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Case Study 1
1. Assumptions
This Forecast uses the sales driven approach; assuming, where logical, that accounts have a high
correlation with revenue. When predicting revenue growth I have looked at the revenue driving forces
of each industry sector that Aurizon Holdings Limited (AZJ) operates in as well as AZJs past
performance.
Coal
Although coal exports have declined in recent years analysts are expecting $10,053 million in 2014
up from $8,774 million in 2013. I have assumed the analysts are correct about this extra demand for
coal and the result will be strong growth on coal revenues for AZJ for the 2014 period and the
following periods to slowly revert back to a more sustainable rate. AZJs coal revenue growth will
also come from strong investment and market share growth. They have done well to secure long term
contracts that are expected to provide income until past 2020 and continue to invest their coal network
to take advantage of the expected increase in demand. This strategy has worked in the past as AZJs
revenues have continued to grow while demand (exports) has decreased therefore I made the base
case assumption that coal haulage revenues to grow 11.8%, 8.4% and 5.1% in 2014, 2015 and 2016
respectively.
Freight
Freight revenues have been declining in recent years. There is no mention from management as to
how they will address this issue, economist expectation of only 1.1% increase in rail freight for 2014,
equal to 2013, and an average CAGR of 2.1% for the decade I expect that this sectors revenues will
continue to decline. I forecast -6.4%, -4.9% and -3.8% for 2014, 2015 and 2016 respectively.
Network Services
AZJs Network revenues have performed erratically. With the investment in the network and economic
data suggesting that demand is going strengthen, backed up by profit upgrades from Rio Tinto and
BHP Billiton, I believe that there will be growth in AZJs network revenues of 5.9%, 3.7% and 3.2%
in 2014, 2015 and 2016 respectively.
Iron Ore
Recent expansion into the iron ore market has provided good revenue for AZJ and has grown rapidly.
This expansion is expected to reach the target of 30mt in 2014, an increase of 5.3mt. There are growth
opportunities in the Pilbara region, although analysts expect it will be difficult to challenge the big
market players in the iron ore industry for this reason I expect growth to continue but at a
substantially slower rate in the future (tonnage forecasts have been used, over growth rates, due to the
previous rapid growth rates being unsustainable and less insightful).
Intersegment adjustment
The intersegment adjustment forecast has been made as average of the adjustments in the previous 3
years and as no pattern has presented itself it is best predicted at this rate in the future.

This combination of macro and internal growth analysis gives a future revenue growth forecast of
5.7%, 4.2% and 3.0% in 2014, 2015 and 2016 respectively before adjusting for inflation. The
adjustment for inflation has been made at a 2.5% rate for all years using the expected 2014 rate to be
the best estimate for all years as inflation doesnt fluctuate substantially. This inflation adjustment
also travels through the model as the inflation affected accounts are linked to revenue.
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Operating Expenses
Operating expenses are assumed to grow as a portion of revenue, adjusting for the following;
Cost savings due to their Integrated Operating Plan of an expected $20m per year.
Reduced redundancy costs as expected voluntary redundancies decline.
Tax
The company is currently not paying the statutory tax but due to lack of information and a long term
expectation for the company to pay the statutory tax rate we have used 30% in our estimates.
Abnormals
The company has announced that it will be incurring 2 impairment expenses;
Pretax $147m in relation to the sale of the locomotive and wagon fleet
Pretax $50m in relation to the failed joint venture with Glencore Xstrata
Receivables and Inventories
I made the assumption that accounts receivable and inventory would expand proportionally to revenue
and that accounts receivable days and inventory days would not substantially deviate from the
average. Therefore an average of the 2011 to 2013 period has been used as an estimate.
Dividends/Retained Earnings
The dividend payout ratio is assumed to stay consistent with 2013 at 65%. AZJs debt is serviceable
and short term capital requirements can be sourced from the unused portion of the debt facility.
Property Plant and Equipment, Depreciation and Capital Expenditure
The information provided by management for planned CAPEX is assumed to be the best estimate.
Depreciation rates as a proportion of PPE have been stable around the mean and therefore the 3 year
average has been the basis for the forecast. One adjustment in PPE for the loss recognized on the
partial sale of the locomotive and wagon fleet. After this PPE is calculated as last years PPE
Depreciation + CAPEX.
The Plug and Non-Current Borrowings
The plug has been used and the deficit placed in overdrafts, in reality this money would come from
the reserves in the long term debt facility as the costs would be significantly cheaper.
Interest Expense
The interest expense has been calculated as 5% (given interest rate) of all current and non-current
borrowings including the amount added with the plug.
Cash and Provision
These accounts were expected to be linked to revenue and therefore increase proportionally.
The unpredictability of the following due to lack of information made either the 3 year average, held
at 0 or no change on previous year the best forecast
Amortisation NCA inventories NCA Investments Investments
Prepaid expenses Intangibles NC Provisions Other NC Liabilities
NCA held for sale Minorities Other current assets

2. Financing Needs
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Looking at the overdrafts account you can see an extra $271m is needed in 2014, increasing to $706m
in 2015 before being paid back down to $600m in 2016. The main driver of this is forecasted growth
capital expenditure which is significantly reduced in 2016 and the reason why the overdraft account is
also reduced in 2016. The sale of the locomotive and wagon fleet also provides some relief from
financing in 2014.
The service of this extra funding is within AZJs capacity as they have $3,600 in floating rate bank
facilities. AZJ will require and extra $706m by 2015 bringing their total long term borrowings to
$3,185m, within the $3,600m limit. The excess lending capacity of $415m in 2015 and then a
reduction in borrowings in 2016 should be considered satisfactory for AZJs growth strategy and I see
no need for extra financing to arise or any change in AZJs dividend policy to occur.

