Australian Pipeline Trust (APA) today announced changes to the composition of its expected results for the financial year ending 2004, following a decision to enter into tax consolidation.
Until the legislation enabling APA, a trust, to elect to be the head entity of a tax-consolidated group, received Royal Assent on June 25, 2004, APA was unable to participate in tax consolidation. APA has now made its decision to enter into tax consolidation with effect from 1 July 2003.
By entering into tax consolidation, APA will take account of a one-off income tax benefit of $92.9 million, which will be reflected in the 2004 full-year results. Given that the implementation and legislation for tax consolidation is evolving, there is potential for further adjustment, and the market will be advised should that occur.
The income tax benefit arises from a restatement of APA’s deferred tax liability (“DTL”) as a consequence of the uplift in tax value of pipeline assets. The DTL had been created primarily as a result of accelerated tax depreciation on the trust’s pipeline assets. It is expected that in the future APA’s effective tax rate should trend towards the corporate tax rate.
APA is reviewing the impact of its election to enter into tax consolidation as it applies to its tax profile and franking credit availability.
APA may also be positively impacted by the decision of SCP Investments (No 1) Pty Limited (SCP), which has an 88.2% interest in the Goldfields Gas Transmission pipeline to elect to participate in the Australian Income Tax Consolidation regime. APA is awaiting confirmation of the quantum of the one-off adjustment, and the market will be advised when known.
The tax consolidation election does not impact on the underlying business, which is continuing to perform as expected.

JK McDonald
Managing Director