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Filed Pursuant to Rule 424(b)(2)
Registration No. 333-103886
PROSPECTUS
ORIGIN ENERGY LIMITED
328,282 Ordinary Shares
This prospectus relates to the resale of 328,282 of our ordinary shares by all of our shareholders who hold less than 2,000 of our ordinary shares and are located in those jurisdictions identified in this prospectus under the heading “Selling Shareholders.” For a period from August 4, 2003 to September 9, 2003, or as such other later date determined by us, the ordinary shares may be offered by the selling shareholders in connection with a share sale facility through ordinary brokerage transactions on the Australian Stock Exchange, at market prices on the Australian Stock Exchange prevailing at the time of the sale as described in this prospectus. The offering of our ordinary shares pursuant to this prospectus is not being underwritten.
Our ordinary shares are traded on the Australian Stock Exchange under the symbol “ORG.”
Investing in our securities involves risks that are described in the “Risk Factors” section beginning on page 2 of this prospectus.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offence.
The date of this prospectus is July 31, 2003.
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The registration statement we filed with the Securities and Exchange Commission includes exhibits that provide more detail on descriptions of the matters discussed in this prospectus. You should read this prospectus and the related exhibits filed with the Securities and Exchange Commission, together with additional information described under the heading “Where You Can Find More Information.”
Unless the context otherwise requires, references in this prospectus to “we,” “us” and “our” refer to Origin Energy Limited and its consolidated subsidiaries.
This summary highlights information contained elsewhere in this prospectus and the documents incorporated by reference. Because this is only a summary, it does not contain all the information you should consider before participating in the share sale facility. You should read the entire prospectus and the documents incorporated by reference carefully.
Our Address
Our principal executive offices are located at Level 39, AMP Centre, 50 Bridge Street, Sydney NSW 2000, Australia, and our telephone number is + 61 2 9220 6400.
The Offering
Ordinary shares | 328,282 |
Selling shareholders | Our ordinary shares are being sold by up to 436 of our shareholders. Such shareholders consist of all of our shareholders who (a) hold less than 2,000 of our ordinary shares and (b) are located outside of Australia, New Zealand, the Cook Islands, Fiji, The United Kingdom, The Netherlands, The Philippines, Papua New Guinea, Tonga, Vanuatu, and Western Samoa. |
Offer details | For a period from August 4, 2003 to September 9, 2003, or as such other later date determined by us, the ordinary shares may be offered by the selling shareholders in connection with a share facility through ordinary brokerage transactions on the Australian Stock Exchange, at market prices on the Australian Stock Exchange prevailing at the time of the sale and in other ways described in “The Offer Details” and “Plan of Distribution.” |
Use of Proceeds | We will not receive any proceeds from the offering. |
Australian Stock Exchange Symbol | ORG. On July 11, 2003, the last reported sale price for our ordinary shares on the Australian Stock Exchange was A$4.27 per share. |
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An investment in our ordinary shares involves a high degree of risk. You should consider carefully the risk factors contained in our filing on Form 20-F/A filed with the Securities and Exchange Commission on July 15, 2003, and all other information contained in and incorporated by reference in this prospectus before making an investment decision. See “Where You Can Find More Information” for information on how to obtain a copy of our Form 20-F. Additional risks and uncertainties that are not yet identified or that we think are immaterial may also materially harm our business, operating results and financial condition and could result in a complete loss of your investment.
WHERE YOU CAN FIND MORE INFORMATION
We have filed a registration statement on Form F-3 with the Securities and Exchange Commission, under the Securities Act of 1933, including exhibits and schedules, in connection with the ordinary shares to be transacted in this offering. This prospectus is part of the registration statement and does not contain all the information included in the registration statement. The registration statement incorporates by reference additional information and exhibits. We are subject to the reporting requirements of the Securities Exchange Act of 1934 and file annual, and periodic reports, and other information with the Securities and Exchange Commission. You may read and copy the registration statement and any document we file with the Securities and Exchange Commission at the public reference room maintained by the Securities and Exchange Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain information on the operation of the public reference room by calling the Securities and Exchange Commission at 1-800-SEC-0330. The Securities and Exchange Commission also maintains a web site that contains reports, and information statements and other information regarding companies, such as us, that file documents electronically with the Securities and Exchange Commission. The address of that site on the world wide web is http://www.sec.gov. The information on the Securities and Exchange Commission’s web site is not part of this prospectus, and any references to this web site or any other web site are inactive textual references only.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Securities and Exchange Commission permits us to “incorporate by reference” the information contained in documents we file with it, which means that we can disclose important information to you by referring you to those documents rather than by including them in this prospectus. Information that is incorporated by reference is considered to be part of this prospectus and you should read it with the same care. Later information that we file with the Securities and Exchange Commission will automatically update and supersede the information that is either contained herein or incorporated by reference herein, and will be considered to be a part of this prospectus from the date such documents are filed. We have filed with the Securities and Exchange Commission, and incorporate by reference in this prospectus:
• | our Annual Report on Form 20-F/A for the year ended June 30, 2002, filed with the Securities and Exchange Commission on July 15, 2003; |
• | our Annual Report on Form 20-F/A for the year ended June 30, 2002, filed with the Securities and Exchange Commission on June 10, 2003; |
• | our Report on Form 6-K, filed with the Securities and Exchange Commission on May 15, 2003, setting forth our report for the quarter ended March 31, 2003, and our Sustainability Report to Stakeholders for the financial year ended June 30, 2002; |
• | our Report on Form 6-K, filed with the Securities and Exchange Commission on February 5, 2003, setting forth our report for the quarter ended December 31, 2002; |
• | our initial Annual Report on Form 20-F for the year ended June 30, 2002, filed with the Securities and Exchange Commission on December 24, 2002; and |
• | our Report on Form 6-K, filed with the Securities and Exchange Commission on December 6, 2002, setting forth our report for the quarter ended September 30, 2002. |
We also incorporate by reference all additional documents that we file with the Securities and Exchange Commission under the terms of Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, that are made after the initial filing date of the registration statement of which this prospectus is a part and before the termination of any offering of securities offered by this prospectus. We may also incorporate by reference certain Forms 6-K subsequently submitted to the Securities and Exchange Commission by stating in those forms that they are being incorporated into this prospectus. Any statement contained in this prospectus or in a document incorporated in, or deemed to be incorporated by reference to, this prospectus shall be deemed to be modified or superseded, for purposes of this prospectus, to the extent that a statement contained in this prospectus or any other subsequently filed document which also is incorporated in, or is deemed to be incorporated by reference to this prospectus, modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus.
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Upon your written or oral request of any or all of the documents incorporated by reference but not delivered with this prospectus, we will send to you the copies you requested at no charge. However, we will not send exhibits to such documents, unless such exhibits are specifically incorporated by reference in such documents. You should direct requests for such copies to the Company Secretary, Origin Energy Limited, Level 39, AMP Centre, 50 Bridge Street Sydney, NSW 2000, Australia. Our telephone number is +61-2 9220-6400.
You should rely only on the information incorporated by reference or provided in this prospectus, and the registration statement. We have not authorized anyone else to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not making an offer to sell these securities in any state where the offer or sale is not permitted. You should assume that the information in this prospectus, or incorporated by reference, is accurate only as of the dates of those documents. Our business, financial condition, results of operations and prospects may have changed since those dates.
Certain statements in this prospectus and the documents incorporated in this prospectus by reference constitute “forward-looking statements” within the meaning of section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934. When used in this prospectus and the documents incorporated in the prospectus by reference, the words “expect,” “anticipate,” “estimate,” “believe,” “no assurance” and similar expressions and statements which are made in the future tense, are intended to identify such forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause our actual results, performance or achievements to differ materially from any future results, performance of achievements expressed or implied by such forward-looking statements. Such factors include among others, those listed under “Risk Factors” and elsewhere in the prospectus. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances upon which any such statement is based.
ENFORCEABILITY OF CIVIL LIABILITIES
We are a company organized under the laws of the State of New South Wales, Australia, and our principal executive offices are located in Sydney, Australia. All of our directors and officers, and some of the experts named in this prospectus, reside outside the United States, principally in Australia. All or a substantial portion of our assets and the assets of the directors, officers and experts, is located outside the United States. As a result, you may not be able to effect service of process within the United States upon us or these persons or enforce judgments of United States courts in the United States against us or them based on the civil liability provisions of the United States federal securities laws. In addition, there are doubts as to the enforceability in Australia against us or any of our directors, officers or experts, in original actions or in actions for enforcement of judgments of United States courts, of liabilities based upon the civil liability provisions of the United States federal securities laws.
Offer Statistics And Expected Timetable
For details on the offer of Ordinary Shares pursuant to this prospectus see “The Offer Details” below.
Capitalization and Indebtedness
The following table sets forth our capitalization and long-term debt in Australian dollars as of May 31, 2003. The shares for sale through this facility will be sold on the Australian Stock Exchange in ordinary market transactions on behalf of eligible shareholders. The proceeds from such sales will be remitted to those selling shareholders. We will not buy back any of the shares sold hereby. Consequently there should be no change to our capitalization as a result of this share sale facility.
The following table is based on our unaudited interim financial statements for the six months ended December 31, 2002 which were prepared in accordance with Australian generally accepted accounting principles (“Australian GAAP”), in a manner consistent with our audited Financial Statements for our fiscal year ended June 30, 2002 and updated for movements in our financial accounts to May 31, 2003. See Note 39 to such Financial Statements included in our Annual
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Report on Form 20-F/A for the year ended June 30, 2002 filed with the Securities and Exchange Commission on July 15, 2003. This table should be read in conjunction with our unaudited financial statements and other financial information contained elsewhere in and incorporated by reference into this prospectus.
May 31, 2003 | ||
(A$ in millions) (Unaudited) | ||
Long term debt | ||
Long term indebtedness (unsecured) | 683.0 | |
Long term lease liabilities (secured) | 0.1 | |
Total long term debt | 683.1 | |
Equity | ||
Ordinary shares(1)(2) | 418.5 | |
Reserves | 113.4 | |
Retained profit | 1,209.9 | |
Outside equity interest in controlled entities | 35.7 | |
Total equity | 1,777.5 | |
Total capitalization | 2,460.6 | |
(1) | No-par value. |
(2) | The number of shares outstanding as of May 31, 2003 excludes 11,519,400 shares of common stock reserved for issuance under our Employee Stock Option Plan. |
Reasons for the Offer and Use of Proceeds
All of the ordinary shares offered hereby are being sold by the selling shareholders. We will not receive any proceeds from the offering. However, your participation in this Share Sale Facility may help us reduce our future costs for the reasons described below.
We evolved from the demerger of Boral Ltd (“Old Boral”), a company listed on the ASX which had a combination of building and construction material businesses and energy businesses. Prior to the demerger, Old Boral was listed on the Nasdaq National Market and had an American Depository Receipt (“ADR”) program in the United States with The Bank of New York as depositary. The company had significant overseas operations, including building and construction material businesses in the United States. A Scheme of Arrangement to separate Old Boral’s building and construction materials businesses from its energy businesses was approved at a meeting of Old Boral’s shareholders on February 17, 2000. Consequently, two industry specific Australian listed companies, Boral Limited (“New Boral”) and Origin Energy, were created from the Old Boral. The mechanisms of the Scheme of Arrangement were such that each holder of Old Boral shares subsequently held one New Boral share and one Origin Energy share for every two Old Boral shares held. The record date for the issue of New Boral and Origin Energy shares was February 25, 2000.
