2014-01-13 Item 6.3 Appendices 1-5

5.2.2 Remaining Council financial information

Table 19 provides a summary of the Remaining Council’s key income statement, balance sheet
and cashflow used by QTC to assess the financial viability of the Remaining Council.

TABLE 19 – SUMMARY OF KEY FINANCIAL INFORMATION

                                  FY2013      FY2014      FY2015      FY2016      FY2017

Income Statement items ($000)

Net rates and utilities          204,460     217,858     235,676     252,104     269,464

Grants and subsidies              10,988      10,988      10,988      10,988      10,988

Total recurrent revenue          331,732     344,697     365,439     383,555     403,362

Employee expenses                121,939     123,801     129,306     134,678     140,274

Materials and services costs     144,234     154,551     166,245     175,041     181,195

Depreciation                      57,968      60,617      64,937      70,481      75,928

Interest expense                  11,199      12,443      13,426      14,354      14,611

Total recurrent expenses         335,340     351,412     373,914     394,554     412,008

Operating surplus/(deficit)       (3,608)     (6,715)     (8,475)    (10,999)     (8,646)



Balance Sheet items ($000)

Cash                             156,616     135,123     109,841      84,043      59,284
Property, plant and equipment   3,278,510   3,437,298   3,601,616   3,748,256   3,889,278

Total QTC borrowings             213,190     232,767     251,419     258,006     254,274



Cashflow items ($000)

Gross capital expenditure        121,770     119,213     126,119     111,548     109,046

New borrowings                    35,320      33,551      35,536      26,666      19,184



Key points to note from Table 19 include:
 Shareholder returns from Unitywater are included within total recurrent revenue. This
  revenue is forecast to fall from current levels commencing in FY2014 as a result of a
  reduction in the rate of interest being earned on shareholder loans upon their impending
  renegotiation. In addition, dividends from Unitywater are expected to reduce because of the
  revised treatment of contributed assets within the context of full cost pricing.
 QTC has included an amount for diseconomies of scale within materials and services. It is
  calculated at 2.5 per cent of the base materials and services costs for each forecast year.
 QTC has included additional costs for FY2015 and FY2016 in the materials and services
  line item for costs associated with the 5 to 10 per cent premium that could be incurred by
  the Remaining Council for the temporary extension of existing waste collection contracts.




De-amalgamation Analysis of Sunshine Coast Regional Council                                 Page 30