Genesis Energy

NEW ZEALAND Genesis Energy

13 June 2008 Performance evaluation

Genesis Energy equity valuation Macquarie Research’s discounted cashflow based equity valuation for Genesis Energy is $2,115m (nominal WACC 9.17%, asset beta 0.60, TGR 3.0%). Forecast financial model A detailed financial model with explicit forecasts out to 2030 has been completed and is summarised through this report. 12 month and 24 month target valuations Our 12 month ($2,257m) and 24 month ($2,433m) target valuations for the company have been derived by rolling forward the discounted cashflow model 12 and 24 months respectively and deducting from these values the forecast 12 and 24 month dividends to the Crown. Financial model assumptions and commentary

We have assessed the sensitivity of our equity valuation to a wide range of inputs. Broadly, these sensitivities are divided into five categories: generation Inside assumptions, electricity supply, gas supply, financials and price path. Performance evaluation report 2 This report highlights and discusses a number of key model input assumptions: Valuation summary 5 ⇒ The extent to which Huntly coal is backed off; Financial model assumptions and commentary 11 ⇒ The company’s retail and SME pricing position; ⇒ Future fuel cost position; Financial statements summary 18 ⇒ Genesis Energy Retail Gas margins; and Genesis Energy historic and forecast performance 21 ⇒ Wholesale electricity price paths. Historic and forecast performance versus SCI Financial flexibility and generation development 22 We have analysed the spread between Genesis Energy’s return on funds and its WACC to gauge its historic and forecast financial performance; Alternative valuation methodologies 23 We have compared our forecasts for Genesis Energy against those outlined in its Statement of Corporate Intent (SCI).

Going forward, Macquarie Research forecasts that Genesis Energy will average a -0.9% return to WACC over the next five years (FY08–12) or a return approximately equal to its cost of capital;

Beyond FY12, Macquarie Research expects Genesis Energy to yield steadily Analyst increasing excess returns, largely as a result of increasing margins on its Stephen Hudson hydro and wind generation. Hydro and wind generation made up around 21- 649 363 1414 [email protected] 25% of the company’s generation (excluding co-generation output) over

FY02-07. Relative SOE and listed gentailer disclosure levels We include a summary of our assessment of the relative disclosure levels for each SOE electricity gentailer and the two listed comparable companies.

Please refer to the important disclosures on inside back cover of this document, or on our website www.macquarie.com.au/research/disclosures.

WS: CSF_Sydney: 2439553: v2 Macquarie Research Equities - Report Genesis Energy

Performance evaluation report Genesis Energy equity valuation Macquarie Research’s discounted cashflow based equity valuation for Genesis Energy is $2,115m (nominal WACC 9.17%, asset beta 0.60, TGR 3.0%). Forecast financial model A detailed financial with explicit forecasts out to 2030 has been completed and is summarised through this report. 12 and 24 month target valuations Our 12 month ($2,257m) and 24 month ($2,433m) target valuations for the company have been derived by rolling forward the discounted cashflow model 12 and 24 months respectively and deducting from these values the forecast 12 and 24 month dividends to the Crown. Sensitivity analysis of main valuation drivers We have assessed the sensitivity of our equity valuation to a wide range of inputs. Broadly, the sensitivities are divided into five categories: generation assumptions, electricity supply, gas supply, financial and price path. WACC analysis We have completed a small report in conjunction with this evaluation on the composition of the Genesis Energy WACC. Alternative valuation methodologies We have assessed a sum of parts valuation for Genesis Energy based on reported transaction asset multiples. The valuation multiples have only been applied to one generating unit at Huntly due to the backing off of generation assumed in the DCF model. The equity value range assessed is $2,603–3,206m. The variance between this range and the DCF based equity valuation could be explained by the fact that international transaction multiples will tend to imply a valuation above the DCF based valuation due to the potential control premia and lower discount rates embedded in these. Additionally, we have analysed a wide number of comparable global generator/retailers in order to cross-check the equity valuation based on our primary methodology, discounted cashflow. Financial model assumptions and commentary We highlight and discuss a number of key model input assumptions in the report: The extent to which Huntly coal is backed off. Overall this station is forecast to operate with a capacity factor of 45%, down from the expected FY06-07 peak of 72%. This reflects Macquarie Research’s expectation that one 250 MW unit will be backed off and committed as reserve capacity ahead of the full introduction of a New Zealand emission trading scheme in 2010; Retail and SME pricing As at May 2007. Genesis Energy was pricing its mass market electricity volumes at an approximate 3% discount to the average market pricing – down from an approximate 7% discount two years prior. This discount strategy may well have been the result of the company’s decision to proceed with the e3p CCGT greenfield plant as well as the impact from expected higher fuel costs as coal is backed off at Huntly and Huntly/e3p’s fuel mix shifts towards higher cost and less flexible gas supply. Average commercial/SME pricing for the company is estimated to be 11.6c/kWh for FY07 – a relatively large discount to the published average commercial pricing (Statistics NZ PPI series). Future fuel costs. Macquarie Research forecasts long run thermal coal prices (Australia to Japan) at US$55/t. Macquarie Research forecasts, consistent with the MED’s base case as outlined in its 2006 ‘Energy Outlook to 2030’, that imported LNG will be required in NZ from 2020; 8 Aug 2008 2 Macquarie Research Equities - Report Genesis Energy

Genesis Energy Retail Gas. We have used Contact Energy’s unit pricing as a proxy for that of Genesis Energy. The company’s gas fuel cost and estimated distribution costs have been used to calculate the business unit’s operating margin. Disclosure levels across this business segment are relatively low. We estimate that the segment contributed around 29% of FY07 EBITDA. Wholesale electricity price paths. We have assessed three wholesale electricity price

paths: nil carbon costed wholesale electricity, a full ETS based carbon cost at $15/t C02e from FY10 and a Comalco exit from NZ from 2012. Post the recent renegotiation of the Meridian Energy-Comalco supply contract, this scenario is now of less relevance. Historic and forecast performance versus SCI We have analysed the spread between Genesis Energy’s return on funds employed and its WACC to gauge, broadly, its historic and forecast financial performance. Genesis Energy has averaged annual returns of around -0.5% pa under WACC over the past five years. In other words, it has broadly returned its cost of capital over this period (based on a post tax nominal WACC of 9.17%). Historic performance has however been relatively volatile, ranging from the 2.7% excess return in FY04 to a negative return to WACC of 3.7% in FY07. Although not clearly observable, the variation of returns appears to have been driven by a combination of higher depreciation on the 30 June 2005 generation asset revaluation, higher thermal fuel costs (over FY05 average fuel costs were up around 13%) and the company’s increased gas retail presence during FY04 (a business with a higher ROCE compared to generation say). Going forward, Macquarie Research forecasts that Genesis Energy will average a -0.9% return to WACC over the next five years (FY08-12) or a return approximately equal to its cost of capital; Beyond FY12, Macquarie Research expects Genesis Energy to yield steadily increasing excess returns, largely as a result of increasing margins on its hydro and wind generation. Hydro and wind generation made up around 25% of the company’s generation (excluding co- generation output) over FY02–06. We have compared our forecasts for Genesis Energy against those outlined in its Statement of Corporate Intent (SCI). Relative SOE and listed gentailer disclosure levels We have set out in the report (figure 3) the key operating assumptions underpinning our DCF valuation for Genesis Energy. A summary of our assessment of the relative disclosure levels for each SOE electricity generator/retailer and the two major listed comparable companies is included (in the same figure 3).

8 Aug 2008 3 Macquarie Research Equities - Report Genesis Energy

Fig 1 Genesis Energy summary financials (GEN $3.91)

Profit & Loss 2006A 2007A 2008E 2009E

Operating Revenue $m 1987 1774 1892 2036 EBITDAF - Recurring $m 210 173 227 202 Depreciation $m 51 53 62 57 Amortisation $m 17 17 0 0 EBIT - Recurring $m 142 103 166 145 EBIT $m 142 103 166 145 Net Interest Expense $m 0 (2) 33 31 Pre-Taxation Profit $m 142 105 132 114 Taxation Expense $m 58 44 43 34 Profit after Taxation $m 84 61 90 80 Tax-affected Non -Recurring Items $m 4 1 0 0 Pre Abnormal Profit after Tax $m 80 61 90 80 1 Adjusted Earnings $m 97 78 90 80 1 Adj for non-recurring items and goodwill amort

Key Assumptions Market Gas Cost $/GJ 6 6 7 7 Wholesale Electricity Price $/MWh 103 67 69 70 Net Margin - Own Generation $/MWh 37 35 35 31 Net Margin - Hedge Output $/MWh 34 -10 3 2 Own Generation output GWh 7959 7497 7780 8258

Discounted Cashflow Valuation Profit and Loss Ratios 2006A 2007A 2008E 2009E PER (adj Earnings) x 25.5 31.8 27.5 30.8 PV FCFs Available to Owners $m 2427 EPS (adj Earnings) c 17.9 14.3 16.6 14.8 Less Net Debt (inc Associate debt share) $m (369) EPS (Reported) c 15.5 11.3 16.6 14.8 Add Kinleith finance lease receivable $m 57 DPS c 0.0 1.8 5.0 5.9 Equity Value $m 2115 Revenue Growth % 33% -11% 7% 8% Shares Outstanding m 541 EBIT Growth % 18% -27% 60% -12% Equity Value per Share $m 3.91 EBITDA/Sales % 11% 10% 12% 10% EBIT/Sales % 7% 6% 9% 7% Assumptions Effective tax rate % 41% 42% 32% 30% Risk Free Rate % 6.5% Payout ratio % -% 12% 30% 40% Asset Beta # 0.60 EV/EBIT x 19.2 26.3 16.5 18.7 Market Risk Premium % 7.0% EV/EBITDA x 13.0 15.7 12.0 13.5 Target Debt/Value % 20% EV/Revenue x 1.4 1.5 1.4 1.3 Nominal Post-Tax WACC % 9.2% Perpetuity Growth Rate % 3.0% Balance Sheet Ratios ROE % 6% 4% 6% 5% ROA % 7% 5% 8% 7% ROFE % 8% 5% 9% 7% Net Debt $m 298 394 369 342 Net Debt/Equity % 20% 26% 24% 21% Net Interest Cover (EBIT) x 7.2 0.0 5.0 4.7 Price/NTA x 1.8 1.7 1.7 1.6 NTA per share cps 250 263 274 283 EFPOWA m 540.6 540.6 540.6 540.6

Cashflow Analysis 2006A 2007A 2008E 2009E Balance Sheet 2006A 2007A 2008E 2009E

Pre-taxation Profit $m 142 105 132 114 Cash $m 10 11 11 11 Depreciation & Amortisation $m 68 70 62 57 Receivables $m 202 190 203 219 Tax (Paid)/Credit $m -44 -51 -43 -34 Inventories $m 51 83 89 96 Other $m 0 0 0 0 Investments $m 0 0 0 0 Gross Cashflow $m 166 124 151 137 Property, Plant & Equipment $m 1527 1625 1644 1644 Changes in Working Capital $m 13 -24 -18 -21 Intangibles $m 103 86 86 86 Changes in Provisions $m 0 0 0 0 Other Assets $m 150 188 188 188 Operating Cashflow $m 179 100 134 116 Total Assets $m 2042 2183 2220 2242 Acquisitions $m 0 0 0 0 Payables $m 4 11 11 12 Capital Expenditure $m -257 -191 -81 -57 Short Term Debt $m 39 39 39 39 Asset Sales $m 21 0 0 0 Long Term Debt $m 269 367 341 314 Other $m 3 4 0 0 Other Liabilities $m 276 262 262 262 Investing Cashflow $m -233 -187 -81 -57 Total Liabilities $m 588 678 653 627 Dividend (ordinary) $m 0 10 27 32 Shareholders' Funds $m 541 541 541 541 Equity Raised $m 0 0 0 0 Minority Interests $m 0 0 0 0 Other $m 0 0 0 0 Total Shareholders' Equity $m 1453 1505 1568 1616 Financing Cashflow $m 55 88 -53 -59 Total Funds Employed $m 2042 2183 2220 2242 Source: Macquarie Research, June 2008

8 Aug 2008 4 Macquarie Research Equities - Report Genesis Energy

Valuation summary Genesis Energy equity valuation and 12 and 24 month targets

Fig 2 Genesis Energy DCF equity valuation summary Perpetuity growth rate 3.0% Perpetuity Value 5,843 PV (FY08-29) $m 1,503 PV of perpetuity $m 924 PV FCF Available to owners $m 2,427 Less Net Debt $m 369 Add Kinleith finance lease rec. $m 57 Equity Value $m 2,115 Equity Value – 12 mth target valuation $m 2,257 Equity Value – 24 mth target valuation $m 2,433 Shares outstanding (m) 541 DCF equity value per share $ 3.91

PV Tax Losses $m -

Assumptions

Corporate Tax Rate 30% Risk free rate 6.5% Asset beta 0.60 Equity beta 0.75 Market Risk Premium 7.0% Target Debt/Venture 20% Target Equity/Venture 80% Cost of Debt 8.7% Tax-adjusted Cost of Debt 6.1% Cost of Equity 10.0%

Nominal WACC (%) 9.2% Real WACC (%) 6.5% Source: Macquarie Research, June 2008

We have summarised our DCF based equity valuation ($2,115m) for Genesis Energy above. The summary includes the discount rate and terminal growth assumptions (nominal post tax WACC 9.2%, asset beta 0.60, TGR 3.0%). Additionally, the 12 month ($2,257m) and 24 month ($2,433m) target valuations for the company are set out. These targets have been derived by rolling forward the discounted cashflow model 12 and 24 months respectively and deducting from these values the forecast 12 and 24 month dividends to the Crown. We have set out in figure 3 the key operating assumptions underpinning the DCF valuation, a summary of our assessment of the relative disclosure levels for each SOE electricity generator/retailer and the two major listed comparable companies. In figure 4, a sensitivity analysis to these assumptions is set out. The key sensitivities are discussed in more detail in the body of the report.

