Balance Sheet of VBA

Consolidated
2010 2009 2008 2007
$m $m $m $m
Current assets
Cash and cash equivalents 814.70 475.90 603.90 704.00
Trade and other receivables 141.10 122.30 108.50 74.30
Inventories 0.00 0.00 0.60 0.40
Derivative financial instruments 36.90 11.90 126.80 26.40
Current tax assets 0.00 1.70 23.50 0.00
Total current assets 992.70 611.80 863.30 805.10
Non-current assets
Receivables 0.30 0.00 0.00 0.00
Investments accounted for using the equity method 7.30 6.70 6.30 2.80
Other financial assets 58.40 49.00 24.00 24.80
Derivative financial instruments 0.00 1.90 60.90 0.00
Property, plant and equipment 2753.90 2645.70 2336.00 1425.00
Intangible assets 53.30 51.10 46.70 47.30
Deferred tax assets 6.00 0.70 0.70 0.70
Total non-current assets 2879.20 2755.10 2474.60 1500.60
Total assets 3871.90 3366.90 3337.90 2305.70
Current liabilities
Trade and other payables 323.80 268.70 224.40 163.30
Interest-bearing liabilities 251.50 233.30 303.70 86.70
Provisions 82.40 75.10 43.40 44.00
Derivative financial instruments 34.90 88.60 72.30 105.00
Current Tax Liabilities 0.00 0.00 0.00 0.10
Unearned revenue 616.30 493.20 408.20 332.70
Total current liabilities 1308.90 1158.90 1052.00 731.80
Non-current liabilities
Payables 0.00 0.10 0.30 0.50
Interest-bearing liabilities 1536.30 1546.10 1182.50 759.70
Provisions 49.90 42.50 47.00 38.00
Derivative financial instruments 8.30 36.10 3.70 0.00
Deferred tax liabilities 34.60 5.00 125.30 29.90
Unearned revenue 0.60 1.10 1.80 2.30
Total non-current liabilities 1629.70 1630.90 1360.60 830.40
Total liabilities 2938.60 2789.80 2412.60 1562.20
Net assets 933.30 577.10 925.30 743.50
Equity
Share capital 632.50 407.70 406.20 405.30
Reserves (3.80) (113.90) 75.80 (49.10)
Retained profits 304.60 283.30 443.30 387.30
Total equity 933.30 577.10 925.30 743.50
21.3 75.2948808 215.8
21.3 75.2948808 194.90
224.80 224.8 4.40
110.10 110.1 (62.00)
21.30 75.3 194.90

0.0 193.08
 2006
$m

573.00
63.20
0.40
6.50
4.70
647.80

0.00
0.40
7.90
0.00
1206.30
52.80
0.60
1268.00
1915.80

154.90
107.30
33.90
0.00
0.00
246.70
542.80

0.80
697.60
39.00
0.00
26.40
3.00
766.80
1309.60
606.20

400.90
12.90
192.40
606.20 1915.80
250.6 250.613
229.7 34.81 0.00
4.4
-62
229.7 34.81
Balance Sheet of VBA

Consolidated
2010 2009 2008 2007
$m $m $m $m
Current assets
Cash and cash equivalents 1134.43 742.13 1031.82 853.39
Trade and other receivables - Current 141.10 122.30 108.50 74.30
Inventories 0.00 0.00 0.60 0.40
Derivative financial instruments - Current 26.10 11.90 3.60 14.70
Current tax assets 0.00 1.70 23.50 0.00
Total current assets 1301.63 878.03 1168.02 942.79
Non-current assets
Receivables 0.30 0.00 0.00 0.00
Investments accounted for using the equity method 7.30 6.70 6.30 2.80
Other financial assets 58.40 49.00 24.00 24.80
Derivative financial instruments - Non Current 0.00 1.90 22.90 0.00
Property, plant and equipment 3852.29 3815.42 3096.28 2263.02
Intangible assets 53.30 51.10 46.70 47.30
Deferred tax assets 59.45 43.53 48.02 37.81
Total non-current assets 4031.04 3967.65 3244.21 2375.73
Total assets 5332.67 4845.68 4412.23 3318.52
Current liabilities
Trade and other payables 323.80 268.70 224.40 163.30
Interest-bearing liabilities - Current 392.25 386.46 439.18 220.55
Provisions - Current 82.40 75.10 43.40 44.00
Derivative financial instruments - Current 3.20 12.30 72.30 0.00
Current Tax Liabilities 0.00 0.00 0.00 0.10
Unearned revenue - Current 616.30 493.20 408.20 332.70
Total current liabilities 1417.95 1235.76 1187.48 760.65
Non-current liabilities
Payables 0.00 0.10 0.30 0.50
Interest-bearing liabilities - Non Current 2594.35 2708.34 1848.42 1550.58
Provisions - Non Current 49.90 42.50 47.00 38.00
Derivative financial instruments - Non Current 8.30 36.10 3.70 0.00
Deferred tax liabilities 34.60 5.00 125.30 29.90
Unearned revenue - Non Current 0.60 1.10 1.80 2.30
Total non-current liabilities 2687.75 2793.14 2026.52 1621.28
Total liabilities 4105.70 4028.90 3214.00 2381.93
Net assets 1226.97 816.78 1198.23 936.58
Equity
Share capital 632.50 407.70 406.20 405.30
Reserves (3.80) (113.90) 75.80 (49.10)
Retained profits 598.27 522.98 716.23 580.38
Total equity 1226.97 816.78 1198.23 936.58

229.71
194.9
34.81
 2006
$m

573.00 788.07
63.20 65.90
0.40 0.30
6.50 1.45
4.70 17.19
647.80 872.91

0.00 0.00
0.40 0.00
7.90 7.90
0.00
2038.27
52.80
92.78
2192.16
2839.96

154.90
249.06
33.90
0.00
0.00
246.70
684.56

0.80
1321.72
39.00
0.00
26.40
3.00
1390.92
2075.48
764.47

400.90 400.35
12.90
350.67 239.68 -1.90 75.81 24.03 242.69
764.47 293.67 50.54 -1.90 75.81 24.03 242.69
0.00

75.29
-100.95
-97.50
 VBA

2010 2009
Net Operating Assets (NOA)
Operating Assets
Trade and other receivables - Current ### ###
Receivables 0.30 -
Inventories - -
Current tax assets - 1.70
7.30
Investments accounted for using the equity method 6.70
Property, plant and equipment ### ###
Intangible assets 53.30 51.10
Deferred tax assets 59.45 43.53
Total Operating Assets 4,113.74 4,040.75

Operating Liabilities
Trade and other payables ### ###
Provisions - Current 82.40 75.10
Current Tax Liabilities - -
Unearned revenue - Current ### ###
Payables - 0.10
` Provisions - Non Current 49.90 42.50
Deferred tax liabilities 34.60 5.00
Unearned revenue - Non Current 0.60 1.10
Total Operating Liabilities 1,107.60 885.70
Net Operating Assets (NOA) 3,006.14 3,155.05

Net Debt
Financial Assets
Cash and cash equivalents ### ###
Derivative financial instruments - Current 26.10 11.90
Other financial assets 58.40 49.00
Derivative financial instruments - Non Current - 1.90
Total Financial Assets 1,218.93 804.93
Financial Liabilities
Interest-bearing liabilities - Current ### ###
Interest-bearing liabilities - Non Current ### ###
Derivative financial instruments - Current 3.20 12.30
Derivative financial instruments - Non Current 8.30 36.10
Total Financial Liabilities 2,998.10 3,143.20
Net Debt 1,779.17 2,338.27

Equity
Share capital ### ###
Reserves (3.80) ###
Retained profits ### ###
 Total Equity 1,226.97 816.78

1,226.97 816.78
59% 74%
- -
Opening CSE 816.78 ###
Clean Surplus Profit 185.39 ###
Net Payments to Shareholders (d) ### (1.50)
Closing CSE ### 816.78

Clean surplus profit 185.39 ###

check csp - -
issue shares
dividend paid - -
contributed eq ### (1.50)

CSP & d Calculation 2010 2009

Dividend Payment - -
Movement in Contributed Equity (224.80) (1.50)
Total d (224.80) (1.50)

Movement in reserves 110.10 (189.70)

Net Profit (Loss) 75.29 (193.25)
CSP 185.39 (382.95)

Check OEt =
Year 2010 1,226.97
Year 2009 816.78
Year 2008 1,198.23
Year 2007 936.58
2008 2007 2006

### 74.30 63.20

- - -
0.60 0.40 0.40
23.50 - 4.70
6.30 2.80 0.40
### ### ###
46.70 47.30 52.80
48.02 37.81 92.78
3,329.91 2,425.63 2,252.56 5,333 4,846 4,412 3,319

### 163.30 ###

43.40 44.00 33.90
- 0.10 -
### 332.70 ###
0.30 0.50 0.80
47.00 38.00 39.00
### 29.90 26.40
1.80 2.30 3.00
850.40 610.80 504.70 4,106 4,029 3,214 2,382
2,479.51 1,814.83 1,747.86 0.956 0.825 0.974 1.214

### 853.39 ###

3.60 14.70 6.50
24.00 24.80 7.90
22.90 - -
1,082.32 892.89 587.40

### 220.55 ###

### ### ###
72.30 - -
3.70 - -
2,363.60 1,771.13 1,570.78
1,281.28 878.24 983.38

### 405.30 ###

75.80 (49.10) 12.90
### 580.38 ###
1,198.23 936.58 764.47

1,198.23 936.58 764.47

52% 48% 56%
- -
936.58 764.47
302.45 188.61
40.80 16.50
### 936.58

302.45 188.61
- -

41.70 20.90 259.80

(0.90) (4.40) (0.55)

2008 2007 2006

41.70 20.90 259.80
(0.90) (4.40) (0.55)
40.80 16.50 259.25

124.90 (62.00) 9.21

177.55 250.61 327.19
302.45 188.61 336.40

Oet-1 + CSP - d
816.78 185.39 (224.80)
1,198.23 (382.95) (1.50)
936.58 302.45 40.80
764.47 188.61 16.50
 Net Operating Assets (NOA)
Operating Assets
Trade and other receivables - Current
Receivables
Inventories
Current tax assets
Investments accounted for using the equity method
Property, plant and equipment
Intangible assets
Deferred tax assets
2,840 Total Operating Assets

Operating Liabilities
Trade and other payables
Provisions - Current
Current Tax Liabilities
Unearned revenue - Current
Payables
Provisions - Non Current
Deferred tax liabilities
Unearned revenue - Non Current
2,075 Total Operating Liabilities
0.936 Net Operating Assets (NOA)

Net Debt
Financial Assets
Cash and cash equivalents
Derivative financial instruments - Current
Other financial assets
Derivative financial instruments - Non Current
Total Financial Assets
Financial Liabilities
Interest-bearing liabilities - Current
Interest-bearing liabilities - Non Current
Derivative financial instruments - Current
Derivative financial instruments - Non Current
Total Financial Liabilities
Net Debt

Equity
Share capital
Reserves
Retained profits
Total Equity
2010 2009 2008 2007 2006

