Public, Sponsored and In-house Financial Training

JOHANNESBURG
Project Finance Modelling

A 4-day course designed to support analysts

within an organisation’s project finance,
business development and treasury divisions
to create and analyse financial models on a
consistent and focussed basis.

¦ Revision of best practice in model structures

¦ Building the cash flow financing section of a model

¦ Calculating the cost of different types of debt capital

¦ Creation of balance sheet

¦ Use of sensitivity analysis - model structures and

advanced Excel tools

¦ Ratios and risk analysis of PPP deals

¦ Review the objectives of PPP, and the implications for

With a 1-Day extension on
model structure
Public - Private Partnerships
(PPP) Modelling

Course Director: Alan Brooke

Date: 28 February – 3 March 2011

Venue: Johannesburg, South Africa

5 easy ways to register 1. Web

www.euromoneytraining.com/AFRICA
3. Telephone
+44 (0)207 779 8543
5. By post
Euromoney Training EMEA, Nestor
or to make an enquiry 2. Email 4. Facsimile House, Playhouse Yard, London
EC4V 5EX, UK
emea@euromoneytraining.com +44 (0)207 779 8140

Agenda
course exercises
Time will not permit creation of
an entire model from scratch.
The outline of a model will be
populated with the required
factors, including basic
assumptions, input data and
calculations to calculate results.
Delegates will then build on the
model to add sensitivities,
inflation factors, financial
structures, accounting
statements, equity returns, ratios
and cover factors, and risk
assessments.
course methodology
The learning methods used are
practical, as practice of newly-
learned techniques enables a
deeper and more effective
building of skills. Each section
will be covered briefly as a
module in a traditional class
style, but the real learning
experience will be found in the
exercises within each module.
Suggested solutions to each
exercise will be provided and
discussed, and participants will
be encouraged to review their
work independently. As the time
available is limited, and the
needs of the participants will
vary, each section will not be
covered in depth, but supporting
materials will be available for
further in-depth learning
Biography
Alan Brooke MBA, CA (SA), CA
(NZ), Consultant
5 easy ways to register
or to make an enquiry
Project Finance Modelling -
Day 1
Introduction & course objectives
¦
Revision of best practice in model structures
– Best financial modelling practice
– Overall structure of the model
– Separation of inputs, calculations and outputs
– Logic flow within the model
– Use of switches to allow option selection
– Use of flags to control timing factors
– Set-up to ease flexibility
– Accommodating multiple options at early stages of project
– Use of corkscrews
– Checks and totals, and error reporting
¦ Inputs & assumptions
– Building assumptions off the term sheets
– Using the assumptions sheets as a sign-off document
– Building-in ability to change and work changes through
the model
– Restricting ranges of inputs and validation criteria
– Version control
– Tracking changes
Exercise – creating an assumptions input sheet with built-
in flexibility
¦ Revenue & cost build-ups
– Build-up of construction or other capital costs
– Correct matching of units
– Treatment of fixed and variable costs
– Use of Debt Service Reserve Accounts and Maintenance
Reserve Accounts
– Pricing assumptions
– Use of lookup functions to change expenditure timings
– Building in sensitivities
Exercise – building in flexibility for capital spend timing
changes and sensitivities
Alan trained as a Chartered Accountant at KPMG in South Africa and
New Zealand before moving into the automotive industry. He was
responsible for building and using forecasting models in both finance
and supply logistics. After a spell in financial management in Australia,
he branched into independent consultancy.
1. Web
www.euromoneytraining.com/AFRICA
2. Email
emea@euromoneytraining.com
Day 2
¦ Brief overview of modelling taxes
– Tax treatment of costs
– Allowing for deductibility and non-deductibility
– Capital allowances
– Cash versus accounting treatment
– Example - Review of an example of tax modelling for an
investment project
¦ Interest and fee calculations
– Circularity and consequences
– Calculations of interest and fees
– Timing of payments
– Cash flow payment vs amortisation in the P&L
– Capitalised fees and interest
Exercise – from a given term sheet of interest rates and
fees, model interest and fee cash flow and P&L effects
¦
Building the cashflow financing section of a model
– Cash flow driven
– Cash positive periods and interest earned
– Debt service reserve accounts
– Fees to be included in drawdown amounts
– Use of multiple facilities for different purposes
¦ Financing section
– Leverage, risk and the debt/equity equation
– Calculating the cost of different types of debt capital
– Cost of equity capital
– Use of Debt Service Reserve Accounts (DSRA)
– Use of the cash flow waterfall
– Modelling issues arising:
– Timing of debt and equity funding
– Fee costs, upfront and spread
– Interest costs, capitalised interest
– Interest rate ratchets
– Debt repayment profiles
– Rate switches or refinancings at various stages of deal
– DSRA interest margin
– Debt repayment profiles and built-in options
– Dividend and other equity returns
– Constraints on dividend payments
– Overall risk profile
Exercise: creation of simple model to reflect debt costs,
DSRA, repayment profiles, and returns to equity under
constraints.
¦ Inflation / escalation factors
– Use of indices
– Controlling start time of inflationary pattern
– Applying multiple rates to different cost & revenue items
– Varying inflation rates over life of the project
– Comparing the effect of actual inflation vs modeled
– Introduce exercise to do outside class – model multiple, variable
rates and analyse a separate set of actual rates
Exercise: from a given P&L
For the past 10 years, Alan has been based in London, working as a
freelance financial modelling and analysis expert for a range of blue-
chip clients. He has extensive financial modelling experience in many
sectors, including property, manufacturing, gas, waste, utilities, rail and
government. These have included a number of PFI transactions in the
water, health and support services sectors. This has involved building,
3. Telephone
+44 (0)207 779 8543
5. By post
Euromoney Training EMEA, Nestor
4. Facsimile
House, Playhouse Yard, London
EC4V 5EX, UK
+44 (0)207 779 8140
 Johannesburg, South Africa