8 Aug 2008 5 Macquarie Research Equities - Report Genesis Energy

Fig 3 Genesis Energy – DCF equity valuation key assumptions

Disclosure Level1 Genesis Meridian Mighty Contact Energy Energy River Power Energy TrustPower

Genesis Energy Generation

Coal : 45-55 % Capacity factors CCGT (e3p) : 88 % √√ √√√ √ √√ √√√ Hydro : 20-40 % Wind : 48 %

Baseload price Spot (ytd CY2007) : $46.35/MWh Forward (FY2008) : $68.77/MWh - - - - -

NZ ETS wholesale carbon cost FY2010 : $15/C02e t - - - - -

Mass market - incumbent (FY2008) : 19.09c/kWh - - - - - Fixed tariffs Mass market - non incumbent (FY2008) : 18.98c/kWh - - - - - SME/Corporate (FY2008) : 12.05c/kWh - - - - -

Gas (FY2008 del.) : $6.58/GJ Thermal fuel costs √ NA √ √√ NA Coal (FY2008 del.) : $4.19/GJ

Captured load-to-baseload premium NZ peak-to-baseload premium : 0% - - - - -

Coal : $17.79/MWh Spark spreads CCGT (inc. e3p) : $3.25/MWh √ NA √ √√ NA

Thermal (coal, CCGT blended) : $9.2/MWh - - - √ - O&M costs Hydro : $11.5/kW pa - - - √ √ Wind (fixed only) : $28.8/kW pa - - - - √

Electricity Supply

Mass market : 581.8k Customer breakdown SME fixed : 84.1k √ √√√ √ √ √√√ SME/Corporate spot : 289

Mass market : 7,250 kWh - √ - √ √√√ Energy use per customer SME fixed : 29,847 kWh - √ - √ √√√ SME/Corporate spot : 2,308 MWh - √ - √ √√√

Energy purchase cost : NA - - - √√√ -

Cost to serve : $162/ICP - - - - √√√ Other costs HVDC transmission : $nil NA √√√ NA - - Site remediation : $5m pa √√√ - - - -

Gas Supply

Mass market : 137,894 √√ NA - √√√ - Customer breakdown SME : NA - NA - - - Corporate : NA - NA - - -

Mass market : 74.9 GJ/customer - NA - √√√ NA Energy use per customer SME fixed : NA - NA - - NA SME/Corporate spot : NA - NA - - NA 1. Degree of public disclosure explicitly or by reasonable deduction (- no, √ incomplete and by deduction, √√ either incomplete or by deduction, √√√ full) Source: Macquarie Research, June 2008

8 Aug 2008 6 Macquarie Research Equities - Report Genesis Energy

Fig 4 Sensitivity analysis – DCF equity valuation Genesis Energy Generation assumptions Δ1 Δ DCF equity valuation2

Coal : 45-55 % + 10% -$306m (-14%) Capacity factors CCGT (e3p) : 88 % + 10% -$793m (-37%) Hydro : 20-40 % + 10% +$448m (21%) Wind : 48 % + 10% Negligible

Spot (ytd CY2007) : $46.35/MWh - - Baseload price Forward (FY2008) : $68.77/MWh + $10/MWh +$39m (2%) Forward (FY2008 - 2030) + $10/MWh +$826m (39%)

NZ ETS wholesale carbon cost FY2010 : $15/C02e t + $10/C02e t -$76m (-4%)

Mass market - incumbent (FY2008) : 19.09c/kWh Fixed tariffs Mass market - non incumbent (FY2008) : 18.98c/kWh + 0.5c/kWh3 +$458m (+22%) SME/Corporate (FY2008) : 12.05c/kWh

Gas (FY2008 del.) : $6.58/GJ + 10% -$221m (+11%) Thermal fuel costs Coal (FY2008 del.) : $4.19/GJ + 10% -$92m (-4%)

Captured load-to-baseload premium NZ peak-to-baseload premium : 0% - -

Coal : $17.79/MWh - - Spark spreads CCGT (inc. e3p) : $3.25/MWh - -

Thermal (coal, CCGT blended) : $9.2/MWh + 10% -$68m (-3%) O&M costs Hydro : $11.5/kW pa + 10% Negligible Wind (fixed only) : $28.8/kW pa - -

Electricity Supply

Mass market : 581.8k Customer breakdown SME fixed : 84.1k + 1% +54m (3%) SME/Corporate spot : 289

Mass market : 7,250 kWh Energy use per customer SME fixed : 29,847 kWh - - SME/Corporate spot : 2,308 MWh

Energy purchase cost : NA - -

Cost to serve : $162/ICP + 10% -$170m (-8%) Other costs HVDC transmission : $nil - - Site remediation : $5m pa - -

Gas Supply

Mass market : 137,894 - - Customer breakdown SME : NA - - Corporate : NA - -

Mass market : 74.9 GJ/customer + 10% +$83m (4%) Energy use per customer SME fixed : NA - - SME/Corporate spot : NA - -

Financial

Nominal after tax WACC : 9.17% + 50bps -$216m (-10%)

Price Path Scenarios

Scenario 2 - $15/t C02e from FY10 Base case

Scenario 1 - nil carbon costing +$114m (+5%)

Scenario 3 - Comalco exit 2012 -$258m (-12%) 1. Equity valuation impact of change in variable ceteris paribus 2. % change from scenario 2 valuation 3. Assumes no change to transmission, distribution, carbon and pass through components. Change in FY08 only and across all fixed pricing and then reversion to forecast retail price path Source: Macquarie Research, June 2008

8 Aug 2008 7 Macquarie Research Equities - Report Genesis Energy

Fig 5 Genesis Energy generation assets and forecast capacity factors Period FY08E FY09E FY10E FY11E FY12E FY13E FY14E FY15E FY16E Period End 30/06/08 30/06/09 30/06/10 30/06/11 30/06/12 30/06/13 30/06/14 30/06/15 30/06/16

Hydro - North Island

Tokaanu - Tongariro Power Development Scheme Annual station capacity (MW) 240 240 240 240 240 240 240 240 240 Availability factor (%) 99.0% 99.0% 99.0% 99.0% 99.0% 99.0% 99.0% 99.0% 99.0% Potential supply (GWh) 2,081 2,081 2,081 2,081 2,081 2,081 2,081 2,081 2,081 Capacity factor (%) 42.0% 42.0% 42.0% 42.0% 42.0% 42.0% 42.0% 42.0% 42.0% Nominal annual generation (GWh) 874 874 874 874 874 874 874 874 874

Rangipo - Tongariro Power Development Scheme Annual station capacity (MW) 120 120 120 120 120 120 120 120 120 Availability factor (%) 99.0% 99.0% 99.0% 99.0% 99.0% 99.0% 99.0% 99.0% 99.0% Potential supply (GWh) 1,041 1,041 1,041 1,041 1,041 1,041 1,041 1,041 1,041 Capacity factor (%) 42.0% 42.0% 42.0% 42.0% 42.0% 42.0% 42.0% 42.0% 42.0% Nominal annual generation (GWh) 437 437 437 437 437 437 437 437 437

Tuai - Waikaremoana Hydro Scheme Annual station capacity (MW) 60 60 60 60 60 60 60 60 60 Availability factor (%) 99.0% 99.0% 99.0% 99.0% 99.0% 99.0% 99.0% 99.0% 99.0% Potential supply (GWh) 520 520 520 520 520 520 520 520 520 Capacity factor (%) 27.5% 27.5% 27.5% 27.5% 27.5% 27.5% 27.5% 27.5% 27.5% Nominal annual generation (GWh) 143 143 143 143 143 143 143 143 143

Piripaua - Waikaremoana Hydro Scheme Annual station capacity (MW) 42 42 42 42 42 42 42 42 42 Availability factor (%) 99.0% 99.0% 99.0% 99.0% 99.0% 99.0% 99.0% 99.0% 99.0% Potential supply (GWh) 364 364 364 364 364 364 364 364 364 Capacity factor (%) 27.5% 27.5% 27.5% 27.5% 27.5% 27.5% 27.5% 27.5% 27.5% Nominal annual generation (GWh) 100 100 100 100 100 100 100 100 100

Kaitawa - Waikaremoana Hydro Scheme Annual station capacity (MW) 36 36 36 36 36 36 36 36 36 Availability factor (%) 99.0% 99.0% 99.0% 99.0% 99.0% 99.0% 99.0% 99.0% 99.0% Potential supply (GWh) 312 312 312 312 312 312 312 312 312 Capacity factor (%) 27.5% 27.5% 27.5% 27.5% 27.5% 27.5% 27.5% 27.5% 27.5% Nominal annual generation (GWh) 86 86 86 86 86 86 86 86 86

Kourarau Hydro Scheme - Wairarapa Annual station capacity (MW) 1 1 1 1 1 1 1 1 1 Availability factor (%) 99.0% 99.0% 99.0% 99.0% 99.0% 99.0% 99.0% 99.0% 99.0% Potential supply (GWh) 10 10 10 10 10 10 10 10 10 Capacity factor (%) 27.5% 27.5% 27.5% 27.5% 27.5% 27.5% 27.5% 27.5% 27.5% Nominal annual generation (GWh) 3 3 3 3 3 3 3 3 3

Total North Island Hydro generation (GWh) 1,642 1,642 1,642 1,642 1,642 1,642 1,642 1,642 1,642

Co-Generation - North Island

Te Awamutu Annual station capacity (MW) 54 54 54 54 54 54 54 54 54 Availability factor (%) 99.0% 99.0% 99.0% 99.0% 99.0% 99.0% 99.0% 99.0% 99.0% Potential supply (GWh) 468 468 468 468 468 468 468 468 468 Capacity factor (%) 60.6% 60.6% 60.6% 60.6% 60.6% 60.6% 60.6% 60.6% 60.6% Nominal annual generation (GWh) 284 284 284 284 284 284 284 284 284

Kinleith Annual station capacity (MW) 40 40 40 40 40 40 40 40 40 Availability factor (%) 99.0% 99.0% 99.0% 99.0% 99.0% 99.0% 99.0% 99.0% 99.0% Potential supply (GWh) 347 347 347 347 347 347 347 347 347 Capacity factor (%) 60.6% 60.6% 60.6% 60.6% 60.6% 60.6% 60.6% 60.6% 60.6% Nominal annual generation (GWh) 210 210 210 210 210 210 210 210 210

Total North Island Co-Generation (GWh) 494 494 494 494 494 494 494 494 494

Wind - North Island

Hau Nui - South Wairarapa Annual station capacity (MW) 9 9 9 9 9 9 9 9 9 Availability factor (%) 85.0% 85.0% 85.0% 85.0% 85.0% 85.0% 85.0% 85.0% 85.0% Potential supply (GWh) 64 64 64 64 64 64 64 64 64 Capacity factor (%) 48.0% 48.0% 48.0% 48.0% 48.0% 48.0% 48.0% 48.0% 48.0% Nominal annual generation (GWh) 31 31 31 31 31 31 31 31 31

