Spreadsheet WACC Model August 2020

WACC Calculator
MODELLER: Edward Jenkins

email edward_jenkins@ipart.nsw.gov.au
THE PURPOSE OF THE MODEL

This model calculates the WACC parameters and combines them to calculate estimates of the WACC at a point in time. The calculated parameters are:
> risk free rate (Rfr)
> debt margin
> inflation
> Market Risk Premium (MRP)
Note: The MRP estimates are hard-coded numbers. They are not calculated in this model as our calculations use copyrighted data.
IPART's methodology for estimating the WACC has been developed over a number of years and documented in a series of reports and updates that are available on our website. This
model's method is current to the February 2018 update available at:
https://www.ipart.nsw.gov.au/Home/Industries/Special-Reviews/Reviews/WACC
MODEL STRUCTURE
The worksheets of this model are divided into six sections, with each section separated by a purple divider tab:
> Documentation - The Cover sheet (this one)
> Inputs - The worksheets in this section contain all the tables that require data inputs from external sources, as follows:
> Daily data - contains daily data with observations reported on a daily basis.
> Monthly data - contains data that is observed monthly.
> Inflation data - contains inflation data that is observed quarterly.
> MRP - contains the final MRP estimate that is based on our six component MRP estimates.
> Assumptions - contains assumptions for the WACC calculations, constant values and data validation lists.
> Outputs - Worksheets in this section contain the primary outputs of the model, namely:
> WACC Calculator - provides estimates of the WACC for a targeted period.
> LG Discount Rate - provides estimates of the LG discount rate for the targeted period.
> Calculations - Worksheets in this section calculate the primary WACC parameters, namely:
> Rfr - calculates the risk free rate estimate for each period for which we have observations from source data.
> Debt Margin - calculates the debt margin estimate for each period for which we have observations from source data.
> Cost of Debt - calculates the cost of debt (debt margin + risk free rate) on an annualised basis.
> Inflation - calculates the inflation estimate for the periods for which source data are available.
> Detailed outputs - Worksheets in this section produce the WACC estimates and WACC parameters as a time series, as follows:
> WACC Parameters - reproduces a time series of the WACC parameters calculated in other worksheets.
> WACC (nominal) - produces a time series of monthly estimates of the nominal WACC.
> WACC (real) - produces a time series of monthly estimates of the real WACC.
> Other calcs - this section contains other calculations:
> Daily data Adj - reproduces the data contained within the 'daily data' worksheet, however it only selects those observations that occurred on business days (the master list of
business days is contained within this worksheet).
> Debt Margin (LG) - calculates the Local Government debt margin estimate for each month that we have observations of source data available.
> Trailing average - calculates the transition to trailing avereage cost of debt and risk free rate.
Each of the worksheets provide more detailed information about the data and calculations.
HOW TO USE THE MODEL

Step 1: Enter financial market data into the first four input worksheets (first four light blue tabs).
Step 2: Check that the inputs in the Assumptions worksheet are appropriate for the regulated business that you have in mind. If not, change the inputs.
Note: you can specify additional types of businesses that have an industry-specific Beta and Gearing level in Table 5.1 .
Step 3: On the WACC calculator worksheet, select the target industry. The model provides default values for sampling dates, length of the regulatory period and beta, but you can
override these in Table 6.2, Table 6.3 and Table 6.4 respectively should you choose to do so. Please read the notes in each of the tables before you override the default
values.
Step 4: View the WACC estimate in Table 6.5 of the WACC calculator worksheet.
COLOUR CODE
This model uses standard IPART colour coding:
Blue cells indicate inputs
Light blue cells indicate inputs with default values
Blue font indicates IPART hard-coded values used that should not be changed
Notes are shown in italics
Key outputs
Pink font indicates calculation checks
Red indicates assumptions made in calculations
Red double line means formula changes across row or column
Page intentionally left blank
1
1 - DAILY DATA
This worksheet contains data that is reported on a daily basis.
COLOUR CODE
Table 1.1 - Australian Bonds (RBA series)
Note: this is the yields on Australian government bonds, 10 years

maturity in percent per anum. Data sourced from RBA statistical
tables, Table F2. Data prior to 20 May 2013 sourced from RBA
historical data (https://www.rba.gov.au/statistics/historical-
data.html). Data 20 May 2013 and onwards sourced from current
RBA statistical tables (https://www.rba.gov.au/statistics/tables/).
Date FCMYGBAG10D index
3/Jan/95 10.06
2/Jan/96 8.09
2/Jan/97 7.46
2/Jan/98 5.99
4/Jan/99 4.97
4/Jan/00 7.13
2/Jan/01 5.47
2/Jan/02 5.91
2/Jan/03 5.15
2/Jan/04 5.67
4/Jan/05 5.47
3/Jan/06 5.23
2/Jan/07 5.90
2/Jan/08 6.34
2/Jan/09 3.96
4/Jan/10 5.76
4/Jan/11 5.50
3/Jan/12 3.84
2/Jan/13 3.40
2/Jan/14 4.33
2/Jan/15 2.87
4/Jan/16 2.82
3/Jan/17 2.75
2/Jan/18 2.66
2/Jan/19 2.29
2/Jan/20 1.35
3/Jan/20 1.25
6/Jan/20 1.20
7/Jan/20 1.22
8/Jan/20 1.19
9/Jan/20 1.24
10/Jan/20 1.25
13/Jan/20 1.21
14/Jan/20 1.26
15/Jan/20 1.21
16/Jan/20 1.18
17/Jan/20 1.18
20/Jan/20 1.17
21/Jan/20 1.16
22/Jan/20 1.12
23/Jan/20 1.10
24/Jan/20 1.09
28/Jan/20 0.95
29/Jan/20 1.02
30/Jan/20 0.97
31/Jan/20 0.96
3/Feb/20 0.93
4/Feb/20 0.93
5/Feb/20 1.04
6/Feb/20 1.09
7/Feb/20 1.04
10/Feb/20 1.01
11/Feb/20 1.02
12/Feb/20 1.06
13/Feb/20 1.04
14/Feb/20 1.05
17/Feb/20 1.06
18/Feb/20 1.02
19/Feb/20 1.03
20/Feb/20 0.99
21/Feb/20 0.93
24/Feb/20 0.91
25/Feb/20 0.92
26/Feb/20 0.91
27/Feb/20 0.84
28/Feb/20 0.81
2/Mar/20 0.79
3/Mar/20 0.78
4/Mar/20 0.71
5/Mar/20 0.77
6/Mar/20 0.66
9/Mar/20 0.60
10/Mar/20 0.78
11/Mar/20 0.66
12/Mar/20 0.76
13/Mar/20 0.96
16/Mar/20 0.92
17/Mar/20 1.05
18/Mar/20 1.22
19/Mar/20 1.50
20/Mar/20 1.15
23/Mar/20 0.92
24/Mar/20 0.90
25/Mar/20 0.98
26/Mar/20 0.93
27/Mar/20 0.93
30/Mar/20 0.79
31/Mar/20 0.77
1/Apr/20 0.68
2/Apr/20 0.77
3/Apr/20 0.77
6/Apr/20 0.78
7/Apr/20 0.92
8/Apr/20 0.92
9/Apr/20 0.91
14/Apr/20 0.93
15/Apr/20 0.91
16/Apr/20 0.85
17/Apr/20 0.86
20/Apr/20 0.84
21/Apr/20 0.86
22/Apr/20 0.84
23/Apr/20 0.88
24/Apr/20 0.88
27/Apr/20 0.91
28/Apr/20 0.93
29/Apr/20 0.92
30/Apr/20 0.89
1/May/20 0.87
4/May/20 0.83
5/May/20 0.87
6/May/20 0.92
7/May/20 0.93
8/May/20 0.90
11/May/20 0.96
12/May/20 0.96
13/May/20 0.96
14/May/20 0.90
15/May/20 0.91
18/May/20 0.91
19/May/20 0.98
20/May/20 0.95
21/May/20 0.92
22/May/20 0.87
25/May/20 0.86
26/May/20 0.89
27/May/20 0.88
28/May/20 0.88
29/May/20 0.89
1/Jun/20 0.90
2/Jun/20 0.91
3/Jun/20 0.97
4/Jun/20 1.02
5/Jun/20 1.09
9/Jun/20 1.05
10/Jun/20 1.02
11/Jun/20 0.92
12/Jun/20 0.91
15/Jun/20 0.86
16/Jun/20 0.92
17/Jun/20 0.92
18/Jun/20 0.88
19/Jun/20 0.86
22/Jun/20 0.87
23/Jun/20 0.90
24/Jun/20 0.92
25/Jun/20 0.88
26/Jun/20 0.87
29/Jun/20 0.88
30/Jun/20 0.87
1/Jul/20 0.94
2/Jul/20 0.92
3/Jul/20 0.91
6/Jul/20 0.92
7/Jul/20 0.89
8/Jul/20 0.87
9/Jul/20 0.90
10/Jul/20 0.86
13/Jul/20 0.90
14/Jul/20 0.91
15/Jul/20 0.87
16/Jul/20 0.88
17/Jul/20 0.87
20/Jul/20 0.89
21/Jul/20 0.87
22/Jul/20 0.89
23/Jul/20 0.86
24/Jul/20 0.87
27/Jul/20 0.89
28/Jul/20 0.92
29/Jul/20 0.88
30/Jul/20 0.86
31/Jul/20 0.82
2
2 - MONTHLY INPUTS
This worksheet contains inputs that are reported on a monthly basis.
COLOUR CODE
Dark grey cells indicate cells that are intentionally left blank - and should remain blank.
Table 2.2 - Capital market yields -

Table 2.1 - End of month table Government bonds
Note: this is the yields on commonwealth

government bonds, indexed to maturity. RBA data
series FCMYGBAG10. Jun 1969 to May 2013
sourced from Table F2 (historical data
https://www.rba.gov.au/statistics/historical-
Note: this table generates the list data.html), Data from Jun 2013 onwards sourced
of months used throughout the from RBA statistics table F2.1. These values are
report. monthly averages.
Date End of month End of month Yield

15/Jul/69 Jul/69 Jul/69 5.80
15/Aug/82 Aug/82 May/87 13.00
15/Aug/83 Aug/83 Jun/87 12.80
15/Aug/14 Aug/14 Jan/90 12.80
15/Aug/34 Aug/34 Jan/00 7.18
15/Aug/43 Aug/43 Oct/00 6.11
15/Aug/44 Aug/44 Nov/00 5.99
15/Aug/68 Aug/68 Nov/02 5.50
15/Aug/69 Aug/69 Dec/02 5.40
15/Aug/93 Aug/93 Dec/04 5.23
15/Aug/94 Aug/94 Jan/05 5.35
15/Aug/35 Aug/35 Jun/08 6.59
15/Aug/36 Aug/36 Jul/08 6.37
15/Aug/54 Aug/54 Jan/10 5.56
15/Aug/94 Aug/94 May/13 3.23
15/Aug/95 Aug/95 Jun/13 3.54
15/Aug/96 Aug/96 Jul/13 3.75
15/Aug/14 Aug/14 Jan/15 2.64
15/Aug/26 Aug/26 Jan/16 2.73
15/Aug/38 Aug/38 Jan/17 2.73
15/Aug/50 Aug/50 Jan/18 2.75
15/Aug/62 Aug/62 Aug/62 2.27
15/Aug/63 Aug/63 Aug/63 2.13
15/Aug/64 Aug/64 Aug/64 1.96
15/Aug/65 Aug/65 Aug/65 1.86
15/Aug/66 Aug/66 Aug/66 1.65
15/Aug/67 Aug/67 Aug/67 1.38
15/Aug/68 Aug/68 Aug/68 1.31
15/Aug/69 Aug/69 Aug/69 0.95
15/Aug/70 Aug/70 Aug/70 1.03
15/Aug/71 Aug/71 Aug/71 1.03
15/Aug/72 Aug/72 Aug/72 1.15
15/Aug/73 Aug/73 Aug/73 1.2
15/Aug/74 Aug/74 Aug/74 1.15
15/Aug/75 Aug/75 Aug/75 0.98
15/Aug/76 Aug/76 Aug/76 0.89
15/Aug/77 Aug/77 Aug/77 0.86
15/Aug/78 Aug/78 Aug/78 0.91
15/Aug/79 Aug/79 Aug/79 0.92
15/Aug/80 Aug/80 Aug/80 0.88
15/Aug/81 Aug/81 Aug/81
15/Aug/82 Aug/82 Aug/82
15/Aug/83 Aug/83 Aug/83
15/Aug/84 Aug/84 Aug/84
15/Aug/85 Aug/85 Aug/85
15/Aug/86 Aug/86 Aug/86
15/Aug/87 Aug/87 Aug/87
15/Aug/88 Aug/88 Aug/88
15/Aug/89 Aug/89 Aug/89
15/Aug/90 Aug/90 Aug/90
15/Aug/91 Aug/91 Aug/91
15/Aug/92 Aug/92 Aug/92
15/Aug/93 Aug/93 Aug/93
15/Aug/94 Aug/94 Aug/94
15/Aug/95 Aug/95 Aug/95
15/Aug/96 Aug/96 Aug/96
15/Aug/97 Aug/97 Aug/97
15/Aug/98 Aug/98 Aug/98
15/Aug/99 Aug/99 Aug/99
15/Aug/00 Aug/00 Aug/00
15/Aug/01 Aug/01 Aug/01
15/Aug/02 Aug/02 Aug/02
15/Aug/03 Aug/03 Aug/03
15/Aug/04 Aug/04 Aug/04
15/Aug/05 Aug/05 Aug/05
15/Aug/06 Aug/06 Aug/06
15/Aug/07 Aug/07 Aug/07
15/Aug/08 Aug/08 Aug/08
15/Aug/09 Aug/09 Aug/09
15/Aug/10 Aug/10 Aug/10
15/Aug/11 Aug/11 Aug/11
15/Aug/12 Aug/12 Aug/12
15/Aug/13 Aug/13 Aug/13
15/Aug/14 Aug/14 Aug/14
15/Aug/15 Aug/15 Aug/15
15/Aug/16 Aug/16 Aug/16
15/Aug/17 Aug/17 Aug/17
15/Aug/18 Aug/18 Aug/18
15/Aug/19 Aug/19 Aug/19
15/Aug/20 Aug/20 Aug/20
15/Aug/21 Aug/21 Aug/21
15/Aug/22 Aug/22 Aug/22
15/Aug/23 Aug/23 Aug/23
15/Aug/24 Aug/24 Aug/24
15/Aug/25 Aug/25 Aug/25
15/Aug/26 Aug/26 Aug/26
15/Aug/27 Aug/27 Aug/27
15/Aug/28 Aug/28 Aug/28
15/Aug/29 Aug/29 Aug/29
15/Aug/30 Aug/30 Aug/30
15/Aug/31 Aug/31 Aug/31
15/Aug/32 Aug/32 Aug/32
15/Aug/33 Aug/33 Aug/33
15/Aug/34 Aug/34 Aug/34
15/Aug/35 Aug/35 Aug/35
15/Aug/36 Aug/36 Aug/36
15/Aug/37 Aug/37 Aug/37
15/Aug/38 Aug/38 Aug/38
15/Aug/39 Aug/39 Aug/39
15/Aug/40 Aug/40 Aug/40
15/Aug/41 Aug/41 Aug/41
15/Aug/42 Aug/42 Aug/42
15/Aug/43 Aug/43 Aug/43
15/Aug/44 Aug/44 Aug/44
15/Aug/45 Aug/45 Aug/45
Table 2.3 - 10-year and 7-year corporate bond
spreads Table 2.4 - 10-year A rated corporate
Note: spreads on corporate bonds are RBA data series: FNFCBBB10M -

Non-financial corporate BBB-rated bonds - spread to AGS - 10-year Note: spreads on corporate bonds are RBA data
target tenor (basis points), and FNFCBBB7m - Non-financial corporate series: FNFCA10M - Non-financial corporate A-rate
BBB-rated bonds - spread to AGS - 7-year target tenor (basis points). bonds - spread to AGS - 10-year target tenor (bas
Sourced from RBA statistical tables F.3. points) sourced from RBA statistical tables F.3.
10-year bond 7-year bond
End of month Series ID spread (bp) spread (bp) End of month Series ID
Jan/05 Jan/05 117.62 113.87 Jan/05 Jan/05

Jun/08 Jun/08 365.25 324.66 Jun/08 Jun/08
Jul/08 Jul/08 300.13 305.96 Jul/08 Jul/08
Jan/10 Jan/10 271.36 251.67 Jan/10 Jan/10
May/13 May/13 282.43 254.05 May/13 May/13
Jun/13 Jun/13 327.78 296.23 Jun/13 Jun/13
Jul/13 Jul/13 307.38 275.21 Jul/13 Jul/13
Jan/15 Jan/15 192.09 229.67 Jan/15 Jan/15
Jan/16 Jan/16 293.94 331.56 Jan/16 Jan/16
Jan/17 Jan/17 208.11 189.97 Jan/17 Jan/17
Jan/18 Jan/18 150.06 125.3 Jan/18 Jan/18
Jan/19 Jan/19 228.5 200.92 Jan/19 Jan/19
Feb/19 Feb/19 221.27 195.85 Feb/19 Feb/19
Mar/19 Mar/19 216.62 189.22 Mar/19 Mar/19
Apr/19 Apr/19 214.41 182.09 Apr/19 Apr/19
May/19 May/19 222.14 188.58 May/19 May/19
Jun/19 Jun/19 209.93 178.63 Jun/19 Jun/19
Jul/19 Jul/19 203.52 168.14 Jul/19 Jul/19
Aug/19 Aug/19 197.63 172.68 Aug/19 Aug/19
Sep/19 Sep/19 187.34 166.13 Sep/19 Sep/19
Oct/19 Oct/19 186.8 166.27 Oct/19 Oct/19
Nov/19 Nov/19 184.34 159.8 Nov/19 Nov/19
Dec/19 Dec/19 172.87 161.54 Dec/19 Dec/19
Jan/20 Jan/20 162.79 148.4 Jan/20 Jan/20
Feb/20 Feb/20 168.1 158.08 Feb/20 Feb/20
Mar/20 Mar/20 303.6 281.47 Mar/20 Mar/20
Apr/20 Apr/20 307.6 301.8 Apr/20 Apr/20
May/20 May/20 269.4 268.3 May/20 May/20
Jun/20 44012 245.3 243.3 Jun/20 Jun/20
Jul/20 44043 196.6 208 Jul/20 Jul/20
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
Dec/99 Dec/99
ar A rated corporate bond spreads
rporate bonds are RBA data

Non-financial corporate A-rated
S - 10-year target tenor (basis
m RBA statistical tables F.3.
10-year bond
spread (bp)
83.9
264.98
248.9
225.94
178.95
196.55
170.65
134.3
258.68
152.84
103.19
150.5
143.15
138.9
133.44
139.56
135.3
122.69
120.71
116
116.71
114.82
111.95
100.86
100.52
194.73
154.1
146.1
124.7
89.3
3
3 - INFLATION DATA
This sheet contains inflation inputs.
COLOUR CODE
Table 3.1 - Inflation inputs Table 3.2 - Source data (RBA stateme
Note: The RBA statement on monetary policy
Note: The 2-year is released quarterly and contains the inflation
ahead forecast forecast that we use in our inflation estimate,
was first applied in found in the indicated location of the statement
April 2020. available here:
https://www.rba.gov.au/publications/smp/
RBA 1-year RBA 2-year

End of month forecast forecast Date Page
Nov/14 2.20 Nov/14 61
Dec/14 2.20
Jan/15 2.50
Feb/15 2.50 Feb/15 71
Mar/15 2.50
Jan/18 2.13
Feb/18 2.13 Feb/18 63
Mar/18 2.13
Apr/18 2.13
May/18 2.13 May/18 58
Jun/18 2.13
Jul/18 2.13
Aug/18 2.13 Aug/18 60
Sep/18 2.13
Oct/18 2.25
Nov/18 2.25 Nov-19 64
Dec/18 2.25
Jan/19 2.00
Feb/19 2.00 Feb-19 66
Mar/19 2.00
Apr/19 2.00
May/19 2.00 May-19 71
Jun/19 2.00
Jul/19 1.75
Aug/19 1.75 Aug-19 60
Sep/19 1.75
Oct/19 1.75
Nov/19 1.75 Nov-19 70
Dec/19 1.75
Jan/20 1.75
Feb/20 1.75 Feb-20 72
Mar/20 1.75
Apr/20 2.75 1.50
May/20 2.75 1.50 May-20 89
Jun/20 2.75 1.50
Jul/20 1.00 1.50
Aug/20 1.00 1.50 Aug-20 91
Sep/20 1.00 1.50
Oct/20 0.00 0.00
Nov/20
Dec/20 0.00 0.00
Jan/21 0.00 0.00
Feb/21
Mar/21 0.00 0.00
Apr/21 0.00 0.00
May/21
Jun/21 0.00 0.00
Jul/21 0.00 0.00
Aug/21
Sep/21 0.00 0.00
Oct/21 0.00 0.00
Nov/21
Dec/21 0.00 0.00
Jan/22 0.00 0.00
Feb/22
Mar/22 0.00 0.00
Apr/22 0.00 0.00
May/22
Jun/22 0.00 0.00
Jul/22 0.00 0.00
Aug/22
Sep/22 0.00 0.00
Oct/22 0.00 0.00
Nov/22
Dec/22 0.00 0.00
Jan/23 0.00 0.00
Feb/23
Mar/23 0.00 0.00
Apr/23 0.00 0.00
May/23
Jun/23 0.00 0.00
Jul/23 0.00 0.00
Aug/23
Sep/23 0.00 0.00
Oct/23 0.00 0.00
Nov/23
Dec/23 0.00 0.00
Jan/24 0.00 0.00
Feb/24
Mar/24 0.00 0.00
Apr/24 0.00 0.00
May/24
Jun/24 0.00 0.00
Jul/24 0.00 0.00
Aug/24
Sep/24 0.00 0.00
Oct/24 0.00 0.00
Nov/24
Dec/24 0.00 0.00
Jan/25 0.00 0.00
Feb/25
Mar/25 0.00 0.00
Apr/25 0.00 0.00
May/25
Jun/25 0.00 0.00
Jul/25 0.00 0.00
Aug/25
Sep/25 0.00 0.00
Oct/25 0.00 0.00
Nov/25
Dec/25 0.00 0.00
ource data (RBA statements on monetary policy)
atement on monetary policy
rly and contains the inflation
use in our inflation estimate,
ted location of the statement
ailable here:
gov.au/publications/smp/
Table
6.1
6.1
6.1
5.1
5.1
5.1
5.1
5.1
5.1
5.1
5.1
6.1
6.1
4
4 - MARKET RISK PREMIUM
This sheet contains MRP estimate inputs.
COLOUR CODE
Table 4.1 - MRP estimate
Note: for discussion of the method

for combining the MRP estimates
into the final MRP estimate see:
IPART, Review of our WACC
method - Final Report, Feb 2018,
p.47.
End of month MRP estimate
Nov/00 6.00%
Nov/02 6.80%
Dec/02 7.10%
Jun/08 6.60%
Jul/08 7.00%
Jan/10 8.20%
Jan/15 8.60%
Jan/16 8.70%
Jan/17 8.60%
Jan/18 8.00%
Jan/19 8.60%
Feb/19 8.50%
Mar/19 8.70%
Apr/19 8.80%
May/19 8.90%
Jun/19 8.80%
Jul/19 8.80%
Aug/19 8.90%
Sep/19 8.80%
Oct/19 8.80%
Nov/19 8.80%
Dec/19 8.70%
Jan/20 8.80%
Feb/20 9.10%
Mar/20 9.70%
Apr/20 9.20%
May/20 8.80%
Jun/20 8.70%
Jul/20 8.60%
Aug/20
Sep/20
Oct/20
Nov/20
Dec/20
5
5 - ASSUMPTIONS
COLOUR CODE
Table 5.1 - Industry parameters

Note: This table contains the assumed Beta, gearing and regulatory period length for the industries available in the WACC calculator
Length of
regulatory
Beta Gearing period
Industry Lower Midpoint Upper Lower Midpoint Upper years
Economy 0.90 1.00 1.10 60.0% 60.0% 60.0% 4
Water 0.60 0.70 0.80 60.0% 60.0% 60.0% 4
Rail 0.80 0.90 1.00 60.0% 60.0% 60.0% 4
Bus 0.70 0.85 1.00 60.0% 60.0% 60.0% 4
Light rail 0.70 0.85 1.00 60.0% 60.0% 60.0% 4
Ferries 0.80 0.90 1.00 40.0% 50.0% 60.0% 4
R&R Buses 0.70 0.85 1.00 40.0% 50.0% 60.0% 4
Valuer General 0.40 0.45 0.50 40.0% 45.0% 50.0% 6
blank 1.00 1.00 1.00 60.0% 60.0% 60.0% 5
blank 1.00 1.00 1.00 60.0% 60.0% 60.0% 5
blank 1.00 1.00 1.00 60.0% 60.0% 60.0% 5
blank 1.00 1.00 1.00 60.0% 60.0% 60.0% 5
Table 5.2 - Other assumed WACC parameters

Note: This table contains the assumed Gamma and tax rates for ALL industries in the WACC calculator.
Gamma 0.25
Corporate tax rate 30.0%
Effective tax rate for equity 30.0%
Effective tax rate for debt 30.0%
Table 5.3 - Long term mid-point of the MRP

Note: see IPART, Review of our WACC method - Final Report, Feb 2018, p.51.
LT MRP mid-point 6.00%
Table 5.4 - Debt raising costs

Note: Debt raising costs are set at a constant 12.5bp, see IPART, Review of our WACC method - Final Report, Feb 2018, Table A.1,
Debt raising costs (bp) 12.50
Table 5.5 - Local Government Discount rate regulatory lengths

LG current estimate length (years) 5
LG long term estimate length (years) 10
DATA VALIDATION LISTS - DO NOT EDIT

ble in the WACC calculator.
eport, Feb 2018, Table A.1, p.87.