As the surviving entity of the demerger under the Scheme of Arrangement, we inherited Old Boral’s reporting obligations under Section 12 of the Securities Exchange Act of 1934, as amended (“Exchange Act”) and its Nasdaq listing. At the time of the demerger, we had no U.S. operations, and we currently have no U.S. operations other than a small indirect passive investment in a production well in Louisiana. We have in excess of 100,000 shareholders, of which less than 0.4% are domiciled in the United States.
We delisted from the Nasdaq National Market effective February 17, 2000 and terminated our ADR program in November 2001. However, since our ordinary shares are registered under Section 12(g) of the Exchange Act, we are required to file annual reports on Form 20-F and periodic reports on Form 6-K with the Securities and Exchange Commission. We are looking at reducing the costs, both in dollar terms and in management resources, associated with the compliance with our reporting obligations and related shareholder servicing costs. Each year, the financial statements set out in our annual report on Form 20-F must be reconciled to US GAAP and audited in accordance with U.S. generally accepted auditing standards, at significant cost to us. In addition, the annual process of preparing the Form 20-F, including the financial statements presentation, constitutes a significant burden on our management resources.
We believe that many of our shareholders acquired Old Boral shares to invest in an international building and construction materials company or received such shares pursuant to employee share plans, and may not wish to continue an association with an Australian energy company. In addition, many shareholders in the United States and other countries outside of Australia that are eligible to participate in the Share Sale Facility hold small parcels of shares. Sales of these shares would ordinarily be subject to significant transaction costs and payment would normally be received in a foreign currency (Australian dollars).
Under our Share Sale Facility, we are giving investors outside of Australia and certain other countries in which we have operations who hold less than 2,000 of our ordinary shares the opportunity to dispose of their entire holding without incurring brokerage or transaction costs, and to receive payment from the sale of such shares in U.S. dollars.
If, following the closing of the Share Sale Facility, the number of shareholders of record in the United States falls below 300, we will seek to deregister under the Exchange Act, pursuant to Rule 12g-4 thereunder, and we will no longer be required to comply with the reporting requirements under the Exchange Act. All shareholders will, however, continue to receive our periodic reports that are lodged with the ASX pursuant to the ASX listing rules.
Interests of Experts And Counsel
Not Applicable.
The Offer Details
We are registering 328,282 ordinary shares on behalf of certain of our selling shareholders described below in order to enable them to sell their ordinary shares through a share sale facility. A description of the share sale facility follows.
Description of Our Share Sale Facility
Our share sale facility will be made available to up to 436 of our shareholders holding 328,282 of our ordinary shares. These shareholders comprise all of our shareholders who (a) hold less than 2,000 of our ordinary shares and (b) are located outside Australia, New Zealand, The Cook Islands, Fiji, The United Kingdom, The Netherlands, The
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Philippines, Papua New Guinea, Tonga, Vanuatu and Western Samoa (“Eligible Shareholders”). For the period from August 4, 2003 to September 9, 2003 (or as such period may be extended), Eligible Shareholders will be entitled to sell all, but not less than all, of their ordinary shares through the share sale facility. Eligible Shareholders will not be obliged to sell their shares through the share sale facility and such shareholders will not receive any premium or other incentive to participate in the share sale facility.
We have engaged Georgeson Shareholder Communications Corporation (“Georgeson”) to act as information agent in connection with the share sale facility. In this capacity, Georgeson will provide administrative and support services. We will pay Georgeson total fees (consisting of the items listed as “Information Agent Fee” and “Printing Fees” in the table under the heading “Expenses of the Issue”) of up to US$41,055 for its services.
We will also require the services of our share registrar, ASX Perpetual Registrars Limited (“Perpetual”), to assist in the processing of data and co-ordination of this facility in Australia. We will pay Perpetual total fees estimated to be approximately A$8,000, or approximately US$5,000, for these services.
We have appointed Citigroup Global Markets Australia Pty Ltd (“CGMA”) to act as broker in connection with the share sale facility. CGMA will conduct sales of the ordinary shares submitted to the share sale facility by Eligible Shareholders in open market transactions on the Australian Stock Exchange. We have agreed to pay CGMA broker’s commission of 0.5% in connection with the sale of the ordinary shares through the share sale facility. These fees are listed as “Transfer Agent Fees” in the table under the heading “Expenses of the Issue” and are not expected to exceed US$2,000.
Georgeson will act as information agent in the United States, co-ordinating the printing and mailing of information and instructions regarding the share sale facility, ensuring that all Eligible Shareholders have received the information, answering any questions regarding the facility and collating responses. Responses will be forwarded to Perpetual who will verify that shareholding details have not changed, and ensure that all shares are able to be sold by our elected broker. CGMA will act as broker in connection with the share sale facility. CGMA will conduct sales of the ordinary shares in open market transactions on the Australian Stock Exchange on a weekly basis in a manner that is expected to minimize any market impact of the sales on the price of our ordinary shares. We expect that sales will commence on the second Friday that the program is open, and will continue on each Friday until the program is terminated. The price per share to be paid to participating Eligible Shareholders will be the volume weighted average share price for that day on which the shares are sold in Australian dollars multiplied by the noon buying rate in New York City for cable transfers in Australian dollars as certified for customs purposes by the Federal Reserve Bank of New York (the “Noon Buying Rate”) on that day. Participating Eligible Shareholders will not be guaranteed a minimum sale price for their ordinary shares. After the sales have been effected on the Australian Stock Exchange and verified, proceeds will be transferred to Georgeson in New York who will then arrange for the mailing of tax forms, checks and closing letters.
Neither we, Perpetual nor Georgeson will directly or indirectly receive any of the commissions paid to CGMA for the sales of the ordinary shares by participating Eligible Shareholders. At no time will we, CGMA, Perpetual or Georgeson take title to any ordinary shares sold through the share sale facility. In addition, neither we, CGMA, Perpetual nor Georgeson will recommend publicly or privately that Eligible Shareholders participate in the share sale facility.
As part of the share sale facility we will also offer exiting Eligible Shareholders the opportunity to have any uncashed dividend checks in Australian dollars which they have previously received replaced by a U.S. dollar check. The conversion from Australian dollars to U.S. dollars will be undertaken at the same “Noon Buying Rate” as is used to convert the proceeds from the sale of their shares to U.S. dollars.
Upon completion of the share sale facility, if we have fewer than 300 U.S. shareholders, calculated pursuant to Rule 12g3-2(a) under the Securities Exchange Act of 1934, as amended, we intend to terminate our registration under the Securities Exchange Act of 1934. As a result, we would no longer be subject to the reporting requirements of the Securities Exchange Act of 1934.
Plan of Distribution
The ordinary shares offered pursuant to this prospectus will be sold pursuant to Regulation S under the Securities Act of 1933, as amended, in brokered transactions on the Australian Stock Exchange. See “The Offer Details” above for a more detailed description of this process.
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Markets
The ordinary shares sold by the selling shareholders will be sold in brokered transactions on the Australian Stock Exchange. See “The Offer Details” above for a more detailed description of this process.
Selling Shareholders
We are registering the ordinary shares offered pursuant to this prospectus on behalf of up to 436 of our shareholders holding 328,282 or approximately 0.050% of our ordinary shares. Such shareholders consist of all of our shareholders who (a) hold less than 2,000 of our ordinary shares and (b) are located outside of Australia, New Zealand, the Cook Islands, Fiji, The United Kingdom, The Netherlands, The Philippines, Papua New Guinea, Tonga, Vanuatu, and Western Samoa. See “The Offer Details” above for a more detailed description of this process.
Dilution
Not Applicable.
Expenses of the Issue
In connection with the issuance and distribution of the securities being registered, all expenses incurred with the registration of the securities will be borne by us.
Expenses (US$) | ||
Registration Fee | 75 | |
Blue Sky Qualification Fees And Expenses* | 5,000 | |
Transfer Agent Fees* | 2,000 | |
Information Agent Fee* | 37,555 | |
Printing Fees* | 3,500 | |
Legal Fees And Expenses* | 80,000 | |
Accounting Fees And Expenses* | 36,300 | |
Data Processing and Co-ordination * | 5,300 | |
US$169,730 | ||
* | Estimated. |
Share Capital
As at June 30, 2002 and July 25, 2003, the total number of our outstanding ordinary shares, no-par value, issued and fully paid was 647,829,152 and 657,777,551, respectively.
The following tables set out the movement in our share capital over the last three years.
Movements in Share Capital July 1, 1999 to June 30, 2000
Number of Shares | A$ in ’000s | |||
Balance at beginning of period | 1,128,155,934 | 1,942,675 | ||
Exercise of Options | — | — | ||
Dividend Re-investment plan | 7,944,422 | 19,520 | ||
Employee Share Plan | — | — | ||
Share Buy Back | — | — | ||
Share Purchase Plan | — | — | ||
Institutional Placements | — | — |
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Number of Shares | A$ in ’000s | |||||
Consolidation of every 2 shares into 1 share in February, 2000 | (568,050,178 | ) | — | |||
Reduction in Share Capital(1) | — | (1,795,039 | ) | |||
Total Movements in Ordinary Share Capital | (560,105,756 | ) | (1,775,519 | ) | ||
Balance at end of period | 568,050,178 | 167,156 | ||||
Movements in Share Capital July 1, 2000 to June 30, 2001
Number of Shares | A$ in ’000s | ||||
Balance at beginning of period | 568,050,178 | 167,156 | |||
Exercise of Options | — | — | |||
Dividend Re-investment plan | 6,304,775 | 11,301 | |||
Employee Share Plan | 453,933 | — | |||
Share Buy Back(2) | (1,760,507 | ) | — | ||
Share Purchase Plan | — | — | |||
Institutional Placements | — | — | |||
Total Movements in Ordinary Share Capital | 4,998,201 | 11,301 | |||
Balance at end of period | 573,048,379 | 178,457 | |||
Movements in Share Capital July 1, 2001 to June 30, 2002
Number of Shares | A$ in ’000s | |||
Balance at beginning of period | 573,048,379 | 178,457 | ||
Exercise of Options | 761,650 | 1,570 | ||
Dividend Re-investment plan | 2,693,165 | 8,117 | ||
Employee Share Plan | 629,145 | — | ||
Share Buy Back | — | — | ||
Share Purchase Plan | 26,500,287 | 73,563 | ||
Institutional Placements | 44,196,526 | 123,332 | ||
Total Movements in Ordinary Share Capital | 74,780,773 | 206,582 | ||
Balance at end of period | 647,829,152 | 385,039 | ||
Movements in Share Capital July 1, 2002 to July 25, 2003
Number of Shares | A$ in ’000s | |||
Balance at beginning of period | 647,829,152 | 385,039 | ||
Exercise of Options | 2,401,100 | 5,533 | ||
Dividend Re-investment plan(3) | 7,547,299 | 28,276 | ||
Employee Share Plan | — | — | ||
Share Buy Back | — | — | ||
Share Purchase Plan | — | — |
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Institutional Placements | — | — | ||
Total Movements in Ordinary Share Capital | 9,948,399 | 33,810 | ||
Balance at end of period | 657,777,551 | 418,849 | ||
(1) | Reduction in issued capital for the in-specie distribution of Blue Circle Southern Cement Limited (renamed Boral Limited) shares to existing shareholders, pursuant to the “Scheme of Arrangement between Boral Limited and the holders of its ordinary shares”, dated December 15, 1999 (568,050,178 shares in Blue Circle Southern Cement Limited at A$3.16 were issued). |
(2) | On May 18, 2001 we completed the buy-back of 1,760,507 ordinary shares, representing 0.31% of our ordinary shares on issue on that date. The buy-back was implemented in accordance with Article 17A of our Constitution which was approved by shareholders at our Extraordinary General Meeting held on April 11, 2001. The total consideration for shares bought back on the market was A$3,992,000, being an average, including incidental costs, of A$2.27 per share. The consideration was deducted from retained profits. |
(3) | In 2002 we offered our Dividend Reinvestment Plan with a 5% discount to the weighted average price of shares sold on market in the 5 days prior to the date of record of the dividend. There was no such discount in prior years. |
Material Changes
On July 11, 2003, we advised the Australian Stock Exchange that we propose to make an off market cash tender offer of A$4.25 per share to acquire all the ordinary shares in Oil Company of Australia Limited (“OCA”) that we do not already own. The timetable for the offer is yet to be determined, and the offer will not be subject to any defeating conditions.
