Investor Presentation April 2012 Agenda 1. TRUenergy overview - - PowerPoint PPT Presentation

April 2012

Investor Presentation

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Agenda

1. TRUenergy overview 2. Retail scale and quality 3. Diverse generation portfolio supported by strong fuel position 4. Strong financial position 5. Recent corporate activity

TRUenergy Overview

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 Strong industry fundamentals  One of Australia’s largest gas and electricity utilities  Vertically integrated, diversified portfolio provides earnings stability  Outstanding track record of earnings growth through disciplined acquisition and

• rganic growth

 Low cost generation portfolio is well positioned for upside through rising

wholesale prices

 Extensive pipeline of development opportunities in retail and generation  Financial strength and flexibility  Well positioned for a low carbon economy driving efficient energy use  Highly experienced management team and Board

TRUenergy Overview

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Ownership Hong Kong listed CLP Holdings Limited Total Assets A$9.3b Gross Debt A$2.4b Revenue* A$6.9b (12 months to 31 Dec 2011) EBITDAF* A$1,047m (normalised) (12 months to 31 Dec 2011) NPAT* A$355m (normalised) (12 months to 31 Dec 2011) Employees 1,285 FTE Capacity Total installed capacity under management of 5,613 MW Customers 2.8m accounts

TRUenergy has evolved to be one of Australia’s leading vertically integrated and diversified energy companies

Tallawarra Power Station (MW) Tallawarra Power Station (420MW) Hallett Power Station (203MW) Cathedral Rocks (66/33MW)

QLD Retail 63,000 accounts

Yallourn Power Station and Coal Mine (1,480MW) Ecogen Hedge (up to 966MW) Gas Storage Facility (22PJ Storage; 500TJ/d Processing)

Brisbane Melbourne Sydney Adelaide

SA Retail 0.2 million accounts QLD Retail 0.1 million accounts VIC Retail 1.2 million accounts NSW/ACT Retail 1.4 million accounts

Waterloo (111MW) 20% interest in Narrabri (500PJ) Delta West GenTrader (2,400MW))

As at 31 December 2011

Power generation

• The largest privately held supplier of generation output to the National

Electricity Market (“NEM”)

• Diversified and reliable owned and contracted fuel supplies

Retail electricity and gas

• Australia’s third largest energy retailer
• Market share of 22% across Eastern Australia

Gas processing and storage

• Owns the largest underground gas storage facility in Australia
• Long-term gas storage contracts

Company Overview Financial and Operational Overview (as at 31 Dec 2011)

* Includes only 10 months contribution from EnergyAustralia and Delta West Gentrader

A strong portfolio of diversified assets

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Notes 1. As at 31 December 2011 2. TRUenergy analysis; Company presentations; Electricity Statement of Opportunities for the National Electricity Market 2011, Australian Energy Market Operator 3. Based on control and ownership of output; ORG includes Mortlake; AGL includes 32.5% of Loy Yang A (“LYA”); On 24 February 2012, AGL announced its intention to acquire the remaining interest in LYA, should this transaction be successful, AGL’s generation capacity and output would increase to 5,377MW and 19,519GWh, respectively 4. 12 months to 30 June 2011; Inclusive of full year generation for Eraring, Shoalhaven, Mount Piper and Wallerawang 5. Total Registered Capacity with Australian Energy Market Operator

AGL Origin TRUenergy

# Mass Market Customers (‘000’s)(1) Electricity 2,013 3,075 1,967 Gas 1,382 950 840 Generation Capacity (MW)(1,2,3,5) 3,906 5,784 5,613 Generation Output (GWh)(2,3,4) 9,148 17,596 29,603 Total capitalisation at 31 December 2011 (A$m book net debt + equity) 7,335 17,269 6,763 S&P / Moody’s Credit Ratings BBB (Negative) / – BBB+ (Stable) / Baa1 (Neg) BBB (Stable) / –

A scale player in the industry following acquisitions in NSW

NEM-wide Generation Capacity (MW)(1,2,3,5) NEM-wide Energy output (GWh) (2,3,4)

National Market Share % / Million Customers

Electricity & Gas Retail Customers(1,2)

TRUenergy is the national No. 1 generator by output and No. 3 energy retailer

4.0 3.4 2.8 2.3

• 1

2 3 4 5 Origin AGL TRU Other 32% 27% 22% 18% 15.7% 11.3% 11.1% 10.0% 9.7% 9.3% 4.9%