3. Important Assumptions
Revenue Growth
The assumptions that have determined the revenue growth are the most important as most accounts
are linked in one way or another to these assumptions. A change in revenue growth by 1% effect
revenue and profitability by approximately $39m and $9m in 2014 respectively, over three years the
effect is approximately $124m and $31m respectively. This effects dividends paid by approximately
$6m per year per percentage point move.
Although many accounts will be effected by changes in revenue growth AZJs financing need is
resilient fluctuations in yearly revenue growth. A 1% change in revenue causes a change in net debt of
approximately $3m per year and $11m over the 3 years.


Payout Ratio
The payout ratio was an important assumption for a company undertaking a growth strategy. The
capital needs of AZJs investments could prove to alter the 65% payout ratio in my forecasts.
A 5% move in the payout ratio causes the net debt to change approximately $30m and a move back to
a 50% payout ratio would improve financial position of AZJ by $66m in 2014 and $269m over the 3
years. This is directly at the expense of dividends paid. The interest expense is reduced by
approximately $3m, $5m and $5m in 2014, 2015 and 2016 respectively, totalling $13m.


Tax Rate
The tax rate has fluctuated in AZJs history and was therefore hard to predict, the conservative
assumption of 30%, the statutory rate, could differ and a 1% move would change net debt by
approximately $3m. The company has paid lower tax rates in previous years and reducing the rate to
24% improves the companys net debt by approximately $20m per year. The net profit and therefore
dividends are also significantly affected by the tax rate lowering the rate to 24% would increase AZJs
profit by an average of $51m and dividends would increase by an average of $33m.


4. Operating Ratio
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Aurizon Is currently undertaking heavy cost cutting strategies, The Drive to 75 initiative has seen
the company introduce a voluntary redundancy program which has been a great success. They have
reduced the workforce by 2,047 employees since the IPO and the program is expected to be mostly
complete by 2015. The efforts of management have been successful and resulted in a reduction in the
cost operating ratio from 78.4% in 2010 to 66.8% in 2014.
Redundancy costs associated with the redundancy program are expected to be close to fully realised
by 2015 and according to my analysis costs decrease by $64m in 2014 and $28m in 2015. The
Integrated Operating Plan will also provide a cost benefit as the plan to reduce the size of Aurizons
locomotive and wagon fleet is expected to save $20m per annum from 2014 until 2018. Accounting
for these cost savings puts Aurizon ahead of schedule and their cost operating ratio should be 64.7%
and 64.1% in 2014 and 2015 respectively. The savings from the reduced labour force may see
Aurizon outperform these estimates.
The negotiation of a new enterprise agreement with employees is causing trouble for Aurizon as
internal dissatisfaction rises the risk of industrial action resulting in strikes also rise. The costs
associated with a strike would disrupt Aurizons plans for a 65% cost operating ratio.
External pressure from Asciano Limited may also threaten sales margins if aggressive competitive
tactics are pursued and price cutting results. The macro factors determining the future of the resources
sector in have proven to be volatile recently and if demand drops and revenues fall the cost operating
ratio is likely to deteriorate as fixed costs become proportionately larger to variable costs.

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A B C D E F G H I J K L M N O P Q R S T U V W X Y
