2013 Annual General Meeting 23 October 2013 Important Notice p - - PDF document

2013 Annual General Meeting

23 October 2013

Important Notice p

Forward looking statements This presentation contains forward looking statements, including statements of current intention, statements of opinion and predictions as to possible future events S uch statements are not statements of fact and there can be no certainty of outcome in predictions as to possible future events. S uch statements are not statements of fact and there can be no certainty of outcome in relation to the matters to which the stat ements relate. These forward looking stat ements involve known and unknown risks, uncertainties, assumptions and other important factors that could cause the actual outcomes to be materially different from the events or results expressed or implied by such statements. Those risks, uncertainties, assumptions and other important factors are not all within the control of Origin and cannot be predicted by Origin and include changes in circumstances or events that may cause

• bj ectives to change as well as risks, circumstances and events specific to the industry, countries and markets in which Origin and its

l d b di j i d i d d ki Th l i l d l i di i related bodies corporate, j oint ventures and associated undertakings operate. They also include general economic conditions, exchange rates, interest rates, the regulatory environment, competitive pressures, selling price, market demand and conditions in the financial markets which may cause obj ectives to change or may cause outcomes not to be realised. None of Origin Energy Limited or any of its respective subsidiaries, affiliates and associated companies (or any of their respective

• fficers, employees or agents) (the Relevant Persons) makes any representation, assurance or guarantee as to the accuracy or

lik lih d f f lfil t f f d l ki t t t t d i li d i f d l ki t t t Th likelihood of fulfilment of any forward looking statement or any outcomes expressed or implied in any forward looking statements. The forward looking statements in this presentation reflect views held only at the date of this presentation. S tatements about past performance are not necessarily indicative of future performance. Except as required by applicable law or the AS X Listing Rules, the Relevant Persons disclaim any obligation or undertaking to publicly update any forward looking statements, whether as a result of new information or future events. p y g No offer of securities This presentation does not constitute investment advice, or an inducement or recommendation to acquire or dispose of any securities in Origin, in any j urisdiction. 2 |

The Board

Ralph J Norris KNZM I d d t N ti Di t Independent Non-executive Director

3 |

The Board

Karen A Moses E ti Di t Fi d S t t Executive Director, Finance and S trategy

4 |

The Board

Bruce G Beeren N ti Di t Non-executive Director

5 |

The Board

Bruce Morgan I d d t N ti Di t Independent Non-executive Director

6 |

The Board

Grant A King M i Di t Managing Director

7 |

Company S ecretary

Andrew C Clarke G G l C l d C Group General Counsel and Company S ecretary

8 |

The Board

Gordon M Cairns I d d t N ti Di t Independent Non-executive Director

9 |

The Board

Helen M Nugent AO I d d t N ti Di t Independent Non-executive Director

10 |

The Board

John H Akehurst I d d t N ti Di t Independent Non-executive Director

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2013 Annual General Meeting

23 October 2013

12 |

Chairman’s Address

13 |

Outline

• 1. Overview - 2013 financial year
• 2. Policy environment
• 3. Reflecting on Origin’s growth
• 3. Reflecting on Origin s growth
• 4. Board and management
• 5. Conclusion

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• 1. Overview – 2013 financial year

15 |

2013 financial results

($ million) June 13 June 12 Change Statutory Profit 378 980 (61% ) Statutory Profit 378 980 (61% ) S tatutory EPS 34.6 cps 90.6 cps (62% ) Revenue 14,619 12,935 13% Underlying Profit* 760 893 (15% ) Underlying EPS * 69.5 cps 82.6 cps (16% ) Group OCAT* 1 142 1 781 (36% ) Group OCAT 1,142 1,781 (36% ) Free cash flow* 1,188 1,415 (16% ) Free cash flow per share* 108.2 cps 129.9 cps (17% ) Capital Expenditure1 1,172 1,680 (30% ) Origin’s cash contributions to APLNG2 561 1,167 (52% ) Origin Undrawn Committed Debt Facilities and cash3 5 251 4 191 25% Origin Undrawn Committed Debt Facilities and cash 5,251 4,191 25%

