Eskom Annual Report 2007 - Statements of changes in equity

Group five-year review

	Unit	2007 (12 months)	2006 (12 months)	2005¹ (15 months)	2003 (12 months)	2002 (12 months)

FUNDING AND RESOURCES
Key financial figures
Total assets	Rm	143 754	128 286	110 027	99 499	82 482
Total equity	Rm	56 809	50 371	46 947	42 841	37 717
Total equity and liabilities	Rm	143 754	128 286	110 027	99 499	82 482
Revenue	Rm	40 068	36 052	43 207	32 948	29 684
Net fair value gain on embedded derivatives	Rm	4 275	1 318	72	–	–
Net fair value loss on other derivatives	Rm	(613)	(182)	(171)	(283)	(118)
Finance income	Rm	2 748	2 783	3 936	4 024	2 506
Finance cost	Rm	(4 296)	(4 521)	(5 447)	(5 328)	(5 281)
Profit before tax	Rm	9 458	6 647	7 686	5 276	5 454
Income tax expense	Rm	(2 504)	(2 122)	(2 313)	(1 859)	(1 727)
Profit for the year	Rm	6 454	4 641	5 411	3 417	3 727
Cash generated from operations	Rm	14 804	13 292	15 515	13 535	12 911
Net cash from operating activities	Rm	13 281	12 346	15 302	13 451	12 859
Net cash used in investing activities	Rm	(14 104)	(9 003)	(5 345)	(3 311)	(2 191)
Net cash from/(used in) financing activities	Rm	1 128	(1 368)	(8 873)	(11 915)	(8 125)
Financial ratios
Earnings protection (profitability indicators)
Return on total assets	%	7,80	9,06	12,74	9,97	13,07
Return on average equity	%	12,04	9,54	12,05	8,48	10,37
Total operating expenditure/revenue	%	70,52	67,15	65,26	64,84	60,24
Net pre-tax interest coverage	ratio	3,68	2,82	2,69	2,17	2,23
EBITDA interest coverage	ratio	4,13	4,00	4,16	3,48	3,22
Liquidity	ratio	1,49	1,28	1,57	1,12	1,27
Solvency	ratio	1,65	1,65	1,74	1,76	1,84
Cash flow protection (cash flow adequacy indicators)
Funds from operations/average total debt	%	29,85	32,05	46,81	43,43	44,96
Funds from operations/capex	%	94,16	137,13	286,29	406,25	586,90
Funds from operations/net interest coverage	%	7,71	6,77	9,70	9,96	4,57
Capital structure
Debt:equity	ratio	0,09	0,01	–	0,08	0,24
Debt:equity (including long-term provisions)	ratio	0,30	0,22	0,17	0,29	0,46
Interest cover	ratio	3,38	3,76	5,50	4,30	2,88
Credit ratings
Standard and Poor’s
– Foreign currency	rating	BBB+/Stable	BBB+/Stable	BBB/Stable	BBB/Stable	BBB-/Positive
– Local currency	rating	A-/Stable	A-/Stable	A-/Stable	A-/Positive	A-/Stable
Moody’s
– Foreign currency	rating	A2/Stable	A2/Stable	Baa1/Stable	Baa1/Stable	Baa1/Stable
– Local currency	rating	A1/Stable	A1/Stable	A3/Stable	A3/Stable	A3/Stable
FitchRatings
– Foreign currency	rating	–	–	–	–	–
– Local currency	rating	A/Stable	A/Stable	A-/Stable	A-/Stable	BBB+/Stable
Other
Average selling price of electricity²	cents per kWh	18,06³	17,01³	16,04³	16,05³	14,98³
Average total cost of electricity sold	cents per kWh	16,09³	14,25³	14,25³	13,61³	12,48³
Employees	number	32 674	31 458	31 475	31 972	32 357
Value created per employee	R000	781	679	808	578	570
Productivity improvement/(decline) for electricity business	%	1,90³	(2,10)³	1,80³	2,50³	1,60³
Employment equity	%	63,00³	60,10³	57,90³	56,30³	54,60³
Gender equity	%	33,30³	31,80³	28,90³	27,80³	24,50³
People with disabilities	%	2,80³	2,50³	2,00³	1,40³	0,16³
Training cost	Rm	748³	543³	518³	505³	494³
Eskom bursars	number	5 136³	2 163³	1 568³	1 850³	2 010³
CONTINUITY OF SUPPLY
Total electricity sold	GWh	218 120	207 921	256 959	196 980	187 957
Coal burnt in power stations	Mt	119,11	112,10	136,40	104,40	96,50
Energy availability factor	%	87,50	87,40	89,50	87,50	89,30
Peak demand on integrated system	MW	34 807	33 461	34 195	31 928	31 621
Peak demand on integrated system including load reductions	MW	35 312	33 461	34 195	31 928	31 621
Unplanned automatic grid separations	trips per unit	1,76	1,55	1,33	1,78	1,30
Demand-side management savings	MW	169,80	72,30	85,40	0,50	–
Specific water consumption by power stations⁴	L/kWh sent out	1,35	1,32	1,27	1,29	1,27
Relative particulate emissions	kg/MWh sent out	0,20	0,21	0,26	0,28	0,29
Carbon dioxide emissions⁵	Mt	208,90	203,70	247,00	190,10	175,20
Radiation release	millisieverts	0,0034	0,0049	0,0079	0,0123	0,0060
Lost time incidence rate	index	0,35	0,40	0,45 6	0,37	0,45
Employee fatalities	number	8	10	19	5	11
Contractor fatalities	number	18	13	17	6	4
Public fatalities	number	41	34	40	27 3	41 3
CAPACITY EXPANSION
Generation capacity installed and commissioned	MW	1 360	190	–	–	–
Transmission lines installed	km	430	237	397	262	(107)
Transmission transformer capacity installed	MVA	1 000	1 090	5 280	–	165
Distribution lines installed	km	6 393	5 656	10 537	10 998	8 778
Distribution transformer capacity installed	MVA	2 967	1 866	2 249	2 304	943
DEVELOPMENTAL INITIATIVES
Black economic empowerment	Rm	16 557	11 681	10 334³	6 861³	4 891³
Electrification	number of homes connected	152 125	135 903	222 314	175 396	211 628
Corporate social investment	Rm	74,70	83,60¹¹	159,80	158,60	64,90¹⁰