Aurizon Holdings Limited: Financial Summary
A$ in millions, year end Jun
Profit And Loss FY10 FY11 FY12 FY13 FY14 FY15 FY16 Assumptions FY11 FY12 FY13 FY14 FY15 FY16 Further Assumptions FY11 FY12 FY13 FY14 FY15 FY16
Revenue 2903 3291 3,632 3,763 4,077 4,356 4,597 Revenue Growth 13.4% 10.3% 3.6% 5.7% 4.2% 3.0% Inflation rate 2.5% 2.5% 2.5%
Operating Expenses (2,275) (2,324) (2,583) (2,513) (2,638) (2,790) (2,941) Operating Expenses (2,638) (2,790) (2,941) OPEX Ratio 70.6% 71.1% 66.8% 64.7% 64.1% 64.0%
EBITDA 628 967 1,048 1,251 1,439 1,565 1,656 Redundancy cost (96) (32) (4) 0
Amortisation 0 (133) (141) (191) (155) (155) (155) Amortisation (155) (155) (155) Redundancy cost benefit 64 28 4
Depreciation (424) (313) (323) (306) (334) (349) (372) Depreciation rate 3.8% 3.6% 3.2% 3.5% 3.5% 3.5% IOP cost benefit 20
EBIT 204 520 585 754 950 1,062 1,129 Operating ratio 93% 84% 84% 80% 77% 76%
Net Interest 0 (138) (39) (103) (131) (153) (147) Interest rate 5% 5% 5%
Pre-Tax Profit 204 382 546 651 819 909 982
Tax 0 (113) (126) (135) (246) (273) (295) Statutory Tax Rate 30% 30% 30% Payout ratio 0.50 0.55 0.60 0.65 0.70
Minorities 0 0 0 0 0 0 0 Total Borrowings 2,683 2,705 2,727 2,749 2,771
Abnormals (post tax) 0 80 21 (69) (138) 0 0 Abnormals (post tax) (138) Interest Expense (128) (129) (130) (131) (132)
Reported NPAT 204 350 441 447 435 636 688 Net Debt 2,559 2,581 2,603 2,625 2,647
Normalised NPAT 204 269 420 516 573 636 688 Shareholder Equity 6,714 6,692 6,670 6,648 6,626
Dividends paid (219) (240) (262) (283) (304)
Balance Sheet FY10 FY11 FY12 FY13 FY14 FY15 FY16 Balance Sheet FY11 FY12 FY13 FY14 FY15 FY16 Revenue Growth 0.1% 2.1% 4.1% 6.1% 8.1%
Cash 0 117.1 99 108 124 133 140 Cash/Revenue 3.6% 2.7% 2.9% 3.0% 3.0% 3.0% Revenue 3,861 3,938 4,016 4,093 4,170
Excess Cash 0 0 0 0 0 0 0 NPAT 384 403 421 439 457
Receivables 525 473.5 548 580 610 652 688 A/c Recievables Days 52.52 55.09 56.21 54.60 54.60 54.60 Net Debt 2,644 2,637 2,631 2,624 2,617
Investments 16.0 21.3 0.1 0.4 0.4 0.4 0.4 Investments 21.3 0.1 0.4 0.4 0.4 0.4 Shareholder Equity 6,630 6,636 6,643 6,649 6,655
Prepaid Expenses 0.0 10.6 8.0 10.2 10.2 10.2 10.2 Prepaid Expenses 10.6 8.0 10.2 10.2 10.2 10.2 Dividends Paid (250) (262) (274) (285) (297)
Inventories 167 177.6 216 212 230 246 259 Inventory days 20 22 21 21 21 21 Tax Rate 24.0% 26.0% 28.0% 30.0% 32.0%
NCA Held for Sale 0 0 9 23 0 0 0 NPAT 473 460 448 435 423
Other Current Assets 10 0 0 0 0 0 0 Other Current Assets 0 0 0 Overdraft 258 262 266 271 275
Total Current Assets 718 800 880 933 974 1,041 1,098 Net Debt 2,612 2,616 2,621 2,625 2,630
NCA Inventories 24 21 9 19 18 18 18 Average NCA Invintories 18 18 18 Shareholder Equity 6,661 6,657 6,652 6,648 6,643
NCA Investments 43 40 78 79 79 79 79 Average NCA Investmetns 66 18 18 Dividends Paid (307) (299) (291) (283) (275)
PPE 7,884 8,276 9,037 9,473 9,892 10,543 10,671 Loss Recognised from sale of locomotive & wagon fleet (147) OPEX Ratio 64.8% 65.8% 66.8% 67.8% 68.8%
Total Intangibles 39 24 16 11 17 17 17 Average intangibles 17 17 17 Operating Expenses (2,556) (2,597) (2,638) (2,678) (2,719)
Other Non Current Assets 4 0 1 3 1 1 1 Average Other Non Current Assets 1 1 1 NPAT 493 464 435 406 377
Total Non Current Assets 7,994 8,361 9,140 9,586 10,008 10,659 10,787 Net Debt 2,605 2,615 2,625 2,635 2,646
Total Assets 8,712 9,161 10,020 10,519 10,982 11,699 11,884 Shareholder Equity 6,668 6,658 6,648 6,638 6,628
Dividends Paid (320) (302) (283) (264) (245)
Creditors 335 342 350 321 347 371 392 A/c payable Days 37.88 35.14 31.11 31.11 31.11 31.11
Overdrafts 0 0 0 0 271 706 600 Payout ratio 0.50 0.55 0.60 0.65 0.70
Current Borrowings 0 0 0 0 0 0 0 Current Borrowings 0 0 0 Total Borrowings 3,088 3,120 3,153 3,185 3,217
