ACTEW CORPORATION
Objectives
ACTEW Corporation aims to prudently manage its 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.
2009-10 Priorities
Strategic and operational issues to be pursued in 2009-10 include:
•	undertaking the detailed planning, design and construction work associated with enlarging the Cotter Dam to 78 gigalitres capacity, and the extraction and transfer of water from the Murrumbidgee River to Googong Reservoir;
•	progressing arrangements for purchasing water from the Murray Darling Basin, to secure additional water from a source not largely dependent on local rainfall;
•	investigating and implementing appropriate carbon abatement strategies for ACTEW, including water security major projects;
•	addressing environmental issues associated with the water security major projects;
•	monitoring and reporting to Government on the progress of the water security projects and ensuring the community is kept informed and engaged; 
•	working with the ACT Government to achieve appropriate catchment management governance and administrative arrangements for the Cotter, Googong and Murrumbidgee River catchments;
•	implementing source water quality protection programs in water supply catchments;
•	working with the ACT Government to develop an appropriate strategy to meet the Think water, act water target of 20 per cent use of recycled water by 2013;
•	investigating options to manage total dissolved solids (including salt) concentrations associated with the discharge from the Lower Molonglo Water Quality Control Centre;
•	managing and reviewing the Permanent Water Conservation Measures and the Temporary Water Restrictions necessary for management of the current drought conditions;
•	working with the ACT Government to achieve a reduction in per capita mains water consumption of 12 per cent by 2013 and 25 per cent by 2023 in keeping with the targets included in Think water, act water;
•	continuing to investigate and commence implementation of a ‘smart metering’ pilot program;
•	managing ACTEW’s investments in electricity, gas and telecommunications to achieve satisfactory returns; 
•	continuing ACTEW’s contribution to the ACT community by supporting organisations, events and initiatives; and
•	engaging and educating our customers on water and sewerage related issues.

Estimated Employment Level
2008-09
Budget			2008-09
Est. Outcome	2009-10
Budget	
34		  Staffing  (FTE)	35	35	

Special Notes on ACTEW’s 2009-10 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 the latest available forecasts at the time of Budget.  Final cost estimates will be determined late in the 2008-09 financial year when the targeted cost of the projects (Target Outturn Cost numbers) are determined.
The 2009-10 Budget includes the following borrowing estimates:
•	2008-09 at $200 million; 
•	2009-10 at $250 million; and
•	2010-11 at $100 million.
The final amount, timing and type of borrowing is highly uncertain due to the current state of financial markets plus the final determination of the Water Security Major Projects cost estimates. 

Changes to Appropriation
						
Changes to Appropriation - Departmental						
	2008-09	2009-10	2010-11	2011-12	2012-13	
Government Payment for Outputs	Est. Out.	Budget	Estimate	Estimate	Estimate	
	$'000	$'000	$'000	$'000	$'000	
						
2008-09 Budget	9,817	10,004	10,195	10,390	10,390	
						
2009-10 Budget Technical Adjustment						
General Revenue Assistance - Revised Indexation - Assistance for Water and Sewerage Services	 - 	 - 	 - 	 - 	260	
						
