DIRECTORS’ REPORT CONT. OPERATING AND FINANCIAL REVIEW (CONTINUED) 1. Review (continued) The table below shows the underlying performance measures of the Group based on EBITDA. The table reports:  1. EBITDA per the statutory accounts (refer page 11 for definition). 2. EBITDA per the statutory accounts adjusted for the market value changes from the table above. 3. A measure called Cash EBITDA. This is a measure of the cashflow from operations that AACo’s businesses create by removing the impact  of the Cattle Fair Value Adjustments which are non-cash items. This measure is intended to demonstrate underlying cash performance  from operations. 12 Australian Agricultural Company Limited The table below shows the main elements of Cattle fair value adjustments: (1)   Biological transformation in accordance with Australian Accounting Standard AASB 141 Agriculture, includes reclassification of an animal as it moves from being a branded calf  and progresses through the various stages to become either a trading animal (grass and then feedlot in some cases) and then as it ages. All these changes occur and are measured  before the ultimate sale (cash realisation). 3 months to  31 Mar 2013  $’000 3 months to  31 Mar 2012  $’000 Biological transformation  (1) 1,116 8,952 Market value changes (43,179) (6,002) Natural increase 7,897 12,974 Attrition (3,448) (3,433) Other (52) (39) (37,666)  12,452 -80000 -60000 -40000 -20000 0 20000 40000 60000 Dec-12 Mar-12 Mar-13 EBITDA EBITDA Cash EBITDA adj for Market Value change $ ‘000’s