China outlook Separating the myth from the reality Climbing the great wall of fear!

Macquarie Research Commodities China outlook Separating the myth from the reality Climbing the great wall of fear! September 211 Jim Lennon Macquarie Capital (Europe) Limited Level 7, 28 Ropemaker St, London, UK +44 23 37 4271 jim.lennon@macquarie.com Macquarie Research is a division of Macquarie Group Limited, an affiliate and parent company of Macquarie Capital (USA) Inc., a registered broker - dealer and member of The Financial Industry Regulatory Authority ( FINRA ). All transactions by U.S. investors involving securities discussed in this report must be effected through Macquarie Capital (USA) Inc., which assumes responsibility in the U.S. for the contents of this report. This research report has been prepared in whole or part by foreign research analysts. These research analysts are not registered/qualified as a research analyst with FINRA, but instead have satisfied the registration/qualification requirements or other research-related standards of a foreign jurisdiction that have been recognized for these purposes by FINRA

Overview of presentation Trends in Chinese supply and demand over the past decade Summary of our medium term supply and demand forecasts Short term Chinese volatility why we are not worried about China in 212 a review of recent macro trends China s de-synchronisation with rest of world we explain why Page 2

China outlook short-term slower but still stronger for longer China commodities growth is cyclical but in a steady upward direction still plenty of growth to come as urbanisation and industrialisation trends continue. The Chinese authorities are as worried about bubbles/over-capacity/overheating as anybody. China moves quickly to prevent them as it is doing now China opens and shuts capacity more quickly than anyone else Per capita analysis and common sense suggest that there is still a lot more growth to come from China, at least out to 215 and probably to 22. 211 has been a year of inventory destocking in China due to tight monetary policy 212 could see a strong 1H rebound in apparent demand, especially if the rest of the world slows Page 3

% CAGR % of total It s all been China for demand over the past decade 3% 2 2% 1% % - Average growth in consumption, 2-21 24.4% 18.% 18.9% 15.% 13.9%.9% -1.3% -.8% -1.7% -1.7% Copper Aluminium Zinc Nickel Lead 4 4% 3 3% 2 2% 1% % China's share of global consumption 42% 43% 41% 4% 38% 12% 13% 1% 8% 7% 6% 3% 3% 4% 4% 4% 2% Copper Aluminium Zinc Nickel Lead China Rest of world 198 199 2 21 Source: Antaike, ICSG, ILZSG, INSG, IAI, Brook Hunt, Macquarie Research, September 211 Page 4

' Ni mt Zn mt Cu mt Pb Big jump decade on decade in demand, except for copper (wasn t enough of it!) 6 5 4 3 2 1-1 -2 Copper demand growth by decade 198-9 199-2 2-1 China World Ex-China Total 4. 3.5 3. 2.5 2. 1.5 1..5. -.5-1. Lead demand growth by decade 198-9 199-2 2-1 China World Ex-China Total Nickel demand growth by decade Zinc demand growth by decade 6 5 4 3 2 1-1 -2 198-9 199-2 2-1 China World Ex-China Total 6 5 4 3 2 1-1 -2 198-9 199-2 2-1 21-2F China World Ex-China Total Source: Antaike, ICSG, ILZSG, INSG, IAI, Macquarie Research, September 211 Page 5

mtt Zn 't Ni mt copper mtt Pb Where supply came from: China dominates except in mining Copper supply growth Lead supply growth 4. 3.5 3. 2.5 2. 1.5 1..5. Scrap Mine and scrap 2-1 2-1 3. 2.5 2. 1.5 1..5. -.5-1. Scrap 2-1 2-1 Mined Refined Mined Refined China Ex-China China Ex-China Zinc supply growth Nickel supply growth 4. 3.5 3. 2.5 2. 1.5 1..5. 2-1 2-1 35 3 25 2 15 1 5 2-1 2-1 Mined Refined Mined Refined China Ex-China China Ex-China Source: Antaike, ICSG, ILZSG, INSG, IAI, Brook Hunt, Macquarie Research, September 211 Page 6

% of total % of total % of total % of total China has met a lot of its own requirements, especially in smelting/refining 4 4% 3 3% 2 2% 1% % China's share of copper mine and refined production and consumption 4% 2 21 8% 9% 2 Source: Antaike, ICSG, ILZSG, INSG, IAI, Brook Hunt, Macquarie Research, September 211 12% 38% Mined Refined Consumed China's share of zinc mine and refined production and consumption 4 2 41% 41% 4% 21 3 3% 29% 2 23% 22% 2% 1% % Mined Refined Consumed 4 4% 3 3% 2 2% 1% % 4 4% 3 3% 2 2% 1% % China's share of lead mine and refined production and consumption 2 21 22% China's share of nickel mine and refined production and consumption 2 21 46% 47% 17% 6% 6% Page 7 23% 1% Mined Refined Consumed 4% Mined Refined Consumed 43% China has excelled in smelting/refining due to: Extremely low capital costs of building new smelters (1/4 th to 1/3 rd of rest of world) Short lead times to build 12-18months vs. 3-4 years elsewhere Lower environmental standards (arguably now changing) Access to cheap finance and other incentives