2009-10 Budget	9,817	10,004	10,195	10,390	10,650	

ACTEW Corporation
Operating Statement
  2008-09			  2008-09	   2009-10		  2010-11	    2011-12	  2012-13		
    Budget			Est.Outcome	   Budget	     Var	  Estimate	    Estimate	  Estimate		
    $'000			    $'000	   $'000	      %	    $'000	     $'000	   $'000		
		Income								
		Revenue								
9,817		Government Payment for Outputs	9,817	10,004	2	10,195	10,390	10,650		
195,000		User Charges - Non ACT Government	178,882	186,735	4	218,977	258,076	272,656		
29,299		User Charges - ACT Government	28,319	30,088	6	31,794	33,605	35,257		
11,653		Interest	11,354	3,262	-71	4,430	4,576	5,218		
2,740		Other Revenue	2,786	3,575	28	4,245	4,916	5,589		
248,509		Total Revenue	231,158	233,664	1	269,641	311,563	329,370		
		Gains								
5,343		Other Gains	0	0	-	0	0	0		
5,343		Total Gains	0	0	-	0	0	0		
253,852		Total Income	231,158	233,664	1	269,641	311,563	329,370		
		Expenses								
4,600		Employee Expenses	4,469	4,815	8	5,059	5,312	5,561		
274		Superannuation Expenses	390	409	5	429	450	473		
5,717		Supplies and Services	7,094	5,907	-17	7,145	7,183	7,463		
32,100		Depreciation and Amortisation	32,291	37,118	15	44,293	48,899	46,651		
39,618		Borrowing Costs	39,997	45,486	14	63,934	60,750	57,925		
113,638		Cost of Goods Sold	117,005	116,154	-1	121,011	134,905	137,356		
5,125		Other Expenses	5,147	5,480	6	5,699	5,871	6,013		
201,072		Total Ordinary Expenses	206,393	215,369	4	247,570	263,370	261,442		
61,530		Share of Operating Result from Joint Venture accounted for using the Equity Method	79,050	64,168	-19	61,783	63,280	64,274		
114,310		Operating Result From Ordinary Activities	103,815	82,463	-21	83,854	111,473	132,202		
37,722		Income Tax Equivalent	34,259	27,213	-21	27,672	36,786	43,627		
76,588		Operating Result	69,556	55,250	-21	56,182	74,687	88,575		

ACTEW Corporation
Balance Sheet
    Budget			Est.Outcome	    Planned		   Planned	   Planned	   Planned		
as at 30/6/09			as at 30/6/09	as at 30/6/10	   Var	as at 30/6/11	as at 30/6/12	as at 30/6/13		
   $'000			   $'000	     $'000	    %	    $'000	    $'000	    $'000		
		Current Assets								
344,805		Cash and Cash Equivalents	201,237	190,315	-5	86,008	40,586	74,025		
29,681		Receivables	39,412	42,171	7	45,123	48,282	51,662		
17,525		Other	17,149	17,149	-	17,149	17,149	17,149		
392,011		Total Current Assets	257,798	249,635	-3	148,280	106,017	142,836		
		Non Current Assets								
0		Receivables	0	40,000	100	80,000	120,000	160,000		
470,313		Investments	482,421	477,855	-1	467,687	456,361	440,494		
1,298,080		Property, Plant and Equipment	1,257,957	1,417,119	13	1,911,555	2,008,698	2,000,282		
0		Intangibles	29,046	34,456	19	34,456	34,456	34,456		
195,252		Capital Works in Progress	172,658	343,613	99	63,639	58,505	52,235		
13,234		Tax Assets	19,760	19,760	-	19,760	19,760	19,760		
775		Other	1,375	1,375	-	1,375	1,375	1,375		
1,977,654		Total Non Current Assets	1,963,217	2,334,178	19	2,578,472	2,699,155	2,708,602		
2,369,665		TOTAL ASSETS	2,221,015	2,583,813	16	2,726,752	2,805,172	2,851,438		
		Current Liabilities								
29,180		Payables	27,278	29,187	7	31,230	33,416	35,755		
9,488		Interest Bearing Liabilities	11,027	6,634	-40	6,764	9,048	11,398		
17,781		Employee Benefits	17,597	17,597	-	17,597	17,597	17,597		
15,495		Other Provisions	13,911	11,050	-21	11,236	14,937	17,715		
0		Income Tax Payable	4,412	5,341	21	6,812	8,660	9,961		
1,431		Other	1,694	1,694	-	1,694	1,694	1,694		
73,375		Total Current Liabilities	75,919	71,503	-6	75,333	85,352	94,120		
		Non Current Liabilities								
856,761		Interest Bearing Liabilities	784,376	1,067,742	36	1,200,979	1,161,931	1,190,533		
463		Employee Benefits	324	324	-	324	324	324		
1,671		Other Provisions	1,506	1,506	-	1,506	1,506	1,506		
361,452		Non Current Income Tax Payable	341,135	370,384	9	372,442	406,179	411,495		
1,220,347		Total Non Current Liabilities	1,127,341	1,439,956	28	1,575,251	1,569,940	1,603,858		
1,293,722		TOTAL LIABILITIES	1,203,260	1,511,459	26	1,650,584	1,655,292	1,697,978		
1,075,943		NET ASSETS	1,017,755	1,072,354	5	1,076,168	1,149,880	1,153,460		
		REPRESENTED BY FUNDS EMPLOYED								
766,672		Accumulated Funds	766,672	766,672	-	766,672	766,672	766,672		
309,271		Reserves	251,083	305,682	22	309,496	383,208	386,788		
1,075,943		TOTAL FUNDS EMPLOYED	1,017,755	1,072,354	5	1,076,168	1,149,880	1,153,460		