6
6 - WACC CALCULATOR
COLOUR CODE
Light blue cells indicate inputs with default values
Key outputs
Cells that are in teal are default override cells, ie, they will override a default value (a WACC parameter sampling month, the length
of the regulatory period or a point in the beta range). Leave blank unless there is a good reason to override the default value.
Table 6.1 - WACC industry

Industry Economy Select industry from the drop-down menu.
Table 6.2 - WACC data sampling date

Sample Date 31/Jul/20 Select the sample month for the WACC parameters.
Note: Inputs for WACC parameters are a mix of daily and monthly
Sample month Jul/20
data, therefore for consistency WACC estimates are generated on
an end of month basis.
Default sample month
Sample month - Risk free rate & debt margin Jul/20
Sample month - Inflation Jul/20
Sample month - MRP Jul/20
Override sample month
Sample month - Risk free rate & debt margin

Note: Leave these blank for sampling consistency across WACC
parameters. Selecting a month other than the target month in these
Sample month - Inflation cells will cause the selected WACC parameter to be sampled in a
different month to the other parameters. Only enter a date in
Sample month - MRP these cells if there is a compelling reason to do so.
Table 6.3 - Length of regulatory period (years) & other options
Default regulatory period length Note: this will select the number of tranches that will be used to
estimate the Rfr, cost of debt and inflation.
Length of regulatory period 4
Note: entering a value here will override the default regulatory

Override regulatory period length
period length for the selected industry in this WACC calculator only.
This will not impact the WACC time series produced in the detailed
Length of regulatory period outputs section of the model.
Trailing Average adjustment

Is an adjustment to the trailing average
occuring? No
How many years into the adjustment is this
decision?
Sample month Jul/20
Note: set this selector to the month that the final decision will be in.
That is, if this is a draft with a January sample data, however the
Alternative month selection for tranches -1 final will have a March sample date then you would select March
through -9 here.
Mid-point of the
RBA target Note: This will select the value used in the second year of the
Value of second year inflation forecast range geometric average calculation of our current inflation estimate.
Table 6.4 - Beta selection

Default Beta
Lower 0.9
Mid-point 1.0 Note: the WACC calculator will calculate the WACC using the Beta
Upper 1.1 mid-point as a default.
Override Beta
Note: entering values here will override the default beta values for
Lower the selected industry in this WACC calculator only. This will not
Mid-point impact the WACC time series produced in the detailed outputs
Upper section of the model.
Default Beta range Mid-point Note: entering values here will override the default beta range
selection for the selected industry in this WACC calculator only.
Override Beta range This will not impact the WACC time series produced in the detailed
outputs section of the model.
Table 6.5 - WACC calculation

Step 1 Step 2 - Final WACC range
Current market Long term
data averages Lower Midpoint Upper
Nominal risk free rate 1.9% 2.8%
Inflation 2.1% 2.1%
Implied Debt Margin 2.1% 2.6%
Market Risk premium 8.6% 6.0%

Debt funding 60% 60%
Equity funding 40% 40%
Total funding (debt + equity) 100% 100%
Gamma 0.25 0.25
Corporate tax rate 30% 30%
Effective tax rate for equity 30% 30%
Effective tax rate for debt 30% 30%
Equity beta 1.00 1.00
Cost of equity (nominal post-tax) 10.5% 8.8%

Cost of equity (real-post tax) 8.2% 6.6%
Cost of debt (nominal pre-tax) 4.0% 5.4%

Cost of debt (real pre-tax) 1.9% 3.2%
Nominal Vanilla (post-tax nominal) WACC 6.6% 6.8% 6.6% 6.7% 6.8%
Post-tax real WACC 4.4% 4.6% 4.4% 4.5% 4.6%
Pre-tax nominal WACC 7.8% 7.8% 7.8% 7.8% 7.8%
pre-tax real WACC point estimate 5.6% 5.6% 5.6% 5.6% 5.6%
Note: The final WACC range is given by the midpoints of the WACC ranges estimated using current market data and long-term
averages. In Step 1, we estimate the midpoint of the WACC range estimated using current market data (Column C) and the
midpoint of the WACC range estimated using long-term averages (Column D). In Step 2, the minimum of the 2 midpoints from Step
1 will be the lower bound of the final WACC range, and the maximum of the 2 midpoints from Step 1 will be the upper bound of the
final WACC range.
7
7 - LOCAL GOVERNMENT DISCOUNT RATE CALCULATOR
This worksheet calculates the Local Government Discount Rate.
COLOUR CODE
Key outputs
Pink font indicates calculation checks
Table 7.1 - Sampling date

Sampling date 31/Jul/20 Select sampling date here. Note: this calculator will automatically convert the inputted
date into an end of month value and return an estimate of the debt margin at end of that
Sample month Jul/20 month.
Table 7.2 - Discount rate

Unrounded Rounded to 1 decimal place
Nominal discount rate 3.20% 3.2%
Real discount rate 0.98% 1.0%
Table 7.3 - Bond yield data
Note: bond yield values are all rounded to 1 decimal place to be consistent
with the corresponding inputs in the primary WACC calculation.
Commonwealth 10-year bond yield Note: this is the notional risk free rate.
Risk free rate (current) 1.90%
Risk free rate (long term) 2.80%
Mid-point 2.35%
Corporate A rated 10-year bond debt margins Note: this is the notional debt margin of A rated corporate firms.
Debt margin (current) 1.30%
Debt margin (long term) 1.60%
Mid-point 1.45%
Corporate A rated 10-year bond yield Note: this is the notional cost of debt of A rated corporate firms.
Current 3.20%
Long term 4.40%
Mid-point 3.80%
Spread between Corporate A rated 10-year

bond yield and Commonwealth 10-year bond
yield 1.45%
Check=0 0.00%
Table 7.4 - Other inputs into LG discount rate
Note: this is half of the spread between the cost of debt and the risk free rate. Which is
Half of the spread 0.73% equal to half of the debt margin.
Note: Debt raising costs are set at a constant 12.5bp, see IPART, Review of our WACC
Debt raising costs 0.125% method - Final Report, Feb 2018, Table A.1, p.87.
Inflation forecast 2.20%

8
8 - RISK FREE RATE
These calculations continue until December 2025.
COLOUR CODE
Table 8.1 - GACGB10 index Table 8.2 - Risk free rate estimates (annua
Note: this table reproduces the FMCYGBAG10D index, however it

only selects observations from business days (ie, not weekends or
public holidays).
Australian bond 10Y Australian bond 10Y -

- middle rate middle rate
Date End of month
(FMCYGBAG10D (FMCYGBAG10D index)
index) un-annualised un-annualised as %
1/3/1995 10.06 10.06%

12/30/2004 5.35 5.35%
12/31/2004 5.33 5.33%
1/4/2005 5.47 5.47% Jan/05
1/3/2006 5.23 5.23% Jan/06
1/2/2007 5.90 5.90% Jan/07
1/2/2008 6.34 6.34% Jan/08
1/2/2009 3.96 3.96% Jan/09
1/4/2010 5.76 5.76% Jan/10
1/4/2011 5.50 5.50% Jan/11
1/3/2012 3.84 3.84% Jan/12
1/2/2013 3.40 3.40% Jan/13
1/2/2014 4.33 4.33% Jan/14
1/2/2015 2.87 2.87% Jan/15
1/4/2016 2.82 2.82% Jan/16
1/3/2017 2.75 2.75% Jan/17
1/2/2018 2.66 2.66% Jan/18
7/30/2018 2.65 2.65% Jul/18
7/31/2018 2.65 2.65% Jul/18
8/1/2018 2.69 2.69% Aug/18
8/2/2018 2.73 2.73% Aug/18
8/3/2018 2.73 2.73% Aug/18
8/7/2018 2.66 2.66% Aug/18
1/2/2019 2.29 2.29% Jan/19
1/2/2020 1.35 1.35% Jan/20
1/4/2021 #N/A #N/A Jan/21
1/4/2022 #N/A #N/A Jan/22
1/3/2023 #N/A #N/A Jan/23
1/2/2024 #N/A #N/A Jan/24
1/2/2025 #N/A #N/A Jan/25
12/31/2025 #N/A #N/A Dec/25
8.2 - Risk free rate estimates (annualised) Table 8.3 - Final day of sampling period for tranche
Note: we decided to use an annualised

estimate of the risk free rate, discussed
in: IPART, Review of our WACC method
- Final Report, Feb 2018, pp 40-41. Note: This table of formula calculate the matching date for the final day of the sampli
Long Term Current estimate

estimate - 4 tranches
(annualised) (annualised)
Tranche -1 Tranche -2 Tranche -3 Tranche -4 Tranche -5
-1 -2 -3 -4 -5
6.22% 5.64% 4/Jan/04 4/Jan/03 4/Jan/02 4/Jan/01 4/Jan/00

3.65% 2.55% 30/Jul/17 30/Jul/16 30/Jul/15 30/Jul/14 30/Jul/13
3.65% 2.55% 31/Jul/17 31/Jul/16 31/Jul/15 31/Jul/14 31/Jul/13
3.65% 2.56% 1/Aug/17 1/Aug/16 1/Aug/15 1/Aug/14 1/Aug/13
#N/A #N/A 4/Jan/20 4/Jan/19 4/Jan/18 4/Jan/17 4/Jan/16
#N/A #N/A 31/Dec/24 31/Dec/23 31/Dec/22 31/Dec/21 31/Dec/20
or tranche Table 8.4 - Final day of sampling window for tranche (busi
Note: This table of formula calculates the matching date, that is also a bu
window for each tranche. Assumption: When selecting the 40-day obs
tranche we have assumed that the final date of the 40-day window remain
March 2018 and the 39 business days before it are the window for 2018, th
before it will be the window for 2017 and so on, going back as many years
the previous year is not a business day we have taken the most recent bus
day of the window. For example, if 2 April 2018 (a Monday) was selected
window for 2018 then 31 March 2017 would be the final day of the 40-day w
was a Sunday, 1 April 2017 was a Saturday so 31 March 2017 (a Friday) is t
where there is data. This moving of start dates does not flow through from o
the previous example, the last day of the 40-day observation window in 2016
as the basis for the 2017 window. Instead the same procedure will be repe
date, and take the most recent prior business day if this is a weekend. T
creeping over time and will ensure it only shifts a maximum of -2 days, an
correcting itself.
date for the final day of the sampling window for each tranche.
Tranche -6 Tranche -7 Tranche -8 Tranche -9 Tranche -1 Tranche -2 Tranche -3 Tranche -4

-6 -7 -8 -9
4/Jan/99 4/Jan/98 4/Jan/97 4/Jan/96 2/Jan/04 3/Jan/03 4/Jan/02 4/Jan/01

3/Jan/00 3/Jan/99 3/Jan/98 3/Jan/97 31/Dec/04 2/Jan/04 3/Jan/03 3/Jan/02
2/Jan/01 2/Jan/00 2/Jan/99 2/Jan/98 30/Dec/05 31/Dec/04 2/Jan/04 2/Jan/03
2/Jan/02 2/Jan/01 2/Jan/00 2/Jan/99 2/Jan/07 30/Dec/05 31/Dec/04 2/Jan/04
2/Jan/03 2/Jan/02 2/Jan/01 2/Jan/00 2/Jan/08 2/Jan/07 30/Dec/05 31/Dec/04
2/Jan/07 2/Jan/06 2/Jan/05 2/Jan/04 30/Dec/11 31/Dec/10 31/Dec/09 2/Jan/09
2/Jan/08 2/Jan/07 2/Jan/06 2/Jan/05 2/Jan/13 30/Dec/11 31/Dec/10 31/Dec/09
3/Jan/11 3/Jan/10 3/Jan/09 3/Jan/08 31/Dec/15 2/Jan/15 3/Jan/14 3/Jan/13
30/Jul/12 30/Jul/11 30/Jul/10 30/Jul/09 28/Jul/17 29/Jul/16 30/Jul/15 30/Jul/14
31/Jul/12 31/Jul/11 31/Jul/10 31/Jul/09 31/Jul/17 29/Jul/16 31/Jul/15 31/Jul/14
1/Aug/12 1/Aug/11 1/Aug/10 1/Aug/09 1/Aug/17 29/Jul/16 31/Jul/15 1/Aug/14
2/Aug/12 2/Aug/11 2/Aug/10 2/Aug/09 2/Aug/17 2/Aug/16 31/Jul/15 1/Aug/14
3/Aug/12 3/Aug/11 3/Aug/10 3/Aug/09 3/Aug/17 3/Aug/16 31/Jul/15 1/Aug/14
7/Aug/12 7/Aug/11 7/Aug/10 7/Aug/09 4/Aug/17 5/Aug/16 7/Aug/15 7/Aug/14
2/Jan/13 2/Jan/12 2/Jan/11 2/Jan/10 2/Jan/18 30/Dec/16 31/Dec/15 2/Jan/15
2/Jan/18 2/Jan/17 2/Jan/16 2/Jan/15 30/Dec/22 31/Dec/21 31/Dec/20 2/Jan/20
2/Jan/19 2/Jan/18 2/Jan/17 2/Jan/16 2/Jan/24 30/Dec/22 31/Dec/21 31/Dec/20
31/Dec/19 31/Dec/18 31/Dec/17 31/Dec/16 31/Dec/24 29/Dec/23 30/Dec/22 31/Dec/21
g window for tranche (business day) Table 8.5 - Row number of final day of tranche
he matching date, that is also a business day for the final date of the sampling
on: When selecting the 40-day observation window for a particular years debt
date of the 40-day window remains the same in each year. For example, if 30
efore it are the window for 2018, then 30 March 2017 and the 39 business days
so on, going back as many years as relevant. However when the exact date of
we have taken the most recent business day prior to the exact date as the final
April 2018 (a Monday) was selected as the final day in the 40-day observation
uld be the final day of the 40-day window for 2017. This is because 2 April 2017
ay so 31 March 2017 (a Friday) is the most immediate day prior to the exact date
dates does not flow through from one tranche to the next however. To continue
40-day observation window in 2016 will not be based on the 31 March 2017 used
ad the same procedure will be repeated where we target 2 April 2016 as the start
business day if this is a weekend. This will prevent the 40-day window slowly
nly shifts a maximum of -2 days, and for a maximum of 2-years in a row before
correcting itself.
Note: This table of formula calculates the row in
Tranche -5 Tranche -6 Tranche -7 Tranche -8 Tranche -9 Starting row Tranche -1 Tranche -2
4/Jan/00 4/Jan/99 2/Jan/98 3/Jan/97 4/Jan/96 2521 2269 2018

3/Jan/01 31/Dec/99 31/Dec/98 2/Jan/98 3/Jan/97 2772 2520 2269
2/Jan/02 2/Jan/01 31/Dec/99 31/Dec/98 2/Jan/98 3022 2771 2520
2/Jan/03 2/Jan/02 2/Jan/01 31/Dec/99 31/Dec/98 3273 3022 2771
2/Jan/04 2/Jan/03 2/Jan/02 2/Jan/01 31/Dec/99 3525 3273 3022
3/Jan/07 3/Jan/06 31/Dec/04 2/Jan/04 3/Jan/03 4277 4026 3776
31/Dec/09 2/Jan/09 2/Jan/08 2/Jan/07 30/Dec/05 5030 4779 4528
3/Jan/12 31/Dec/10 31/Dec/09 2/Jan/09 3/Jan/08 5533 5281 5030
2/Jan/13 30/Dec/11 31/Dec/10 31/Dec/09 2/Jan/09 5783 5532 5281
30/Jul/13 30/Jul/12 29/Jul/11 30/Jul/10 30/Jul/09 5927 5676 5426
31/Jul/13 31/Jul/12 29/Jul/11 30/Jul/10 31/Jul/09 5928 5677 5426
1/Aug/13 1/Aug/12 29/Jul/11 30/Jul/10 31/Jul/09 5929 5678 5426
2/Aug/13 2/Aug/12 2/Aug/11 30/Jul/10 31/Jul/09 5930 5679 5427
2/Aug/13 3/Aug/12 3/Aug/11 3/Aug/10 31/Jul/09 5931 5680 5428
7/Aug/13 7/Aug/12 5/Aug/11 6/Aug/10 7/Aug/09 5932 5681 5430
2/Jan/14 2/Jan/13 30/Dec/11 31/Dec/10 31/Dec/09 6034 5783 5532
3/Jan/18 3/Jan/17 31/Dec/15 2/Jan/15 3/Jan/14 7040 6789 6537
31/Dec/20 31/Dec/19 31/Dec/18 29/Dec/17 30/Dec/16 7792 7541 7289
ber of final day of tranche sampling window Table 8.6 - Difference betw
Note: This table of formula calcul

window for each tranche. These
le of formula calculates the row in the data table that matches the date for the sampling period.
1767 1515 1262 1010 757 506 254 252

2018 1766 1514 1261 1009 757 506 252
2269 2017 1765 1513 1261 1009 757 251
2520 2269 2017 1765 1513 1261 1009 251
2771 2520 2269 2017 1765 1513 1261 252
3024 2773 2521 2269 2018 1767 1515 252
3275 3024 2773 2521 2269 2018 1767 250
3525 3274 3023 2772 2520 2269 2018 251
3776 3525 3273 3022 2771 2520 2269 252
4026 3776 3525 3273 3022 2771 2520 251
4276 4026 3776 3525 3273 3022 2771 251
4530 4278 4027 3777 3525 3275 3024 252
4780 4529 4277 4026 3776 3525 3274 252
5030 4779 4528 4276 4026 3776 3525 251
5175 4923 4672 4421 4170 3920 3670 251
5176 4924 4673 4422 4170 3920 3671 251
5176 4925 4674 4423 4170 3920 3671 251
5176 4925 4675 4424 4171 3920 3671 251
5176 4925 4675 4425 4172 3921 3671 251
5180 4928 4677 4426 4174 3924 3675 251
5281 5030 4779 4528 4276 4026 3776 251
5532 5281 5030 4779 4528 4276 4026 251
5785 5534 5282 5030 4780 4530 4278 252
6036 5785 5534 5282 5030 4780 4530 252
6286 6035 5784 5533 5281 5030 4780 251
6537 6285 6034 5783 5532 5281 5030 251
6789 6537 6285 6034 5783 5532 5281 252
7039 6789 6537 6284 6033 5782 5532 251
Table 8.6 - Difference between starting row and start of tranche
Note: This table of formula calculates the difference between the starting row and the final day of the 40-day observation
window for each tranche. These values are used in offset functions to select the appropriate data range for averaging
within each tranche.
503 754 1006 1259 1511 1764 2015 2267

503 754 1006 1258 1511 1763 2015 2266
502 753 1005 1257 1509 1761 2013 2265
502 753 1004 1256 1508 1760 2012 2264
503 754 1005 1256 1508 1760 2012 2264
502 753 1004 1256 1508 1759 2010 2262
502 752 1003 1254 1506 1758 2009 2260
501 752 1003 1254 1505 1757 2008 2259
502 752 1003 1255 1506 1757 2008 2259
503 753 1003 1254 1506 1757 2008 2259
502 754 1004 1254 1505 1757 2008 2259
502 752 1004 1255 1505 1757 2007 2258
503 753 1004 1256 1507 1757 2008 2259
502 753 1004 1255 1507 1757 2007 2258
501 752 1004 1255 1506 1757 2007 2257
502 752 1004 1255 1506 1758 2008 2257
503 753 1004 1255 1506 1759 2009 2258
503 754 1005 1255 1506 1759 2010 2259
503 755 1006 1256 1506 1759 2010 2260
502 752 1004 1255 1506 1758 2008 2257
502 753 1004 1255 1506 1758 2008 2258
502 753 1004 1255 1506 1757 2009 2259
502 753 1004 1256 1508 1758 2008 2260
504 754 1005 1256 1508 1760 2010 2260
503 754 1005 1256 1507 1759 2010 2260
501 753 1005 1256 1507 1758 2009 2260
503 753 1005 1257 1508 1759 2010 2261
503 753 1003 1255 1508 1759 2010 2260
Offset for 40-day window -39.00
Note: the offset for a 40-day window is only 39 days because the offset is inclusive of its starting cell. That is, it will include the selected ce
Table 8.7 - Average risk free rate for each tranche
Note: This table of formula calculates the average risk free rate for each 40-day observation window of each tranche.
Tranche -0 Tranche -1 Tranche -2 Tranche -3 Tranche -4 Tranche -5 Tranche -6 Tranche -7 Tranche -8
5.32% 5.81% 5.43% 5.70% 5.72% 6.66% 4.99% 6.08% 7.25%

5.38% 5.31% 5.81% 5.43% 5.68% 5.74% 6.65% 4.99% 6.08%
5.65% 5.39% 5.31% 5.81% 5.44% 5.66% 5.76% 6.65% 4.99%
6.11% 5.65% 5.39% 5.31% 5.81% 5.44% 5.66% 5.76% 6.65%
4.52% 6.11% 5.65% 5.39% 5.31% 5.81% 5.44% 5.66% 5.76%
5.47% 4.52% 6.10% 5.66% 5.37% 5.32% 5.81% 5.43% 5.70%
5.49% 5.47% 4.52% 6.10% 5.66% 5.37% 5.32% 5.81% 5.43%
3.93% 5.48% 5.47% 4.52% 6.11% 5.66% 5.38% 5.31% 5.81%
3.16% 3.94% 5.48% 5.47% 4.52% 6.11% 5.65% 5.39% 5.31%
4.20% 3.16% 3.94% 5.48% 5.47% 4.52% 6.11% 5.65% 5.39%
3.09% 4.20% 3.16% 3.94% 5.48% 5.47% 4.52% 6.11% 5.65%
2.86% 3.09% 4.20% 3.18% 3.92% 5.49% 5.47% 4.52% 6.10%
2.67% 2.86% 3.09% 4.20% 3.17% 3.93% 5.48% 5.47% 4.52%
2.57% 2.66% 2.86% 3.09% 4.20% 3.16% 3.94% 5.48% 5.47%
2.67% 2.53% 2.01% 2.95% 3.57% 3.66% 2.94% 5.08% 5.23%
2.66% 2.53% 2.01% 2.95% 3.57% 3.67% 2.95% 5.08% 5.23%
2.66% 2.54% 2.01% 2.95% 3.56% 3.67% 2.95% 5.08% 5.23%
2.66% 2.55% 2.00% 2.95% 3.56% 3.68% 2.95% 5.07% 5.23%
2.66% 2.55% 1.99% 2.95% 3.56% 3.68% 2.95% 5.05% 5.22%
2.66% 2.56% 1.98% 2.92% 3.53% 3.70% 2.95% 5.02% 5.20%
2.55% 2.57% 2.66% 2.86% 3.09% 4.20% 3.16% 3.94% 5.48%
1.18% 2.55% 2.57% 2.66% 2.86% 3.09% 4.20% 3.16% 3.94%
#N/A 1.18% 2.53% 2.57% 2.68% 2.86% 3.09% 4.20% 3.18%
#N/A #N/A 1.18% 2.53% 2.57% 2.68% 2.86% 3.09% 4.20%
#N/A #N/A #N/A 1.18% 2.54% 2.57% 2.67% 2.86% 3.09%
#N/A #N/A #N/A #N/A 1.18% 2.55% 2.57% 2.66% 2.86%
#N/A #N/A #N/A #N/A #N/A 1.18% 2.55% 2.57% 2.66%
#N/A #N/A #N/A #N/A #N/A #N/A 1.18% 2.56% 2.57%
t will include the selected cell, and the 39 behind it.
Table 8.8 - RfR annualisation factor Table 8.9 - Risk free rate estimates (un-an
Note: RfR annualisation factor discussed in : IPART,