4.69% 3.88% 4.38% 4.09% 3.62%

0.01% 0.00% 0.00% 0.00% 0.00%
0.00% 0.00% 0.02% 0.02% 0.02%
0.00% 0.05% 0.95% 0.00% 0.27%
0.24% 0.21% 0.25% 0.15% 0.02%
128.15% 120.93% 124.88% 124.70% 116.62%
1.77% 1.62% 1.88% 2.61% 3.02%
1.98% 1.38% 1.94% 2.08% 5.31%
136.84% 128.07% 134.30% 133.66% 128.88%

10.77% 8.52% 9.05% 9.00% 8.86%

2.74% 2.38% 1.75% 2.42% 1.94%
0.00% 0.00% 0.00% 0.01% 0.00%
20.50% 15.63% 16.46% 18.33% 14.11%
0.00% 0.00% 0.01% 0.03% 0.05%
1.66% 1.35% 1.90% 2.09% 2.23%
1.15% 0.16% 5.05% 1.65% 1.51%
0.02% 0.03% 0.07% 0.13% 0.17%
36.84% 28.07% 34.30% 33.66% 28.88%
100.00% 100.00% 100.00% 100.00% 100.00%

63.76% 31.74% 80.53% 97.17% 58.27%

1.47% 0.51% 0.28% 1.67% 0.66%
3.28% 2.10% 1.87% 2.82% 0.80%
0.00% 0.08% 1.79% 0.00% 0.00%
68.51% 34.42% 84.47% 101.67% 59.73%

22.05% 16.53% 34.28% 25.11% 25.33%

145.82% 115.83% 144.26% 176.55% 134.41%
0.18% 0.53% 5.64% 0.00% 0.00%
0.47% 1.54% 0.29% 0.00% 0.00%
168.51% 134.42% 184.47% 201.67% 159.73%
100.00% 100.00% 100.00% 100.00% 100.00%

51.55% 49.92% 33.90% 43.27% 52.44%

-0.31% -13.95% 6.33% -5.24% 1.69%
48.76% 64.03% 59.77% 61.97% 45.87%
100.00% 100.00% 100.00% 100.00% 100.00%
Income Statement of VBA

Con
2010
$m
Revenue and income 
Revenue  2,976.1
Other income  5.1
Share of net profits of associate accounted for using the equity method  0.60
2,981.80
Operating expenditure 
Aircraft operating costs  188.8
Airport charges, navigation and station operations  591.2
Contract and other maintenance costs  135.4
Commissions and other marketing and reservations costs  195.3
Fuel and oil  782.1
Labour and staff related costs  639.8
Other expenses from ordinary activities  145.9
Depreciation and amortisation  203.8
Foreign exchange losses  21.60
Total operating expenses  2,903.90
Profit / (loss) before tax expense, finance costs, ineffective cash flow hedges and 
non-designated derivatives  77.90
Ineffective cash flow hedges and non-designated derivatives  12.60
Profit / (loss) before related income tax expense and net finance costs  90.50
Finance costs  (83.90)
Finance income  27.70
Net financing costs  (56.20)
Profit / (loss) before income tax expense  34.30
Income tax expense / (benefit)  13.00
Net profit / (loss) attributable to the members of Virgin Blue Holdings Limited  21.30

0.38
Other comprehensive income 
Exchange differences on translation of foreign operations  26.9
Effective portion of changes in fair value of cash flow hedges  (20.2)
Net change in fair value of cash flow hedges transferred to profit or loss  111.9
Income tax on other comprehensive income  (10.5)
Other comprehensive income for the period net of income tax  108.1
Total comprehensive income for the period attributable to equity holders of 
Virgin Blue Holdings Limited  129.4
 Consolidated
2009 2008 2007 2006
$m $m $m $m

2,600.3 2,321.7 2,161.4 1,389.2

34.7 3.5 5.3 2.9
0.40 9.60 2.40 0.40
2,635.40 2,334.80 2,169.10 1,392.50

141.1 141.7 137.7 112.0

535.3 457.9 387.0 266.8
140.0 109.0 107.0 77.7
182.8 130.1 111.8 81.5
748.9 589.3 488.9 330.5
595.2 536.1 428.1 284.3
112.4 96.1 84.1 43.4
183.7 123.7 100.2 63.8
25.10 0.00 0.00 0.00
2,664.50 2,183.90 1,844.80 1,260.00

(29.10) 150.90 324.30 132.50

(133.20) 16.80 0.00 0.00
(162.30) 167.70 324.30 132.50
(90.50) (69.20) (57.70) (36.60)
26.60 41.90 41.90 26.90
(63.90) (27.30) (15.80) (9.70)
(226.20) 140.40 308.50 122.80
(66.20) 42.70 92.70 38.30
(160.00) 97.70 215.80 84.50

0.29 0.30 0.30 0.31

(12.8)  (2.3) 
(259.5)  181.5 
29.8  (59.6) 
53.8 
(188.7) 

(348.7)  217.3 
Income Statement of VBA
C
2010
$m
Revenue and income 
Revenue  2,819.0
Other income  5.1
Share of net profits of associate accounted for using the equity method  0.60
Net adjusted income from capitalised lease  50.54
2,875.28
Operating expenditure 
Aircraft operating costs  188.8
Airport charges, navigation and station operations  591.2
Contract and other maintenance costs  135.4
Commissions and other marketing and reservations costs  195.3
Fuel and oil  621.6
Labour and staff related costs  639.8
Other expenses from ordinary activities  145.9
Depreciation and amortisation  203.8
Foreign exchange losses  21.60
Total operating expenses  2,743.39
Profit / (loss) before tax expense, finance costs, ineffective cash flow hedges and 
non-designated derivatives  131.89
Ineffective cash flow hedges and non-designated derivatives  12.60
Profit / (loss) before related income tax expense and net finance costs  144.49
Finance costs  (83.90)
Finance income  27.70
Net financing costs  (56.20)
Profit / (loss) before income tax expense  88.29
Income tax expense / (benefit)  13.00
Net profit / (loss) attributable to the members of Virgin Blue Holdings Limited  75.29

Other comprehensive income 

Exchange differences on translation of foreign operations  26.9
Effective portion of changes in fair value of cash flow hedges  (20.2)
Net change in fair value of cash flow hedges transferred to profit or loss  111.9
Income tax on other comprehensive income  (10.5)
Other comprehensive income for the period net of income tax  108.1
Total comprehensive income for the period attributable to equity holders of 
Virgin Blue Holdings Limited  129.4
 Consolidated
2009 2008 2007 2006
$m $m $m $m

2,568.9 2,325.7 2,172.2 1,389.2

34.7 3.5 5.3 2.9
0.40 9.60 2.40 0.40
-1.90 75.81 24.03 242.69
2,602.15 2,414.65 2,203.91 1,635.19

141.1 141.7 137.7 112.0

535.3 457.9 387.0 266.8
140.0 109.0 107.0 77.7
182.8 130.1 111.8 81.5
748.9 589.3 488.9 330.5
595.2 536.1 428.1 284.3
112.4 96.1 84.1 43.4
183.7 123.7 100.2 63.8
25.10 0.00 0.00 0.00
2,664.50 2,183.90 1,844.80 1,260.00

(62.35) 230.75 359.11 375.19

(133.20) 16.80 0.00 0.00
(195.55) 247.55 359.11 375.19
(90.50) (69.20) (57.70) (36.60)
26.60 41.90 41.90 26.90
(63.90) (27.30) (15.80) (9.70)
(259.45) 220.25 343.31 365.49
(66.20) 42.70 92.70 38.30
(193.25) 177.55 250.61 327.19

(12.8)  (2.3) 
(259.5)  181.5 
29.8  (59.6) 
53.8 
(188.7) 

(348.7)  217.3 
 2010 2009 2008 2007 2006
lease payment 172.1 126 112.3 119.3 97.134
maintenance reserve 52.9 44.2 34.2 38.5 31.113
other 67.1 58 53 37.7 29.021
292.1 228.2 199.5 195.5 157.268
VBA
2010
Operating Revenues
Revenue 2,819.04
Other income 5.10
Share of net profits of associate accounted for using the equity
method 0.60
Net adjusted income from capitalised lease 50.54
Total Revenue 2,875.28
Operating Expenses
Aircraft operating costs 188.80
Airport charges, navigation and station operations 591.20
Contract and other maintenance costs 135.40
Commissions and other marketing and reservations costs 195.30
Fuel and oil 621.59
Labour and staff related costs 639.80
Depreciation and amortisation 203.80
Other expenses from ordinary activities 145.90
Foreign exchange losses 21.60
Total Operating Expenses 2,743.39
Net Operating Profit/ (Loss) from ordinary activities 131.89
Other Operating Income/Expenses
Ineffective cash flow hedges and non-designated derivatives 12.60
Net Operating Income/(Loss) before Tax 144.49
Tax on operating profit 29.86
Clean Surplus Adjustment 110.10
Net Operating Profit/ (Loss) After Tax 224.73
Net Financial Expenses
Finance costs (83.90)
Finance income 27.70
NFE (56.20)
Tax effect at 30% (16.86)
Net Interest Expense After Tax (39.34)

Comprehensive Income (csp) 185.39

2010
Operating Revenues
 Revenue 98.04%
Other income 0.18%
Share of net profits of associate accounted for using the equity 0.02%
method
Net adjusted income from capitalised lease 1.76%
Total Revenue 100%
Operating Expenses
Aircraft operating costs 6.57%
Airport charges, navigation and station operations 20.56%
Contract and other maintenance costs 4.71%
Commissions and other marketing and reservations costs 6.79%
Fuel and oil 21.62%
Labour and staff related costs 22.25%
Depreciation and amortisation 7.09%
Other expenses from ordinary activities 5.07%
Foreign exchange losses 0.75%
Total Operating Expenses 95.41%
Net Operating Profit/ (Loss) from ordinary activities 4.59%
Other Operating Income/Expenses
Ineffective cash flow hedges and non-designated derivatives 0.44%
Net Operating Income/(Loss) before Tax 5.03%
Tax on operating profit 1.04%
Clean Surplus Adjustment 3.83%
Net Operating Profit/ (Loss) After Tax 7.82%
Net Financial Expenses 0.00%
Finance costs -2.92%
Finance income 0.96%
NFE -1.95%
Tax effect at 30% -0.59%
Net Interest Expense After Tax -1.37%

Comprehensive Income (csp) 6.45%

2009 2008 2007 2006

2,568.95 2,325.74 2,172.18 1,389.20

34.70 3.50 5.30 2.90

0.40 9.60 2.40 0.40

(1.90) 75.81 24.03 242.69
2,602.15 2,414.65 2,203.91 1,635.19

141.10 141.70 137.70 112.00

535.30 457.90 387.00 266.80
140.00 109.00 107.00 77.70
182.80 130.10 111.80 81.50
748.90 589.30 488.90 330.50
595.20 536.10 428.10 284.30
183.70 123.70 100.20 63.80
112.40 96.10 84.10 43.40
25.10 0.00 0.00 0.00
2,664.50 2,183.90 1,844.80 1,260.00
(62.35) 230.75 359.11 375.19