ACTEW Corporation
Cash Flow Statement
  2008-09			  2008-09	   2009-10		  2010-11	    2011-12	  2012-13		
    Budget			Est.Outcome	   Budget	     Var	  Estimate	    Estimate	  Estimate		
    $'000			    $'000	   $'000	      %	    $'000	     $'000	   $'000		
		CASH FLOWS FROM OPERATING ACTIVITIES								
		Receipts								
9,817		Cash from Government for Outputs	9,817	10,004	2	10,195	10,390	10,650		
224,901		User Charges	207,409	217,640	5	252,063	293,438	310,123		
11,653		Interest Received	11,354	3,262	-71	4,430	4,576	5,218		
41,000		Other Revenue	52,873	74,309	41	77,400	79,915	85,254		
287,371		Operating Receipts	281,453	305,215	8	344,088	388,319	411,245		
		Payments								
3,786		Related to Employees	4,053	4,386	8	4,611	4,841	5,066		
274		Related to Superannuation	390	409	5	429	450	473		
5,393		Related to Supplies and Services	7,094	5,907	-17	7,145	7,183	7,463		
39,618		Borrowing Costs	39,997	45,486	14	63,934	60,750	57,925		
139,391		Other	139,034	140,588	1	150,891	171,853	180,069		
188,462		Operating Payments	190,568	196,776	3	227,010	245,077	250,996		
98,909		NET CASH INFLOW/(OUTFLOW FROM OPERATING ACTIVITIES	90,885	108,439	19	117,078	143,242	160,249		
		CASH FLOWS FROM INVESTING ACTIVITIES								
		Receipts								
725		Proceeds from Sale/Maturities of Investments	2,678	0	-100	0	0	0		
725		Investing Receipts	2,678	0	-100	0	0	0		
		Payments								
161,552		Purchase of Property, Plant and Equipment and Capital Works	214,990	300,222	40	258,755	40,914	31,964		
161,552		Investing Payments	214,990	300,222	40	258,755	40,914	31,964		
-160,827		NET CASH INFLOW/ (OUTFLOW) FROM INVESTING ACTIVITIES	-212,312	-300,222	-41	-258,755	-40,914	-31,964		
		CASH FLOWS FROM FINANCING ACTIVITIES								
		Receipts								
275,000		Borrowings Received	200,000	250,000	25	100,000	0	0		
275,000		Financing Receipts	200,000	250,000	25	100,000	0	0		
		Payments								
75,507		Dividends to Government	74,596	58,112	-22	55,996	70,986	85,798		
9,863		Repayment of Borrowings	6,404	11,027	72	6,634	76,764	9,048		
85,370		Financing Payments	81,000	69,139	-15	62,630	147,750	94,846		
189,630		NET CASH INFLOW/(OUTFLOW FROM FINANCING ACTIVITIES	119,000	180,861	52	37,370	-147,750	-94,846		
127,712		NET INCREASE/ (DECREASE) IN CASH HELD	-2,427	-10,922	-350	-104,307	-45,422	33,439		
217,093		CASH AT BEGINNING OF REPORTING PERIOD	203,664	201,237	-1	190,315	86,008	40,586		
344,805		CASH AT THE END OF THE REPORTING PERIOD	201,237	190,315	-5	86,008	40,586	74,025		