Total North Island Wind Generation (GWh) 31 31 31 31 31 31 31 31 31

Thermal (Gas) - North Island

Huntly Annual station capacity (MW) 500 500 500 500 500 500 500 500 500 Availability factor (%) 89.1% 89.1% 89.1% 89.1% 89.1% 89.1% 89.1% 89.1% 89.1% Potential supply (GWh) 3,902 3,902 3,902 3,902 3,902 3,902 3,902 3,902 3,902 Capacity factor (%) 48.0% 40.0% 42.0% 44.0% 48.0% 48.0% 48.0% 48.0% 48.0% Nominal annual generation (GWh) 1,873 1,561 1,639 1,717 1,873 1,873 1,873 1,873 1,873

P48 8 Aug 2008 8 Macquarie Research Equities - Report Genesis Energy

Annual station capacity (MW) 48 48 48 48 48 48 48 48 48 Availability factor (%) 78.5% 78.5% 78.5% 78.5% 78.5% 78.5% 78.5% 78.5% 78.5% Potential supply (GWh) 330 330 330 330 330 330 330 330 330 Capacity factor (%) 74.6% 74.6% 74.6% 74.6% 74.6% 74.6% 74.6% 74.6% 74.6% Nominal annual generation (GWh) 246 246 246 246 246 246 246 246 246

e3p (Energy Efficiency Enhancement Project) Annual station capacity (MW) 400 400 400 400 400 400 400 400 400 Availability factor (%) 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% 98.0% Potential supply (GWh) 3,434 3,434 3,434 3,434 3,434 3,434 3,434 3,434 3,434 Capacity factor (%) 65.0% 88.0% 88.0% 88.0% 88.0% 88.0% 88.0% 88.0% 88.0% Nominal annual generation (GWh) 2,232 3,022 3,022 3,022 3,022 3,022 3,022 3,022 3,022

Total North Island Gas Fired Generation (GWh) 4,351 4,829 4,907 4,985 5,141 5,141 5,141 5,141 5,141

8 Aug 2008 9 Macquarie Research Equities - Report Genesis Energy

Fig 5 Generation assets ($NZm) cont’d Period FY08E FY09E FY10E FY11E FY12E FY13E FY14E FY15E FY16E Period End 30/06/08 30/06/09 30/06/10 30/06/11 30/06/12 30/06/13 30/06/14 30/06/15 30/06/16

Thermal (Coal) - North Island

Huntly Annual station capacity (MW) 500 500 500 500 500 500 500 500 500 Availability factor (%) 89.1% 89.1% 89.1% 89.1% 89.1% 89.1% 89.1% 89.1% 89.1% Potential supply (GWh) 3,902 3,902 3,902 3,902 3,902 3,902 3,902 3,902 3,902 Capacity factor (%) 45.0% 45.0% 45.0% 45.0% 45.0% 45.0% 45.0% 45.0% 45.0% Nominal annual generation (GWh) 1,756 1,756 1,756 1,756 1,756 1,756 1,756 1,756 1,756

Total North Island Coal Fired Generation (GWh) 1,756 1,756 1,756 1,756 1,756 1,756 1,756 1,756 1,756 Total Huntly (GWh) 6,107 6,585 6,663 6,741 6,897 6,897 6,897 6,897 6,897

Total NZ mean generation (GWh) - ex co- generation 7,780 8,258 8,336 8,414 8,570 8,570 8,570 8,570 8,570 Actual generation (GWh) - ex-co-generation 7,780 8,258 8,336 8,414 8,570 8,570 8,570 8,570 8,570

Hedge Output (GWh) Total hedge output (GWh) 0 0 0 0 0 0 0 0 0

Total own generation and contracts (GWh) 7,780 8,258 8,336 8,414 8,570 8,570 8,570 8,570 8,570 Agent volumes (GWh) 0 0 0 0 0 0 0 0 0 Total electricity sold (GWh) 7,780 8,258 8,336 8,414 8,570 8,570 8,570 8,570 8,570 Source: Macquarie Research, June 2008

8 Aug 2008 10 Macquarie Research Equities - Report Genesis Energy

Financial model assumptions and commentary (i) Generation assets The financial model sets out Genesis Energy’s generation assets by plant and region. Our generation output forecasts are driven from assumed availability and capacity factors. We assume mean hydrology conditions and existing operating level limits at both the country and company level. We do not specifically forecast major maintenance downtime into plant availability factors but instead assume a smoothed maintenance profile (ie average life cycle availability factors). Huntly coal backed off as e3p proved up With regard to the 1040MW Huntly station, we have assumed that coal is progressively backed off at Huntly over the next year as e3p fully ramps up. We forecast that the FY07 level of coal fired generation (4,183 GWh or 72% of total Huntly generation output) will decrease to 1,756 GWh or 26% of total Huntly generation (including e3p) by 2010. Overall this station is forecast to operate with a capacity factor of 45%, down from the FY06 peak of 72%. This reflects Macquarie Research’s expectation that one 250 MW unit will be backed off and committed as reserve capacity. Recent comments from both ministers and Genesis Energy, and generation data, support this assumption. The sensitivity to this assumption for the company’s DCF equity valuation suggests that this move is predominantly motivated by the economics of a carbon-costed wholesale electricity market. For every 5ppt increase to Huntly coal’s long run capacity factor, Genesis Energy’s equity value decreases by $185m (-9%). (ii) Retail and SME pricing We have analysed the Ministry of Economic Development quarterly mass market electricity pricing data for each retailer. We have split this analysis into incumbency and non- incumbency regions and have separated out the impact on retail pricing from changes to lines charges. We have done this to enable a comparison of the net retail margin for each retailer. Genesis Energy has an approximate 30% market share in the electricity mass market – split approximately 70/30 incumbency customers/non-incumbency customers. As at May 2007, Genesis Energy was pricing its mass market electricity volumes at an approximate 3% discount to the average market pricing – down from an approximate 7% discount two years prior. This discount strategy may well have been the result of the company’s decision to proceed with the e3p CCGT Greenfield plant as well as the impact from expected higher fuel costs as coal is backed off at Huntly and Huntly/e3p’s fuel mix shifts towards higher cost and less flexible gas supply. We have provided a number of valuation sensitivities in figure 4 including fixed pricing. We have attempted to back out Genesis Energy’s commercial/SME fixed pricing through an earnings reconciliation. Our valuation for the company is highly sensitive to this variable given its approximate 40% share of company generation volumes. Average commercial/SME pricing for the company is estimated to be 11.6c/kWh for FY07 – a relatively large discount to the published average commercial pricing (Statistics NZ PPI series). Genesis Energy may have higher per customer usage across its commercial customer base given its regional exposure. In addition, this pricing may have been influenced by the e3p commission timing.

8 Aug 2008 11 Macquarie Research Equities - Report Genesis Energy

Fig 6 Genesis Energy customer volumes and pricing ($NZm) Period FY08E FY09E FY10E FY11E FY12E FY13E Period End 30/06/08 30/06/09 30/06/10 30/06/11 30/06/12 30/06/13

Customer volumes Fixed price volumes (GWh) Mass market – incumbent 2,881 2,910 2,939 2,969 2,998 3,028 Mass market - non-incumbent 1,337 1,350 1,363 1,377 1,391 1,405 TOU - SMEs 2,590 2,694 2,802 2,914 2,928 2,943 Total fixed price volume 6,808 6,954 7,104 7,259 7,317 7,376

Spot price volumes % TOU volume spot/total 27.3% 32.6% 30.5% 28.4% 30.0% 28.9% TOU - commercial and industrial 972 1,304 1,232 1,155 1,2531,194 less: estimated agent volumes ------Total non-agent spot price volumes 972 1,304 1,232 1,155 1,253 1,194

Electricity Customer numbers (inc dual fuel) Mass market - incumbent 397,446 401,421 405,435 409,489 413,584 417,720 Usage per user (annualised) 7,250 7,250 7,250 7,250 7,250 7,250

Mass market - non-incumbent 184,347 186,191 188,053 189,933 191,832 193,751 Usage per user (annualised) 7,250 7,250 7,250 7,250 7,250 7,250

TOU - fixed SMEs 84,073 84,283 84,494 84,705 84,917 85,129 Usage per user (annualised) 29,847 29,996 30,146 30,297 30,448 30,601

TOU - spot industrial 289 287 286 284 283 281 Usage per user (annualised) 2,308,028 2,404,429 2,421,565 2,492,587 2,548,645 2,632,310

Pricing Fixed prices (c/kWh) Change in Mass market - incumbent 2.79% 1.36% 10.72% 2.40% 4.14% 2.24% Mass market - incumbent 19.09 19.35 21.42 21.94 22.85 23.36

Change in Lines and transmission charges - incumbent 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% Lines and transmission charges - incumbent 7.60 7.75 7.91 8.06 8.23 8.39

Change in Mass market - non-incumbent 2.24% 1.83% 11.11% 2.29% 4.13% 2.08% Mass market - non-incumbent 18.98 19.33 21.47 21.97 22.87 23.35

Change in Lines charge - non-incumbent 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% Lines charge - non-incumbent 7.24 7.38 7.53 7.68 7.84 7.99

TOU fixed price - discount to market 35.0% 35.0% 35.0% 35.0% 35.0% 35.0% TOU fixed - SMEs 12.05 12.21 13.52 13.85 14.42 14.74

Lines charge - TOU SMEs 3.62 3.69 3.77 3.84 3.92 4.00

Spot prices (c/kWh) TOU spot - commercial and industrial 68.77 70.43 72.17 73.98 75.86 77.81

Wage Inflation 2.8% 2.6% 2.3% 2.4% 2.5% 2.5% Cost to serve ($/ICP) 161.9 166.1 169.9 174.0 178.3 182.8 Source: Macquarie Research, June 2008

8 Aug 2008 12 Macquarie Research Equities - Report Genesis Energy

Fig 7 Macquarie base case (2) with carbon tax ($NZm) Period FY08E FY09E FY10E FY11E Period End 30/06/08 30/06/09 30/06/10 30/06/11

Net margin / ckWh Integrated Generation

Average tariff realisation 16.4 16.6 17.8 18.1 Transmission and distribution 6.0 6.1 6.2 6.3 Fuel 5.3 5.8 6.0 6.1 Carbon - - 1.1 1.1 Cost to serve 1.6 1.6 1.6 1.6 Net margin 3.5 3.1 2.9 3.0

Total fixed price volume 6,808.2 6,954.0 7,104.4 7,259.5 EBITDA - Integrated generation 240.2 213.2 203.6 219.7

Spot Output

Location factor and losses 9.0% 9.0% 9.0% 9.0%

Average tariff realisation 62.6 64.1 65.7 67.3 Huntly SRMC 59.4 62.0 64.2 66.1 Net margin 3.2 2.1 1.5 1.3

TOU - commercial and industrial 972 1,304 1,232 1,155 EBITDA - spot volumes 3.1 2.8 1.8 1.5

Meters - - - - Meters EBITDA - - - -

Huntly capacity backed off 249.7 289.7 279.7 269.7 EBITDA - Huntly reserve generation income 20.0 23.2 22.4 21.6

O&M Costs

Gas/Coal 9.2 9.5 9.7 9.9 Wind (fixed) 28.8 29.5 30.2 30.9 Wind warranty (fixed) 28.8 29.5 30.2 30.9 Wind 6.5 6.6 6.8 6.9 Wind warranty 6.5 6.6 6.8 6.9 Hydro (fixed) 11.5 11.8 12.1 12.3 O&M 62.2 68.4 70.7 73.2

Other Costs

Site remediation provision 5.0 - - - Expensed exploration costs - - - - Development and mitigation costs 22.1 23.2 7.0 7.4

EBITDA

EBITDA - Electricity 174.0 147.6 150.1 162.3 EBITDA - Gas 53.1 54.7 56.4 58.1 Total EBITDA 227.1 202.3 206.5 220.3 Source: Macquarie Research, June 2008

8 Aug 2008 13 Macquarie Research Equities - Report Genesis Energy

Fig 8 Genesis Energy electricity customer mix and relative pricing Period FY02 FY03 FY04 FY05 FY06 Period End 15/05/02 15/05/03 15/05/04 15/05/05 15/05/06

GEN Retail Domestic ICPs - Incumbencies UnitedNetworks (Waitemata) 102199 Powerco (Thames Valley) 43848 WEL Networks 52500 Powerco (Wairarapa) 13781 Powerco (New Plymouth) 17539 Powerco (Stratford) 4620 Powerco (Hawera) 4385 Powerco (Wanganui) 23177 Powerco (Manawatu) 34139 UnitedNetworks (Wellington, North & South) 82819 Total mass market - incumbent 379006 Mass market - non Incumbent 175794 TOU fixed - commercial 38413 TOU spot - industrial 290 GEN Retail market share (by energised ICP) 29.2% GEN Retail ICPs 554800 Total energised ICPs - NZ 1900000