(133.20) 16.80 0.00 0.00

(195.55) 247.55 359.11 375.19
(47.03) 50.89 97.44 41.21
(189.70) 124.90 (62.00) 9.21
(338.22) 321.56 199.67 343.19

(90.50) (69.20) (57.70) (36.60) (0.028) (0.029)

26.60 41.90 41.90 26.90
(63.90) (27.30) (15.80) (9.70)
(19.17) (8.19) (4.74) (2.91)
(44.73) (19.11) (11.06) (6.79) 225

(382.95) 302.45 188.61 336.40 185.39

(39)
185

2009 2008 2007 2006

 98.72% 96.32% 98.56% 84.96%
1.33% 0.14% 0.24% 0.18%
0.02% 0.40% 0.11% 0.02%

-0.07% 3.14% 1.09% 14.84%

100% 100% 100% 100%

5.42% 5.87% 6.25% 6.85%

20.57% 18.96% 17.56% 16.32%
5.38% 4.51% 4.86% 4.75%
7.02% 5.39% 5.07% 4.98%
28.78% 24.41% 22.18% 20.21%
22.87% 22.20% 19.42% 17.39%
7.06% 5.12% 4.55% 3.90%
4.32% 3.98% 3.82% 2.65%
0.96% 0.00% 0.00% 0.00%
102.40% 90.44% 83.71% 77.06%
-2.40% 9.56% 16.29% 22.94%

-5.12% 0.70% 0.00% 0.00%

-7.52% 10.25% 16.29% 22.94%
-1.81% 2.11% 4.42% 2.52%
-7.29% 5.17% -2.81% 0.56%
-13.00% 13.32% 9.06% 20.99%
0.00% 0.00% 0.00% 0.00%
-3.48% -2.87% -2.62% -2.24%
1.02% 1.74% 1.90% 1.65%
-2.46% -1.13% -0.72% -0.59%
-0.74% -0.34% -0.22% -0.18%
-1.72% -0.79% -0.50% -0.42%

-14.72% 12.53% 8.56% 20.57%

 0

(0.029) (0.033) (0.023) (0.028)

1. Forecast sales 2009 2010 2011 2012
Actual Actual Forecast Forecast
Sales growth rate - estimated 6% 6% 6%
Sales      2,635.40       2,981.80  3,160.71 3,350.35

2. Forecast ATO and calculate NOA

Forecast ATO 0.92 0.97 0.97 0.97
Calculate NOA (NOA=Sales/ATO) 2,865 3,006 3,258 3,454

3. Revise sales forecasts

4. Forecast PM and calculate NOPAT

Forecast PM (after tax) 9% 9% 9%
Calculate NOPAT (NOPAT = Sales x PM) 225 284 302

5. Forecast other operating income

- -

6.Calculate free cash flow (NOPAT – change in NOA)

change in NOA 142 252 196
calculate FCF 83 32 106

7. Forecast net dividend payout

estimated as a % of NOPAT 0% 4% 4%
- 11 12
8. Calculate net payments to debt holders
payments = FCF - dividend 83 21 94

9. Forecast cost of debt and debt balance

Forecast cost of debt after tax 5% 5% 5%
Opening debt balance 2,338 1,779 1,847
Calculate cost of debt (net financing after tax) 117 89 92
Calculate closing debt (opening + interest - repayment) 1,779 1,847 1,846
check leverage (debt/noa ratio) - 59.18% 56.69% 53.44%

10.Calculate comprehensive income

NOPAT - NFEAT - 108 196 209

11.Calculate equity (and check it works using both equations)

equity = assets - liabilities - 1,227 1,411 1,608
closing equity = opening equity + income - dividend - 1,227 1,411 1,608
Check - - -

ROE #DIV/0! 17.6% 14.8% 13.9%

OROA 0.0% 7.7% 9.1% 9.0%
Dividend Payout as percentage of CSP #DIV/0! 0.0% 5.8% 5.8%
Sustainable Growth Rate #DIV/0! 17.6% 14.0% 13.1%

1 1 2
Discount Dividend Valuation - - 11 12
Dividend Growth 6.0%

Cost of Capital 9.74%

TV Growth Rate 3.6%
TV 208
Discount Factor 1.10 1.10 1.20
PV dividends 0 10 10
PV of TV

Total PV 196.93

Number of Shares 2,209

Share Price 0.09

1 1 2
Discount Free Cash Flow - 83 32 106
FCF Growth -61.3% 229.9%

Cost of Capital 9.74%

TV Growth Rate 3.6%
TV
Discount Factor 1.10 1.10 1.20
PV FCF 0 29 88
PV of TV

Total PV 1,701.33
Less Debt 1,779.17
PV equity (77.83)

Number of Shares 2,209

Share Price (0.04)

 1 1 2
Discount Abnormal Earnings
CSP - 108 196 209
BE 0 1,227 1,411 1,608
AE - 76 72
AE Growth -6%

Cost of Capital 9.74%

TV Growth Rate 3.0%
TV
Discount Factor 1.10 1.10 1.20
PV AE 0 69 60
PV of TV

Total PV 805.21
Plus BV 1,226.97
PV equity 2,032.18

Number of Shares 2,209

Share Price 0.920

 1 2 3 4
Discount Free Cash Flow #REF! #REF! #REF! #REF!
FCF Growth #REF! #REF! #REF!

Cost of Capital 13%

TV Growth Rate 7.2%
TV
Discount Factor 1.10 1.20 1.32 1.45
PV FCF #REF! #REF! #REF! #REF!
PV of TV

Total PV #REF!
Less Debt -
PV equity #REF!

Number of Shares 53,703

Share Price #REF!

1 2 3 4
Discount Abnormal Earnings
CSP #REF! #REF! #REF! #REF!
BE 0 #REF! #REF! #REF! #REF!
AE #REF! #REF! #REF! #REF!
AE Growth #REF! #REF! #REF!
Cost of Capital 13%
TV Growth Rate 6.4%
TV
Discount Factor 1.10 1.20 1.32 1.45
PV AE #REF! #REF! #REF! #REF!
PV of TV

Total PV #REF!
Plus BV -
PV equity #REF!

Number of Shares 53,703

Share Price #REF!

 2013 2014 2015 2016 2017 2018 2019 2020 2021
Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast
6% 6% 6% 6% 6% 6% 6% 6% 6%
3,551.37 3,764.45 3,990.32 4,229.74 4,483.52 4,752.54 5,037.69 5,339.95 5,660.35

0.97 0.97 0.97 0.97 0.97 0.97 0.97 0.97 0.97

3,661 3,881 4,114 4,361 4,622 4,900 5,193 5,505 5,835

9% 9% 9% 9% 9% 9% 9% 9% 9%
320 339 359 381 404 428 453 481 509

- - - - - - - - -

207 220 233 247 262 277 294 312 330

112 119 126 134 142 150 159 169 179

4% 4% 4% 4% 4% 4% 4% 4% 10%
13 14 14 15 16 17 18 19 51

100 106 112 119 126 133 141 150 128

 5% 5% 5% 5% 5% 5% 5% 5% 5%
1,846 1,838 1,825 1,804 1,776 1,739 1,692 1,636 1,568
92 92 91 90 89 87 85 82 78
1,838 1,825 1,804 1,776 1,739 1,692 1,636 1,568 1,518
50.21% 47.02% 43.86% 40.72% 37.62% 34.54% 31.50% 28.48% 26.01%
2.49%

227 247 268 290 315 341 369 399 431

1,823 2,056 2,310 2,585 2,883 3,207 3,558 3,937 4,317

1,823 2,056 2,310 2,585 2,883 3,207 3,558 3,937 4,317
- - - - - - - - -

13.3% 12.7% 12.3% 11.9% 11.5% 11.2% 10.9% 10.6% 10.4%

9.0% 9.0% 9.0% 9.0% 9.0% 9.0% 9.0% 9.0% 9.0%
5.6% 5.5% 5.4% 5.2% 5.1% 5.0% 4.9% 4.8% 11.8%
12.5% 12.0% 11.6% 11.2% 10.9% 10.6% 10.4% 10.1% 9.2%

3 4 5 6 7 8 9 10 11
13 14 14 15 16 17 18 19 51
6.0% 6.0% 6.0% 6.0% 6.0% 6.0% 6.0% 6.0% 165.0%

221
1.32 1.45 1.59 1.75 1.92 2.10 2.31 2.53
10
166.88

3 4 5 6 7 8 9 10
112 119 126 134 142 150 159 169
6.0% 6.0% 6.0% 6.0% 6.0% 6.0% 6.0% 6.0%

2055.19645
1.32 1.45 1.59 1.75 1.92 2.10 2.31 2.53
85 82
1416.86
 3 4 5 6 7 8 9 10

227 247 268 290 315 341 369 399

1,823 2,056 2,310 2,585 2,883 3,207 3,558 3,937
71 69 68 65 63 60 56 52
-1% -2% -2% -3% -4% -5% -6% -7%

887.01
1.32 1.45 1.59 1.75 1.92 2.10 2.31 2.53
53 48 42 37 33
462.65
 5 6
#REF! #REF!
#REF! #REF!

#REF!
1.59 1.75
#REF!
#REF!

5 6

#REF! #REF!
#REF! #REF!
#REF! #REF!
#REF! #REF!
#REF!
1.59 1.75
#REF!
#REF!
3.26% 3.22% 3.19% 3.16% 3.13% 3.10% 3.08% 3.05% 3.02% 2.47% 26.01% 0.00% 0.00% 0.00%
0.00% 0.00% 0.00% 0.00% 0.00%
1. Forecast sales 2010 2011 2012 2013
Actual Forecast Forecast Forecast
Sales growth rate - estimated 4% 4% 4% 4%
Sales      2,981.80  3,101.07 3,225.11 3,354.12

2. Forecast ATO and calculate NOA

Forecast ATO 0.50 0.50 0.50 0.50
Calculate NOA (NOA=Sales/ATO) 3,006 6,202 6,450 6,708

3. Revise sales forecasts

4. Forecast PM and calculate NOPAT

Forecast PM (after tax) 8% 8% 8% 8%
Calculate NOPAT (NOPAT = Sales x PM) 225 248 258 268

5. Forecast other operating income

- - -

6.Calculate free cash flow (NOPAT – change in NOA)

change in NOA 142 3,196 248 258
calculate FCF 83 - 2,948 10 10

7. Forecast net dividend payout

estimated as a % of NOPAT 0% 10% 10% 10%
- 25 26 27
8. Calculate net payments to debt holders
payments = FCF - dividend 83 (2,973) (16) (17)

9. Forecast cost of debt and debt balance

Forecast cost of debt after tax 4% 4% 4% 4%
Opening debt balance 2,338 1,779 4,823 5,032
Calculate cost of debt (net financing after tax) 94 71 193 201
Calculate closing debt (opening + interest - repayment) 1,779 4,823 5,032 5,250
check leverage (debt/noa ratio) 59.18% 77.76% 78.01% 78.26%