We currently hold 85.23% of the issued capital of OCA and currently consolidate OCA into our accounts, with adjustments made for the minority interests at the net income level. Should we be successful in acquiring all the shares we do not currently own at the proposed offer price, the transaction will cost us approximately A$74 million plus ancillary costs. We expect the cost of the transaction to be offset by the benefit of consolidating 100% of OCA into our financial results. The acquisition, which will be funded out of existing debt facilities, is therefore not expected to have a material impact on our financial performance.
The balance of the issued capital in OCA is held by approximately 500 shareholders. Santos Ltd, an Australian oil and gas exploration and production company, holds around 12.5% of the issued capital, while the next largest shareholder holds less than 0.2% of the issued capital. Santos Ltd has agreed to accept the offer in respect of 2.9 million of its shares, giving us a relevant interest in 87.69% of the issued capital of OCA. Under the terms of our agreement with Santos, Santos is free to accept or reject our offer for the shares not covered by the agreement, or to accept any alternative offer that may be made.
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Six Months ended December 31, 2002 compared with Six Months ended December 31, 2001
Six months ended December 31, | ||||||
2002 | 2001 | |||||
(All amounts in millions of A$ unless otherwise specified) | ||||||
(unaudited) | ||||||
STATEMENT OF FINANCIAL PERFORMANCE DATA: | ||||||
Amounts prepared in accordance with Australian GAAP | ||||||
Sales revenue | 1,658.1 | 1,222.8 | ||||
Operating profit before significant items | 138.9 | 83.0 | ||||
Significant items | — | — | ||||
Income tax | (47.2 | ) | (25.8 | ) | ||
Net income before outside equity interest | 91.7 | 57.2 | ||||
Outside equity interest | (2.1 | ) | (2.6 | ) | ||
Net income | 89.6 | 54.7 | ||||
Number of shares (shares) | 652,317,960 | 646,312,069 | ||||
Basic earnings per share (A$ per share) | 0.138 | 0.087 | ||||
Diluted earnings per share (A$ per share) | 0.137 | 0.087 | ||||
Amounts prepared in accordance with US GAAP | ||||||
Net income | 140.3 | 80.8 | ||||
Basic earnings per ordinary share (A$ per share) | 0.216 | 0.129 | ||||
Diluted earnings per ordinary share (A$ per share) | 0.215 | 0.128 | ||||
As at December 31, 2002 | As at December 31, 2001 | |||||
STATEMENT OF FINANCIAL POSITION DATA: | ||||||
Amounts prepared in accordance with Australian GAAP | ||||||
Current assets | 668.9 | 522.1 | ||||
Current liabilities | 654.0 | 487.8 | ||||
Total assets | 3,326.3 | 2,873.8 | ||||
Long-term debt | 630.1 | 520.0 | ||||
Equity | 1,731.2 | 1,569.4 | ||||
Amounts prepared in accordance with US GAAP | ||||||
Total assets | 3,512.6 | 2,878.0 | ||||
Long-term debt | 630.1 | 520.0 | ||||
Equity | 1,804.4 | 1,619.2 |
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Results By Segment
Six Months ended December 31, 2002
(in millions of A$)
External Sales | Earnings Before Interest, Tax, Depreciation & Amortization (EBITDA)(1) | Earnings Before Interest and Tax (EBIT)(2) | ||||
Segments | ||||||
Exploration and Production | 144.6 | 90.2 | 47.1 | |||
Retail | 1,396.4 | 133.8 | 94.6 | |||
Generation | 40.9 | 19.5 | 10.5 | |||
Networks | 76.2 | 12.3 | 11.4 | |||
Total | 1,658.1 | 255.9 | 163.7 | |||
Assets | Depreciation And Amortization | Capital Expenditure and Acquisitions | ||||
Segments | ||||||
Exploration and Production | 967.8 | 43.1 | 135.1 | |||
Retail | 1,530.5 | 39.2 | 152.5 | |||
Generation | 367.8 | 9.1 | 94.1 | |||
Networks | 171.8 | 0.9 | 0.1 | |||
Unallocated | 288.4 | — | — | |||
Total | 3,326.3 | 92.3 | 381.8 | |||
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Six Months ended December 31, 2001
(in millions of A$)
External Sales | Earnings Before Interest, Tax, Depreciation & Amortization (EBITDA)(1) | Earnings Before Interest and Tax (EBIT)(2) | ||||
Segments | ||||||
Exploration and Production | 140.8 | 102.3 | 57.4 | |||
Retail | 990.8 | 67.7 | 34.8 | |||
Generation | 27.6 | 10.4 | 2.5 | |||
Networks | 63.5 | 12.2 | 10.9 | |||
Total | 1,222.8 | 192.6 | 105.5 | |||
Assets | Depreciation And Amortization | Capital Expenditure and Acquisitions | ||||
Segments | ||||||
Exploration and Production | 828.9 | 44.9 | 75.0 | |||
Retail | 1,373.9 | 33.0 | 39.1 | |||
Generation | 287.6 | 8.0 | 31.2 | |||
Networks | 173.3 | 1.3 | 0.8 | |||
Unallocated | 210.1 | — | — | |||
Total | 2,873.8 | 87.1 | 146.1 | |||
(1) | EBITDA is used extensively in our Australian financial statements to assess segment performance and is net profit before the deduction of depreciation, amortization, interest, tax and outside equity interests. EBITDA is the sum of amounts disclosed as EBIT and Depreciation and Amortization. |
(2) | EBIT is used extensively in our Australian financial statements to assess segment performance and is net profit before the deduction of interest, tax and outside equity interests. EBIT is reconciled to net profit after tax for the six months ended December 31, 2002 of A$89.6 million (December 31, 2001: A$54.7 million) by adding back interest expense of A$24.8 million (December 31, 2001: A$22.5 million); income tax of A$47.2 million (December 31, 2001: A$25.8 million) and net profit attributable to outside equity interests of A$2.1 million (December 31, 2001: A$2.6 million). |
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Profit
We reported a net profit after tax of A$89.6 million for the six months ended December 31, 2002, an increase of A$34.9 million, or 64%, compared to A$54.7 million for the six months ended December 31, 2001. The increase was principally due to improved contribution from our Retail segment following electricity tariff increases of 13.5% in January 2002 and our acquisition of the CitiPower retail electricity business in July 2002. There were no significant items in the result for either this half or the prior corresponding period.
Basic earnings per share increased by 59% to A$0.138 per share on a capital base that increased by 4.7%. We declared an interim dividend of A$0.05 per share in relation to the six months ended December 31, 2002 on February 20, 2003, franked to A$0.02, which will be paid on March 24, 2003, compared to a fully franked interim dividend of A$0.02 per share for the six months ended December 31, 2001. The Dividend Reinvestment Plan will apply to this dividend and a 5% discount will be provided, based on the average of share price transactions for Origin Energy Limited shares over the five trading days prior to the date of record, March 7, 2003.
Revenue
Revenue from ordinary activities for the six months ended December 31, 2002 increased A$432.4 million or 35%, to A$1,669.9 million from A$1,237.5 million in the six months ended December 31, 2001. This revenue consists principally of sales of energy and related products as well as revenue from rendering of services, distributions received and proceeds from the sale of assets. Our total external energy sales revenue, that is, sales revenue after eliminating intersegment sales, increased A$435.3 million or 36%, to A$1,658.1 million in the six months ended December 31, 2002 from A$1,222.8 million in the six months ended December 31, 2001. Revenue increased from all segments, but most notably in the Retail and Generation segments as discussed below.
External sales revenue for the Retail segment increased to A$1,396.4 million in the six months ended December 31, 2002 from A$990.8 million in the six months ended December 31, 2001, an increase of A$405.6 million or 41%. This was due mainly to the addition of revenues from the retail electricity business that we acquired from CitiPower in July 2002 which accounted for A$304.8 million of this increase. In addition, on January 13, 2002, we received a 13.5% increase in electricity tariffs in the area covered by the Powercor electricity retail business acquired by us in June 2001 which added a further A$36.3 million of revenue. These increases in revenue are related to fundamental growth of the retail business and we have now established a dynamic, dual-fuel energy retail business with over 2 million customers.
External sales for the Generation segment increased to A$40.9 million in the six months ended December 31, 2002 from A$27.6 million in the six months ended December 31, 2001, an increase of A$13.3 million, or 48%. This increase was principally as a result of increased contribution from power generation reflecting our acquisition of a 50% interest in the Worsley Cogeneration power station which contributed an additional A$0.9 million to revenue, the commissioning of the new Quarantine Power Station which contributed an additional A$2.6 million to revenue, and the impact of significantly higher prices received for sales from merchant plants which contributed an additional A$7.9 million to revenue. These new assets have helped strengthen our position and expertise in both the area of contracted cogeneration plants in the case of Worsley and the development of merchant plants addressing the peak component of the electricity market in the case of Quarantine.
External sales revenue for the Networks segment increased to A$76.2 million in the six months ended December 31, 2002 from A$63.5 million in the six months ended December 31, 2001, an increase of A$12.7 million or 20%. This increase was principally due to the cost recovery of increased responsibilities for the implementation of Full Retail Contestability activities under our operating and maintenance contracts with Envestra Limited which contributed an additional A$12.5 million to revenue.
External sales revenue for the Exploration and Production segment increased to A$144.6 million in the six months ended December 31, 2002 from A$140.8 million in the six months ended December 31, 2001, an increase of A$3.8 million or approximately 3%. This increase was primarily due to higher prices for gas and liquids, which including the effect of currency and oil price hedging added A$9.1 million to revenues, offsetting lower oil production from the sale of producing fields in the Eromanga Basin during early 2002, which
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reduced revenues by A$4.4 million. The balance, a reduction of A$0.9 million, was attributable to a variety of factors. The discovery of oil in the Hovea, Jingemia, and Eremia fields in the Perth Basin during 2001 and 2002 is likely to add significantly to oil production as these fields are appraised and developed during the coming year, reversing the decline in revenue following the sale of the Eromanga Basin oil fields.
The total of revenues received from ordinary activities also includes distributions received of A$7.7 million in the six months ended December 31, 2002 from our interest in Envestra Limited compared to distributions received of A$6.7 million in the six months ended December 31, 2001, an increase of A$1.0 million. This increase was due to an increase in our shareholding in Envestra Limited of 17.4 million shares in March 2002.