Retail prices (weighted average)_ GEN incumbencies - inc lines chgs ex GST (c/kWh) 13.38 14.08 14.79 16.29 17.15 % chge 4.2% 5.2% 5.0% 10.2% 5.2% GEN incumbencies lines chgs ex GST (c/kWh) 6.60 6.75 6.86 7.04 7.34 % chge 2.0% 2.3% 1.6% 2.7% 4.2% GEN incumbencies - exc lines chgs ex GST (c/kWh) 6.78 7.32 7.93 9.25 9.80 % chge 6.4% 8.0% 8.3% 16.7% 6.0%

Total NZ - inc lines chgs ex GST (c/kWh) (incumbents) 12.84 13.69 14.94 16.32 17.35 % chge 3.9% 6.6% 9.2% 9.2% 6.3% Total NZ lines chgs - ex GST (c/kWh) 5.87 5.98 6.10 6.35 6.74 % chge -0.9% 2.0% 1.9% 4.1% 6.2% Total NZ - exc lines chgs ex GST (c/kWh) (incumbents) 6.98 7.71 8.84 9.97 10.61 % chge 8.3% 10.4% 14.8% 12.8% 6.4%

Average commercial prices (c/kWh) 12.31 13.34 14.33 15.72 16.34 PPI - commercial customer prices3 4.2% 8.4% 7.4% 9.7% 4.0% Wholesale prices (Hay2201) 76.43 72.67 47.70 44.91 95.52 % chge 82.5% -4.9% -34.4% -5.8% 112.7%

Genesis discount/premium to average pricing -2.8% -5.0% -10.4% -7.3% -7.6% Source: Macquarie Research, June 2008

(iii) Forecast fuel cost We make a number of assumptions to forecast Genesis Energy’s fuel cost: We have assumed that coal is progressively backed off at Huntly over the next year as e3p fully ramps up. We forecast that the FY07 level of coal fired generation (4,183 GWh or 72% of total Huntly generation output) will decrease to 1,756 GWh or 26% of total Huntly generation (including e3p) by 2010; Macquarie Research forecasts long run thermal coal prices (Australia to Japan) at US$55/t; Macquarie Research forecasts, consistent with the MED’s current base case as outlined in its 2006 ‘Energy Outlook to 2030’, that imported LNG will be required in NZ from 2020; The price of imported gas is assumed to be a function of the oil price consistent with the formula detailed in the next section; Genesis Energy capitalises its development costs on Kupe and amortises these over the estimated useful life of the field. We have assumed that this amortisation is not materially different from the industry gas price path over the life of the field; Kupe is expected to be online in 2009 and produce around 20 PJ pa of sales gas, and almost entirely committed to e3p.

8 Aug 2008 14 Macquarie Research Equities - Report Genesis Energy

Fig 9 Fuel ($NZm) Period FY07A FY08E FY09E Period End 30/06/07 30/06/08 30/06/09

Primary Energy and Emission Assumptions 1 PJ = X GWh electricity 278 278 278 1 PJ = X tonnes sub-bituminous coal 44,000 44,000 44,000 X C02/PJ coal (000t) 95 95 95 X C02/PJ gas (000t) 57 57 57 Huntly turbine efficiency - coal 33.4% 33.4% 33.4% Huntly turbine efficiency - gas 33.4% 38.7% 39.3% For Huntly coal fired generation: X C02/PJ electricity (000t) 264 264 264 For Huntly gas fired generation: X C02/PJ electricity (000t) 158 158 148 Huntly Coal fired generation C02e/GWh (t) 980 980 980 Huntly Gas fired generation C02e/GWh (t) 680 680 680

Coal Total NZ Coal fired net generation (inc co-generation) (GWh) NA NA NA Huntly coal fired net generation (ex co-generation) (GWh) 4,183 1,756 1,756 Huntly assumed own energy needs 3.7% 3.7% 3.7% Implied Huntly coal consumption (000 t) - inc own energy needs 2,059 864 864 Assumed coal cost/GJ delivered 4.68 4.19 4.63 NZD/USD 0.77 0.74 0.67 Thermal coal prices (US$/t Australia to Japan) 64.00 55.00 55.00 Assumed fuel cost - coal ($m) 4.68 4.19 4.63

Gas Gas fired net generation (GWh) 1,640 4,351 4,829 Assumed fuel cost - gas/GJ 6.35 6.58 6.81 Assumed fuel cost - gas ($m) 116.50 276.03 312.55

Total fuel cost - gas and coal ($m) 335.37 358.36 403.49 Average fuel cost/MWh 55.46 56.51 59.01 Reserve price ($/MWh) 2.20 2.88 2.95 Source: Macquarie Research, June 2008

(iv) Genesis Energy retail gas The company discloses its retail gas customer numbers and related revenue but does not provide information on volumes or gas costs. We estimate that the segment contributed around 29% of FY07 EBITDA. We have used Contact Energy’s unit pricing as a proxy for that of Genesis Energy. The company’s gas fuel cost and estimated distribution costs have been used to calculate the business unit’s operating margin.

Fig 10 Genesis Energy retail gas margins Period FY07A FY08E FY09E FY10E FY11E Period End 30/06/07 30/06/08 30/06/09 30/06/10 30/06/11

`Ü~åÖÉ=áå=d~ë=ÅìëíçãÉê=åìãÄÉêë=EáåÅ=Çì~ä=ÑìÉäF= == PKMMB= PKMMB= PKMMB= PKMMB= d~ë=ÅìëíçãÉê=åìãÄÉêë=EáåÅ=Çì~ä=ÑìÉäF= NPPIUTU= NPTIUVQ= NQOIMPN= NQSIOVO= NRMISUN======cçêÉÅ~ëí=dÉåÉëáë=~îÉê~ÖÉ=Åçåëìãéíáçå= TQKRM= TQKUT= TRKOR= TRKSO= TSKMM======d~ë=ëçäÇ== VKVT= NMKPO= NMKSV= NNKMS= NNKQR= ^îÉê~ÖÉ=éêáÅÉ=EÉñ=dpqF= NQKSP= NQKUV= NRKNS= NRKQP= NRKTM= d~ë=êÉîÉåìÉ= NQRKVT= NRPKTU= NSOKMO= NTMKSV= NTVKUP======d~ë=ÇáëíêáÄìíáçå= NKMM= NKMN= NKMO= NKMP= NKMQ= ^ëëìãÉÇ=ÑìÉä=Åçëí=J=Ö~ë= SKPR= SKRU= SKUN= TKMR= TKPM= d~ë=Åçëí=ÇáëíêáÄìíÉÇ= TKPR= TKRV= TKUP= UKMU= UKPQ======`çëí=íç=ëÉêîÉ= ONKMV= OOKPO= OPKRV= OQKUR= OSKON= b_fq=ã~êÖáå= RNKRT= RPKNQ= RQKTR= RSKQP= RUKMU= Source: Macquarie Research, June 2008

8 Aug 2008 15 Macquarie Research Equities - Report Genesis Energy

(v) Wholesale electricity price path scenarios We have modelled three wholesale electricity price paths – a base case (base case 2) and two variants. Base case 1 Base case 1 is modelled around the MED’s base case as outlined in its 2006 ‘Energy Outlook to 2030’ and assumes the following: Long run NZD/USD exchange rate at 0.63; The wholesale electricity price is set by the LRMC for a CCGT at varying gas costs; New gas discovery rate at 60 PJ pa (compared to the current annual demand level of around 150 PJ); Imported LNG required from 2020; Oil prices assumed at US$35/bbl real (as opposed to MED’s US$60/bbl which the ministry acknowledges as a forecast outlier versus consensus); Price of imported gas is assumed to be a function of the oil price (delivered NZ$/GJ = 2.003 + 0.0493 x (oil price – 1) + 1.25 (storage/regassification infrastructure); The net retail margin is assumed to stay relatively constant, averaging 15% pa long term (currently 16% based on Macquarie Research’s estimate); The industry cost to serve is estimated at $158/ICP growing at CPI; Long run CPI is 2.5% pa; No carbon charge. Base case 2 – $15/t cost of carbon from 2010 This scenario is as per base case 1 but with the addition of a carbon cost to wholesale electricity prices. It is assumed that the price is set by an ETS of an EU ETS form and is a constant nominal

$15/t C02e. The impost on fossil-fuel-based generators is assumed to be passed on to end users. Base case 3 – Comalco exit post 2012 This scenario is as per base case 1 but also assumes the withdrawal of Comalco by 2012. We have attempted to capture this scenario by assuming a reduction in net retail margins (-30% from 2012) for an eight year period. This scenario has become less relevant following the renegotiation of the Meridian Energy- Comalco supply contracts.

8 Aug 2008 16 Macquarie Research Equities - Report Genesis Energy

Fig 11 Wholesale electricity price path variants

FY Mar LNG price 31/03/07 31/03/08 31/03/09 31/03/10 31/03/11 31/03/12 31/03/13 31/03/14 31/03/15 31/03/16 31/03/17 31/03/18 31/03/19 31/03/20 31/03/21LT Macquarie Base 1 Market gas cost $/GJ 6.35 6.58 6.81 7.05 7.30 7.56 7.83 8.11 8.40 8.70 9.01 9.33 9.66 10.00 10.00 10.00 Wholesale electricity price $MWh 67.11 68.77 70.43 72.17 73.98 75.86 77.81 79.83 81.93 84.10 86.34 88.65 91.04 95.78 95.78 95.78 Carbon charge c/kWh 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Distribution c/kWh 4.20 4.28 4.37 4.46 4.55 4.64 4.73 4.82 4.92 5.02 5.12 5.22 5.33 5.43 5.54 5.54 Transmission c/kWh 1.90 1.94 1.98 2.02 2.06 2.10 2.14 2.18 2.23 2.27 2.32 2.36 2.41 2.46 2.51 2.51 Metering c/kWh 0.50 0.51 0.51 0.52 0.52 0.53 0.53 0.54 0.54 0.55 0.55 0.56 0.56 0.57 0.57 0.57 Reserve generation/ECNZ levy c/kWh 0.17 0.17 0.17 0.17 0.17 0.43 0.43 0.43 0.44 0.44 0.45 0.45 0.46 0.46 0.47 0.47 Retail c/kWh 4.33 4.38 4.41 4.58 4.73 5.01 5.13 5.25 5.37 5.37 5.49 5.62 5.62 5.65 5.74 5.74 Retail electricity price1 c/kWh 17.81 18.15 18.48 18.96 19.42 20.28 20.74 21.21 21.69 22.06 22.56 23.08 23.48 24.15 24.41 24.41 % change % p.a. 1.9% 1.8% 2.6% 2.5% 4.4% 2.2% 2.3% 2.3% 1.7% 2.3% 2.3% 1.7% 2.9% 1.1%

Cost to serve $/ICP 125 128 131 135 138 141 145 149 152 156 160 164 168 172 177 177 Net retail margin (ex cost to serve) % 16.0% 15.8% 15.5% 15.8% 16.0% 16.5% 16.5% 16.5% 16.5% 16.0% 16.0% 16.0% 15.5% 15.0% 15.0% 15.0%

Macquarie Base 2 - with $15/t carbon cap tax from 2010 Market gas cost $/GJ 6.35 6.58 6.81 7.05 7.30 7.56 7.83 8.11 8.40 8.70 9.01 9.33 9.66 10.00 10.00 10.00 Wholesale electricity price $MWh 67.11 68.77 70.43 72.17 73.98 75.86 77.81 79.83 81.93 84.10 86.34 88.65 91.04 95.78 95.78 95.78 Carbon charge c/kWh 0.00 0.00 0.00 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 Distribution c/kWh 4.20 4.28 4.37 4.46 4.55 4.64 4.73 4.82 4.92 5.02 5.12 5.22 5.33 5.43 5.54 5.54 Transmission c/kWh 1.90 1.94 1.98 2.02 2.06 2.10 2.14 2.18 2.23 2.27 2.32 2.36 2.41 2.46 2.51 2.51 Metering c/kWh 0.50 0.51 0.51 0.52 0.52 0.53 0.53 0.54 0.54 0.55 0.55 0.56 0.56 0.57 0.57 0.57 Reserve generation/ECNZ levy c/kWh 0.17 0.17 0.17 0.17 0.17 0.43 0.43 0.43 0.44 0.44 0.45 0.45 0.46 0.46 0.47 0.47 Retail c/kWh 4.33 4.38 4.41 4.73 4.88 5.17 5.29 5.41 5.53 5.52 5.64 5.78 5.76 5.79 5.88 5.88 Retail electricity price1 c/kWh 17.81 18.15 18.48 19.91 20.38 21.24 21.70 22.17 22.65 23.01 23.51 24.03 24.42 25.09 25.35 25.35 % change % p.a. 1.9% 1.8% 7.7% 2.4% 4.2% 2.1% 2.2% 2.2% 1.6% 2.2% 2.2% 1.6% 2.7% 1.0% Net retail margin (ex cost to serve) % 16.0% 15.8% 15.5% 15.8% 16.0% 16.5% 16.5% 16.5% 16.5% 16.0% 16.0% 16.0% 15.5% 15.0% 15.0% 15.0%