10.Calculate comprehensive income

NOPAT - NFEAT 131 177 65 67

11.Calculate equity (and check it works using both equations)

equity = assets - liabilities 1,227 1,379 1,418 1,459
closing equity = opening equity + income - dividend 1,227 1,379 1,418 1,459
Check - - - -

ROE 21.4% 13.6% 4.7% 4.7%

OROA 7.7% 5.4% 4.1% 4.1%
Dividend Payout as percentage of CSP 0.0% 14.0% 39.6% 40.0%
Sustainable Growth Rate 21.4% 11.7% 2.8% 2.8%

1 2 3
Discount Dividend Valuation - 25 26 27
Dividend Growth 4.0% 4.0%

Cost of Capital 13.61%

TV Growth Rate 1.0%
TV 221
Discount Factor 1.14 1.29 1.47
PV dividends 22 20 18
PV of TV 151

Total PV 211.09

Number of Shares 2,209

Share Price 0.10

1 2 3
Discount Free Cash Flow 83 - 2,948 10 10
FCF Growth -3644.9% -100.3% 4.0%

Cost of Capital 13.61%

TV Growth Rate 1.0%
TV
Discount Factor 1.14 1.29 1.47
PV FCF -2,595 8 7
PV of TV

Total PV (2,520.51)
Less Debt 1,779.17
PV equity (4,299.68)

Number of Shares 2,209

Share Price (1.95)

1 2 3
Discount Abnormal Earnings
CSP 131 177 65 67
BE 1,227 1,379 1,418 1,459
AE 10 - 123 - 126
AE Growth -1330% -3%

Cost of Capital 14%

TV Growth Rate 0.0%
TV
Discount Factor 1.14 1.29 1.47
PV AE 9 -95 -86
PV of TV

Total PV (582.00)
Plus BV 1,226.97
PV equity 644.97

Number of Shares 2,209

Share Price 0.292

 2 3 4 5
Discount Free Cash Flow #REF! #REF! #REF! #REF!
FCF Growth #REF! #REF! #REF! #REF!

Cost of Capital 13%

TV Growth Rate 7.2%
TV #REF!
Discount Factor 1.29 1.47 1.67 1.89
PV FCF #REF! #REF! #REF! #REF!
PV of TV #REF!

Total PV #REF!
Less Debt -
PV equity #REF!

Number of Shares 53,703

Share Price #REF!

2 3 4 5
Discount Abnormal Earnings
CSP #REF! #REF! #REF! #REF!
BE 0 #REF! #REF! #REF! #REF!
AE #REF! #REF! #REF! #REF!
AE Growth #REF! #REF! #REF! #REF!
Cost of Capital 13%
TV Growth Rate 6.4%
TV #REF!
Discount Factor 1.29 1.47 1.67 1.89
PV AE #REF! #REF! #REF! #REF!
PV of TV #REF!

Total PV #REF!
Plus BV -
PV equity #REF!

Number of Shares 53,703

Share Price #REF!

 2014 2015 2016 2017 2018 2019 2020 2021
Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast
4% 4% 4% 4% 4% 4% 4% 4%
3,488.28 3,627.82 3,772.93 3,923.85 4,080.80 4,244.03 4,413.79 4,590.34

0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50

6,977 7,256 7,546 7,848 8,162 8,488 8,828 9,181

8% 8% 8% 8% 8% 8% 8% 8%
279 290 302 314 326 340 353 367

- - - - - - - -

268 279 290 302 314 326 340 353

11 11 12 12 13 13 14 14

10% 10% 10% 10% 10% 10% 10% 10%

28 29 30 31 33 34 35 37

(17) (18) (19) (19) (20) (21) (22) (23)

 4% 4% 4% 4% 4% 4% 4% 4%
5,250 5,477 5,714 5,961 6,219 6,487 6,768 7,060
210 219 229 238 249 259 271 282
5,477 5,714 5,961 6,219 6,487 6,768 7,060 7,365
78.50% 78.75% 79.00% 79.24% 79.49% 79.73% 79.98% 80.23%
-18.58% -0.25%

69 71 73 75 78 80 82 85

1,500 1,542 1,585 1,629 1,674 1,720 1,767 1,815

1,500 1,542 1,585 1,629 1,674 1,720 1,767 1,815
- - - - - - - -

4.7% 4.7% 4.7% 4.7% 4.7% 4.7% 4.7% 4.7%

4.1% 4.1% 4.1% 4.1% 4.1% 4.1% 4.1% 4.1%
40.4% 40.8% 41.2% 41.6% 42.0% 42.4% 42.9% 43.3%
2.8% 2.8% 2.8% 2.7% 2.7% 2.7% 2.7% 2.7%

4 5 6 7 8 9 10 11
28 29 30 31 33 34 35 37
4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0%

1.67 1.89 2.15 2.44 2.77 3.15 3.58

 4 5 6 7 8 9 10
11 11 12 12 13 13 14
4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0%

88.5422252
1.67 1.89 2.15 2.44 2.77 3.15 3.58
6
53
 4 5 6 7 8 9 10

69 71 73 75 78 80 82
1,500 1,542 1,585 1,629 1,674 1,720 1,767
- 129 - 133 - 137 - 140 - 144 - 148 - 152
-3% -3% -3% -3% -3% -3% -3%

1.67 1.89 2.15 2.44 2.77 3.15 3.58

-78 -70 -63 -57 -52 -47 -42
 6
#REF!
#REF!

2.15

#REF!
#REF!
#REF!
#REF!
2.15
-0.25% -0.25% -0.25% -0.25% -0.25% -0.25% -0.25% -0.25% -0.25% 80.23% 0.00% 0.00% 0.00% 0.00%
0.00% 0.00% 0.00% 0.00%
Qantas Airways Ltd
Valuations

2004 2005

Residual Income Models (Abnormal earnings model)

Net Profit

Shareholders Funds

Residual Income
Forecast

Valuation
Cost of Capital 10%
Terminal Growth Rate 0%
Book Value
Residual Income Forecast
Terminal

Market Value 960.97

Shares 2,209.13

Share Price 0.435

2004 2005

Dividend Valuation

Dividend 314.6

Shares 2,209.1 2,209.1

DPS 0.142

Valuation
Cost of Capital 10%
Terminal Growth Rate 1.5%
Dividend Forecast $0.49
Terminal Value 1.33

Share Price 1.82

 2004 2005

Residual Operating income model

NOPAT 388.79 713.4201241853

NOA 10,666.8 10,944.3

Residual Operating Income

Forecast 20.08

Valuation
Cost of Capital (firm) 6.5%
Terminal Growth Rate 2%
NOA 10,666.8
Residual Operating Income Forecast 130.8
Terminal 778.6

Firm value 11,576.2

Book value of debt 5,404.7

Equity value 6,171.51

Shares 2,209.1

Share Price 2.79

2002 2004 2005

Discounted cash flow model

NOPAT 388.79 713.4201241853

NOA 7146.3 10,666.8 10,944.3
change NOA 3,520.5 277.5
fcf: (3,131.7) 435.9

Free cash flow

Forecast 435.91
Valuation
Cost of Capital (firm) 6.5%
Terminal Growth Rate 1.5%

FCF Forecast 734.4

Terminal 2,219.0

Firm value 2,953.3

Book value of debt 5,404.7

Equity value - 2,451.36

Shares 2,209.1

Share Price (1.11)

 2006 2007 2008 2009

336.4 188.6 302.4 (383.0)

764.5 936.6 1,198.2 816.8

336.40 112.58 209.29 (502.13)

(0.67) 0.86 (3.40)

2006 2007 2008 2009

337.6 355.0 373.4 392.9

2,209.1 2,209.1 2,209.1 2,209.1

0.153 0.161 0.169 0.178

 2006 2007 2008 2009

754.1441308217 797.3115778562 843.0690717129 891.5720152009

11,573.1 12,239.5 12,946.0 13,694.8

42.76 45.06 47.50 50.08

2006 2007 2008 2009

754.1441308217 797.3115778562 843.0690717129 891.5720152009

11,573.1 12,239.5 12,946.0 13,694.8
628.7 666.5 706.5 748.8
125.4 130.8 136.6 142.7

125.40 130.85 136.61 142.73

 2010 2009 2008 2007
Balance Sheet (Relatively to Total Assets)
Total Operating Assets 4,113.74 4,040.75 3,329.91 2,425.63
Total Financial Assets 1,218.93 804.93 1,082.32 892.89
Total Assets 5,332.67 4,845.68 4,412.23 3,318.52

Total Operating Liabilities 1,107.60 885.70 850.40 610.80

Total Financial Liabilities 2,998.10 3,143.20 2,363.60 1,771.13
Total Equity 1,226.97 816.78 1,198.23 936.58
Total Liablities & Equity 5,332.67 4,845.68 4,412.23 3,318.52

Income Statement (Relatively to Revenue)

2010 2009 2008 2007
Total Revenue 2,875.28 2,602.15 2,414.65 2,203.91
Total Operating Expenses 2,743.39 2,664.50 2,183.90 1,844.80
Other Operating Income/Expenses 12.60 (133.20) 16.80 0.00
Net Operating Income/(Loss) before Tax 144.49 (195.55) 247.55 359.11
Tax on operating profit 29.86 (47.03) 50.89 97.44
Clean Surplus Adjustment 110.10 (189.70) 124.90 (62.00)
Net Operating Profit/ (Loss) After Tax 224.73 (338.22) 321.56 199.67
Net Interest Expense After Tax (39.34) (44.73) (19.11) (11.06)

Balance Sheet (Relatively to Total Assets) 2010 2009 2008 2007

Total Operating Assets 77.14% 83.39% 75.47% 73.09%
Total Financial Assets 22.86% 16.61% 24.53% 26.91%
Total Assets 100% 100% 100% 100%
Total Operating Liabilities 20.77% 18.28% 19.27% 18.41%
Total Financial Liabilities 56.22% 64.87% 53.57% 53.37%
Total Equity 23.01% 16.86% 27.16% 28.22%
Total Liablities & Equity 100% 100% 100% 100%

Income Statement (Relatively to Revenue) 2010 2009 2008 2007

Total Revenue 100.00% 100.00% 100.00% 100.00%
Total Operating Expenses 90.15% 101.18% 90.60% 84.12%
Ineffective cash flow hedges and non-designated derivatives 0.41% -5.06% -0.70% 0.00%
Net Operating Income/(Loss) before Tax 10.26% -6.24% 8.71% 15.88%
Tax on operating profit 0.98% -1.79% 2.11% 4.44%
Clean Surplus Adjustment 3.62% -7.20% 5.18% -2.83%
Net Operating Profit/ (Loss) After Tax 12.90% -11.65% 11.78% 8.61%
Net Interest Expense After Tax -1.29% -1.70% -0.79% -0.50%
Comprehensive Income (csp) 11.61% -13.35% 10.99% 8.11%
 2006

2,252.56
587.40
2,839.96

504.70
1,570.78
764.47
2,839.96

2006
1,635.19
1,260.00
0.00
375.19
41.21
9.21
343.19
(6.79)

