INFRATIL OVERVIEW

INVESTOR DAY
MARCH 8, 2011

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Infratil Investor Day 2011 - Agenda

Time Presenter Topic

9.00am Marko Bogoievski ‐ CEO Infratil Infratil overview and introduction 
9.45am Dr Philip Verleger – PKVerleger LLC The global oil market and future oil prices
10.45am Break
11.00am Mike Bennetts ‐ CEO Greenstone  Current plans and the future of the NZ’s fuel 
Energy and energy markets
12.30pm Lunch
1.15pm Bruce Harker – Chair TrustPower  Long term outlook for the NZ electricity 
and John Culy (Morrison & Co) market and what it means for TrustPower 
1.45pm Vince Hawksworth – CEO  TrustPower options and development
TrustPower opportunities
2.30pm Lloyd Morrison – Chair Morrison &
Co and Marko Bogoievski Wrap up and summary
3.00pm Dr Philip Verleger – PKVerleger LLC Crude oil workshop (breakout session)

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Objectives for the day

• Principal objectives:
- Introduce the team
- Update the facts
- Highlight the challenges and the opportunities
- Lay out the plan
- Get your perspective

• Focus is on capital allocation, NZ energy markets and positioning of

Greenstone Energy and TrustPower:
- Australian energy focus day is scheduled for March 29 in Sydney

• Emphasis on the long-term prospects and valuation considerations for

our businesses

• Brief update on Christchurch

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Infratil – focus and consistency are reaping rewards

• Strengthening cash flow and earnings

• Increased proportion of portfolio with strong market positions in sectors
we believe are fundamentally attractive
• Improving value of internal development pipeline and reinvestment
options
• Better access to capital following improved credit metrics and
significant program of capital raising and refinancing
• The Greenstone transaction is an example of the opportunities
available for an investor with operating experience and access to
capital

Consistency and discipline will drive a re-rating

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Current context … pressure building for a re-rating

• Emphasis on improving free cash

flow and earnings continues
• Core holdings performing very well
and current outlook is significantly
ahead of our base 2010-11 plan
targets
• Value of internal development
pipeline continues to grow
• Less competition for complex
infrastructure assets requiring active
management
• Most investors accept that IFT is
trading at a significant discount to
underlying valuation

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Investors seeking confirmation and follow through

• The Greenstone transaction has forced a partial re-examination of IFT

following a busy 2008-2010
- good execution in a number of financial and operational initiatives
- most investors now looking for follow through and confirmation of recent
performance

• While IFT returns have been good over 2009 and 2010, the share price
has basically tracked improvements in underlying NTA
- Discount to NTA remains wide
• Good long-term sector allocation and growth in valuations needs to be
supported by active management and delivery of tangible short-term
results
- Transparency over operational milestones and valuation metrics
- Periodic realisations

Steady growth in free cash flow and earnings is always the best catalyst

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2010/11 delivery - better performance with less risk

• Greenstone Energy
- Market share gains and improving margins in
rapidly changing market
- Opportunities to reinvest
- Capex consistent with bid case
• Lumo Energy (formerly Infratil Energy Australia)
- Material earnings contribution
- NSW privatisation a positive outcome re future
wholesale liquidity, and strong industry valuation
markers
- Proven value of peaking facilities in increasingly
volatile market with weak average price outlook
• Limited refinancing risk
- Successful GEL, TPW and IFT parent bond offers
- Successful rollover of senior debt (with good term
and pricing)
- Significantly improved financial flexibility

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Investors are adept at finding new concerns …

• Immediate outlook for TPW

- recent TPW performance and spike in
customer churn following SOE asset swaps
has raised some question over the medium
term outlook

• Privatisation of SOE’s
- SOE privatizations – although good for long
term market discipline – may create some
liquidity and trading issues during the
execution phase

• Sustainability of GEL earnings in the long

term
- How long can margin and volume growth be
sustained?

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So, what will drive the re-rating?

Dividends

Total 
Growing  Closing the NTA 
Underlying NTA Shareholder  Discount
Returns

Buybacks

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We’ve been working on the qualitative factors…

Dividends

Closing the NTA 
Discount

Growing 
Total 
Underlying NTA Shareholder 
Returns
- Discipline
- Consistency of the 
investment model
- Access to capital
- Origination outlook
Buybacks

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But focus is always on growing underlying NTA …

Dividends

Growing 
Underlying NTA

Total 
Closing the NTA 
Shareholder  Discount
Returns
- Sector allocation
- Performance 
management
- Sequence and timing 
of projects
- M&A Buybacks

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High conviction around our major assumptions ...