Macquarie Base 3 - Macquarie Base modified for Comalco exit 2012 Market gas cost $/GJ 6.35 6.58 6.81 7.05 7.30 7.56 7.83 8.11 8.40 8.70 9.01 9.33 9.66 10.00 10.00 10.00 Wholesale electricity price $MWh 67.11 68.77 70.43 72.17 73.98 75.86 77.81 79.83 81.93 84.10 86.34 88.65 91.04 95.78 95.78 95.78 Carbon charge c/kWh 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Distribution c/kWh 4.20 4.28 4.37 4.46 4.55 4.64 4.73 4.82 4.92 5.02 5.12 5.22 5.33 5.43 5.54 5.54 Transmission c/kWh 1.90 1.94 1.98 2.02 2.06 2.10 2.14 2.18 2.23 2.27 2.32 2.36 2.41 2.46 2.51 2.51 Metering c/kWh 0.50 0.51 0.51 0.52 0.52 0.53 0.53 0.54 0.54 0.55 0.55 0.56 0.56 0.57 0.57 0.57 Reserve generation/ECNZ levy c/kWh 0.17 0.17 0.17 0.17 0.17 0.43 0.43 0.43 0.44 0.44 0.45 0.45 0.46 0.46 0.47 0.47 Retail c/kWh 4.33 4.38 4.41 4.58 4.73 3.88 3.97 4.06 4.16 4.17 4.27 4.38 4.39 4.56 5.46 5.46 Retail electricity price1 c/kWh 17.81 18.15 18.48 18.96 19.42 19.15 19.58 20.02 20.48 20.86 21.34 21.83 22.25 23.06 24.12 24.12 % change % p.a. 1.9% 1.8% 2.6% 2.5% -1.4% 2.2% 2.3% 2.3% 1.9% 2.3% 2.3% 1.9% 3.6% 4.6% 4.6% Net retail margin % 16% 16% 16% 16% 16% 12% 12% 12% 12% 11% 11% 11% 11% 11% 14% 14%

MED Base Market gas cost $/GJ 6.35 6.58 6.81 7.05 7.30 7.56 7.83 8.11 8.40 8.70 9.01 9.33 9.66 10.00 10.00 10.00 Wholesale electricity price $MWh 70.08 70.08 70.08 70.08 72.18 74.35 76.58 78.88 81.24 83.68 86.19 88.78 91.44 94.18 94.65 94.65 Retail electricity price1 c/kWh 17.81 17.98 18.15 18.32 18.52 18.73 18.93 19.14 19.35 19.68 20.02 20.36 20.70 21.05 21.41 21.41

% change % p.a. 1.0% 1.0% 1.0% 1.1% 1.1% 1.1% 1.1% 1.1% 1.7% 1.7% 1.7% 1.7% 1.7% 1.7% Source: Macquarie Research, June 2008

8 Aug 2008 17 Macquarie Research Equities - Report Genesis Energy

Financial statements summary

Fig 12 Genesis Energy balance sheet ($NZm)

Period FY04A FY05A FY06A FY07A FY08E FY09E FY10E FY11E FY12E FY13E FY14E FY15E FY16E FY17E FY18E FY19E FY20E Period End 30/06/04 30/06/05 30/06/06 30/06/07 30/06/08 30/06/09 30/06/10 30/06/11 30/06/12 30/06/13 30/06/14 30/06/15 30/06/16 30/06/17 30/06/18 30/06/19 30/06/20

`ìêêÉåí=~ëëÉíë= `~ëÜ=~åÇ=aÉéçëáí=~ÅÅçìåí= NNKV= UKO= VKS= NMKV= NMKV NMKV NMKV NMKV NMKV NMKV NMKV QOKN= NOTKP= OOSKS PPPKP QSTKT SNMKU ^ÅÅçìåíë=êÉÅÉáî~ÄäÉ== NTQKO= OMQKQ= OMNKT= NVMKQ= OMPKO ONUKS OPSKU OQQKV OSMKM OSSKM OTNKT OTTKQ= OUNKU= OUUKM OVQKQ OVVKP PMTKQ fåîÉåíçêáÉë= J= J= RNKQ= UPKQ= UUKV VRKT NMPKS NMTKO NNPKU NNSKQ NNUKV NONKQ= NOPKP= NOSKN NOUKV NPNKM NPQKR fåÅçãÉ=q~ñ=^ëëÉí= J= J= NPKO= OPKO= OPKO OPKO OPKO OPKO OPKO OPKO OPKO OPKO= OPKO= OPKO OPKO OPKO OPKO líÜÉê= TPKQ= VVKP= ONKN= OMKP= OMKP OMKP OMKP OMKP OMKP OMKP OMKP OMKP= OMKP= OMKP OMKP OMKP OMKP qçí~ä=ÅìêêÉåí=~ëëÉíë= ORVKR= PNNKU= OVTKM= POUKO= PQSKR PSUKT PVQKU QMSKR QOUKO QPSKU QQRKN QUQKR= RTSKM= SUQKP UMMKO VQNKR NIMVSKP ======kçå=ÅìêêÉåí=~ëëÉíë======mêçéÉêíó=mä~åí=~åÇ= bèìáéãÉåí= TUNKM= NIPPNKU= NIROSKS= NISOQKS= NISQPKV NISQPKS NISQPKQ NISQPKP NISQPKO NISQPKM NISQOKV NISQOKU= NISQOKS= NISQOKR NISQOKQ NISQOKO NISQOKN dççÇïáää=~åÇ=çíÜÉê= áåí~åÖáÄäÉë= NPSKO= NNVKQ= NMOKS= URKU= URKU URKU URKU URKU URKU URKU URKU URKU= URKU= URKU URKU URKU URKU fåîÉëíãÉåí=^ëëçÅá~íÉë= J= J= J= J= J J J J J J J J= J= J J J J líÜÉê== VNKQ= NMQKP= NNRKP= NQQKN= NQQKN NQQKN NQQKN NQQKN NQQKN NQQKN NQQKN NQQKN= NQQKN= NQQKN NQQKN NQQKN NQQKN qçí~ä=åçå=ÅìêêÉåí=~ëëÉíë= NIMMUKS= NIRRRKS= NITQQKR= NIURQKR= NIUTPKU NIUTPKR NIUTPKP NIUTPKO NIUTPKN NIUTOKV NIUTOKU NIUTOKT= NIUTOKR= NIUTOKQ NIUTOKP NIUTOKN NIUTOKM ======qçí~ä=~ëëÉíë== NIOSUKO= NIUSTKQ= OIMQNKR= OINUOKT= OIOOMKP OIOQOKO OIOSUKN OIOTVKT OIPMNKP OIPMVKU OIPNTKV OIPRTKO= OIQQUKR= OIRRSKT OISTOKQ OIUNPKS OIVSUKP ======`ìêêÉåí=äá~ÄäáäáíáÉë======`ìêêÉåí=_çêêçïáåÖë= SVKU= OVKO= PVKM= PUKS= PUKS PUKS PUKS PUKS PUKS PUKS PUKS PUKS= PUKS= PUKS PUKS PUKS PUKS ^ÅÅçìåíë=m~ó~ÄäÉ= NMKU= NOKR= QKQ= NMKT= NNKQ NOKP NPKP NPKU NQKS NRKM NRKP NRKS= NRKV= NSKO NSKS NSKV NTKP mêçîáëáçåë=~åÇ=çíÜÉê= NRUKR= NVUKP= OPOKN= ONSKV= ONSKV ONSKV ONSKV ONSKV ONSKV ONSKV ONSKV ONSKV= ONSKV= ONSKV ONSKV ONSKV ONSKV qçí~ä=ÅìêêÉåí=äá~ÄäáäáíáÉë= OPVKN= OQMKN= OTRKR= OSSKO= OSTKM OSTKU OSUKV OSVKP OTMKO OTMKR OTMKU OTNKN= OTNKQ= OTNKT OTOKN OTOKQ OTOKU ======kçå=ÅìêêÉåí=äá~ÄäáäáíáÉë======aÉÑÉêêÉÇ=q~ñ=iá~Äáäáíó= SKO= NTKQ= OTKV= PMKS= PMKS PMKS PMKS PMKS PMKS PMKS PMKS PMKS= PMKS= PMKS PMKS PMKS PMKS kçå=`ìêêÉåí=_çêêçïáåÖë= NUKO= OOPKQ= OSUKR= PSSKS= PQMKU PNPKU OUTKO OPUKO NVMKQ NOPKP QVKP J= MKM= EMKMF MKM J EMKMF líÜÉê= NOKU= NSKV= NSKQ= NQKQ= NQKQ NQKQ NQKQ NQKQ NQKQ NQKQ NQKQ NQKQ= NQKQ= NQKQ NQKQ NQKQ NQKQ qçí~ä=åçåJÅìêêÉåí=äá~ÄäáäáíáÉë= PTKO= ORTKU= PNOKU= QNNKS= PURKT PRUKT PPOKN OUPKN OPRKP NSUKO VQKO QQKV= QQKV= QQKV QQKV QQKV QQKV ======kÉí=~ëëÉíë= VVNKU= NIPSVKS= NIQRPKO= NIRMQKV= NIRSTKS NISNRKS NISSTKO NITOTKP NITVRKU NIUTNKN NIVROKV OIMQNKN= OINPOKO= OIOQMKM OIPRRKQ OIQVSKP OISRMKR ======bèìáíó======pÜ~êÉ=`~éáí~ä= RQMKS= RQMKS= RQMKS= RQMKS= RQMKS RQMKS RQMKS RQMKS RQMKS RQMKS RQMKS RQMKS= RQMKS= RQMKS RQMKS RQMKS RQMKS oÉëÉêîÉë= J= J= J= J= J J J J J J J J= J= J J J J oÉí~áåÉÇ=b~êåáåÖë= QRNKO= UOVKM= VNOKT= VSQKP= NIMOTKM NIMTRKN NINOSKS NINUSKT NIORRKP NIPPMKR NIQNOKP NIRMMKS= NIRVNKS= NISVVKR NIUNQKV NIVRRKU OINNMKM jáåçêáíáÉë= J= J= J= J= J J J J J J J J= J= J J J J qçí~ä=Éèìáíó= VVNKU= NIPSVKS= NIQRPKO= NIRMQKV= NIRSTKS NISNRKS NISSTKO NITOTKP NITVRKU NIUTNKN NIVROKV OIMQNKN= OINPOKO= OIOQMKM OIPRRKQ OIQVSKP OISRMKR Source: Macquarie Research, June 2008

8 Aug 2008 18 Macquarie Research Equities - Report Genesis Energy

Fig 13 Genesis Energy income statement ($NZm) Period FY04A FY05A FY06A FY07A FY08E FY09E FY10E FY11E FY12E FY13E FY14E FY15E FY16E FY17E FY18E FY19E FY20E Period End 30/06/04 30/06/05 30/06/06 30/06/07 30/06/08 30/06/09 30/06/10 30/06/11 30/06/12 30/06/13 30/06/14 30/06/15 30/06/16 30/06/17 30/06/18 30/06/19 30/06/20