Provisions 30 316 381 428 464 496 523 Provisions 9.6% 10.5% 11.4% 11.4% 11.4% 11.4% Interest Expense (148) (149) (151) (153) (154)
Other current liabilities 310 36 38 42 46 49 52 Other non-current liabilities 1.1% 1.0% 1.1% 1.1% 1.1% 1.1% Net Debt 2,955 2,988 3,020 3,052 3,084
Total Current Liabilities 675 694 767.7 791.3 1128.065 1622.313 1566.686 Shareholder Equity 6,968 6,935 6,903 6,870 6,838
Non Current Borrowings 500 803 1,202 2,479 2,479 2,479 2,479 2013 NC Borrowings 2,479 2,479 2,479 Dividends paid (320) (351) (382) (414) (445)
Non Current Provisions 407 328 447 487 421 421 421 Average NC Provisions 421 421 421 Revenue Growth -0.6% 1.4% 3.4% 5.4% 7.4%
Other Non Current Liabilities 343 345 310 267 307 307 307 Average Other NC Liabilites 307 307 307 Revenue 4,153 4,237 4,320 4,404 4,488
Total Non Current Liabilities 1250 1476 1958.6 3232.2 3206.4 3206.4 3206.4 NPAT 586 606 627 648 669
Total Liabilities 1925 2170 2726.3 4023.5 4334.465 4828.713 4773.086 Net Debt 3,071 3,063 3,056 3,048 3,040
Shareholder Equity 6,853 6,860 6,867 6,875 6,882
Equity 6074 6,112 6,119 5,071 5,071 5,071 5,071 2013 Equity 5,071 5,071 5,071 Dividends Paid (381) (394) (408) (421) (435)
Reserves (2) (2) (2) 0 0 0 0 2013 Reserves 0 0 0 Tax Rate 24.0% 26.0% 28.0% 30.0% 32.0%
Retained Profits 716 882 1,177 1,424 1,576 1,799 2,040 NPAT 691 673 655 636 618
Sesitivity Analysis
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2015
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A B C D E F G H I J K L M N O P Q R S T U V W X Y
Outside Equity Interests 0 0 0 0 0 0 0 Overdraft 687 694 700 706 713
Total Shareholders Equity 6788 6991.7 7294.2 6495.6 6647.809 6870.49 7111.193 Net Debt 3,033 3,039 3,046 3,052 3,059
Net Debt 500 686.1 1102.8 2371 2,625 3,052 2,939 Shareholder Equity 6,890 6,883 6,877 6,870 6,864
Days in a Year 365 Dividends Paid (449) (437) (426) (414) (402)
OPEX Ratio 62.7% 63.7% 64.7% 65.7% 66.7%
Total Assets 8,712 9,161 10,020 10,519 10,982 11,699 11,884 Trial assets 9,161 10,020 10,519 10,982 11,699 11,884 Operating Expenses (2,702) (2,745) (2,789) (2,833) (2,876)
Total Liabilities + Total Equity 8,713 9,162 10,021 10,519 10,982 11,699 11,884 Trial Liabilities + Equity 9162 10021 10519 10711 10993 11284 NPAT 699 668 637 606 575
plug (1) (1) (1) 271 706 600 Net Debt 3,030 3,041 3,052 3,063 3,074
Shareholder Equity 6,892 6,882 6,871 6,860 6,849
Cash Flow Statement FY10 FY11 FY12 FY13 FY14 FY15 FY16 Cash Flow Statement FY11 FY12 FY13 FY14 FY15 FY16 Dividends Paid (454) (434) (414) (394) (374)
Payment for Purchase of PPE (1,338) (1,156) (944) (900) (1,000) (500) Schedualed Capex (900) (1,000) (500)
Proceeds From Sale of PPE 38 46 49 44 44 44 Proceeds From Sale of PPE 38 46 49 44 44 44 Payout ratio 0.50 0.55 0.60 0.65 0.70
Dividends Paid (86) (181) (200) (283) (414) (447) Dividend Payout ratio 0.65 0.65 0.65 Total Borrowings 2,974 3,009 3,044 3,079 3,113
Interest Expense (142) (143) (145) (147) (149)
Net Debt 2,834 2,869 2,904 2,939 2,973
Shareholder Equity 7,216 7,181 7,146 7,111 7,076
Coal FY10 FY11 FY12 FY13 FY14 FY15 FY16 Coal FY11 FY12 FY13 FY14 FY15 FY16 Dividends paid (346) (380) (413) (447) (481)
Revenue ($ million) 1647 1655 1772 1863 2082 2257 2372 Revenue growth 0.5% 7.0% 5.1% 11.8% 8.4% 5.1% Revenue Growth -1.7% 0.3% 2.3% 4.3% 6.3%
Coal exports($mil) 10840 10089 9724 8774 10053 Coal Export Growth -4% -9.8% 14.6% Revenue 4,389 4,478 4,565 4,657 4,746
Freight Freight NPAT 635 657 680 703 726
Revenue ($ million) 1097.1 1221 1164.6 1081.2 1003.8 939.5 893.5 Revenue Growth 11.3% -4.6% -7.2% -6.4% -4.9% -3.8% Net Debt 2,958 2,950 2,942 2,933 2,925
Network Services Network Services Shareholder Equity 7,093 7,101 7,108 7,116 7,124
Revenue ($ million) 1059 1180 924 1062 1125 1166 1204 Revenue Growth 11.4% -21.7% 15.0% 5.9% 3.7% 3.2% Dividends Paid (412) (427) (442) (457) (472)
