NEW ZEALAND CEN NZ Price (at 06:38, 14 Aug 2012 GMT) Outperform NZ$4.88 Volatility index Low 12-month target NZ$ 5.70 12-month TSR % +21.8 Valuation NZ$ - DCF (WACC 8.1%, beta 0.6, ERP 7.0%, RFR 4.0%) 5.58 GICS sector Utilities Market cap NZ$m 3,507 30-day avg turnover NZ$m 2.6 Number shares on issue m 718.7 Investment fundamentals Year end 30 Jun 2012A 2013E 2014E 2015E Revenue m 2,679.7 2,394.8 2,494.0 2,591.2 EBIT m 317.5 332.8 375.3 426.2 Reported profit m 190.4 188.0 205.9 233.3 Adjusted profit m 176.0 188.0 205.9 233.3 Gross cashflow m 369.1 381.7 400.9 426.7 CFPS 51.8 53.1 55.8 59.4 CFPS growth % 0.4 2.6 5.0 6.4 PGCFPS x 9.4 9.2 8.7 8.2 PGCFPS rel x 1.08 1.21 1.21 1.18 EPS adj 24.7 26.2 28.7 32.5 EPS adj growth % -0.3 6.1 9.5 13.3 PER adj x 19.8 18.7 17.0 15.0 PER rel x 1.12 1.23 1.21 1.13 Total DPS 23.0 24.0 25.0 26.0 Total div yield % 4.7 4.9 5.1 5.3 Franking 1 % 100 100 100 100 ROA % 5.4 5.4 6.1 6.9 ROE % 5.3 5.5 6.0 6.7 EV/EBITDA x 9.7 9.4 8.7 8.0 Net debt/equity % 42.0 45.3 43.2 39.2 P/BV x 1.0 1.0 1.0 1.0 1 NZ imputation credits are only able to be used by shareholders to offset NZ income tax liability. CEN NZ vs NZSE50, & rec history Note: Recommendation timeline - if not a continuous line, then there was no Macquarie coverage at the time or there was an embargo period. Source: FactSet, Macquarie Research, August 2012 (all figures in NZD unless noted) 14 August 2012 Macquarie Securities (NZ) Limited Retail recovering its footing Event (CEN) reported 2H12 EBITDAF and NPAT of $278m and $100m, ahead of Macquarie (consensus) estimates by 11% (6%) and 20% (5%). Final DPS at $0.12 was in line. Impact The positive operating earnings variance for us seems to be in: higher retail electricity contribution (driven by +4% increase in average realisation versus Macq. estimate +2.0% pcp or $13m positive variance); higher spot exposed revenue (higher peak/ccgt spark spread and lower net swaption cover costs of around $11m versus FY11); Higher net ancillary revenues (possibly $20m higher pcp with around half this amount sustainable on an ongoing basis); lower carbon costs on lower unit cost; lower 2H gas generation cost ($3m positive operating variance) possibly due to reshaping of 2012 and 2013 take-or-pay (TOP) volumes; Higher C&I pricing (CEN indicated it continues to re-contract its book close to ASX futures levels (3Q13 now above $90/MWh) although this impact is difficult to isolate; lower non-fuel operating electricity costs ($3m positive variance). The company indicated it expects its gas re-contracting to provide materials earnings improvement in the next few years. We will check with the company what impact 2H12 contract reshaping is likely to have on unit costs/ccgt operating regime going forward. Earnings and target price revision FY13-15 EPS upgrades of 14%, 24% and 33% resp. on higher retail average realisations and lower interest costs. PT conseq. moves from $5.25 to $5.70. Price catalyst 12-month price target: NZ$5.70 based on a DCF methodology. Catalyst: Nov ASM, further SOE retail tariff adjustments, firming ASX futures Action and recommendation The company is comfortable with FY13 consensus (FY13 EBITDAF pre-result $525m). It indicated that firming retail tariffs, the CY13 swaption roll-over ($10m effective net cost pa), lower carbon costs and lower TOP gas risks are expected to offset a net ancillary revenue step-down ($10m due to dry South Island hydro-inflows) and an over-supplied wholesale market. We suspect that the company is conservative here. Please refer to the important disclosures and analyst certification on inside back cover of this document, or on our website www.macquarie.com/disclosures.