Revenue 1,386.6 1,495.7 1,986.7 1,773.7 1,892.1 2,035.6 2,205.0 2,280.5 2,421.5 2,477.3 2,530.8 2,583.9 2,624.2 2,682.6 2,742.3 2,787.0 2,862.8 Operating Expenses 1,212.6 1,331.6 1,776.7 1,600.5 1,665.0 1,833.3 1,998.5 2,060.2 2,185.3 2,230.2 2,274.2 2,318.2 2,357.7 2,382.2 2,430.4 2,422.2 2,475.2 EBITDA 174.1 164.1 210.0 173.2 227.1 202.3 206.5 220.3 236.2 247.1 256.6 265.7 266.5 300.4 311.9 364.8 387.5 Depreciation 30.9 37.4 51.2 53.0 61.6 56.9 55.1 51.7 51.7 51.7 51.7 51.7 51.7 51.7 51.7 51.7 51.7 Goodwill amortisation 16.8 16.8 16.8 16.8 ------EBIT - Recurring 126.3 109.9 141.9 103.4 165.5 145.5 151.4 168.6 184.5 195.3 204.9 214.0 214.7 248.7 260.1 313.1 335.8 EBIT - Non-Recurring 9.2 10.6 5.6 0.9 ------Equity accounted earnings ------Total EBIT 135.5 120.5 141.9 103.4 165.5 145.5 151.4 168.6 184.5 195.3 204.9 214.0 214.7 248.7 260.1 313.1 335.8 Net Interest Expense 5.2 1.9 0.0 (1.9) 33.3 31.0 28.7 25.4 21.2 16.3 10.1 3.8 (2.1) (8.0) (14.6) (22.4) (31.3) km_q= NPMKP= NNUKT= NQNKV= NMRKO= NPOKO NNQKQ NOOKT NQPKO NSPKO NTVKN NVQKU ONMKO= ONSKU= ORSKT= OTQKU PPRKR PSTKN q~ñ~íáçå=bñéÉåëÉL=E`êÉÇáíF= RMKO= QUKQ= RUKO= QQKM= QOKS PQKP PSKU QOKV QVKM RPKT RUKQ SPKN= SRKM= TTKM= UOKQ NMMKS NNMKN km^q= UMKN= TMKO= UPKT= SNKP= UVKR UMKN URKV NMMKO NNQKP NORKQ NPSKP NQTKN= NRNKU= NTVKT= NVOKP OPQKU ORTKM oÉîÉåìÉ== NIPUSKS= NIQVRKT= NIVUSKT= NITTPKT= NIUVOKN OIMPRKS OIOMRKM OIOUMKR OIQONKR OIQTTKP OIRPMKU OIRUPKV= OISOQKO= OISUOKS= OITQOKP OITUTKM OIUSOKU léÉê~íáåÖ=bñéÉåëÉë== NIONOKS= NIPPNKS= NITTSKT= NISMMKR= NISSRKM NIUPPKP NIVVUKR OIMSMKO OINURKP OIOPMKO OIOTQKO OIPNUKO= OIPRTKT= OIPUOKO= OIQPMKQ OIQOOKO OIQTRKO

EFPO and Ratios Fully paid ordinary shares on issue (at period end) 540.6 540.6 540.6 540.6 540.6 540.6 540.6 540.6 540.6 540.6 540.6 540.6 540.6 540.6 540.6 540.6 540.6

oÉîÉåìÉ== NIPUSKS= NIQVRKT= NIVUSKT= NITTPKT= NIUVOKN OIMPRKS OIOMRKM OIOUMKR OIQONKR OIQTTKP OIRPMKU OIRUPKV= OISOQKO= OISUOKS= OITQOKP OITUTKM OIUSOKU b_fqa^= NTQKN= NSQKN= ONMKM= NTPKO= OOTKN OMOKP OMSKR OOMKP OPSKO OQTKN ORSKS OSRKT= OSSKR= PMMKQ= PNNKV PSQKU PUTKR b_fq=J=oÉÅìêêáåÖ= NOSKP= NMVKV= NQNKV= NMPKQ= NSRKR NQRKR NRNKQ NSUKS NUQKR NVRKP OMQKV ONQKM= ONQKT= OQUKT= OSMKN PNPKN PPRKU bmp= NQKU= NPKM= NRKR= NNKP= NSKS NQKU NRKV NUKR ONKN OPKO ORKO OTKO= OUKN= PPKO= PRKS QPKQ QTKR bmp=E~ÇàìëíÉÇF= NSKO= NQKU= NTKV= NQKP= NSKS NQKU NRKV NUKR ONKN OPKO ORKO OTKO= OUKN= PPKO= PRKS QPKQ QTKR `cmp= OOKQ= OPKM= PMKT= OPKM= OUKM ORKP OSKN OUKN PMKT POKU PQKU PSKU= PTKS= QOKU= QRKN RPKM RTKN ======b_fqa^=ã~êÖáå= NOKSB= NNKMB= NMKSB= VKUB= NOKMB VKVB VKQB VKTB VKUB NMKMB NMKNB NMKPB= NMKOB= NNKOB= NNKQB NPKNB NPKRB b_fq=ã~êÖáå= VKNB= TKQB= TKNB= RKUB= UKTB TKNB SKVB TKQB TKSB TKVB UKNB UKPB= UKOB= VKPB= VKRB NNKOB NNKTB ======bsLoÉîÉåìÉ= NKUñ= NKSñ= NKOñ= NKQñ= NKPñ NKOñ NKNñ NKNñ NKMñ NKMñ NKMñ MKVñ= MKVñ= MKVñ= MKVñ MKVñ MKUñ bsLb_fqa^= NPKVñ= NQKUñ= NNKSñ= NQKMñ= NMKTñ NOKMñ NNKUñ NNKMñ NMKPñ VKUñ VKRñ VKNñ= VKNñ= UKNñ= TKUñ SKTñ SKPñ bsLb_fq= NVKOñ= OOKNñ= NTKNñ= OPKRñ= NQKTñ NSKTñ NSKMñ NQKQñ NPKOñ NOKQñ NNKUñ NNKPñ= NNKPñ= VKUñ= VKPñ TKUñ TKOñ mbo= OSKQñ= PMKNñ= ORKPñ= PQKRñ= OPKSñ OSKQñ OQKSñ ONKNñ NUKRñ NSKVñ NRKRñ NQKQñ= NPKVñ= NNKUñ= NNKMñ VKMñ UKOñ mbo=E~ÇàìëíÉÇF= OQKNñ= OSKQñ= ONKUñ= OTKPñ= OPKSñ OSKQñ OQKSñ ONKNñ NUKRñ NSKVñ NRKRñ NQKQñ= NPKVñ= NNKUñ= NNKMñ VKMñ UKOñ mêáÅÉL`c= NTKRñ= NTKMñ= NOKTñ= NTKMñ= NQKMñ NRKQñ NRKMñ NPKVñ NOKTñ NNKVñ NNKOñ NMKSñ= NMKQñ= VKNñ= UKTñ TKQñ SKVñ ======m~óçìí=ê~íáç= OUKSB= OVKMB= JB= NOKQB= PMKMB QMKMB QMKMB QMKMB QMKMB QMKMB QMKMB QMKMB= QMKMB= QMKMB= QMKMB QMKMB QMKMB amp= QKS= QKP= J= NKU= RKM RKV SKQ TKQ UKR VKP NMKN NMKV= NNKO= NPKP= NQKO NTKQ NVKM váÉäÇ= NKOB= NKNB= JB= MKRB= NKPB NKRB NKSB NKVB OKOB OKQB OKSB OKUB= OKVB= PKQB= PKSB QKQB QKVB ======kq^=éÉê=ëÜ~êÉ= NRUKP= OPNKP= OQVKV= OSOKR= OTQKN OUPKM OVOKR PMPKT PNSKP PPMKP PQRKQ PSNKT= PTUKS= PVUKR= QNVKV QQRKV QTQKR mêáÅÉLkq^= OKRñ= NKTñ= NKSñ= NKRñ= NKQñ NKQñ NKPñ NKPñ NKOñ NKOñ NKNñ NKNñ= NKMñ= NKMñ= MKVñ MKVñ MKUñ ======kÉí=ÇÉÄí= TSKN= OQQKR= OVTKV= PVQKQ= PSUKS PQNKS PNRKM OSSKM ONUKO NRNKN TTKN EPKQF= EUUKTF= ENUTKVF= EOVQKSF EQOVKMF ERTOKNF kÉí=ÇÉÄíLÉèìáíó= TKTB= NTKVB= OMKRB= OSKOB= OPKRB ONKNB NUKVB NRKQB NOKNB UKNB PKVB EMKOBF= EQKOBF= EUKQBF= ENOKRBF ENTKOBF EONKSBF kÉí=ÇÉÄíLÇÉÄí=H=Éèìáíó= TKNB= NRKNB= NTKMB= OMKUB= NVKMB NTKRB NRKVB NPKPB NMKUB TKRB PKUB EMKOBF= EQKPBF= EVKOBF= ENQKPBF EOMKUBF EOTKRBF kÉí=ÇÉÄíLbs= PKNB= NMKNB= NOKPB= NSKPB= NRKOB NQKNB NPKMB NNKMB VKMB SKOB PKOB EMKNBF= EPKTBF= ETKTBF= ENOKNBF ENTKTBF EOPKSBF kÉí=fåíÉêÉëí= RKO= NKV= MKM= ENKVF= PPKP PNKM OUKT ORKQ ONKO NSKP NMKN PKU= EOKNF= EUKMF= ENQKSF EOOKQF EPNKPF `~éáí~äáëÉÇ=áåíÉêÉëí= J=UKS=NVKT=J=JJJJJJJJ=J=J=JJJ qçí~ä=fåíÉêÉëí= RKO= NMKR= NVKT= ENKVF= PPKP PNKM OUKT ORKQ ONKO NSKP NMKN PKU= EOKNF= EUKMF= ENQKSF EOOKQF EPNKPF b_fq=L=áåíÉêÉëí= OQKPñ= NMKRñ= TKOñ= J=ñ= RKMñ QKTñ RKPñ SKSñ UKTñ NOKMñ OMKOñ RSKRñ= J=ñ= J=ñ= J=ñ J=ñ J=ñ ======oÉíìêå=çå=~ëëÉíë= NNKOB= SKPB= TKPB= QKVB= TKUB SKTB SKVB TKTB UKPB UKUB VKOB VKQB= VKNB= NMKNB= NMKNB NNKRB NNKTB oÉíìêå=çå=Éèìáíó= TKOB= QKSB= RKRB= QKMB= RKTB RKMB RKOB RKUB SKQB SKTB TKMB TKOB= TKNB= UKMB= UKOB VKQB VKTB oÉíìêå=çå=ÑìåÇë=ÉãéäçóÉÇ= NNKUB= SKUB= UKNB= RKQB= UKRB TKQB TKSB UKRB VKOB VKTB NMKNB NMKRB= NMKRB= NOKNB= NOKSB NRKNB NSKOB t^``= VKOB= VKOB= VKOB= VKOB= VKOB VKOB VKOB VKOB VKOB VKOB VKOB VKOB= VKOB= VKOB= VKOB VKOB VKOB ol`b=J=t^``=ëéêÉ~Ç= OKTB= EOKQBF= ENKNBF= EPKTBF= EMKSBF ENKTBF ENKRBF EMKTBF EMKMBF MKRB MKVB NKPB= NKPB= OKVB= PKQB SKMB TKMB Source: Macquarie Research, June 2008

8 Aug 2008 19 Macquarie Research Equities - Report Genesis Energy

Fig 14 Genesis Energy cashflow statement ($NZm)