Iron Ore Iron Ore Tax Rate 24.0% 26.0% 28.0% 30.0% 32.0%
Tonnages (million) 13.6 24.7 30 33.1 35.7 Tonnage growth 11.1 5.3 3.1 2.6 NPAT 747 728 708 688 668
Revenue ($ million) 197 357 433 478 515 Revenue ($ million) 81.2% 21.5% 10.3% 7.9% Overdraft 579 586 593 600 607
Corporate and Intersegment Elimination Corporate and Intersegment Elimination Net Debt 2,918 2,925 2,932 2,939 2,945
Revenue ($ million) 3,803 4,056 4,057 4,362 4,644 4,841 4,985 Revenue Growth 7% 0% 8% 6% 4% 3% Shareholder Equity 7,132 7,125 7,118 7,111 7,104
Revenue adjustment (900) (765) (425) (599) (667) (695) (716) Dividends Paid (486) (473) (460) (447) (434)
adjustment/Revenue 24% 19% 10% 14% 14% 14% 14% Average Adj/Rev 14% 14% 14% OPEX Ratio 62.0% 63.0% 64.0% 65.0% 66.0%
Adj Revenue ($ million) 2,903 3,291 3,632 3,763 3,977 4,146 4,269 Adj Revenue Growth 13% 10% 4% 6% 4% 3% Operating Expenses (2,847) (2,893) (2,939) (2,985) (3,031)
NPAT 754 722 689 657 624
Net Debt 2,915 2,927 2,938 2,949 2,961
Shareholder Equity 7,135 7,123 7,112 7,100 7,089
Dividends Paid (490) (469) (448) (427) (406)
2016
Assumptions Segmented Revenue and Important Drivers
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A B C D E F G H I J K
Aurizon Holdings Limited: Financial Summary
A$ in millions, year end Jun
Profit And Loss FY10 FY11 FY12 FY13 FY14 FY15 FY16 Assumptions
Revenue 2903 3291 3631.6 3763.2 =((1+O4)*F4)*(1+$W$4)=((1+P4)*G4)*(1+$W$4)=((1+Q4)*H4)*(1+$W$4) Revenue Growth
Operating Expenses -2275 -2324.3 -2583.4 -2512.5 =O5 =P5 =Q5 Operating Expenses
EBITDA =C4+C5 =D4+D5 =E4+E5 =F4+F5 =G4+G5 =H4+H5 =I4+I5
Amortisation 0 -133 -140.9 -190.5 =O7 =P7 =Q7 Amortisation
Depreciation -424 -313.4 -322.8 -305.8 =-F30*O8 =-G30*P8 =-H30*Q8 Depreciation rate
EBIT =C6+C7+C8 =D6+D7+D8 =E6+E7+E8 =F6+F7+F8 =G6+G7+G8 =H6+H7+H8 =I6+I7+I8
Net Interest 0 -137.9 -39 -103.3 =(G19+G20-G37-G38-G42)*O10 =(H19+H20-H37-H38-H42)*P10 =(I19+I20-I37-I38-I42)*Q10 Interest rate
Pre-Tax Profit =C9+C10 =D9+D10 =E9+E10 =F9+F10 =G9+G10 =H9+H10 =I9+I10
Tax 0 -113 -125.6 -135.4 =-G11*O12 =-H11*P12 =-I11*Q12 Statutory Tax Rate
Minorities 0 0 0 0 0 0 0
Abnormals (post tax) 0 80.1 21 -68.8 =O14 0 0 Abnormals (post tax)
Reported NPAT =C11+C12+C13+C14 =D11+D12+D13+D14 =E11+E12+E13+E14 =F11+F12+F13+F14 =G11+G12+G13+G14 =H11+H12+H13+H14 =I11+I12+I13+I14
Normalised NPAT =C11+C12+C13 =D11+D12+D13 =E11+E12+E13 =F11+F12+F13 =G11+G12+G13 =H11+H12+H13 =I11+I12+I13
Balance Sheet FY10 FY11 FY12 FY13 FY14 FY15 FY16 Balance Sheet
Cash 0 117.1 98.8 107.6 =O19*G4 =P19*H4 =Q19*I4 Cash/Revenue
Excess Cash 0 0 0 0 =IF(O58<0,-O58,0) =IF(P58<0,-P58,0) =IF(Q58<0,-Q58,0)
Receivables 525 473.5 548.1 579.5 =$O$21*G4/$L$54 =$O$21*H4/$L$54 =$O$21*I4/$L$54 A/c Recievables Days
Investments 16 21.3 0.1 0.4 =O22 =P22 =Q22 Investments
Prepaid Expenses 0 10.6 8 10.2 =O23 =P23 =Q23 Prepaid Expenses
Inventories 167 177.6 215.8 212.2 =O24*G4/$L$54 =P24*H4/$L$54 =Q24*I4/$L$54 Inventory days
NCA Held for Sale 0 0 8.7 23 0 0 0
Other Current Assets 10 0 0 0 =O26 =P26 =Q26 Other Current Assets
Total Current Assets =SUM(C19:C26) =SUM(D19:D26) =SUM(E19:E26) =SUM(F19:F26) =SUM(G19:G26) =SUM(H19:H26) =SUM(I19:I26)
NCA Inventories 24 20.7 8.7 19 =$O$28 =$O$28 =$O$28 Average NCA Invintories
NCA Investments 43 40.3 78 79.4 =F29 =G29 =H29 Average NCA Investmetns
PPE 7884 8275.7 9037.2 9473.4 =F30+G8-G61+O30 =G30+H8-H61+P30 =H30+I8-I61+Q30 Loss Recognised from sale of locomotive & wagon fleet
Total Intangibles 39 24.3 16 10.8 =O31 =P31 =Q31 Average intangibles
Other Non Current Assets 4 0 0.5 3 =O32 =P32 =Q32 Average Other Non Current Assets
Total Non Current Assets =SUM(C28:C32) =SUM(D28:D32) =SUM(E28:E32) =SUM(F28:F32) =SUM(G28:G32) =SUM(H28:H32) =SUM(I28:I32)