• 4.0%

8.0% 12.0% 16.0% 20.0% TRU MacGen Stanwell CS Energy Int. Power Origin AGL Private sector Government owned 5,784 5,613 4,690 4,358 4,251 3,906 3,033

• 2,000

4,000 6,000 8,000 Origin TRU MacGen Snowy Hydro Stanwell AGL Int. Power Private sector Government owned

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Managing Director Richard McIndoe

Chief Financial Officer James Spence General Counsel & Company Secretary David Lambert Group Executive Manager Operations & Construction Michael Hutchinson Group Executive Manager Energy Markets Mark Collette Executive Manager Information Services Gary Martin Group Executive Manager Retail Adrian Merrick Executive Manager Human Resources Adrian Merrick (Acting)

Experienced management team

Significant business and industry experience, track record of delivery

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TRUenergy has evolved from a base load generator to a fully integrated energy company

A clear strategy has resulted in a unique group of assets which fit the long term vision

Standalone Generator Fully Integrated Vertical Integration Horizontal Integration

• Base load brown coal

generator

• Some vertical integration

through AusPower and retailer contracts

• Risks associated with single

generator in a single market, long generation position

• Generation expansion

through acquisition, merger and Greenfield development

• Portfolio of generating

capacity in different states, different fuel types, across the merit order

• Expansion of the I&C

business through AusPower to track generation growth

• Acquired direct interest in

mass market retailer

• Creation of a horizontally

and vertically integrated company

• Generation and retail across

states

• Australia’s third largest

energy retailer Investment Time

Acquisition of NSW assets 2011 Tallawarra site commissioned 2009 Acquisition of Merchant Energy Business 2005 Acquisition of Yallourn 2001 Iona expansion 2009 Acquisition of Narrabri (20%) Acquisition of Roaring 40s Wind Assets

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Vertical integration is the key strategic driver

Mass Market Retail Load Sold Contracts Load Swing National Electricity Market Generation Energy Bought Contracts

Electricity

Operations & Construction Energy Markets

Hallett Tallawarra Ecogen Yallourn

Electricity

Channels to Market

Mass Market Retail Business Retail

Generation Capacity

Retail Energy Markets

I&C/Business Load Balanced Capacity Balanced Energy Available for Sale Sales

Mt Piper & Wallerawang Pricing, forecasting & green certificates Outage planning, bidding & dispatch

The TRUenergy portfolio is well balanced with significant scale and diversity

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TRUenergy value chain

Fuel Wholesale Markets Retail Markets Gas Market Electricity Market TRUenergy Business Units Operations and Construction Energy Markets Retail Yallourn Coal Mine Coal Contracts Iona Gas Processing and Storage Tallawarra Hallett Ecogen Yallourn Delta West Mass Market and Business customer segments Mass Market and Business customer segments Hedging Wholesale (pool) Contracts Wholesale Market Industrial Contracts Industrial Contracts Hedging Gas Supply / Transportation Contracts Waterloo Cathedral Rocks Wind Narrabri CSM Gas Supply / Transportation Contracts Narrabri CSM

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 Defensive industry, providing an essential service for households and industry  Stable returns and upside through organic growth opportunities  Industry participants that are long low cost generation are well positioned to

benefit from rising energy prices and demand

 Carbon certainty and compensation for market participants and investors  Opportunities for quality upstream gas developments  Industry expected to grow significantly in the next two decades – up to $240B

investment required in the domestic electricity and gas sectors by 20301

 Electricity market frameworks are robust and delivering reliable energy supply to

consumers

 Australian Government is committed to delivering Australia’s energy needs and

goals through competitive and well regulated markets and endorses a market based approach to meeting future investment needs2

Fundamentals of the industry are positive

1. Department Resources Energy and Tourism forecast 2. Department Resources Energy and Tourism Energy White Paper p xiv

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Key business strengths

Robust financial position and strong credit metrics supporting investment grade rating Proven strong debt market and shareholder support Clear carbon strategy and actively managed environmental issues Sound operating performance Experienced management team Horizontally diversified retail and generation portfolio and fuel base Vertically integrated business model provides a natural hedge Strong market position TRUenergy

Retail Scale and Quality

14 NSW ~32% of market Victoria ~25% of market South Australia ~12% of market Queensland ~5% of market

TRU 948 EA 200 TRU 97 EA 1,307 TRU 65 EA 31 TRU 157

One of Australia’s largest gas and electricity utilities

• 22% share of the NEM, #3 provider
• Over 2.8m customer accounts, comprising 2.0m electricity and