Better exposed generation and retail contributions over 2H12 (CEN) reported 2H12 EBITDAF and NPAT of $278m and $100m, ahead of Macquarie (consensus) estimates by 11% (6%) and 20% (5%). Final DPS at $0.12 was in line. The result is pre-fair value adjustments (-$11.5m), Oakey Power gain on sale ($27.9m) and other smaller costs/impairments (combined -$6.6m). The positive operating earnings variance seems to be in: higher retail electricity contribution (driven by +4% increase in average realisation versus Macq. estimate +2.0% pcp or $13m positive variance); higher spot exposed revenue (higher peak/ccgt spark spread and lower net swaption cover costs of around $11m versus FY11 ); Higher C&I pricing (CEN indicated it continues to re-contract its book close to ASX futures levels (3Q13 now above $90/MWh which is well above our current estimate) although this impact is difficult to isolate; Higher net ancillary revenues (possibly $20m higher pcp with around half this amount sustainable on an ongoing basis); Lower carbon costs on lower unit cost; Lower 2H gas generation cost ($3m positive operating variance) possibly due to reshaping of 2012 and 2013 take-or-pay (TOP) volumes; Lower non-fuel operating electricity costs ($3m positive variance). Fig 1 2H12 snapshot (FY June) 1H12A 2H12A 2H12E Consensus 2H12E Operating Revenue $m 1272 1408 1215 EBITDAF $m 231 278 250 265 Depreciation $m 95 99 92 Amortisation $m 0 0 0 EBIT - Recurring $m 136 179 156 EBIT $m 127 201 158 Net Interest Expense $m 37 35 42 Pre-Taxation Profit $m 90 166 116 Taxation Expense $m 22 44 33 Profit after Taxation $m 68 122 83 Minorities $m 0 0 0 Reported Profit after taxation $m 68 122 83 Tax-affected Non -Recurring Items $m -8 23 0 Pre Abnormal Profit after Tax $m 76 100 83 94 Adjusted Earnings 1 $m 76 100 83 DPS cps 11.0 12.0 12.0 12.0 1 Adjusted for non-recurring items 1H12A 2H12A 2H12E Wholesale electricity revenue $m 398 572 403 Retail electricity sales (gross) $m 752 729 700 Retail electricity sales (net of energy cost) $m 374 245 373 Key Operating Variables Average Wholesale Price Realised - GWAP $/MWh 79.31 102.30 95.00 GWAP/TWAP (HAY) x 1.02 1.03 1.03 Hedge level (volume basis, inc retail) % 88% 93% 85% Total generation (inc. swaption) GWh 5289 5364 5379 Energy cost/gwap x 1.06 1.14 1.07 Implied CFD income $m -21.4 13.7 0.0 Average retail realisation (c/kwh) 17.54 18.24 17.90 Growth pcp % 0.6% 4.0% 2.0% Retail electricity customer growth (average pcp) % -4.5% -0.9% 0.5% Gas purchase and transmission cost $/GJ 5.95 6.29 6.99 Take or Pay gas losses $m 0 0 0 Retail electricity margin ($77/MWh transfer price; LWAP/TWAP 1.09) % 9.0% na 9.0% Source: Company data, Bloomberg mean consensus data, Macquarie Research, August 2012 14 August 2012 2
FCF yield 2019E 2017E 2015E 2013E 2011A 2009A 2007A 2005A 2003A 2001A Macquarie Private Wealth We think unfavourable hydrology and mass-market margin compression, in particular, hurt CEN in 1H12 resulting in a negative variance versus our forecasts. We saw something of a reversal of both factors in this half. A wet North/dry South hydrology mix and over-supplied wholesale market (close to 6,000 GWh of new, largely must run, generation plant versus demand growth of around 1,300 GWh from 2007-11) led to an unfavourable exposed generation position for CEN during 1H12; Lower hydro volumes over 1H (-16%) were replaced with more expensive thermal generation with higher wholesale prices only just covering these costs. Wholesale prices were up markedly in percentage terms (+46% pcp to around $79/MWh) but need to reach $75/MWh just to cover the SRMC of CEN s CCGT fleet and around $90-100/MWh to cover its thermal peakers; This half has seen CEN s GWAP closer to $100/MWh which should see an improved exposed generation position (peak/ccgt spark spreads and lower effective swaption cost see below); The