Total Assets =SUM(C33,C27) =SUM(D33,D27) =SUM(E33,E27) =SUM(F33,F27) =SUM(G33,G27) =SUM(H33,H27) =SUM(I33,I27)
Creditors 335 341.5 349.6 320.7 =G4*O36/$L$54 =H4*P36/$L$54 =I4*Q36/$L$54 A/c payable Days
Overdrafts 0 0 0 0 =IF(O58>0,O58,0) =IF(P58>0,P58,0) =IF(Q58>0,Q58,0)
Current Borrowings 0 0 0 0 =O38 =P38 =Q38 Current Borrowings
Provisions 30 316.3 380.6 428.3 =O39*G4 =P39*H4 =Q39*I4 Provisions
Other current liabilities 310 36.2 37.5 42.3 =O40*G4 =P40*H4 =Q40*I4 Other non-current liabilities
Total Current Liabilities =SUM(C36:C40) =SUM(D36:D40) =SUM(E36:E40) =SUM(F36:F40) =SUM(G36:G40) =SUM(H36:H40) =SUM(I36:I40)
Non Current Borrowings 500 803.2 1201.6 2478.6 =$O$42 =$O$42 =$O$42 2013 NC Borrowings
Non Current Provisions 407 328.1 446.8 486.8 =O43 =P43 =Q43 Average NC Provisions
Other Non Current Liabilities 343 344.7 310.2 266.8 =O44 =P44 =Q44 Average Other NC Liabilites
Total Non Current Liabilities =SUM(C42:C44) =SUM(D42:D44) =SUM(E42:E44) =SUM(F42:F44) =SUM(G42:G44) =SUM(H42:H44) =SUM(I42:I44)
Total Liabilities =C45+C41 =D45+D41 =E45+E41 =F45+F41 =G45+G41 =H45+H41 =I45+I41
Equity 6074 6111.9 6119.1 5071.4 =O48 =P48 =Q48 2013 Equity
Reserves -2 -2.3 -2 0.1 =$O$49 =$O$49 =$O$49 2013 Reserves
Retained Profits 716 882.1 1177.1 1424.1 =+F50+G15+G63 =+G50+H15+H63 =+H50+I15+I63
Outside Equity Interests 0 0 0 0 0 0 0
Total Shareholders Equity =SUM(C48:C51) =SUM(D48:D51) =SUM(E48:E51) =SUM(F48:F51) =SUM(G48:G51) =SUM(H48:H51) =SUM(I48:I51)
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
A B C D E F G H I J K
Net Debt =(C42+C38)-C19 =(D42+D38)-D19 =(E42+E38)-E19 =(F42+F38)-F19 =(G42+G38+G37)-G19-G20 =(H42+H38+H37)-H19-H20 =(I42+I38+I37)-I19-I20
Days in a Year
Total Assets =C34 =D34 =E34 =F34 =G34 =H34 =I34 Trial assets
Total Liabilities + Total Equity =C46+C52 =D46+D52 =E46+E52 =F46+F52 =G46+G52 =H46+H52 =I46+I52 Trial Liabilities + Equity
plug
Cash Flow Statement FY10 FY11 FY12 FY13 FY14 FY15 FY16 Cash Flow Statement
Payment for Purchase of PPE -1337.6 -1156.3 -943.5 =O61 =P61 =Q61 Schedualed Capex
Proceeds From Sale of PPE 37.7 45.8 48.9 =AVERAGE(D62:F62) =G62 =H62 Proceeds From Sale of PPE
Dividends Paid -86.4 -180.6 -199.9 =-G15*O63 =-H15*P63 =-I15*Q63 Dividend Payout ratio
Coal FY10 FY11 FY12 FY13 FY14 FY15 FY16 Coal
Revenue ($ million) 1646.7 1655.4 1771.5 1862.6 =F68*(1+O68) =G68*(1+P68) =H68*(1+Q68) Revenue growth
Coal exports($mil) 10840 10089 9724 8774 10053 Coal Export Growth
Freight Freight
Revenue ($ million) 1097.1 1221 1164.6 1081.2 =(N71+1)*F71 =(O71+1)*G71 =(P71+1)*H71 Revenue Growth
Network Services Network Services
Revenue ($ million) 1058.8 1179.8 923.7 1062.1 =F73*(1+O73) =G73*(1+P73) =H73*(1+Q73) Revenue Growth
Iron Ore Iron Ore
Tonnages (million) 13.6 24.7 30 =G75+P75 =Q75+H75 Tonnage growth
Revenue ($ million) 196.7 356.5 =F76*(1+O76) =G76*(1+P76) =H76*(1+Q76) Revenue ($ million)
Corporate and Intersegment Elimination Corporate and Intersegment Elimination
Revenue ($ million) =C68+C71+C73+C76 =D68+D71+D73+D76 =E68+E71+E73+E76 =F68+F71+F73+F76 =G68+G71+G73+G76 =H68+H71+H73+H76 =I68+I71+I73+I76 Revenue Growth
Revenue adjustment =-936.7+37.1 =-859.5+94.3 =-552.5+127.6 =-638.3+39.1 =-G80*G78 =-H80*H78 =-I80*I78
adjustment/Revenue =-C79/C78 =-D79/D78 =-E79/E78 =-F79/F78 =O80 =P80 =Q80 Average Adj/Rev
Adj Revenue ($ million) =C78+C79 =D78+D79 =E78+E79 =F78+F79 =G78+G79 =H78+H79 =I78+I79 Adj Revenue Growth
Assumptions Segmented Revenue and Important Drivers
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
L M N O P Q R S T U V W X Y
FY11 FY12 FY13 FY14 FY15 FY16 Further Assumptions FY11 FY12 FY13 FY14 FY15 FY16
=L81 =M81 =N81 =O81 =P81 =Q81 Inflation rate 0.025 0.025 0.025
=-G4*V5+W7+W8 =-H4*W5+X7+X8 =-I4*X5+Y7+Y8 OPEX Ratio =-D5/D4 =-E5/E4 =-F5/F4 =-G5/G4 =-H5/H4 =-I5/I4
