Annual Report 2011 - Watercare
Annual Report 2011 - Watercare
Annual Report 2011 - Watercare
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<strong>Watercare</strong> Services Limited<br />
<strong>2011</strong> ANNUAL REPORT<br />
FINANCIAL COMMENTARY (continued)<br />
<strong>2011</strong> <strong>2011</strong> <strong>2011</strong> 2010 2012<br />
actual budget Variance to Budget Actual Budget<br />
$000 $000 $000 $000<br />
Depreciation and Amortisation<br />
Water 71,106 54,510 (30.4%) 34,680 82,730<br />
Wastewater 72,520 87,906 17.5% 34,075 100,950<br />
143,626 142,416 (0.8%) 68,755 183,680<br />
Depreciation for <strong>2011</strong> was 0.8% over budget primarily due to the acceleration of depreciation on various water assets due for replacement.<br />
The budget for water depreciation was understated and wastewater depreciation overstated due to incorrect budget assumptions being used<br />
for the useful lives of the retail assets integrated from the local network operators on 1 November 2010.<br />
<strong>2011</strong> <strong>2011</strong> <strong>2011</strong> 2010 2012<br />
actual budget Variance to Budget Actual Budget<br />
$000 $000 $000 $000<br />
Finance costs<br />
Water<br />
Paid and payable 27,899 31,045 10.1% 10,846 39,161<br />
Capitalised on asset construction (1,998) (4,143) 51.8% (1,060) (3,022)<br />
25,901 26,902 3.7% 9,786 36,139<br />
Wastewater<br />
Paid and payable 37,922 39,512 4.0% 26,502 49,841<br />
Capitalised on asset construction (2,716) (5,274) 48.5% (4,775) (3,846)<br />
35,206 34,238 (2.8%) 21,727 45,995<br />
Total<br />
Paid and payable 65,821 70,557 6.7% 37,348 89,002<br />
Capitalised on asset construction (4,714) (9,417) 49.9% (5,835) (6,868)<br />
61,107 61,140 0.1% 31,513 82,134<br />
Total finance costs of $61.1 million were 0.1% below budget. The lower interest costs were due to lower interest rates and lower debt due to<br />
lower capital expenditure than budgeted. This was partially offset by the amount of interest capitalised to assets under construction being lower<br />
than budget by $4.7 million due to less qualifying projects being integrated from the local network operators than was assumed.<br />
<strong>2011</strong> <strong>2011</strong> <strong>2011</strong> 2010 2012<br />
actual budget Variance to Budget Actual Budget<br />
$000 $000 $000 $000<br />
Tax<br />
Current tax - - - - -<br />
Deferred tax 4,438 (250) N/A 11,311 (1,236)<br />
4,438 (250) N/A 11,311 (1,236)<br />
The deferred tax balance reflects the change in deferred tax due to the reduction of the tax depreciation rates to zero on buildings with useful<br />
lives greater than 50 years which were integrated from the local network operators on 1 November 2010. No tax was payable on the trading<br />
result for the year.<br />
PAGE 63<br />
<strong>2011</strong> Financial <strong>Report</strong><br />
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