OCF result was a blow-out (+50% variance to Macq) partly due to lower tax paid. Te Mihi broadly on track Progress on Te Mihi appears to remain broadly on track (2013 completion versus mid 2013 target at February). We ll clarify whether there has been any slippage. There were some small changes to the capex guidance which we have incorporated (around $50m of geothermal capex appears to have been deferred from F12 to FY13). We summarise our FCF forecasts below. Fig 2 FCF to increase at twice the inflation rate over the next 5 years 16% 14% forecast 12% 10% 8% 6% 4% 2% 0% Source: Company data, Macquarie Research, August 2012 Retail pricing well ahead of Macq; CEN churn returns to national average A better than forecast retail electricity contribution (driven by +4% increase in average realisation versus Macq. estimate +2.0% pcp or $13m positive variance and normalisation of company churn to national levels for the first time since 2008) was an important indicator for us. We think there are clear signs that price convergence over this calendar year may well be characterised by upward pressure in SOE tariffs as opposed to last year s downward pressure in private sector pricing. To wit, each of the three SOE gentailers have announced energy only price increases ahead of our expectations so far this year. We expect to see the SOEs continue to move retail pricing up to more closely reflect the current estimated energy cost (approximately $77/MWh before shape and location adjustments). 14 August 2012 3
Some gas re-profiling over 2H12; material gains over the next few years The company has indicated that it expects its gas re-contracting to provide materials earnings improvement in the next few years. Its CY13 TOP volumes have fallen from 38PJ to 32 in CY12 with a 1PJ reduction effected in respect of this year. CY14 sees a material increase in TOP volumes from the last disclosure as TOP ROFR gas has been confirmed. We will check with the company what impact this is likely to have on gas costs/ccgt operating regime going forward. The published materials talk of reshaping contract volumes from 2H14 to allow CEN to flexibly match retail sales (i.e. renewables generation portfolio will cover mass market load by at least 1.6x FY12 sales with flexible thermal (gas storage plus future contracted gas position) to cover TOU load). Macq. models an average CCGT CF of 60% (LT average of around 80%) and a $9.50/GJ all in gas cost until CY15 and then $0.70/GJ step down from that year. The company has clarified that it does not intend to shift Otahuhu to an OCGT configuration for at least the next year. It continues to work through consenting, manufacturer and gas supplier negotiations as it seeks to optimise its position. Comfortable with guidance (very comfortable?) The company is comfortable with FY13 consensus (FY13 EBITDAF pre-result $525m) with the firmer retail tariffs, the CY13 swaption roll-over, lower carbon costs and lower TOP gas risks expected to offset a net ancillary revenue step-down ($10m due to dry South Island hydro-inflows) and an over-supplied wholesale market. We suspect that the company is conservative here but given, recent volatility, this is understandable. Note, CEN s estimated 500 GWh swaption cover will expire December 2012. We estimate that it has a combined variable/fixed call cost of $110/MWh. Based on current forward pricing of around $90/MWh, the effective net cost of this cover is around $10m pa equivalent to the cost saving we have modelled on a full-year basis (i.e. from January 2012). The effective cost of this cover for FY12 based on the exposed GWAP was $7m ($18m FY11). Our upgrades move us slightly higher than pre-release consensus We have upgraded our FY13-15 EPS forecasts by 14%, 24% and 33% resp. These upgrades reflect higher forecast retail average realisations and lower forecast interest costs predominantly. Our PT moves from $5.25 to $5.70 with about half of this due to a lower discount rate and half due to our operating earnings changes. 14 August 2012 4
