CONSOLIDATED INCOME STATEMENTS For the six months ended 31 December 2015

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Cory Phelps
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1 1 CONSOLIDATED INCOME STATEMENTS For the six months ended (Audited) Year 30 June Revenue 121, , ,365 Other income Operating income 122, , ,460 Contracted services for port operations (25,596) (24,388) (45,159) Contracted services for transport operations 0 (3,397) (6,648) Employee benefit expenses (16,318) (22,424) (42,662) Direct fuel and power expenses (3,586) (5,420) (10,032) Maintenance of property, plant and equipment (5,643) (8,474) (15,026) Other expenses (7,310) (7,678) (16,441) Operating expenses (58,453) (71,781) (135,968) Results from operating activities 64,473 64, ,492 Depreciation and amortisation (11,791) (11,835) (23,238) Impairment of property, plant and equipment Impairment of property, plant and equipment on revaluation 0 0 (1,876) (11,791) (11,835) (24,954) Operating profit before finance costs and taxation 52,682 52, ,538 Finance income 374 1,157 2,259 Finance expenses (refer note 7) (8,916) (8,273) (17,092) Net finance costs (8,542) (7,116) (14,833) Share of profit from Equity Accounted Investees 7,043 4,872 10,298 Net gain on disposal of investments 0 4,731 8,609 Impairment of goodwill 0 0 (6,221) Profit before income tax 51,183 55, ,341 Income tax expense (12,619) (12,642) (26,243) Profit for the period 38,564 42,571 79,148 Attributable to: Owners of the Parent Company 38,564 42,571 79,148 Profit for the period 38,564 42,571 79,148 Basic and diluted earnings per share attributable to ordinary equity holders of the Parent Company (cents) SUPPLEMENTARY (NON STATUTORY) DISCLOSURE Underlying Profit After Tax Underlying profit after tax is presented to allow readers to make a more meaningful comparison of the s profit after removing one-off and non operational items. Underlying profit after tax (refer note 5) 38,564 38,508 79,007 Underlying earnings per share (cents) These statements are to be read in conjunction with the notes on pages 6 to 13.

2 2 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the six months ended (Audited) Year 30 June Profit for the period 38,564 42,571 79,148 Other comprehensive income Items that are or may be reclassified to profit or loss: Cash flow hedge changes in fair value 399 (3,354) (4,584) Cash flow hedge reclassified to profit or (962) 828 1,624 loss Changes in cash flow hedges transferred to (357) property, plant and equipment, net of tax Share of net change in cash flow hedge reserves of Equity Accounted Investees (77) (118) (269) (997) (2,397) (2,768) Items that will never be reclassified to profit or loss: Asset revaluation, net of tax ,587 Share of net change in revaluation reserves of Equity Accounted Investees 0 0 (328) ,259 Total other comprehensive income (997) (2,397) 64,491 Total comprehensive income 37,567 40, ,639 Attributable to: Owners of the Parent Company 37,567 40, ,649 Total comprehensive income 37,567 40, ,639 These statements are to be read in conjunction with the notes on pages 6 to 13.

3 3 CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY For the six months ended Share Capital Share Based Payment Reserve Hedging Reserve Revaluation Reserve Retained Earnings Total Balance at 30 June 68,397 0 (3,686) 598, , ,419 Profit for the period ,571 42,571 Total other comprehensive income 0 0 (2,397) 0 0 (2,397) Total comprehensive income 0 0 (2,397) 0 42,571 40,174 Decrease in share capital (137) (137) Dividends paid during the period (39,474) (39,474) (refer note 8) Equity settled share based payment Total transactions with owners in their capacity as owners (137) (39,474) (39,107) Balance at 68, (6,083) 598, , ,486 Profit for the period ,577 36,577 Total other comprehensive income 0 0 (371) 67, ,888 Total comprehensive income 0 0 (371) 67,259 36, ,465 Increase in share capital Dividends paid during the period (29,945) (29,945) Equity settled share based payment Total transactions with owners in their capacity as owners (29,945) (29,401) Balance at 30 June 68,267 1,041 (6,454) 666, , ,550 Profit for the period ,564 38,564 Total other comprehensive income 0 0 (997) 0 0 (997) Total comprehensive income 0 0 (997) 0 38,564 37,567 Increase in share capital Dividends paid during the period (40,835) (40,835) (refer note 8) Equity settled share based payment Total transactions with owners in their capacity as owners (40,835) (39,878) Balance at 68,577 1,688 (7,451) 666, , ,239 These statements are to be read in conjunction with the notes on pages 6 to 13.