No businesses were disposed of during the six months ended December 2002. In the six months ended December 31, 2002 proceeds from the sale of assets were A$2.2 million, principally from the sale of minor operating assets. In the six months ended December 2001 the equivalent amount was A$0.7 million.
Expenses
Our total expenses for ordinary activities excluding borrowing costs were A$1,512.5 million in the six months ended December 31, 2002 compared to A$1,134.7 million in the six months ended December 31, 2001, an increase of A$377.8 million, or 33%. Expenses consist primarily of raw materials and consumables used in production, depreciation and amortization, employee expenses, contracting costs, exploration and production costs and administrative and other expenses.
Raw materials and consumables expense increased to A$1,105.4 million in the six months ended December 31, 2002 from A$803.3 million in the six months ended December 31, 2001, an increase of A$302.1 million or 38%. This increase principally reflected the impact of six months operations of the CitiPower retail electricity business acquired in July 2002, which added A$261.3 million to electricity purchasing costs, higher supply costs for the LPG business, which added A$5.2 million to costs, and other miscellaneous factors in total increasing costs by A$35.6 million.
Depreciation and amortization increased to A$92.3 million in the six months ended December 31, 2002 from A$87.1 million in the six months ended December 31, 2001, an increase of A$5.2 million or 6%. This was primarily due to an increase of A$5.5 million in the depreciation charges associated with computer systems for full retail contestability to A$5.8 million, and an increase in the amortization charge of A$2.4 million to A$9.5 million against commodity hedging contracts acquired from Powercor in June 2001, partially offset by a decrease of A$2.2 million in the depreciation of buildings, plant and equipment.
Employee expenses increased to A$101.6 million in the six months ended December 31, 2002 from A$77.4 million, an increase of A$24.2 million or 31%. This was largely due to an increase in employee numbers from 2,423 to 2,961 predominantly as a result of our growing retail businesses.
Administrative and other expenses increased to A$55.3 million in the six months ended December 31, 2002 from A$34.8 million in the six months ended December 31, 2001, an increase of A$20.5 million or 59% principally due to additional administrative expenses associated with the growth of the Retail business, which added A$10.5 million to costs, an increase in insurance costs of A$3.4 million, and an increase in duties paid in relation to the Networks business of A$6.6 million.
Exploration and production costs increased to A$35.2 million in the six months ended December 31, 2002 from A$25.3 million in the six months ended December 31, 2001, an increase of A$9.9 million or 39%. This increase was largely due to an increase in exploration provisioning of A$6.6 million from A$7.0 million to A$13.6 million and an increase in expenses associated with joint ventures of A$3.2 million, including charges relating to areas that are operated by other companies, such as our main producing asset, the Cooper Basin.
Net interest expense
Net interest expense increased A$2.3 million or 10% to A$24.8 million in the six months ended December 31, 2002 from A$22.5 million in the six months ended December 31, 2001. The increase was largely due to increased borrowing costs associated with funding our acquisition of the electricity retail business of CitiPower in July 2002 and acquisition of coal seam gas assets, also in July 2002.
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Income tax expense
Income tax expense increased A$21.4 million or 83% to A$47.2 million in the six months ended December 31, 2002 from A$25.8 million in the six months ended December 31, 2001. The increase primarily reflects the higher pre-tax profit and reduced tax loss transfers available to the company, which has raised the effective tax rate from 31% to 34%.
Liquidity and Capital Resources
Capital Expenditure
Capital expenditure on plant and equipment for the six months ended December 31, 2002 totaled A$57.3 million, a decrease of A$15.2 million or 21% from A$72.6 million in the prior corresponding period. This was due to capital expenditure on the Quarantine Power Station and systems to support retail contestability that were included in the six months ended December 31, 2001, but were not repeated in the six months ended December 31, 2002. Expenditure on the Quarantine Power project is complete and only minor expenditure is anticipated on systems to support retail contestability going forward.
Expenditure on exploration and development totaled A$97.0 million in the six months ended December 31, 2002, an increase of A$37.7 million or 64% in the six months ended December 31, 2001. This was largely due to the acquisition of various coal seam gas interests in Queensland for a total A$48.0 million. We may undertake further acquisitions of this nature in the future if other companies decide to bring assets to market but this cannot be predicted at this time.
The acquisition in December 2002 of the Mt Stuart power station and related entities for an effective consideration of A$93.3 million was not settled until January 2003 and accordingly is not reflected in the cash flows in the six months ended December 31, 2002. There were no transactions for the purchase of controlled entities completed in the six months ended December 31, 2002, compared with A$7.7 million in the previous period where we paid for the acquisition of the Gasmart appliance stores in Victoria.
Expenditure on the purchase of businesses was A$131.6 million in the six months ended December 31, 2002, representing the purchase of the CitiPower retail electricity business in July 2002. There was no expenditure on the purchase of businesses in the equivalent period last year. We do not anticipate significant acquisitions in this area in the foreseeable future.
Borrowings
As at December 31, 2002, our total debt was A$735.1 million, compared to A$650.4 million at June 30, 2002. After deducting cash of A$30.4 million, net borrowings were A$704.7 million as at December 31, 2002. Our net debt to equity ratio at December 31, 2002 was approximately 41% compared to 39% at June 30, 2002. The increase in this ratio was primarily due to higher borrowings required to fund acquisitions described under Capital Expenditure above.
Our short-term borrowings were A$105.0 million at December 31, 2002 compared to A$85.2 million at June 30, 2002, comprising approximately 14% of our total debt at December 31, 2002. Of this short-term debt, A$90.0 million was outstanding at December 31, 2002 under our unsecured working capital facility. This facility was renewed in January 2003 and has a fixed maturity of February 2004.
Our long-term borrowings at December 31, 2002 were A$630.1 million compared to A$565.1 million at June 30, 2002, comprising approximately 86% of our total debt. Our long-term debt is all payable later than two years but not later than five years.
On March 11, 2003 we issued US$250 million of senior unsecured notes in three series with maturities ranging from 2010 to 2018 to US institutional investors in a traditional private placement. The details of each of the three tranches are set out below:
• | Tranche A: US$75 million due July 1, 2010 with a coupon rate of 4.75% payable semi-annually. |
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• | Tranche B: US$80 million due March 11, 2015 with a coupon rate of 5.39% payable semi-annually. |
• | Tranche C: US$95 million due March 12, 2018 with a coupon rate of 5.66% payable semi annually. |
The notes are repayable in full at their maturity date. The notes are senior unsecured obligations of Origin Energy Limited and are guaranteed by a group of wholly-owned subsidiaries of Origin Energy.
The proceeds of this debt issuance have been used to repay existing Australian dollar denominated indebtedness under various bank loan facilities. We have swapped the repayment of both principal and interest in relation to these notes into Australian dollars through foreign exchange swaps with an aggregate exposure of A$423 million. See Section 11 of our Annual Report on Form 20-F/A, filed with the Securities and Exchange Commission on July 15, 2003, for a more detailed discussion of our foreign exchange rate position.
The weighted average interest rate of our interest bearing debt was 5.7% at December 31, 2002, compared to 5.9% as at June 30, 2002. We expect that the issuance of the US$250 million of senior unsecured notes described above will not result in any significant change to our weighted average interest rate in the short to medium term. As at March 17, 2003, other than the US$250 million of senior unsecured notes which have been swapped into Australian dollars as described above, all our interest bearing debt was denominated in Australian dollars.
Cash flows from operating, investing and financing activities
The following table summarizes our cash flows from operating activities, investing activities and financing activities for the periods shown
Six months ended December 31, | ||||||
2002 | 2001 | |||||
(in millions of $A) | ||||||
Operating activities | 219.2 | 146.0 | ||||
Investing activities | (283.7 | ) | (139.5 | ) | ||
Financing activities | 84.3 | (0.8 | ) |
Net cash provided by operating activities increased to A$219.2 million in the six months ended December 31, 2002 from A$146.0 million for the six months ended December 31, 2001. This was due to a significant increase in cash received from customers of A$417.8 million, outweighing an increase in cash paid to suppliers and employees of A$345.2 million.
Net interest and other borrowing costs increased to A$24.5 million in the six months ended December 31, 2002, from A$22.4 million in the six months ended December 31, 2001, primarily due to higher average borrowings over the period. Income taxes paid of A$15.4 million in the six months ended December 31, 2002 are consistent with the level of income taxes paid in the previous corresponding period.
Net cash flows used in investing activities were A$283.7 million in the six months ended December 31, 2002 compared to A$139.5 million for the six months ended December 31, 2001, an increase of A$144.2 million. This reflects the acquisition of the electricity retail business of CitiPower in July 2002, the acquisition of additional coal seam gas assets, also in July 2002, and expenditure in our oil and gas operations, particularly in relation to development of oil discoveries in the Perth Basin.
Net cash flows provided/(net cash flows used) by financing activities increased to A$84.3 million in the six months ended December 31, 2002 compared to A$(0.8) million in the six months ended December 31, 2001. Proceeds from issues of shares and options were A$3.8 million in the six months ended December 31, 2002 compared to A$197.9 million in the previous corresponding period. This was partially offset by net proceeds of borrowings of A$91.5 million in the six months ended December 31, 2002 compared to a net repayment of borrowings of A$176.0 million in the previous corresponding period. Dividends paid were A$10.9 million compared to A$22.7 million in the previous corresponding period.
Equity Capital
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Share capital increased by A$14.1 million in the six months ended December 31, 2002, principally as a result of a high level of participation in the Dividend Reinvestment Plan which increased equity capital by A$10.3 million and the exercise of options under the Senior Executive Option Plan.
Dividends
An interim dividend of A$0.05 per share franked to A$0.02 per share was declared in conjunction with the release of our interim financial results on February 20, 2003. The dividend had a record date of March 7, 2003 and was paid on March 24, 2003. The Dividend Reinvestment Plan applied to this dividend with a 5% discount to the weighted average of share price transactions for Origin Energy Limited shares over the five trading days prior to the date of record.
The consolidated financial statements and schedule of Origin Energy Limited as of June 30, 2002 and 2001 and for each of the years in the three year period ended June 30, 2002 have been incorporated by reference herein in reliance on the reports of KPMG, independent accountants, given on the authority of said firm as experts in auditing and accounting.
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ORIGIN ENERGY LIMITED
PAGE | ||
Unaudited Half Yearly Report for the six months ended December 31, 2002 and 2001 | F-2 | |
Unaudited Consolidated Statement of Financial Performance for the six months ended December 31, 2002 and 2001 | F-3 | |
Notes to the Unaudited Consolidated Statement of Financial Performance for the six months ended December 31, 2002 and 2001 | F-4 | |
Unaudited Consolidated Statement of Financial Position as at December 31, 2002 and 2001 | F-7 | |
Notes to Unaudited Consolidated Statement of Financial Position | F-9 | |
Unaudited Consolidated Statement of Cash Flows for the six months ended December 31, 2002 and 2001 | F-10 | |
Other notes to the Unaudited Consolidated Financial Statements | F-11 |
CURRENCY OF PRESENTATION
We publish our financial statements in Australian dollars. In our financial statements references to “dollars”, “A$” or “$” are to Australian dollars.
