Vector Annual Report 2020

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Non-GAAP financial information

Vector’s standard profit measure prepared under New Zealand Generally Accepted Accounting Practice (GAAP) is net profit. Vector has used non- GAAP profit measures when discussing financial performance in this document. The directors and management believe that these measures provide useful information as they are used internally to evaluate the performance of business units, to establish operational goals and to allocate resources. For a more comprehensive discussion on the use of non-GAAP profit measures, please DEFINITIONS EBITDA:

refer to the policy ‘Reporting non-GAAP profit measures’ available on our website (vector.co.nz). Non-GAAP profit measures are not prepared in accordance with New Zealand International Reporting Standards (NZ IFRS) and are not uniformly defined; therefore, the non-GAAP profit measures reported in this document may not be comparable with those that other companies report and should not be viewed in isolation from or considered as a substitute for measures reported by Vector in accordance with NZ IFRS.

Earnings before interest, taxation, depreciation, amortisation and impairments from continuing operations EBITDA from continuing operations adjusted for fair value changes, associates, third-party contributions, and significant one-off gains, losses, revenues and/or expenses.

Adjusted EBITDA:

GAAP TO NON-GAAP RECONCILIATION

YEAR ENDED 30 JUNE ($ MILLION) Group EBITDA and adjusted EBITDA from continuing operations

2020

2019

Reported net profit for the period (GAAP)

97.3

84.0

126.5

133.3

Add back: net interest costs Add back: tax (benef it)/expense

55.2

52.5

262.8

246.8

Add back: depreciation and amortisation

32.0

46.6

Add back: impairment

EBITDA

573.8

563.2

Adjusted for: Associates (share of net (prof it)/loss)

(0.3)

(0.6)

(86.4)

(79.3)

Third-party contributions

3.4

2.5

Fair value change on f inancial instruments

(0.5)

Gain on sale of Kapuni gas interests

Adjusted EBITDA

490.0

485.8

2020

2019

LESS THIRD-PARTY CONTRIBUTIONS

YEAR ENDED 30 JUNE ($ MILLION)

LESS THIRD-PARTY CONTRIBUTIONS

SEGMENT ADJUSTED EBITDA

REPORTED SEGMENT EBITDA

SEGMENT ADJUSTED EBITDA

REPORTED SEGMENT EBITDA

AND OTHER MOVEMENTS

AND OTHER MOVEMENTS

Segment adjusted EBITDA

Metering

154.8

– – –

154.8

138.7

– – –

138.7

Gas Trading

33.9

33.9

31.3

31.3

Unregulated segments

188.7

188.7

170.0

170.0

Regulated segment

423.3

(85.7)

337.6

446.0

(79.0)

367.0

TOTAL REPORTED SEGMENTS

612.0

(85.7)

526.3

616.0

(79.0)

537.0

Corporate and other

(38.2)

1.9

(36.3)

(52.8)

1.6

(51.2)

TOTAL

573.8

(83.8)

490.0

563.2

(77.4)

485.8

THE INTERPLAY OF TODAY AND TOMORROW

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