Day 3 about us
Euromoney Training EMEA is a
¦ Creation of balance sheet Day 4 – Extra day division of Euromoney Institutional
Investor Plc, a leading provider of
– Link between modeled cash flow and P&L
Business-to-Business financial
¦
– Key balance sheet items and their calculation
– Non-cash items: depreciation, deferred tax
Overview of PPP information worldwide.
– Assumptions required to be made – What is PPP and how is it different? We deliver over 500 financial
– Use of existing figures or opening balance sheets – The objectives of PPP deals training courses publicly in Europe,
– Creation of check totals – The parties to a PPP deal Middle East & Africa. Please visit
– The structure of a typical PPP deal our website for the latest
– Exercise from a given P&L and cash flow statement, calculate information on these:
the balance sheet – Different forms of service delivery and / or construction
delivery: BOT, BOO, BTO, DBFO, BBMT www.euromoneytraining.com/Africa
¦ Derivation of ratios – Risk profiles of PPP deals customer service
– Examples of, and reasons for, PPP failure. Only when the nature If you would like to enquire about a
– Cash available for distribution and free cash flow
of PPP is understood, can modelling of its structure commence. course or you are not sure which
– Debt service coverage ratio training course is best for your level
¦
– Interest cover ratio of experience and current job
– Equity returns: IRR & NPV calculations
Structure & layout of models
requirements please contact our
– Best practice in calculation & presentation of ratios in the model – Review the objectives of PPP, and the implications for
customer services adviser on
model structure Tel: +44 207 779 8543
Exercise – from a given cash flow and balance sheet, – Implications for deal of fixed deal end-dates
calculate the above ratios – Tax implications and unused capital allowances customised financial
– Practical tips in building models training for you
If you cannot find the training you
¦ Comparing different updates & versions of the model ¦ Financing section require at a suitable time or place,
we can also provide you with the
– Separate runs and variation of inputs – Simple financial structures used in PPP deals: opportunity to:
– Ability to compare results – Debt finance:
– Reviewing future implications of variances – Local Currency • co-host a public course in your
– Foreign Currency country - choose the subject,
location, level and the timing
Example – creating a comparison worksheet to enable – Mezzanine
variance analysis of any two versions of a model – Equity finance: • have a course delivered in-house
– Preference Capital that is customised to the
– Convertibles requirements of your staff &
¦ Sensitivity analysis – Contingent
clients at a location of your
choice.
– Break-even calculations – IPOs/Floats at project start or at exit
– Stress-testing of model – Government finance: If you would like to discuss the
– Varying inputs to assess effect on results – Credit Guarantees possibility of co-hosting a public
– Use of goal seek – Buy-Back/Put Options course in your country or having an
in-house course delivered for your
– Use of statistical techniques – probabilities and Monte Carlo – Renationalisation Rights staff, please contact:
simulations – Leasing/Leveraged Leasing
– Version control to allow comparison of outputs – Monoline Insurers Anna Jakimova
– Comparison of actual results against forecast as a – Financing constraints: Director
sensitivity analysis Tel: +44 207 779 8085
– use of covenants
E: emea@euromoneytraining.com
– restrictive ratios
Excercise: from a given model of cash flows, P&L and – debt service cover factors
balance sheet, calculate effect of varying inputs to a given – loan cover factors
hotel booking
degree, and stress-test model to break-even. If you require assistance with
– loan to value calculations booking accommodation for one of
– Returns to equity – NPV, IRR, other measures our courses, please contact our
¦ Risk reviews logistics team on:
¦ Comparators +44 207 779 8543 or email
– Use of risk matrices – Public sector comparators (PSC) and their role emea@euromoneytraining.com
– Relationship to model and sensitivity analysis – Using comparators to assess overall deal indicating the course you will
– Probability analysis – Review of actual PSC example be attending.
– Risk-adjusted returns – equity view & lender’s view
Excercise: ¦ Wrap-up
–For a given model, calculate risk-adjusted returns from – Overall review
potential project risks; – Key points to re-iterate
–Perform a risk assessment applicable to participants’ own – Brief introduction to further exercises
projects, and model probability-weighted outcomes. – Final questions and issues to discuss