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HALF YEARLY REPORT
(unaudited)
Name of Entity
Origin Energy Limited and its Controlled Entities
ACN | Half Yearly (tick) | Preliminary (tick) | Half year Ended (‘current period’) | ||||
000 051 696 | ü | 31 December 2002 |
For announcement to the market
$’A’000 | |||||||
Revenues from ordinary activities(item 1.1) | up | 34.9 | % to | 1,669,903 | |||
Profit from ordinary activities after tax attributable to members(item 1.22) | up | 63.9 | % to | 89,599 | |||
Profit from extraordinary items after tax attributable to members(item 2.5) | 0.0 | % | — | ||||
Net profit for the period attributable to Members(item 1.11) | up | 63.9 | % to | 89,599 |
Dividends | Amount per security | Franked amount per security at 30% tax | ||
Interim dividend(item 15.6) | 5.0 cents | 2.0 cents | ||
Previous corresponding period (item 15.7) | 2.0 cents | 2.0 cents | ||
Date for determining entitlements to the dividend(see item 15.2) | 7 March 2003 |
Brief explanation of any of the figures reported above (see Note 1) and short details of any bonus or cash issue or other | NIL | |
This unaudited half yearly report should be read in conjunction with the most recent annual financial report. |
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Unaudited Consolidated statement of financial performance for the six months ended December 31, 2002 and 2001
Current period $A’000 | Previous $A’000 | % Change +/- | |||||||||
1.1 | Revenues from ordinary activities(see items 1.23-1.25) | 1,669,903 | 1,237,468 | 34.9 | % | ||||||
1.2 | Expenses from ordinary activities(see items 1.26+1.27) | (1,512,481 | ) | (1,134,693 | ) | 33.3 | % | ||||
1.3 | Borrowing costs | (25,485 | ) | (23,318 | ) | 9.3 | % | ||||
1.4 | Share of net profits of associates and joint venture entities(see item 16.7) | 6,928 | 3,543 | 95.5 | % | ||||||
1.5 | Profit from ordinary activities before tax | 138,865 | 83,000 | 67.3 | % | ||||||
1.6 | Income tax on ordinary activities | 47,201 | 25,776 | 83.1 | % | ||||||
1.7 | Profit from ordinary activities after tax | 91,664 | 57,224 | 60.2 | % | ||||||
1.8 | Profit from extraordinary items after tax(see item 2.5) | — | — | — | |||||||
1.9 | Net profit | 91,664 | 57,224 | 60.2 | % | ||||||
1.10 | Net profit attributable to outside equity interests | 2,065 | 2,562 | (19.4 | %) | ||||||
1.11 | Net profit for the period attributable to members | 89,599 | 54,662 | 63.9 | % | ||||||
Non-owner transaction changes in equity | |||||||||||
1.12 | Net increase in asset revaluation reserve | — | — | ||||||||
1.13 | Net exchange differences on translation of financial statements of self-sustaining foreign operations: — Net gain/(loss) on translation of assets and liabilities of overseas controlled entities | 1,126 | (708 | ) | |||||||
1.14 | Other revenue, expense and initial adjustments recognized directly in equity | — | — | ||||||||
1.15 | Initial adjustments from UIG transitional provisions | — | — | ||||||||
1.16 | Total revenues, expenses and valuation adjustments attributable to members of Origin Energy Limited recognized directly in equity(Items 1.12 to 1.15) | 1,126 | (708 | ) | |||||||
1.17 | Total changes in equity from non-owner related transactions attributable to members of Origin Energy Limited | 90,725 | 53,954 | ||||||||
Earnings per share (EPS)
Current Period | Previous corresponding period | % Change +/- | |||||||
1.18 | Basic earnings per share | 13.8 cents | 8.7 cents | 58.6 | % | ||||
1.19 | Diluted earnings per share | 13.7 cents | 8.7 cents | 57.5 | % | ||||
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Notes to the unaudited consolidated statement of financial performance for the six months ended December 31, 2002 and 2001
Profit from ordinary activities attributable to members
Current period $A’000 | Previous corresponding period $A’000 | |||||
1.20 | Profit from ordinary activities after tax(item 1.7) | 91,664 | 57,224 | |||
1.21 | Less outside equity interests | 2,065 | 2,562 | |||
1.22 | Profit from ordinary activities after tax, attributable to members | 89,599 | 54,662 | |||
Revenue and expenses from ordinary activities—by nature
Current Period $A’000 | Previous corresponding period $A’000 | |||||
Revenue from sale of goods | 1,581,882 | 1,159,176 | ||||
Revenue from rendering of services | 76,256 | 63,579 | ||||
1.23 | Total sales revenue | 1,658,138 | 1,222,755 | |||
1.24 | Interest revenue | 681 | 816 | |||
1.25 | Other revenue from ordinary activities | 11,084 | 13,897 | |||
Revenue from ordinary activities | 1,669,903 | 1,237,468 | ||||
1.26 | Details of relevant expenses: | |||||
Raw materials and consumables used, and changes in finished goods and work in progress | 1,105,392 | 803,263 | ||||
Advertising | 10,184 | 5,297 | ||||
Amortization of intangibles | 11,914 | 12,221 | ||||
Amortization of commodity hedging contracts | 9,537 | 7,092 | ||||
Bad and doubtful debts | 5,194 | 2,243 | ||||
Employee expenses | 101,602 | 77,366 | ||||
Exploration and production costs | 35,219 | 25,331 | ||||
Consultancy costs | 3,782 | 3,778 | ||||
Contracting costs | 57,081 | 53,214 | ||||
Motor vehicle expenses | 8,119 | 8,404 | ||||
Net book value of assets sold | 2,521 | 1,669 | ||||
Occupancy expenses | 13,424 | 9,765 | ||||
Repairs and maintenance | 8,242 | 7,586 | ||||
Royalties | 14,212 | 14,833 | ||||
Administration and other expenses from ordinary activities | 55,255 | 34,803 | ||||
1.27 | Depreciation and amortization excluding amortization of intangibles(see item 2.3) | 70,803 | 67,828 | |||
Expenses from ordinary activities | 1,512,481 | 1,134,693 | ||||
Borrowing costs | 25,485 | 23,318 | ||||
Total expenses | 1,537,966 | 1,158,011 | ||||
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Current Period $A’000 | Previous corresponding period $A’000 | |||||
Capitalized outlays | ||||||
1.28 | Interest costs capitalized in asset values | — | — | |||
1.29 | Outlays capitalized in intangibles (unless arising from an acquisition of a business) | — | — | |||
Consolidated retained profits
Current Period $A’000 | Previous corresponding period $A’000 | |||||||
1.30 | Retained profits at the beginning of the financial period | 1,095,158 | 999,223 | |||||
1.31 | Net profit attributable to members (item 1.11) | 89,599 | 54,662 | |||||
1.32 | Net transfers (to) and from reserves | 79 | (8 | ) | ||||
1.33 | Net effect of changes in accounting policies | — | — | |||||
1.34 | Dividends and other equity distributions paid or payable | (26 | ) | (14,708 | ) | |||
1.35 | Retained profits at the end of the financial period | 1,184,810 | 1,039,169 | |||||
Intangible and extraordinary items
Consolidated—current period | |||||||||||
Before tax $A’000 | Related tax (expense) / benefit $A’000 | Related outside equity interests $A’000 | Amount (after tax) attributable to members $A’000 | ||||||||
2.1 | Amortization of goodwill | 5,905 | — | — | 5,905 | ||||||
2.2 | Amortization of other intangibles | 6,009 | — | — | 6,009 | ||||||
2.3 | Total amortization of intangibles | 11,914 | — | — | 11,914 | ||||||
2.4 | Extraordinary items (details) | — | — | — | — | ||||||
2.5 | Total extraordinary items | — | — | — | — | ||||||
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Consolidated—previous corresponding period | ||||||||||
Before tax $A’000 | Related tax (expense) / benefit $A’000 | Related outside equity interests $A’000 | Amount (after tax) attributable to members $A’000 | |||||||
2.1 | Amortization of goodwill | 2,814 | — | — | 2,814 | |||||
2.2 | Amortization of other intangibles | 9,407 | — | — | 9,407 | |||||
2.3 | Total amortization of intangibles | 12,221 | — | — | 12,221 | |||||
2.4 | Extraordinary items (details) | — | — | — | — | |||||
2.5 | Total extraordinary items | — | — | — | — | |||||
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Unaudited consolidated statement of financial position as at December 31, 2002 and 2001
At end of current period $A’000 | As shown in last annual report $A’000 | As shown in $A’000 | ||||||
Current assets | ||||||||
4.1 | Cash assets | 30,418 | 17,255 | 21,155 | ||||
4.2 | Receivables | 508,939 | 485,538 | 388,347 | ||||
4.3 | Other financial assets | 4,111 | — | 681 | ||||
4.4 | Inventories | 53,246 | 46,392 | 48,065 | ||||
4.6 | Other | 72,190 | 37,064 | 63,824 | ||||
4.7 | Total current assets | 668,904 | 586,249 | 522,072 | ||||
Non-current assets | ||||||||
4.8 | Receivables | 22,350 | 21,499 | 32,792 | ||||
4.9 | Investments (equity accounted) | 56,680 | 53,347 | 50,132 | ||||
4.10 | Other investments and other financial assets | 186,037 | 196,135 | 201,153 | ||||
4.12 | Exploration and evaluation expenditure capitalized | 138,978 | 125,624 | 84,828 | ||||
4.13 | Development properties | 9,443 | 5,031 | 3,850 | ||||
4.14 | Other property, plant and equipment (net) | 1,305,353 | 1,155,372 | 1,123,259 | ||||
4.15 | Intangibles (net) | 730,932 | 634,436 | 696,699 | ||||
4.16 | Tax assets | 199,354 | 171,654 | 150,490 | ||||
4.17 | Other | 8,316 | 8,587 | 8,507 | ||||
4.18 | Total non-current assets | 2,657,443 | 2,371,685 | 2,351,710 | ||||
4.19 | Total assets | 3,326,347 | 2,957,934 | 2,873,782 | ||||
Current liabilities | ||||||||
4.20 | Payables | 475,070 | 371,534 | 351,555 | ||||
4.21 | Interest bearing liabilities | 105,000 | 85,238 | 47,041 | ||||
4.22 | Tax liabilities | 787 | 3,290 | 7,637 | ||||
4.23 | Provisions | 68,894 | 67,451 | 81,526 | ||||
4.24 | Other | 4,297 | — | — | ||||
4.25 | Total current liabilities | 654,048 | 527,513 | 487,759 | ||||
Non-current liabilities | ||||||||
4.26 | Payables | 5,881 | 6,100 | 28,188 | ||||
4.27 | Interest bearing liabilities | 630,125 | 565,139 | 520,000 | ||||