Review of our WACC method - Final Report, Feb
of each tranche. 2018, pp 40-41.
Long Term
estimate
Adjustment factor Adjustment factor
Tranche -9 Date long term) (current) End of month
8.33% 4/Jan/05 0.09% 0.08% Jan/05 6.13%

7.25% 3/Jan/06 0.09% 0.08% Jan/06 5.83%
6.08% 2/Jan/07 0.08% 0.08% Jan/07 5.67%
4.99% 2/Jan/08 0.08% 0.08% Jan/08 5.68%
6.65% 2/Jan/09 0.08% 0.07% Jan/09 5.63%
5.72% 4/Jan/10 0.08% 0.07% Jan/10 5.51%
5.70% 4/Jan/11 0.08% 0.07% Jan/11 5.49%
5.43% 3/Jan/12 0.07% 0.06% Jan/12 5.31%
5.81% 2/Jan/13 0.06% 0.05% Jan/13 5.08%
5.31% 2/Jan/14 0.06% 0.04% Jan/14 4.92%
5.39% 2/Jan/15 0.06% 0.03% Jan/15 4.70%
5.66% 4/Jan/16 0.05% 0.03% Jan/16 4.45%
6.11% 3/Jan/17 0.04% 0.03% Jan/17 4.15%
4.52% 2/Jan/18 0.04% 0.02% Jan/18 3.79%
5.52% 30/Jul/18 0.03% 0.02% Jul/18 3.62%
5.53% 31/Jul/18 0.03% 0.02% Jul/18 3.62%
5.53% 1/Aug/18 0.03% 0.02% Aug/18 3.62%
5.53% 2/Aug/18 0.03% 0.02% Aug/18 3.62%
5.53% 3/Aug/18 0.03% 0.02% Aug/18 3.61%
5.54% 7/Aug/18 0.03% 0.02% Aug/18 3.61%
5.47% 2/Jan/19 0.03% 0.02% Jan/19 3.60%
5.48% 2/Jan/20 0.03% 0.01% Jan/20 3.17%
3.92% 4/Jan/21 #N/A #N/A Jan/21 #N/A
3.18% 4/Jan/22 #N/A #N/A Jan/22 #N/A
4.20% 3/Jan/23 #N/A #N/A Jan/23 #N/A
3.09% 2/Jan/24 #N/A #N/A Jan/24 #N/A
2.86% 2/Jan/25 #N/A #N/A Jan/25 #N/A
2.66% 31/Dec/25 #N/A #N/A Dec/25 #N/A
ee rate estimates (un-annualised) Table 8.10 - Current estimates of the Risk free rate for other regulatory period len
Note: This offsets

by the number of
tranches in the
current estimate -1
because the offset
includes the original
cell.
Current estimate
- 4 tranches Current Current Current Current Current
estimate - 1 estimate - 2 estimate - 3 estimate - 4 estimate - 5
Date tranches tranches tranches tranches tranches
1 2 3 4 5
5.56% Jan/05 5.32% 5.56% 5.52% 5.56% 5.60%

5.48% Jan/06 5.38% 5.35% 5.50% 5.48% 5.52%
5.54% Jan/07 5.65% 5.52% 5.45% 5.54% 5.52%
5.62% Jan/08 6.11% 5.88% 5.72% 5.62% 5.66%
5.42% Jan/09 4.52% 5.31% 5.43% 5.42% 5.40%
5.44% Jan/10 5.47% 5.00% 5.36% 5.44% 5.43%
5.40% Jan/11 5.49% 5.48% 5.16% 5.40% 5.45%
4.85% Jan/12 3.93% 4.71% 4.96% 4.85% 5.10%
4.51% Jan/13 3.16% 3.55% 4.19% 4.51% 4.51%
4.20% Jan/14 4.20% 3.68% 3.77% 4.20% 4.45%
3.60% Jan/15 3.09% 3.64% 3.48% 3.60% 3.97%
3.33% Jan/16 2.86% 2.97% 3.38% 3.33% 3.45%
3.21% Jan/17 2.67% 2.77% 2.87% 3.21% 3.20%
2.79% Jan/18 2.57% 2.61% 2.70% 2.79% 3.07%
2.54% Jul/18 2.67% 2.60% 2.40% 2.54% 2.75%
2.54% Jul/18 2.66% 2.60% 2.40% 2.54% 2.74%
2.54% Aug/18 2.66% 2.60% 2.40% 2.54% 2.74%
2.54% Aug/18 2.66% 2.60% 2.40% 2.54% 2.74%
2.54% Aug/18 2.66% 2.60% 2.40% 2.54% 2.74%
2.53% Aug/18 2.66% 2.61% 2.40% 2.53% 2.73%
2.66% Jan/19 2.55% 2.56% 2.59% 2.66% 2.75%
2.24% Jan/20 1.18% 1.87% 2.10% 2.24% 2.36%
#N/A Jan/21 #N/A #N/A #N/A #N/A #N/A
#N/A Dec/25 #N/A #N/A #N/A #N/A #N/A
r regulatory period lengths (un-annualised) Table 8.11 - RfR annualisation factors
Note: this table calculates the annualisation factor
Current Current Current Current Current Current

estimate - 6 estimate - 7 estimate - 8 estimate - 9 estimate - 10 estimate - 1
tranches tranches tranches tranches tranches Date tranche
6 7 8 9 10 1
5.77% 5.66% 5.71% 5.88% 6.13% 4/Jan/05 0.07%

5.56% 5.71% 5.62% 5.68% 5.83% 3/Jan/06 0.07%
5.54% 5.57% 5.71% 5.63% 5.67% 2/Jan/07 0.08%
5.62% 5.62% 5.64% 5.75% 5.68% 2/Jan/08 0.09%
5.47% 5.46% 5.49% 5.52% 5.63% 2/Jan/09 0.05%
5.41% 5.47% 5.46% 5.49% 5.51% 4/Jan/10 0.07%
5.44% 5.42% 5.47% 5.46% 5.49% 4/Jan/11 0.08%
5.19% 5.22% 5.23% 5.30% 5.31% 3/Jan/12 0.04%
4.78% 4.90% 4.96% 5.00% 5.08% 2/Jan/13 0.02%
4.46% 4.70% 4.82% 4.88% 4.92% 2/Jan/14 0.04%
4.22% 4.26% 4.50% 4.62% 4.70% 2/Jan/15 0.02%
3.79% 4.03% 4.09% 4.31% 4.45% 4/Jan/16 0.02%
3.32% 3.63% 3.86% 3.93% 4.15% 3/Jan/17 0.02%
3.09% 3.21% 3.49% 3.71% 3.79% 2/Jan/18 0.02%
2.90% 2.90% 3.18% 3.40% 3.62% 30/Jul/18 0.02%
2.90% 2.90% 3.18% 3.40% 3.62% 31/Jul/18 0.02%
2.90% 2.91% 3.18% 3.41% 3.62% 1/Aug/18 0.02%
2.90% 2.91% 3.18% 3.40% 3.62% 2/Aug/18 0.02%
2.90% 2.91% 3.17% 3.40% 3.61% 3/Aug/18 0.02%
2.89% 2.90% 3.17% 3.39% 3.61% 7/Aug/18 0.02%
2.99% 3.01% 3.13% 3.39% 3.60% 2/Jan/19 0.02%
2.49% 2.73% 2.78% 2.91% 3.17% 2/Jan/20 0.00%
#N/A #N/A #N/A #N/A #N/A 4/Jan/21 #N/A
#N/A #N/A #N/A #N/A #N/A 31/Dec/25 #N/A
R annualisation factors
culates the annualisation factor for each risk free rate estimate in Table 8.10.
Current Current Current Current Current Current Current

estimate - 2 estimate - 3 estimate - 4 estimate - 5 estimate - 6 estimate - 7 estimate - 8
tranches tranches tranches tranches tranches tranches tranches
2 3 4 5 6 7 8
0.08% 0.08% 0.08% 0.08% 0.08% 0.08% 0.08%

0.07% 0.08% 0.08% 0.08% 0.08% 0.08% 0.08%
0.08% 0.07% 0.08% 0.08% 0.08% 0.08% 0.08%
0.09% 0.08% 0.08% 0.08% 0.08% 0.08% 0.08%
0.07% 0.07% 0.07% 0.07% 0.07% 0.07% 0.08%
0.06% 0.07% 0.07% 0.07% 0.07% 0.07% 0.07%
0.08% 0.07% 0.07% 0.07% 0.07% 0.07% 0.07%
0.06% 0.06% 0.06% 0.07% 0.07% 0.07% 0.07%
0.03% 0.04% 0.05% 0.05% 0.06% 0.06% 0.06%
0.03% 0.04% 0.04% 0.05% 0.05% 0.06% 0.06%
0.03% 0.03% 0.03% 0.04% 0.04% 0.05% 0.05%
0.02% 0.03% 0.03% 0.03% 0.04% 0.04% 0.04%
0.02% 0.02% 0.03% 0.03% 0.03% 0.03% 0.04%
0.02% 0.02% 0.02% 0.02% 0.02% 0.03% 0.03%
0.02% 0.01% 0.02% 0.02% 0.02% 0.02% 0.03%
0.02% 0.01% 0.02% 0.02% 0.02% 0.02% 0.03%
0.02% 0.01% 0.02% 0.02% 0.02% 0.02% 0.03%
0.02% 0.01% 0.02% 0.02% 0.02% 0.02% 0.03%
0.02% 0.01% 0.02% 0.02% 0.02% 0.02% 0.03%
0.02% 0.01% 0.02% 0.02% 0.02% 0.02% 0.03%
0.02% 0.02% 0.02% 0.02% 0.02% 0.02% 0.02%
0.01% 0.01% 0.01% 0.01% 0.02% 0.02% 0.02%
#N/A #N/A #N/A #N/A #N/A #N/A #N/A
Table 8.12 - Current estimates of the Risk free rate for other regulatory peri

tranches tranches Date tranche tranches tranches tranches
9 10 1 2 3 4
0.09% 0.09% 4/Jan/05 5.39% 5.64% 5.60% 5.64%

0.08% 0.09% 3/Jan/06 5.46% 5.42% 5.58% 5.56%
0.08% 0.08% 2/Jan/07 5.73% 5.60% 5.53% 5.62%
0.08% 0.08% 2/Jan/08 6.20% 5.97% 5.80% 5.69%
0.08% 0.08% 2/Jan/09 4.57% 5.38% 5.50% 5.49%
0.08% 0.08% 4/Jan/10 5.55% 5.06% 5.44% 5.51%
0.07% 0.08% 4/Jan/11 5.56% 5.56% 5.23% 5.47%
0.07% 0.07% 3/Jan/12 3.97% 4.76% 5.02% 4.91%
0.06% 0.06% 2/Jan/13 3.19% 3.58% 4.24% 4.56%
0.06% 0.06% 2/Jan/14 4.24% 3.71% 3.80% 4.24%
0.05% 0.06% 2/Jan/15 3.11% 3.68% 3.51% 3.63%
0.05% 0.05% 4/Jan/16 2.88% 3.00% 3.41% 3.36%
0.04% 0.04% 3/Jan/17 2.69% 2.78% 2.89% 3.23%
0.03% 0.04% 2/Jan/18 2.59% 2.63% 2.71% 2.81%
0.03% 0.03% 30/Jul/18 2.68% 2.61% 2.41% 2.55%
0.03% 0.03% 31/Jul/18 2.68% 2.61% 2.42% 2.55%
0.03% 0.03% 1/Aug/18 2.68% 2.62% 2.42% 2.56%
0.03% 0.03% 2/Aug/18 2.68% 2.62% 2.42% 2.55%
0.03% 0.03% 3/Aug/18 2.68% 2.62% 2.42% 2.55%
0.03% 0.03% 7/Aug/18 2.67% 2.62% 2.41% 2.54%
0.03% 0.03% 2/Jan/19 2.57% 2.58% 2.61% 2.68%
0.02% 0.03% 2/Jan/20 1.19% 1.88% 2.11% 2.25%
#N/A #N/A 4/Jan/21 #N/A #N/A #N/A #N/A
#N/A #N/A 31/Dec/25 #N/A #N/A #N/A #N/A
for other regulatory period lengths (annualised)

tranches tranches tranches tranches tranches tranches
5 6 7 8 9 10
5.67% 5.86% 5.74% 5.80% 5.97% 6.22%

5.60% 5.64% 5.80% 5.70% 5.76% 5.92%
5.60% 5.62% 5.65% 5.79% 5.71% 5.75%
5.73% 5.70% 5.70% 5.72% 5.84% 5.76%
5.47% 5.54% 5.54% 5.56% 5.59% 5.71%
5.50% 5.48% 5.54% 5.54% 5.56% 5.59%
5.52% 5.51% 5.49% 5.54% 5.54% 5.56%
5.17% 5.26% 5.29% 5.30% 5.37% 5.38%
4.56% 4.84% 4.96% 5.03% 5.07% 5.15%
4.50% 4.51% 4.75% 4.87% 4.94% 4.98%
4.01% 4.27% 4.31% 4.55% 4.68% 4.76%
3.48% 3.83% 4.07% 4.13% 4.36% 4.50%
3.22% 3.35% 3.66% 3.90% 3.97% 4.19%
3.10% 3.11% 3.24% 3.52% 3.75% 3.83%
2.76% 2.92% 2.92% 3.20% 3.43% 3.65%
2.76% 2.92% 2.93% 3.20% 3.43% 3.65%
2.76% 2.92% 2.93% 3.20% 3.43% 3.65%
2.76% 2.92% 2.93% 3.20% 3.43% 3.65%
2.76% 2.92% 2.93% 3.20% 3.43% 3.65%
2.75% 2.91% 2.92% 3.19% 3.42% 3.64%
2.76% 3.01% 3.04% 3.15% 3.42% 3.63%
2.38% 2.50% 2.75% 2.80% 2.93% 3.19%
#N/A #N/A #N/A #N/A #N/A #N/A
9
9 - DEBT MARGIN
Note: Our final decisions on estimation of the cost of debt are discussed in: IPART, Review of our WACC method - Final Report, Feb 2018, pp 24-25.
COLOUR CODE
Table 9.1 - 10-year and 7-year corporate bond spreads Table 9.2 - Debt Margin estim
Note: this column calculates a value for the 10-

year bond data series where a value is missing. It
Note: this does this by taking the change between the last
column month with data and the missing month in the 7-
identifies the Note: this column Note: FNFCBBB10M - Note: FNFCBBB7m - year bond data series and applying that to the last
month performs a calculation Non-financial corporate Non-financial corporate month with data's value in the 10-year bond
applicable for modifying the end of BBB-rated bonds - BBB-rated bonds - series. As at June 2018 there were no missing Note: the debt margin is the difference b
each row in all month so leap year spread to AGS - 10-year spread to AGS - 7-year values in the 10-year series due to a RBA data risk free rate. Therefore when annualisin
tables of this February's are able to be target tenor (basis target tenor (basis revision in June 2018. However procedure has measure the debt margin as the differen
worksheet. indexed. points). points). been maintained in case of future data lapses. of debt and the annualise
End of month 10-year bond spread

End of month (indexable) (bp) 7-year bond spread (bp) Selected Data (bp) End of month
Jan/05 Jan/05 117.62 113.87 117.62

Dec/13 Dec/13 288.86 251.04 288.86
Jan/14 Jan/14 279.85 242.16 279.85 Jan/14
Jan/15 Jan/15 192.09 229.67 192.09 Jan/15
Jan/18 Jan/18 150.06 125.30 150.06 Jan/18
Jan/19 Jan/19 228.50 200.92 228.50 Jan/19
Feb/19 Feb/19 221.27 195.85 221.27 Feb/19
Mar/19 Mar/19 216.62 189.22 216.62 Mar/19
Apr/19 Apr/19 214.41 182.09 214.41 Apr/19
May/19 May/19 222.14 188.58 222.14 May/19
Jun/19 Jun/19 209.93 178.63 209.93 Jun/19
Jul/19 Jul/19 203.52 168.14 203.52 Jul/19
Aug/19 Aug/19 197.63 172.68 197.63 Aug/19
Sep/19 Sep/19 187.34 166.13 187.34 Sep/19
Oct/19 Oct/19 186.80 166.27 186.80 Oct/19
Nov/19 Nov/19 184.34 159.80 184.34 Nov/19
Dec/19 Dec/19 172.87 161.54 172.87 Dec/19
Jan/20 Jan/20 162.79 148.40 162.79 Jan/20
Feb/20 Feb/20 168.10 158.08 168.10 Feb/20
Mar/20 Mar/20 303.60 281.47 303.60 Mar/20
Apr/20 Apr/20 307.60 301.80 307.60 Apr/20
May/20 May/20 269.40 268.30 269.40 May/20
Jun/20 Jun/20 245.30 243.30 245.30 Jun/20
Jul/20 Jul/20 196.60 208.00 196.60 Jul/20
Aug/20 Aug/20 #N/A #N/A #N/A Aug/20
Sep/20 Sep/20 #N/A #N/A #N/A Sep/20
Oct/20 Oct/20 #N/A #N/A #N/A Oct/20
Nov/20 Nov/20 #N/A #N/A #N/A Nov/20
Dec/20 Dec/20 #N/A #N/A #N/A Dec/20
Jan/21 Jan/21 #N/A #N/A #N/A Jan/21
Dec/25 Dec/25 #N/A #N/A #N/A Dec/25
- Debt Margin estimates (annualised) Table 9.3 - Date of tranche sampling window Table 9.4 - Row of tranch
ebt margin is the difference between the cost of debt and the
. Therefore when annualising the figures we have chosen to
e debt margin as the difference between the annualised cost
of debt and the annualised risk free rate. Note: This table of formula calculate the matching month for the sampling window in each tranche. Note: This table of formula calcu
Current estimate - 4
Long term estimate tranches (%) Tranche Tranche Tranche Tranche Tranche Tranche Tranche Tranche Tranche
(%) (annualised) (annualised) -1 -2 -3 -4 -5 -6 -7 -8 -9 Tranche -0
-1 -2 -3 -4 -5 -6 -7 -8 -9
Jan/04 Jan/03 Jan/02 Jan/01 Jan/00 Jan/99 Jan/98 Jan/97 Jan/96
Dec/12 Dec/11 Dec/10 Dec/09 Dec/08 Dec/07 Dec/06 Dec/05 Dec/04
3.09% 3.25% Jan/13 Jan/12 Jan/11 Jan/10 Jan/09 Jan/08 Jan/07 Jan/06 Jan/05 109
2.70% 2.36% Feb/18 Feb/17 Feb/16 Feb/15 Feb/14 Feb/13 Feb/12 Feb/11 Feb/10 170
2.63% 2.33% Mar/18 Mar/17 Mar/16 Mar/15 Mar/14 Mar/13 Mar/12 Mar/11 Mar/10 171
2.58% 2.26% Apr/18 Apr/17 Apr/16 Apr/15 Apr/14 Apr/13 Apr/12 Apr/11 Apr/10 172
2.59% 2.23% May/18 May/17 May/16 May/15 May/14 May/13 May/12 May/11 May/10 173
2.66% 2.26% Jun/18 Jun/17 Jun/16 Jun/15 Jun/14 Jun/13 Jun/12 Jun/11 Jun/10 174
2.64% 2.22% Jul/18 Jul/17 Jul/16 Jul/15 Jul/14 Jul/13 Jul/12 Jul/11 Jul/10 175
2.60% 2.13% Aug/18 Aug/17 Aug/16 Aug/15 Aug/14 Aug/13 Aug/12 Aug/11 Aug/10 176
2.64% 2.08% Sep/18 Sep/17 Sep/16 Sep/15 Sep/14 Sep/13 Sep/12 Sep/11 Sep/10 177
2.62% 2.03% Oct/18 Oct/17 Oct/16 Oct/15 Oct/14 Oct/13 Oct/12 Oct/11 Oct/10 178
2.63% 2.06% Nov/18 Nov/17 Nov/16 Nov/15 Nov/14 Nov/13 Nov/12 Nov/11 Nov/10 179
2.66% 2.12% Dec/18 Dec/17 Dec/16 Dec/15 Dec/14 Dec/13 Dec/12 Dec/11 Dec/10 180
2.60% 2.00% Feb/19 Feb/18 Feb/17 Feb/16 Feb/15 Feb/14 Feb/13 Feb/12 Feb/11 182
2.63% 2.18% Mar/19 Mar/18 Mar/17 Mar/16 Mar/15 Mar/14 Mar/13 Mar/12 Mar/11 183
2.67% 2.37% Apr/19 Apr/18 Apr/17 Apr/16 Apr/15 Apr/14 Apr/13 Apr/12 Apr/11 184
2.64% 2.33% May/19 May/18 May/17 May/16 May/15 May/14 May/13 May/12 May/11 185
2.64% 2.26% Jun/19 Jun/18 Jun/17 Jun/16 Jun/15 Jun/14 Jun/13 Jun/12 Jun/11 186
2.60% 2.13% Jul/19 Jul/18 Jul/17 Jul/16 Jul/15 Jul/14 Jul/13 Jul/12 Jul/11 187
#N/A #N/A Aug/19 Aug/18 Aug/17 Aug/16 Aug/15 Aug/14 Aug/13 Aug/12 Aug/11 188
#N/A #N/A Sep/19 Sep/18 Sep/17 Sep/16 Sep/15 Sep/14 Sep/13 Sep/12 Sep/11 189
#N/A #N/A Oct/19 Oct/18 Oct/17 Oct/16 Oct/15 Oct/14 Oct/13 Oct/12 Oct/11 190
#N/A #N/A Nov/19 Nov/18 Nov/17 Nov/16 Nov/15 Nov/14 Nov/13 Nov/12 Nov/11 191
#N/A #N/A Dec/19 Dec/18 Dec/17 Dec/16 Dec/15 Dec/14 Dec/13 Dec/12 Dec/11 192
#N/A #N/A Jan/20 Jan/19 Jan/18 Jan/17 Jan/16 Jan/15 Jan/14 Jan/13 Jan/12 193
#N/A #N/A Dec/24 Dec/23 Dec/22 Dec/21 Dec/20 Dec/19 Dec/18 Dec/17 Dec/16 252
Offset for 2-month window -1.00
Note: the offset for a 2-month window is only one month because the offse
Table 9.4 - Row of tranche sampling window Table 9.5 - Average debt margin for each tranche
Note: This table of formula calculates the average debt margin for each
Note: This table of formula calculates the row in the data table that matches the date for the sampling period. tranche. Measured in basis points
Tranche -1 Tranche -2 Tranche -3 Tranche -4 Tranche -5 Tranche -6 Tranche -7 Tranche -8 Tranche -9 Month Tranche -0 Tranche -1 Tranche -2 Tranche -3 Tranche -4
97 85 73 61 49 37 25 13 1 Jan/14 284.36 309.12 398.93 222.19 258.21