1) Capital expenditure is based on cash flow amounts rather than accrual accounting amounts; includes growth and stay-in-business capital expenditure, capitalised interest, acquisition expenditure 2) Origin’s cash contributions to APLNG made partially via loan repayments. 2) Origin s cash contributions to APLNG made partially via loan repayments. 3) Excluding Contact and bank guarantees. * Refer Glossary 16 |

Origin entered into a new $7.4 billion bank loan facility to refinance all existing unsecured bank debt on new to refinance all existing unsecured bank debt on new terms and pricing and extend its debt maturity profile …

4,000 4,500

Origin Debt & Bank Guarantee Pro-forma Maturity Profile as at 30 September 2013^

Loan & Bank Guarantees - Undrawn

Recent financing activity:

• $7.4b Syndicated bank loan

l $1 2b b i ti

2 000 2,500 3,000 3,500 $ million

Loans & Bank Guarantees - Drawn Hybrids, US and EUR PP, 144A & medium term notes

plus $1.2b oversubscriptions

• $2.0b of $7.4b bank loan

refinanced via US$800m and

500 1,000 1,500 2,000 A$

refinanced via US$800m and €800m note issuances

FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 FY2023+

^Origin debt maturity profile as at 30 S eptember 2013 adj usted for: (1) $1.2b bank oversubscriptions; (2) US $800m and Euro 800m notes issuances and cancellation of the $2b Capital Market Tranche; (3) Excludes NZ$200m Preference S hares.

… Origin is fully funded for its investment in Australia Pacific LNG

17 |

S

• cial changes and environmental challenges in our

sector require improved disclosure sector require improved disclosure ... ... Origin’s S ustainability Report demonstrates greater focus and transparency on this critical aspect of our business

18 |

Public debate about coal seam gas has been clouded by misinformation clouded by misinformation ... ... and Origin continues to take a leadership position on CS G

19 |

Origin is focused on fair representation and equitable treatment of women through all levels of our treatment of women through all levels of our workforce ...

27% 40% 27% 40%

WOMEN IN THE WOMEN IN

22%

WORKPLACE PROFESSIONAL AND MANAGEMENT ROLES

22%

WOMEN ON THE BOARD

11% 90% 11%

WOMEN IN EXECUTIVE MANAGEMENT TEAM

90%

WOMEN STILL IN ROLES 1 YEAR AFTER MATERNITY

... which will help Origin be a more successful organisation

MANAGEMENT TEAM LEAVE

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• 2. Policy environment

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Australia must develop a comprehensive policy framework framework ... ... which will allow the nation to capitalise on its resources position and capture growing market opportunities

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Australia has the potential to create significant benefits through natural gas development benefits through natural gas development ... ... however, policy must promote investment in exploration and supply to meet demand

23 |

Australia needs the appropriate climate change policy settings settings... ...without locking the nation into considerably higher future electricity costs

24 |

Origin has long advocated for energy price deregulation as it promotes competition investment and as it promotes competition, investment and innovation ... ... which is in the long-term interest of both consumers and the broader energy market

25 |

• 3. Reflecting on Origin’s growth

26 |

S ince demerger from Boral in 2000, Origin has built the leading Australian integrated energy company the leading Australian integrated energy company ...

The largest integrated energy business in Australia and Joint developer

• f Australia

Pacific LNG’s t t i CSG t Growing resource

• pportunities

d ti ll in Australia and New Zealand two train CSG to LNG project domestically and overseas

based on Australia’s largest customer base the largest ... based on Australia s largest customer base, the largest power generation portfolio and a strong upstream gas business

27 |

The development and growth of the Company ... ... has been captured in our Annual Reports since Origin’s demerger from Boral

28 |

Throughout Origin’s history, the Board and management team have been united in our vision for the Company team have been united in our vision for the Company... ...which has become one of the hallmarks of Origin’s success

29 |

Origin drilled its first CS G exploration well in 1993 ... ... and began acquiring maj or CS G assets in Queensland in 1996/ 97

30 |

• 4. Board and management

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• 5. Conclusion

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During the past year, Board and management worked to ensure the relevant issues in Origin are being to ensure the relevant issues in Origin are being addressed ... ... and your Company is well-placed to continue to deliver increasing value for shareholders