4.28 | Tax liabilities | 230,746 | 197,055 | 183,084 | ||||
4.29 | Provisions | 74,345 | 36,088 | 85,330 | ||||
4.31 | Total non-current liabilities | 941,097 | 804,382 | 816,602 | ||||
4.32 | Total liabilities | 1,595,145 | 1,331,895 | 1,304,361 | ||||
4.33 | Net assets | 1,731,202 | 1,626,039 | 1,569,421 | ||||
Equity | ||||||||
4.34 | Capital/contributed equity | 399,124 | 385,039 | 381,366 | ||||
4.35 | Reserves | 113,394 | 112,347 | 114,569 | ||||
4.36 | Retained profits | �� | 1,184,810 | 1,095,158 | 1,039,169 | |||
4.37 | Equity attributable to members of the parent entity | 1,697,328 | 1,592,544 | 1,535,104 | ||||
4.38 | Outside equity interest in controlled entities | 33,874 | 33,495 | 34,317 | ||||
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At end of current period $A’000 | As shown in last annual report $A’000 | As shown in $A’000 | ||||||
4.39 | Total equity | 1,731,202 | 1,626,039 | 1,569,421 | ||||
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Notes to the unaudited consolidated statement of financial position
Exploration and evaluation expenditure capitalized
Current period $A’000 | Previous $A’000 | |||||||
5.1 | Opening balance | 125,624 | 63,688 | |||||
5.2 | Expenditure incurred during current period | 14,461 | 24,770 | |||||
5.3 | Expenditure written off during current period | (308 | ) | (5,167 | ) | |||
Increase in provision for write-down during current period | (11,621 | ) | (1,835 | ) | ||||
5.4 | Acquisitions, disposals, revaluation increments, etc | 18,126 | 3,372 | |||||
5.5 | Expenditure transferred to Mine Properties | (7,304 | ) | — | ||||
5.6 | Closing balance as shown in the consolidated statement of financial position(item 4.12) | 138,978 | 84,828 | |||||
Development properties
6.1 to 6.7 not applicable
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Unaudited consolidated statement of cash flows for six months ended December 31, 2002 and 2001
Current period $A’000 | Previous $A’000 | |||||||
Cash flows related to operating activities | ||||||||
7.1 | Receipts from customers | 1,913,902 | 1,496,076 | |||||
7.2 | Payments to suppliers and employees | (1,653,187 | ) | (1,308,034 | ) | |||
7.3 | Dividends/distributions received from associates and joint venture entities | 4,000 | 4,000 | |||||
7.4 | Other dividends received | 399 | 409 | |||||
7.5 | Interest and other items of similar nature received | 1,093 | 817 | |||||
7.6 | Interest and other costs of finance paid | (25,615 | ) | (23,182 | ) | |||
7.7 | Income taxes paid | (15,353 | ) | (14,128 | ) | |||
7.8 | Other (subvention payments) | (6,000 | ) | (10,000 | ) | |||
7.9 | Net operating cash flows | 219,239 | 145,958 | |||||
Cash flows related to investing activities | ||||||||
7.10 | Payment for purchases of property, plant and equipment | (57,338 | ) | (72,573 | ) | |||
Payment for exploration and development | (96,991 | ) | (59,253 | ) | ||||
7.11 | Proceeds from sale of property, plant and equipment | 2,200 | 692 | |||||
Payment for purchase of controlled entities | — | (7,651 | ) | |||||
Payment for purchase of businesses | (131,614 | ) | — | |||||
7.12 | Payment for purchases of equity investments | — | (700 | ) | ||||
7.17 | Net investing cash flows | (283,743 | ) | (139,485 | ) | |||
Cash flows related to financing activities | ||||||||
7.18 | Proceeds from issues of securities (shares, options, etc) | 3,794 | 197,892 | |||||
7.19 | Proceeds from borrowings | 328,115 | — | |||||
7.20 | Repayment of borrowings | (236,662 | ) | (176,040 | ) | |||
7.21 | Dividends paid | (10,943 | ) | (22,653 | ) | |||
7.23 | Net financing cash flows | 84,304 | (801 | ) | ||||
7.24 | Net increase/(decrease) in cash held | 19,800 | 5,672 | |||||
7.25 | Cash at beginning of period | 10,551 | 15,910 | |||||
7.26 | Exchange rate adjustments toitem 7.25 | 67 | (427 | ) | ||||
7.27 | Cash at end of period (see reconciliation of cash) | 30,418 | 21,155 | |||||
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Non-cash financing and investing activities
Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows are as follows:
(i) | Issue of shares in respect of dividend reinvestment plan $10,291,000 (2001: $5,017,000). |
(ii) | On 13 December 2002 Origin Energy acquired all of the Mt Stuart Power Station and related entities (refer 13.1) from AES Corporation for an effective consideration of $93,255,000. At 31 December 2002 this amount had not been settled and thus is not reflected in the statement of cash flows. |
Reconciliation of cash
Reconciliation of cash at the end of the period (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows:
Current period $A’000 | Previous $A’000 | |||||
8.1 | Cash on hand and at bank | 30,365 | 17,632 | |||
8.2 | Deposits at call | — | 250 | |||
8.3 | Bank overdraft | — | — | |||
8.4 | Other (term deposits) | 53 | 3,273 | |||
8.5 | Total cash at end of period(item 7.27) | 30,418 | 21,155 | |||
Other notes to the financial statements
Ratios
Current period | Previous corresponding period | |||||||
Profit before tax/revenue | ||||||||
9.1 | Consolidated profit from ordinary activities before tax(item 1.5) as a percentage of revenue(item 1.1) | 8.3 | % | 6.7 | % | |||
Profit after tax/equity interests | ||||||||
9.2 | Consolidated net profit from ordinary activities after tax attributable to members(item 1.11) as a percentage of equity at the end of the period(item 4.37) | 5.3 | % | 3.6 | % | |||
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Earnings per security (EPS)
Current period | Previous Corresponding period | |||||
10 | Details of basic and diluted EPS reported separately in accordance with paragraph 9 and 18 of AASB 1027:“Earnings Per Share” are as follows. | |||||
Basic EPS | 13.8 cents | 8.7 cents | ||||
Diluted EPS | 13.7 cents | 8.7 cents | ||||
Weighted average number of shares used as the denominator | ||||||
Weighted average number of ordinary shares used as the denominator in calculating basic earnings per share | 649,429,172 | 627,644,269 | ||||
Weighted average number of ordinary shares and potential ordinary shares used as the denominator in calculating diluted earnings per share | 653,164,478 | 630,990,582 | ||||
Reconciliation of earnings used in calculating EPS: | $A’000 | $A’000 | ||||
Basic and alternative EPS | ||||||
Net profit | 91,664 | 57,224 | ||||
Less: Outside equity interests | 2,065 | 2,562 | ||||
Amount used as numerator in calculating basic and diluted EPS | 89,599 | 54,662 | ||||
Information concerning the classification of securities
(a) Fully paid ordinary shares
Fully paid ordinary shares are classified as ordinary shares for the purposes of calculating basic and diluted earnings per share.
(b) Share Options
Share options granted under the Senior Executive Option Plan have been classified as potential ordinary shares and have been included in the determination of diluted earnings per share. The options have not been included in the determination of basic earnings per share.
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NTA Backing
Current period | Previous corresponding period | |||||
11.1 Net tangible asset backing per ordinary security | $ | 1.48 | $ | 1.30 | ||
Discontinuing operations
12.1 not applicable
Control gained over entities having material effect
13.1 | Names of entities | AES Australia Holding BV AES Mt Stuart BV AES Mt Stuart General Partnership |
13.2 | Consolidated operating profit/(loss) and extraordinary items after tax of the entities since the date in the current period on which control was acquired | $(76,000) | ||
13.3 | Date from which such profit has been calculated | 13 December 2002 | ||
13.4 | Operating profit/(loss) and extraordinary items after tax of the entities for the whole of the previous corresponding period. | N/A |
Comparative—31 December 2001: Not applicable
Loss of control of entities having material effect
14.1 to 14.5 not applicable
Dividends
15.1 | Date the dividend is payable | 24 March 2003 | ||
15.2 | Date to determine entitlements to the dividend (i.e. on the basis of registrable transfers received by 5.00 pm if securities are not CHESS approved, or security holding balances established by 5.00 pm or such later time permitted by SCH Business Rules if securities are CHESS approved) | 7 March 2003 |
Amount per security
Franking rate applicable | Amount per security | Franked amount per security at 30% tax | ||||
15.6 | Interim dividend: Current year | 5.0 cents | 2.0 cents | |||
15.7 | Previous year | 2.0 cents | 2.0 cents |
The financial effect of the current period dividend has not been brought to account in the half-year consolidated financial report for the period ended 31 December 2002.
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Interim dividend on all securities
Current period $A’000 | Previous corresponding period $A’000 | |||||
15.10 | Ordinary securities (refer below) | — | 12,926 | |||
Add: Final prior year dividend (over)/under provided | 26 | 1,782 | ||||
15.13 | Total | 26 | 14,708 |
The dividend plans shown below are in operation: Dividend Reinvestment Plan
The last date for receipt of election notices for the dividend | 7 March 2003 |
Any other disclosures in relation to dividends
Subsequent to reporting date, the directors have declared an interim dividend of five cents per ordinary share, franked to two cents per ordinary share. The total amount of this dividend is $32,634,000. In accordance with the adoption of AASB 1044 “Provisions, Contingent Liabilities and Contingent Assets”, as the interim dividend had not been declared on or before the reporting date, it has not been recognized as a liability at reporting date or disclosed as a dividend paid or payable in consolidated retained profits.