ACTEW Corporation
Statement of Changes in Equity
    Budget			Est.Outcome	    Planned		   Planned	   Planned	   Planned		
as at 30/6/09			as at 30/6/09	as at 30/6/10	   Var	as at 30/6/11	as at 30/6/12	as at 30/6/13		
   $'000			   $'000	     $'000	    %	    $'000	    $'000	    $'000		
1,043,505		Opening Balance	1,013,812	1,017,755	..	1,072,354	1,076,168	1,149,880		
		Accumulated Funds								
0		Net Effect of a Correction of an Error	2	0	-100	0	0	0		
76,588		Operating Result for the Period	69,556	55,250	-21	56,182	74,687	88,575		
		Reserves								
32,438		Increase/(Decrease in asset revaluation reserve	3,941	54,599	#	3,814	73,712	3,580		
109,026		Total Income And Expense For The Period	73,499	109,849	49	59,996	148,399	92,155		
		Transactions Involving Equity Holders Affecting Accumulated Funds								
-76,588		Dividend Approved	-69,556	-55,250	-21	-56,182	-74,687	-88,575		
1,075,943		Closing Balance	1,017,755	1,072,354	5	1,076,168	1,149,880	1,153,460		
Notes to the Budget Statements
Significant variations are as follows:
Operating Statement
•	user charges — non ACT Government: 
•	the decrease of $16.118 million in the 2008-09 estimated outcome from the original budget is due to the original budget being based on the Independent Competition and Regulatory Commission (ICRC) draft decision while the estimated outcome is based on the ICRC final decision adjusted for stage 3 water restrictions; and 
•	the increase of $7.853 million in the 2009-10 Budget from the 2008-09 estimated outcome is due to the impact of the ICRC final decision;
•	user charges — ACT Government:
•	the decrease of $0.980 million in the 2008-09 estimated outcome from the original budget is due to lower water usage as a result of stage 3 water restrictions; and 
•	the increase of $1.769 million in the 2009-10 Budget from the 2008-09 estimated outcome is a result of the ICRC final decision;
•	interest:
•	the decrease of $0.299 million in the 2008-09 estimated outcome from the original budget is due to lower than expected interest rate levels; and
•	the decrease of $8.092 million in the 2009-10 Budget from the 2008-09 estimated outcome is a result of expected lower interest rates for the full financial year;
•	
employment and superannuation expenses:  the increase of $0.365 million in the 2009-10 Budget from the 2008-09 estimated outcome is due to the retention of staff;
•	supplies and services:
•	the increase of $1.377 million in the 2008-09 estimated outcome compared to the original budget mainly due to a $1 million endowment payment to the ANU for a perpetual PhD for water sustainability research; and
•	the decrease of $1.187 million in the 2009-10 Budget from the 2008-09 estimated outcome is due to the one-off ANU endowment payment in 2008-09;
•	depreciation and amortisation: 
•	the increase of $0.191 million in the 2008-09 estimated outcome compared to the original budget is due to higher levels of capital expenditure; and
•	the increase of $4.827 million in the 2009-10 Budget from the 2008-09 estimated outcome is due to higher levels of capital expenditure on the Water Security Major Projects and general capital expenditure;
•	borrowing costs:  the increase of $5.489 million in the 2009-10 Budget compared to the 2008-09 estimated outcome is due to a forecast new borrowing of $200 million in late 2008-09;
•	cost of goods sold: 
•	the increase of $3.367 million in the 2008-09 estimated outcome compared to the original budget is mainly due to a $6 million provision transferring costs incurred for the water purification plant from capital expenditure to operational expenditure.  This has been partially offset by a lower water abstraction charge than budgeted due to stage 3 water restrictions; and
•	the decrease of $0.851 million in 2009-10 Budget from the estimated outcome is due to increased water operating costs offset by the one-off provision for the water purification plant in 2008-09; 
•	revenue of associates and joint ventures:  the increase of $17.520 million in the 2008-09 estimated outcome compared to the original budget is due to favourable price and volume variances in the ActewAGL Retail partnership plus profit from the sale of ActewAGL House;
•	income tax equivalent:
•	the decrease of $3.463 million in the 2008-09 estimated outcome from the original budget is due to a decrease in expected profit; and
•	the decrease of $7.046 million in the 2009-10 Budget from the 2008-09 estimated outcome is due to a decrease in the expected profit.