¦ Documenting the model

– Setting up base case model
– Recording changes to model structure
– Recording changes to assumptions
– User guides
– Running scenarios: descriptions, comparisons to base, version
control

developing and using models to support projects to financial close,
analysing risk, testing scenarios and forecasting results.
With an extensive accounting background, Alan brings accounting
knowledge, analytical skills and wide commercial experience to
transactions and modelling.
He is course director of the Euromoney course Financial Modelling
for PPP projects, and delivers in-house training for a range of clients
on behalf of Euromoney.

5 easy ways to register 1. Web

www.euromoneytraining.com/AFRICA
3. Telephone
+44 (0)207 779 8543
5. By post
Euromoney Training EMEA, Nestor
or to make an enquiry 2. Email 4. Facsimile House, Playhouse Yard, London
EC4V 5EX, UK
emea@euromoneytraining.com +44 (0)207 779 8140
 Public, Sponsored and In-house Financial Training

Project Finance Modelling

28 February – 3 March 2011
Johannesburg, South Africa

A four day course featuring:

¦ Revision of best practice in model structures ¦ Creation of balance sheet

¦ Building the cash flow financing section of a model ¦ Use of sensitivity analysis - model structures and advanced Excel tools
¦ Calculating the cost of different types of debt capital ¦ Ratios and risk analysis of PPP deals
¦ Review the objectives of PPP, and the implications for model structure

Course Director: Alan Brooke MBA, CA (SA), CA (NZ),Consultant

5 easy ways to register 1. Web

www.euromoneytraining.com/AFRICA
3. Telephone
+44 (0)207 779 8543
5. By post
Euromoney Training EMEA, Nestor
or to make an enquiry 2. Email 4. Facsimile
House, Playhouse Yard, London
EC4V 5EX, UK
emea@euromoneytraining.com +44 (0)207 779 8140

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