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Details of aggregate share of profits/(losses) of associates and joint venture entities
Group’s share of associates’ and joint venture entities’:
Current period $A’000 | Previous corresponding period $A’000 | |||||
16.1 | Profit from ordinary activities before tax | 9,471 | 5,337 | |||
16.2 | Income tax on ordinary activities | 2,543 | 1,794 | |||
16.3 | Profit from ordinary activities after income tax | 6,928 | 3,543 | |||
16.4 | Extraordinary items net of tax | — | — | |||
16.5 | Net profit | 6,928 | 3,543 | |||
16.6 | Adjustment | — | — | |||
16.7 | Share of net profits of associates and joint venture entities | 6,928 | 3,543 | |||
Material interests in entities which are not controlled entities
Name of entity | Percentage of ownership interest held at the end of the period | Contribution to net profit (item 1.9) | ||||||||||
Current period | Previous corresponding period | Current period A$’000 | Previous A$’000 | |||||||||
17.1 | Equity accounted associates and joint venture entities | |||||||||||
Bulwer Island Energy Partnership | 50 | % | 50 | % | 3,699 | 2,245 | ||||||
17.2 | Total | 3,699 | 2,245 | |||||||||
17.3 | Other material interests | |||||||||||
Envestra Limited | 19.1 | % | 19.9 | % | 7,692 | 6,701 | ||||||
17.4 | Total | 7,692 | 6,701 | |||||||||
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Issued and quoted securities at end of current period
Category of securities | Number issued | Number quoted | Issue price | Amount paid- up | |||||||
18.3 | Ordinary securities | 652,317,960 | 652,317,960 | — | — | ||||||
18.4 | Changes during current period | ||||||||||
(a) Increases through issues | 4,488,808 | 4,488,808 | — | — | |||||||
(b) Decreases through returns of capital, buy-backs, redemptions, consolidations | — | — | — | — | |||||||
18.7 | Options | Exercise price | Expiry date | ||||||||
30,000 | — | $ | 2.92 | 2 Mar 2003 | |||||||
455,000 | — | $ | 1.66 | 4 Dec 2003 | |||||||
50,000 | — | $ | 1.50 | 4 Dec 2003 | |||||||
30,000 | — | $ | 1.66 | 19 Jan 2004 | |||||||
1,250,000 | — | $ | 2.24 | 1 Feb 2004 | |||||||
1,584,300 | — | $ | 1.76 | 6 Dec 2004 | |||||||
139,400 | — | $ | 1.78 | 6 Dec 2004 | |||||||
1,830,000 | — | $ | 1.27 | 1 Mar 2005 | |||||||
400,000 | — | $ | 1.27 | 1 Mar 2005 | |||||||
495,000 | — | $ | 2.74 | 31 Aug 2006 | |||||||
3,495,000 | — | $ | 3.20 | 16 Dec 2006 | |||||||
30,000 | — | $ | 3.20 | 14 Jan 2007 | |||||||
2,580,000 | — | $ | 3.56 | 19 Dec 2007 | |||||||
18.8 | Issued during current period | 2,580,000 | — | $ | 3.56 | 19 Dec 2007 | |||||
18.9 | Exercised during current period | 1,125,000 | — | $ | 2.92 | 11 Dec 2002 | |||||
190,000 | — | $ | 1.66 | 4 Dec 2003 | |||||||
30,000 | — | $ | 1.66 | 19 Jan 2004 | |||||||
81,600 | — | $ | 1.76 | 6 Dec 2004 | |||||||
18.10 | Expired during current period | 35,000 | — | $ | 2.92 | 11 Dec 2002 | |||||
70,000 | — | $ | 5.02 | 11 Dec 2002 | |||||||
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PRIMARY REPORTING—BUSINESS SEGMENTS
Exploration and Production | Retail | Generation | Networks | Consolidated | |||||||||||||||||||||
Current Period | Previous Corresponding Period | Current Period | Previous Corresponding Period | Current Period | Previous Corresponding Period | Current Period | Previous Corresponding Period | Current Period | Previous Corresponding Period | ||||||||||||||||
A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | ||||||||||||||||
REVENUE | |||||||||||||||||||||||||
Total Sales | 167,904 | 163,653 | 1,396,446 | 990,825 | 40,916 | 27,630 | 76,226 | 63,522 | 1,681,492 | 1,245,630 | |||||||||||||||
Intersegment Sales Elimination ** | (23,354 | ) | (22,875 | ) | — | — | — | — | — | — | (23,354 | ) | (22,875 | ) | |||||||||||
External Sales Revenue | 144,550 | 140,778 | 1,396,446 | 990,825 | 40,916 | 27,630 | 76,226 | 63,522 | 1,658,138 | 1,222,755 | |||||||||||||||
Other Revenue | 885 | 6,020 | 1,004 | 779 | 88 | — | 9,107 | 7,098 | 11,084 | 13,897 | |||||||||||||||
Total Segment Revenue | 145,435 | 146,798 | 1,397,450 | 991,604 | 41,004 | 27,630 | 85,333 | 70,620 | 1,669,222 | 1,236,652 | |||||||||||||||
Unallocated Revenue | 681 | 816 | |||||||||||||||||||||||
Revenue from Ordinary | 1,669,903 | 1,237,468 | |||||||||||||||||||||||
RESULT | |||||||||||||||||||||||||
Segment Result | 47,119 | 57,419 | 93,523 | 34,187 | 4,684 | (514 | ) | 11,415 | 10,867 | 156,741 | 101,959 | ||||||||||||||
Share of Net Profits of Associates and Joint Venture Entities | — | — | 1,124 | 566 | 5,804 | 2,977 | — | — | 6,928 | 3,543 | |||||||||||||||
Earnings Before Interest and Tax (EBIT) | 47,119 | 57,419 | 94,647 | 34,753 | 10,488 | 2,463 | 11,415 | 10,867 | 163,669 | 105,502 | |||||||||||||||
Net Interest Expense | (24,804 | ) | (22,502 | ) | |||||||||||||||||||||
Profit from | 138,865 | 83,000 | |||||||||||||||||||||||
Income Tax Expense | (47,201 | ) | (25,776 | ) | |||||||||||||||||||||
Net Profit | 91,664 | 57,224 | |||||||||||||||||||||||
EARNINGS BEFORE INTEREST, TAX, DEPRECIATION AND AMORTIZATION (EBITDA) | 90,248 | 102,340 | 133,830 | 67,706 | 19,545 | 10,426 | 12,300 | 12,171 | 255,923 | 192,643 | |||||||||||||||
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DEPRECIATION AND AMORTIZATION | 43,129 | 44,921 | 39,183 | 32,953 | 9,057 | 7,963 | 885 | 1,304 | 92,254 | 87,141 | ||||||||||
OTHER NON-CASH EXPENSES | 16,352 | 8,772 | 20,272 | 10,733 | 750 | 1,552 | 1,084 | 212 | 38,458 | 21,269 | ||||||||||
ACQUISITIONS OF NON-CURRENT ASSETS (includes capital expenditure) | 135,141 | 74,964 | 152,480 | 39,094 | 94,097 | 31,200 | 95 | 811 | 381,813 | 146,069 | ||||||||||
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SEGMENTS (continued)
PRIMARY REPORTING—BUSINESS SEGMENTS
Exploration and Production | Retail | Generation | Networks | Consolidated | ||||||||||||||||
Current Period | Previous Corresponding Period | Current Period | Previous Corresponding Period | Current Period | Previous Corresponding Period | Current Period | Previous Corresponding Period | Current Period | Previous Corresponding Period | |||||||||||
A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | A$’000 | |||||||||||
ASSETS | ||||||||||||||||||||
Segment Assets | 967,829 | 828,938 | 1,524,680 | 1,370,149 | 316,875 | 241,219 | 171,845 | 173,286 | 2,981,229 | 2,613,592 | ||||||||||
Investments in Associates and Joint Venture Entities | — | — | 5,793 | 3,721 | 50,887 | 46,411 | — | — | 56,680 | 50,132 | ||||||||||
Total Segment Assets | 967,829 | 828,938 | 1,530,473 | 1,373,870 | 367,762 | 287,630 | 171,845 | 173,286 | 3,037,909 | 2,663,724 | ||||||||||
Unallocated Assets* | 288,437 | 210,058 | ||||||||||||||||||
Total Assets | 3,326,346 | 2,873,782 | ||||||||||||||||||
LIABILITIES | ||||||||||||||||||||
Segment Liabilities | 76,183 | 72,303 | 362,392 | 321,023 | 112,362 | 75,099 | 27,078 | 19,471 | 578,015 | 487,896 | ||||||||||
Unallocated Liabilities* | 1,017,130 | 816,465 | ||||||||||||||||||
Total Liabilities | 1,595,145 | 1,304,361 | ||||||||||||||||||
* | Unallocated assets consists of cash and deferred tax assets and other unallocatable assets. Unallocated liabilities consists of current and non-current interest bearing liabilities, current and deferred tax liabilities and other unallocatable liabilities. |
** | Intersegment pricing is determined on an arm’s length basis. |
Industry Segments: | Products and Services: | |
Exploration and Production | Natural gas and oil | |
Retail | Natural gas, electricity, LPG, energy related products and services | |
Generation | Natural gas-fired cogeneration and power generation, clean energy services and project development | |
Networks | Infrastructure investment and management services |
SECONDARY REPORTING—GEOGRAPHICAL SEGMENTS
The consolidated entity operates predominantly in Australia. More than 90% of revenue, profit, assets and acquisition of non-current assets relate to operations in Australia.
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Additional notes to the Half Yearly Report
1. INCOME TAX EXPENSE
Current period $A’000 | Previous $A’000 | |||||
Income tax expense on profit from ordinary activities (item 1.6) | 47,201 | 25,776 | ||||
Income tax expense on pretax accounting profit: | ||||||
(i) at Australian tax rate | 41,660 | 24,900 | ||||
(ii) adjustment for difference between Australian and overseas tax rates | (167 | ) | 35 | |||
Income tax expense on pretax accounting profit at standard rates | 41,493 | 24,935 | ||||
Add/(subtract) tax effect of major items causing permanent differences: | ||||||
Non-taxable distributions received | (1,615 | ) | (1,404 | ) | ||
Depreciation and amortization | 6,496 | 8,418 | ||||
Capital losses not previously recognized | 114 | — | ||||
Share of associates’ net profit | (1,173 | ) | (389 | ) | ||
Past tax losses and exploration expenditure recouped | (182 | ) | (1,976 | ) | ||
Under/(over) provision of tax in previous years | 1,927 | 912 | ||||
Tax rate change on prior year adjustments | (286 | ) | 856 | |||
Net benefit of subvention payments | — | (5,652 | ) | |||
Other items | 427 | 76 | ||||
5,708 | 841 | |||||
Income tax expense for the period | 47,201 | 25,776 | ||||
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Additional notes to the Half Yearly Report
2. CONTRIBUTED EQUITY
Current period $A’000 | As shown in last annual report $A’000 | |||
Issued and paid-up capital | ||||
652,317,960 (June 2002: 647,829,152) ordinary shares, fully paid | 399,124 | 385,039 | ||
Ordinary share capital | ||||
Balance at the beginning of the financial period | 385,039 | 178,457 | ||
Shares issued: | ||||
— Nil (June 2002: 44,196,526) shares in accordance with the Share Placement | — | 123,332 | ||
— Nil (June 2002: 26,500,287) shares in accordance with the Share Purchase Plan | — | 73,563 | ||
— 1,426,600 (June 2002: 761,650) shares in accordance with the Senior Executive Option Plan | 3,794 | 1,570 | ||
— 3,062,208 (June 2002: 2,693,165) shares in accordance with the Dividend Reinvestment Plan | 10,291 | 8,117 | ||
— Nil (June 2002: 629,145) shares in accordance with the Employee Share Plan | — | — | ||
Total movements in ordinary share capital | 14,085 | 206,582 | ||
399,124 | 385,039 | |||
3. CONTINGENT LIABILITIES
Current period $A’000 | As shown in last annual report $A’000 | |||
Unsecured bank guarantees | 173,140 | 99,566 | ||
Origin Energy Limited has given to its bankers letters of responsibility in respect of accommodation provided from time to time by the banks to Origin Energy Limited’s wholly or partly-owned controlled entities.
Warranties and indemnities have been given by entities in the consolidated entity in relation to environmental liabilities for certain properties as part of the terms and conditions of divestments.
A number of sites within the Origin Energy Group have been identified as contaminated, generally as a result of prior activities conducted at the sites, and review and appropriate implementation of clean-up requirements for these is ongoing. For sites where the requirements can be assessed and costs estimated, clean-up costs have been expensed or provided for. Ongoing environmental management programmes ensure that appropriate controls are in place at all sites.
Certain entities within the consolidated entity are subject to various lawsuits and claims including native title claims. Any liabilities arising from such lawsuits and claims are not expected to have a material adverse effect on the consolidated financial statements.
A Demerger Deed was entered into in the 2000 year containing certain indemnities and other agreements between Origin Energy Limited and Boral Limited and their respective controlled entities covering the transfer of the businesses, investments, debt and assets of Boral Limited and some temporary shared arrangements.
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Additional notes to the Half Yearly Report
4. RECONCILIATION FROM AUSTRALIAN GAAP TO US GAAP
A. Principal differences between Australian GAAP and US GAAP
Financial statements in the United States are prepared in accordance with accounting principles generally accepted in the United States (US GAAP). In Australia, financial statements are prepared in accordance with applicable accounting standards issued by the Australian Accounting Standards Board and codified in the Australian Corporations Law (Australian GAAP).
