Slide 1: Results Announcement - Presentation (ASX cover fax)
Origin energy To Company Announcements Office Facsimite 1300 300 021 Company Australian Stock Exchange Limited Date 30 August 2006 From Bill Hundy Pages 43 Subject Results Announcement - Presentation This Transmittal is confidential. If you have received this document in error, please contact Origin
Slide 2: Final Results Announcement
Final Results Announcement Full-year ended 30 June 2006 30 August 2006
Slide 3: Outline
Outline Page 2 e Performance Highlights Financial Review Operating Review Outlook All references to $ are references to Australian dollars unless otherwise specifically marked All comparative data are in relation to the prior corresponding period, 1 July 2004 to 30 June 2005, unless otherwise stated
Slide 4: Consolidation of Contact and reporting segments
The consolidation of 100% of Contact produces a number of significant changes in the presentation of Origin’s results Page 3 Consolidation of Contact ~ Origin has consolidated 100% of Contact Energy as required by Australian accounting standards ~ Minority interests are recognised in reporting of ne
Slide 5: Disclaimer
Disclaimer Page 4 Any forward looking information in this presentation has been prepared on the basis of a number of assumptions which may prove to be incorrect and these statements speak only as of the date of this presentation. This presentation should not be relied upon as a recommendation to buy
Slide 6: Performance Highlights
drigin ener Performance Highlights
Slide 7: Financial Highlights
Financial Highlights Page 6 *« Revenue * EBITDA * NPAT « Free cash flow * OCAT Ratio « Gearing) « EPS - Basic . - Normalised®) * Free cash flow per share « Final dividend fully franked « Full year dividend fully franked $5,950 million $1,087 million $332 million $583 million 12.5% 42% 41.9 cps 41.9
Slide 8: Significant Operational Events
Significant Operational Events + A full 12 month contribution and strong performance by Contact Energy + Higher retail margins despite higher market churn and higher LPG purchasing costs + Lower production from Perth Basin oil fields + Doubling of CSG sales and Spring Gully performing above expectat
Slide 9: Financial Review
drigin ener Financial Review
Slide 10: Recurring A-IFRS profit for FY2005
At the interim results we advised a recurring A-IFRS profit of $288 million for FY2005 taking into account the introduction of successful efforts Page 9 ($ milfion) June 2005 NPAT after Total under A-GAAP 266 Total A-IFRS adjustments (pre-successful efforts) 45 Successful efforts (10) A-IFRS NPAT co
Slide 11: Profit & Loss
Profit & Loss Page 10 ($ million) Jun 06 Jun05 % change Revenue 5,950 4,902 21 EBITDA 1,087 918 18 EBIT 791 656 20 Net financing costs‘) 167 148 13 Tax expense 169 137 23 Minority Interests 122 70 74 NPAT 332 301 10 ROE 12.3% 11.9% EPS ~ Basic 41.9 cps 42.1 cps (0.4) EPS ~ Normalised 41.9 cps 39.5 c
Slide 12: EBITDA of $1,087m up 18%
EBITDA of $1,087m up 18% on full 12 month contribution from Contact and strong Retail performance Page 1f Divisions ($ million) Jun 06 Juno05 % change Exploration & Production 205 230 (11) Retail 273 257 6 Generation 60 52 14 Networks 30 34 (14) Contact 519 346 50 Total 1,087 918 18 « E&P: Lower oil
Slide 13: Depreciation & Amortisation
Depreciation & Amortisation ($ million) Jun06 Jun05 Generation property, plant and equipment 125 97 Other buildings, plant and equipment 110 98 Amortisation in producing areas‘) 59 56 Electricity hedging contracts - 7 Other 3 4 Total 297 262 + Increase in D&A are mostly due to a full 12 months of Co
Slide 14: Interest
Interest Page 13 ($ million) Jun 06 Jun 05 Net financing costs (A-IFRS) Unwinding of discount on provisions Mark-to-market on interest rates swaps Net interest expense Capitalised interest Net interest expense + capitalised interest Adjusted net interest cover (x EBIT) Weighted average interest rate
Slide 15: Tax Reconciliation
Tax Reconciliation ($ million) Jun 06 Jun 05 Profit before tax 623 509 Prima facie tax 197 158 less recognition of change in net loss (12) (11) position less other differences (16) (10) equals Tax expense 169 137 Effective tax rate 27.1% 27.0% Tax paid 119 181 * Increase in Tax expense primarily due
Slide 16: Growth capital increased as BassGas and Otway neared completion
