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New Zealand Gazette – 2008 – No. 39

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✨ Electricity Financial Performance Measures

26 FEBRUARY 2008

NEW ZEALAND GAZETTE, No. 39

925

VECTOR LIMITED

ELECTRICITY LINES BUSINESS

Form for the Derivation of Financial Performance Measures from Financial Statements

For the year ended 31 March 2007

SCHEDULE 1 - PART 7

Derivation Table	Input and Calculation	Symbol in formula	ROF	ROE	ROI
Operating surplus before interest and income tax from financial statements	250,046
Operating surplus before interest and income tax adjusted pursuant to requirement 18 (OSBIT)	250,046
Interest on cash, bank balances, and short-term investments (ISTI)	103
OSBIT minus ISTI	249,943	a	249,943		249,943
Net surplus after tax from financial statements	41,042
Net surplus after tax adjusted pursuant to requirement 18 (NSAT)	41,042	n		41,042
Amortisation of goodwill and amortisation of other intangibles	30,244	g	add 30,244	add 30,244	add 30,244
Subvention payment	-	s	add	add	add
Depreciation of SFA at SY (v)	78,210
Depreciation of SFA at ODV (y)	63,354
ODV depreciation adjustment	14,856	d	add 14,856	add 14,856	add 14,856
Subvention payment tax adjustment	-	s*t		deduct	deduct
Interest tax shield	40,269	q			deduct 40,269
Revaluations	-	r
Income tax	53,897	p			deduct 53,897
Numerator			274,852	85,951	177,686
			OSBIT** = a + g + d	NSAT* = n + g + s + d - st	OSBIT* = a + g - q + r + d - st - p

Fixed assets at end of previous financial year (FA₀)	2,536,630
Fixed assets at end of current financial year (FA₁)	2,602,372
Adjusted net working capital at end of previous financial year (ANWC₀)	(6,007)
Adjusted net working capital at end of current financial year (ANWC₁)	(27,177)
Average total funds employed (ATFE)	2,551,409	c	2,551,409		2,551,409
	(or requirement 32 time-weighted average)
Total equity at end of previous financial year (TE₀)	879,688
Total equity at end of current financial year (TE₁)	874,814
Average total equity	877,251	k		877,251
	(or requirement 32 time-weighted average)
WUC at end of previous financial year (WUC₀)	69,732
WUC at end of current financial year (WUC₁)	115,348
Average total works under construction	92,540	e	deduct 92,540	deduct 92,540	deduct 92,540
	(or requirement 32 time-weighted average)
Revaluations	-	r
Half of Revaluations	-	r/2			deduct
Intangible assets at end of previous financial year (IA₀)	499,470
Intangible assets at end of current financial year (IA₁)	469,226
Average total intangible asset	484,348	m		deduct 484,348
	(or requirement 32 time-weighted average)
Subvention payment at end of previous financial year (S₀)	-
Subvention payment at end of current financial year (S₁)	-
Subvention payment tax adjustment at end of previous financial year	-
Subvention payment tax adjustment at end of current financial year	-
Average subvention payment & related tax adjustment	-	v		add
System fixed assets at end of previous financial year as book value (SFA₀ᵦᵥ)	2,442,362
System fixed assets at end of current financial year as book value (SFA₁ᵦᵥ)	2,475,000
Average value of system fixed assets at book value	2,458,681	f	deduct 2,458,681	deduct 2,458,681	deduct 2,458,681
	(or requirement 32 time-weighted average)
System fixed assets at year beginning at ODV value (SFA₀ₒ𝒹ᵥ)	1,986,468
System fixed assets at end of current financial year at ODV value (SFA₁ₒ𝒹ᵥ)	2,031,645
Average value of system fixed assets at ODV value	2,009,056	h	add 2,009,056	add 2,009,056	add 2,009,056
	(or requirement 32 time-weighted average)
Denominator			2,009,244	(149,762)	2,009,244
			ATFE*** = c - e - f + h	Ave TE*** = k - e - m + v - f + h	ATFE*** = c - e - f + h

Financial Performance Measure:			13.7%	(57.4%)	8.8%
			ROF = OSBIT / ATFE* x 100	ROE = NSAT / Ave TE* x 100	ROI = OSBIT / ATFE* x 100

t = maximum statutory income tax rate applying to corporate entities
bv = book value
ave = average
odv = optimised deprival valuation
subscript '0' = end of the previous financial year
subscript '1' = end of the current financial year
ROF = return on funds
ROE = return on equity
ROI = return on investment
Interest expense accruals have been excluded from the calculation of ROF and ROI. Including the interest expense accruals ROF is 13.8% and ROI is 8.9%.

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