(CEN:$4.88) Interim Results 1H/12A 2H/12A 1H/13E 2H/13E Profit & Loss 2012A 2013E 2014E 2015E June y/e Sept/June y/e2 Operating Revenue $m 1272 1408 1198 1197 Operating Revenue $m 2680 2395 2494 2591 EBITDAF - Recurring $m 231 278 260 266 EBITDAF - Recurring $m 509 526 570 620 Depreciation $m 95 99 95 99 Depreciation $m 193 194 195 193 Amortisation $m 0 0 0 0 Amortisation $m 0 0 0 0 EBIT - Recurring $m 136 179 165 168 EBIT - Recurring $m 316 333 375 426 EBIT $m 127 201 165 168 EBIT $m 327 333 375 426 Net Interest Expense $m 37 35 34 38 Net Interest Expense $m 72 72 93 111 Pre-Taxation Profit $m 90 166 131 130 Pre-Taxation Profit $m 256 261 282 315 Taxation Expense $m 22 44 37 36 Taxation Expense $m 65 73 76 82 Profit after Taxation $m 68 122 94 94 Profit after Taxation $m 190 188 206 233 Minorities $m 0 0 0 0 Minorities $m 0 0 0 0 Reported Profit after taxation $m 68 122 94 94 Reported Profit after taxation $m 190 188 206 233 Tax-affected Non -Recurring Items $m (8) 23 0 0 Tax-affected Non -Recurring Items $m 14 0 0 0 Pre Abnormal Profit after Tax $m 76 100 94 94 Pre Abnormal Profit after Tax $m 176 188 206 233 Adjusted Earnings 1 $m 76 100 94 94 Adjusted Earnings 1 $m 176 188 206 233 1 Adj for non-recurring items Wholesale and retail electricity 1H/12A 2H/12A 1H/13E 2H/13E Wholesale and retail electricity 2012A 2013E 2014E 2015E Wholesale electricity revenue $m 398 572 323 337 Wholesale electricity revenue $m 971 660 728 788 Retail electricity sales (gross) $m 752 729 770 747 Retail electricity sales (gross) $m 1480 1517 1540 1566 Retail electricity sales (net of energy cost) $m 374 245 474 438 Retail electricity sales (net of energy cost) $m 619 912 906 884 Key Assumptions Key Assumptions Average Wholesale Price Realised - GWAP ($/M Wh) 79.31 102.30 60.00 67.00 Average Wholesale Price Realised - GWAP ($/M Wh) 90.81 63.50 68.17 73.38 CFD year average strike price ($/M Wh) 79.31 102.30 60.00 67.00 CFD year average strike price ($/M Wh) 73.90 63.50 68.17 73.38 Hedge level (volume basis, inc retail) (GWh) 88% 93% 83% 83% Hedge level (volume basis, inc retail) (GWh) 91% 83% 83% 83% Total generation (GWh) 5289 5364 5379 5028 Total generation (GWh) 10653 10407 10684 10745 Energy cost/gwap (x) 1.06 1.14 1.11 1.11 Energy cost/gwap (x) 1.10 1.11 1.08 1.08 Gas purchase and transmission cost ($/GJ) 7.22 7.52 11.25 10.59 Gas purchase and transmission cost ($/GJ) 7.37 10.92 10.74 10.17 Discounted Cashflow Valuation Profit and Loss Ratios 2012A 2013E 2014E 2015E PER (adj Earnings) x 19.9 18.7 17.0 15.0 PV FCFs Available to Owners $m 5379 EPS (adj Earnings) c 24.5 26.2 28.7 32.5 Less Net Debt (inc Associate debt share) $m 1437 EPS (Reported) c 26.5 26.2 28.7 32.5 Equity Value $m 3942 DPS c 23.0 24.0 25.0 26.0 Shares Outstanding m 707 Revenue Growth % 20% -11% 4% 4% Equity Value per Share $m 5.58 EBIT Growth % 20% 2% 13% 14% Includes PV Tax Losses $m - EBITDA/Sales % 19% 22% 23% 24% EBIT/Sales % 12% 14% 15% 16% Assumptions Effective tax rate % 26% 28% 27% 26% Risk free rate 4.0% Payout ratio % 94 92 87 80 Asset beta 0.57 EV/EBIT x 14.7 14.0 12.4 10.9 Post-tax market risk premium 7.0% EV/EBITDA x 9.1 8.8 8.1 7.5 Target D/V 42% EV/Sales x 1.7 1.9 1.9 1.8 Nominal WACC (%) 8.1% Balance Sheet Ratios Terminal Year Assumptions ROE % 9.2 9.7 10.8 12.1 EBITDA (FY20) $m 670 ROA % 5.7 5.8 6.5 7.4 Perpetuity growth rate % pa 2.5 ROFE % 6.8 6.8 7.5 8.7 Terminal EV/EBITDA x 9.53 Net Debt $m 1437 1555 1495 1378 Capex=Depreciation yes Net Debt/Equity % 42.0 45.3 