10 DECEMBER NEW ZEALAND GAZETTE 4537

FORM FOR THE DERIVATION OF FINANCIAL AND EFFICIENCY MEASURES FROM THE
FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 1999

in
formula calculations ROA ROE ROI
$000 $000 $000

Earnings before interest and tax (EBIT) a 247,068
Net profit after tax (NPAT) n 111,012 247,068
Amortised goodwill g
Subvention payment s
Depreciation of SFA at BV d 91,597 91,597 91,597
Depreciation of SFA at ODV d 91,597 91,597 91,597
ODV depreciation tax alignment b
Subvention payment tax adjustment s*t
Interest tax Shield q 32,414
Revaluations r (14,113)
Income tax p 39,712

Numerator (as adjusted) a + g + s +d 247,068 n+g+s-s*t +d-b 111,012 a+g-q+r+s+d-p 160,829

Fixed assets at year beginning (FA o) 2,294,704 2,294,704 2,294,704
Fixed assets at year end (FA i) 2,193,947 2,193,947 2,193,947
Net working capital at year beginning (NWC o) 5,246 5,246 5,246
Net working capital at year end (NWC I) 41,821 41,821 41,821
Average total funds employed (ATFE) c 2,267,859 2,267,859 2,267,859
Total equity at year beginning (TE o) 907,069 907,069 907,069
Total equity at year end (TE i) 874,277 874,277 874,277
Average total equity k 890,673 890,673 890,673
Works under construction at year beginning (WUC o) 51,515 51,515 51,515
Works under construction at year end (WUC i) 76,245 76,245 76,245
Average total works under construction c 63,880 63,880 63,880
Revaluations r (14,113) (14,113) (14,113)

Goodwill asset at year beginning (GW o)
Goodwill asset at year end (GW i)
Average goodwill asset m (GW o + GW i)/2
Subvention payment for previous year S o - t
Subvention payment tax adjustment for previous year
Subvention payment for this year S i - t
Subvention payment tax adjustment for this year
Average subvention payment & related tax adjustment v [(S o + S i)(1 - t)]/2

System fixed assets at year beginning at book value (SFA bvo) 2,182,000 2,182,000 2,182,000
System fixed assets at year end at book value (SFA bvi) 2,089,000 2,089,000 2,089,000
Average value of system fixed assets at book value f 2,135,500 2,135,500 2,135,500

System fixed assets at year beginning ODV value (SFA odvo) 2,182,000 2,182,000 2,182,000
System fixed assets at year end ODV value (SFA odvi) 2,089,000 2,089,000 2,089,000
Average value of system fixed assets at ODV value h 2,135,500 2,135,500 2,135,500

Denominator (as adjusted) c - e - f + h 2,203,979 k-e-m+v-f+h 826,793 e-e-.5r-f+h 2,211,036

Financial performance measure ATFE adj x 100 adj/ATFE adj 13.4 x 100 adj/ATFE adj 7.3

Transpower has excluded from EBIT the change in revaluation reserve. In 1998 the Accounting Return on Equity and on Assets included the
movement in the revaluation reserve. Including the devaluation of $14.1 million alters the ROA to 10.6 and the ROE to 11.7.

Paragraph 2.18 of the Electricity Information Disclosure Handbook issued by the Ministry of Commerce, requires
that prior year figures are not to be recalculated. Accordingly year beginning balances represent balances of the Transpower Group
rather than Transpower Lines Business. This does not have a material impact on the financial and efficiency measures.