Related  Net Asset  Confidence 

Fundamental Assumption or Trend Asset Exposure Levels

Rising electricity price path in NZ TPW $1.1bn High

Inherent NPV in exclusive development  TPW, Lumo, 

options and internal capex PE, GEL $2.0bn High

Future value of dual‐fuel customers in
concentrated Australian energy market Lumo $0.3bn High

Future international PAX CAGR > GDP WIAL $0.4bn High

Improving net margins per litre in NZ  GEL $0.4bn Med ‐ High

downstream oil industry

Value of peaking and storage assets in capacity 
constrained energy markets TPW, Lumo $1.6bn Med

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Satisfaction with our secondary assumptions …

Related  Net Asset  Confidence 

Fundamental Assumption or Trend Asset Exposure Levels

Development of carbon pricing in Australia and 
New Zealand TPW, Lumo, PE $1.6bn Med

Further development of LCC airline model in 
Australasia and Asia  WIAL $0.4bn Med

Public transport PAX growth reflected in 
profitable long‐term contracts NZ Bus $0.2bn Med

Crude oil prices upward bias IFT $0.2bn Low ‐ Med

NZD exchange rates (varies by currency) IFT variable Low ‐ Med

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Capital allocation priorities are under constant review

• Portfolio rebalancing is not complete

- Still monitoring public transport and European airport sectors
- Other opportunities to recycle capital (e.g. Snowtown I)
• Group capital expenditure largely depends on decisions around TPW,
Greenstone, and Australian energy
- TPW: generation and irrigation
- Greenstone: branding decision and terminal choices
- Australian energy: generation (WA and NSW) and retail
- NZ Bus fleet renewal underway
• Origination activity is largely focused on energy and transport opportunities in
Australia and NZ
- Opportunities adjacent to our existing positions in Greenstone Energy and IEA/Lumo
- Market scans are constantly conducted across a broad range of infrastructure sectors

Buybacks and periodic realisations will be executed when value to price

ratios highlight the best use of scarce capital

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And sector choices are being actively managed …

Activity Recent Examples Future Focus (example)

Drive short‐term  Greenstone, Lumo Energy, NZ  Greenstone, Lumo, TPW

performance Bus
Deliver greenfield  Kwinana, Port Stanvac,  Snowtown II, Arnold hydro,
construction projects Mahinerangi NSW gas‐fired power station

Optimise commercial  Public transport operating  Pricing round at WIAL, Oil 

models model in NZ industry JV structures

Maximise access to capital NZ retail bond market International equity investors

Share buybacks TPW buyback program IFT parent

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Momentum + activity = compound growth

Activity Recent Examples Future Focus (example)

Influence industry  SOE privatisations in the NZ 

structure Air NZ/Virgin alliance electricity market
Develop resource consents  Arnold and Wairau hydro 
for future projects schemes Water and irrigation in NZ

Influence regulatory NZ public transport, NZ airport  NZ electricity market, 

outcomes information disclosure regime downstream oil fuel spec’s

Divest lower return assets Listed portfolio investments To be determined

Acquire new positions at  Opportunities adjacent to Lumo 

significant discounts to NPV Greenstone Energy Energy and Greenstone

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2011 Outlook - upside bias to EBITDAF earnings

• EBITDAF range $415 million to $435

million – major assumptions:
- approx $30 million equity earnings contribution from HY 30 Sept 2010 FY 2011
50% of Greenstone Energy ($Millions) H1 2011 Guidance
- TrustPower EBITDAF in line with FY 2010
EBITDAF $258 $415‐$435
- WIAL and NZ Bus hold first half gains
- IEA $40-$50m FY EBITDAF reflecting significant
seasonality in second half of year Net Interest ($80) ($160‐$170)

• Upside confidence to EBITDAF outlook Operating Cash Flow $94 $160‐$180

partially balanced by recent developments
- GEL gross margins temporarily impacted by recent
Investment/Capex ($301) ($450‐$500)
spike in crude oil prices and weakness in NZD
- Direct cost of Christchurch earthquake

• Operating cash flow reflects EBITDAF,

interest, tax and anticipated movements in
working capital

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Confidence in the long-term outlook

• Favourable sector trends and capital investment program will drive

consolidated EBITDAF towards $500 million
- exposure to rising energy prices and consumption, changing NZ fuels industry, air
travel and urban mobility
• Next phase of investment cycle will suit Infratil
- large pools of infrastructure capital targeting passive utility returns (not growth
infrastructure)
- few active managers of complex assets
- many quality assets currently in “work-out” or PE funds
- constraints on government spending will mean increased private provision of
infrastructure
• Infratil’s priorities: energy and transport sectors in Australia and New
Zealand
- control or influential stakes in unlisted assets in sectors we understand well
- partnerships and co-investment model especially for larger value opportunities
- other sectors and investment ideas continue to be actively monitored

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