109 97 85 73 61 49 37 25 13 Jan/15 196.78 284.36 309.12 398.93 222.19
145 133 121 109 97 85 73 61 49 Jan/18 157.51 212.28 275.43 196.78 284.36
157 145 133 121 109 97 85 73 61 Jan/19 229.90 157.51 212.28 275.43 196.78
158 146 134 122 110 98 86 74 62 Feb/19 224.89 148.89 199.27 305.60 191.78
159 147 135 123 111 99 87 75 63 Mar/19 218.95 162.55 190.56 295.62 202.19
160 148 136 124 112 100 88 76 64 Apr/19 215.52 173.45 189.99 259.77 214.54
161 149 137 125 113 101 89 77 65 May/19 218.28 175.68 187.83 246.94 213.28
162 150 138 126 114 102 90 78 66 Jun/19 216.04 184.27 183.91 257.78 212.98
163 151 139 127 115 103 91 79 67 Jul/19 206.73 189.66 174.16 253.28 220.52
164 152 140 128 116 104 92 80 68 Aug/19 200.58 189.56 165.50 233.40 232.85
165 153 141 129 117 105 93 81 69 Sep/19 192.49 186.24 163.01 228.09 255.65
166 154 142 130 118 106 94 82 70 Oct/19 187.07 187.69 156.41 220.40 269.19
167 155 143 131 119 107 95 83 71 Nov/19 185.57 199.44 158.68 216.65 261.18
168 156 144 132 120 108 96 84 72 Dec/19 178.61 220.38 165.70 218.84 255.97
169 157 145 133 121 109 97 85 73 Jan/20 167.83 229.90 157.51 212.28 275.43
170 158 146 134 122 110 98 86 74 Feb/20 165.45 224.89 148.89 199.27 305.60
171 159 147 135 123 111 99 87 75 Mar/20 235.85 218.95 162.55 190.56 295.62
172 160 148 136 124 112 100 88 76 Apr/20 305.60 215.52 173.45 189.99 259.77
173 161 149 137 125 113 101 89 77 May/20 288.50 218.28 175.68 187.83 246.94
174 162 150 138 126 114 102 90 78 Jun/20 257.35 216.04 184.27 183.91 257.78
175 163 151 139 127 115 103 91 79 Jul/20 220.95 206.73 189.66 174.16 253.28
176 164 152 140 128 116 104 92 80 Aug/20 #N/A 200.58 189.56 165.50 233.40
177 165 153 141 129 117 105 93 81 Sep/20 #N/A 192.49 186.24 163.01 228.09
178 166 154 142 130 118 106 94 82 Oct/20 #N/A 187.07 187.69 156.41 220.40
179 167 155 143 131 119 107 95 83 Nov/20 #N/A 185.57 199.44 158.68 216.65
180 168 156 144 132 120 108 96 84 Dec/20 #N/A 178.61 220.38 165.70 218.84
181 169 157 145 133 121 109 97 85 Jan/21 #N/A 167.83 229.90 157.51 212.28
240 228 216 204 192 180 168 156 144 Dec/25 #N/A #N/A #N/A #N/A #N/A
Length of regulatory period 4
y one month because the offset is inclusive of its starting cell.
Note: this is a cell reference to the selection made on the

WACC calculator worksheet.
Table 9.6 - Debt Margin estimates

n for each tranche (unannualised) Table 9.7 - Debt Margin estimates all regulatory le
Note: This offsets by the

number of tranches in
the current estimate -1
average debt margin for each 2-month observation window of each because the offset
che. Measured in basis points. includes the original cell.
Current Current
Long term Current estimate - 4 End of estimate 1- estimate 2-
Tranche -5 Tranche -6 Tranche -7 Tranche -8 Tranche -9 End of month estimate (%) tranches (%) month tranche tranches
1 2
826.64 216.94 132.14 106.57 117.62 Jan/14 2.87% 3.04% Jan/14 2.84% 2.97%
258.21 826.64 216.94 132.14 106.57 Jan/15 2.95% 2.97% Jan/15 1.97% 2.41%
309.12 398.93 222.19 258.21 826.64 Jan/18 3.14% 2.10% Jan/18 1.58% 1.85%
284.36 309.12 398.93 222.19 258.21 Jan/19 2.54% 2.19% Jan/19 2.30% 1.94%
268.42 306.31 390.18 217.97 259.94 Feb/19 2.51% 2.20% Feb/19 2.25% 1.87%
250.94 307.38 368.88 214.96 231.02 Mar/19 2.44% 2.17% Mar/19 2.19% 1.91%
236.20 307.34 355.50 233.23 211.10 Apr/19 2.40% 2.10% Apr/19 2.16% 1.94%
220.36 296.03 359.99 252.20 242.17 May/19 2.41% 2.07% May/19 2.18% 1.97%
207.33 305.11 378.89 260.33 272.63 Jun/19 2.48% 2.10% Jun/19 2.16% 2.00%
192.62 317.58 376.85 270.94 256.58 Jul/19 2.46% 2.06% Jul/19 2.07% 1.98%
186.73 312.47 358.43 298.53 239.83 Aug/19 2.42% 1.97% Aug/19 2.01% 1.95%
193.85 322.48 352.68 325.42 243.32 Sep/19 2.46% 1.92% Sep/19 1.92% 1.89%
202.82 315.30 332.22 337.37 237.59 Oct/19 2.45% 1.88% Oct/19 1.87% 1.87%
214.01 301.02 322.48 363.03 226.55 Nov/19 2.45% 1.90% Nov/19 1.86% 1.93%
210.94 293.86 322.71 388.54 226.52 Dec/19 2.48% 1.96% Dec/19 1.79% 1.99%
196.78 284.36 309.12 398.93 222.19 Jan/20 2.45% 1.92% Jan/20 1.68% 1.99%
191.78 268.42 306.31 390.18 217.97 Feb/20 2.42% 1.85% Feb/20 1.65% 1.95%
202.19 250.94 307.38 368.88 214.96 Mar/20 2.45% 2.02% Mar/20 2.36% 2.27%
214.54 236.20 307.34 355.50 233.23 Apr/20 2.49% 2.21% Apr/20 3.06% 2.61%
213.28 220.36 296.03 359.99 252.20 May/20 2.46% 2.18% May/20 2.89% 2.53%
212.98 207.33 305.11 378.89 260.33 Jun/20 2.46% 2.10% Jun/20 2.57% 2.37%
220.52 192.62 317.58 376.85 270.94 Jul/20 2.42% 1.98% Jul/20 2.21% 2.14%
232.85 186.73 312.47 358.43 298.53 Aug/20 #N/A #N/A Aug/20 #N/A #N/A
255.65 193.85 322.48 352.68 325.42 Sep/20 #N/A #N/A Sep/20 #N/A #N/A
269.19 202.82 315.30 332.22 337.37 Oct/20 #N/A #N/A Oct/20 #N/A #N/A
261.18 214.01 301.02 322.48 363.03 Nov/20 #N/A #N/A Nov/20 #N/A #N/A
255.97 210.94 293.86 322.71 388.54 Dec/20 #N/A #N/A Dec/20 #N/A #N/A
275.43 196.78 284.36 309.12 398.93 Jan/21 #N/A #N/A Jan/21 #N/A #N/A
#N/A 178.61 220.38 165.70 218.84 Dec/25 #N/A #N/A Dec/25 #N/A #N/A
gin estimates all regulatory lengths (unannualised) Table 9.8 - Debt Margin estimates all re
Note: this table is producing the annualised values for

cost of debt and the annualised risk free rate. We calc
risk free rate. Further, our annualisation process is s
rate + the annualised debt margin (were we to annual
free rate being the se
Current Current Current Current Current Current Current Current Current
estimate 3- estimate 4- estimate 5- estimate 6- estimate 7- estimate 8- estimate 9- estimate 10- estimate 1-
tranches tranches tranches tranches tranches tranches tranches tranches End of month tranche
3 4 5 6 7 8 9 10 1
3.31% 3.04% 2.95% 3.83% 3.59% 3.31% 3.06% 2.87% Jan/14 3.05%
2.63% 2.97% 2.82% 2.78% 3.57% 3.39% 3.16% 2.95% Jan/15 2.13%
2.15% 2.10% 2.25% 2.39% 2.62% 2.57% 2.57% 3.14% Jan/18 1.73%
2.00% 2.19% 2.14% 2.26% 2.38% 2.58% 2.54% 2.54% Jan/19 2.46%
1.91% 2.20% 2.14% 2.23% 2.35% 2.54% 2.50% 2.51% Feb/19 2.41%
1.91% 2.17% 2.14% 2.20% 2.33% 2.50% 2.46% 2.44% Mar/19 2.35%
1.93% 2.10% 2.11% 2.15% 2.28% 2.44% 2.43% 2.40% Apr/19 2.31%
1.94% 2.07% 2.08% 2.10% 2.23% 2.40% 2.41% 2.41% May/19 2.34%
1.95% 2.10% 2.11% 2.10% 2.24% 2.43% 2.45% 2.48% Jun/19 2.31%
1.90% 2.06% 2.09% 2.06% 2.22% 2.41% 2.45% 2.46% Jul/19 2.22%
1.85% 1.97% 2.04% 2.01% 2.17% 2.35% 2.42% 2.42% Aug/19 2.15%
1.81% 1.92% 2.05% 2.03% 2.20% 2.37% 2.47% 2.46% Sep/19 2.07%
1.77% 1.88% 2.04% 2.04% 2.20% 2.34% 2.45% 2.45% Oct/19 2.01%
1.81% 1.90% 2.04% 2.06% 2.20% 2.32% 2.47% 2.45% Nov/19 2.00%
1.88% 1.96% 2.08% 2.08% 2.21% 2.33% 2.51% 2.48% Dec/19 1.93%
1.85% 1.92% 2.09% 2.07% 2.18% 2.29% 2.48% 2.45% Jan/20 1.82%
1.80% 1.85% 2.09% 2.06% 2.15% 2.26% 2.45% 2.42% Feb/20 1.80%
2.06% 2.02% 2.21% 2.18% 2.22% 2.33% 2.48% 2.45% Mar/20 2.51%
2.32% 2.21% 2.29% 2.26% 2.28% 2.38% 2.51% 2.49% Apr/20 3.22%
2.27% 2.18% 2.23% 2.22% 2.22% 2.31% 2.45% 2.46% May/20 3.04%
2.19% 2.10% 2.20% 2.19% 2.17% 2.28% 2.45% 2.46% Jun/20 2.73%
2.06% 1.98% 2.09% 2.11% 2.08% 2.22% 2.39% 2.42% Jul/20 2.36%
#N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A Aug/20 #N/A
#N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A Sep/20 #N/A
#N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A Oct/20 #N/A
#N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A Nov/20 #N/A
#N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A Dec/20 #N/A
#N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A Jan/21 #N/A
#N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A Dec/25 #N/A
ebt Margin estimates all regulatory lengths (annualised)
producing the annualised values for the debt margin for each regulatory period length. The annualised debt margin is the difference between the annualised
he annualised risk free rate. We calculate the debt margin like this because conceptually, the debt margin is the remainder between the cost of debt and the
rther, our annualisation process is sensitive to the order in which we annualise. That is, the annualised cost of debt is not equal to the annualised Risk free
sed debt margin (were we to annualise the two parameters individually). We have annualised the cost of debt as the primary value, with the annualised risk
free rate being the second annualised value leaving the annualised debt margin as the remainder of the two.
Current Current Current Current Current Current Current Current Current
estimate 2- estimate 3- estimate 4- estimate 5- estimate 6- estimate 7- estimate 8- estimate 9- estimate 10-
tranches tranches tranches tranches tranches tranches tranches tranches tranches
2 3 4 5 6 7 8 9 10
3.17% 3.52% 3.25% 3.16% 4.08% 3.84% 3.54% 3.28% 3.09%

2.59% 2.82% 3.17% 3.02% 2.99% 3.80% 3.62% 3.38% 3.17%
2.01% 2.32% 2.27% 2.42% 2.57% 2.80% 2.76% 2.76% 3.35%
2.10% 2.16% 2.35% 2.31% 2.43% 2.55% 2.76% 2.72% 2.73%
2.03% 2.07% 2.36% 2.30% 2.40% 2.52% 2.72% 2.69% 2.70%
2.06% 2.07% 2.33% 2.30% 2.37% 2.50% 2.67% 2.64% 2.63%
2.10% 2.09% 2.26% 2.27% 2.32% 2.45% 2.62% 2.61% 2.58%
2.13% 2.10% 2.23% 2.25% 2.27% 2.39% 2.57% 2.59% 2.59%
2.16% 2.10% 2.26% 2.27% 2.27% 2.41% 2.61% 2.63% 2.66%
2.14% 2.06% 2.22% 2.25% 2.22% 2.39% 2.59% 2.62% 2.64%
2.10% 2.01% 2.13% 2.20% 2.17% 2.34% 2.52% 2.59% 2.60%
2.04% 1.96% 2.08% 2.21% 2.19% 2.37% 2.54% 2.64% 2.64%
2.02% 1.92% 2.03% 2.20% 2.20% 2.36% 2.51% 2.63% 2.62%
2.08% 1.96% 2.06% 2.20% 2.22% 2.36% 2.49% 2.65% 2.63%
2.15% 2.04% 2.12% 2.24% 2.25% 2.37% 2.50% 2.68% 2.66%
2.14% 2.00% 2.07% 2.25% 2.23% 2.34% 2.46% 2.66% 2.63%
2.10% 1.95% 2.00% 2.25% 2.22% 2.31% 2.43% 2.62% 2.60%
2.43% 2.21% 2.18% 2.37% 2.34% 2.39% 2.50% 2.66% 2.63%
2.77% 2.47% 2.37% 2.45% 2.43% 2.44% 2.55% 2.68% 2.67%
2.69% 2.43% 2.33% 2.40% 2.38% 2.38% 2.48% 2.62% 2.64%
2.52% 2.35% 2.26% 2.36% 2.35% 2.33% 2.45% 2.62% 2.64%
2.29% 2.21% 2.13% 2.25% 2.27% 2.24% 2.38% 2.56% 2.60%
#N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
10
10 - Cost of Debt
Note: the cost of debt is estimated as the risk free rate plus the debt margin, discussed in: IPART, Review of our WACC method - Final R
Note: Our final decisions on annualising the cost of debt and risk free rate are discussed in: IPART, Review of our WACC method - Final
COLOUR CODE
Table 10.1 - Un-annualised risk free rate and debt margin Table 10.2 - Un-annualis
Note: the cost of debt is estimat

the risk free rate and the
Value in formula YRF current YDRP current YRF long term YDRP long term
Risk free rate Debt margin Risk free rate Debt margin
End of month (current) (current) (long term) (long term) End of month
Jan/14 4.22% 3.04% 4.90% 2.87% Jan/14
Jan/18 2.75% 2.10% 3.75% 3.14% Jan/18
Jan/19 2.64% 2.19% 3.58% 2.54% Jan/19
Feb/19 2.59% 2.20% 3.55% 2.51% Feb/19
Mar/19 2.53% 2.17% 3.54% 2.44% Mar/19
Apr/19 2.47% 2.10% 3.50% 2.40% Apr/19
May/19 2.37% 2.07% 3.38% 2.41% May/19
Jun/19 2.24% 2.10% 3.28% 2.48% Jun/19
Jul/19 2.14% 2.06% 3.20% 2.46% Jul/19
Aug/19 2.06% 1.97% 3.11% 2.42% Aug/19
Sep/19 2.04% 1.92% 3.07% 2.46% Sep/19
Oct/19 2.14% 1.88% 3.10% 2.45% Oct/19
Nov/19 2.20% 1.90% 3.14% 2.45% Nov/19
Dec/19 2.24% 1.96% 3.17% 2.48% Dec/19
Jan/20 2.24% 1.92% 3.14% 2.45% Jan/20
Feb/20 2.20% 1.85% 3.10% 2.42% Feb/20
Mar/20 2.13% 2.02% 3.08% 2.45% Mar/20
Apr/20 2.06% 2.21% 3.01% 2.49% Apr/20
May/20 2.00% 2.18% 2.92% 2.46% May/20
Jun/20 1.91% 2.10% 2.83% 2.46% Jun/20
Jul/20 1.86% 1.98% 2.76% 2.42% Jul/20
Aug/20 #N/A #N/A #N/A #N/A Aug/20
Sep/20 #N/A #N/A #N/A #N/A Sep/20
Oct/20 #N/A #N/A #N/A #N/A Oct/20
Nov/20 #N/A #N/A #N/A #N/A Nov/20
Dec/20 #N/A #N/A #N/A #N/A Dec/20
Jan/21 #N/A #N/A #N/A #N/A Jan/21
Dec/25 #N/A #N/A #N/A #N/A Dec/25
Formula 10.1
our WACC method - Final Report, Feb 2018, p 24.

of our WACC method - Final Report, Feb 2018, pp 40-41. Note: Formula source, see: IPART, Review of our WACC method - Final Report, Feb 2018, B
le 10.2 - Un-annualised Cost of debt Table 10.3 - Cost of debt annualisation adjustment factor
Note: this table calculates the annualisation adjuctment factor
e: the cost of debt is estimated to be the sum of (dicsussed in Box 4.1 of IPART, Review of our WACC method -
the risk free rate and the debt margin. Final Report, Feb 2018, p 41) using Formula 10.1.
Value in formula Δd current Δd long term

Cost of debt Cost of debt
adjustment factor adjustment factor
Current Long term End of month (current) (long term)
7.26% 7.78% Jan/14 0.13% 0.15%
4.86% 6.90% Jan/18 0.06% 0.12%
4.83% 6.12% Jan/19 0.06% 0.09%
4.78% 6.06% Feb/19 0.06% 0.09%
4.70% 5.98% Mar/19 0.06% 0.09%
4.57% 5.89% Apr/19 0.05% 0.09%
4.44% 5.79% May/19 0.05% 0.08%
4.35% 5.76% Jun/19 0.05% 0.08%
4.19% 5.66% Jul/19 0.04% 0.08%
4.04% 5.53% Aug/19 0.04% 0.08%
3.97% 5.54% Sep/19 0.04% 0.08%
4.02% 5.55% Oct/19 0.04% 0.08%
4.11% 5.59% Nov/19 0.04% 0.08%
4.20% 5.65% Dec/19 0.04% 0.08%
4.16% 5.60% Jan/20 0.04% 0.08%
4.05% 5.52% Feb/20 0.04% 0.08%
4.15% 5.53% Mar/20 0.04% 0.08%
4.27% 5.51% Apr/20 0.05% 0.08%
4.17% 5.38% May/20 0.04% 0.07%
4.02% 5.29% Jun/20 0.04% 0.07%
3.84% 5.19% Jul/20 0.04% 0.07%
#N/A #N/A Aug/20 #N/A #N/A
#N/A #N/A Sep/20 #N/A #N/A
#N/A #N/A Oct/20 #N/A #N/A
#N/A #N/A Nov/20 #N/A #N/A
#N/A #N/A Dec/20 #N/A #N/A
#N/A #N/A Jan/21 #N/A #N/A
#N/A #N/A Dec/25 #N/A #N/A
ACC method - Final Report, Feb 2018, Box 4.1, equation 4, p 41.
n adjustment factor Table 10.4 - Annualised cost of debt Table 10.5 - Un-annualised risk free rate and d
Note: the annualised cost of debt is equal to the