33 |

Chairman’s Address

34 |

Managing Director’s Address

35 |

Outline

• 1. S

afety

• 2. Underlying business performance
• 3. Trading update and future prospects
• 3. Trading update and future prospects
• 4. Conclusion

36 |

S afety performance improved by 15% …

10 0

TRIFR1

Employee / Contractor hours

3500000

All

6 0 7.0 8.0 9.0 10.0

6.7

2000000 2500000 3000000 3500000

All hours

2 0 3.0 4.0 5.0 6.0 500000 1000000 1500000 2000000 0.0 1.0 2.0 500000 pr-12 un-12 ug-12 ct-12 ec-12 eb-13 pr-13 un-13 ug-13

11 Life Saving Rules

Ap Ju Au Oc De Fe Ap Ju Au

ith 11 Lif S i R l i t d d t d i f th …with 11 Life S aving Rules introduced to drive further improvements towards our obj ective of zero harm

(1) Tot al Recordable Inj ury Frequency Rat e. 37 |

• 2. Underlying business performance

38 |

Origin continues to focus on four key priorities

Improving the performance of our existing businesses

• Removal of controls on retail pricing reduces risk and improves earnings potential
• S

tabilising competitive environment reduces churn and improves longer term outlook for margin

• Implementation of retail systems improves operating effectiveness and competitive capability
• Investments to improve availability and capacity of upstream assets and additional gas contracting

will provide benefits

• Completion of Contact’s investment in lower cost and flexible generation reduces exposure to
• Completion of Contact s investment in lower cost and flexible generation reduces exposure to

hydrology and improves reliability of earnings

• Reduction in employee numbers, business restructuring and asset sales reduce costs base

Delivering the Australia Pacific LNG Project Managing the funding of our investment in Australia Pacific LNG Delivering the Australia Pacific LNG Project

• Proj ect on track with delivery of first LNG targeted in mid 2015

g g g

• Origin entered into a new $7.4 billion bank loan facility and accepted oversubscriptions of $1.2

billion to refinance all existing unsecured bank debt on new terms and pricing and extend debt maturity profile

• $2.0 billion of the bank loan facility was refinanced via US

$800 million and Euro800 million notes $2.0 billion of the bank loan facility was refinanced via US $800 million and Euro800 million notes issuances

• Origin is fully funded for its investment in Australia Pacific LNG

Creating growth opportunities for the future

39 |

Creating growth opportunities for the future

• Existing opportunities being progressed to be FID-ready to provide medium term growth

following completion of Australia Pacific LNG

Underlying Profit 1 of $760m was a 15% reduction

• n the prior year
• n the prior year …

1,000

Underlying Profit2

CAGR 19%3

700 800 900

CAGR 19%

400 500 600 million 200 300 400 $ 100 Financial Y ear

…however this is the second highest Underlying Profit t d i O i i ’ hi t

(1) Underlying profit is a non-IFRS measure used internally by management to assess the performance of Origin’s business, and to make decisions on allocation of resources. (2) Amounts for years 2001 to 2005 reflect previous AGAAP and have not been restated under IFRS. (3) From listing until 30 June 2013.

reported in Origin’s history

40 |

Energy market remained highly competitive with increased churn and discounting increased churn and discounting …

7

20 0)

• 48
• 23

7

• 40
• 20
• ccount s ('000
• 112
• 100
• 80
• 60

Cust omer A

• 120

H1 FY2012 H2 FY2012 H1 FY2013 H2 FY2013

… Origin achieved a considerable improvement in customer

41 |

acquisition and retention, with this trend continuing into the new financial year

Investment in new retail systems nearing completion, with all mass market customers now migrated1 with all mass market customers now migrated1 … …allowing delivery of new products and services to help g y p p build better, more direct relationships with customers

(1) Migration of Country Energy customers completed on 9 October 2013.