Operating activities Pre-taxation profit (excl Associate Inc) NPMKP= NNUKT= NQNKV= NMRKO= NPOKO NNQKQ NOOKT NQPKO NSPKO NTVKN NVQKU ONMKO= ONSKU= ORSKT= OTQKU PPRKR PSTKN Non-cash interest EMKUF= J= J= MKS= J J J J J J J J= J= J= J J J Depreciation/goodwill amortisation QTKU= RQKO= SUKM= SVKU= SNKS RSKV RRKN RNKT RNKT RNKT RNKT RNKT= RNKT= RNKT= RNKT RNKT RNKT Tax credit/(paid) ERSKPF= EQUKTF= EQPKVF= ERNKRF= EQOKSF EPQKPF EPSKUF EQOKVF EQVKMF ERPKTF ERUKQF ESPKNF= ESRKMF= ETTKMF= EUOKQF ENMMKSF ENNMKNF (Gain)/loss on sale of assets J= J= J= J= J J J J J J J J= J= J= J J J Other non-cash items (asset provisions, add minority adjustments) J= J= J= J= J J J J J J J J= J= J= J J J Gross cashflow NONKM= NOQKO= NSSKN= NOQKO= NRNKO NPTKM NQNKM NROKM NSSKM NTTKN NUUKN NVUKV= OMPKR= OPNKQ= OQQKN OUSKS PMUKT (Inc) / dec in working cap. UKU= ENMKUF= NPKP= EOQKMF= ENTKSF EONKPF EORKNF ENNKOF EOMKVF EUKPF ETKVF ETKVF= ESKMF= EUKTF= EUKUF ESKSF ENNKOF Inc / (dec) in provisions J= J= J= J= J J J J J J J J= J= J= J J J Operating cashflow NOVKU= NNPKQ= NTVKQ= NMMKO= NPPKS NNRKT NNRKV NQMKU NQRKN NSUKU NUMKN NVNKM= NVTKR= OOOKT= OPRKO OTVKV OVTKR ======Investing activities ======Capital expenditure ENNTKVF= EOSNKTF= EORTKPF= ENVNKMF= EUMKVF ERSKSF ERQKVF ERNKSF ERNKSF ERNKSF ERNKSF ERNKSF= ERNKSF= ERNKSF= ERNKSF ERNKSF ERNKSF Acquisitions / Investments J= J= J= J= J J J J J J J J= J= J= J J J Asset sales MKN= J= ONKM= J= J J J J J J J J= J= J= J J J (Loans to) / repaid by other entities J= J= PKR= PKV= J J J J J J J J= J= J= J J J Investing Cashflow ENNTKVF= EOSNKTF= EOPOKUF= ENUTKOF= EUMKVF ERSKSF ERQKVF ERNKSF ERNKSF ERNKSF ERNKSF ERNKSF= ERNKSF= ERNKSF= ERNKSF ERNKSF ERNKSF ======Financing activities ======Equity raised J= J= J= J= J J J J J J J J= J= J= J J J Debt drawndown / repayments J= J= RQKV= VTKU= EORKUF EOTKMF EOSKSF EQVKNF EQTKUF ESTKNF ETQKMF EQVKPF= EMKMF= J= EMKMF MKM MKM Dividends paid EORKNF= EOPKOF= J= EVKSF= EOSKVF EPOKMF EPQKPF EQMKNF EQRKTF ERMKNF ERQKRF ERUKVF= ESMKTF= ETNKVF= ETSKVF EVPKVF ENMOKUF Other J= J= J= J= J J J J J J J J= J= J= J J J Finance Cashflow - ex debt repayments EORKNF= EOPKOF= RQKV= UUKO= EROKTF ERVKNF ESMKVF EUVKNF EVPKRF ENNTKOF ENOUKRF ENMUKOF= ESMKTF= ETNKVF= ETSKVF EVPKVF ENMOKUF ======Inc / (dec) in net cash held ENPKNF= ENTNKRF= NKQ= NKO= J J J J J J J PNKO= URKO= VVKP= NMSKT NPQKQ NQPKN Source: Macquarie Research, June 2008

Fig 15 Taxation ($NZm)

mêÉJq~ñ=mêçÑáí= NPMKP= NNUKT= NQNKV= NMRKO= NPOKO= NNQKQ NOOKT NQPKO NSPKO NTVKN NVQKU ONMKO= ONSKU= ORSKT= OTQKU PPRKR PSTKN iÉëëW=bèìáíó=b~êåáåÖë= J= J= J= J= J= J J J J J J J= J= J= J J J ^ÇÇW=dççÇïáää=^ãçêíáë~íáçå= NSKU= NSKU= NSKU= NSKU= J= J J J J J J J= J= J= J J J léÉê~íáåÖ=pìêéäìë=ÄÉÑçêÉ= q~ñ~íáçå= NQTKN= NPRKR= NRUKT= NOOKN= NPOKO= NNQKQ NOOKT NQPKO NSPKO NTVKN NVQKU ONMKO= ONSKU= ORSKT= OTQKU PPRKR PSTKN q~ñ=bñéÉåëÉLE`êÉÇáíF= RMKO= QUKQ= RUKO= QQKM= QOKS= PQKP PSKU QOKV QVKM RPKT RUKQ SPKN= SRKM= TTKM= UOKQ NMMKS NNMKN ======bÑÑÉÅíáîÉ=q~ñ~íáçå=o~íÉ= PUKRB= QMKUB= QNKMB= QNKUB= POKPB= PMKMB PMKMB PMKMB PMKMB PMKMB PMKMB PMKMB= PMKMB= PMKMB= PMKMB PMKMB PMKMB ======aÉÑÉêêÉÇ=q~ñ~íáçå== J= J= J= J= J= J J J J J EMKMF EMKMF= J= J= J J J Source: Macquarie Research, June 2008

8 Aug 2008 20 Macquarie Research Equities - Report Genesis Energy

Genesis Energy historic and forecast performance We have analysed the spread between Genesis Energy’s return on funds employed and its WACC to gauge, broadly, its historic and forecast financial performance (see figure 13 above). In this regard we make the following observations: Genesis Energy has averaged excess annual returns of around -0.5% pa over the past five years. In other words, it has broadly returned its cost of capital over this period (based on a post tax nominal WACC of 9.17%); Historic performance has however been relatively volatile ranging from the 2.7% excess return in FY04 to a negative return to WACC of 3.7% in FY07. Although not clearly observable, the variation of returns appears to have been driven by a combination of higher depreciation on the 30 June 2005 generation asset revaluation, higher thermal fuel costs (over FY05 average fuel costs were up around 13%) and the company’s increased gas retail presence during FY04 (a business with a higher ROCE compared to generation say); Going forward, Macquarie Research forecasts that Genesis Energy will average a -0.9% return to WACC over the next five years (FY08–12) or approximately its cost of capital; This small deterioration in returns versus the past five year period appears to be primarily due to lower spark spreads as the company backs off coal fired generation at Huntly and moves to a full commissioning of e3p (average fuel costs are forecast to rise by 6.1% pa over this time whilst average wholesale prices are forecast to rise 2.5% pa). Note, consistent with normal practice, we do not forecast asset revaluations and therefore generally tend to understate accounting depreciation; Beyond FY11, Macquarie Research expects Genesis Energy to yield steadily increasing excess returns, largely as a result of increasing margins on its hydro and wind generation. Hydro and wind generation made up around 25% of the company’s generation (excluding co-generation output) over FY02–06.

Statement of Corporate Intent target comparison We have compared our forecasts for Genesis Energy against those outlined in its Statement of Corporate Intent (SCI) (see Fig 16 below). We note that the company has generally exceeded its SCI forecasts over the past four years. Without detail on the assumptions underpinning the forecast it is difficult to make comment on the forecast variances.

Fig 16 SCI performance targets versus Macquarie Research forecasts ($NZm) Period FY04A FY05A FY06A FY07A FY08E FY09E Period End 30/06/04 30/06/05 30/06/06 30/06/07 30/06/08 30/06/09

EBIT/average total assets - SCI 6.8% 8.4% 5.9% 4.7% 5.4% 6.6% EBIT/average total assets - Macquarie 10.9% 7.7% 7.3% 4.9% 7.5% 6.5% NPAT/average shareholders' funds - SCI 4.7% 6.6% 4.8% 3.3% 3.7% 5.7% NPAT/average shareholders' funds - Macquarie 8.3% 5.9% 5.9% 4.1% 5.8% 5.0% Source: Macquarie Research, June 2008

8 Aug 2008 21 Macquarie Research Equities - Report Genesis Energy

Financial flexibility and generation development Genesis Energy’s FY08 gearing ratio is forecast at 23.5% and EBIT interest cover ratio at 5.0x. We forecast that these ratios will be at 18.9% and 5.3x at FY10. This indicates that the company will have sufficient financial flexibility to proceed with further generation development of a scale similar to e3p which will had a total capital cost of around $520m. We outline below our forecast capex for the company out to FY09. Note we have not included the Rodney power station in our forecasts. There is a degree of uncertainty regarding the feasibility of this project in light of the Government’s planned legislated ban on new base load thermal generation. Whether such a project proceeds in the next decade may depend on the extent to which Genesis Energy are able to replace retired capacity at Huntly.

Fig 17 Capital expenditure ($NZm)

Period FY05A FY06A FY07A FY08E FY09E Period End 30/06/2005 30/06/2006 30/06/2007 30/06/2008 30/06/2009

eóÇêç=ÖÉåÉê~íáçå=ã~áåíÉå~åÅÉ=Eíê~åëÑçêãÉêëI=ëäìáÅÉ=Ö~íÉëI=Ö~åíêóI=êÉÅçåëÉåíëF= J= J= J= J= J= qÜÉêã~ä=ÖÉåÉê~íáçå=ã~áåíÉå~åÅÉ=EáåÅä=ÅççäáåÖ=íçïÉêF= J= NTKM= J= J= J= d~ë=Éñéäçê~íáçå= OMKN= NVKM= SSKM= J= J= táåÇ=ÖÉåÉê~íáçå=ã~áåíÉå~åÅÉ=EÖÉ~ê=ÄçñÉëI=Ää~ÇÉëI=êÉÅçåëÉåíëF= J= J= J= J= J= ÉPé=ÄìáäÇ= NRMKM= OMMKM= TMKM= OMKM= J= `~éáí~äáëÉÇ=áåíÉêÉëí= UKS= NVKT= J= J= J= líÜÉê=êÉëçìêÅÉ=ÅçåëÉåíáåÖ= J= J= J= J= J= líÜÉê=ÖêçïíÜ=Å~éÉñ= UPKM= NKR= RRKM= J= J= j~áåíÉå~åÅÉ=Å~éÉñ= = = == SMKV= RSKS= qçí~ä=Å~éÉñ= OSNKT= ORTKP= NVNKM= OMKM= J= = Depreciation and Amortisation 54.2 68.0 57.2 63.5 58.8 Source: Macquarie Research, June 2008

8 Aug 2008 22 Macquarie Research Equities - Report Genesis Energy

Alternative valuation methodologies We have assessed a sum of parts valuation for Genesis Energy based on reported transaction asset multiples. The valuation multiples have only been applied to one generating unit at Huntly due to the backing off of generation assumed in the DCF model. The equity value range assessed is $2,603–3,206m, somewhat higher than the 12 month DCF based equity valuation target of $2,257m. The variance between this range and the DCF based equity valuation could be explained by the fact that international transaction multiples will tend to imply a valuation above the DCF based valuation due to the potential control premia and lower discount rates embedded in these. We have included sum of parts equity valuations for two key listed comparable companies, Contact Energy and TrustPower, and compared this with their respective market capitalisations. Additionally, we have analysed a wide number of comparable global generator/retailers in order to cross check the equity valuation based on our primary methodology, discounted cashflow.

Fig 18 Genesis Energy sum of parts equity valuation (NZ$m)

Transaction asset Low asset High asset multiple range Comment value value Genesis Energy

NZ Conventional Generation TVO= MW 779-1002 (Eur/kW) Weighted average asset UK/European multiples NINNO= NIQPM= NZ Wind V= MW 1827-2220 (Eur/kW) Operational and under construction OU= PR= NZ Base Load Hydro QVV= MW 1210-1485 (Eur/kW) Benchmark multiples adjusted for 33% mean capacity factor NIMUU= NIPPR= Renewables Pipeline J= MW 74-221 (Eur/kW) European benchmarks J= J= NZ Supply TVQIMSQ= 480-502 (Eur/cust.) Residential electricity and gas customers SUT= TNU= Co-Generation Finance Lease Net Book value RT= RT= Other Value of energy contracts, metering and connections J= J=

Contact Energy

NZ Conventional Generation 737 MW 779-1002 (Eur/kW) Weighted average asset UK/European multiples 1034 1331 NZ Wind 0 1827-2220 (Eur/kW) Operational and under construction 0 0 NZ Base Load Hydro 755 MW 2000-2500 (Eur/kW) 2721 3401 NZ Base Geothermal 340 MW 2000-2500 (Eur/kW) 1225 1532 Renewables Pipeline 263 MW 74-221 (Eur/kW) Geothermal 263 MW 35 105 NZ Supply 620000 480-502 (Eur/cust.) 536 561 Other Thermal peaker, Whirinaki contract, metering estimated book value 50 100

TrustPower

NZ Conventional Generation - 779-1002 (Eur/kW) Operational and under construction - - NZ Wind 161 MW 1827-2220 (Eur/kW) 530 644 NZ Base Load Hydro 426.9 MW 2000-2500 (Eur/kW) 1538 1923 Renewables Pipeline 504 MW 74-221 (Eur/kW) 388 MW wind; 116 MW hydro 67 201 NZ Supply 220000 480-502 (Eur/cust.) 190 199 Other Telecommunications business estimated book value 15 30 Source: Macquarie Securities, Iberdrola, Scottish Power June 2008

8 Aug 2008 23 Macquarie Research Equities - Report Genesis Energy

Fig 19 Genesis Energy sum of parts equity valuation (NZ$m)

4000

3500 3206

3000 718 57 57 369 687 2500 13 3 5

2000

10 8 8 1430 1500

2603 35

1000 28

1112 500

0 NZ Conventional NZ Wind NZ Base Load NZ Supply Co-Generation Net Debt Equity Value Generation Hydro Finance Lease

Source: Macquarie Research, June 2008

Fig 20 Contact Energy sum of parts equity valuation (NZ$m)