un-annualised cost of debt + the adjustment factor.
1 2
End of month Current Long term End of month Rfr 1-tranche Rfr 2-tranches
Jan/14 7.51% 8.05% Jan/14 4.22% 3.77%
Jan/18 5.04% 7.14% Jan/18 2.67% 2.72%
Jan/19 5.01% 6.34% Jan/19 2.35% 2.51%
Feb/19 4.97% 6.28% Feb/19 2.20% 2.50%
Mar/19 4.88% 6.20% Mar/19 2.04% 2.41%
Apr/19 4.75% 6.11% Apr/19 1.91% 2.32%
May/19 4.62% 6.00% May/19 1.75% 2.26%
Jun/19 4.52% 5.97% Jun/19 1.52% 2.13%
Jul/19 4.36% 5.86% Jul/19 1.34% 2.00%
Aug/19 4.20% 5.73% Aug/19 1.12% 1.87%
Sep/19 4.13% 5.74% Sep/19 0.98% 1.79%
Oct/19 4.18% 5.75% Oct/19 1.04% 1.85%
Nov/19 4.27% 5.80% Nov/19 1.10% 1.89%
Dec/19 4.37% 5.86% Dec/19 1.18% 1.87%
Jan/20 4.33% 5.80% Jan/20 1.18% 1.76%
Feb/20 4.21% 5.72% Feb/20 1.06% 1.63%
Mar/20 4.32% 5.73% Mar/20 0.93% 1.48%
Apr/20 4.44% 5.71% Apr/20 0.88% 1.40%
May/20 4.34% 5.57% May/20 0.89% 1.33%
Jun/20 4.18% 5.48% Jun/20 0.92% 1.22%
Jul/20 4.00% 5.38% Jul/20 0.90% 1.12%
Aug/20 #N/A #N/A Aug/20 #N/A #N/A
Sep/20 #N/A #N/A Sep/20 #N/A #N/A
Oct/20 #N/A #N/A Oct/20 #N/A #N/A
Nov/20 #N/A #N/A Nov/20 #N/A #N/A
Dec/20 #N/A #N/A Dec/20 #N/A #N/A
Jan/21 #N/A #N/A Jan/21 #N/A #N/A
Dec/25 #N/A #N/A Dec/25 #N/A #N/A
ed risk free rate and debt margin - for all regulatory period lengths
3 4 5 6 7 8 9 10
Rfr 10-
Rfr 3-tranches Rfr 4-tranches Rfr 5-tranches Rfr 6-tranches Rfr 7-tranches Rfr 8-tranches Rfr 9-tranches tranches
3.78% 4.22% 4.48% 4.42% 4.67% 4.81% 4.86% 4.90%
2.74% 2.75% 3.05% 3.09% 3.19% 3.49% 3.71% 3.75%
2.59% 2.64% 2.67% 2.93% 2.98% 3.09% 3.36% 3.58%
2.58% 2.59% 2.58% 2.85% 2.93% 3.05% 3.33% 3.55%
2.54% 2.53% 2.53% 2.79% 2.89% 3.04% 3.32% 3.54%
2.45% 2.47% 2.47% 2.73% 2.83% 2.98% 3.25% 3.50%
2.36% 2.37% 2.43% 2.67% 2.75% 2.85% 3.13% 3.38%
2.25% 2.24% 2.38% 2.60% 2.72% 2.77% 3.04% 3.28%
2.18% 2.14% 2.30% 2.51% 2.67% 2.71% 2.97% 3.20%
2.12% 2.06% 2.21% 2.42% 2.61% 2.67% 2.90% 3.11%
2.08% 2.04% 2.17% 2.39% 2.61% 2.68% 2.86% 3.07%
2.15% 2.14% 2.24% 2.44% 2.66% 2.71% 2.89% 3.10%
2.15% 2.20% 2.31% 2.47% 2.70% 2.75% 2.91% 3.14%
2.10% 2.24% 2.37% 2.49% 2.73% 2.78% 2.91% 3.17%
2.07% 2.24% 2.35% 2.42% 2.68% 2.76% 2.88% 3.14%
2.02% 2.20% 2.28% 2.33% 2.59% 2.70% 2.83% 3.10%
1.92% 2.13% 2.21% 2.26% 2.52% 2.65% 2.81% 3.08%
1.84% 2.06% 2.15% 2.20% 2.47% 2.58% 2.74% 3.01%
1.81% 2.00% 2.08% 2.18% 2.42% 2.52% 2.64% 2.92%
1.73% 1.91% 1.97% 2.13% 2.36% 2.49% 2.56% 2.83%
1.63% 1.86% 1.89% 2.06% 2.28% 2.45% 2.51% 2.76%
#N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
1 2 3 4 5 6 7 8
Debt Margin Debt Margin Debt Margin Debt Margin Debt Margin Debt Margin Debt Margin Debt Margin
1-tranche 2-tranches 3-tranches 4-tranches 5-tranches 6-tranches 7-tranches 8-tranches
2.84% 2.97% 3.31% 3.04% 2.95% 3.83% 3.59% 3.31%
1.58% 1.85% 2.15% 2.10% 2.25% 2.39% 2.62% 2.57%
2.30% 1.94% 2.00% 2.19% 2.14% 2.26% 2.38% 2.58%
2.25% 1.87% 1.91% 2.20% 2.14% 2.23% 2.35% 2.54%
2.19% 1.91% 1.91% 2.17% 2.14% 2.20% 2.33% 2.50%
2.16% 1.94% 1.93% 2.10% 2.11% 2.15% 2.28% 2.44%
2.18% 1.97% 1.94% 2.07% 2.08% 2.10% 2.23% 2.40%
2.16% 2.00% 1.95% 2.10% 2.11% 2.10% 2.24% 2.43%
2.07% 1.98% 1.90% 2.06% 2.09% 2.06% 2.22% 2.41%
2.01% 1.95% 1.85% 1.97% 2.04% 2.01% 2.17% 2.35%
1.92% 1.89% 1.81% 1.92% 2.05% 2.03% 2.20% 2.37%
1.87% 1.87% 1.77% 1.88% 2.04% 2.04% 2.20% 2.34%
1.86% 1.93% 1.81% 1.90% 2.04% 2.06% 2.20% 2.32%
1.79% 1.99% 1.88% 1.96% 2.08% 2.08% 2.21% 2.33%
1.68% 1.99% 1.85% 1.92% 2.09% 2.07% 2.18% 2.29%
1.65% 1.95% 1.80% 1.85% 2.09% 2.06% 2.15% 2.26%
2.36% 2.27% 2.06% 2.02% 2.21% 2.18% 2.22% 2.33%
3.06% 2.61% 2.32% 2.21% 2.29% 2.26% 2.28% 2.38%
2.89% 2.53% 2.27% 2.18% 2.23% 2.22% 2.22% 2.31%
2.57% 2.37% 2.19% 2.10% 2.20% 2.19% 2.17% 2.28%
2.21% 2.14% 2.06% 1.98% 2.09% 2.11% 2.08% 2.22%
Table 10.6 - Un-annualised cost of debt - for all regulatory period length
9 10 1 2 3 4
Debt Margin Debt Margin Cost of Debt Cost of Debt Cost of Debt Cost of Debt
9-tranches 10-tranches End of month 1- tranche 2- tranches 3- tranches 4- tranches
3.06% 2.87% Jan/14 7.06% 6.73% 7.09% 7.26%
2.57% 3.14% Jan/18 4.25% 4.56% 4.89% 4.86%
2.54% 2.54% Jan/19 4.65% 4.45% 4.59% 4.83%
2.50% 2.51% Feb/19 4.45% 4.37% 4.49% 4.78%
2.46% 2.44% Mar/19 4.23% 4.32% 4.44% 4.70%
2.43% 2.40% Apr/19 4.07% 4.27% 4.38% 4.57%
2.41% 2.41% May/19 3.93% 4.23% 4.30% 4.44%
2.45% 2.48% Jun/19 3.68% 4.14% 4.19% 4.35%
2.45% 2.46% Jul/19 3.40% 3.98% 4.08% 4.19%
2.42% 2.42% Aug/19 3.13% 3.82% 3.97% 4.04%
2.47% 2.46% Sep/19 2.91% 3.69% 3.88% 3.97%
2.45% 2.45% Oct/19 2.91% 3.73% 3.92% 4.02%
2.47% 2.45% Nov/19 2.96% 3.82% 3.96% 4.11%
2.51% 2.48% Dec/19 2.96% 3.87% 3.99% 4.20%
2.48% 2.45% Jan/20 2.86% 3.75% 3.92% 4.16%
2.45% 2.42% Feb/20 2.72% 3.58% 3.82% 4.05%
2.48% 2.45% Mar/20 3.29% 3.76% 3.98% 4.15%
2.51% 2.49% Apr/20 3.93% 4.00% 4.16% 4.27%
2.45% 2.46% May/20 3.77% 3.86% 4.08% 4.17%
2.45% 2.46% Jun/20 3.49% 3.58% 3.92% 4.02%
2.39% 2.42% Jul/20 3.11% 3.26% 3.69% 3.84%
#N/A #N/A Aug/20 #N/A #N/A #N/A #N/A
#N/A #N/A Sep/20 #N/A #N/A #N/A #N/A
#N/A #N/A Oct/20 #N/A #N/A #N/A #N/A
#N/A #N/A Nov/20 #N/A #N/A #N/A #N/A
#N/A #N/A Dec/20 #N/A #N/A #N/A #N/A
#N/A #N/A Jan/21 #N/A #N/A #N/A #N/A
#N/A #N/A Dec/25 #N/A #N/A #N/A #N/A
regulatory period lengths Table 10.7 - Cost of debt an
5 6 7 8 9 10
Cost of Debt Cost of Debt Cost of Debt Cost of Debt Cost of Debt Cost of Debt End of
5- tranches 6- tranches 7- tranches 8- tranches 9- tranches 10- tranches month
7.42% 8.26% 8.26% 8.12% 7.92% 7.78% Jan/14
5.30% 5.48% 5.81% 6.06% 6.28% 6.90% Jan/18
4.82% 5.19% 5.36% 5.67% 5.90% 6.12% Jan/19
4.73% 5.08% 5.28% 5.59% 5.83% 6.06% Feb/19
4.67% 4.99% 5.22% 5.54% 5.77% 5.98% Mar/19
4.57% 4.88% 5.11% 5.42% 5.68% 5.89% Apr/19
4.51% 4.77% 4.98% 5.24% 5.54% 5.79% May/19
4.49% 4.71% 4.95% 5.20% 5.49% 5.76% Jun/19
4.39% 4.57% 4.90% 5.12% 5.42% 5.66% Jul/19
4.26% 4.43% 4.79% 5.02% 5.32% 5.53% Aug/19
4.23% 4.42% 4.82% 5.05% 5.33% 5.54% Sep/19
4.28% 4.48% 4.86% 5.05% 5.34% 5.55% Oct/19
4.35% 4.53% 4.89% 5.07% 5.38% 5.59% Nov/19
4.44% 4.57% 4.94% 5.12% 5.42% 5.65% Dec/19
4.43% 4.49% 4.86% 5.05% 5.36% 5.60% Jan/20
4.37% 4.39% 4.74% 4.96% 5.27% 5.52% Feb/20
4.42% 4.44% 4.75% 4.98% 5.29% 5.53% Mar/20
4.44% 4.47% 4.75% 4.96% 5.25% 5.51% Apr/20
4.32% 4.39% 4.64% 4.83% 5.09% 5.38% May/20
4.17% 4.32% 4.53% 4.77% 5.01% 5.29% Jun/20
3.98% 4.17% 4.36% 4.67% 4.90% 5.19% Jul/20
#N/A #N/A #N/A #N/A #N/A #N/A Aug/20
#N/A #N/A #N/A #N/A #N/A #N/A Sep/20
#N/A #N/A #N/A #N/A #N/A #N/A Oct/20
#N/A #N/A #N/A #N/A #N/A #N/A Nov/20
#N/A #N/A #N/A #N/A #N/A #N/A Dec/20
#N/A #N/A #N/A #N/A #N/A #N/A Jan/21
#N/A #N/A #N/A #N/A #N/A #N/A Dec/25
Table 10.7 - Cost of debt annualisation adjustment factor (for all period lengths)
1 2 3 4 5 6 7 8
Cost of Debt Cost of Debt Cost of Debt Cost of Debt Cost of Debt Cost of Debt Cost of Debt Cost of Debt
1- tranche 2- tranches 3- tranches 4- tranches 5- tranches 6- tranches 7- tranches 8- tranches
0.12% 0.11% 0.13% 0.13% 0.14% 0.17% 0.17% 0.16%
0.05% 0.05% 0.06% 0.06% 0.07% 0.08% 0.08% 0.09%
0.05% 0.05% 0.05% 0.06% 0.06% 0.07% 0.07% 0.08%
0.05% 0.05% 0.05% 0.06% 0.06% 0.06% 0.07% 0.08%
0.04% 0.05% 0.05% 0.06% 0.05% 0.06% 0.07% 0.08%
0.04% 0.05% 0.05% 0.05% 0.05% 0.06% 0.07% 0.07%
0.04% 0.04% 0.05% 0.05% 0.05% 0.06% 0.06% 0.07%
0.03% 0.04% 0.04% 0.05% 0.05% 0.06% 0.06% 0.07%
0.03% 0.04% 0.04% 0.04% 0.05% 0.05% 0.06% 0.07%
0.02% 0.04% 0.04% 0.04% 0.05% 0.05% 0.06% 0.06%
0.02% 0.03% 0.04% 0.04% 0.04% 0.05% 0.06% 0.06%
0.02% 0.03% 0.04% 0.04% 0.05% 0.05% 0.06% 0.06%
0.02% 0.04% 0.04% 0.04% 0.05% 0.05% 0.06% 0.06%
0.02% 0.04% 0.04% 0.04% 0.05% 0.05% 0.06% 0.07%
0.02% 0.04% 0.04% 0.04% 0.05% 0.05% 0.06% 0.06%
0.02% 0.03% 0.04% 0.04% 0.05% 0.05% 0.06% 0.06%
0.03% 0.04% 0.04% 0.04% 0.05% 0.05% 0.06% 0.06%
0.04% 0.04% 0.04% 0.05% 0.05% 0.05% 0.06% 0.06%
0.04% 0.04% 0.04% 0.04% 0.05% 0.05% 0.05% 0.06%
0.03% 0.03% 0.04% 0.04% 0.04% 0.05% 0.05% 0.06%
0.02% 0.03% 0.03% 0.04% 0.04% 0.04% 0.05% 0.05%
Table 10.8 - Annualised cost of debt (for all period lengths)
9 10 1 2 3 4 5
Cost of Cost of Cost of Cost of Cost of
Cost of Debt Cost of Debt End of Debt 1- Debt 2- Debt 3- Debt 4- Debt 5-
9- tranches 10- tranches month tranche tranches tranches tranches tranches
0.16% 0.15% Jan/14 7.31% 6.97% 7.34% 7.51% 7.69%
0.10% 0.12% Jan/18 4.42% 4.74% 5.07% 5.04% 5.49%
0.09% 0.09% Jan/19 4.82% 4.62% 4.77% 5.01% 5.00%
0.09% 0.09% Feb/19 4.62% 4.55% 4.67% 4.97% 4.91%
0.08% 0.09% Mar/19 4.40% 4.49% 4.62% 4.88% 4.85%
0.08% 0.09% Apr/19 4.24% 4.44% 4.55% 4.75% 4.75%
0.08% 0.08% May/19 4.09% 4.40% 4.47% 4.62% 4.69%
0.08% 0.08% Jun/19 3.84% 4.30% 4.36% 4.52% 4.66%
0.07% 0.08% Jul/19 3.56% 4.15% 4.25% 4.36% 4.56%
0.07% 0.08% Aug/19 3.28% 3.98% 4.14% 4.20% 4.43%
0.07% 0.08% Sep/19 3.05% 3.85% 4.05% 4.13% 4.39%
0.07% 0.08% Oct/19 3.06% 3.89% 4.08% 4.18% 4.46%
0.07% 0.08% Nov/19 3.11% 3.98% 4.13% 4.27% 4.53%
0.07% 0.08% Dec/19 3.11% 4.03% 4.15% 4.37% 4.62%
0.07% 0.08% Jan/20 3.00% 3.91% 4.08% 4.33% 4.61%
0.07% 0.08% Feb/20 2.86% 3.74% 3.98% 4.21% 4.54%
0.07% 0.08% Mar/20 3.44% 3.92% 4.14% 4.32% 4.59%
0.07% 0.08% Apr/20 4.10% 4.17% 4.32% 4.44% 4.62%
0.06% 0.07% May/20 3.93% 4.02% 4.25% 4.34% 4.49%
0.06% 0.07% Jun/20 3.65% 3.74% 4.08% 4.18% 4.34%
0.06% 0.07% Jul/20 3.26% 3.41% 3.85% 4.00% 4.14%
#N/A #N/A Aug/20 #N/A #N/A #N/A #N/A #N/A
#N/A #N/A Sep/20 #N/A #N/A #N/A #N/A #N/A
#N/A #N/A Oct/20 #N/A #N/A #N/A #N/A #N/A
#N/A #N/A Nov/20 #N/A #N/A #N/A #N/A #N/A
#N/A #N/A Dec/20 #N/A #N/A #N/A #N/A #N/A
#N/A #N/A Jan/21 #N/A #N/A #N/A #N/A #N/A
#N/A #N/A Dec/25 #N/A #N/A #N/A #N/A #N/A
iod lengths)
6 7 8 9 10
Cost of Cost of Cost of Cost of Cost of
Debt 6- Debt 7- Debt 8- Debt 9- Debt 10-
tranches tranches tranches tranches tranches
8.55% 8.56% 8.41% 8.20% 8.05%
5.68% 6.02% 6.27% 6.51% 7.14%
5.38% 5.56% 5.87% 6.11% 6.34%
5.27% 5.48% 5.80% 6.04% 6.28%
5.18% 5.41% 5.74% 5.98% 6.20%
5.07% 5.30% 5.61% 5.89% 6.11%
4.96% 5.16% 5.44% 5.74% 6.00%
4.89% 5.14% 5.39% 5.69% 5.97%
4.75% 5.08% 5.31% 5.62% 5.86%
4.60% 4.97% 5.20% 5.51% 5.73%
4.60% 5.00% 5.24% 5.52% 5.74%
4.66% 5.04% 5.24% 5.54% 5.75%
4.71% 5.08% 5.26% 5.58% 5.80%
4.75% 5.12% 5.31% 5.62% 5.86%
4.66% 5.04% 5.24% 5.55% 5.80%
4.56% 4.92% 5.15% 5.47% 5.72%
4.61% 4.93% 5.16% 5.48% 5.73%
4.64% 4.93% 5.15% 5.44% 5.71%
4.57% 4.82% 5.02% 5.28% 5.57%
4.49% 4.71% 4.95% 5.19% 5.48%
4.34% 4.53% 4.85% 5.08% 5.38%
#N/A #N/A #N/A #N/A #N/A
11
11 - INFLATION FORECAST
Note: The RBA releases its statement on monetary policy four times per year (February, May, August and November). Assumptio
statement we take the 1-year forecast of inflation to use in our inflation estimate calculation. The data released in a given report a
quarter in which it was released (ie. the month before the statement, the month the statement is released and the month after the
release). We apply this logic because the statement is released very early in the month and can be inferred to be end of month da
previous month (eg. the February update represents end of month January) and this data is then not replaced until the next stateme
with end of month data for its prior month (eg. the May statement representing end of month April). Under these assumptions we the
the February update for January, February and March or 1st quarter calendar year.
COLOUR CODE
Table 11.1 - Inflation inputs
Note: RBA 2-year Note: IPART

ahead forecast assumption, see
was first IPART, Review of
considered for our WACC method -
incorporation in Final Report, Feb
Arpil 2020. 2017, p 80.
Selector:
RBA 1-year RBA 2-year Midpoint of RBA RBA 1-year

End of month forecast forecast target range forecast (%)
Nov/14 2.20 2.5 2.20%
Jan/17 2.00 2.5 2.00%
Jan/18 2.13 2.5 2.13%
Jan/19 2.00 2.5 2.00%
Feb/19 2.00 2.5 2.00%
Mar/19 2.00 2.5 2.00%
Apr/19 2.00 2.5 2.00%
May/19 2.00 2.5 2.00%
Jun/19 2.00 2.5 2.00%
Jul/19 1.75 2.5 1.75%
Aug/19 1.75 2.5 1.75%
Sep/19 1.75 2.5 1.75%
Oct/19 1.75 2.5 1.75%
Nov/19 1.75 2.5 1.75%
Dec/19 1.75 2.5 1.75%
Jan/20 1.75 2.5 1.75%
Feb/20 1.75 2.5 1.75%
Mar/20 1.75 2.5 1.75%
Apr/20 2.75 1.50 2.5 2.75%
May/20 2.75 1.50 2.5 2.75%
Jun/20 2.75 1.50 2.5 2.75%
Jul/20 1.00 1.50 2.5 1.00%
Aug/20 1.00 1.50 2.5 1.00%
Sep/20 1.00 1.50 2.5 1.00%
Oct/20 0.00 0.00 2.5 0.00%
Nov/20 0.00 0.00 2.5 0.00%
Dec/20 0.00 0.00 2.5 0.00%
Jan/21 0.00 0.00 2.5 0.00%
Dec/25 0.00 0.00 2.5 0.00%
ry, May, August and November). Assumption: From this
lation. The data released in a given report applies to the
statement is released and the month after the statement
nth and can be inferred to be end of month data from the
ata is then not replaced until the next statement is released
onth April). Under these assumptions we therefore rely on
r 1st quarter calendar year.
Table 11.2 - Inflation estimate
Note: This column Note: The inflation estimate used for generating the WACC will be the one
selects the second year corresponding to the length of the regulatory period calculated in Table 11.3.
forecast as either the IPART's approach to inflation is discussed in: IPART, Review of our WACC method
RBA 2-year forecast or Final Report, February 2018, pp 79-80.
the mid-point of its
range.
Length of regulatory
2 period 4.00
Second year of Midpoint of RBA

geometric average target range (%) End of month Inflation estimate
2.50% Nov/14 2.42%
2.50% Jan/17 2.37%
2.50% Jan/18 2.41%
2.50% Jan/19 2.37%
2.50% Feb/19 2.37%
2.50% Mar/19 2.37%
2.50% Apr/19 2.37%
2.50% May/19 2.37%
2.50% Jun/19 2.37%
2.50% Jul/19 2.31%
2.50% Aug/19 2.31%
2.50% Sep/19 2.31%
2.50% Oct/19 2.31%
2.50% Nov/19 2.31%
2.50% Dec/19 2.31%
2.50% Jan/20 2.31%
2.50% Feb/20 2.31%
2.50% Mar/20 2.31%
2.50% 2.50% Apr/20 2.56%
2.50% 2.50% May/20 2.56%
2.50% 2.50% Jun/20 2.56%
2.50% 2.50% Jul/20 2.12%
2.50% 2.50% Aug/20 2.12%
2.50% 2.50% Sep/20 2.12%
2.50% 2.50% Oct/20 1.87%
2.50% 2.50% Nov/20 1.87%
2.50% 2.50% Dec/20 1.87%
2.50% 2.50% Jan/21 1.87%
2.50% 2.50% Dec/25 1.87%
Table 11.3 - Inflation estimate by regulatory period length
enerating the WACC will be the one

atory period calculated in Table 11.3.
n: IPART, Review of our WACC method -
ry 2018, pp 79-80.
Note: these geomeans consist of the 1-year forecast and n-1 years of the midpoint of the RB
Length of
regulatory period 1 2 3
4-year geometric mean - 2-year geometric 3-year geometric

rounded to 1dp (%) End of month 1-year forecast mean (%) mean (%)
2.40% Nov/14 2.20% 2.35% 2.40%
2.40% Jan/17 2.00% 2.25% 2.33%
2.40% Jan/18 2.13% 2.31% 2.37%
2.40% Jan/19 2.00% 2.25% 2.33%
2.40% Feb/19 2.00% 2.25% 2.33%
2.40% Mar/19 2.00% 2.25% 2.33%
2.40% Apr/19 2.00% 2.25% 2.33%
2.40% May/19 2.00% 2.25% 2.33%
2.40% Jun/19 2.00% 2.25% 2.33%
2.30% Jul/19 1.75% 2.12% 2.25%
2.30% Aug/19 1.75% 2.12% 2.25%
2.30% Sep/19 1.75% 2.12% 2.25%
2.30% Oct/19 1.75% 2.12% 2.25%
2.30% Nov/19 1.75% 2.12% 2.25%
2.30% Dec/19 1.75% 2.12% 2.25%
2.30% Jan/20 1.75% 2.12% 2.25%
2.30% Feb/20 1.75% 2.12% 2.25%
2.30% Mar/20 1.75% 2.12% 2.25%
2.60% Apr/20 2.75% 2.62% 2.58%
2.60% May/20 2.75% 2.62% 2.58%
2.60% Jun/20 2.75% 2.62% 2.58%
2.10% Jul/20 1.00% 1.75% 2.00%
2.10% Aug/20 1.00% 1.75% 2.00%
2.10% Sep/20 1.00% 1.75% 2.00%
1.90% Oct/20 0.00% 1.24% 1.66%
1.90% Nov/20 0.00% 1.24% 1.66%
1.90% Dec/20 0.00% 1.24% 1.66%
1.90% Jan/21 0.00% 1.24% 1.66%
1.90% Dec/25 0.00% 1.24% 1.66%
years of the midpoint of the RBA target range OR the RBA 1-year forecast, RBA 2-year forecast and n-2 years of the midpoint of the RBA target range
4 5 6 7 8
4-year geometric 5-year geometric 6-year geometric 7-year geometric 8-year geometric
mean (%) mean (%) mean (%) mean (%) mean (%)
2.42% 2.44% 2.45% 2.46% 2.46%
2.37% 2.40% 2.42% 2.44% 2.44%
2.41% 2.42% 2.44% 2.45% 2.45%
2.37% 2.40% 2.42% 2.44% 2.44%
2.37% 2.40% 2.42% 2.44% 2.44%
2.37% 2.40% 2.42% 2.44% 2.44%
2.37% 2.40% 2.42% 2.44% 2.44%
2.37% 2.40% 2.42% 2.44% 2.44%
2.37% 2.40% 2.42% 2.44% 2.44%
2.31% 2.35% 2.37% 2.41% 2.41%
2.31% 2.35% 2.37% 2.41% 2.41%
2.31% 2.35% 2.37% 2.41% 2.41%
2.31% 2.35% 2.37% 2.41% 2.41%
2.31% 2.35% 2.37% 2.41% 2.41%
2.31% 2.35% 2.37% 2.41% 2.41%
2.31% 2.35% 2.37% 2.41% 2.41%
2.31% 2.35% 2.37% 2.41% 2.41%
2.31% 2.35% 2.37% 2.41% 2.41%
2.56% 2.55% 2.54% 2.53% 2.53%
2.56% 2.55% 2.54% 2.53% 2.53%
2.56% 2.55% 2.54% 2.53% 2.53%
2.12% 2.20% 2.25% 2.31% 2.31%
2.12% 2.20% 2.25% 2.31% 2.31%
2.12% 2.20% 2.25% 2.31% 2.31%
1.87% 2.00% 2.08% 2.18% 2.18%
1.87% 2.00% 2.08% 2.18% 2.18%
1.87% 2.00% 2.08% 2.18% 2.18%
1.87% 2.00% 2.08% 2.18% 2.18%
1.87% 2.00% 2.08% 2.18% 2.18%
years of the midpoint of the RBA target range.
9 10
9-year geometric 10-year geometric

mean (%) mean (%)
2.47% 2.47%
2.44% 2.45%
2.46% 2.46%
2.44% 2.45%
2.44% 2.45%
2.44% 2.45%
2.44% 2.45%
2.44% 2.45%
2.44% 2.45%
2.42% 2.42%
2.42% 2.42%
2.42% 2.42%
2.42% 2.42%
2.42% 2.42%
2.42% 2.42%
2.42% 2.42%
2.42% 2.42%
2.42% 2.42%
2.53% 2.52%
2.53% 2.52%
2.53% 2.52%
2.33% 2.35%
2.33% 2.35%
2.33% 2.35%
2.22% 2.25%
2.22% 2.25%
2.22% 2.25%
2.22% 2.25%
2.22% 2.25%
12
12 - WACC PARAMETERS
This worksheet presents the WACC parameters calculated in this model for referencing in the WACC calculations performed on othe
COLOUR CODE
Table 12.1 - Month Table 12.2 - WACC parameters for current estimate
Note: this table is used for
matching functions that
apply to multiple tables
across this sheet. Note: Rfr and debt margin are both annualised.
Cwth 10-yr Implied Debt
End of month End of month bonds (Rfr) Margin Cost of Debt
Jan/15 Jan/15 3.57% 3.17% 6.74%

Jan/18 Jan/18 2.77% 2.27% 5.04%
Jan/19 Jan/19 2.66% 2.35% 5.01%
Jan/20 Jan/20 2.25% 2.07% 4.33%
Feb/20 Feb/20 2.21% 2.00% 4.21%
Mar/20 Mar/20 2.15% 2.18% 4.32%
Apr/20 Apr/20 2.07% 2.37% 4.44%
May/20 May/20 2.01% 2.33% 4.34%
Jun/20 Jun/20 1.92% 2.26% 4.18%
Jul/20 Jul/20 1.87% 2.13% 4.00%
Aug/20 Aug/20 #N/A #N/A #N/A
Sep/20 Sep/20 #N/A #N/A #N/A
Oct/20 Oct/20 #N/A #N/A #N/A
Nov/20 Nov/20 #N/A #N/A #N/A
Dec/20 Dec/20 #N/A #N/A #N/A
Dec/25 Dec/25 #N/A #N/A #N/A
he WACC calculations performed on other worksheets.
ent estimate Table 12.3 - WACC parameters for current estimate (rounded to 1d
Note: the rounded value of the implied debt margin is the difference between the rounded va
the cost of debt and Rfr. Conceptually the debt margin is the difference between the cost of d
the Rfr, rounding in this way ensures that the rounded value of the cost of debt will equal the r
value of the rfr + the rounded value of the debt margin.
MRP Inflation End of month bonds (Rfr) Margin Cost of Debt
8.60% 2.50% Jan/15 3.60% 3.10% 6.70%