4 4 CONSOLIDATED STATEMENTS OF FINANCIAL POSITION As at (Audited) 30 June Assets Property, plant and equipment (refer note 9) 1,100,501 1,012,341 1,097,401 Intangible assets 21,663 43,440 21,357 Derivative financial instruments (refer note 12) Investments in Equity Accounted Investees 120,869 77, ,972 Total non current assets 1,243,033 1,133,508 1,238,010 Cash and cash equivalents 6,010 11,120 17,918 Receivables and prepayments 43,558 41,185 39,489 Inventories Derivative financial instruments (refer note 12) ,066 Total current assets 50,101 53,286 59,008 Total assets 1,293,134 1,186,794 1,297,018 Equity Share capital 68,577 68,260 68,267 Share based payment reserve 1, ,041 Hedging reserve (7,451) (6,083) (6,454) Revaluation reserve 666, , ,156 Retained earnings 156, , ,540 Total equity attributable to owners of the Parent Company 885, , ,550 Total equity 885, , ,550 Liabilities Loans and borrowings 125,130 97, ,065 Deferred consideration Derivative financial instruments (refer note 12) 8,901 6,473 8,384 Provisions 1,596 1,430 1,607 Deferred tax liabilities 58,736 46,602 60,357 Total non current liabilities 194, , ,413 Loans and borrowings 187, , ,297 Deferred consideration Derivative financial instruments (refer note 12) Trade and other payables 20,049 19,962 20,242 Provisions 1,524 1,311 2,120 Provision for tax 3,917 3,739 9,919 Total current liabilities 213, , ,055 Total liabilities 407, , ,468 Total equity and liabilities 1,293,134 1,186,794 1,297,018 These statements are to be read in conjunction with the notes on pages 6 to 13.

5 5 CONSOLIDATED STATEMENTS OF CASH FLOWS For the six months ended (Audited) Year 30 June Cash flows from operating activities Cash inflows 122, , ,890 Cash outflows (90,598) (100,524) (180,336) Net cash inflow from operating activities 31,842 34,713 90,554 Cash flows from investing activities Cash inflows 7,547 6,797 11,299 Cash outflows (17,560) (28,310) (66,008) Net cash used in investing activities (10,013) (21,513) (54,709) Cash flows from financing activities Cash inflows 7,098 35,834 95,180 Cash outflows (40,835) (39,474) (114,667) Net cash used in financing activities (33,737) (3,640) (19,487) Net (decrease)/increase in cash and cash (11,908) 9,560 16,358 equivalents Add opening cash brought forward 17,918 1,560 1,560 Ending cash carried forward 6,010 11,120 17,918 RECONCILIATION OF PROFIT FOR THE PERIOD TO CASH FLOWS FROM OPERATING ACTIVITIES Profit for the period 38,564 42,571 79,148 Adjustments for non cash and non operating items Finance lease interest revenue 0 (258) (258) Depreciation and amortisation expense 11,791 11,835 23,238 Decrease in deferred taxation expense (1,264) (1,040) (3,282) Share of surpluses retained by Equity Accounted (7,043) (4,872) (10,277) Investees Net gain on disposal of investments 0 (4,731) (8,609) Impairment of goodwill 0 0 6,221 Other ,567 3,996 1,334 8,600 Less movements in working capital (10,718) (9,192) 2,806 Net cash flows from operating activities 31,842 34,713 90,554 These statements are to be read in conjunction with the notes on pages 6 to 13.

