6/11	   Var	as at 30/6/12	as at 30/6/13	as at 30/6/14		
   $'000			   $'000	     $'000	    %	    $'000	    $'000	    $'000		
		Opening Equity								
766,672		Opening Accumulated Funds	766,670	766,670	-	766,670	766,670	766,670		
240,581		Opening Asset Revaluation Reserve	224,447	292,194	30	301,178	374,782	385,369		
10,502		Opening Other Reserve	7,640	7,640	-	7,640	7,640	7,640		
1,017,755		Balance at the Start of the Reporting Period	998,757	1,066,504	7	1,075,488	1,149,092	1,159,679		
		Comprehensive Income								
55,250		Operating Result for the Period	87,880	60,383	-31	62,915	78,366	97,087		
54,599		Increase/(Decrease) in Asset Revaluation Reserve Surpluses	67,747	8,984	-87	73,604	10,587	88,099		
109,849		Total Comprehensive Income	155,627	69,367	-55	136,519	88,953	185,186		
0		Total Movement in Reserves	0	0	-	0	0	0		
		Transactions Involving Owners Affecting Accumulated Funds								
-55,250		Dividend Approved	-87,880	-60,383	31	-62,915	-78,366	-97,087		
-55,250		Total Transactions Involving Owners Affecting Accumulated Funds	-87,880	-60,383	31	-62,915	-78,366	-97,087		
		Closing Equity								
766,672		Closing Accumulated Funds	766,670	766,670	-	766,670	766,670	766,670		
295,180		Closing Asset Revaluation Reserve	292,194	301,178	3	374,782	385,369	473,468		
10,502		Closing Other Reserve	7,640	7,640	-	7,640	7,640	7,640		
1,072,354		Balance at the End of the Reporting Period	1,066,504	1,075,488	1	1,149,092	1,159,679	1,247,778		
Notes to Budget Statements
Significant variations are as follows:
Operating Statement
•	user charges — non ACT Government:
–	the increase of $7.246 million in the 2009‑10 estimated outcome from the original budget is due to higher than anticipated water consumption and an increased number of sewerage customers; and
–	the increase of $9.965 million in the 2010‑11 Budget from the 2009‑10 estimated outcome is mainly due to the impact of water pricing increments, offset by reduced consumption from ongoing restrictions.
•	user charges — ACT Government:  the increase of $1.968 million in the 2010‑11 Budget from the 2009‑10 estimated outcome is a result of the impact of water pricing increments, offset by reduced consumption from ongoing restrictions.
•	interest:
–	the increase of $4.273 million in the 2009‑10 estimated outcome from the original budget is due to higher than expected cash balances throughout the year; and
–	the increase of $1.215 million in the 2010‑11 Budget from the 2009‑10 estimated outcome is due to a higher cash balance as a result of new borrowings.
•	other revenue:  the decrease of $0.479 million in the 2010‑11 Budget from the 2009‑10 estimated outcome is due to a decrease in interest earned on debtor accounts.
•	other gains:  the increase of $12.426 million in the 2009‑10 estimated outcome from the original budget is due to the one‑off gain on the sale of Ecowise Environmental.
•	employment and superannuation expenses:  the increase of $0.798 million in the 2009‑10 estimated outcome from the original budget is due to the restructuring of staff within ACTEW and the Water Security Major Projects.
•	supplies and services:  the increase of $1.586 million in the 2009‑10 estimated outcome from the original budget is mainly due to relocation costs associated with new accommodation and higher doubtful debts.
•	depreciation and amortisation:
–	the decrease of $4.441 million in the 2009‑10 estimated outcome from the original budget reflects delays in the capitalisation of capital expenditure; and
–	the increase of $4.681 million in the 2010‑11 Budget from the 2009‑10 estimated outcome is due to the completion and capitalisation of capital works.
•	borrowing costs:
–	the decrease of $2.827 million in the 2009‑10 estimated outcome from the original  budget is due to lower borrowings due to timing of capital works; and
–	the increase of $20.162 million in the 2010‑11 Budget from the 2009‑10 estimated outcome is due to increased borrowings for the capital program.