8.00% 2.41% Jan/18 2.80% 2.20% 5.00%
8.60% 2.37% Jan/19 2.70% 2.30% 5.00%
8.80% 2.31% Jan/20 2.30% 2.00% 4.30%
9.10% 2.31% Feb/20 2.20% 2.00% 4.20%
9.70% 2.31% Mar/20 2.10% 2.20% 4.30%
9.20% 2.56% Apr/20 2.10% 2.30% 4.40%
8.80% 2.56% May/20 2.00% 2.30% 4.30%
8.70% 2.56% Jun/20 1.90% 2.30% 4.20%
8.60% 2.12% Jul/20 1.90% 2.10% 4.00%
0.00% 2.12% Aug/20 #N/A #N/A #N/A
0.00% 2.12% Sep/20 #N/A #N/A #N/A
0.00% 1.87% Oct/20 #N/A #N/A #N/A
0.00% 1.87% Nov/20 #N/A #N/A #N/A
0.00% 1.87% Dec/20 #N/A #N/A #N/A
0.00% 1.87% Dec/25 #N/A #N/A #N/A
ent estimate (rounded to 1dp) Table 12.4 - WACC parameters for long term estimate
the difference between the rounded values of
is the difference between the cost of debt and
value of the cost of debt will equal the rounded
alue of the debt margin. Note: Rfr and debt margin are both annualised.
8.60% 2.50% Jan/15 4.71% 3.17% 7.87%

8.00% 2.40% Jan/18 3.79% 3.35% 7.14%
8.60% 2.40% Jan/19 3.61% 2.73% 6.34%
8.80% 2.30% Jan/20 3.17% 2.63% 5.80%
9.10% 2.30% Feb/20 3.13% 2.60% 5.72%
9.70% 2.30% Mar/20 3.10% 2.63% 5.73%
9.20% 2.60% Apr/20 3.04% 2.67% 5.71%
8.80% 2.60% May/20 2.94% 2.64% 5.57%
8.70% 2.60% Jun/20 2.84% 2.64% 5.48%
8.60% 2.10% Jul/20 2.78% 2.60% 5.38%
0.00% 2.10% Aug/20 #N/A #N/A #N/A
0.00% 2.10% Sep/20 #N/A #N/A #N/A
0.00% 1.90% Oct/20 #N/A #N/A #N/A
0.00% 1.90% Nov/20 #N/A #N/A #N/A
0.00% 1.90% Dec/20 #N/A #N/A #N/A
0.00% 1.90% Dec/25 #N/A #N/A #N/A
term estimate Table 12.5 - WACC parameters for long term estimate (rounded to 1
Note: the rounded value of the implied debt margin is the difference between the rounded valu
the cost of debt and Rfr. Conceptually the debt margin is the difference between the cost of de
the Rfr, rounding in this way ensures that the rounded value of the cost of debt will equal the ro
value of the rfr + the rounded value of the debt margin.
6.00% 2.50% Jan/15 4.70% 3.20% 7.90%

6.00% 2.41% Jan/18 3.80% 3.30% 7.10%
6.00% 2.37% Jan/19 3.60% 2.70% 6.30%
6.00% 2.31% Jan/20 3.20% 2.60% 5.80%
6.00% 2.31% Feb/20 3.10% 2.60% 5.70%
6.00% 2.31% Mar/20 3.10% 2.60% 5.70%
6.00% 2.56% Apr/20 3.00% 2.70% 5.70%
6.00% 2.56% May/20 2.90% 2.70% 5.60%
6.00% 2.56% Jun/20 2.80% 2.70% 5.50%
6.00% 2.12% Jul/20 2.80% 2.60% 5.40%
6.00% 2.12% Aug/20 #N/A #N/A #N/A
6.00% 2.12% Sep/20 #N/A #N/A #N/A
6.00% 1.87% Oct/20 #N/A #N/A #N/A
6.00% 1.87% Nov/20 #N/A #N/A #N/A
6.00% 1.87% Dec/20 #N/A #N/A #N/A
6.00% 1.87% Dec/25 #N/A #N/A #N/A
term estimate (rounded to 1dp) Table 12.6 - Error checks
the difference between the rounded values of
is the difference between the cost of debt and
value of the cost of debt will equal the rounded Note: this table checks that the end of month dates in each
alue of the debt margin. table are consistent with Table 12.1. Where TRUE = no error
MRP Inflation Table 12.2 Table 12.3 Table 12.4 Table 12.5
6.00% 2.50% 100.00% 100.00% 100.00% 100.00%

6.00% 2.40% 100.00% 100.00% 100.00% 100.00%
6.00% 2.40% 100.00% 100.00% 100.00% 100.00%
6.00% 2.30% 100.00% 100.00% 100.00% 100.00%
6.00% 2.30% 100.00% 100.00% 100.00% 100.00%
6.00% 2.30% 100.00% 100.00% 100.00% 100.00%
6.00% 2.60% 100.00% 100.00% 100.00% 100.00%
6.00% 2.60% 100.00% 100.00% 100.00% 100.00%
6.00% 2.60% 100.00% 100.00% 100.00% 100.00%
6.00% 2.10% 100.00% 100.00% 100.00% 100.00%
6.00% 2.10% 100.00% 100.00% 100.00% 100.00%
6.00% 2.10% 100.00% 100.00% 100.00% 100.00%
6.00% 1.90% 100.00% 100.00% 100.00% 100.00%
6.00% 1.90% 100.00% 100.00% 100.00% 100.00%
6.00% 1.90% 100.00% 100.00% 100.00% 100.00%
6.00% 1.90% 100.00% 100.00% 100.00% 100.00%
Table 12.7 - Cost of Debt for differing regulatory period lengths (rounded to 1dp)
Cost of debt Cost of debt Cost of debt Cost of debt Cost of debt Cost of debt
End of month 1-year 2-years 3-years 4-years 5-years 6-years
1 2 3 4 5 6
Jan/15 4.90% 6.10% 6.30% 6.70% 7.00% 7.20%

Jan/18 4.40% 4.70% 5.10% 5.00% 5.50% 5.70%
Jan/19 4.80% 4.60% 4.80% 5.00% 5.00% 5.40%
Jan/20 3.00% 3.90% 4.10% 4.30% 4.60% 4.70%
Feb/20 2.90% 3.70% 4.00% 4.20% 4.50% 4.60%
Mar/20 3.40% 3.90% 4.10% 4.30% 4.60% 4.60%
Apr/20 4.10% 4.20% 4.30% 4.40% 4.60% 4.60%
May/20 3.90% 4.00% 4.20% 4.30% 4.50% 4.60%
Jun/20 3.60% 3.70% 4.10% 4.20% 4.30% 4.50%
Jul/20 3.30% 3.40% 3.80% 4.00% 4.10% 4.30%
Aug/20 #N/A #N/A #N/A #N/A #N/A #N/A
Sep/20 #N/A #N/A #N/A #N/A #N/A #N/A
Oct/20 #N/A #N/A #N/A #N/A #N/A #N/A
Nov/20 #N/A #N/A #N/A #N/A #N/A #N/A
Dec/20 #N/A #N/A #N/A #N/A #N/A #N/A
ded to 1dp) Table 12.8 - Inflation for differing regulatory
Cost of debt Cost of debt Cost of debt Cost of debt Inflation 1- Inflation 2-
7-years 8-years 9-years 10-years End of month year years
7 8 9 10 1 2
8.00% 8.10% 8.00% 7.90% Jan/15 2.50% 2.50%

6.00% 6.30% 6.50% 7.10% Jan/18 2.10% 2.30%
5.60% 5.90% 6.10% 6.30% Jan/19 2.00% 2.20%
5.00% 5.20% 5.60% 5.80% Jan/20 1.80% 2.10%
4.90% 5.10% 5.50% 5.70% Feb/20 1.80% 2.10%
4.90% 5.20% 5.50% 5.70% Mar/20 1.80% 2.10%
4.90% 5.10% 5.40% 5.70% Apr/20 2.80% 2.60%
4.80% 5.00% 5.30% 5.60% May/20 2.80% 2.60%
4.70% 5.00% 5.20% 5.50% Jun/20 2.80% 2.60%
4.50% 4.90% 5.10% 5.40% Jul/20 1.00% 1.70%
#N/A #N/A #N/A #N/A Aug/20 1.00% 1.70%
#N/A #N/A #N/A #N/A Sep/20 1.00% 1.70%
#N/A #N/A #N/A #N/A Oct/20 0.00% 1.20%
#N/A #N/A #N/A #N/A Nov/20 0.00% 1.20%
#N/A #N/A #N/A #N/A Dec/20 0.00% 1.20%
#N/A #N/A #N/A #N/A Dec/25 0.00% 1.20%
differing regulatory period lengths (rounded to 1dp)
Inflation 3- Inflation 4- Inflation 5- Inflation 6- Inflation 7- Inflation 8- Inflation 9-

years years years years years years years
3 4 5 6 7 8 9
2.50% 2.50% 2.50% 2.50% 2.50% 2.50% 2.50%

2.40% 2.40% 2.40% 2.40% 2.50% 2.50% 2.50%
2.30% 2.40% 2.40% 2.40% 2.40% 2.40% 2.40%
2.20% 2.30% 2.30% 2.40% 2.40% 2.40% 2.40%
2.20% 2.30% 2.30% 2.40% 2.40% 2.40% 2.40%
2.20% 2.30% 2.30% 2.40% 2.40% 2.40% 2.40%
2.60% 2.60% 2.50% 2.50% 2.50% 2.50% 2.50%
2.60% 2.60% 2.50% 2.50% 2.50% 2.50% 2.50%
2.60% 2.60% 2.50% 2.50% 2.50% 2.50% 2.50%
2.00% 2.10% 2.20% 2.20% 2.30% 2.30% 2.30%
2.00% 2.10% 2.20% 2.20% 2.30% 2.30% 2.30%
2.00% 2.10% 2.20% 2.20% 2.30% 2.30% 2.30%
1.70% 1.90% 2.00% 2.10% 2.20% 2.20% 2.20%
1.70% 1.90% 2.00% 2.10% 2.20% 2.20% 2.20%
1.70% 1.90% 2.00% 2.10% 2.20% 2.20% 2.20%
1.70% 1.90% 2.00% 2.10% 2.20% 2.20% 2.20%
Table 12.9 - risk free rate for differing regulatory period lengths (rounded to 1
Inflation 10- End of Rfr 2- Rfr 3- Rfr 4- Rfr 5- Rfr 6- Rfr 7-

years month Rfr 1-year years years years years years years
10 1 2 3 4 5 6 7
2.50% Jan/15 2.80% 3.50% 3.50% 3.60% 4.00% 4.20% 4.20%

2.50% Jan/18 2.70% 2.70% 2.80% 2.80% 3.10% 3.10% 3.20%
2.40% Jan/19 2.40% 2.50% 2.60% 2.70% 2.70% 3.00% 3.00%
2.40% Jan/20 1.20% 1.80% 2.10% 2.30% 2.40% 2.40% 2.70%
2.40% Feb/20 1.10% 1.60% 2.00% 2.20% 2.30% 2.30% 2.60%
2.40% Mar/20 0.90% 1.50% 1.90% 2.10% 2.20% 2.30% 2.50%
2.50% Apr/20 0.90% 1.40% 1.80% 2.10% 2.20% 2.20% 2.50%
2.50% May/20 0.90% 1.30% 1.80% 2.00% 2.10% 2.20% 2.40%
2.50% Jun/20 0.90% 1.20% 1.70% 1.90% 2.00% 2.10% 2.40%
2.30% Jul/20 0.90% 1.10% 1.60% 1.90% 1.90% 2.10% 2.30%
2.30% Aug/20 #N/A #N/A #N/A #N/A #N/A #N/A #N/A
2.30% Sep/20 #N/A #N/A #N/A #N/A #N/A #N/A #N/A
2.20% Oct/20 #N/A #N/A #N/A #N/A #N/A #N/A #N/A
2.20% Nov/20 #N/A #N/A #N/A #N/A #N/A #N/A #N/A
2.20% Dec/20 #N/A #N/A #N/A #N/A #N/A #N/A #N/A
2.20% Dec/25 #N/A #N/A #N/A #N/A #N/A #N/A #N/A
d lengths (rounded to 1dp)
Rfr 8- Rfr 9- Rfr 10-

years years years
8 9 10
4.50% 4.60% 4.70%

3.50% 3.70% 3.80%
3.10% 3.40% 3.60%
2.80% 2.90% 3.20%
2.70% 2.80% 3.10%
2.70% 2.80% 3.10%
2.60% 2.80% 3.00%
2.50% 2.70% 2.90%
2.50% 2.60% 2.80%
2.50% 2.50% 2.80%
#N/A #N/A #N/A
#N/A #N/A #N/A
#N/A #N/A #N/A
#N/A #N/A #N/A
#N/A #N/A #N/A
#N/A #N/A #N/A
13
13 - NOMINAL WACC TIME SERIES
COLOUR CODE
Table 13.1 - Month of WACC e Table 13.2 - Current estimate of the nominal WACC
Note: this column
identifies the Note: half-way Note: Nominal WACC (Vanilla post-tax nominal) = (gearing % * cost of debt) + (equity %
month applicable calculation risk free rate + debt margin. And where: cost of equity = risk free rate + MRP. This t
for each row in all used in index current (short term) estimates of the market parameters for each period. For the purpo
tables of this functions in have chosen regulatory period lengths that are fixed, that is: they will not change as you
worksheet. other tables. WACC calculator.
Industry Economy Water Rail Bus Light rail Ferries
Beta 1.00 0.70 0.90 0.85 0.85 0.90
Gearing 60% 60% 60% 60% 60% 50%
Regulatory period length 4.00 4.00 4.00 4.00 4.00 4.00
End of month Match no#
Jan/15 1 8.90% 7.87% 8.56% 8.38% 8.38% 9.02%
Jan/17 25 8.20% 7.17% 7.86% 7.68% 7.68% 8.37%
Jan/18 37 7.32% 6.36% 7.00% 6.84% 6.84% 7.50%
Jan/19 49 7.52% 6.49% 7.18% 7.00% 7.00% 7.72%
Feb/19 50 7.44% 6.42% 7.10% 6.93% 6.93% 7.63%
Mar/19 51 7.46% 6.42% 7.11% 6.94% 6.94% 7.67%
Apr/19 52 7.34% 6.28% 6.99% 6.81% 6.81% 7.56%
May/19 53 7.28% 6.21% 6.92% 6.75% 6.75% 7.51%
Jun/19 54 7.14% 6.08% 6.79% 6.61% 6.61% 7.36%
Jul/19 55 7.00% 5.94% 6.65% 6.47% 6.47% 7.21%
Aug/19 56 6.92% 5.85% 6.56% 6.39% 6.39% 7.16%
Sep/19 57 6.82% 5.76% 6.47% 6.29% 6.29% 7.06%
Oct/19 58 6.92% 5.86% 6.57% 6.39% 6.39% 7.16%
Nov/19 59 6.98% 5.92% 6.63% 6.45% 6.45% 7.21%
Dec/19 60 7.04% 6.00% 6.69% 6.52% 6.52% 7.27%
Jan/20 61 7.02% 5.96% 6.67% 6.49% 6.49% 7.26%
Feb/20 62 7.04% 5.95% 6.68% 6.49% 6.49% 7.30%
Mar/20 63 7.30% 6.14% 6.91% 6.72% 6.72% 7.57%
Apr/20 64 7.16% 6.06% 6.79% 6.61% 6.61% 7.39%
May/20 65 6.90% 5.84% 6.55% 6.37% 6.37% 7.11%
Jun/20 66 6.76% 5.72% 6.41% 6.24% 6.24% 6.97%
Jul/20 67 6.60% 5.57% 6.26% 6.08% 6.08% 6.82%
Aug/20 68 #N/A #N/A #N/A #N/A #N/A #N/A
Sep/20 69 #N/A #N/A #N/A #N/A #N/A #N/A
Oct/20 70 #N/A #N/A #N/A #N/A #N/A #N/A
Nov/20 71 #N/A #N/A #N/A #N/A #N/A #N/A
Dec/20 72 #N/A #N/A #N/A #N/A #N/A #N/A
Dec/25 132 #N/A #N/A #N/A #N/A #N/A #N/A
minal WACC Table 13.3 - Long term estimate of the nom
aring % * cost of debt) + (equity % * beta * cost of equity). Where: Cost of debt =
ity = risk free rate + MRP. This table produces the nominal WACC using the
ers for each period. For the purposes of this time series WACC productions we
hat is: they will not change as you use the regulatory period length selector in the
WACC calculator. Note: This table produces the nominal WACC using
R&R Buses Valuer General blank blank blank blank Economy Water Rail Bus
0.85 0.45 1.00 1.00 1.00 1.00 1.00 0.70 0.90 0.85
50% 45% 60% 60% 60% 60% 60% 60% 60% 60%
4.00 6.00 5.00 5.00 5.00 5.00
8.81% 7.68% 9.24% 9.24% 9.24% 9.24% 9.02% 8.30% 8.78% 8.66%
8.16% 6.78% 8.26% 8.26% 8.26% 8.26% 8.60% 7.88% 8.36% 8.24%
7.30% 6.25% 7.74% 7.74% 7.74% 7.74% 8.18% 7.46% 7.94% 7.82%
7.51% 6.21% 7.52% 7.52% 7.52% 7.52% 7.62% 6.90% 7.38% 7.26%
7.41% 6.08% 7.38% 7.38% 7.38% 7.38% 7.62% 6.90% 7.38% 7.26%
7.45% 6.03% 7.36% 7.36% 7.36% 7.36% 7.56% 6.84% 7.32% 7.20%
7.34% 6.01% 7.40% 7.40% 7.40% 7.40% 7.46% 6.74% 7.22% 7.10%
7.28% 5.94% 7.34% 7.34% 7.34% 7.34% 7.36% 6.64% 7.12% 7.00%
7.14% 5.81% 7.30% 7.30% 7.30% 7.30% 7.32% 6.60% 7.08% 6.96%
6.99% 5.67% 7.20% 7.20% 7.20% 7.20% 7.22% 6.50% 6.98% 6.86%
6.93% 5.59% 7.08% 7.08% 7.08% 7.08% 7.06% 6.34% 6.82% 6.70%
6.84% 5.57% 7.04% 7.04% 7.04% 7.04% 7.06% 6.34% 6.82% 6.70%
6.94% 5.67% 7.14% 7.14% 7.14% 7.14% 7.12% 6.40% 6.88% 6.76%
6.99% 5.67% 7.14% 7.14% 7.14% 7.14% 7.16% 6.44% 6.92% 6.80%
7.05% 5.64% 7.20% 7.20% 7.20% 7.20% 7.22% 6.50% 6.98% 6.86%
7.04% 5.61% 7.24% 7.24% 7.24% 7.24% 7.16% 6.44% 6.92% 6.80%
7.07% 5.59% 7.26% 7.26% 7.26% 7.26% 7.06% 6.34% 6.82% 6.70%
7.32% 5.74% 7.52% 7.52% 7.52% 7.52% 7.06% 6.34% 6.82% 6.70%
7.16% 5.56% 7.32% 7.32% 7.32% 7.32% 7.02% 6.30% 6.78% 6.66%
6.89% 5.46% 7.06% 7.06% 7.06% 7.06% 6.92% 6.20% 6.68% 6.56%
6.75% 5.33% 6.86% 6.86% 6.86% 6.86% 6.82% 6.10% 6.58% 6.46%
6.61% 5.22% 6.66% 6.66% 6.66% 6.66% 6.76% 6.04% 6.52% 6.40%
#N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A #N/A
estimate of the nominal WACC Table 13.4 - Lower estimate
es the nominal WACC using the long term estimates of the market parameters for each period. Note: This ta
Light rail Ferries R&R Buses Valuer General blank blank blank blank Economy Water
0.85 0.90 0.85 0.45 1.00 1.00 1.00 1.00 1.00 0.70
60% 50% 50% 45% 60% 60% 60% 60% 60% 60%
8.66% 9.00% 8.85% 7.63% 9.02% 9.02% 9.02% 9.02% 8.90% 7.87%
8.24% 8.55% 8.40% 7.16% 8.60% 8.60% 8.60% 8.60% 8.20% 7.17%
7.82% 8.15% 8.00% 6.77% 8.18% 8.18% 8.18% 8.18% 7.32% 6.36%
7.26% 7.65% 7.50% 6.30% 7.62% 7.62% 7.62% 7.62% 7.52% 6.49%
7.26% 7.65% 7.50% 6.30% 7.62% 7.62% 7.62% 7.62% 7.44% 6.42%
7.20% 7.60% 7.45% 6.26% 7.56% 7.56% 7.56% 7.56% 7.46% 6.42%
7.10% 7.50% 7.35% 6.16% 7.46% 7.46% 7.46% 7.46% 7.34% 6.28%
7.00% 7.40% 7.25% 6.06% 7.36% 7.36% 7.36% 7.36% 7.28% 6.21%
6.96% 7.35% 7.20% 6.00% 7.32% 7.32% 7.32% 7.32% 7.14% 6.08%
6.86% 7.25% 7.10% 5.90% 7.22% 7.22% 7.22% 7.22% 7.00% 5.94%
6.70% 7.10% 6.95% 5.76% 7.06% 7.06% 7.06% 7.06% 6.92% 5.85%
6.70% 7.10% 6.95% 5.76% 7.06% 7.06% 7.06% 7.06% 6.82% 5.76%
6.76% 7.15% 7.00% 5.80% 7.12% 7.12% 7.12% 7.12% 6.92% 5.86%
6.80% 7.20% 7.05% 5.86% 7.16% 7.16% 7.16% 7.16% 6.98% 5.92%
6.86% 7.25% 7.10% 5.90% 7.22% 7.22% 7.22% 7.22% 7.04% 6.00%
6.80% 7.20% 7.05% 5.86% 7.16% 7.16% 7.16% 7.16% 7.02% 5.96%
6.70% 7.10% 6.95% 5.76% 7.06% 7.06% 7.06% 7.06% 7.04% 5.95%
6.70% 7.10% 6.95% 5.76% 7.06% 7.06% 7.06% 7.06% 7.06% 6.14%
6.66% 7.05% 6.90% 5.70% 7.02% 7.02% 7.02% 7.02% 7.02% 6.06%
6.56% 6.95% 6.80% 5.60% 6.92% 6.92% 6.92% 6.92% 6.90% 5.84%
6.46% 6.85% 6.70% 5.50% 6.82% 6.82% 6.82% 6.82% 6.76% 5.72%
6.40% 6.80% 6.65% 5.46% 6.76% 6.76% 6.76% 6.76% 6.60% 5.57%
13.4 - Lower estimate of the nominal WACC
Note: This table produces the lower estimate of the nominal WACC for each period.
Rail Bus Light rail Ferries R&R Buses Valuer General blank blank blank blank
0.90 0.85 0.85 0.90 0.85 0.45 1.00 1.00 1.00 1.00
60% 60% 60% 50% 50% 45% 60% 60% 60% 60%
8.56% 8.38% 8.38% 9.00% 8.81% 7.63% 9.02% 9.02% 9.02% 9.02%
7.86% 7.68% 7.68% 8.37% 8.16% 6.78% 8.26% 8.26% 8.26% 8.26%
7.00% 6.84% 6.84% 7.50% 7.30% 6.25% 7.74% 7.74% 7.74% 7.74%
7.18% 7.00% 7.00% 7.65% 7.50% 6.21% 7.52% 7.52% 7.52% 7.52%
7.10% 6.93% 6.93% 7.63% 7.41% 6.08% 7.38% 7.38% 7.38% 7.38%
7.11% 6.94% 6.94% 7.60% 7.45% 6.03% 7.36% 7.36% 7.36% 7.36%
6.99% 6.81% 6.81% 7.50% 7.34% 6.01% 7.40% 7.40% 7.40% 7.40%
6.92% 6.75% 6.75% 7.40% 7.25% 5.94% 7.34% 7.34% 7.34% 7.34%
6.79% 6.61% 6.61% 7.35% 7.14% 5.81% 7.30% 7.30% 7.30% 7.30%
6.65% 6.47% 6.47% 7.21% 6.99% 5.67% 7.20% 7.20% 7.20% 7.20%
6.56% 6.39% 6.39% 7.10% 6.93% 5.59% 7.06% 7.06% 7.06% 7.06%
6.47% 6.29% 6.29% 7.06% 6.84% 5.57% 7.04% 7.04% 7.04% 7.04%
6.57% 6.39% 6.39% 7.15% 6.94% 5.67% 7.12% 7.12% 7.12% 7.12%
6.63% 6.45% 6.45% 7.20% 6.99% 5.67% 7.14% 7.14% 7.14% 7.14%
6.69% 6.52% 6.52% 7.25% 7.05% 5.64% 7.20% 7.20% 7.20% 7.20%
6.67% 6.49% 6.49% 7.20% 7.04% 5.61% 7.16% 7.16% 7.16% 7.16%
6.68% 6.49% 6.49% 7.10% 6.95% 5.59% 7.06% 7.06% 7.06% 7.06%
6.82% 6.70% 6.70% 7.10% 6.95% 5.74% 7.06% 7.06% 7.06% 7.06%
6.78% 6.61% 6.61% 7.05% 6.90% 5.56% 7.02% 7.02% 7.02% 7.02%
6.55% 6.37% 6.37% 6.95% 6.80% 5.46% 6.92% 6.92% 6.92% 6.92%
6.41% 6.24% 6.24% 6.85% 6.70% 5.33% 6.82% 6.82% 6.82% 6.82%
6.26% 6.08% 6.08% 6.80% 6.61% 5.22% 6.66% 6.66% 6.66% 6.66%
Table 13.5 - Upper estimate of the nominal WACC
Note: This table produces the upper estimate of the nominal WACC for each period.
Economy Water Rail Bus Light rail Ferries R&R Buses Valuer General blank blank
1.00 0.70 0.90 0.85 0.85 0.90 0.85 0.45 1.00 1.00
60% 60% 60% 60% 60% 50% 50% 45% 60% 60%
9.02% 8.30% 8.78% 8.66% 8.66% 9.02% 8.85% 7.68% 9.24% 9.24%
8.60% 7.88% 8.36% 8.24% 8.24% 8.55% 8.40% 7.16% 8.60% 8.60%
8.18% 7.46% 7.94% 7.82% 7.82% 8.15% 8.00% 6.77% 8.18% 8.18%
7.62% 6.90% 7.38% 7.26% 7.26% 7.72% 7.51% 6.30% 7.62% 7.62%
7.62% 6.90% 7.38% 7.26% 7.26% 7.65% 7.50% 6.30% 7.62% 7.62%
7.56% 6.84% 7.32% 7.20% 7.20% 7.67% 7.45% 6.26% 7.56% 7.56%
7.46% 6.74% 7.22% 7.10% 7.10% 7.56% 7.35% 6.16% 7.46% 7.46%
7.36% 6.64% 7.12% 7.00% 7.00% 7.51% 7.28% 6.06% 7.36% 7.36%
7.32% 6.60% 7.08% 6.96% 6.96% 7.36% 7.20% 6.00% 7.32% 7.32%
7.22% 6.50% 6.98% 6.86% 6.86% 7.25% 7.10% 5.90% 7.22% 7.22%
7.06% 6.34% 6.82% 6.70% 6.70% 7.16% 6.95% 5.76% 7.08% 7.08%
7.06% 6.34% 6.82% 6.70% 6.70% 7.10% 6.95% 5.76% 7.06% 7.06%
7.12% 6.40% 6.88% 6.76% 6.76% 7.16% 7.00% 5.80% 7.14% 7.14%
7.16% 6.44% 6.92% 6.80% 6.80% 7.21% 7.05% 5.86% 7.16% 7.16%
7.22% 6.50% 6.98% 6.86% 6.86% 7.27% 7.10% 5.90% 7.22% 7.22%
7.16% 6.44% 6.92% 6.80% 6.80% 7.26% 7.05% 5.86% 7.24% 7.24%
7.06% 6.34% 6.82% 6.70% 6.70% 7.30% 7.07% 5.76% 7.26% 7.26%
7.30% 6.34% 6.91% 6.72% 6.72% 7.57% 7.32% 5.76% 7.52% 7.52%
7.16% 6.30% 6.79% 6.66% 6.66% 7.39% 7.16% 5.70% 7.32% 7.32%
6.92% 6.20% 6.68% 6.56% 6.56% 7.11% 6.89% 5.60% 7.06% 7.06%
6.82% 6.10% 6.58% 6.46% 6.46% 6.97% 6.75% 5.50% 6.86% 6.86%
6.76% 6.04% 6.52% 6.40% 6.40% 6.82% 6.65% 5.46% 6.76% 6.76%
Table 13.6 - Mid-point estimate of the nominal WACC
ch period. Note: This table produces the mid-point estimate of the nominal WACC for each pe
blank blank Economy Water Rail Bus Light rail Ferries R&R Buses Valuer General
1.00 1.00 1.00 0.70 0.90 0.85 0.85 0.90 0.85 0.45
60% 60% 60% 60% 60% 60% 60% 50% 50% 45%
9.24% 9.24% 8.96% 8.08% 8.67% 8.52% 8.52% 9.01% 8.83% 7.65%
8.60% 8.60% 8.40% 7.52% 8.11% 7.96% 7.96% 8.46% 8.28% 6.97%
8.18% 8.18% 7.75% 6.91% 7.47% 7.33% 7.33% 7.83% 7.65% 6.51%
7.62% 7.62% 7.57% 6.69% 7.28% 7.13% 7.13% 7.69% 7.50% 6.25%
7.62% 7.62% 7.53% 6.66% 7.24% 7.10% 7.10% 7.64% 7.46% 6.19%
7.56% 7.56% 7.51% 6.63% 7.22% 7.07% 7.07% 7.63% 7.45% 6.14%
7.46% 7.46% 7.40% 6.51% 7.10% 6.96% 6.96% 7.53% 7.35% 6.08%
7.36% 7.36% 7.32% 6.43% 7.02% 6.87% 6.87% 7.45% 7.27% 6.00%
7.32% 7.32% 7.23% 6.34% 6.93% 6.79% 6.79% 7.36% 7.17% 5.91%
7.22% 7.22% 7.11% 6.22% 6.81% 6.67% 6.67% 7.23% 7.05% 5.78%
7.08% 7.08% 6.99% 6.10% 6.69% 6.54% 6.54% 7.13% 6.94% 5.67%
7.06% 7.06% 6.94% 6.05% 6.64% 6.50% 6.50% 7.08% 6.90% 5.66%
7.14% 7.14% 7.02% 6.13% 6.72% 6.58% 6.58% 7.16% 6.97% 5.73%
7.16% 7.16% 7.07% 6.18% 6.77% 6.63% 6.63% 7.21% 7.02% 5.76%
7.22% 7.22% 7.13% 6.25% 6.84% 6.69% 6.69% 7.26% 7.07% 5.77%
7.24% 7.24% 7.09% 6.20% 6.79% 6.65% 6.65% 7.23% 7.05% 5.73%
7.26% 7.26% 7.05% 6.14% 6.75% 6.60% 6.60% 7.20% 7.01% 5.67%
7.52% 7.52% 7.18% 6.24% 6.87% 6.71% 6.71% 7.33% 7.14% 5.75%
7.32% 7.32% 7.09% 6.18% 6.79% 6.63% 6.63% 7.22% 7.03% 5.63%
7.06% 7.06% 6.91% 6.02% 6.61% 6.47% 6.47% 7.03% 6.85% 5.53%
6.86% 6.86% 6.79% 5.91% 6.50% 6.35% 6.35% 6.91% 6.72% 5.42%
6.76% 6.76% 6.68% 5.80% 6.39% 6.24% 6.24% 6.81% 6.63% 5.34%
e nominal WACC for each period.
blank blank blank blank
1.00 1.00 1.00 1.00
60% 60% 60% 60%
9.13% 9.13% 9.13% 9.13%