2006
79.32%
20.68%
100%
17.77%
55.31%
26.92%
100%

2006
100.00%
77.06%
0.00%
22.94%
2.52%
0.56%
20.99%
-0.42%
20.57%
 2010 2009
Operating Revenues
Total Revenue 3043.14336 2633.50054
Total Operating Expenses 2743.4 2664.5
Ineffective cash flow hedges and non-designated derivatives 12.6 -133.2
Net Operating Income/(Loss) before Tax 312.343363 -164.19946
Tax on operating profit 29.86 -47.03
Clean Surplus Adjustment 110.1 -189.7
Net Operating Profit/ (Loss) After Tax 392.583363 -306.86946
Net Interest Expense After Tax -39.34 -44.73
Comprehensive Income (csp) 353.243363 -351.59946
 2008 2007 2006

2410.60602 2193.13423 1635.18965

2183.9 1844.8 1260
-16.8 0 0
209.90602 348.334228 375.18965
50.89 97.44 41.21
124.9 -62 9.211
283.91602 188.894228 343.19065
-19.11 -11.06 -6.79
264.80602 177.834228 336.40065
ROE Analysis
Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Initial Forecast 14.82% 13.86% 13.25% 12.73% 12.27% 11.87% 11.51% 11.19% 10.90% 10.64%
Sales decrese 50%* 28.07% 24.17% 21.49% 19.49% 17.93% 16.68% 15.66% 14.75% 13.94% 13.30%
PM decrease 50%* 14.12% 14.06% 14.15% 14.23% 14.31% 14.38% 14.45% 14.35% 14.18% 14.17%
Payout Ratio 0%* 29.38% 25.72% 23.27% 21.48% 20.11% 19.03% 18.17% 17.32% 16.58% 16.04%
* everything else's held constant (ceteris paribus)
2021 Avg. Diff from Initial
10.44% 12.14%
12.75% 18.02% 5.88%
14.16% 14.23% 2.10% -17.2722160781842000%
15.57% 20.24% 8.11%
 Main Ratio 2010 2009 2008 2007
ROE (CSP / avg. Equity) 18.14% -38.01% 28.33% 22.18%
OROA (NOPAT / avg. NOA) 7.30% -12.01% 14.98% 11.21%
NFL (avg. Net Debt / avg.Equity) 201.47% 179.63% 101.16% 109.44%
EIAT (NFE / avg. Net Debt) 1.91% 2.47% 1.77% 1.19%
Spread (OROA - EIAT) 5.38% -14.48% 13.21% 10.02%
Check ROE (OROA + Spread x NFL) 18.14% -38.01% 28.33% 22.18%
Profit Margin (NOPAT/Sales) 7.52% -13.01% 13.85% 9.24%
Asset Turnover (Sales / avg. NOA) 0.97 0.92 1.08 1.21
7.30% -12.01% 14.98% 11.21%
0.18142642 0.18142642 0.22175983
185.39 0.18142642
Total Equity 1,226.97 816.78 1,198.23 936.58
Comprehensive Income (csp) 185.39 (382.95) 302.45 188.61
NOPAT 224.73 (338.22) 321.56 199.67
Net Operating Assets (NOA) 3,006.14 3,155.05 2,479.51 1,814.83
Net Debt 1,779.17 2,338.27 1,281.28 878.24
Net Interest Expense After Tax (39.34) (44.73) (19.11) (11.06)
avg eq 1,021.87 1,007.50 1,067.41 850.53
avg NOA 3,080.59 2,817.28 2,147.17 1,781.34
avg Net Debt 2,058.72 1,809.77 1,079.76 930.81
Revenue 2986.9 2600.3 2321.7 2161.4

2010 2009 2008 2007

ROE (CSP / avg. Equity) 18.14% -38.01% 28.33% 22.18%
2010 2009 2008 2007
OROA (NOPAT / avg. NOA) 7.30% -12.01% 14.98% 11.21%
2010 2009 2008 2007
NFL (avg. Net Debt / avg.Equity) 2.01 1.80 1.01 1.09
2010 2009 2008 2007
EIAT (NFE / avg. Net Debt) 1.91% 2.47% 1.77% 1.19%
2010 2009 2008 2007
Spread (OROA - EIAT) 5.38% -14.48% 13.21% 10.02%
Check ROE (OROA + Spread x NFL) 0.18142642 -0.38010223 0.283346277 0.22175983
2010 2009 2008 2007
Profit Margin (NOPAT/Sales) 7.52% -13.01% 13.85% 9.24%
2010 2009 2008 2007
Asset Turnover (Sales / avg. NOA) 0.97 0.92 1.08 1.21
 2010 2009 2008 2007
ROE (CSP / avg. Equity) 18.1% -38.0% 28.3% 22.2%
OROA (NOPAT / avg. NOA) 7.3% -12.0% 15.0% 11.2%
EIAT (NFE / avg. Net Debt) 1.9% 2.5% 1.8% 1.2%
Spread (OROA - EIAT) 5.4% -14.5% 13.2% 10.0%
Profit Margin (NOPAT/Sales) 7.5% -13.0% 13.9% 9.2%
2010 2009 2008 2007
Asset Turnover (Sales / avg. NOA) 0.97 0.92 1.08 1.21
NFL (avg. Net Debt / avg.Equity) 2.01 1.80 1.01 1.09
 2006 ### -26.00% 13.36% 10.97%
43.74% 10.8% -26.0% 13.4% 11.0%

12.40% 24.776720246256000%

4.61%

764.47 773.87
336.40
343.19
1,747.86
983.38
(6.79)
769.17
1,747.86 168370 ROE (CSP / avg. E
983.38 0.154954147
40.00%
1389.2
30.00%
20.00%
10.00%
0.00%
2010 2009
-10.00%
-20.00%
-30.00%
-40.00%
-50.00%
ROE (CSP / avg. Eq

EIAT (NFE / avg. Ne

3.00%

2.50%

2.00%

1.50%

1.00%

0.50%

0.00%
2010 2009
EIAT (NFE / avg. Net
1.00%

0.50%

0.00%
2010 2009
EIAT (NFE / avg. Net

Asset Turnover (Sales

1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
2010 2009
Asset Turnover (Sales /
 ROE (CSP / avg. Equity) OROA (NOPAT / avg. NO
20.00%
15.00%
10.00%
5.00%
2009 2008 2007
0.00%
2010 2009 2008
-5.00%
-10.00%
-15.00%
ROE (CSP / avg. Equity) OROA (NOPAT / avg. NOA)

EIAT (NFE / avg. Net Debt) Spread (OROA - EIAT)

15.00%
10.00%
5.00%
0.00%
2010 2009 2008
-5.00%
-10.00%
-15.00%
2009 2008 2007 -20.00%
EIAT (NFE / avg. Net Debt) Spread (OROA - EIAT)
 2010 2009 2008
-5.00%
-10.00%
-15.00%
2009 2008 2007 -20.00%
EIAT (NFE / avg. Net Debt) Spread (OROA - EIAT)

Asset Turnover (Sales / avg. NOA) Financial Ratio Graph

40.0%
30.0%
20.0%
10.0%
0.0%
2010
-10.0% 2009 2008
-20.0%
-30.0%
-40.0%
-50.0%
ROE (CSP / avg. Equity) OROA (NOP
2009 2008 2007 EIAT (NFE / avg. Net Debt) Spread (OR
Asset Turnover (Sales / avg. NOA) Profit Margin (NOPAT/Sales)
ROA (NOPAT / avg. NOA) NFL (avg. Net Debt / avg.Equity)
2.50

2.00

1.50

1.00
2009 2008 2007
0.50

0.00
2010 2009 2008
OROA (NOPAT / avg. NOA) NFL (avg. Net Debt / avg.Equity)

Spread (OROA - EIAT) Profit Margin (NOPAT/Sales)

20.00%
15.00%
10.00%
5.00%
2009 2008 2007
0.00%
2010 2009 2008
-5.00%
-10.00%
-15.00%
Spread (OROA - EIAT) Profit Margin (NOPAT/Sales)
 2009 2008 2007
0.00%
2010 2009 2008
-5.00%
-10.00%
-15.00%
Spread (OROA - EIAT) Profit Margin (NOPAT/Sales)

Financial Ratio Graph ATO and NFL Graph

2.50

2.00

2009 2008 2007 1.50

1.00

0.50

P / avg. Equity) OROA (NOPAT / avg. NOA) -

E / avg. Net Debt) Spread (OROA - EIAT) 2010 2009 2008
argin (NOPAT/Sales) Asset Turnover (Sales / avg. NOA) NFL (avg. Net Debt / a
et Debt / avg.Equity)

2008 2007
(avg. Net Debt / avg.Equity)

rgin (NOPAT/Sales)

2008 2007

ofit Margin (NOPAT/Sales)

 2008 2007

ofit Margin (NOPAT/Sales)

and NFL Graph

2008 2007
avg. NOA) NFL (avg. Net Debt / avg.Equity)
Undo accounting transaction from distortion (million AUD)

1. Operating Lease transform to Finance Lease

Year Account Before
2010 Operating lease rentals (expense) 292.1
2009 Operating lease rentals (expense) 228.2
2008 Operating lease rentals (expense) 199.5
2007 Operating lease rentals (expense) 195.5
2006 Operating lease rentals (expense) 157.2

Assumption : All of the aircraft lease by the company is financing lease, since all of the rewards and ownership of the aircrafts belon
company

Fuel Expense
Year Account Before
2010 Fuel and Oil Expense 782.1
2009 Fuel and Oil Expense 748.9
2008 Fuel and Oil Expense 589.3
2007 Fuel and Oil Expense 488.9
2006 Fuel and Oil Expense 330.5

Assumption : The oil price is decrease 17%* on average from 2009 to 2010 (*moving average of jet fuel price ATA statist
2008;$128.86/barrel, 2009;$79.67/barrel and 2010; $94.25/barrel )
Financial Instrument-Hedging Current Assets
Year Account Before

2010 Fuel hedging contracts – cash flow hedges 10.8

2009 Fuel hedging contracts – cash flow hedges 0

2008 Fuel hedging contracts – cash flow hedges 123.2

2007 Fuel hedging contracts – cash flow hedges 11.7

2006 Fuel hedging contracts – cash flow hedges 0

Financial Instrument-Hedging Non Current Assets

Year Account Before

2010 Fuel hedging contracts – cash flow hedges 0

2009 Fuel hedging contracts – cash flow hedges 0

2008 Fuel hedging contracts – cash flow hedges 38

2007 Fuel hedging contracts – cash flow hedges 0

2006 Fuel hedging contracts – cash flow hedges 0

Financial Instrument-Hedging Current Liabilities

Year Account Before
2010 Fuel hedging contracts – cash flow hedges 31.7
2009 Fuel hedging contracts – cash flow hedges 76.3
 2008 Fuel hedging contracts – cash flow hedges 0
2007 Fuel hedging contracts – cash flow hedges 105
2006 Fuel hedging contracts – cash flow hedges 0

