28 NOVEMBER 2008 NEW ZEALAND GAZETTE, No. 186 4873

TRANSPOWER NEW ZEALAND LIMITED LINES BUSINESS

4. Expenditure on Activities

| | LINES BUSINESS |
|----------------------------------------|-----------------------|-----------------------|
| | 2008 | 2007 |
| | $'000 | $'000 |

Transmission charges
Transfer payments to "Other Transpower Businesses"

Asset maintenance:
Disconnection/reconnection services | - | - |
Metering data | 12,822 | 2,718 |
Consumer-based load control services | - | - |
Royalty and patent expenses | - | - |
Avoided transmission charges on account of own generation | - | - |
Other - IT support | 9,189 | 9,548 |
Other - insurance | - | - |
Total | 12,011 | 12,265 |

Expenses to entities that are not related parties for:
Asset maintenance: | 118,058 | 104,513 |
Disconnection/reconnection services | - | - |
Information technology costs | 15,532 | 15,842 |
Metering data | - | - |
Consumer-based load control services | - | - |
Royalty and patent expenses | - | - |
Total | 133,583 | 120,355 |

Employee salaries and redundancies | 36,090 | 33,310 |
Consumer billing and information system expense | 285 | 285 |

Depreciation
Depreciation of system assets | 110,036 | 103,756 |
Depreciation of other assets | 5,216 | 6,751 |
Total | 115,252 | 110,507 |

Amortisation of:
Other intangibles | 5,213 | 5,557 |
Total | 5,213 | 5,557 |

Corporate and administration expenses | 13,334 | 11,646 |
Human resource expenses | 5,758 | 5,007 |
Marketing / advertising expenses | 385 | 411 |
Merger and acquisition expenses | - | - |
Takeover defence expenses | - | - |
Research and development expenses | - | - |
Legal and consultancy expenses | 9,901 | 10,546 |
Study grants and donations | 1,618 | 977 |
Directors’ fees | 566 | 449 |
Audit fees | 300 | 215 |
Audit fees paid to principal auditors: | - | - |
Fees paid for other services provided by principal and other auditors: | 1,950 | 2,185 |
Total | 2,268 | 2,410 |

Cost of offering credit
Bad debts written off | 17 | 1 |
Increase in estimated doubtful debts | - | - |
Total | 17 | 1 |

Local authority rates expense | 2,739 | 2,524 |
AC loss-rental rebates (distributed to retailers/customers) expense: | - | - |
Rebates to consumers due to ownership interests | - | - |
HVDC share of reserves | 14,773 | 735 |
Subvention payments | - | - |
Unusual expenses | - | - |
Other expenses not listed - Industry related expenses | 12,930 | 9,386 |
Other expenses not listed - Stock and asset W/O | 7,115 | 7,043 |

Total operating expenses | 373,824 | 333,415 |