43.2 39.2 Net Interest Cover (EBIT) x 3.0 2.7 3.2 3.8 Price/NTA x 1.2 1.1 1.1 1.1 NTA per share cps 424 426 430 437 EFPOWA m 718.7 718.7 718.7 718.7 Cashflow Analysis 2011A 2012A 2013E 2014E Balance Sheet 2012A 2013E 2014E 2015E Pre-taxation Profit $m 211 256 261 282 Depreciation & Amortisation $m 166 193 194 195 Tax (Paid)/Credit $m (23) (35) (73) (76) Cash $m 6 6 6 6 Other $m 35 59 0 0 Receivables $m 351 299 307 321 Gross Cashflow $m 389 473 382 401 Inventories $m 131 111 115 120 Changes in Working Capital $m (11) (33) 11 (2) Investments $m 0 0 0 0 Other $m 0 0 0 0 Property, Plant & Equipment $m 5164 5308 5273 5206 Operating Cashflow $m 378 440 393 399 Intangibles $m 370 370 370 370 Acquisitions $m 0 63 0 0 Other Assets $m 90 90 90 90 Capital Expenditure $m 530 503 338 160 Total Assets $m 6112 6185 6161 6114 Asset Sales $m 0 0 0 0 Payables $m 409 348 358 374 Other $m 0 0 0 0 Short Term Debt $m 102 102 102 102 Investing Cashflow $m (530) (566) (338) (160) Long Term Debt $m 1341 1459 1399 1282 Dividend (ordinary) $m 34 43 172 180 Other Liabilities $m 843 843 843 843 Equity Raised $m 351 0 0 0 Total Liabilities $m 2695 2752 2702 2601 Other $m 0 0 0 0 Shareholders' Funds $m 3418 3433 3459 3513 Financing Cashflow $m 317 (43) (172) (180) Minority Interests $m 0 0 0 0 Total Shareholders' Equity $m 3418 3433 3459 3513 Net Change in Cash (inc FX) $m 165 (168) (118) 60 Total Funds Employed $m 6112 6185 6161 6114 Source: Company data, Macquarie Research, August 2012 14 August 2012 5
Important disclosures: Recommendation definitions Macquarie - Australia/New Zealand Outperform return >3% in excess of benchmark return Neutral return within 3% of benchmark return Underperform return >3% below benchmark return Benchmark return is determined by long term nominal GDP growth plus 12 month forward market dividend yield Macquarie Asia/Europe Outperform expected return >+10% Neutral expected return from -10% to +10% Underperform expected return <-10% Macquarie First South - South Africa Outperform expected return >+10% Neutral expected return from -10% to +10% Underperform expected return <-10% Macquarie - Canada Outperform return >5% in excess of benchmark return Neutral return within 5% of benchmark return Underperform return >5% below benchmark return Macquarie - USA Outperform (Buy) return >5% in excess of Russell 3000 index return Neutral (Hold) return within 5% of Russell 3000 index return Underperform (Sell) return >5% below Russell 3000 index return Volatility index definition* This is calculated from the volatility of historical price movements. Very high highest risk Stock should be expected to move up or down 60 100% in a year investors should be aware this stock is highly speculative. High stock should be expected to move up or down at least 40 60% in a year investors should be aware this stock could be speculative. Medium stock should be expected to move up or down at least 30 40% in a year. Low medium stock should be expected to move up or down at least 25 30% in a year. Low stock should be expected to move up or down at least 15 25% in a year. * Applicable to Australian/NZ/Canada stocks only Recommendations 12 months Note: Quant recommendations may differ from Fundamental Analyst recommendations Financial definitions All "Adjusted" data items have had the following adjustments made: Added back: goodwill amortisation, provision for catastrophe reserves, IFRS derivatives & hedging, IFRS impairments & IFRS interest expense Excluded: non recurring items, asset revals, property revals, appraisal value uplift, preference dividends & minority interests EPS = adjusted net profit / efpowa* ROA = adjusted ebit / average total assets ROA Banks/Insurance = adjusted net profit /average total assets ROE = adjusted net