42 |

Origin is the leading power generator in Australia with 6 010 MW of capacity with 6,010 MW of capacity …

Eraring Power Station NSW

and recently completed the acquisition of Eraring Energy

Eraring Power Station, NSW

…and recently completed the acquisition of Eraring Energy, providing further scale and flexibility benefits

43 |

Origin has boosted its gas portfolio with recent contracts contracts …

Recent gas purchases Sources and uses of Energy Markets’

3rd party

Recent gas purchases

200 Additional volumes that can be sold

gy East Coast gas portfolio

APLNG purchases contracts

100 150 / a into the gas market if none used in generation

Mass Market / C&I pu c ases

Recent gas sales

50 100 PJ/

Mass Market / C&I Max Product ion Pot ent ial Above ToP 3rd part y cont ract s JV Part ners - Cont ract ed

S

• urces

Uses

JV Part ners Cont ract ed APLNG Purchases Equit y gas

and is positioned to benefit from a significant increase in

44 |

… and is positioned to benefit from a significant increase in east coast gas demand

Recent investments in Contact’s generation portfolio will improve flexibility and lower generation costs will improve flexibility and lower generation costs …

Stratford Peaker Te Mihi geothermal Power Station

45 |

…resulting in more reliable earnings

Investments in Exploration & Production assets improves reliability and increases production capacity … reliability and increases production capacity …

BassGas

combined with a flexible gas portfolio will enable

Otway

46 |

… combined with a flexible gas portfolio will enable

increased supply into a growing east coast gas market

Australia Pacific LNG is on budget and on schedule to deliver first LNG by mid-2015 to deliver first LNG by mid-2015 … creating a step change in Origin’s earnings and cash

47 |

…creating a step change in Origin s earnings and cash flows which will support future growth

Maj or Upstream and Downstream milestones continue to be met to be met

Upstream

Cable installation in Combabula Inlet risers at gas processing facility Gathering works in Condabri

Downstream

48 | LNG Tank B –roof raised on 29 July Bat am Module Yard –Propane Condensat e Module Curt is Island

Australia Pacific LNG’s industry-leading 2P reserves base includes prime acreage in both known “ sweet spots” … includes prime acreage in both known sweet spots …

Australia Pacific LNG Reserves and Resources (100% ) Australia Pacific LNG permits

PJ

15 000 20,000

( )

10,000 15,000

• 5,000

3P 2P

Ramp and Tail Gas Train 2 Train 1

Estimated Requirements

… more than covers gas requirements for all domestic

QCLNG GS A Domestic Gas Origin Contract Ramp and Tail Gas Train 2 Train 1

APLNG tenure in the Surat and Bowen basins at 30 June 2012

49 |

(1) Some of Australia Pacific LNG’s CSG reserves and resources are subject to reversionary rights to transfer back to Tri-Star a 45% interest in APLNG’s share of those CSG interests that were acquired from Tri-Star in 2002 if certain conditions are met.

contracts and offtakes for both LNG trains

Origin entered into a new $7.4 billion bank loan facility to refinance all existing unsecured bank debt on new to refinance all existing unsecured bank debt on new terms and pricing and extend its debt maturity profile …

4,000 4,500

Origin Debt & Bank Guarantee Pro-forma Maturity Profile as at 30 September 2013^

Loan & Bank Guarantees - Undrawn

Recent financing activity:

• $7.4b S

yndicated bank loan l $1 2b b i ti

2 000 2,500 3,000 3,500 million

Loans & Bank Guarantees - Drawn Hybrids, US and EUR PP, 144A & medium term notes

plus $1.2b oversubscriptions

• $2.0b of $7.4b bank loan

refinanced via US $800m and

500 1,000 1,500 2,000 A$

refinanced via US $800m and €800m note issuances

FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 FY2023+

^Origin debt maturity profile as at 30 S eptember 2013 adj usted for: (1) $1.2b bank oversubscriptions; (2) US $800m and Euro 800m notes issuances and cancellation of the $2b Capital Market Tranche; (3) Excludes NZ$200m Preference S hares.

…Origin is fully funded for its investment in Australia Pacific LNG

50 |

Capital expenditure in Origin’s existing businesses has reduced significantly has reduced significantly …

Growth and Acquisition Capex

5 000 4,000 5,000

Acquisition APLNG Corporate Contact

3,000 n

Contact Exploration & Production Energy Markets

000 2,000 $ million 1,000

• 1,000

2011 2012 2013 Financial Y ear

…as these businesses have matured, making cash flow available to fund other activities

51 |

Progressing existing development opportunities …

Existing development opportunities Origin continues to prepare existing gas and renewable energy development opportunities for FID to be taken in the medium term: Gas opportunities such as Ironbark in Queensland

