Investor Presentaiton
Cash earnings and reported net profit reconciliation.
Cash earnings 1 policy
Westpac Group uses a measure of performance referred to as cash earnings to assess financial
performance at both a Group and divisional level
This measure has been used in the Australian banking market for over 15 years and management
believes it is the most effective way to assess performance for the current period against prior periods
and to compare performance across divisions and across peer companies
To calculate cash earnings, reported net profit is adjusted for:
Material items that key decision makers at the Westpac Group believe do not reflect the Group's
operating performance
Items that are not normally considered when dividends are recommended, such as the impact of
treasury shares and economic hedging impacts
Accounting reclassifications between individual line items that do not impact reported results
profit
Reported net profit and cash earnings ($bn)
Results
1H21
Change Change
1H21-2H20 1H21-1H20
($m)
(%)
(%)
3,537
119%
256%
Cash
earnings
Cash EPS
(cents)
97.1
117%
251%
Reported net
3,443
213%
189%
Reported
EPS (cents)
94.5
210%
185%
Reported net profit and cash earnings adjustments ($m)
â– Reported profit
Cash earnings
2H20
1H21
3.6
3.6
3.4
3.5
Reported net profit
1,100
3,443
3.2
3.3
Fair value (gain)/loss on economic hedges
Ineffective hedges
581
46
(37)
48
1.6
1.2
1.1
1.0
Adjustments related to Pendal Group
Treasury shares
(32)
3
Cash earnings
1,615
3,537
1H19
2H19
1H20
2H20
1H21
1 Cash earnings is not a measure of cash flow or net profit determined on a cash accounting basis, as it includes non-cash items reflected in net profit determined in accordance with AAS (Australian Accounting Standards). The specific adjustments
outlined include both cash and non-cash items. Cash earnings is reported net profit adjusted for material items to ensure they appropriately reflect profits available to ordinary shareholders. All adjustments shown are after tax. For further details refer to
page109.
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Westpac Group 2021 Interim Results Presentation & Investor Discussion Pack
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