profit / average shareholders funds Gross cashflow = adjusted net profit + depreciation *equivalent fully paid ordinary weighted average number of shares All Reported numbers for Australian/NZ listed stocks are modelled under IFRS (International Financial Reporting Standards). Recommendation proportions For quarter ending 30 June 2012 AU/NZ Asia RSA USA CA EUR Outperform 55.67% 61.00% 53.43% 42.58% 69.23% 46.60% (for US coverage by MCUSA, 9.05% of stocks followed are investment banking clients) Neutral 30.50% 22.11% 36.99% 52.41% 28.02% 33.69% (for US coverage by MCUSA, 8.14% of stocks followed are investment banking clients) Underperform 13.83% 16.89% 9.59% 5.01% 2.75% 19.71% (for US coverage by MCUSA, 0.45% of stocks covered are investment banking clients) Company Specific Disclosures: Important disclosure information regarding the subject companies covered in this report is available at www.macquarie.com/disclosures. 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 of Macquarie Group Ltd ABN 94 122 169 279 (AFSL No. 318062) (MGL) and its related entities (the Macquarie Group) and has taken reasonable care to achieve and maintain independence and objectivity in making any recommendations. General Disclaimers: Macquarie Securities (Australia) Ltd; Macquarie Capital (Europe) Ltd; Macquarie Capital Markets Canada Ltd; Macquarie Capital Markets North America Ltd; Macquarie Capital (USA) Inc; Macquarie Capital Securities Ltd and its Taiwan branch; Macquarie Capital Securities (Singapore) Pte Ltd; Macquarie Securities (NZ) Ltd; Macquarie First South Securities (Pty) Limited; Macquarie Capital Securities (India) Pvt Ltd; Macquarie Capital Securities (Malaysia) Sdn Bhd; Macquarie Securities Korea Limited and Macquarie Securities (Thailand) Ltd are not authorized 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 Bank Limited ABN 46 008 583 542 (MBL) or MGL. MBL does not guarantee or otherwise provide assurance in respect of the obligations of any of the above mentioned entities. MGL provides a guarantee to the Monetary Authority of Singapore in respect of the obligations and liabilities of Macquarie Capital Securities (Singapore) Pte Ltd for up to SGD 35 million. 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. 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. MGL has established and implemented a conflicts policy at group level (which may be revised and updated from time to time) (the "Conflicts Policy") pursuant to regulatory requirements (including the FSA Rules) which sets out how we must seek to identify and manage all material conflicts of interest. 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 your investment objectives, financial situation or particular needs. Macquarie salespeople, traders and other professionals may provide oral or written market commentary or trading strategies to our clients that reflect opinions which are contrary to the opinions expressed in this research. Macquarie Research produces a variety of research products including, but not limited to, fundamental analysis, macro-economic analysis, quantitative analysis, and trade ideas. Recommendations contained in one type of research product may differ from recommendations contained in other types of research, whether as a result of differing time horizons, methodologies, or otherwise. Before making an investment decision on the basis of this research, you need to consider, with or without the assistance of an adviser, whether the advice is appropriate in light of your 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. Clients should contact analysts at, and execute transactions through, a Macquarie Group entity in their home jurisdiction unless governing law permits otherwise. The date and timestamp for