• Gas opportunities such as Ironbark in Queensland

and Halladale/ Black Watch in the Otway Basin

• S

tockyard Hill, a large scale wind proj ect in western Victoria Exploration activities

• Origin will continue exploration activities to

increase its gas resource position, including by g p , g y participation in proj ects such as the planned well to be drilled in Canterbury Basin, New Zealand Future renewable opportunities

• Controlled spend will continue to grow Origin’s

position in hydro and geothermal resources

52 |

… to provide medium-term growth following completion

• f Australia Pacific LNG

• 3. Trading update and future prospects

53 |

Trading update

54 |

Managing Director’s Address

55 |

Formal Business

56 |

1 Fi i l R t

• 1. Financial Report

57 |

Resolutions 2 and 3: Resolutions 2 and 3:

Election and Re-election of Directors

58 |

l Resolution 2:

Election of Mr Bruce W D Morgan

59 |

Resolution 2: Election of Mr Bruce W D Morgan Election of Mr Bruce W D Morgan Bruce W D Morgan Independent Non-executive Director

60 |

Resolution 2: Election of Mr Bruce W D Morgan Election of Mr Bruce W D Morgan

Proxy votes received: For 563,396,047 Against 6,292,963 Open 14 825 114 Open 14,825,114 Abstain 1,536,426

61 |

Resolution 3: Resolution 3:

Re-election of Mr Gordon M Cairns

62 |

Resolution 3: Re-election of Mr Gordon M Cairns Re election of Mr Gordon M Cairns Gordon M Cairns Independent Non-Executive Director

63 |

Resolution 3: Re-election of Mr Gordon M Cairns Re election of Mr Gordon M Cairns

Proxy votes received: For 563,269,049 Against 6,548,213 Open 14 814 108 Open 14,814,108 Abstain 1,419,180

64 |

Resolution 4:

Remuneration Report

65 |

Resolution 4: Remuneration Report Remuneration Report

Proxy votes received: For 549,406,740 Against 28,920,305 Open 4 648 941 Open 4,648,941 Abstain 2,747,206

66 |

SPECIAL BUSINESS Resolution 5:

Renewal of proportional takeover provisions

67 |

Resolution 5: Renewal of proportional takeover provisions Renewal of proportional takeover provisions

Proxy votes received: For 563,676,500 Against 3,949,490 Open 14 968 421 Open 14,968,421 Abstain 3,456,139

68 |

2013 Annual General Meeting

23 October 2013

69 |

Important Notice

Fi i l i f ti Financial information Origin’ s S tatutory Profit contains a number of items that when excluded provide a different perspective on the financial and operational performance of the business. Income S tatement amounts presented on an underlying basis such as Underlying Consolidated Profit, are non- IFRS financial measures, and exclude the impact of these items consistent with the manner in which the Managing Director reviews the financial and operating performance of the business. Each underlying measure disclosed has been adj usted to remove the impact of these p g p y g j p items on a consistent basis. This presentation also includes certain other non-IFRS financial measures. These non-IFRS financial measures are used internally by management to assess the performance of Origin’ s business and make decisions on allocation of resources. Non-IFRS measures have not been subj ect to audit or review. Non-IFRS Financial Measures Non-IFRS Financial measures are financial measures that are presented other than in accordance with all relevant Accounting S tandards.

Term Meaning Term Meaning

Free cash flow Cash available to fund distributions to shareholders and growth capital expenditure. Free cash flow per share Free cash flow divided by the closing number of shares on issue. Group OCAT Group Operating cash flow after tax (OCAT) of the consolidated entity (including Origin’ s share of Australia Pacific LNG OCAT). Underlying measures are measures used internally by management to assess the profitabilit y of the Origin business. Underlying profit and loss measures:

• EPS
• Profit

y g y y g p y g The Underlying profit and loss measures are derived from the equivalent S tatutory profit measures disclosed in the Consolidated Financial S tatements and exclude the impact of certain items that do not align with the manner in which the Managing Director reviews the financial and operating performance of the business. Underlying Consolidated Profit is disclosed in note 2 of the Origin Consolidated Financial S

• tatements. Underlying EPS

is disclosed in note 32 of the Origin Consolidated Financial S tatements.

70 |