0.8m gas accounts

• Geographically diversified customer base across the NEM

High quality, recognised retail brands

• EnergyAustralia and TRUenergy are trusted brands with a

reputation for efficiency and service

Significant organic growth opportunities in Queensland and South Australia

• Ability to flex sales effort in these states according to value
• pportunities

Positioned to leverage growth in retail gas

• Able to leverage existing NSW electricity customers into new

retail gas accounts

The combined business of EnergyAustralia and TRUenergy creates a truly national leader with ~22% share of the NEM

TRUenergy has a market leading position in the NEM

As at 31 December 2011

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Integration activities have progressed well to date

Integration Management

• The migration of EnergyAustralia customer accounts to TRUenergy management and systems is supported by a large

and coordinated Integration Program

• During the transition period EnergyAustralia customer accounts are managed in collaboration with the former owner,

Ausgrid, under a Transition Services Agreement (TSA). The TSA is in place for up to 36 months until the services are transitioned to in-house TRUenergy management

• The EnergyAustralia Integration Program and TSA are ensuring that the full value of the acquisition is realised

Operational Performance

• All service levels defined within the TSA have been met each month since the acquisition
• Ausgrid’s operational performance compares well to others in the market
• The transition to TRUenergy of work packages including sales and marketing, load forecasting, and wholesale

settlements was completed in 2011 ahead of schedule, with access to Ausgrid systems maintained for customer acquisition and retention

• Work is underway to prepare for data migration and banking changeover, to support a smooth transition of cash flows and

data by the end of the TSA and integration period

Diverse generation portfolio supported by strong fuel position

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TRUenergy’s generation portfolio is well diversified by fuel source and geography

Plant Fuel Capacity (MW) Ownership Merit Order VIC NSW SA Yallourn Brown Coal 1,480 Own Base

✓

Mt Piper Black Coal 1,400 Contract (until 2043) Base

✓

Wallerawang Black Coal 1,000 Contract (until 2029) Base

✓

Tallawarra Gas 420 Own Intermediate

✓

Hallett Gas 203 Own Peak

✓

Newport Gas 500 Contract (until 2019) Peak

✓

Jeeralang Gas 466 Contract (until 2019) Peak

✓

Waterloo Wind 111 Own Semi-scheduled

✓

Cathedral Rocks Wind 661/332 Own (50%) Non-scheduled

✓

1. Total capacity 2. Equity share

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Fuel Plant Fuel Arrangement

Brown Coal Yallourn

• TRUenergy owns the brown coal mine adjacent to power

station

• Operating licence to 2026 and reserves beyond 2032

Black Coal Mt Piper Portfolio of long term coal supply contracts through to 2029

• Diversity of coal supply from different mines
• Volume flexibility in existing supply contracts and ability to

defer to take advantage of uplift in pool prices

• Continue to negotiate longer term coal supply contract on

competitive prices Wallerawang Gas Tallawarra Portfolio of long term gas contracts through to 2021 (plus equity gas from Narrabri)

• Subject to Take-or-Pay arrangements, but with rights to bank

gas for use at later times

• Gas storage provides considerable flexibility in managing gas

requirements Hallett Newport Jeeralang

Generation assets are supported by long term fuel supply contracts

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Other TRUenergy assets further reinforces it as an integrated energy business

Upstream Gas Gas Supply Contracts Gas Storage

• Acquired 20% interest in Narrabri Project in Gunnedah

Basin (NSW)

• Effective interest of over 500PJ of coal seam gas

reserves

• Hedges rising gas price risk with potential development

upside

• Experienced partner in Santos
• Portfolio of gas supply contracts from multiple suppliers
• Total volumes of 1,100PJ over the next seven years

(sufficient to cover internal requirements over this period)

• Gas storage facility at Iona (Victoria)
• 22PJ of underground gas storage
• Capacity of 500TJ/day
• Supplies gas to Victoria and South Australia
• Provides TRUenergy with the option to store surplus gas

during off peak periods and withdraw during peak periods to manage seasonality in demand and hedge against price spikes

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TRUenergy’s generation portfolio broadly reflects NEM intensity

• Largest privately-owned energy portfolio in the NEM
• TRUenergy’s portfolio carbon intensity of 0.95 compared with NEM of ~0.89
• Yallourn’s captive coal mine provides a fixed low cost fuel source, contributing to a low cost generation

portfolio

• Yallourn is very well positioned to benefit from a rising wholesale gas price market, despite the

introduction of the carbon tax from 1 July 2012

20% 27% 53%

Source: TRUenergy estimates and ACIL Tasman market model data

TRUenergy Fuel Mix1 NEM Fuel Mix2

Yallourn 27% Tallawarra 8% Hallett 4% Ecogen 18% Mt Piper 25% Wallerawang 18% Brown Coal Gas Black Coal