above share price and market cap is the closed price of the price date. #CLOSE is the final price at which the security is traded in the relevant exchange on the date indicated. Country-Specific Disclaimers: Australia: In Australia, research is issued and distributed by Macquarie Securities (Australia) Ltd (AFSL No. 238947), a participating organisation of the Australian Securities Exchange. New Zealand: In New Zealand, research is issued and distributed by Macquarie Securities (NZ) Ltd, a NZX Firm. Canada: In Canada, research is prepared, approved and distributed by Macquarie Capital Markets Canada Ltd, a participating organisation of the Toronto Stock Exchange, TSX Venture Exchange & Montréal Exchange. Macquarie Capital Markets North America Ltd., which is a registered brokerdealer and member of FINRA, accepts responsibility for the contents of reports issued by Macquarie Capital Markets Canada Ltd in the United States and sent to US persons. Any person wishing to effect transactions in the securities described in the reports issued by Macquarie Capital Markets Canada Ltd should do so with Macquarie Capital Markets North America Ltd. The Research Distribution Policy of Macquarie Capital Markets Canada Ltd is to allow all clients that are entitled to have equal access to our research. United Kingdom: In the United Kingdom, research is issued and 14 August 2012 6
distributed by Macquarie Capital (Europe) Ltd, which is authorised and regulated by the Financial Services Authority (No. 193905). Germany: In Germany, this research is issued and/or distributed by Macquarie Capital (Europe) Limited, Niederlassung Deutschland, which is authorised and regulated by the UK Financial Services Authority (No. 193905). and in Germany by BaFin. France: In France, research is issued and distributed by Macquarie Capital (Europe) Ltd, which is authorised and regulated in the United Kingdom by the Financial Services Authority (No. 193905). Hong Kong & Mainland China: In Hong Kong, research is issued and distributed by Macquarie Capital Securities Ltd, which is licensed and regulated by the Securities and Futures Commission. In Mainland China, Macquarie Securities (Australia) Limited Shanghai Representative Office only engages in nonbusiness operational activities excluding issuing and distributing research. Only non-a share research is distributed into Mainland China by Macquarie Capital Securities Ltd. Japan: In Japan, research is issued and distributed by Macquarie Capital Securities (Japan) Limited, a member of the Tokyo Stock Exchange, Inc. and Osaka Securities Exchange Co. Ltd (Financial Instruments Firm, Kanto Financial Bureau (kin-sho) No. 231, a member of Japan Securities Dealers Association and The Financial Futures Association of Japan and Japan Securities Investment Advisers Association). India: In India, research is issued and distributed by Macquarie Capital Securities (India) Pvt Ltd., 92, Level 9, 2 North Avenue, Maker Maxity, Bandra Kurla Complex, Bandra (East), Mumbai 400 051, India, which is a SEBI registered Stock Broker having membership with National Stock Exchange of India Limited (INB231246738) and Bombay Stock Exchange Limited (INB011246734). Malaysia: In Malaysia, research is issued and distributed by Macquarie Capital Securities (Malaysia) Sdn. Bhd. (Company registration number: 463469-W) which is a Participating Organisation of Bursa Malaysia Berhad and a holder of Capital Markets Services License issued by the Securities Commission. Taiwan: Information on securities/instruments that are traded in Taiwan is distributed by Macquarie Capital Securities Ltd, Taiwan Branch, which is licensed and regulated by the Financial Supervisory Commission. No portion of the report may be reproduced or quoted by the