Growth capital increased as BassGas and Otway projects neared completion and Spring Gully completed Stage || development... ($ million) Jun 06 Jun 05 Stay-in-business 209 132 Growth Exploration & Production 452 315 Retail 24 39 Generation 11 3 Networks 0 0 Contact 20 18 Total capital expenditure 716
Slide 17: Operating cash flow after tax has increased
Operating cash flow after tax has increased with a full 12 months of Contact... Page 16 ($ million) Jun 06 Jun 05 EBITDA 1,087 918 Change in working capital 16 (31) Stay-in~business capex‘) (206) (111) Other? (10) 4 Tax paid (119) (181) OCAT 768 599 Net interest paid (185) (150) Free cash flow 583 4
Slide 18: Cash flow return from the business segments
Cash flow return from the business segments is measured pre-tax and targets 14.2% over a full year Page 17 Funds Operating OCFR OCFR Employed Cashflow Jun06 Jun0O5 ($m) ($m) (%) (%) Exploration & 1,465 197 13.4 13.7 Production Retail 1,229 183 14.9 17.5 Generation 319 42 13.2 14.4 Networks 167 44 26
Slide 19: Balance Sheet and Gearing
Balance Sheet and Gearing ($ million) Jun 06 Jun 05 Net debt (A-IFRS) 2,410 2,743 Added back fair value adjustment (m-t- “m) 226 - Adjusted net debt . . oe . . . 2,636 2,743 Total equity — . _ : _ : | : 3,646 3,519 Adjusted net debt to (debt + equity) OS 42% | 44% « Net debt under A-IFRS includes a
Slide 20: Final dividend of 9cps declared
A final dividend of 9cps has been declared, bringing the full year dividend to 18cps fully franked Dividends ~ cents per share Payment and DRP 25 Franking « Ex-dividend date 4 September 2006 29 | 100% 100% 40% 100% 100% 100% + Date of record 8 September 2006 « Payable 29 September 2006 « DRP to appl
Slide 21: Operating Review
drigin ener Operating Review
Slide 22: Exploration & Production: EBITDA of $205m
Exploration & Production: EBITDA of $205m down 11% as Perth Basin oil fields commenced decline... 600 Total Sales Revenue & EBITDA ($m) Ww } o Revenue i Jun-06 | ‘Jun-05 | EBITDA Capex * + 500 t . [=] o 3 © (wis) xade> 27% decline in Perth Basin oil production largely offsets higher liquids prices F
Slide 23: Oil production from the Perth Basin declined
Oil production from the Perth Basin declined from the peak of last year and liquids yields from gas production fell... 12.05 Liquids Sales by Product by Half Year (PJE) - « Perth Basin scale precipitate impacted production early in the year and water influx has led to earlier than anticipated onset
Slide 24: Initial production from Spring Gully
initial production from the Spring Gully field has started to monetise Origin’s substantial reserve base... 1600 | 1400 | 1200 4 1000 4 soo 4 600 4 400 | 200 4 oJ & ZP Reserves (PJ) Annuai Production (PJ) Page 23 CSG Reserves SS Se SP OP ns a a a CSG Production CSG developments initiatly required lo
Slide 25: 2P reserves increased significantly
Origin’s 2P reserves increased significantly year on year with reserves additions in Spring Gully adding 170 PJe... Proved and Probable Reserves (PJe)”) 2P reserves at 30 June 2005 2,220 add field appraisal (Spring Gully) 170 add acquisitions (Pangea CSG, BassGas, Otway) 171 less production (78) les
Slide 26: BassGas and Otway Gas Project
BassGas commenced production during June 2006 while the Otway Gas Project is expected to commence commissioning late in the December quarter BassGas Project (42.5%) Otway Gas Project (30.75%) ¢ Project construction complete with « Project nearing completion with all initial sales of gas in June and
Slide 27: Kupe gas project approved in New Zealand
In New Zealand the Kupe gas project has been approved, new exploration seismic has been acquired... Bowne * Kupe Gas Project (50%) gin pret: °Siee - - = EES) conte perme + Final investment decision approved on 28 Rae Eset saci June « Contract for drilling rig awarded + Technip favoured offshore and
Slide 28: Retail: EBITDA of $273m up 6%
Retail: EBITDA of $273m up 6% in challenging conditions. Despite high churn, customer numbers and margins increased 3,500 350 i Jun-06 3,000 -Jun-05 1 300 E m wr 2,500 5 +250 2 < = e 9 = > & 2,000 - + 200 @ > é w 1,500 5 + 150 @ wy x a ev = 1,000 + + 100 3 s ° ia 500 + r 50 04 r Q Page 27 Revenue EB
Slide 29: Gross margin for all products increased
The Gross margin for all products increased year on year... Retail Gross Margin ($) and EBIT Margin (%} Product Gross Margin ($ million) (bars} 2000 «2001 «42002 2003 2004 2005 2005 A- 2006 AGAAP IFRS [mmm aturat cus EDeeericity BELG creme 8iT Mars | EBIT Margin (%) (line) Gas gross margin increased