• 2. Excludes hydro, wind and others

Source: TRUenergy estimates and ACIL Tasman market model data

• 1. Excludes wind

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Thermal Status Marulan 700MW Investment decision to be made first half 2012 Fully Permitted Ipswich Up to 1,500MW Development underway; targeting 2013 investment decision for 500MW Early Stage Gladstone Up to 1,500MW Development process progressing for 500MW Early Stage Tallawarra B 420MW Permitted for CCGT; awaiting market signals Fully Permitted Yallourn CCGT 1,000MW Near finalisation of permits; awaiting contract for closure outcomes Late Stage Strzelecki Up to 800MW Land option secured; permitting to commence in 2012 Early Stage Wind Status Stony Gap 123 MW Development application lodged Late Stage Robertstown 75MW Meetings conducted with landowners Late Stage Waterloo II 18MW Aim to lodge development application May 2012 Late Stage White Rock 150MW+ Site secured with milestone based option agreement Early Stage

• Pipeline of generation projects at different stages of permitting
• Final investment decision will be contingent on strategic fit within portfolio, market signals and

maintaining current credit rating

Strong pipeline of new generation projects to support retail load

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Asset CO2 Int.* (kg/kWh) Increase in carbon price Increase in gas price Comment Yallourn 1.39

 ✓

• A$350m impairment (pre-tax)
• Transitional Assistance (cash and free

carbon permits) Delta Western (Mt Piper/Wallerawang) 0.90 / 0.92

 ✓

• Lower gross margins following introduction
• f carbon pricing but offset by increasing

gas prices Ecogen (Newport / Jeeralang) 0.56 / 0.94

✓ 

• Improved position in merit order following

introduction of carbon Tallawarra 0.37

✓ 

• Higher efficiency reduces its exposure to

increases in gas prices relative to other gas power plants Hallett 1.05

✓

• Increase market price volatility results in

higher usage and profitability Wind n/a

✓ ✓

• Higher pool prices with no change to cost

base Iona Gas Storage n/a

✓ ✓

• Value of inventory and gross margins

increases with increases in carbon and gas prices Narrabri CSM n/a

✓ ✓

• Increase in underlying asset value

Impact of carbon and gas price on TRUenergy’s asset portfolio

* Calculated on a “sent out” basis

Strong financial position

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170 180 190 200 210 220 2008 2009 2010 2011* A$m

CAPEX^

2,000 4,000 6,000 8,000 2008 2009 2010 2011* A$m

Revenue

200 400 600 800 1,000 1,200 2008 2009 2010 2011* A$m

EBITDAF

Revenue A$6,923m 99% on 2010 EBITDAF A$1,047m2 67% on 2010 NPAT A$355m2 76% on 2010

*

Improving financial performance

• Acquisition of EnergyAustralia retail customers

and Delta Western GTA (1 March 2011)

• Acquisition of Narrabri Project and Roaring 40s
• Higher retail tariffs
• Retention of S&P rating; a significant

achievement in growth/transformation environment

• 1. Normalised result
• 2. An Australia Segment EBITDAF of $1,053m and NPAT (Operating

earnings before one-off items) of $365m was reported by CLP as part of its 2011 Group Final results. The CLP definition of the Australia Segment includes various businesses and investments that are external to the TRUenergy Group, hence reported numbers for TRUenergy will differ

2011 Performance1 Key Drivers

* Includes only 10 months contribution from EnergyAustralia and Delta West Gentrader ^ Capex includes maintenance and additional PP&E as reported in the Cashflow Statement for TRUenergy Holdings Financial Statements

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Revolving 47% MTN 19% USPP 14% WCF 20%

200 400 600 800 1,000 1,200 2012 2013 2014 2015 2016 2017 2018+ Revolving MTN USPP WCF

Supported with BBB stable credit rating and clear intention to maintain prudent investment grade credit profile

• Standard and Poor’s credit rating of ‘BBB/Stable’
• Total drawn net corporate debt of A$2.3bn as at 31 December 20111 (undrawn senior debt of A$460m)
• Working Capital Facility of A$700m (cash and bank guarantees), with A$204m drawn (all guarantees) as at