6 6 NOTES TO THE INTERIM FINANCIAL STATEMENTS For the six months ended 1 REPORTING ENTITY Port of Tauranga Limited (the Parent Company ) is a company incorporated and domiciled in New Zealand, registered under the Companies Act 1993 and listed on the New Zealand Stock Exchange ( NZX ). It is an FMC reporting entity for the purposes of the Financial Markets Conduct Act The Parent Company, which is designated as profit-orientated for financial reporting purposes, is an issuer in terms of the Financial Reporting Act The unaudited interim financial statements (the financial statements ) for Port of Tauranga Limited comprise the Port of Tauranga Limited, its subsidiaries, and the s interest in Equity Accounted Investees (together referred to as the ). As previously reported, in the prior period the sold its investment in its subsidiaries Tapper Transport Limited and MetroPack Limited, and its investment in MetroBox Limited into a newly formed entity, Coda Limited Partnership (Coda). Coda is treated as an Equity Accounted Investee and this has impacted on the reported revenues and operating expenses of the in the current period as all profits from Coda flow through as a share of profit from Equity Accounted Investees in a separate line in the consolidated income statement. 2 BASIS OF PREPARATION These financial statements have been prepared in accordance with New Zealand Generally Accepted Accounting Practice ( NZ GAAP ) and New Zealand International Accounting Standard ( NZ IAS ) 34 Interim Financial Reporting. They do not include all information required for full annual financial statements and should be read in conjunction with the annual financial statements and related notes included in Port of Tauranga Limited s Annual Report for the year ended 30 June. 3 SIGNIFICANT ACCOUNTING POLICIES The accounting policies adopted are consistent with those followed in the preparation of the s annual financial statements for the year ended 30 June. In addition, the following new standard was applied during the period: NZ IFRS 15 Revenue From Contracts With Customers This standard was issued by the International Accounting Standards Board ( IASB ) on 28 May. The standard replaces NZ IAS 11 Construction Contracts, NZ IAS 18 Revenue, IFRS Interpretations Committee ( IFRIC ) 13 Customer Loyalty Programmes, IFRIC 15 Agreements for the Construction of Real Estate, IFRIC 18 Transfer of Assets from Customers and Standards Interpretations Committee ( SIC ) 31 Revenue Barter Transactions Involving Advertising Services. The change has had no significant impact on the measurement of the s revenue.

7 7 The following new standard is effective for annual periods beginning after 1 July 2016, and has not been applied in preparing these financial statements: New Zealand International Financial Reporting Standards ( NZ IFRS ) 9 Financial Instruments This standard was issued on 24 July and affects the classification and measurement of financial assets and also widens the scope on impairment judgements. The standard will be effective for annual periods beginning on or after 1 January 2018, and will be applied retrospectively with some exemptions. Early adoption is permitted. This standard becomes mandatory for the s 2019 consolidated financial statements and could change the classification and measurement of financial assets. Management is currently in the process of evaluating the potential effect of the adoption of NZ IFRS 9. 4 ACCOUNTING ESTIMATES AND JUDGEMENTS The preparation of the financial statements in conformity with NZ IAS 34 requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. In preparing these financial statements, the significant judgements made by management in applying the s accounting policies and the key sources of estimation and uncertainty, were the same as those applied to the s consolidated financial statements for the year ended 30 June. 5 UNDERLYING PROFIT AFTER TAX (NON STATUTORY DISCLOSURE) Reported profit after tax 38,564 42,571 Fair value gain recognised on loss of 0 (4,731) control of Subsidiary Impairment of goodwill in MetroBox Limited Underlying profit after tax 38,564 38,508

8 8 6 SEGMENT INFORMATION The determines and presents operating segments based on the information that is internally provided to the Chief Executive, who is the s Chief Operating Decision Maker ( CODM ), as defined by NZ IFRS 8 Operating Segments. The operates in three main reportable segments, being: Port Operations consists of providing and managing port services, and cargo handling facilities through the Port of Tauranga Limited and the Timaru Container Terminal Limited. Port terminals and bulk operations have been aggregated together within the Port Operations segment, due to the similarities in economic characteristics, customers, nature of products and processes, and risks. Property Services consists of managing and maintaining the Port of Tauranga Limited s property assets. Marshalling Services consists of the contracted terminal operations, stevedoring, marshalling and scaling activities of Quality Marshalling (Mount Maunganui) Limited. In the prior period the also operated a fourth reportable segment called Transport Services. The operations of the Transport Services segment were disposed of on 1 May. The three main business segments are managed separately as they provide different services to customers and have their own operational and marketing requirements. The remaining activities of the are not allocated to individual business segments. The operates in one geographical area, that being New Zealand. Due to the significant shared cost base of the Port activities, operating costs, measures of profitability, assets and liabilities are aggregated and are not reported to the CODM at a segment level, but rather at a port level, as all business decisions are made at a whole port level.

9 9 Port Operations Property Services Marshalling Services Unallocated (1) Total segment revenue (external) 102,779 12,370 6, ,927 Other income and expenditure: Share of profit from ,043 7,043 Equity Accounted Investees Interest income Other income Interest expense (8,916) (8,916) Depreciation and 0 0 (1,084) (10,707) (11,791) amortisation expense Other unallocated 0 0 (4,952) (53,501) (58,453) expenditure Income tax expense 0 0 (265) (12,354) (12,619) Total other income and expenditure 0 0 (6,098) (77,265) (83,363) Total segment result 102,779 12, (77,265) 38,564 (1) Operating costs are not allocated to individual business segments within the Parent Company. Port Operations Property Services Transport Services (2) Marshalling Services Unallocated (1) Total segment revenue (external) 98,685 11,791 19,903 5, ,269 Other income and expenditure: Share of profit from Equity ,872 4,872 Accounted Investees Interest income Other income ,582 5,642 Interest expense 0 0 (63) 0 (8,210) (8,273) Depreciation and 0 0 (1,173) (1,164) (9,498) (11,835) amortisation expense Other unallocated 0 0 (16,421) (4,497) (50,863) (71,781) expenditure Income tax expense 0 0 (663) (23) (11,956) (12,642) Total other income and expenditure 0 0 (18,320) (5,624) (69,754) (93,698) Total segment result 98,685 11,791 1, (69,754) 42,571 (1) Operating costs are not allocated to individual business segments within the Parent Company. (2) The operations of the Transport Services segment were disposed of on 1 May.

