2010 Mighty River Power Interim Results

Interim Results Briefing to Banks & Institutional Investors

26 February 2010

Half Year Profitability 125

100

75 $M 50

25

0 2000

2001

2002

2003

Net Profit after Tax

ƒ

Slide 2

2004

2005

2006

2007

2008

2009

2010

Underlying Earnings after Tax

Depreciation & amortisation has risen from $39.6m in 2008 to $51.8m in 2009, following the commissioning of Kawerau , to $ $57.6m in 2010 due to the revaluation of Kawerau.

Half Year EBITDAF & Operating Cash Flow 250

200

150 $M 100

50

0 2000

2001

2002

2003 EBITDAF

ƒ Slide 3

2004

2005

2006

2007

2008

2009

2010

Operating Cash Flow

2010 operating cash flow impacted by changes in provisional tax payments dates. Two payments were made ,one for the prior tax year (high profits) and one for current tax year. compared to one in prior periods.

Energy Margin

$M

600

60%

500

55%

400

50%

300

45%

200

40%

100

35%

0

30% 2000

2001

2002 Full Year

ƒ

Slide 4

2003

2004

2005

Half Year

2006

2007

2008

2009

2010 Interim

% Half Year to Full Year

Energy Margin represents sales less lines & metering costs, energy costs, market fees & levies , transmission connection costs and debtor and billing related costs

Energy Margin 65 60 55 50 $M $

45 40 35 30 25 20 Jul

Aug

Sep

Oct

Year to June 2008

Slide 5

Nov

Dec

Jan

Year to June 2009

Feb

Mar

Year to June 2010

Apr

May

Jun

Generation Portfolio Performance 31 December 08 GWh Geothermal

GWh

Share %

Variance GWh

%

628

18.0

640

21.7

12

1.9

2,595

74.4

2,075

70.3

(520)

(20.0)

244

70 7.0

228

77 7.7

(16)

(6 6) (6.6)

20

0.6

10

0.4

(4)

(23.5)

Total

3,487

100.0

2,953

100.0

(528)

(15.2)

Renewable Portfolio

3,223

92.5

2,715

91.8

(508)

(15.8)

Hydro Co-Gen Bio-energy

Slide 6

Share %

31 December 09

Generation Portfolio Performance 31 December 2008 3,487 GWh

31 December 2009 2,953 GWh

0% 8%

1%

0%

7%

8% 22%

18%

22%

70% 70%

74%

Hydro

Slide 7

Geothermal

Thermal

Biomass

4,500

500

4,000

450

3 500 3,500

400 350

3,000

300

2,500

250

2,000

200

1,500

150

1 000 1,000

100

500

50

0

M Mean Storage St (LHS) Slide 8

Daily Spot Price e ($/MWh))

Natio onal Stora age (GWh)

National Market Conditions

0

N ti National l Storage St (LHS)

B Benmore (RHS)

Wh k Whakamaru (RHS)

Mighty River Power Portfolio 600

450

Taupo Storrage (GWh) T

350

400

300 250

300

200 150

200

100

100

50

0

0

Waikato Generation (RHS) Taupo Storage (LHS) Slide 9

SWN Generation (RHS) Whakamaru (RHS)

Dailyy Spot Pricce ($/MWh h)

400

500

Generation Volumes & Yields 31 December 2008 GWh

VWAP/TWAP

GWh

$/MWh

VWAP/TWAP

– Kawerau

365

374

– Rotokawa

148

149

– Mokai

115

117

Geothermal

628

58.53

0.94

640

43.41

0.99

2 595 2,595

70 69 70.69

1 13 1.13

2 075 2,075

53 02 53.02

1 20 1.20

Co-Gen

244

112.86

1.71

228

77.49

1.65

Biomass

20

70.10

1.02

10

47.02

0.99

3,487

71.46

2,953

52.83

Hydro

Total

Slide 10

$/MWh

31 December 2009

500

200

450

150

400

100

350

50

300

0

250

-50

200

-100

150

-150

100

-200

50

-250

0

Net Po osition (Avverage MW W)

250

Net Position (LHS)

Slide 11

Average short position Jul – Dec 2009: 450GWh

Whakamaru (RHS)

Dailly Spot Priice ($/MW Wh)

Net Position

Retail Market Share

Slide 12

Retail Volumes & Yield 31 December 2008 GWh

$/MWh

31 December 2009 GWh

$/MWh

Sales Residential FPVV

1,193

102.8

1,379

105.9

Other FPVV

930

94 5 94.5

1 123 1,123

93 6 93.6

Spot

958

68.1

1,035

47.8

Contracts for Difference

791

553

Purchases Total NZEM Purchases

ƒ

Slide 13

3,209

Purchase VWAP/TWAP 2008: 1.11; 2009:1.10

74.0

3,638

50.3

Capital Expenditure 300

250

200 $M 150

100

50

0 2001

2002

Reinvestment

Slide 14

2003

2004

Geothermal

2005

Thermal

2006

Hydro

2007

Wind

2008

2009

2010 Interim

Other new investment

Slide 15

Net Debt & Total Assets 4,500 4,000 3,500 3,000 $M

2,500 2,000 1,500 1,000 500 0 2000

Slide 16

2001

2002

2003

2004

Total Assets

2005

2006

Net Debt

2007

2008

2009

2010 Interim

2005 – Generation assets revaluation, 2008 – Hydro and Co-generation asset revaluation, 2009 – Kawerau asset revaluation S&P confirmed BBB+ credit rating during annual review in December

Debt Maturity Profile 1,400 1,200 1 000 1,000

$M

800 600 400 200

Jan 21

Jan 20

Jan 19

Jan 18

Jan 17

FRN $300m

Yr10 Bond $30

7Yr Bond $120m

5+5 $200m

Bank Debt $150m

$250m RCAF

Bank Debt $30m

US$ 8m

Two year facility will eventually be replaced by DCM issue Continued focus on long duration debt Slide 17

Jan 16

Jan 15

Jan 14

Jan 13

Jan 12

Jan 11

Jan 10

0

Drawn debt at 31December 2009 - $860m $400m of debt raised over last six months

Ministerial Inquiry

Supportive of reforms particularly

• • •

Change in governance arrangements (EA, CCom) Increases in contract market liquidity

Too early to ascertain effect of physical/virtual asset swaps

• •

Slide 18

Preservation of the market model

Virtual swap terms still to be negotiated Uncertain impact p of swaps p on security/retail y competition p

Retail Pricing

ETS impacts post July 2010 introduction

• •

Slide 19

Expect flow-on effect on retail prices due to wholesale price uplift p

Retail acquisition remains profitable over customer life-cycle

• •

$25/tonne CO2 cap; $ p; 50% liabilityy on emissions until Dec 2012

Most competitive retail landscape since Empower days Hedge for expanding geothermal portfolio

Rising gas prices create upward pressure on wholesale price Expectations of long-term forward pricing needs to be at a level to justify new investment

Questions

Slide 20