31 December 2011

• Successfully refinanced NSW acquisition facility (A$1.6bn) and existing corporate debt facilities (A$460m

Facility B and A$300m Working Capital Facility)

• Inaugural “US Private Placement” debt issues
• Positioning for future debt capital markets issuance to diversify debt sources and tenor

1. Excludes Cathedral Rocks non-recourse debt 2. Excluding Working Capital Facility

Debt Maturity Profile (A$ millions, at 31/12/2011) Debt Composition (%)

Weighted avg maturity of 4.0 yrs2

Long-term and increasingly diversified debt facilities

Recent Corporate Activity

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The major transactions of 2011 have been a continuation of

• ur vertical integration strategy

EnergyAustralia

• Overall customer base more than doubled

Delta Western gentrader

• TRUenergy becomes the largest privately-owned

generation portfolio in the NEM

Roaring 40s

• 144MW of renewable generation added. Significant

development pipeline

Coal Seam Gas

• Interest in more than 500 PJ of Gas coal seam gas

reserves provides confidence that equity gas will be available for generation and retail

Carbon policy

• Compensation for generators included in Government’s

Clean Energy package

Development Pipeline

• Added to Pipeline of renewable and thermal projects to

grow our generation portfolio

Total Assets (A$ millions) Earnings Summary (A$ millions)

Achieved record financial results while delivering major acquisitions

2,500 5,000 7,500 10,000 2008 2009 2010 2011 2,000 4,000 6,000 8,000 250 500 750 1,000 1,250 2008 2009 2010 2011

EBITDAF (LHS) Revenue (RHS)

Appendix

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TRUenergy 18% Macquarie 30% Origin 18% Delta 16% Snowy Hydro 15% Other 3% TRUenergy 23% Loy Yang A 22% Intl.Power 21% Snowy Hydro 21% AGL 5% Other 8%

Market share of generation capacity by State

Victoria NSW South Australia

Source: AER, ‘Sate of the Energy Market’, 2011 TRUenergy 7% AGL 34%

• Intl. Power

19% Alinta 18% Origin 9% Infigen 5% Infratil 4% Other 4%

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Retail customer market share by fuel type

Source: AER, ‘State of the Energy Market’, 2011, p.103. Source: UBS

Electricity Gas

0% 25% 50% 75% 100% VIC NSW SA QLD ACT TRUenergy AGL Origin ActewAGL Other - Private Other - Govt 0% 25% 50% 75% 100% VIC NSW SA QLD ACT TRUenergy AGL Origin ActewAGL Other - Private Other - Govt

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Portfolio helps to maximise returns in a volatile market

Source: TRUenergy Source: TRUenergy

Actual 2011 Volume (TWh) Actual 2011 Generation Capacity and Retail Load (MW)

5 10 15 20 25 30 35 40 Long Short Yallourn Delta West Other Contracts VIC NSW SA/QLD 2,000 4,000 6,000 8,000 Long Short Yallourn Delta Tallawarra Ecogen Hallett Swaps Caps Vic NSW Qld SA

TRUenergy is effectively internally hedged

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Merit order adjusted for carbon price

• Portfolio of generation assets with strength in both geographic and fuel diversity
• TRUenergy’s average weighted short run marginal cost to generate is slightly below the NEM

weighted average TRUenergy’s portfolio is lower than market average merit order with or without carbon

Excludes semi scheduled capacity (such as wind power) and hydro, which effectively has zero SRMC, and assumes fuel cost is held constant Brown coal (excl. Yallourn) generators highlighted in brown Source: TRUenergy modelling.

Hallett: 203MW Gas Jeeralang: 466MW Gas Tallawarra: 420MW Gas Mt Piper: 1,400MW Black Coal Wallerawang: 1,000MW Black Coal Yallourn: 1,480MW Brown Coal 10,000 15,000 20,000 460 25,000 30,000 35,000 20 40 5,000 80 100 120 400 420 140 Newport: 500MW Gas 60

2010 Indicative Merit Order ($23/t Carbon)

SRMC ($/MWh) Indicative capacity (MW)

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Disclaimer

This presentation may contain forward looking statements and comments about future events, including our expectations about the performance of TRUenergy Group's business. Such comments are not audited and are based on a number of factors that we cannot control and so no representation or warranty is provided by or on behalf of TRUenergy or CLP that they should or will be achieved. We cannot be certain that the comments will be accurate or complete and so they should not be relied on. Please note that, in providing this presentation, TRUenergy has not considered the

• bjectives, financial position or needs of any particular recipient.