8.43% 8.43% 8.43% 8.43%
7.96% 7.96% 7.96% 7.96%
7.57% 7.57% 7.57% 7.57%
7.50% 7.50% 7.50% 7.50%
7.46% 7.46% 7.46% 7.46%
7.43% 7.43% 7.43% 7.43%
7.35% 7.35% 7.35% 7.35%
7.31% 7.31% 7.31% 7.31%
7.21% 7.21% 7.21% 7.21%
7.07% 7.07% 7.07% 7.07%
7.05% 7.05% 7.05% 7.05%
7.13% 7.13% 7.13% 7.13%
7.15% 7.15% 7.15% 7.15%
7.21% 7.21% 7.21% 7.21%
7.20% 7.20% 7.20% 7.20%
7.16% 7.16% 7.16% 7.16%
7.29% 7.29% 7.29% 7.29%
7.17% 7.17% 7.17% 7.17%
6.99% 6.99% 6.99% 6.99%
6.84% 6.84% 6.84% 6.84%
6.71% 6.71% 6.71% 6.71%
#N/A #N/A #N/A #N/A
#N/A #N/A #N/A #N/A
#N/A #N/A #N/A #N/A
#N/A #N/A #N/A #N/A
#N/A #N/A #N/A #N/A
#N/A #N/A #N/A #N/A
14
14 - REAL WACC TIME SERIES
COLOUR CODE
Table 14.1 - Month of WACC estimate Table 14.2 - Current estimate of the real WACC
Note: this column
identifies the month
applicable for each row in Note: half-way calculation
all tables of this used in index functions in
worksheet. other tables. Note: Real WACC = nominal WACC / (1+ inflation) -1. This table
Industry Economy Water Rail Bus Light rail
Beta 1.00 0.70 0.90 0.85 0.85
Gearing 60% 60% 60% 60% 60%
Regulatory period length 4.00 4.00 4.00 4.00 4.00
End of month
Jan/15 1 6.24% 5.24% 5.91% 5.74% 5.74%
Jan/17 25 5.66% 4.66% 5.33% 5.16% 5.16%
Jan/18 37 4.80% 3.87% 4.49% 4.34% 4.34%
Jan/19 49 5.00% 3.99% 4.66% 4.50% 4.50%
Feb/19 50 4.92% 3.93% 4.59% 4.42% 4.42%
Mar/19 51 4.94% 3.92% 4.60% 4.43% 4.43%
Apr/19 52 4.82% 3.79% 4.48% 4.31% 4.31%
May/19 53 4.77% 3.72% 4.42% 4.24% 4.24%
Jun/19 54 4.63% 3.60% 4.29% 4.11% 4.11%
Jul/19 55 4.59% 3.56% 4.25% 4.08% 4.08%
Aug/19 56 4.52% 3.47% 4.17% 3.99% 3.99%
Sep/19 57 4.42% 3.39% 4.07% 3.90% 3.90%
Oct/19 58 4.52% 3.48% 4.17% 4.00% 4.00%
Nov/19 59 4.57% 3.54% 4.23% 4.06% 4.06%
Dec/19 60 4.63% 3.61% 4.29% 4.12% 4.12%
Jan/20 61 4.61% 3.58% 4.27% 4.10% 4.10%
Feb/20 62 4.63% 3.57% 4.28% 4.10% 4.10%
Mar/20 63 4.89% 3.75% 4.51% 4.32% 4.32%
Apr/20 64 4.44% 3.37% 4.09% 3.91% 3.91%
May/20 65 4.19% 3.16% 3.85% 3.68% 3.68%
Jun/20 66 4.05% 3.04% 3.72% 3.55% 3.55%
Jul/20 67 4.41% 3.40% 4.07% 3.90% 3.90%
Aug/20 68 #N/A #N/A #N/A #N/A #N/A
Sep/20 69 #N/A #N/A #N/A #N/A #N/A
Oct/20 70 #N/A #N/A #N/A #N/A #N/A
Nov/20 71 #N/A #N/A #N/A #N/A #N/A
Dec/20 72 #N/A #N/A #N/A #N/A #N/A
Jan/21 73 #N/A #N/A #N/A #N/A #N/A
Nov/25 131 #N/A #N/A #N/A #N/A #N/A
Dec/25 132 #N/A #N/A #N/A #N/A #N/A
f the real WACC Table 14.3 - Long term estimate of t
1+ inflation) -1. This table produces the current (short term) estimate of the real WACC. Note: This table produces the long te
Ferries R&R Buses Valuer General blank blank blank blank Economy Water Rail
0.90 0.85 0.45 1.00 1.00 1.00 1.00 1.00 0.70 0.90
50% 50% 45% 60% 60% 60% 60% 60% 60% 60%
4.00 4.00 6.00 5.00 5.00 5.00 5.00
6.36% 6.15% 5.05% 6.58% 6.58% 6.58% 6.58% 6.36% 5.66% 6.13%
5.83% 5.62% 4.28% 5.72% 5.72% 5.72% 5.72% 6.05% 5.35% 5.82%
4.98% 4.79% 3.76% 5.21% 5.21% 5.21% 5.21% 5.64% 4.94% 5.41%
5.20% 4.99% 3.72% 5.00% 5.00% 5.00% 5.00% 5.10% 4.39% 4.86%
5.10% 4.90% 3.60% 4.86% 4.86% 4.86% 4.86% 5.10% 4.39% 4.86%
5.14% 4.93% 3.55% 4.84% 4.84% 4.84% 4.84% 5.04% 4.34% 4.80%
5.04% 4.82% 3.53% 4.88% 4.88% 4.88% 4.88% 4.94% 4.24% 4.71%
4.99% 4.77% 3.45% 4.82% 4.82% 4.82% 4.82% 4.84% 4.14% 4.61%
4.84% 4.63% 3.33% 4.79% 4.79% 4.79% 4.79% 4.80% 4.10% 4.57%
4.80% 4.58% 3.19% 4.79% 4.79% 4.79% 4.79% 4.81% 4.11% 4.57%
4.75% 4.53% 3.12% 4.67% 4.67% 4.67% 4.67% 4.65% 3.95% 4.42%
4.65% 4.44% 3.09% 4.63% 4.63% 4.63% 4.63% 4.65% 3.95% 4.42%
4.75% 4.54% 3.19% 4.73% 4.73% 4.73% 4.73% 4.71% 4.01% 4.48%
4.80% 4.58% 3.19% 4.73% 4.73% 4.73% 4.73% 4.75% 4.05% 4.52%
4.85% 4.64% 3.17% 4.79% 4.79% 4.79% 4.79% 4.81% 4.11% 4.57%
4.85% 4.63% 3.14% 4.83% 4.83% 4.83% 4.83% 4.75% 4.05% 4.52%
4.88% 4.66% 3.11% 4.85% 4.85% 4.85% 4.85% 4.65% 3.95% 4.42%
5.15% 4.91% 3.26% 5.10% 5.10% 5.10% 5.10% 4.65% 3.95% 4.42%
4.67% 4.44% 2.98% 4.70% 4.70% 4.70% 4.70% 4.31% 3.61% 4.07%
4.40% 4.18% 2.89% 4.45% 4.45% 4.45% 4.45% 4.21% 3.51% 3.98%
4.25% 4.04% 2.76% 4.25% 4.25% 4.25% 4.25% 4.11% 3.41% 3.88%
4.62% 4.41% 2.95% 4.36% 4.36% 4.36% 4.36% 4.56% 3.86% 4.33%
ng term estimate of the real WACC Table 14.4 - Lower e
his table produces the long term estimate of the real WACC (using the same formula as in Table 14.2).
Bus Light rail Ferries R&R Buses Valuer General blank blank blank blank Economy
0.85 0.85 0.90 0.85 0.45 1.00 1.00 1.00 1.00 1.00
60% 60% 50% 50% 45% 60% 60% 60% 60% 60%
6.01% 6.01% 6.34% 6.20% 5.00% 6.36% 6.36% 6.36% 6.36% 6.24%
5.70% 5.70% 6.01% 5.86% 4.65% 6.05% 6.05% 6.05% 6.05% 5.66%
5.29% 5.29% 5.62% 5.47% 4.27% 5.64% 5.64% 5.64% 5.64% 4.80%
4.75% 4.75% 5.13% 4.98% 3.81% 5.10% 5.10% 5.10% 5.10% 5.00%
4.75% 4.75% 5.13% 4.98% 3.81% 5.10% 5.10% 5.10% 5.10% 4.92%
4.69% 4.69% 5.08% 4.93% 3.76% 5.04% 5.04% 5.04% 5.04% 4.94%
4.59% 4.59% 4.98% 4.83% 3.67% 4.94% 4.94% 4.94% 4.94% 4.82%
4.49% 4.49% 4.88% 4.74% 3.57% 4.84% 4.84% 4.84% 4.84% 4.77%
4.45% 4.45% 4.83% 4.69% 3.52% 4.80% 4.80% 4.80% 4.80% 4.63%
4.46% 4.46% 4.84% 4.69% 3.52% 4.81% 4.81% 4.81% 4.81% 4.59%
4.30% 4.30% 4.69% 4.55% 3.38% 4.65% 4.65% 4.65% 4.65% 4.52%
4.30% 4.30% 4.69% 4.55% 3.38% 4.65% 4.65% 4.65% 4.65% 4.42%
4.36% 4.36% 4.74% 4.59% 3.42% 4.71% 4.71% 4.71% 4.71% 4.52%
4.40% 4.40% 4.79% 4.64% 3.48% 4.75% 4.75% 4.75% 4.75% 4.57%
4.46% 4.46% 4.84% 4.69% 3.52% 4.81% 4.81% 4.81% 4.81% 4.63%
4.40% 4.40% 4.79% 4.64% 3.48% 4.75% 4.75% 4.75% 4.75% 4.61%
4.30% 4.30% 4.69% 4.55% 3.38% 4.65% 4.65% 4.65% 4.65% 4.63%
4.30% 4.30% 4.69% 4.55% 3.38% 4.65% 4.65% 4.65% 4.65% 4.65%
3.96% 3.96% 4.34% 4.19% 3.02% 4.31% 4.31% 4.31% 4.31% 4.31%
3.86% 3.86% 4.24% 4.09% 2.92% 4.21% 4.21% 4.21% 4.21% 4.19%
3.76% 3.76% 4.14% 4.00% 2.83% 4.11% 4.11% 4.11% 4.11% 4.05%
4.21% 4.21% 4.60% 4.46% 3.29% 4.56% 4.56% 4.56% 4.56% 4.41%
Table 14.4 - Lower estimate of the real WACC
Note: This table produces the lower estimate of the real WACC.
Water Rail Bus Light rail Ferries R&R Buses Valuer General blank blank blank
0.70 0.90 0.85 0.85 0.90 0.85 0.45 1.00 1.00 1.00
60% 60% 60% 60% 50% 50% 45% 60% 60% 60%
5.24% 5.91% 5.74% 5.74% 6.34% 6.15% 5.00% 6.36% 6.36% 6.36%
4.66% 5.33% 5.16% 5.16% 5.83% 5.62% 4.28% 5.72% 5.72% 5.72%
3.87% 4.49% 4.34% 4.34% 4.98% 4.79% 3.76% 5.21% 5.21% 5.21%
3.99% 4.66% 4.50% 4.50% 5.13% 4.98% 3.72% 5.00% 5.00% 5.00%
3.93% 4.59% 4.42% 4.42% 5.10% 4.90% 3.60% 4.86% 4.86% 4.86%
3.92% 4.60% 4.43% 4.43% 5.08% 4.93% 3.55% 4.84% 4.84% 4.84%
3.79% 4.48% 4.31% 4.31% 4.98% 4.82% 3.53% 4.88% 4.88% 4.88%
3.72% 4.42% 4.24% 4.24% 4.88% 4.74% 3.45% 4.82% 4.82% 4.82%
3.60% 4.29% 4.11% 4.11% 4.83% 4.63% 3.33% 4.79% 4.79% 4.79%
3.56% 4.25% 4.08% 4.08% 4.80% 4.58% 3.19% 4.79% 4.79% 4.79%
3.47% 4.17% 3.99% 3.99% 4.69% 4.53% 3.12% 4.65% 4.65% 4.65%
3.39% 4.07% 3.90% 3.90% 4.65% 4.44% 3.09% 4.63% 4.63% 4.63%
3.48% 4.17% 4.00% 4.00% 4.74% 4.54% 3.19% 4.71% 4.71% 4.71%
3.54% 4.23% 4.06% 4.06% 4.79% 4.58% 3.19% 4.73% 4.73% 4.73%
3.61% 4.29% 4.12% 4.12% 4.84% 4.64% 3.17% 4.79% 4.79% 4.79%
3.58% 4.27% 4.10% 4.10% 4.79% 4.63% 3.14% 4.75% 4.75% 4.75%
3.57% 4.28% 4.10% 4.10% 4.69% 4.55% 3.11% 4.65% 4.65% 4.65%
3.75% 4.42% 4.30% 4.30% 4.69% 4.55% 3.26% 4.65% 4.65% 4.65%
3.37% 4.07% 3.91% 3.91% 4.34% 4.19% 2.98% 4.31% 4.31% 4.31%
3.16% 3.85% 3.68% 3.68% 4.24% 4.09% 2.89% 4.21% 4.21% 4.21%
3.04% 3.72% 3.55% 3.55% 4.14% 4.00% 2.76% 4.11% 4.11% 4.11%
3.40% 4.07% 3.90% 3.90% 4.60% 4.41% 2.95% 4.36% 4.36% 4.36%
Table 14.5 - Upper estimate of the real WACC
Note: This table produces the upper estimate of the real WACC.
blank Economy Water Rail Bus Light rail Ferries R&R Buses Valuer General blank
1.00 1.00 0.70 0.90 0.85 0.85 0.90 0.85 0.45 1.00
60% 60% 60% 60% 60% 60% 50% 50% 45% 60%
6.36% 6.36% 5.66% 6.13% 6.01% 6.01% 6.36% 6.20% 5.05% 6.58%
5.72% 6.05% 5.35% 5.82% 5.70% 5.70% 6.01% 5.86% 4.65% 6.05%
5.21% 5.64% 4.94% 5.41% 5.29% 5.29% 5.62% 5.47% 4.27% 5.64%
5.00% 5.10% 4.39% 4.86% 4.75% 4.75% 5.20% 4.99% 3.81% 5.10%
4.86% 5.10% 4.39% 4.86% 4.75% 4.75% 5.13% 4.98% 3.81% 5.10%
4.84% 5.04% 4.34% 4.80% 4.69% 4.69% 5.14% 4.93% 3.76% 5.04%
4.88% 4.94% 4.24% 4.71% 4.59% 4.59% 5.04% 4.83% 3.67% 4.94%
4.82% 4.84% 4.14% 4.61% 4.49% 4.49% 4.99% 4.77% 3.57% 4.84%
4.79% 4.80% 4.10% 4.57% 4.45% 4.45% 4.84% 4.69% 3.52% 4.80%
4.79% 4.81% 4.11% 4.57% 4.46% 4.46% 4.84% 4.69% 3.52% 4.81%
4.65% 4.65% 3.95% 4.42% 4.30% 4.30% 4.75% 4.55% 3.38% 4.67%
4.63% 4.65% 3.95% 4.42% 4.30% 4.30% 4.69% 4.55% 3.38% 4.65%
4.71% 4.71% 4.01% 4.48% 4.36% 4.36% 4.75% 4.59% 3.42% 4.73%
4.73% 4.75% 4.05% 4.52% 4.40% 4.40% 4.80% 4.64% 3.48% 4.75%
4.79% 4.81% 4.11% 4.57% 4.46% 4.46% 4.85% 4.69% 3.52% 4.81%
4.75% 4.75% 4.05% 4.52% 4.40% 4.40% 4.85% 4.64% 3.48% 4.83%
4.65% 4.65% 3.95% 4.42% 4.30% 4.30% 4.88% 4.66% 3.38% 4.85%
4.65% 4.89% 3.95% 4.51% 4.32% 4.32% 5.15% 4.91% 3.38% 5.10%
4.31% 4.44% 3.61% 4.09% 3.96% 3.96% 4.67% 4.44% 3.02% 4.70%
4.21% 4.21% 3.51% 3.98% 3.86% 3.86% 4.40% 4.18% 2.92% 4.45%
4.11% 4.11% 3.41% 3.88% 3.76% 3.76% 4.25% 4.04% 2.83% 4.25%
4.36% 4.56% 3.86% 4.33% 4.21% 4.21% 4.62% 4.46% 3.29% 4.56%
Table 14.6 - Mid-point estimate of the real WACC
eal WACC. Note: This table produces the mid-point estimate of the real W
blank blank blank Economy Water Rail Bus Light rail Ferries R&R Buses
1.00 1.00 1.00 1.00 0.70 0.90 0.85 0.85 0.90 0.85
60% 60% 60% 60% 60% 60% 60% 60% 50% 50%
6.58% 6.58% 6.58% 6.30% 5.45% 6.02% 5.88% 5.88% 6.35% 6.17%
6.05% 6.05% 6.05% 5.86% 5.00% 5.57% 5.43% 5.43% 5.92% 5.74%
5.64% 5.64% 5.64% 5.22% 4.40% 4.95% 4.81% 4.81% 5.30% 5.13%
5.10% 5.10% 5.10% 5.05% 4.19% 4.76% 4.62% 4.62% 5.16% 4.98%
5.10% 5.10% 5.10% 5.01% 4.16% 4.73% 4.58% 4.58% 5.11% 4.94%
5.04% 5.04% 5.04% 4.99% 4.13% 4.70% 4.56% 4.56% 5.11% 4.93%
4.94% 4.94% 4.94% 4.88% 4.02% 4.59% 4.45% 4.45% 5.01% 4.83%
4.84% 4.84% 4.84% 4.80% 3.93% 4.51% 4.37% 4.37% 4.93% 4.75%
4.80% 4.80% 4.80% 4.72% 3.85% 4.43% 4.28% 4.28% 4.84% 4.66%
4.81% 4.81% 4.81% 4.70% 3.83% 4.41% 4.27% 4.27% 4.82% 4.64%
4.67% 4.67% 4.67% 4.58% 3.71% 4.29% 4.15% 4.15% 4.72% 4.54%
4.65% 4.65% 4.65% 4.54% 3.67% 4.25% 4.10% 4.10% 4.67% 4.49%
4.73% 4.73% 4.73% 4.61% 3.75% 4.32% 4.18% 4.18% 4.75% 4.57%
4.75% 4.75% 4.75% 4.66% 3.79% 4.37% 4.23% 4.23% 4.79% 4.61%
4.81% 4.81% 4.81% 4.72% 3.86% 4.43% 4.29% 4.29% 4.85% 4.67%
4.83% 4.83% 4.83% 4.68% 3.81% 4.39% 4.25% 4.25% 4.82% 4.64%
4.85% 4.85% 4.85% 4.64% 3.76% 4.35% 4.20% 4.20% 4.79% 4.60%
5.10% 5.10% 5.10% 4.77% 3.85% 4.46% 4.31% 4.31% 4.92% 4.73%
4.70% 4.70% 4.70% 4.38% 3.49% 4.08% 3.93% 3.93% 4.50% 4.32%
4.45% 4.45% 4.45% 4.20% 3.34% 3.91% 3.77% 3.77% 4.32% 4.14%
4.25% 4.25% 4.25% 4.08% 3.22% 3.80% 3.65% 3.65% 4.20% 4.02%
4.56% 4.56% 4.56% 4.49% 3.63% 4.20% 4.06% 4.06% 4.61% 4.43%
id-point estimate of the real WACC.
Valuer General blank blank blank blank
0.45 1.00 1.00 1.00 1.00
45% 60% 60% 60% 60%
5.03% 6.47% 6.47% 6.47% 6.47%