The half-year consolidated financial report does not include full note disclosures of the type normally included in an annual financial report. A full description of the principal differences between the accounting policies, where material to the preparation of Origin Energy Limited’s financial statements, may be found in the consolidated entity’s full financial statements for the year ended June 30, 2002 filed on Form 20-F/A with the Securities Exchange Commission on July 15, 2003.
The accounting policies have been consistently applied by each entity in the consolidated entity and, except where stated, are consistent with those of the previous year.
Dividends
The new Australian accounting standard AASB 1044 “ Provisions, Contingent Liabilities and Contingent Assets” was applied for the first time from 1 July 2002. Under AASB 1044 the accounting treatment for dividends is now consistent with US GAAP and, accordingly, only dividends declared or publicly recommended on or before the reporting date are recognised as a liability.
Goodwill amortization
Statement of Financial Accounting Standard (SFAS) No. 142 “Goodwill and Other Intangible Assets” was adopted on 1 July 2002. Under SFAS No 142, goodwill is no longer required to be systematically amortized over its economic useful life, not exceeding forty years, but rather is subject to an impairment test. Origin Energy determined that the value of goodwill was not impaired as at 1 July 2002, being the date of adoption of SFAS No. 142. Accordingly, all goodwill amortization expensed during the period under Australian GAAP has been reversed for US GAAP reporting purposes.
B. Recently issued accounting standards and pronouncements under U.S. GAAP
In July 2002 the Financial Accounting Standards Board (“FASB”) issued Statement No. 146,Accounting for Costs Associated with Exit or Disposal Activities (“Statement 146”). Statement 146 requires that a liability for costs associated with an exit or disposal activity be recorded when the liability is incurred and measured initially at fair value. Statement 146 applies to costs associated with:
(a) an exit activity that does not involve an entity newly acquired in a business combination; or
(b) a disposal activity within the scope of Statement 144.
Because the provisions of this statement are to be applied prospectively to exit or disposal activities initiated after December 31, 2002, the impact of adopting this statement cannot be determined.
In October 2002, the Emerging Issues Task Force (“EITF”) reached a consensus under EITF 02-3,Recognition of Reporting of Gains and Losses on Energy Trading Contracts, to rescind EITF Issue No. 98-10 (and related interpretative guidance of EITF 00-17 and Topic D-105) and precluded mark-to-market accounting for energy trading contracts that are not derivatives pursuant to SFAS No. 133. Prior to being rescinded, EITF 98-10 had required mark-to-market accounting be applied to all energy trading contracts. Additionally, EITF 02-3 stipulated that all mark-to-market gains and losses on energy trading contracts should be included on a net basis in the income statement. EITF 02-3 also prescribed specific disclosure requirements in relation to energy trading contracts. The consensus regarding the rescission of EITF 98-10 is effective for fiscal periods beginning after December 15, 2002 for all contracts held by an entity, but is effective for all new contracts entered into after October 25, 2002. We have assessed the impact of EITF 02-3 on our
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financial statements and results of operations and are of the opinion that EITF 02-3 has no material impact on our results of operations, financial position or liquidity.
In November 2002 the FASB issued Interpretation No. 45,Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others(“FIN 45”). FIN 45 prescribes the disclosures to be made by a guarantor in its annual financial statements regarding its obligations under guarantees. FIN 45 also requires the recognition of a liability by a guarantor at the inception of certain guarantees that are entered into or modified after December 31, 2002. The impact of FIN 45 on our future consolidated financial statements will depend upon whether we enter into, or modify, any material guarantee arrangements.
In December 2002 the FASB issued Statement No. 148,Accounting for Stock-Based Compensation—Transition and Disclosure, an amendment of FASB Statement No. 123 (“Statement 148”). Statement 148 provides alternative methods of transition for a voluntary change to the fair value method of accounting for stock-based employee compensation. In addition, this Statement amends the disclosure requirements of Statement 123 to require prominent disclosure in annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. Statement 148 will be effective for our financial statements in the year ending June 30, 2003. We make an adjustment for the expense recognized in relation to stock-based employee compensation in our reconciliation of net income under Australian GAAP to U.S. GAAP with this adjustment being calculated using the fair value method prescribed by Statement 123 for all options issued after July 1, 2001. We do not believe the adoption of Statement 148 will have a material impact on our results of operations, financial position or liquidity.
In January 2003 the FASB issued interpretation No. 46,Consolidation of Variable Interest Entities (“FIN 46”). FIN 46 provides guidance regarding the identification of variable interest entities and determining when such entities are to be consolidated. FIN 46 will be effective for our Financial Statements in the fiscal year ending June 30, 2003. We do not believe the adoption of FIN 46 will materially impact our results of operations, financial position or liquidity.
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Additional notes to the Half Yearly Report
4. RECONCILIATION FROM AUSTRALIAN GAAP TO US GAAP (continued)
C. Impact on Net Income
Application of US GAAP would have had the following effect on net income:
Dec-2002 A$’000 | Dec-2001 A$’000 | |||||
Operating profit after income tax as reported in the consolidated financial statements | 91,664 | 57,224 | ||||
Outside equity interests | (2,065 | ) | (2,562 | ) | ||
Operating profit in accordance with Australian GAAP | 89,599 | 54,662 | ||||
Adjustments: (before income tax and outside equity interests) | ||||||
Depreciation, depletion and amortization of: | ||||||
Buildings | 116 | 138 | ||||
Mine Properties | (4,600 | ) | (2,789 | ) | ||
Goodwill and Licences (1) | 4,206 | (1,537 | ) | |||
Deferred expenses | 993 | 411 | ||||
Employee costs | (2,325 | ) | (2,796 | ) | ||
Profit/(Loss) on sale of non-current assets | 73 | — | ||||
Restructuring and other provisions | (11,811 | ) | (8,267 | ) | ||
Software development and implementation costs | 70 | (1,877 | ) | |||
Derivative financial instruments | 80,260 | 50,622 | ||||
Discount on long term obligations | (305 | ) | (688 | ) | ||
Movement in provision for diminution in investments | 560 | — | ||||
156,836 | 87,879 | |||||
Adjustment: Tax effect of adjustments | (16,823 | ) | (6,862 | ) | ||
Net adjustment after tax before outside equity interests | 140,013 | 81,017 | ||||
Adjustment: outside equity interests share of after tax adjustments | 306 | (174 | ) | |||
Approximate net income in accordance with US GAAP | 140,319 | 80,843 | ||||
Other comprehensive income, net of taxes: | ||||||
Foreign currency translation adjustments net of income tax (tax expense/(benefit) 2002: $Nil, 2001: $Nil) | 1,126 | (708 | ) | |||
Unrealized gains/ (losses) on investments (tax benefit 2002: $5,449,000, tax benefit 2001: $3,609,000) | 12,714 | 8,422 | ||||
Comprehensive income in accordance with US GAAP | 154,159 | 88,557 | ||||
Accumulated other comprehensive income balances: | ||||||
Foreign currency translation adjustments | 8,846 | 8,456 | ||||
Additional minimum liability related to pensions | (1,883 | ) | (1,883 | ) | ||
Unrealized gains/ (losses) on investments | 866 | (2,405 | ) | |||
7,829 | 4,168 | |||||
Basic earnings per share in accordance with US GAAP | 21.6 | ¢ | 12.9 | ¢ | ||
The weighted average number of shares used in the calculation of basic EPS for each period is: 2002: 649,429,172, 2001: 627,644,269) | ||||||
Diluted earnings per share in accordance with US GAAP | 21.5 | ¢ | 12.8 | ¢ | ||
The weighted average number of shares used in the calculation of diluted EPS for each period is: 2002: 653,164,478, 2001: 620,990,582) | ||||||
The following table includes profit and loss account information prepared in accordance with Australian GAAP but presented in US GAAP format: | ||||||
Operating revenue | 1,658,138 | 1,222,755 | ||||
Operating expenses: | ||||||
Cost of sales | 1,105,392 | 803,263 | ||||
Other operating expenses | 314,835 | 244,289 | ||||
Depreciation and amortization | 92,254 | 87,141 | ||||
Total operating expenses | 1,512,481 | 1,134,693 | ||||
Operating profit before interest and tax | 145,657 | 88,062 | ||||
Other income | 11,765 | 14,713 | ||||
Interest expense | (25,485 | ) | (23,318 | ) | ||
Income tax expense | (47,201 | ) | (25,776 | ) | ||
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Dec-2002 A$’000 | Dec-2001 A$’000 | |||||
Net income after interest and tax | 84,736 | 53,681 | ||||
Equity share of associated entities after tax | 6,928 | 3,543 | ||||
Minority interest in operating profits/losses after interest and tax | (2,065 | ) | (2,562 | ) | ||
Net profit after income tax | 89,599 | 54,662 | ||||
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Additional notes to the Half Yearly Report
4. RECONCILIATION FROM AUSTRALIAN GAAP TO US GAAP (continued)
D. Impact on Equity
Application of US GAAP would have had the following effect on Equity:
Dec-2002 A$’000 | Jun-2002 A$’000 | Dec-2001 A$’000 | |||||||
Equity in accordance with Australian GAAP | 1,731,202 | 1,626,039 | 1,569,421 | ||||||
Outside equity interests | (33,874 | ) | (33,495 | ) | (34,317 | ) | |||
1,697,328 | 1,592,544 | 1,535,104 | |||||||
Adjustments to items in the Statements of Financial Position: (before income tax and outside equity interests): | |||||||||
Current Asset | |||||||||
Other | (168 | ) | (1,292 | ) | (3,724 | ) | |||
Non-Current Assets | |||||||||
Other Financial Assets | 86,380 | (12,603 | ) | 26,136 | |||||
Property, plant and equipment | (22,763 | ) | (18,422 | ) | (12,142 | ) | |||
Intangibles(1) | 143,442 | 167,007 | 181,847 | ||||||
Other | (5,961 | ) | (5,830 | ) | (5,783 | ) | |||
Current Liabilities | |||||||||
Provisions(2) | 12,464 | 25,335 | 31,121 | ||||||
Non-Current Liabilities | |||||||||
Provisions | (10,457 | ) | (12,132 | ) | (17,477 | ) | |||
Deferred Tax Liability | (146,449 | ) | (157,836 | ) | (173,361 | ) | |||
1,753,816 | 1,576,771 | 1,561,721 | |||||||
Adjustment: Tax effect of adjustments | 39,784 | 64,047 | 46,959 | ||||||
Net adjustment after tax before outside equity interests | 1,793,600 | 1,640,818 | 1,608,680 | ||||||
Adjustment: outside equity interests share of after tax adjustments | 10,840 | 10,534 | 10,517 |
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Approximate Equity in accordance with US GAAP | 1,804,440 | 1,651,352 | 1,619,197 | |||
Except as otherwise noted below, all explanations of adjustments to reconcile from Australian GAAP to US GAAP are consistent with those of the previous year and may be found in the consolidated entity’s full financial statements for the year ended June 30, 2002 on Form 20-F/A filed with the Securities Exchange Commission on July 15, 2003.
(1) | From July 1, 2002 under US GAAP goodwill is no longer required to be systematically amortised over its useful life but rather is subject to an impairment test. Origin Energy determined that the value of goodwill was not impaired as at July 1, 2002, being the date of adoption of SFAS No. 142. Accordingly, all goodwill amortisation expensed during the period under Australian GAAP has been reversed for US GAAP reporting purposes. |
(2) | From July 1, 2002, the accounting treatment for dividends under Australian GAAP changed and is now consistent with US GAAP. |
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