Definitions of ratios

•	Return on total assets: net operating profit⁷ expressed as a percentage of total assets.⁸
•	Return on average equity: profit for the year divided by average equity.
•	Operating expenditure/revenue: operating expenditure⁹ divided by revenue.
•	Net pre-tax interest coverage: profit before tax plus finance cost (interest and discount amortised portion) divided by finance cost (interest and discount amortised portion).
•	EBITDA interest coverage: net operating profit⁷ plus finance income, depreciation and amortisation expense, net impairment reversal/(loss), divided by finance cost (interest and discount amortised portion).
•	Liquidity: current assets divided by current liabilities.
•	Solvency: total assets divided by total liabilities.
•	Funds from operations/average total debt: cash flows from operating activities divided by the average financial instrument liabilities.
•	Funds from operations/capex: cash flows from operating activities divided by net cash used in investing activities.
•	Funds from operations/net interest coverage: cash flows from operating activities divided by net finance cost plus capitalised interest.
•	Debt: equity: net financial assets and liabilities¹² divided by total reserves¹².
•	Debt: equity including long-term provisions: net financial assets and liabilities ¹² plus non-current retirement benefit obligations and provisions, divided by total reserves.
	Interest cover: net operating profit⁷ divided by net finance cost plus net fair value loss on other derivatives.
•	Value created per employee: value created divided by number of employees as per value added statement.
•	Average total cost of electricity sold: the sum of operating expenditure⁹, net fair value loss on other derivatives, depreciation and amortisation expense, net impairment reversal/(loss) and net finance cost divided by GWh sold.


1.	Represents, unless indicated otherwise, the 15-month period from1 January 2004 to31 March 2005.
2.	Average price of electricity sold based on total sales.
3.	Represents Eskom Holdings information only.
4.	Volume of water consumed per unit of generated power sent out, excluding rain and mine water used.
5.	Calculated figures based on coal characteristics and the power station design parameters.
6.	Calculated for the period1 April 2004to31 March 2005.
7.	Operating profit before net finance cost excluding net fair value adjustments on embedded and other derivatives.
8.	Total assets are reduced by financial instrument assets and derivative financial assets since Eskom's funding is managed in a single pool of financial market assets and liabilities.
9.	Operating expenditure comprises primary energy, employee benefit expense, other operating expenses and other income.
10.	Expenditure by the Eskom Development Foundation only.
11.	Amounts spent on the Eskom public scholarship programme reported under skills development.
12.	Excludes net effect of embedded derivatives.

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