10 10 7 FINANCE EXPENSES Interest expense on borrowings 9,030 8,256 Less: Interest capitalised to property, plant and equipment (263) (71) 8,767 8,185 Interest on finance leases 0 63 Interest on deferred consideration Ineffective portion of changes in fair value of cash flow hedges Total finance expenses 8,916 8,273 8 DIVIDENDS The following dividends were paid by the : Final dividend of 30.0 cents per share (: 29.0 cents per share) 40,835 39,474 9 PROPERTY, PLANT AND EQUIPMENT Acquisitions and Disposals During the six months ended, the acquired assets with a cost of $ million (six months ended : $ million). During the six months ended, the disposed of assets with a carrying value of $2.410 million (six months ended : $0.117 million).

11 11 10 RELATED PARTY TRANSACTIONS Related party transactions with related parties: Transactions With Equity Accounted Investees Services provided to Tapper Transport Limited 0 63 Services provided by Tapper Transport Limited Accounts receivable by Tapper Transport Limited 0 55 Accounts payable by Tapper Transport Limited 0 26 Services provided to Port of Tauranga Limited 4 75 Services provided by Port of Tauranga Limited Accounts receivable by Port of Tauranga Limited Accounts payable by Port of Tauranga Limited 0 29 Advances by Port of Tauranga Limited 7,519 4,339 Services provided to Timaru Container Terminal Limited Services provided by Timaru Container Terminal 0 12 Limited Accounts receivable by Timaru Container Terminal 0 3 Limited Accounts payable by Timaru Container Terminal Limited Services provided to Quality Marshalling Limited Services provided by Quality Marshalling Limited 1,756 1,155 Accounts receivable by Quality Marshalling Limited Accounts payable by Quality Marshalling Limited 7 19 The following table shows the s change in shareholdings relevant to 31 December : Related Party % Ownership % Ownership MetroBox Limited (previously MetroBox Auckland Limited) Coda Limited Partnership During the six months ended the entered into transactions with companies in which Directors hold directorships. These directorships have not resulted in the having a significant influence over the operations, policies, or key decisions of these companies. No related party debts have been written off or forgiven during the period.

12 12 Controlling Entity Quayside Securities Limited owns 54.14% (as at : 54.14%) of the issued ordinary shares in Port of Tauranga Limited. Quayside Securities Limited is beneficially owned by Bay of Plenty Regional Council, the Ultimate Controlling Party. Transactions with the Ultimate Controlling Party during the period include services provided to Port of Tauranga Limited $7,717 (six months ended : $11,506). Transactions with Key Management Personnel The does not provide any non cash benefits to Directors and executive officers in addition to their Directors fees or salaries. Short term employee benefits Directors fees Executive salaries 1,561 1, COMMITMENTS Capital commitments Estimated capital commitments for the contracted for at the reporting date but not provided for 45,986 21,199 Capital commitments at relate to the purchase of two container cranes, three straddles and the harbour dredging programme.

13 13 12 FINANCIAL INSTRUMENTS The fair value of financial instruments traded in active markets is based on quoted market prices at the reporting date. The fair value of financial instruments that are not traded in active markets (for example over-the-counter derivatives) are determined by using market accepted valuation techniques incorporating observable market data about conditions existing at each reporting date. The fair value of interest rate swaps is calculated as the present value of the estimated future cash flows. The fair value of forward exchange contracts is determined using quoted forward exchange rates at the reporting date. Derivative financial instruments are categorised as Level 2 in the fair value measurement hierarchy. 13 SUBSEQUENT EVENTS There have been no subsequent events.

CONSOLIDATED INCOME STATEMENT For the six months ended 31 December 2010

1 CONSOLIDATED INCOME STATEMENT For the six months ended (Audited) Year 30 June Revenue 92,829 67,046 148,054 Other income 0 22 22 Operating income 92,829 67,068 148,076 Contracted services for port operations