4.46% 5.89% 5.89% 5.89% 5.89%
4.01% 5.43% 5.43% 5.43% 5.43%
3.76% 5.05% 5.05% 5.05% 5.05%
3.70% 4.98% 4.98% 4.98% 4.98%
3.66% 4.94% 4.94% 4.94% 4.94%
3.60% 4.91% 4.91% 4.91% 4.91%
3.51% 4.83% 4.83% 4.83% 4.83%
3.42% 4.79% 4.79% 4.79% 4.79%
3.36% 4.80% 4.80% 4.80% 4.80%
3.25% 4.66% 4.66% 4.66% 4.66%
3.24% 4.64% 4.64% 4.64% 4.64%
3.31% 4.72% 4.72% 4.72% 4.72%
3.33% 4.74% 4.74% 4.74% 4.74%
3.34% 4.80% 4.80% 4.80% 4.80%
3.31% 4.79% 4.79% 4.79% 4.79%
3.24% 4.75% 4.75% 4.75% 4.75%
3.32% 4.88% 4.88% 4.88% 4.88%
3.00% 4.51% 4.51% 4.51% 4.51%
2.90% 4.33% 4.33% 4.33% 4.33%
2.80% 4.18% 4.18% 4.18% 4.18%
3.12% 4.46% 4.46% 4.46% 4.46%
15
15 - DAILY DATA - ADJUSTED FOR BUSINESS DAYS
This worksheet selects the inputs from daily data worksheet that are from business days. That is, only reproducing those observatio
COLOUR CODE
Table 15.1 - Master

list of business days Table 15.2 - Risk free rate series
Note: this table contains the

master list of business days 1
Jan 1973 to 31 Dec 2025
calculated in another model. Note: this table reproduces Table 1.1 - Australian Bonds (RBA series).
Business days Business days End of month

1/1/1973 1/Jan/73 Jan/73
1/2/1973 2/Jan/73 Jan/73
1/6/1976 6/Jan/76 Jan/76
1/7/1976 7/Jan/76 Jan/76
1/11/1980 11/Jan/80 Jan/80
1/25/1990 25/Jan/90 Jan/90
12/30/1994 30/Dec/94 Dec/94
1/3/1995 3/Jan/95 Jan/95
8/26/1996 26/Aug/96 Aug/96
8/27/1996 27/Aug/96 Aug/96
2/11/2000 11/Feb/00 Feb/00
2/25/2010 25/Feb/10 Feb/10
2/26/2016 26/Feb/16 Feb/16
2/27/2017 27/Feb/17 Feb/17
12/28/2017 28/Dec/17 Dec/17
12/29/2017 29/Dec/17 Dec/17
1/2/2018 2/Jan/18 Jan/18
7/19/2018 19/Jul/18 Jul/18
7/20/2018 20/Jul/18 Jul/18
7/23/2018 23/Jul/18 Jul/18
7/24/2018 24/Jul/18 Jul/18
7/25/2018 25/Jul/18 Jul/18
7/26/2018 26/Jul/18 Jul/18
7/27/2018 27/Jul/18 Jul/18
7/30/2018 30/Jul/18 Jul/18
7/31/2018 31/Jul/18 Jul/18
8/1/2018 1/Aug/18 Aug/18
8/2/2018 2/Aug/18 Aug/18
8/23/2018 23/Aug/18 Aug/18
2/26/2019 26/Feb/19 Feb/19
12/18/2025 18/Dec/25 Dec/25
12/19/2025 19/Dec/25 Dec/25
12/22/2025 22/Dec/25 Dec/25
12/23/2025 23/Dec/25 Dec/25
12/24/2025 24/Dec/25 Dec/25
12/29/2025 29/Dec/25 Dec/25
12/30/2025 30/Dec/25 Dec/25
12/31/2025 31/Dec/25 Dec/25
That is, only reproducing those observations that are not on weekends or public holidays.
1.1 - Australian Bonds (RBA series).

Australian bond 10Y - middle rate
(FMCYGBAG10D index) un-
annualised
#N/A
#N/A
#N/A
#N/A
#N/A
#N/A
#N/A
10.06
8.06
8.16
7.11
5.48
2.39
2.71
2.67
2.63
2.66
2.66
2.62
2.67
2.72
2.68
2.69
2.65
2.65
2.65
2.69
2.73
2.53
2.09
#N/A
#N/A
#N/A
#N/A
#N/A
#N/A
#N/A
#N/A
16
16 - DEBT MARGIN - LOCAL GOVERNMENT
Note: Our final decisions on estimation of the cost of debt are discussed in: IPART, Review of our WACC method - Final Report, Feb
COLOUR CODE
Table 16.1 - 10-year corporate bond spreads
Note: this
column
identifies the Note: this column
month performs a calculation
applicable for modifying the end of
each row in all month so leap year Note: FNFCA10M - Non-financial corporate A-
tables of this February's are able to be rated bonds - spread to AGS - 10-year target tenor
worksheet. indexed. (basis points)
End of month
End of month (indexable) Selected Data (bp)
Jan/05 Jan/05 83.90

Dec/13 Dec/13 146.21
Jan/14 Jan/14 141.67
Jan/15 Jan/15 134.30
Jan/16 Jan/16 258.68
Jan/17 Jan/17 152.84
Jan/18 Jan/18 103.19
Feb/18 Feb/18 100.34
Mar/18 Mar/18 120.03
Apr/18 Apr/18 114.88
May/18 May/18 121.72
Jun/18 Jun/18 128.72
Jul/18 Jul/18 132.98
Aug/18 Aug/18 130.74
Sep/18 Sep/18 129.06
Oct/18 Oct/18 129.42
Nov/18 Nov/18 139.12
Dec/18 Dec/18 152.21
Jan/19 Jan/19 150.50
Jan/20 Jan/20 100.86
Dec/25 Dec/25 #N/A
ur WACC method - Final Report, Feb 2018, pp 24-25.
Table 16.3 - Date of tranche sampling window Table 16.4 - Row of
Note: This table of formula calculate the matching month for the sampling window in each tranche. Note: This table of formu
Tranche Tranche Tranche Tranche Tranche Tranche Tranche Tranche Tranche

-1 -2 -3 -4 -5 -6 -7 -8 -9 Tranche -0
-1 -2 -3 -4 -5 -6 -7 -8 -9
Jan/04 Jan/03 Jan/02 Jan/01 Jan/00 Jan/99 Jan/98 Jan/97 Jan/96
Dec/12 Dec/11 Dec/10 Dec/09 Dec/08 Dec/07 Dec/06 Dec/05 Dec/04
Jan/13 Jan/12 Jan/11 Jan/10 Jan/09 Jan/08 Jan/07 Jan/06 Jan/05 109
Feb/17 Feb/16 Feb/15 Feb/14 Feb/13 Feb/12 Feb/11 Feb/10 Feb/09 158
Mar/17 Mar/16 Mar/15 Mar/14 Mar/13 Mar/12 Mar/11 Mar/10 Mar/09 159
Apr/17 Apr/16 Apr/15 Apr/14 Apr/13 Apr/12 Apr/11 Apr/10 Apr/09 160
May/17 May/16 May/15 May/14 May/13 May/12 May/11 May/10 May/09 161
Jun/17 Jun/16 Jun/15 Jun/14 Jun/13 Jun/12 Jun/11 Jun/10 Jun/09 162
Jul/17 Jul/16 Jul/15 Jul/14 Jul/13 Jul/12 Jul/11 Jul/10 Jul/09 163
Aug/17 Aug/16 Aug/15 Aug/14 Aug/13 Aug/12 Aug/11 Aug/10 Aug/09 164
Sep/17 Sep/16 Sep/15 Sep/14 Sep/13 Sep/12 Sep/11 Sep/10 Sep/09 165
Oct/17 Oct/16 Oct/15 Oct/14 Oct/13 Oct/12 Oct/11 Oct/10 Oct/09 166
Nov/17 Nov/16 Nov/15 Nov/14 Nov/13 Nov/12 Nov/11 Nov/10 Nov/09 167
Dec/17 Dec/16 Dec/15 Dec/14 Dec/13 Dec/12 Dec/11 Dec/10 Dec/09 168
Dec/24 Dec/23 Dec/22 Dec/21 Dec/20 Dec/19 Dec/18 Dec/17 Dec/16 252
Offset for 2-month windo
Note: the offset for a 2-mon
Table 16.4 - Row of tranche sampling window Table 16.5 - Averag
Note: This table of formu

Note: This table of formula calculates the row in the data table that matches the date for the sampling period.
Tranche -1 Tranche -2 Tranche -3 Tranche -4 Tranche -5 Tranche -6 Tranche -7 Tranche -8 Tranche -9 Tranche -0
97 85 73 61 49 37 25 13 1 143.94
109 97 85 73 61 49 37 25 13 137.10
121 109 97 85 73 61 49 37 25 241.74
133 121 109 97 85 73 61 49 37 153.05
145 133 121 109 97 85 73 61 49 109.25
146 134 122 110 98 86 74 62 50 101.77
147 135 123 111 99 87 75 63 51 110.19
148 136 124 112 100 88 76 64 52 117.46
149 137 125 113 101 89 77 65 53 118.30
150 138 126 114 102 90 78 66 54 125.22
151 139 127 115 103 91 79 67 55 130.85
152 140 128 116 104 92 80 68 56 131.86
153 141 129 117 105 93 81 69 57 129.90
154 142 130 118 106 94 82 70 58 129.24
155 143 131 119 107 95 83 71 59 134.27
156 144 132 120 108 96 84 72 60 145.67
157 145 133 121 109 97 85 73 61 151.36
169 157 145 133 121 109 97 85 73 106.41
240 228 216 204 192 180 168 156 144 #N/A
Offset for 2-month window -1.00
Note: the offset for a 2-month window is only one month because the offset is inclusive of its starting cell.
Table 16.5 - Average debt margin for each tranche
Note: This table of formula calculates the average debt margin for each 2-month observation window of each
tranche.
Tranche -1 Tranche -2 Tranche -3 Tranche -4 Tranche -5 Tranche -6 Tranche -7 Tranche -8 Tranche -9
187.48 260.02 184.37 216.81 405.86 225.65 96.58 89.38 83.90

143.94 187.48 260.02 184.37 216.81 405.86 225.65 96.58 89.38
137.10 143.94 187.48 260.02 184.37 216.81 405.86 225.65 96.58
241.74 137.10 143.94 187.48 260.02 184.37 216.81 405.86 225.65
153.05 241.74 137.10 143.94 187.48 260.02 184.37 216.81 405.86
145.31 253.91 132.57 138.85 185.37 250.32 180.81 225.81 428.02
139.56 230.27 141.38 134.23 190.42 238.81 177.66 211.38 482.52
143.62 188.01 152.20 129.01 197.66 230.69 177.19 191.61 437.52
143.21 173.57 149.31 124.31 190.24 237.65 184.14 201.86 339.51
138.92 181.34 151.30 124.33 187.75 249.14 194.79 223.13 268.07
131.17 171.79 170.18 123.66 183.60 229.92 198.31 213.27 230.02
124.00 162.34 185.97 123.50 173.97 214.25 213.09 203.07 219.28
121.72 159.26 201.29 128.30 181.96 219.87 235.28 209.23 234.31
116.71 151.48 208.14 137.20 174.93 204.74 230.18 203.63 242.65
114.61 148.58 201.31 150.85 162.10 195.14 239.18 198.67 249.52
115.79 152.36 212.84 149.24 153.59 195.58 260.95 194.40 230.62
109.25 153.05 241.74 137.10 143.94 187.48 260.02 184.37 216.81
151.36 109.25 153.05 241.74 137.10 143.94 187.48 260.02 184.37
#N/A #N/A #N/A #N/A #N/A 113.39 145.67 115.79 152.36
Table 16.6 - Debt Margin estimates all regulatory lengths (unannualised)
Note: the debt margin estimate for each tranche length should be the average of the number of tranches corresponding to the length of t
for a 3-year regulatory period should be the average debt margin for tranches 0, -1 & -2
estimate 1- estimate 2- estimate 3- estimate 4- estimate 5- estimate 6-
End of month tranche tranches tranches tranches tranches tranches
Length of regula 1 2 3 4 5 6
Jan/14 1.44% 1.66% 1.97% 1.94% 1.99% 2.33%

Jan/15 1.37% 1.41% 1.56% 1.82% 1.83% 1.88%
Jan/16 2.42% 1.89% 1.74% 1.78% 1.94% 1.92%
Jan/17 1.53% 1.97% 1.77% 1.69% 1.73% 1.87%
Jan/18 1.09% 1.31% 1.68% 1.60% 1.57% 1.62%
Feb/18 1.02% 1.24% 1.67% 1.58% 1.54% 1.60%
Mar/18 1.10% 1.25% 1.60% 1.55% 1.51% 1.58%
Apr/18 1.17% 1.31% 1.50% 1.50% 1.46% 1.55%
May/18 1.18% 1.31% 1.45% 1.46% 1.42% 1.50%
Jun/18 1.25% 1.32% 1.48% 1.49% 1.44% 1.51%
Jul/18 1.31% 1.31% 1.45% 1.51% 1.46% 1.52%
Aug/18 1.32% 1.28% 1.39% 1.51% 1.46% 1.50%
Sep/18 1.30% 1.26% 1.37% 1.53% 1.48% 1.54%
Oct/18 1.29% 1.23% 1.32% 1.51% 1.49% 1.53%
Nov/18 1.34% 1.24% 1.32% 1.50% 1.50% 1.52%
Dec/18 1.46% 1.31% 1.38% 1.57% 1.55% 1.55%
Jan/19 1.51% 1.30% 1.38% 1.64% 1.58% 1.56%
Jan/20 1.06% 1.29% 1.22% 1.30% 1.52% 1.50%
orresponding to the length of the regulatory period. That is, the current estimate
t margin for tranches 0, -1 & -2.
Current Current Current Current
estimate 7- estimate 8- estimate 9- estimate 10-
tranches tranches tranches tranches
7 8 9 10
2.32% 2.15% 2.01% 1.89%

2.19% 2.20% 2.06% 1.95%
1.96% 2.22% 2.23% 2.10%
1.87% 1.91% 2.14% 2.16%
1.76% 1.77% 1.82% 2.04%
1.73% 1.74% 1.79% 2.04%
1.69% 1.70% 1.75% 2.06%
1.66% 1.67% 1.70% 1.96%
1.62% 1.65% 1.69% 1.86%
1.65% 1.69% 1.75% 1.84%
1.63% 1.67% 1.73% 1.78%
1.59% 1.66% 1.70% 1.75%
1.63% 1.72% 1.76% 1.82%
1.60% 1.69% 1.73% 1.80%
1.58% 1.68% 1.72% 1.79%
1.61% 1.73% 1.76% 1.81%
1.61% 1.73% 1.74% 1.79%
1.49% 1.54% 1.66% 1.67%
#N/A #N/A #N/A #N/A
17
17 - TRAILING AVERAGE CALCULATION
Table 17.1 - Rfr & Debt margin tranches
Nominal risk Implied Debt

Tranche Selected month free rate Margin
Tranche -0 Jul/20 0.90% 2.21%
Tranche -1 Jul/20 1.34% 2.07%
Tranche -2 Jul/20 2.66% 1.90%
Tranche -3 Jul/20 2.53% 1.74%
Tranche -4 Jul/20 2.01% 2.53%
Tranche -5 Jul/20 2.95% 2.21%
Tranche -6 Jul/20 3.57% 1.93%
Tranche -7 Jul/20 3.67% 3.18%
Tranche -8 Jul/20 2.95% 3.77%
Tranche -9 Jul/20 5.08% 2.71%
Table 17.2 - Transition to the trailing average

Regulatory period length 4
Year of transition 4
Check Okay
Calculations
proportion of transition 100.0%
proportion of remaining years 75.0%
Weight for tranche-0 25.0%

Weight for tranche-8 0.0% Formula 17.1 - Annualisation adjust
Check=0 0.0%
Table 17.3 - Value of Risk free rate and Debt margin
Annualisation
Cod (un- adjustment
Rfr Debt Margin annualised) factor
Note: this
Note: this is the calculation is
Note: this is the rfr + the debt based on
risk free rate margin Formula 17.1.
Current (4-year regulatory period) 1.86% 1.98% 3.96% 0.0392%
Long term (10-year regulatory period) 2.76% 2.42% 5.31% 0.0706%
mula 17.1 - Annualisation adjustment factor
Rfr
annualisation Cod Debt margin
Cod adjustment (annualised, Rfr (annualised (annualised,
(annualised) factor Rfr (annualised) 1dp) 1dp) 1dp)
Note: this is the Note: this is the
un-annualised un-annualised
value + the Note: this value + the Note: this is the Note: this is the Note: this is the
annualisation calculation is annualisation CoD rounded to Rfr rounded to Debt margin
adjustment based on adjustment one decimal one decimal rounded to one
factor. Formula 17.1. factor. place. place. decimal place.
4.00% 0.0086% 1.87% 4.00% 1.90% 2.10%
5.38% 0.0191% 2.78% 5.40% 2.80% 2.60%

Spreadsheet WACC Model August 2020

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Spreadsheet WACC Model August 2020

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WACC Calculator

MODELLER: Edward Jenkins

THE PURPOSE OF THE MODEL

HOW TO USE THE MODEL

Table 1.1 - Australian Bonds (RBA series)

Note: this is the yields on Australian government bonds, 10 years

Table 2.2 - Capital market yields -

Note: this is the yields on commonwealth

Date End of month End of month Yield

Note: spreads on corporate bonds are RBA data series: FNFCBBB10M -

Jan/05 Jan/05 117.62 113.87 Jan/05 Jan/05

rporate bonds are RBA data

RBA 1-year RBA 2-year

Table 4.1 - MRP estimate

Note: for discussion of the method

Table 5.1 - Industry parameters

Table 5.2 - Other assumed WACC parameters

Table 5.3 - Long term mid-point of the MRP

Table 5.4 - Debt raising costs

Table 5.5 - Local Government Discount rate regulatory lengths

DATA VALIDATION LISTS - DO NOT EDIT

eport, Feb 2018, Table A.1, p.87.

Table 6.1 - WACC industry

Table 6.2 - WACC data sampling date

Sample month - Risk free rate & debt margin

Table 6.3 - Length of regulatory period (years) & other options

Note: entering a value here will override the default regulatory

Trailing Average adjustment

Table 6.4 - Beta selection

Table 6.5 - WACC calculation

Market Risk premium 8.6% 6.0%

Cost of equity (nominal post-tax) 10.5% 8.8%

Cost of debt (nominal pre-tax) 4.0% 5.4%

Table 7.1 - Sampling date

Table 7.2 - Discount rate

Table 7.3 - Bond yield data

Spread between Corporate A rated 10-year

Table 7.4 - Other inputs into LG discount rate

Inflation forecast 2.20%

Note: this table reproduces the FMCYGBAG10D index, however it

Australian bond 10Y Australian bond 10Y -

1/3/1995 10.06 10.06%

Note: we decided to use an annualised

Long Term Current estimate

6.22% 5.64% 4/Jan/04 4/Jan/03 4/Jan/02 4/Jan/01 4/Jan/00

Tranche -6 Tranche -7 Tranche -8 Tranche -9 Tranche -1 Tranche -2 Tranche -3 Tranche -4

4/Jan/99 4/Jan/98 4/Jan/97 4/Jan/96 2/Jan/04 3/Jan/03 4/Jan/02 4/Jan/01

Note: This table of formula calculates the row in

Tranche -5 Tranche -6 Tranche -7 Tranche -8 Tranche -9 Starting row Tranche -1 Tranche -2

4/Jan/00 4/Jan/99 2/Jan/98 3/Jan/97 4/Jan/96 2521 2269 2018

Note: This table of formula calcul

Tranche -3 Tranche -4 Tranche -5 Tranche -6 Tranche -7 Tranche -8 Tranche -9 Tranche -1

1767 1515 1262 1010 757 506 254 252

Tranche -2 Tranche -3 Tranche -4 Tranche -5 Tranche -6 Tranche -7 Tranche -8 Tranche -9

503 754 1006 1259 1511 1764 2015 2267

Table 8.7 - Average risk free rate for each tranche

Tranche -0 Tranche -1 Tranche -2 Tranche -3 Tranche -4 Tranche -5 Tranche -6 Tranche -7 Tranche -8

5.32% 5.81% 5.43% 5.70% 5.72% 6.66% 4.99% 6.08% 7.25%

Note: RfR annualisation factor discussed in : IPART,

8.33% 4/Jan/05 0.09% 0.08% Jan/05 6.13%

Note: This offsets

5.56% Jan/05 5.32% 5.56% 5.52% 5.56% 5.60%

Note: this table calculates the annualisation factor