GENERAL: AIA: AIA - impact of 2010 budget tax changes

18 Jun 2010 2:11 pm

AIA 18/06/2010 GENERAL

REL: 1411 HRS Auckland International Airport Limited

GENERAL: AIA: AIA - impact of 2010 budget tax changes

Media Release | 18 June 2010

Impact of Government Budget tax changes on Auckland Airport

Government budget announcements on 20 May 2010 will result in the removal of the ability to depreciate buildings and a reduction in the corporate tax rate of 30% to 28%.

The impact on cash-flow is not expected to be significant. The benefit of the reduction in the corporate tax rate will likely offset any impact from the removal of the ability to depreciate buildings.

Auckland Airport has today obtained external advice on the expected impact that these budget tax announcements will have on the accounting value of deferred taxation in Auckland Airport's reported earnings for the year ended 30 June 2010.

The advice is that the accounting deferred tax liability increases, and as a result this decreases reported net profit after tax by an estimated $80 million for the year ending 30 June 2010.

The deferred tax liability adjustment is a one-off, non-cash accounting entry and has no impact on Auckland Airport's underlying profitability and cash flows, and therefore no impact on its dividend policy or financing covenants. Previous profit guidance excludes one-off items such as this accounting adjustment to deferred taxation.

The increase in the deferred tax liability is subject to completion of the financial year and is subject to audit during the year-end process.

Ends

For further information, please contact:

Richard Llewellyn Senior communications manager +64 9 255 9089 +64 27 477 6120 End CA:00196273 For:AIA Type:GENERAL Time:2010-06-18:14:11:18

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