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Local Government Forecasting Model v3 LGFP CFO and Finance Managers Forum 24 July 2015

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2 Local Government Forecasting Model LGFM Features and benefits Using the LGFM to tell your Councils financial story Agenda

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Local Government Forecasting Model v3.0 Features and benefits 3

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LGFM v3 New Features Business units Bottom-up revenue & expense forecasting Improved treatment of grants More accurate interest expense More accurate depreciation Run sensitivities and scenarios Ability to normalise Different loan types are catered for Improved cash flow timings Better reporting User comments Improved notifications 4

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5 LGFM v3 Features Develop financial forecasts for up to six internal business units Calculate financial sustainability metrics for each business unit Assess the profitability of your commercialised business units Model internal transactions, including internal operating revenues and expenses, borrowings, dividends and tax equivalents. Business Units

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6 LGFM v3 Features Business units Whole of Council Revenue & Expenses Assets QTC Debt Cash Miscellaneous

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7 LGFM v3 Features Business units Allocation to business units Whole of Council Revenue & Expenses Assets QTC Debt Cash Miscellaneous Business unit 5GeneralBusiness unit 1Business unit 2Business unit 3Business unit 4

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8 LGFM v3 Features Business units operating internals Business unit 5 Operating internals Whole of Council Revenue & Expenses Assets QTC Debt Cash Miscellaneous GeneralBusiness unit 1Business unit 2Business unit 3Business unit 4

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9 LGFM v3 Features Business units internal loans General Business unit 1 Internal Loan Loan repayments + internal margin Business unit 2Business unit 3Business unit 4Business unit 5

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10 LGFM v3 Features Business units dividends General Business unit 1 Tax equivalents and dividends Business unit 2Business unit 3Business unit 4Business unit 5

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11 LGFM v3 Features Efficiently develop scenarios to Sensitise specific aspects of your business > Applying different growth factors to revenue and expense line items Quantify how a particular course of action may impact your financial sustainability Built-in Scenario Manager

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12 LGFM v3 Features Model scenarios with a high degree of flexibility, including Adding or removing a particular capex project Adding or excluding additional debt repayments Built-in Scenario Manager

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13 LGFM v3 Features Easily eliminate the impact of the revenues and expenses associated with a specific subsidy program (eg, NDRRA) Normalise results

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14 LGFM v3 Features Generate dashboard-style, visual reporting for decision makers Generate user-specific reports, including favourite ratios and metrics Create custom reports from blank templates View reports for whole-of- council and individual business units Reporting capability

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15 LGFM v3 Features Add capital expenditure events on any date to produce more accurate depreciation estimates and cash balance forecasting Assign residual values to new capital expenditure with the depreciation forecast adjusted automatically Assign work-in-progress to individual assets or projects Asset flexibility Base revaluations, for new assets, on user-defined rates according to asset class, with depreciation calculations adjusted automatically

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16 LGFM v3 Features Model debt with a greater range of loan types which closely approximate QTC debt products Improved debt forecasting Add loans at any date in the forecast period (no longer fixed at 30 June)

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17 LGFM v3 Features Forecast with more flexibility around the timing of cash flows for revenues, expenses, capital expenditure, borrowings and debt repayments More accurately estimate interest with bi-monthly cash forecasts that: reflect councils cash cycle identify minimum cash requirements and surplus cash Cash forecasting

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18 Dashboard Detailed cash forecasts

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Local Government Forecasting Model v3.0 Telling your financial story 19

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20 LGFM v3.0 Completeness check (Checklist) Accuracy check (Notifications) Interpret / analyse (Dashboard sustainability indicators) Normalise - elimination of abnormal items (eg, NDRRA) Review standard or customised reports Run sensitivities and scenarios Using LGFM to tell your financial story

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Model completeness and accuracy 21 Checklist page

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Model completeness and accuracy 22 Notifications page

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23 Interpret and analyse Dashboard

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24 Interpret and analyse Dashboard - key sustainability metrics

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25 Generate standard and custom reports Operating performance report extract

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26 Generate standard and custom reports Liquidity position report extract

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27 Sensitivities and scenarios Control Panel allows users to sensitise, normalise and control outputs Select the Base Case or Alternate Case Look at either the whole-of-council or individual BUs On the dashboard, we can print specific sections Normalise resultsSelect which BUs to view

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28 Summary Features Business units Scenario manager Normalise results Reporting capability Asset & debt improvements Enhanced cash forecasting LGFM v3 What to look for Completeness (checklist) Accuracy (notifications) Interpret and analyse (dashboard) Run standard and custom reports Sensitivities and scenarios

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29 Resources available to LGs On QTC Connect: Model User guide Quick Reference guide FAQs guide Video Tutorials One-on-one training and support LGFM v3

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Questions 30 Ross Kline, Senior Advisor T: 07 3842 4898 E: rkline@qtc.com.aurkline@qtc.com.au

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31 Disclaimer QTC has prepared this presentation for use solely for the LGFP CFO and Finance Managers Forum. The recipient shall not use the presentation for any purpose other than the purpose for which the presentation was expressly provided. The presentation contains confidential information. None of its contents may be provided or disclosed to any other party without QTCs express written consent. The information in this presentation is provided by QTC in good faith in relation to the information available at the time of its preparation and on the basis of information supplied to QTC by third parties. QTC has not independently verified the information supplied to it and accordingly does not represent that the information provided to QTC is accurate or complete and it should not be relied upon as such. QTC is under no obligation or duty to notify anyone if there is any change in any information or any new information or if it forms a different opinion at any time after the date of this presentation. Neither QTC nor any of its employees or agents accepts any liability for any loss or damage suffered by any person as a result of that person or any other person placing any reliance on, or acting on the basis of, the contents of this presentation. To the extent permitted by law, QTC expressly excludes any representation or warranty in relation to the accuracy, currency and completeness of the presentation. To the extent permitted by law, QTC limits its liability to the amount of any fees paid to QTC for this presentation. The recipient acknowledges that QTC is not a legal, tax or accounting advisor and that independent expert advice from practitioners in the relevant disciplines should be obtained on those matters before acting upon the information contained in this presentation. Queensland Treasury Corporation 2015