The Cost of Capital Report

As at 31 December 2010

Welcome to our Cost of Capital Report for the December 2010 quarter This document supplements our full analysis of the cost of capital in New Zealand, which can be found on our website pwc.co.nz

The Cost of Capital Report

As at December 31 2010
Input Assumptions: Market Risk Premium Risk Free Rate Of Return 7.5% 5.3% Marginal Tax Rate On Debt Investor Tax Rate On Equity 30.0% 30.0%

Company PGG Wrightson Limited Sanford Limited Seeka Kiwifruit Industries Limited Turners & Growers Limited

NZSE Code PGW SAN SEK TUR

EBIT NPAT Multiple Multiple 14.0 13.0 27.4 12.5 16.7 17.0 -7.2 20.5

Equity Beta 0.87 0.39 0.78 0.58

D/(D+E) Ratio 61% 22% 61% 27%

WACC 8.3% 6.3% 7.6% 7.4% 7.6%

Agriculture & Fishing

Building Materials & Construction

Fletcher Building Limited Nuplex Industries Limited Steel & Tube Holdings Limited

FBU NPX STU

59.5 7.9 13.9

17.7 8.8 32.7

1.42 1.72 1.07

26% 18% 17%

12.1% 14.7% 10.8% 12.4%

Consumer

Briscoe Group Limited Hallenstein Glasson Holdings Limited Kirkcaldie & Stains Limited Michael Hill International Limited Postie Plus Group Limited Pumpkin Patch Limited Restaurant Brands New Zealand Limited Smiths City Group Limited The Colonial Motor Company Limited The Warehouse Group Limited Turners Auctions Limited Wakefield Health Limited

BGR HLG KRK MHI PPG PPL RBD SCY CMO WHS TUA WFD

9.2 8.3 17.7 10.7 11.6 8.6 9.5 14.0 11.3 10.1 8.7 9.7

13.6 12.5 -13.3 12.7 27.0 11.0 13.2 10.0 -54.1 18.6 11.5 13.1

0.97 0.82 0.45 1.01 0.69 1.29 0.47 2.26 0.42 0.44 0.71 0.35

0% 0% 33% 13% 43% 19% 7% 87% 28% 15% 30% 14%

10.9% 9.9% 6.8% 10.5% 8.0% 12.0% 7.1% 9.4% 6.6% 6.7% 8.3% 6.3% 8.5%

Energy Processing

Contact Energy Limited Horizon Energy Distribution Limited Infratil Limited The New Zealand Refining Company Limited TrustPower Limited Vector Limited

CEN HED IFT NZR TPW VCT

19.6 11.9 15.2 35.4 13.6 11.8

27.0 15.2 21.3 51.6 19.4 11.1

1.01 0.39 1.21 0.61 0.64 0.66

27% 23% 51% 13% 24% 55%

9.5% 6.4% 9.5% 7.9% 7.7% 6.9% 8.4%

Company Delegats Group Limited Goodman Fielder Limited

NZSE Code DGL GFF

EBIT NPAT Multiple Multiple 43.0 10.7 -16.8 15.2

Equity Beta 0.72 0.99

D/(D+E) Ratio 38% 29%

WACC 7.8% 9.3% 9.2%

Food & Beverages

Forestry & Forest Products Intermediate & Durables

Tenon Limited

TEN

20.3

29.5

0.71

27%

8.3% 8.3%

Ebos Group Limited Fisher & Paykel Appliances Holdings Limited Fisher & Paykel Healthcare Corporation Limited Methven Limited Rakon Limited Scott Technology Limited Skellerup Holdings Limited

EBO FPA FPH MVN RAK SCT SKL

10.7 -32.2 15.1 11.4 -69.9 8.6 12.4

16.2 -7.2 22.6 14.6 -29.6 15.6 19.1

0.68 1.86 0.58 1.09 1.59 1.27 0.93

15% 66% 5% 16% 5% 13% 15%

8.3% 10.1% 7.9% 11.0% 15.1% 12.4% 9.9% 9.3%

Investment

Hellaby Holdings Limited Rubicon Limited Sealegs Corporation Limited

HBY RBC SLG

11.1 497.0 41.6

17.7 -134.1 48.8

1.19 0.53 2.35

34% 9% 3%

10.7% 7.4% 20.9% 8.9%

Leisure & Tourism

Millennium & Copthorne Hotels New Zealand Limited SKYCITY Entertainment Group Limited Tourism Holdings Limited

