27 NOVEMBER 2009 NEW ZEALAND GAZETTE, No. 172 4167

TRANSPOWER NEW ZEALAND LIMITED LINES BUSINESS

4. Expenditure on Activities

| | LINES BUSINESS |
|---------------------------------------------------------------|-----------------------|-----------------------|
| | 2009 | 2008 |
| | $000 | $000 |
| Transmission charges | | |
| Transfer payments to "Other Transpower Businesses" | | |
| Asset maintenance: | | |
| Disconnection/reconnection services | - | - |
| Metering data | 2,361 | 2,822 |
| Consumer-based load control services | - | - |
| Royalty and patent expenses | - | - |
| Avoided transmission charges on account of own generation | - | - |
| Other - IT support | 9,226 | 9,189 |
| Other - insurance | - | - |
| Total | 12,187 | 12,011 |

Expenses to entities that are not related parties for:

| | | |
| Asset maintenance: | 127,438 | 118,051 |
| Disconnection/reconnection services | - | - |
| Information technology costs | 16,104 | 15,532 |
| Metering data | - | - |
| Consumer-based load control services | - | - |
| Royalty and patent expenses | - | - |
| Total | 143,542 | 133,583 |

| Employee salaries and redundancies | 36,929 | 36,090 |
| Consumer billing and information system expense | 1,285 | 285 |

| Depreciation | | |
| Depreciation of system assets | 117,034 | 110,036 |
| Depreciation of other assets | 7,247 | 5,216 |
| Total | 124,781 | 115,252 |

| Amortisation of: | | |
| Other intangibles | 6,190 | 5,213 |
| Total | 6,190 | 5,213 |

| Corporate and administration expenses | 12,926 | 13,331 |
| Human resource expenses | 5,575 | 5,753 |
| Marketing / advertising expenses | 335 | 385 |
| Merger and acquisition expenses | - | - |
| Takeover defence expenses | - | - |
| Research and development expenses | - | - |
| Legal and consultancy expenses | 10,827 | 9,901 |
| Study grants and donations | 1,361 | 1,611 |
| Directors' fees | 556 | 566 |

| Audit fees | | |
| Audit fees paid to principal auditors | 315 | 300 |
| Audit fees paid to other auditors | 60 | 18 |
| Fees paid for other services provided by principal and other auditors | 1,523 | 1,950 |
| Total | 1,898 | 2,268 |

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

| Local authority rates expense | 2,627 | 2,739 |
| AC loss-rental rebates (distributed to retailers/customers) expense | - | - |
| Rebates to consumers due to ownership interests | - | - |
| HVDC share of reserves | 27,452 | 14,773 |
| Subvention payments | - | - |
| Unusual expenses | - | - |

| Other expenses not listed - Industry related expenses | 8,032 | 12,930 |
| Other expenses not listed - Stock and asset write-offs | 7,161 | 7,115 |

| Total operating expenses | 402,795 | 373,824 |