Redundancy cost -96 =-(1+56/206)*25 -4 0
=AVERAGE(D7:F7) =O7 =P7 Redundancy cost benefit =-V6+W6 =-W6+X6 =-X6+Y6
=-D8/D30 =-E8/E30 =-F8/F30 =AVERAGE(L8:N8)=O8 =P8 IOP cost benefit 20
Operating ratio =(-C5-C7-C8)/C4 =(-D5-D7-D8)/D4 =(-E5-E7-E8)/E4 =(-F5-F7-F8)/F4 =(-G5-G7-G8)/G4 =(-H5-H7-H8)/H4
0.05 0.05 0.05
0.3 0.3 0.3 Payout ratio 0.5 0.55 0.6 0.65 0.7
Total Borrowings =$G$37+$G$38+$G$42 =TABLE(O63,) =TABLE(O63,) =TABLE(O63,) =TABLE(O63,) =TABLE(O63,)
=-(147+50)*(1-O12) Interest Expense =G10 =TABLE(O63,) =TABLE(O63,) =TABLE(O63,) =TABLE(O63,) =TABLE(O63,)
Net Debt =$G$53 =TABLE(O63,) =TABLE(O63,) =TABLE(O63,) =TABLE(O63,) =TABLE(O63,)
Shareholder Equity =$G$52 =TABLE(O63,) =TABLE(O63,) =TABLE(O63,) =TABLE(O63,) =TABLE(O63,)
Dividends paid =$G$63 =TABLE(O63,) =TABLE(O63,) =TABLE(O63,) =TABLE(O63,) =TABLE(O63,)
FY11 FY12 FY13 FY14 FY15 FY16 Revenue Growth 0.001 0.021 0.041221310208251 0.061 0.081
=D19/D4 =E19/E4 =F19/F4 =AVERAGE(L19:N19) =O19 =P19 Revenue =G4 =TABLE(O4,) =TABLE(O4,) =TABLE(O4,) =TABLE(O4,) =TABLE(O4,)
NPAT =G15 =TABLE(O4,) =TABLE(O4,) =TABLE(O4,) =TABLE(O4,) =TABLE(O4,)
=D21/D4*$L$54 =E21/E4*$L$54 =F21/F4*$L$54 =AVERAGE(L21:N21) =O21 =P21 Net Debt =G53 =TABLE(O4,) =TABLE(O4,) =TABLE(O4,) =TABLE(O4,) =TABLE(O4,)
21.3 0.1 0.4 0.4 0.4 0.4 Shareholder Equity =G52 =TABLE(O4,) =TABLE(O4,) =TABLE(O4,) =TABLE(O4,) =TABLE(O4,)
10.6 8 10.2 10.2 10.2 10.2 Dividends Paid =G63 =TABLE(O4,) =TABLE(O4,) =TABLE(O4,) =TABLE(O4,) =TABLE(O4,)
=D24/D4*$L$54 =E24/E4*$L$54 =F24/F4*$L$54 =N24 =O24 =P24 Tax Rate 0.24 0.26 0.28 0.3 0.32
NPAT =G15 =TABLE(O12,) =TABLE(O12,) =TABLE(O12,) =TABLE(O12,) =TABLE(O12,)
0 0 0 Overdraft =G37 =TABLE(O12,) =TABLE(O12,) =TABLE(O12,) =TABLE(O12,) =TABLE(O12,)
Net Debt =G53 =TABLE(O12,) =TABLE(O12,) =TABLE(O12,) =TABLE(O12,) =TABLE(O12,)
=AVERAGE(C28:F28) 18 18 Shareholder Equity =G52 =TABLE(O12,) =TABLE(O12,) =TABLE(O12,) =TABLE(O12,) =TABLE(O12,)
=AVERAGE(D29:F29) 18 18 Dividends Paid =G63 =TABLE(O12,) =TABLE(O12,) =TABLE(O12,) =TABLE(O12,) =TABLE(O12,)
-147 OPEX Ratio 0.647649872448980.657649872448980.667649872448980.677649872448980.68764987244898
=AVERAGE(D31:F31) =O31 =P31 Operating Expenses =O5 =TABLE(V5,) =TABLE(V5,) =TABLE(V5,) =TABLE(V5,) =TABLE(V5,)
=AVERAGE(D32:F32) =O32 =P32 NPAT =G15 =TABLE(V5,) =TABLE(V5,) =TABLE(V5,) =TABLE(V5,) =TABLE(V5,)
Net Debt =G53 =TABLE(V5,) =TABLE(V5,) =TABLE(V5,) =TABLE(V5,) =TABLE(V5,)
Shareholder Equity =G52 =TABLE(V5,) =TABLE(V5,) =TABLE(V5,) =TABLE(V5,) =TABLE(V5,)
Dividends Paid =G63 =TABLE(V5,) =TABLE(V5,) =TABLE(V5,) =TABLE(V5,) =TABLE(V5,)
=D36/D4*$L$54 =E36/E4*$L$54 =F36/F4*$L$54 =N36 =O36 =P36
Payout ratio 0.5 0.55 0.6 0.65 0.7
0 0 0 Total Borrowings =H$37+H$38+$H$42 =TABLE(P63,) =TABLE(P63,) =TABLE(P63,) =TABLE(P63,) =TABLE(P63,)
=D39/D4 =E39/E4 =F39/F$4 =N39 =O39 =P39 Interest Expense =H10 =TABLE(P63,) =TABLE(P63,) =TABLE(P63,) =TABLE(P63,) =TABLE(P63,)
=D40/D$4 =E40/E$4 =F40/F$4 =N40 =O40 =P40 Net Debt =$H$53 =TABLE(P63,) =TABLE(P63,) =TABLE(P63,) =TABLE(P63,) =TABLE(P63,)
Shareholder Equity =$H$52 =TABLE(P63,) =TABLE(P63,) =TABLE(P63,) =TABLE(P63,) =TABLE(P63,)
=F42 =O42 =P42 Dividends paid =$H$63 =TABLE(P63,) =TABLE(P63,) =TABLE(P63,) =TABLE(P63,) =TABLE(P63,)
=AVERAGE(D43:F43) =O43 =P43 Revenue Growth -0.006 0.014 0.0339701194304487 0.054 0.074
=AVERAGE(D44:F44) =O44 =P44 Revenue =H4 =TABLE(P4,) =TABLE(P4,) =TABLE(P4,) =TABLE(P4,) =TABLE(P4,)
NPAT =H15 =TABLE(P4,) =TABLE(P4,) =TABLE(P4,) =TABLE(P4,) =TABLE(P4,)
Net Debt =H53 =TABLE(P4,) =TABLE(P4,) =TABLE(P4,) =TABLE(P4,) =TABLE(P4,)
Shareholder Equity =H52 =TABLE(P4,) =TABLE(P4,) =TABLE(P4,) =TABLE(P4,) =TABLE(P4,)
=F48 =O48 =P48 Dividends Paid =H63 =TABLE(P4,) =TABLE(P4,) =TABLE(P4,) =TABLE(P4,) =TABLE(P4,)
0 0 0 Tax Rate 0.24 0.26 0.28 0.3 0.32
