preliminary final report & june quarterly update - Leighton Holdings

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Notes continued for the year ended 30 June 2011 10. ACQUISITION AND DISPOSALS OF CONTROLLED ENTITIES AND BUSINESSES Acquisitions During the year to 30 June 2011 the Consolidated Entity made the following acquisitions: Devine Limited On 29 June 2011 Leighton Residential Investments Pty Ltd, a controlled entity of the Company, acquired 2,500,000 additional shares in Devine Limited (‘Devine’), a company listed on the Australian Securities Exchange, at $0.23 per share which increased the Group’s interest to 50.06%. The decision to acquire a controlling interest in Devine followed a review of the Group’s property interests. The increased shareholding provides stronger flexibility and certainty to the Group’s strategy and position in property. The decision also supports Devine’s strategy to grow the business through joint ventures and commercial relationships with other strategic partners that will be assured by the increased shareholding. As a result of this purchase the Group has gained a controlling interest in Devine as well as the Hamilton Harbour and Townsville joint ventures between Devine and Leighton Properties. The acquisition has been accounted for under the requirements of Accounting Standard AASB 3 Business Combinations as follows: the purchase consideration paid for Devine was determined as $149.1 million (comprising: cash paid of $0.6 million; the market value of non-controlling interest of $74.5 million; and, the market value of the Group’s previously held equity interest of 49.66% of $74.0 million); and the fair value of the identifiable net assets of Devine acquired by the Group was $344.2 million. The fair value of the identifiable net assets was determined using the assistance of independent valuation experts. The fair value of the identifiable net assets of Devine of $344.2 million exceeded the total purchase consideration resulting in a gain on acquisition of a controlled entity of $195.1 million. In accordance with AASB 3, the Group revalued its previously held equity interest in Devine resulting in a loss of $94.1 million. The net gain on the acquisition recognised in profit and loss was $101.0 million (Refer note 4: Items included in profit before tax). Due to the date of the acquisition there was no contribution by Devine to the Group’s operating profit and loss for the year ended 30 June 2011. Devine’s contribution for the year is recorded in share of profits of associates. For comparative purposes the total reported profit of Devine for the year ended 30 June 2010 was $8.2 million. Other acquisitions During the year the Group also acquired Delron Cleaning Pty Limited on 1 July 2010 for $8.1 million including acquisition costs, and Moonamang Joint Venture Pty Limited on 10 June 2011 for one hundred dollars including acquisition costs. Disposals Leighton Contractors (India) Private Limited On 24 December 2010 the Group sold 35% of Leighton Contractors (India) Private Limited (“Leighton India”) to Welspun Infra Projects Private Limited (“Welspun”) and entered into a joint venture arrangement with Welspun to pursue opportunities in the Indian construction market. As the Group no longer controls Leighton India the transaction has been recorded as a disposal of a controlled entity and the acquisition of an interest in a joint venture entity. The disposal has been accounted for under the requirements of Accounting Standard AASB 127 Consolidated and Separate Financial Statements as follows: the total consideration received was US$298.8 million (comprising: cash consideration of US$104.6 million (of which US$95.7m has been received to date) and non-cash consideration of US$194.2 million (fair value of the 65% retained interest based on the cash consideration)) less the carrying value of Leighton India’s net assets of US$39.4 million, resulting in a gain before tax of US$259.4 million. (Refer to note 4: Items included in profit before tax). Leighton India’s contribution since 31 December 2010 is recorded in share of profits of joint ventures entities. Leighton Holdings Limited Appendix 4E and Consolidated Preliminary Final Report for the Year Ended 30 June 2011 23
Notes continued for the year ended 30 June 2011 11. RECONCILIATION OF PROFIT / (LOSS) FOR THE YEAR TO NET CASH FROM OPERATING ACTIVITIES 2011 $m 2010 $m Profit / (loss) for the year (405.7) 615.1 Adjustments for non-cash items: - Depreciation of property, plant and equipment 865.6 824.0 - Amortisation of intangibles 0.6 - - Net (gain) / loss on sale of assets (322.2) (30.5) - Net (gain) on acquisition of a controlled entity (101.0) - - Impairment of investments in infrastructure toll road companies 4.0 16.3 - Impairment of investments accounted for using the equity method 296.4 - - Impairment of goodwill 0.7 - - Property development and property joint venture write-downs 80.1 38.9 - Net amounts set aside to provisions 427.7 373.8 - Share of profits of associates 144.4 (7.7) - Foreign exchange losses (4.6) 5.4 - Share based payments 14.8 7.5 Net changes in assets / liabilities: - Decrease / (increase) in receivables (190.2) 20.3 - Decrease / (increase) in joint ventures (2.2) (108.3) - Decrease / (increase) in inventories (62.9) 13.8 - Increase / (decrease) in payables 1,301.6 184.5 - Increase / (decrease) in provisions (379.9) (324.7) - Current and deferred income tax movement (345.9) 111.1 Net cash from operating activities 1,321.3 1,739.5 Leighton Holdings Limited Appendix 4E and Consolidated Preliminary Final Report for the Year Ended 30 June 2011 24
Page 1 and 2: 2010/11 PRELIMINARY FINAL REPORT &
Page 3 and 4: Results for Announcement to the Mar
Page 5 and 6: Commentary on the Results continued
Page 7 and 8: Consolidated Statement of Comprehen
Page 9 and 10: Consolidated Statement of Changes i
Page 11 and 12: Notes to the Consolidated Prelimina
Page 13 and 14: Notes continued for the year ended
Page 23: Notes continued for the year ended
Page 31 and 32: Financial Highlights 30 June 2011 3
Page 33 and 34: The Company raised $758 million in
Page 35 and 36: The poor financial performance of t
Page 37 and 38: Production at existing mines in Que
Page 39 and 40: invested in the offshore constructi
Page 41 and 42: construction work done is expected
Page 43 and 44: Operational Analysis Operating Reve
Page 45 and 46: • $541m for contract mining servi
Page 47 and 48: • $75m for construction of a prod
Page 49: • Deer Park: Leighton Properties

preliminary final report & june quarterly update - Leighton Holdings

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