MCK SKC THL

14.0 11.0 11.3

18.1 23.2 15.0

0.42 1.27 1.73

18% 27% 41%

6.6% 11.6% 12.7% 11.1%

Media & Telecommunications

Sky Network Television Limited Telecom Corporation of New Zealand Limited TeamTalk Limited

SKT TEL TTK

14.5 9.3 10.5

19.6 10.9 12.2

1.02 1.03 0.46

22% 40% 35%

10.0% 8.8% 6.7% 9.1%

Mining

New Zealand Oil and Gas Limited

NZO

46.1

519.8

0.61

17%

7.8% 7.8%

Ports

Auckland International Airport Limited Lyttelton Port Company Limited Northland Port Corporation (NZ) Limited Port of Tauranga Limited South Port New Zealand Limited

AIA LPC NTH POT SPN

17.4 16.9 21.6 15.8 8.7

100.7 25.5 -89.8 33.5 22.6

0.96 0.39 0.32 0.73 0.55

28% 23% 0% 18% 4%

9.1% 6.4% 6.1% 8.4% 7.7% 8.8%

Company AMP NZ Office Trust CDL Investments New Zealand Limited Vital Healthcare Property Trust Argosy Property Trust Kiwi Income Property Trust Goodman Property Trust The National Property Trust Property for Industry Limited

NZSE Code ANO CDI VHP ARG KIP GMT NAP PFI

EBIT NPAT Multiple Multiple -37.4 40.3 12.8 -28.9 35.4 43.9 62.1 -872.2 -5.1 58.0 41.0 -7.6 -78.2 -124.0 -6.4 -19.7

Equity Beta 0.46 0.53 0.40 0.63 0.57 0.60 0.61 0.45

D/(D+E) Ratio 27% 0% 25% 50% 47% 40% 35% 34%

WACC 6.6% 7.6% 6.4% 6.8% 6.6% 7.0% 7.5% 6.5% 6.7%

Property

Finance & Other Services

Abano Healthcare Group Limited Metlifecare Limited Ryman Healthcare Limited NZX Limited Pyne Gould Corporation Limited

ABA MET RYM NZX PGC

1.6 14.4 21.2 4.9 11.0

1.3 4.2 14.6 4.8 17.2

0.97 1.16 1.17 1.07 1.27

23% 74% 42% 12% 76%

9.9% 7.4% 9.6% 11.0% 7.5% 8.6%

Textiles & Apparel

Cavalier Corporation Limited

CAV

10.9

18.4

1.45

21%

12.9% 12.9%

Transport

Air New Zealand Limited Mainfreight Limited Freightways Limited

AIR MFT FRE

19.2 15.5 12.3

19.8 19.5 21.0

1.55 1.27 0.91

56% 14% 27%

10.0% 12.2% 9.3% 10.3%

Overseas

Guinness Peat Group PLC GuocoLeisure Limited

GPG GLL

55.1 14.7

-29.9 15.1

1.36 1.30

48% 37%

10.6% 10.5% 10.6%

Market Weighted Average

8.8%

For further information

Auckland
Private Bag 92162 Ph 09 355 8000 Fax 09 355 8001 David Bridgman david.bridgman@nz.pwc.com Eric Lucas eric.lucas@nz.pwc.com Justin Liddell justin.g.liddell@nz.pwc.com Richard Souter richard.souter@nz.pwc.com

Wellington

P O Box 243 Ph 04 462 7000 Fax 04 462 7001 Bruce Wattie bruce.wattie@nz.pwc.com John Redmayne john.redmayne@nz.pwc.com

Christchurch
P O Box 13244 Ph 03 374 3000 Fax 03 374 3001

Craig Armitage craig.armitage@nz.pwc.com

Disclaimer: The Cost of Capital Report is intended as an overview of WACC as at 31 December 2010. Readers are advised that before acting on any matter arising in this report, they should consult PricewaterhouseCoopers Corporate Finance. 2011 PwC New Zealand. All rights reserved. PwC refers to PricewaterhouseCoopers New Zealand or, as the context requires, the PricewaterhouseCoopers global network or other member firms of the network, each of which is a separate and independent legal entity.