Assumption : No hedging strategy applied by the company, as in reality the company hedging strategy is uncommon by s
strike price highly above the average market prediction, as a consequences the company suffers loss from hedging in th
years
 Account After
Finance lease (capitalised) 292.1
Finance lease (capitalised) 228.2
Finance lease (capitalised) 199.5
Finance lease (capitalised) 195.5
Finance lease (capitalised) 157.2

ll of the rewards and ownership of the aircrafts belong to the

After $128.86/barrel
Fuel and Oil Expense 621.6 160.5
Fuel and Oil Expense 748.9
Fuel and Oil Expense 589.3
Fuel and Oil Expense 488.9
Fuel and Oil Expense 330.5

010 (*moving average of jet fuel price ATA statistic

After

Fuel hedging contracts – cash flow hedges 0

Fuel hedging contracts – cash flow hedges 0

Fuel hedging contracts – cash flow hedges 0

Fuel hedging contracts – cash flow hedges 0

Fuel hedging contracts – cash flow hedges 0

After

Fuel hedging contracts – cash flow hedges 0

Fuel hedging contracts – cash flow hedges 0

Fuel hedging contracts – cash flow hedges 0

Fuel hedging contracts – cash flow hedges 0

Fuel hedging contracts – cash flow hedges 0

After
Fuel hedging contracts – cash flow hedges 0
Fuel hedging contracts – cash flow hedges 0
 Fuel hedging contracts – cash flow hedges 0
Fuel hedging contracts – cash flow hedges 0
Fuel hedging contracts – cash flow hedges 0

the company hedging strategy is uncommon by setting the

ces the company suffers loss from hedging in the last 3
barrel, $79.67/barrel and $94.25/barrel

128.86 79.67
79.67 94.25
104.265 86.96
17.305

0.16597132
VBA

CASH FLOW SUMMARY

2010 2009 2008 2007
Operating Activities 369 101 294 406
Investment Activities (271) (562) (995) (294)
Financing Activities 242 335 605 25
Net Cash Increase 340 (126) (97) 137
2006
172
(121)
(266)
(215)
 Assets Current Non-Current Deferred Other = Liabilities + Equity
Adj Assets Tangible Tax
Assets Assets Assets = Current Non-Current
Liabilities
Debt
1 0 = 0
2 0 =
2 0 =
3 =
3 = 0
4 0 = 0
5 0 =
6 0 =
7 = 57,311 -57,311
Total 0 0 0 = 57,311 -57,311
Reported =
Adjusted 0 0 0 0= 57,311 -57,311

’31 Aug 2005 2006 2007 2008 2009 2010

($’000)
Within 1 year 161 63,042 77,706 83,847 83,463 89,582
1-5 years 458 211,265 267,792 257,058 262,339 317,137
Later than 5 89 147,193 146,196 103,480 102,626 78,658
years
Sum 708 421,500 491,694 444,385 448,428 485,377
Discount rate 10% 10% 11.30% 10.79%% 15.92%

1.   Capitalised the opening lease liability

2.   Adjust the lease asset = (1-0.81) X 491,913 = 93,463; tax rate = 30%; 93,463 X 30% = 28,039
3.   Apportion the lease payment,operating lease payment = 83,463 (taken from 2009); interest payment = 491,913 X 10.7
4.   Estimate new leases = 491,913 - 30,386= 461,527
5.   Estimate depreciation for 2010 = (81% X 491,913) : 7= 56,921 + (461,527 : 8) = 57,691 = 114,612
6.   Deferred tax adjusment = 30% X (83,463-53,077-114,612)=- 25,267, increase deferred tax asset and profit.
7.   Reclassify the leased liability taken from 2010 opening lease payment (within 1 year)
8.   The difference apparently comes from previous years operating lease capitalisastion, since this calculation only cover
8

VBA Operational Lease 2005-2010

’31 Aug 2005 2006 2007 2008 2009 2010
($’000)
Within 1 year 161 158.63 152.50 153.00 172.90 163.00
1-5 years 458 409.61 377.20 396.50 367.90 348.20
Later than 5 89 51.33 66.50 307.70 286.80 258.30
years
Sum 708.48 619.57 596.20 857.20 827.60 769.50
Discount rate 11.62% 11.90% 13.93% 12.93% 12.89% 15.81%
Present 634.72 553.68 523.30 759.05 733.10 664.45
Value
 Assets Current Non-Current Deferred Other = Liabilities + Equity
Adj Assets Assets Tax
(PPE) Assets Assets = Current Non-Current
Liabilities
Debt

1 634.72 = 634.72
2 -120.60 =
2 36.18 =
3 =
3 = -251.78
4 382.94 = 382.94
5 -65.10 =
6 56.01 =
7 = 141.76 -141.76
Total 0.00 831.97 92.18 0.00 = 141.76 624.12
Reported 647.80 1,206.30 0.60 388.29 = 542.80 766.80
Adjusted 647.80 2,038.27 92.78 388.29 = 684.56 1,390.92
Note:
1.   Capitalised the opening lease liability
2.   Adjust the lease asset = (1-0.81) X 634.72 = 120.60; tax rate = 30%; 120.60 X 30% = 36.18
3.   Apportion the lease payment,operating lease payment = 325.54 (taken from 2005); interest payment = 634.72 X 11.62% = 73.75 ; de
component = 325.54-73.75=251.78
4.   Estimate new leases = 634.72 - 251.78 = 382.94
5.   Estimate depreciation for 2006 = (81% X 634.72) : 7= 17.228 + (382.94 : 8) = 47.87 = 65.10
6.   Deferred tax adjusment = 30% X (325.54-73.75-65.10)=- 25,267, increase deferred tax asset and profit.
7.   Reclassify the leased liability taken from 2006 opening lease payment (within 1 year)
 Liabilities + Equity

Income R/E Other Equity

0
0
0
0

0
0

0 0 0
0
0 0 0

’31 Aug 2006 2007 2008 2009 2010

($’000)
Within 1 year 57,311 70,642 75,334 75,334 77,279
Over 1 year 378,637 458,094 429,400 416,579 384,230
Sum
435,948 528,736 504,734 491,913 61,509

interest payment = 491,913 X 10.79% = 53,077; debt repayment component = 83,463-53,077=30,386

,691 = 114,612
rred tax asset and profit.

n, since this calculation only covers 1 year period. The adjusment of intangible assets and goodwill should be taken into account as well.

’31 Aug 2005 2006 2007 2008 2009 2010

($’000)
Within 1 year 144.57 141.76 133.85 135.48 153.16 140.75
Over 1 year 490.15 411.92 389.45 623.57 579.95 523.70
Sum
634.72 553.68 523.30 759.05 733.10 664.45
 Liabilities + Equity

Income R/E Other Equity 2010 Operating lea 292.1

228.2
2009 Operating lea
2008 Operating lea 199.5
-120.60 2007 Operating lea 195.5
36.18 2006 Operating lea 157.2
325.54 2005 325.535
-73.75
depreciation -121 -17.228176
-65.10 -383 -47.86775
56.01 -65.095926

242.69 -84.42 0.00

327.19 192.40 413.80 1,854.70 2,242.99
569.88 107.98 413.80 Year

ent = 634.72 X 11.62% = 73.75 ; debt repayment  2007
Total
Reported
rofit. Adjusted
2008
Total
Reported
Adjusted
2009
Total
Reported
Adjusted
2010
Total
Reported
Adjusted
into account as well.
Assets Current Non-Current Deferred Other = Liabilities + Equity
Adj Assets Assets Tax
(PPE) Assets Assets = Current Non-Current
Debt Liabilities

0 838.022824 37.1060735 0 = 133.854121 790.879879 24.0342284

805.1 1425 0.7 325.51296 = 731.8 830.4 250.61296
805.1 2263.02282 37.8060735 325.51296 = 865.654121 1621.27988 274.647188

0 760.284604 47.3220126 0 = 135.482157 665.917843 75.8060202

863.3 2336 0.7 315.445948 = 1052 1360.6 177.545948
863.3 3096.2846 48.0220126 315.445948 = 1187.48216 2026.51784 253.351968

0 1169.71857 42.8277579 0 = 153.157941 1162.24206 -1.8994567

611.8 2645.7 0.7 -84.554273 = 1158.9 1630.9 -193.25427
611.8 3815.41857 43.5277579 -84.554273 = 1312.05794 2793.14206 -195.15373

0 1098.38994 53.4507252 0 = 140.747777 1058.05222 50.5433631

992.7 2753.9 6 194.594881 = 1308.9 1629.7 75.2948808
992.7 3852.28994 59.4507252 194.594881 = 1449.64778 2687.75222 125.838244
Liabilities + Equity

Income R/E Other Equity

-73.639331 0 0
387.3 356.2 0
313.660669 356.2 0

-69.599403 0 0
443.3 482 0
373.700597 482 0

-100.95422 0 0
283.3 293.8 0
182.345781 293.8 0

-97.502702 0 0
304.6 628.7 0
207.097298 628.7 0
 Assets Current Non-Current Deferred Other = Liabilities + Equity
Adj Assets Tangible Tax
Assets Assets Assets = Current Non-Current
Liabilities
Debt
1 435,948 = 435,948
2 -82,830 =
2 24,849 =
3 =
3 = -13,780
4 422,168 = 422,168
5 -103,216 =
6 26,831 =
7 = 70,642 -70,642
Total 0 672,070 51,680 = 70,642 773,694
Reported =
Adjusted 0 672,070 51,680 0= 70,642 773,694

’31 Aug 2006 2007 2008 2009 2010 ’31 Aug

($’000) ($’000)
Within 1 year 63,042 77,706 83,847 83,463 89,582 Within 1 year
1-5 years 211,265 267,792 257,058 262,339 317,137 Over 1 year
Later than 5 147,193 146,196 103,480 102,626 78,658 Sum
years
Sum 421,500 491,694 444,385 448,428 485,377
Discount rate 10% 10% 11.30% 10.79%% 15.92%

1.   Capitalised the opening lease liability

2.   Adjust the lease asset = (1-0.81) X 491,913 = 93,463; tax rate = 30%; 93,463 X 30% = 28,039
3.   Apportion the lease payment,operating lease payment = 83,463 (taken from 2009); interest payment = 491,913 X 10.79%
4.   Estimate new leases = 491,913 - 30,386= 461,527
5.   Estimate depreciation for 2010 = (81% X 491,913) : 7= 56,921 + (461,527 : 8) = 57,691 = 114,612
6.   Deferred tax adjusment = 30% X (83,463-53,077-114,612)=- 25,267, increase deferred tax asset and profit.
7.   Reclassify the leased liability taken from 2010 opening lease payment (within 1 year)
8.   The difference apparently comes from previous years operating lease capitalisastion, since this calculation only covers 1
8

’31 Aug 2005 2006 2007 2008 2009 2010

($’000)
Within 1 year 161 158.63 152.50 153.00 172.90 163.00
1-5 years 458 409.61 377.20 396.50 367.90 348.20
Later than 5 89 51.33 66.50 307.70 286.80 258.30
years
Sum 708.48 619.57 596.20 857.20 827.60 769.50
Discount rate 11.62% 11.90% 13.93% 12.93% 12.89% 15.81%