6926 7000 *

561 100 6000 1654 50 105 536 497

35 5000 3673 1348

4000

3000 5499 2993

2000

1331

1000

1034 * Market Cap $5,167m 0 NZ Conventional NZ Base Load NZ Base Renewables NZ Supply Other Net Debt Equity Value Generation Hydro Geothermal Pipeline

Source: Macquarie Research, June 2008

8 Aug 2008 24 Macquarie Research Equities - Report Genesis Energy

Fig 21 TrustPower sum of parts equity valuation (NZ$m)

3000

2656 2077 19 9 30 * 2500 201 19 0 15

494 67

2000

1500 1692

1000 2001

644

500

530 * Market Cap $2,664m

0 NZ Wind NZ Base Load Renewables Pipeline NZ Supply Other Net Debt Equity Value Hydro

Source: Macquarie Research, June 2008

8 Aug 2008 25 Macquarie Research Equities - Report Genesis Energy

Fig 22 EV/EBITDA (FY09) Fig 23 EV/EBIT (FY09)

14.00x 20.00x

12.00x 18.00x 16.00x 10.00x 14.00x

8.00x 12.00x 10.00x 6.00x 8.00x 4.00x 6.00x 4.00x 2.00x 2.00x - x - x EE FE TE EE FE TE HE HE NU NU EIX SO MC EIX SO MC IDA IDA FPL PPL FPL PPL DTE ETR FTS DTE ETR FTS CNP EGL NST PSD CNL CEN CNP EGL CEN CNL NST PSD BKH CEG GXP PGN POR GEN MER MRP BKH CEG GEN MER MRP GXP PGN POR HNA AYE TPW HNA TPW AYE PNW PNW EDHN OTTR EDHN OTTR BKWN CKWN BKWN CKWN FUM1V ELE-ES ELE-ES FUM1V EMA-CA EMA-CA Source: Macquarie Research, June 2008 Source: Macquarie Research, June 2008

Fig 24 Gearing (Net debt / EV) Fig 25 Market cap vs EV (NZD)

80.00% 140,000

70.00% 120,000 60.00% 100,000 50.00% 80,000 40.00% 60,000 30.00% 40,000 20.00%

10.00% 20,000

-% - FE EE TE TE FE EE HE HE NU NU SO EIX MC SO EIX MC IDA IDA PPL FPL FPL PPL FTS DTE ETR FTS ETR DTE CEN CNL CNP EGL NST PSD NST PSD EGL CNP CEN CNL GXP GEN MER MRP BKH CEG PGN POR PGN POR GXP BKH CEG GEN MER MRP TPW AYE HNA HNA TPW AYE PNW PNW OTTR EDHN OTTR EDHN BKWN CKWN BKWN CKWN ELE-ES FUM1V ELE-ES FUM1V EMA-CA EMA-CA

Source: Macquarie Research, June 2008 Source: Macquarie Research, June 2008

Fig 26 EBITDA margin (FY09) Fig 27 EBIT margin (FY09)

50.00% 40.00%

45.00% 35.00% 40.00% 30.00% 35.00% 30.00% 25.00% 25.00% 20.00% 20.00% 15.00% 15.00% 10.00% 10.00% 5.00% 5.00% -% -% TE FE EE TE FE EE HE HE NU NU SO MC EIX MC SO EIX IDA IDA FPL PPL PPL FPL FTS ETR DTE FTS ETR DTE NST PSD EGL CNL CEN CNP CEN CNL NST PSD EGL CNP POR PGN GXP GEN MER MRP BKH CEG GEN MER MRP PGN POR GXP BKH CEG HNA AYE TPW TPW AYE HNA PNW PNW OTTR EDHN OTTR EDHN CKWN BKWN BKWN CKWN ELE-ES FUM1V FUM1V ELE-ES EMA-CA EMA-CA

Source: Macquarie Research, June 2008 Source: Macquarie Research, June 2008

8 Aug 2008 26 Macquarie Research Equities - Report Genesis Energy

Fig 28 Revenue CAGR (FY08-10) Fig 29 EBITDA CAGR (FY08-10)

25.00% 80.00%

70.00% 20.00% 60.00%

15.00% 50.00% 40.00%

10.00% 30.00%

20.00% 5.00% 10.00%

-% -% FE EE TE FE TE EE HE HE NU NU MC SO EIX MC EIX SO IDA IDA FPL PPL FPL PPL ETR FTS DTE ETR FTS DTE CEN CNL CNP EGL NST PSD NST PSD CNL CNP EGL CEN GEN MER MRP GXP BKH CEG PGN POR GXP PGN POR BKH CEG GEN MER MRP TPW AYE HNA AYE HNA TPW PNW PNW OTTR EDHN EDHN OTTR BKWN CKWN BKWN CKWN FUM1V ELE-ES FUM1V ELE-ES EMA-CA EMA-CA

Source: Macquarie Research, June 2008 Source: Macquarie Research, June 2008

8 Aug 2008 27 Macquarie Research Equities - Report Genesis Energy

Important disclosures: Recommendation definitions Volatility index definition* Financial definitions Macquarie Australia/New Zealand This is calculated from the volatility of historic price All "Adjusted" data items have had the following Outperform – return >5% in excess of benchmark movements. adjustments made: return (>2.5% in excess for listed property trusts) Added back: goodwill amortisation, provision for Neutral – return within 5% of benchmark return (within Very high–highest risk – Stock should be expected catastrophe reserves, IFRS derivatives & hedging, 2.5% for listed property trusts) to move up or down 60–100% in a year – investors IFRS impairments & IFRS interest expense Underperform – return >5% below benchmark return should be aware this stock is highly speculative. Excluded: non recurring items, asset revals, property (>2.5% below for listed property trusts) revals, appraisal value uplift, preference dividends & Macquarie Asia High – stock should be expected to move up or down minority interests Outperform – expected return >+10% at least 40–60% in a year – investors should be aware Neutral – expected return from -10% to +10% this stock could be speculative. EPS = adjusted net profit / efpowa* Underperform – expected return <-10% ROA = adjusted ebit / average total assets Medium – stock should be expected to move up or ROA Banks/Insurance = adjusted net profit /average Macquarie First South Securities (South Africa) down at least 30–40% in a year. total assets Outperform – expected return >+5% ROE = adjusted net profit / average shareholders Neutral – expected return from -5% to +5% Low–medium – stock should be expected to move up funds Underperform – expected return <-5% or down at least 25–30% in a year. Gross cashflow = adjusted net profit + depreciation Recommendations – 12 months *equivalent fully paid ordinary weighted average Low – stock should be expected to move up or down number of shares Note: Quant recommendations may differ from at least 15–25% in a year. Fundamental Analyst recommendations * Applicable to Australian/NZ stocks only All Reported numbers for Australian/NZ listed stocks Recommendation proportions are modelled under IFRS (International Financial AU/NZ Asia RSA Reporting Standards). Outperform 44.37% 58.37% 42.60% Neutral 44.01% 21.30% 46.80% Underperform 11.62% 20.33% 10.60% For quarter ending 31 March 2007

Analyst Certification: The views expressed in this research accurately reflect the personal views of the analyst(s) about the subject securities or issuers and no part of the compensation of the analyst(s) was, is, or will be directly or indirectly related to the inclusion of specific recommendations or views in this research. The analyst principally responsible for the preparation of this research receives compensation based on overall revenues, including investment banking revenues, of Macquarie Bank Ltd ABN 46 008 583 542 (AFSL No.237502)("Macquarie") and its related entities ("the Macquarie group") and has taken reasonable care to achieve and maintain independence and objectivity in making any recommendations. Disclaimers: Macquarie Securities (Australia) Ltd; Macquarie Europe Ltd; Macquarie Securities (USA) Inc; Macquarie Securities Ltd; Macquarie Securities (Singapore) Pte Ltd; and Macquarie Securities (New Zealand) Ltd are not authorised deposit-taking institutions for the purposes of the Banking Act 1959 (Commonwealth of Australia), and their obligations do not represent deposits or other liabilities of Macquarie. Macquarie provides a guarantee to the Monetary Authority of Singapore in respect of Macquarie Securities (Singapore) Pte Ltd for up to SGD25m under the Securities and Futures Act (Chapter 289). Macquarie does not otherwise guarantee or provide assurance in respect of the obligations of any of the above mentioned entities. This research has been prepared for the general use of the wholesale clients of the Macquarie group and must not be copied, either in whole or in part, or distributed to any other person. If you are not the intended recipient you must not use or disclose the information in this research in any way. Nothing in this research shall be construed as a solicitation to buy or sell any security or product, or to engage in or refrain from engaging in any transaction. In preparing this research, we did not take into account the investment objectives, financial situation and particular needs of the reader. Before making an investment decision on the basis of this research, the reader needs to consider, with or without the assistance of an adviser, whether the advice is appropriate in light of their particular investment needs, objectives and financial circumstances. There are risks involved in securities trading. The price of securities can and does fluctuate, and an individual security may even become valueless. International investors are reminded of the additional risks inherent in international investments, such as currency fluctuations and international stock market or economic conditions, which may adversely affect the value of the investment. This research is based on information obtained from sources believed to be reliable but we do not make any representation or warranty that it is accurate, complete or up to date. We accept no obligation to correct or update the information or opinions in it. Opinions expressed are subject to change without notice. No member of the Macquarie group accepts any liability whatsoever for any direct, indirect, consequential or other loss arising from any use of this research and/or further communication in relation to this research. Other Disclaimers: Securities research is issued and distributed by Macquarie Securities (Australia) Ltd (AFSL No. 238947) in Australia, a participating organisation of the Australian Stock Exchange; Macquarie Securities (New Zealand) Ltd in New Zealand, a licensed sharebroker and New Zealand Exchange Firm; Macquarie Europe Ltd in the United Kingdom, which is authorised and regulated by the Financial Services Authority (No. 193905); Macquarie Securities Ltd in Hong Kong, which is licensed and regulated by the Securities and Futures Commission; Macquarie Securities (Japan) Limited in Japan, a member of the Tokyo Stock Exchange, Inc. and Osaka Securities Exchange Co., Ltd and in Singapore, Macquarie Securities (Singapore) Pte Ltd (Company Registration Number: 198702912C), a Capital Markets Services licence holder under the Securities and Futures Act to deal in securities and provide custodial services in Singapore. Pursuant to the Financial Advisers (Amendment) Regulations 2005, Macquarie Securities (Singapore) Pte Ltd is exempt from complying with sections 25, 27 and 36 of the Financial Advisers Act. Economic research is issued and distributed in Australia by Macquarie; in New Zealand by Macquarie Securities (New Zealand) Ltd and in the United Kingdom by Macquarie Europe Ltd. Clients should contact analysts at, and execute transactions through, a Macquarie group entity in their home jurisdiction unless governing law permits otherwise. This research may be distributed in the United States only to major institutional investors and may not be circulated to any other person in the United States. Macquarie Securities (USA) Inc., which is a registered broker-dealer and member of the NASD, accepts responsibility for the content of each research report prepared by one of its non-US affiliates when the research report is distributed in the United States by Macquarie Securities (USA) Inc. All transactions by US investors involving securities discussed in this report must be effected through Macquarie Securities (USA) Inc. The information contained in this email is confidential. If you are not the intended recipient, you must not disclose or use the information in this email in any way. If you received it in error, please tell us immediately by return e-mail and delete the document. We do not guarantee the integrity of any e-mails or attached files and are not responsible for any changes made to them by any other person. Disclosures with respect to the issuers, if any, mentioned in this research are available at www.macquarie.com/research/disclosures. © Macquarie Group

Auckland Bangkok Hong Kong Jakarta Johannesburg Kuala Lumpur Tel: (649) 377 6433 Tel: (662) 694 7999 Tel: (852) 2823 3588 Tel: (62 21) 515 1818 Tel: (27 11) 343 2258 Tel: (60 3) 2059 8833

London Manila Melbourne Mumbai New York Perth Tel: (44 20) 7065 2000 Tel: (63 2) 857 0888 Tel: (613) 9635 8139 Tel: (91 22) 6653 3000 Tel: (1 212) 231 2500 Tel: (618) 9224 0888

Seoul Shanghai Singapore Sydney Taipei Tokyo Tel: (82 2) 3705 8500 Tel: (86 21) 6841 3355 Tel: (65) 6231 1111 Tel: (612) 8232 9555 Tel: (886 2) 2734 7500 Tel: (81 3) 3512 7900 Available to clients on the world wide web at www.macquarie.com/research and through Thomson Financial, Reuters and Bloomberg.

8 Aug 2008 28

DIRECTORY TO BE INSERTED HERE

8 Aug 2008 29