Balance Sheet
•	cash and cash equivalents	:  the decrease of $143.568 million in the 2008-09 estimated outcome from the original budget is due to a lower level of forecast borrowing (from $275 million to $200 million) and a higher level of capital expenditure payments;
•	current receivables:  the increase of $9.731 million in the 2008-09 estimated outcome from the original budget reflects higher actual receivables plus the impact of the ICRC final decision;
•	non current receivables:  the increase of $40 million in the 2009-10 Budget from the estimated outcome reflects a possible new borrowing for ActewAGL currently under consideration.  The proposed structure of the borrowing is for ACTEW to raise the debt facility and on-lend the funds to ActewAGL;
•	investments: 
•	the increase of $12.108 million in the 2008-09 estimated outcome compared to the original budget is due to ACTEW holding more non-cash securities than budgeted; and
•	the decrease in the ActewAGL investment in future years is due to higher forecast cash distributions than profit as the Joint Venture is accounted for using the equity method;
•	property, plant and equipment: 
•	the decrease of $40.123 million in the 2008-09 estimated outcome compared to the original budget is due to a revaluation of property, plant and equipment now forecast to occur in 2009-10; and
•	the large increase in future years relates to an extensive general and water security major projects capital expenditure program plus forecast revaluations for CPI;
•	capital works in progress:
•	the decrease of $22.594 million in the 2008-09 estimated outcome from the original budget reflects the forecast capitalisation of assets; and
•	the increase of $170.955 million in the 2009-10 Budget from the 2008-09 estimated outcome is due to expenditure on the water security major projects (enlarged Cotter Dam, Murrumbidgee to Googong transfer and Tantangara transfer) plus the general capital expenditure program;
•	current and non current interest bearing liabilities:
•	the decrease of $70.846 million in the 2008-09 estimated outcome from the original budget is mainly due to a lower level of new borrowing; and
•	the increase of $278.973 million in 2009-10 Budget from the estimated outcome is from a forecast new borrowing of $250 million and, subject to the Treasurer’s agreement, a $40 million drawdown for the ActewAGL debt facility, partially offset by repayment of borrowings;
•	
Non current income tax payable:
•	the decrease of $20.317 million in the 2008-09 estimated outcome from the original budget is due to no revaluation of ACTEW’s property, plant and equipment being undertaken during the year plus a decrease in operating profit before tax; and
•	the constant increase in future years is due to revaluations of property, plant and equipment and ACTEW’s investment in the ActewAGL Distribution partnership.
Cash Flow Statement
Variations in the statement are mostly explained in the notes above.  Other variations include:
•	other revenue:
•	the increase of $11.873 million in the 2008-09 estimated outcome compared to the original budget is due to an increase in ActewAGL profit; and
•	the increase of $21.436 million in the 2009-10 Budget from the estimated outcome is due to repayment by ActewAGL of borrowings to fund their capital expenditure program.
Statement of Changes in Equity
•	dividend approved:  the decrease of $7.032 million in the 2008-09 estimated outcome from the original budget reflects the operating result.