Assets Current Non-Current Deferred Other = Liabilities + Equity

Adj Assets Assets Tax
(PPE) Assets Assets = Current Non-Current
Liabilities
Debt

1 553.68 = 553.68
2 -105.20 =
2 31.56 =
3 =
3 = -91.31
4 462.37 = 462.37
5 -72.82 =
6 5.55 =
7 = 133.85 -133.85
Total 0.00 838.02 37.11 0.00 = 133.85 790.88
Reported 805.10 1,425.00 0.70 325.51 = 731.80 830.40
Adjusted 805.10 2,263.02 37.81 325.51 = 865.65 1,621.28

1.   Capitalised the opening lease liability

2.   Adjust the lease asset = (1-0.81) X 634.72 = 120.60; tax rate = 30%; 120.60 X 30% = 36.18
3.   Apportion the lease payment,operating lease payment = 325.54 (taken from 2005); interest payment = 634.72 X 11.62% = 73.75 ; debt
4.   Estimate new leases = 634.72 - 251.78 = 382.94
5.   Estimate depreciation for 2010 = (81% X 634.72) : 7= 17.228 + (382.94 : 8) = 47.87 = 65.10
6.   Deferred tax adjusment = 30% X (325.54-73.75-65.10)=- 25,267, increase deferred tax asset and profit.
7.   Reclassify the leased liability taken from 2010 opening lease payment (within 1 year)
The difference apparently comes from previous years operating lease capitalisastion, since this calculation only covers 1 year period. The adj
 Liabilities + Equity

Income R/E Other Equity

-82,830
24,849
63,042
-49,262

-103,216
26,831

-62,606 -57,981 0
0
-62,606 -57,981 0

2006 2007 2008 2009 2010

57,311 70,642 75,334 75,334 77,279

378,637 458,094 429,400 416,579 384,230

435,948 528,736 504,734 491,913 61,509

interest payment = 491,913 X 10.79% = 53,077; debt repayment component = 83,463-53,077=30,386

,691 = 114,612
rred tax asset and profit.

n, since this calculation only covers 1 year period. The adjusment of intangible assets and goodwill should be taken into account as well.

’31 Aug 2005 2006 2007 2008 2009 2010

($’000)
Within 1 year 144.57 141.76 133.85 135.48 153.16 140.75
Over 1 year 490.15 411.92 389.45 623.57 579.95 523.70
 Sum
634.72 553.68 523.30 759.05 733.10 664.45

Liabilities + Equity

Income R/E Other Equity 2010 Operating lea 292.1

2009 Operating lea 228.2

2008 Operating lea 199.5
-105.20 2007 Operating lea 195.5
31.56 2006 Operating lea 157.2
157.20 2005 325.535
-65.89

depreciation -105 -15.028435

-72.82 -462 -57.795875
5.55 -72.82431

24.03 -73.64 0.00

250.61 387.30 356.20 2,230.80 2,556.31
274.65 313.66 356.20

ment = 634.72 X 11.62% = 73.75 ; debt repayment component = 325.54-73.75=251.78

tion only covers 1 year period. The adjusment of intangible assets and goodwill should be taken into account as well.
into account as well.
 Assets Current Non-Current Deferred Other = Liabilities + Equity
Adj Assets Tangible Tax
Assets Assets Assets = Current Non-Current
Liabilities
Debt
1 528,736 = 528,736
2 -100,460 =
2 30,138 =
3 =
3 = -17,959
4 510,777 = 510,777
5 -125,029 =
6 32,121 =
7 = 75,334 -75,334
Total 0 814,024 62,259 = 75,334 946,220
Reported =
Adjusted 0 814,024 62,259 0= 75,334 946,220

’31 Aug 2006 2007 2008 2009 2010 ’31 Aug

($’000) ($’000)
Within 1 year 63,042 77,706 83,847 83,463 89,582 Within 1 year
1-5 years 211,265 267,792 257,058 262,339 317,137 Over 1 year
Later than 5 147,193 146,196 103,480 102,626 78,658 Sum
years
Sum 421,500 491,694 444,385 448,428 485,377
Discount rate 10% 10% 11.30% 10.79%% 15.92%

1.   Capitalised the opening lease liability

2.   Adjust the lease asset = (1-0.81) X 491,913 = 93,463; tax rate = 30%; 93,463 X 30% = 28,039
3.   Apportion the lease payment,operating lease payment = 83,463 (taken from 2009); interest payment = 491,913 X 10.79%
4.   Estimate new leases = 491,913 - 30,386= 461,527
5.   Estimate depreciation for 2010 = (81% X 491,913) : 7= 56,921 + (461,527 : 8) = 57,691 = 114,612
6.   Deferred tax adjusment = 30% X (83,463-53,077-114,612)=- 25,267, increase deferred tax asset and profit.
7.   Reclassify the leased liability taken from 2010 opening lease payment (within 1 year)
8.   The difference apparently comes from previous years operating lease capitalisastion, since this calculation only covers 1
8

’31 Aug 2005 2006 2007 2008 2009 2010

($’000)
Within 1 year 161 158.63 152.50 153.00 172.90 163.00
1-5 years 458 409.61 377.20 396.50 367.90 348.20
Later than 5 89 51.33 66.50 307.70 286.80 258.30
years
Sum 708.48 619.57 596.20 857.20 827.60 769.50
Discount rate 11.62% 11.90% 13.93% 12.93% 12.89% 15.81%

Assets Current Non-Current Deferred Other = Liabilities + Equity

Adj Assets Assets Tax
(PPE) Assets Assets = Current Non-Current
Liabilities
Debt
1 523.30 = 523.30
2 -99.43 =
2 29.83 =
3 =
3 = -122.60
4 400.70 = 400.70
5 -64.29 =
6 17.49 =
7 = 135.48 -135.48
Total 0.00 760.28 47.32 0.00 = 135.48 665.92
Reported 863.30 2,336.00 0.70 315.45 = 1,052.00 1,360.60
Adjusted 863.30 3,096.28 48.02 315.45 = 1,187.48 2,026.52

1.   Capitalised the opening lease liability

2.   Adjust the lease asset = (1-0.81) X 634.72 = 120.60; tax rate = 30%; 120.60 X 30% = 36.18
3.   Apportion the lease payment,operating lease payment = 325.54 (taken from 2005); interest payment = 634.72 X 11.62% = 73.75 ; debt
4.   Estimate new leases = 634.72 - 251.78 = 382.94
5.   Estimate depreciation for 2010 = (81% X 634.72) : 7= 17.228 + (382.94 : 8) = 47.87 = 65.10
6.   Deferred tax adjusment = 30% X (325.54-73.75-65.10)=- 25,267, increase deferred tax asset and profit.
7.   Reclassify the leased liability taken from 2010 opening lease payment (within 1 year)
The difference apparently comes from previous years operating lease capitalisastion, since this calculation only covers 1 year period. The adj
 Liabilities + Equity

Income R/E Other Equity

-100,460
30,138
77,706
-59,747

-125,029
32,121

-74,949 -70,322 0
0
-74,949 -70,322 0

2006 2007 2008 2009 2010

57,311 70,642 75,334 75,334 77,279

378,637 458,094 429,400 416,579 384,230

435,948 528,736 504,734 491,913 61,509

interest payment = 491,913 X 10.79% = 53,077; debt repayment component = 83,463-53,077=30,386

,691 = 114,612
rred tax asset and profit.

n, since this calculation only covers 1 year period. The adjusment of intangible assets and goodwill should be taken into account as well.

’31 Aug 2005 2006 2007 2008 2009 2010

($’000)
Within 1 year 144.57 141.76 133.85 135.48 153.16 140.75
Over 1 year 490.15 411.92 389.45 623.57 579.95 523.70
 Sum
634.72 553.68 523.30 759.05 733.10 664.45

Liabilities + Equity

Income R/E Other Equity 2010 Operating lea 292.1

2009 Operating lea 228.2
2008 Operating lea 199.5
-99.43 2007 Operating lea 195.5
29.83 2006 Operating lea 157.2
195.50 2005 325.535
-72.90

depreciation -99 -14.20396

-64.29 -401 -50.0875
17.49 -64.29146

75.81 -69.60 0.00

177.55 443.30 482.00 3,200.00 3,515.45
253.35 373.70 482.00

ment = 634.72 X 11.62% = 73.75 ; debt repayment component = 325.54-73.75=251.78

tion only covers 1 year period. The adjusment of intangible assets and goodwill should be taken into account as well.
into account as well.
 Assets Current Non-Current Deferred Other = Liabilities + Equity
Adj Assets Tangible Tax
Assets Assets Assets = Current Non-Current
Liabilities
Debt
1 504,734 = 504,734
2 -95,899 =
2 28,770 =
3 =
3 = -26,812
4 477,922 = 477,922
5 -118,145 =
6 27,400 =
7 = 75,334 -75,334
Total 0 768,611 56,170 = 75,334 880,510
Reported =
Adjusted 0 768,611 56,170 0= 75,334 880,510

824,781 824,781
’31 Aug 2006 2007 2008 2009 2010 ’31 Aug
($’000) ($’000)
Within 1 year 63,042 77,706 83,847 83,463 89,582 Within 1 year
1-5 years 211,265 267,792 257,058 262,339 317,137 Over 1 year
Later than 5 147,193 146,196 103,480 102,626 78,658 Sum
years
Sum 421,500 491,694 444,385 448,428 485,377
Discount rate 10% 10% 11.30% 10.79%% 15.92%

1.   Capitalised the opening lease liability

2.   Adjust the lease asset = (1-0.81) X 491,913 = 93,463; tax rate = 30%; 93,463 X 30% = 28,039
3.   Apportion the lease payment,operating lease payment = 83,463 (taken from 2009); interest payment = 491,913 X 10.79%
4.   Estimate new leases = 491,913 - 30,386= 461,527
5.   Estimate depreciation for 2010 = (81% X 491,913) : 7= 56,921 + (461,527 : 8) = 57,691 = 114,612
6.   Deferred tax adjusment = 30% X (83,463-53,077-114,612)=- 25,267, increase deferred tax asset and profit.
7.   Reclassify the leased liability taken from 2010 opening lease payment (within 1 year)
8.   The difference apparently comes from previous years operating lease capitalisastion, since this calculation only covers 1
8

’31 Aug 2005 2006 2007 2008 2009 2010

($’000)
Within 1 year 161 158.63 152.50 153.00 172.90 163.00
1-5 years 458 409.61 377.20 396.50 367.90 348.20
Later than 5 89 51.33 66.50 307.70 286.80 258.30
years
Sum 708.48 619.57 596.20 857.20 827.60 769.50
Discount rate 11.62% 11.90% 13.93% 12.93% 12.89% 15.81%