•	cost of goods sold:
–	the increase of $6.995 million in the 2009‑10 estimated outcome from the original budget is due to management costs for the Tantangara Transfer project being treated as operational rather than capital in nature and higher than expected asset maintenance costs; and
–	the increase of $2.650 million in the 2010‑11 Budget from the 2009‑10 estimated outcome is due to increases in the cost of the Utilities Management Agreement with ActewAGL.
•	revenue of associates and joint ventures:
–	the increase of $12.268 million in the 2009‑10 estimated outcome from the original budget is largely due to reduced borrowings by the ActewAGL Joint Venture; and
–	the decrease of $2.275 million in the 2010‑11 Budget from the 2009-10 estimated outcome is due to the expectation of usual trading activity.
•	income tax equivalent:
–	the increase of $1.696 million in the 2009-10 estimated outcome from the original budget is largely due to increased profitability, offset by a tax refund of $7.6 million related to an overpayment in 2008‑09; and
–	the decrease of $1.802 million in the 2010‑11 Budget from the 2009‑10 estimated outcome is due to an expected return to usual trading levels.
Balance Sheet
•	cash and cash equivalents:
–	the increase of $117.647 million in the 2009‑10 estimated outcome from the original budget is mainly due to forecast borrowings of $330 million scheduled to be received in late 2009‑10; and
–	the decrease of $68.181 million in the 2010‑11 Budget from the 2009‑10 estimated outcome is due to the use of the funds for capital projects.
•	investments:
–	the decrease of $10.039 million in the 2009‑10 estimated outcome from the original budget is due to ActewAGL borrowings that are not likely to proceed; and
–	the increase of $47.842 million in the 2010‑11 Budget from the 2009‑10 estimated outcome is due to lower cash distributions from the ActewAGL investment compared to forecast profit. As ACTEW equity accounts for the investment this leads to an increase in its value.
•	property, plant and equipment:  the increase of $53.285 million in the 2010‑11 Budget from the 2009‑10 estimated outcome largely relates to the general and water security major projects capital expenditure program.
•	capital works in progress:
–	the decrease of $103.796 million in the 2009‑10 estimated outcome from the original budget is due to the finalisation of capital works projects; and
–	the increase of $263.325 million in the 2010‑11 Budget from the 2009‑10 estimated outcome reflects the commencement of the construction phases of the Water Security Major Projects and general capital expenditure.
•	payables:  the increase of $35.270 million in the 2009‑10 estimated outcome from the original budget is due to payables associated with the capital works program.
•	current and non current interest bearing liabilities:
–	the decrease of $66.702 million in the 2009‑10 estimated outcome from the original budget is mainly due to a variation in the timing of borrowings related to the Water Security Major Projects and general capital expenditure; and
–	the increase of $289.423 million in 2010‑11 Budget from the 2009‑10 estimated outcome is mainly due to increased borrowing of $300 million for the Water Security Major Projects.
•	current other provisions:  the increase of $6.526 million in the 2009‑10 estimated outcome from the original budget is related to dividends payable and reflects the increase in budgeted profits.
•	non current income tax payable:
–	the increase of $6.602 million in the 2009‑10 estimated outcome from the original budget is due to an increase in profit before tax; and
–	the increase of $2.739 million in the 2010‑11 Budget from the 2009‑10 estimated outcome is due to revaluation of property, plant and equipment and ACTEW’s investment in the ActewAGL Distribution partnership.
Cash Flow Statement
Variances in the statement are mostly explained in the notes above.  Other significant variations include:
•	other revenue:  the decrease of $31.264 million in the 2009‑10 estimated outcome from the original budget is due to the repayment of borrowings by ActewAGL that are not likely to proceed.
•	proceeds from sale of property, plant and equipment:  the one‑off increase of $20.905 million in the 2009‑10 estimated outcome from the original budget is due to the sale of Ecowise Environmental.
•	proceeds from sale/maturities of investments:  the one‑off increase of $7 million in the 2009‑10 estimated outcome from the original budget is due to a redemption of investments.
•	purchase of land and intangibles:  the one‑off increase of $13.799 million in the 2009‑10 estimated outcome from the original budget reflects the purchase of water licences for the Tantangara Transfer.
Statement of Changes in Equity
•	dividend approved:  the increase of $32.630 million in the 2009‑10 estimated outcome from the original budget is due to an increased after tax operating surplus.