Slide 30: Cooler weather boosted second half sales
Cooler weather conditions in the second half boosted sales and reversed the normal seasonality of sales volumes... 350 5 Victorian EDD Comparison 300 250 200 mFY2006 f FY2005 150 100 @ 10 year Ave EDD’s per month .. helping to turn a 12% decrease in EBIT at the half year to a 10% increase in EBIT at
Slide 31: Wholesale contract prices stable
Wholesale contract prices have been stable. While spot prices rose through the second half... $106 5 398 : Victorian Spot and Forward- Contract soo | ; Electricity Prices _[Sromniy Average Spot Price ~ 2008 Historical Forward Price : |---2007 Historical Forward Price — 2006 Historical Forward Price
Slide 32: Speed-E-Gas acquisition and LPG volumes
The acquisition of Speed-E-Gas and colder weather has seen LPG volumes and EBIT increase... Average International Propane Price (CP} 1,200 . . suloa - Juno “Jul08 - Juno « Active price management S619 AS65S helped control margins squeeze 4,000 + as wholesale purchasing costs A a A rose. ze soot « Sp
Slide 33: Churn rates remain high
Churn rates remain high. Origin acquired over 325,000 new accounts for a net gain of 22,000 gas and electricity accounts 60% | 55% | 50% | 45% | 40% | 35% J 30% 4 25% 4 20% 4° 15% J... 10% 4 5% 0% % Churn: Monthly data annualised Mass Market Churn: Completed & Pending* aon VEC Elec womens iC GAs com
Slide 34: Higher gas and electricity margins
Despite higher costs associated with winning customers Origin has increased its gas and electricity margins.... Product information and % Natural Gas Electricity LPG change from Jun 05 Product Revenue (A$m) 909 Gz) 1,678 (1%) 557 (415%) Gross margin (A$m) 148 (11%) 291° (46%) 145 (3%) EBITDA (A$m) 2
Slide 35: Generation: EBITDA of $60m
Generation: EBITDA of $60m, up 14% from $52m Total Sales Revenue & EBITDA ($m) Page 34 EBITDA Revenue Capex* * Does not include acquisitions (ui$) xadep Scheduled maintenance at Worsley and gas refit at Ladbroke Grove resulted in lower electricity generated (1.6 TWh - down 9%) and lower revenues Hig
Slide 36: High planned availability across all plants
There was high planned availability across all plants... Major Origin | Origin | Capacity | Type | Operation | Availability | Contracting Power Int. % MW Party Plants Worsley 50 120 Cogen | Base 85% Western Power & Worsley Bulwer Is. 50 32 Cogen | Base 95% BP Osborne 50 180 Cogen | Base 97% NRG Flin
Slide 37: Planning and permitting of gas fired power stations
Planning and permitting for the option to develop gas fired power stations are progressing at Mortlake and Spring Gully... Power Plant Developments Solar + Two power projects being progressed, « SLIVER modules continue to be scaled each up to 1000 MW at: up + 75W module undergoing reliability testin
Slide 38: Networks: EBITDA of $30m
Networks: EBITDA of $30m down from $34m last year and reflects effective yield accounting treatment of Envestra distribution... 200 180 5 w@ Jun-06 Total Sales Revenue & EBITDA ($m) 160 + 140 4 120 4 100 + 80 5 Revenue ai Jun-05 | EBITDA Capex* 20.0 + 18.0 + 16.0 + 14.0 r 12.0 + 10.0 r 8.0 (uis) xad
Slide 39: Contact: EBITDA contribution of $519m
Contact: 12 month EBITDA contribution to Origin of $519m up 50% on last year (9 months only)... 2,500 Total Sales Revenue ($m) Lined iw] =i oS Ll 1,000 - (wi$) xade> B VGLIG Acquisition of 51.4% interest completed on 1 October 2004 - nine months included in F¥2005 vs 12 months in FY2006 Earnings ben
Slide 40: Outlook
Slide 41: EBITDA from Australian Operations likely to grow around 15%
in the coming year, EBITDA from Australian Operations is likely to grow by around 15% Page 40 Spring Gully will continue ramp-up BassGas Project will be on-line Otway Gas Project commissioning is anticipated to commence in December quarter 2006 Steady contributions expected from Retail, Generation a
Slide 42: Contact Energy will face challenging conditions
Contact Energy will face challenging conditions which may offset the growth in Australian operations « Contact will face challenging conditions - Favourable weather conditions from FY2006 are unlikely to repeat - Wholesale gas contract prices will increase significantly restricting generation and pu
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