press or any other person without authorisation from Macquarie. Nothing in this research shall be construed as a solicitation to buy or sell any security or product. Research Associate(s) in this report who are registered as Clerks only assist in the preparation of research and are not engaged in writing the research. Thailand: In Thailand, research is produced with the contribution of Kasikorn Securities Public Company Limited, issued and distributed by Macquarie Securities (Thailand) Ltd. Macquarie Securities (Thailand) Ltd. is a licensed securities company that is authorized by the Ministry of Finance, regulated by the Securities and Exchange Commission of Thailand and is an exchange member of the Stock Exchange of Thailand. Macquarie Securities (Thailand) Limited and Kasikorn Securities Public Company Limited have entered into an exclusive strategic alliance agreement to broaden and deepen the scope of services provided to each parties respective clients. The strategic alliance does not constitute a joint venture. The Thai Institute of Directors Association has disclosed the Corporate Governance Report of Thai Listed Companies made pursuant to the policy of the Securities and Exchange Commission of Thailand. Macquarie Securities (Thailand) Ltd does not endorse the result of the Corporate Governance Report of Thai Listed Companies but this Report can be accessed at: http://www.thaiiod.com/en/publications.asp?type=4. South Korea: In South Korea, unless otherwise stated, research is prepared, issued and distributed by Macquarie Securities Korea Limited, which is regulated by the Financial Supervisory Services. Information on analysts in MSKL is disclosed at http://dis.kofia.or.kr/fs/dis2/fundmgr/disfundmgranalystpop.jsp?companycd2=a03053&pagediv=02. South Africa: In South Africa, research is issued and distributed by Macquarie First South Securities (Pty) Limited, a member of the JSE Limited. Singapore: In Singapore, research is issued and distributed by Macquarie Capital Securities (Singapore) Pte Ltd (Company Registration Number: 198702912C), a Capital Markets Services license 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 Capital Securities (Singapore) Pte Ltd is exempt from complying with sections 25, 27 and 36 of the Financial Advisers Act. All Singapore-based recipients of research produced by Macquarie Capital (Europe) Limited, Macquarie Capital Markets Canada Ltd, Macquarie First South Securities (Pty) Limited and Macquarie Capital (USA) Inc. represent and warrant that they are institutional investors as defined in the Securities and Futures Act. United States: In the United States, research is issued and distributed by Macquarie Capital (USA) Inc., which is a registered broker-dealer and member of FINRA. Macquarie Capital (USA) Inc, 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 Capital (USA) Inc. Macquarie Capital (USA) Inc. s affiliate s analysts are not registered as research analysts with FINRA, may not be associated persons of Macquarie Capital (USA) Inc., and therefore may not be subject to FINRA rule restrictions on communications with a subject company, public appearances, and trading securities held by a research analyst account. Any persons receiving this report directly from Macquarie Capital (USA) Inc. and wishing to effect a transaction in any security described herein should do so with Macquarie Capital (USA) Inc. Important disclosure information regarding the subject companies covered in this report is available at www.macquarie.com/research/disclosures, or contact your registered representative at 1-888-MAC-STOCK, or write to the Supervisory Analysts, Research Department, Macquarie Securities, 125 W.55th Street, New York, NY 10019. Macquarie Group 14 August 2012 7