Assets Current Non-Current Deferred Other = Liabilities + Equity

Adj Assets Assets Tax
(PPE) Assets Assets = Current Non-Current
Liabilities
Debt
1 759.05 = 759.05
2 -144.22 =
2 43.27 =
3 =
3 = -101.35
4 657.70 = 657.70
5 -102.82 =
6 -0.44 =
7 = 153.16 -153.16
Total 0.00 1,169.72 42.83 0.00 = 153.16 1,162.24
Reported 611.80 2,645.70 0.70 -84.55 = 1,158.90 1,630.90
Adjusted 611.80 3,815.42 43.53 -84.55 = 1,312.06 2,793.14

1.   Capitalised the opening lease liability

2.   Adjust the lease asset = (1-0.81) X 634.72 = 120.60; tax rate = 30%; 120.60 X 30% = 36.18
3.   Apportion the lease payment,operating lease payment = 325.54 (taken from 2005); interest payment = 634.72 X 11.62% = 73.75 ; debt
4.   Estimate new leases = 634.72 - 251.78 = 382.94
5.   Estimate depreciation for 2010 = (81% X 634.72) : 7= 17.228 + (382.94 : 8) = 47.87 = 65.10
6.   Deferred tax adjusment = 30% X (325.54-73.75-65.10)=- 25,267, increase deferred tax asset and profit.
7.   Reclassify the leased liability taken from 2010 opening lease payment (within 1 year)
The difference apparently comes from previous years operating lease capitalisastion, since this calculation only covers 1 year period. The adj
 Liabilities + Equity

Income R/E Other Equity

-95,899
28,770
83,847
-57,035

-118,145
27,400

-63,933 -67,130 0
0
-63,933 -67,130 0

0
2006 2007 2008 2009 2010

57,311 70,642 75,334 75,334 77,279

378,637 458,094 429,400 416,579 384,230

435,948 528,736 504,734 491,913 61,509

interest payment = 491,913 X 10.79% = 53,077; debt repayment component = 83,463-53,077=30,386

,691 = 114,612
rred tax asset and profit.

n, since this calculation only covers 1 year period. The adjusment of intangible assets and goodwill should be taken into account as well.

’31 Aug 2005 2006 2007 2008 2009 2010

($’000)
Within 1 year 144.57 141.76 133.85 135.48 153.16 140.75
Over 1 year 490.15 411.92 389.45 623.57 579.95 523.70
 Sum
634.72 553.68 523.30 759.05 733.10 664.45

Liabilities + Equity

Income R/E Other Equity 2010 Operating lea 292.1

2009 Operating lea 228.2
2008 Operating lea 199.5
-144.22 2007 Operating lea 195.5
43.27 2006 Operating lea 157.2
199.50 2005 325.535
-98.15

depreciation -144 -20.602902

-102.82 -658 -82.2125
-0.44 -102.8154

-1.90 -100.95 0.00

-193.25 283.30 293.80 3,258.20 3,173.65
-195.15 182.35 293.80

ment = 634.72 X 11.62% = 73.75 ; debt repayment component = 325.54-73.75=251.78

tion only covers 1 year period. The adjusment of intangible assets and goodwill should be taken into account as well.
into account as well.
 Assets Current Non-Current Deferred Other = Liabilities + Equity
Adj Assets Tangible Tax
Assets Assets Assets = Current Non-Current
Liabilities
Debt
1 491,913 = 491,913
2 -93,463 =
2 28,039 =
3 =
3 = -30,386
4 461,527 = 461,527
5 -114,612 =
6 25,267 =
7 = 77,279 -77,279
Total 0 745,365 53,306 = 77,279 845,775
Reported 388,154 81,349 11,718 183,693 = 227,156 534,386
Adjusted 388,154 826,714 65,024 183,693 = 304,435 1,380,161

1,463,585 1,463,585
’31 Aug 2006 2007 2008 2009 2010 ’31 Aug
($’000) ($’000)
Within 1 year 63,042 77,706 83,847 83,463 89,582 Within 1 year
1-5 years 211,265 267,792 257,058 262,339 317,137 Over 1 year
Later than 5 147,193 146,196 103,480 102,626 78,658 Sum
years
Sum 421,500 491,694 444,385 448,428 485,377
Discount rate 10% 10% 11.30% 10.79%% 15.92%

1.   Capitalised the opening lease liability

2.   Adjust the lease asset = (1-0.81) X 491,913 = 93,463; tax rate = 30%; 93,463 X 30% = 28,039
3.   Apportion the lease payment,operating lease payment = 83,463 (taken from 2009); interest payment = 491,913 X 10.79% = 53,077; de
4.   Estimate new leases = 491,913 - 30,386= 461,527
5.   Estimate depreciation for 2010 = (81% X 491,913) : 7= 56,921 + (461,527 : 8) = 57,691 = 114,612
6.   Deferred tax adjusment = 30% X (83,463-53,077-114,612)=- 25,267, increase deferred tax asset and profit.
7.   Reclassify the leased liability taken from 2010 opening lease payment (within 1 year)
The difference apparently comes from previous years operating lease capitalisastion, since this calculation only covers 1 year period. The adj

Assets Current Non-Current Deferred Other = Liabilities + Equity

Adj Assets Assets Tax

(PPE) Assets Assets = Current Non-Current

Liabilities
Debt
 1 292.10 = 292
2 -58 =
2 18 =
3 =
3 = -30,386
4 461,527 = 461,527
5 -114,612 =
6 25,267 =
7 = 77,279 -77,279
Total 0 745,365 25,285 = 77,279 845,775
Reported 388,154 81,349 11,718 183,693 = 227,156 534,386
Adjusted 388,154 826,714 37,003 183,693 = 304,435 1,380,161

1.   Capitalised the opening lease liability

2.   Adjust the lease asset = (1-0.81) X 491,913 = 93,463; tax rate = 30%; 93,463 X 30% = 28,039
3.   Apportion the lease payment,operating lease payment = 83,463 (taken from 2009); interest payment = 491,913 X 10.79% = 53,077; de
4.   Estimate new leases = 491,913 - 30,386= 461,527
5.   Estimate depreciation for 2010 = (81% X 491,913) : 7= 56,921 + (461,527 : 8) = 57,691 = 114,612
6.   Deferred tax adjusment = 30% X (83,463-53,077-114,612)=- 25,267, increase deferred tax asset and profit.
7.   Reclassify the leased liability taken from 2010 opening lease payment (within 1 year)
The difference apparently comes from previous years operating lease capitalisastion, since this calculation only covers 1 year period. The adj

’31 Aug 2006 2007 2008 2009 2010 ’31 Aug

($’000) ($’000)
Within 1 year 158.63 152.50 153.00 172.90 163.00 Within 1 year
1-5 years 409.61 377.20 396.50 367.90 348.20 Over 1 year
Later than 5 51.33 66.50 307.70 286.80 258.30 Sum
years
Sum 619.57 596.20 857.20 827.60 769.50
Discount rate 11.90% 13.93% 12.93% 12.89% 15.81%

’31 Aug 2005 2006 2007 2008 2009 2010

($’000)
Within 1 year 161 158.63 152.50 153.00 172.90 163.00
1-5 years 458 409.61 377.20 396.50 367.90 348.20
Later than 5 89 51.33 66.50 307.70 286.80 258.30
years
Sum 708.48 619.57 596.20 857.20 827.60 769.50
Discount rate 11.62% 11.90% 13.93% 12.93% 12.89% 15.81%

Assets Current Non-Current Deferred Other = Liabilities + Equity

Adj Assets Assets Tax
(PPE) Assets Assets = Current Non-Current
Liabilities
 = Non-Current
Liabilities
Debt

1 733.10 = 733.10
2 -139.29 =
2 41.79 =
3 =
3 = -133.70
4 599.40 = 599.40
5 -94.82 =
6 11.66 =
7 = 140.75 -140.75
Total 0.00 1,098.39 53.45 0.00 = 140.75 1,058.05
Reported 992.70 2,753.90 6.00 194.59 = 1,308.90 1,629.70
Adjusted 992.70 3,852.29 59.45 194.59 = 1,449.65 2,687.75

Notes
1.   Capitalised the opening lease liability
2.   Adjust the lease asset = (1-0.81) X 733.10 = 139.29; tax rate = 30%; 139.29 X 30% = 41.79
3.   Apportion the lease payment,operating lease payment = 228.20 (taken from 2009); interest payment = 733.10 X 12.89% = 94.50 ; debt
4.   Estimate new leases = 733.10 - 133.70 = 599.40
5.   Estimate depreciation for 2010 = (81% X 733.10) : 7= 19.90 + (599.40: 8) = 94.82
6.   Deferred tax adjusment = 30% X (228.20-94.50-94.82)=11.66, increase deferred tax asset and profit.
7.   Reclassify the leased liability taken from 2010 opening lease payment (within 1 year)
The difference apparently comes from previous years operating lease capitalisastion, since this calculation only covers 1 year period. The adj
 Liabilities + Equity

Income R/E Other Equity

-93,463
28,039
83,463
-53,077

-114,612
25,267

-58,959 -65,424 0 798,671

151,397 -248,025 0 798,671 664,914
92,438 -313,449 0

0
2006 2007 2008 2009 2010

57,311 70,642 75,334 75,334 77,279

378,637 458,094 429,400 416,579 384,230

435,948 528,736 504,734 491,913 61,509

75334.4165

ment = 491,913 X 10.79% = 53,077; debt repayment component = 83,463-53,077=30,386

tion only covers 1 year period. The adjusment of intangible assets and goodwill should be taken into account as well.

Liabilities + Equity

Income R/E Other Equity

 dep tax
-58 0.2 0.3
18 0.2
83,463
-53,077 interest payment
29.21
-114,612
25,267

-58,959 -65,424 0
151,397 -248,025 0
92,438 -313,449 0

ment = 491,913 X 10.79% = 53,077; debt repayment component = 83,463-53,077=30,386

tion only covers 1 year period. The adjusment of intangible assets and goodwill should be taken into account as well.

2006 2007 2008 2009 2010

141.76 133.85 135.48 153.16 140.75

411.92 389.45 623.57 579.95 523.70

553.68 523.30 759.05 733.10 664.45

’31 Aug 2005 2006 2007 2008 2009 2010

($’000)
Within 1 year 144.57 141.76 133.85 135.48 153.16 140.75
Over 1 year 490.15 411.92 389.45 623.57 579.95 523.70
Sum
634.72 553.68 523.30 759.05 733.10 664.45

Liabilities + Equity

Income R/E Other Equity 2010 Operating lea 292.1

 Income R/E Other Equity

228.2
2009 Operating lea
2008 Operating lea 199.5
-139.29 2007 Operating lea 195.5
41.79 2006 Operating lea 157.2
228.20 2005 325.535
-94.50

depreciation -139 -19.898511

-94.82 -599 -74.925
11.66 -94.823511

50.54 -97.50 0.00

75.29 304.60 628.70 3,752.60 3,947.19
125.84 207.10 628.70

ment = 733.10 X 12.89% = 94.50 ; debt repayment component = 228.20-94.50=133.70

tion only covers 1 year period. The adjusment of intangible assets and goodwill should be taken into account as well.