NPAT =H15 =TABLE(P12,) =TABLE(P12,) =TABLE(P12,) =TABLE(P12,) =TABLE(P12,)
Overdraft =H37 =TABLE(P12,) =TABLE(P12,) =TABLE(P12,) =TABLE(P12,) =TABLE(P12,)
Net Debt =H53 =TABLE(P12,) =TABLE(P12,) =TABLE(P12,) =TABLE(P12,) =TABLE(P12,)
Sesitivity Analysis
2014
2015
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
L M N O P Q R S T U V W X Y
Shareholder Equity =H52 =TABLE(P12,) =TABLE(P12,) =TABLE(P12,) =TABLE(P12,) =TABLE(P12,)
365 Dividends Paid =H63 =TABLE(P12,) =TABLE(P12,) =TABLE(P12,) =TABLE(P12,) =TABLE(P12,)
OPEX Ratio 0.626684242880249 0.636684242880249 0.646684242880250.656684242880250.66668424288025
=D19+SUM(D21:D26)+D33 =E19+SUM(E21:E26)+E33 =F19+SUM(F21:F26)+F33 =G19+SUM(G21:G26)+G33 =H19+SUM(H21:H26)+H33 =I19+SUM(I21:I26)+I33 Operating Expenses =P5 =TABLE(W5,) =TABLE(W5,) =TABLE(W5,) =TABLE(W5,) =TABLE(W5,)
=D36+SUM(D38:D40)+D45+D52 =E36+SUM(E38:E40)+E45+E52 =F36+SUM(F38:F40)+F45+F52 =G36+SUM(G38:G40)+G45+G52 =H36+SUM(H38:H40)+H45+H52 =I36+SUM(I38:I40)+I45+I52 NPAT =H15 =TABLE(W5,) =TABLE(W5,) =TABLE(W5,) =TABLE(W5,) =TABLE(W5,)
=L56-L57 =M56-M57 =N56-N57 =O56-O57 =P56-P57 =Q56-Q57 Net Debt =H53 =TABLE(W5,) =TABLE(W5,) =TABLE(W5,) =TABLE(W5,) =TABLE(W5,)
Shareholder Equity =H52 =TABLE(W5,) =TABLE(W5,) =TABLE(W5,) =TABLE(W5,) =TABLE(W5,)
FY11 FY12 FY13 FY14 FY15 FY16 Dividends Paid =H63 =TABLE(W5,) =TABLE(W5,) =TABLE(W5,) =TABLE(W5,) =TABLE(W5,)
-900 -1000 -500
37.7 45.8 48.9 =AVERAGE(L62:N62) =O62 =P62 Payout ratio 0.5 0.55 0.6 0.65 0.7
0.65 0.65 0.65 Total Borrowings =$I$37+$I$38+$I$42 =TABLE(Q63,) =TABLE(Q63,) =TABLE(Q63,) =TABLE(Q63,) =TABLE(Q63,)
Interest Expense =I10 =TABLE(Q63,) =TABLE(Q63,) =TABLE(Q63,) =TABLE(Q63,) =TABLE(Q63,)
Net Debt =$I$53 =TABLE(Q63,) =TABLE(Q63,) =TABLE(Q63,) =TABLE(Q63,) =TABLE(Q63,)
Shareholder Equity =$I$52 =TABLE(Q63,) =TABLE(Q63,) =TABLE(Q63,) =TABLE(Q63,) =TABLE(Q63,)
FY11 FY12 FY13 FY14 FY15 FY16 Dividends paid =$I$63 =TABLE(Q63,) =TABLE(Q63,) =TABLE(Q63,) =TABLE(Q63,) =TABLE(Q63,)
=(D68/C68)-1 =(E68/D68)-1 =(F68/E68)-1 0.118 0.084 0.051 Revenue Growth -0.017 0.003 0.0225363011621849 0.043 0.063
=(E69/D69)-1 =(F69/E69)-1 =(G69/F69)-1 Revenue =I4 =TABLE(Q4,) =TABLE(Q4,) =TABLE(Q4,) =TABLE(Q4,) =TABLE(Q4,)
NPAT =I15 =TABLE(Q4,) =TABLE(Q4,) =TABLE(Q4,) =TABLE(Q4,) =TABLE(Q4,)
=(D71/C71)-1 =(E71/D71)-1 =(F71/E71)-1 -0.064 -0.049 -0.038 Net Debt =I53 =TABLE(Q4,) =TABLE(Q4,) =TABLE(Q4,) =TABLE(Q4,) =TABLE(Q4,)
Shareholder Equity =I52 =TABLE(Q4,) =TABLE(Q4,) =TABLE(Q4,) =TABLE(Q4,) =TABLE(Q4,)
=D73/C73-1 =E73/D73-1 =F73/E73-1 0.059 0.037 0.032 Dividends Paid =I63 =TABLE(Q4,) =TABLE(Q4,) =TABLE(Q4,) =TABLE(Q4,) =TABLE(Q4,)
Tax Rate 0.24 0.26 0.28 0.3 0.32
=F75-E75 =G75-F75 3.1 2.6 NPAT =I15 =TABLE(Q12,) =TABLE(Q12,) =TABLE(Q12,) =TABLE(Q12,) =TABLE(Q12,)
=(F76/E76)-1 =G75/F75-1 =H75/G75-1 =I75/H75-1 Overdraft =I37 =TABLE(Q12,) =TABLE(Q12,) =TABLE(Q12,) =TABLE(Q12,) =TABLE(Q12,)
Net Debt =I53 =TABLE(Q12,) =TABLE(Q12,) =TABLE(Q12,) =TABLE(Q12,) =TABLE(Q12,)
=D78/C78-1 =E78/D78-1 =F78/E78-1 =G78/F78-1 =H78/G78-1 =I78/H78-1 Shareholder Equity =I52 =TABLE(Q12,) =TABLE(Q12,) =TABLE(Q12,) =TABLE(Q12,) =TABLE(Q12,)
Dividends Paid =I63 =TABLE(Q12,) =TABLE(Q12,) =TABLE(Q12,) =TABLE(Q12,) =TABLE(Q12,)
=AVERAGE(D80:F80) =O80 =P80 OPEX Ratio 0.620154019220086 0.630154019220086 0.640154019220086 0.650154019220086 0.660154019220086
=D81/C81-1 =E81/D81-1 =F81/E81-1 =G81/F81-1 =H81/G81-1 =I81/H81-1 Operating Expenses =Q5 =TABLE(X5,) =TABLE(X5,) =TABLE(X5,) =TABLE(X5,) =TABLE(X5,)
NPAT =I15 =TABLE(X5,) =TABLE(X5,) =TABLE(X5,) =TABLE(X5,) =TABLE(X5,)
Net Debt =I53 =TABLE(X5,) =TABLE(X5,) =TABLE(X5,) =TABLE(X5,) =TABLE(X5,)
Shareholder Equity =I52 =TABLE(X5,) =TABLE(X5,) =TABLE(X5,) =TABLE(X5,) =TABLE(X5,)
Dividends Paid =I63 =TABLE(X5,) =TABLE(X5,) =TABLE(X5,) =TABLE(X5,) =TABLE(X5,)
2016
Assumptions