2 21 22 23 24 25 26 27 28 29 21 211 2 21 22 23 24 25 26 27 28 29 21 211 't Ni 'mt annualised Virtually ALL nickel and aluminium growth have come from China in recent years, based on cheap smelting capacity World refined nickel production by quarter to Q2 211 Chinese aluminium to the rescue 4 39 38 37 36 35 34 33 32 31 3 29 28 27 26 25 ` 5 45 4 35 3 25 2 World ex-chinese nickel pig iron Total world World Ex-China Total World Source: Antaike, INSG, Brook Hunt, Macquarie Research, September 211 Chinese nickel pig iron and aluminium production near the top of global cash cost curves extremely low capex means 1-3 year capital payback possible on investments Raw materials: bauxite and low-grade nickel ores (from Indonesia/Philippines) which are plentiful and easy to mine Page 8

2 = 1 2 = 1 All growth in lead is from China in zinc China is all the smelting growth Index of lead and zinc mine production Index of lead and zinc metal production 35 4 3 35 25 3 25 2 2 15 15 1 1 5 5 2 22 24 26 28 21 2 22 24 26 28 21 China zinc World Ex-China zinc World Ex-China lead China lead China lead World Ex-China lead China zinc World Ex-China zinc Source: Brook Hunt, Macquarie Research, September 211 Chinese zinc mine production have average 13% a year since 2, while rest of world production has averaged 1% a year; lead mine and zinc and lead refined production has not grown outside China Page 9

2 21 22 23 24 25 26 27 28 29 21 211f 199 1992 1994 1996 1998 2 22 24 26 28 21 't contained Cu mine supply: % change yoy LME price: $/tonne Copper supply tightness driven by lack of China supply response 8 7 6 5 4 3 2 1 Chinese domestic copper supply and demand 8% 7% 6% 4% 3% 2% 1% % -1% -2% Change in global copper mine supply and average LME price 3.8% 2.6% -.9%.7% 7.3% 1.8% 1.4% 2.8% 1.3% 1.7% 1.3%.6% 1 9 8 7 6 5 4 3 2 1 Domestic mine production and scrap generation Consumed % change YoY (mine supply) LME cash price Source: Antaike, ICSG, Brook Hunt, LME, Macquarie Research, September 211 China can meet only one-third of its copper demand (from concentrate and scrap) Non-Chinese production has not responded to price incentive over past six years Page 1

2 21 22 23 24 25 26 27 28 29 21 211F 2 21 22 23 24 25 26 27 28 29 21 211F 't contained zinc 't contained lead 2 21 22 23 24 25 26 27 28 29 21 211F 2 21 22 23 24 25 26 27 28 29 21 211F 't contained copper 't contained nickel Imports of raw materials and primary have soared 8 7 6 5 Chinese copper industry statistics Net semis/alloys imports Conc/blister/scrap imports Net Metal Imports Consumed Refined Mined 7 6 5 4 Chinese nickel industry statistics Stainless Imports (Ni cont) Imports raw materials. Net imports refined Ni Consumed Primary production Mine production 4 3 3 2 2 1 1 Chinese zinc industry statistics -1 Chinese lead industry statistics Note: 211 based on prorated YTD data 55 5 45 4 35 3 Semis/oxide/alloy net imports Net Conc. imports Net Metal imports Consumed 525 425 325 Net imports conc. Net imports - metal & alloy Consumed Refined Mined 25 2 225 15 1 125 5 25-5 -1-75 Source: Antaike, ICSG, ILZSG, INSG, Brook Hunt, Macquarie Research, September 211 Page 11

% CAGR % CAGR We think that there is yet more growth to come, albeit slower in China than in the past decade 2. 2.% 1. 1.%..% -. -1.% -1. -2.% Trend growth in Ex-Chinese consumption 1.9% 1.3% 1.3%.9%.9%.6% -.8% -1.3% -1.7% -1.7% Copper Aluminium Zinc Nickel Lead Trend growth in Chinese consumption 3% 2 24.4% 2% 18.% 18.9% 15.% 13.9% 1% 9.3% 5.3% 6.1% 8.% 7.3% % Copper Aluminium Zinc Nickel Lead 2-1 21-2F 2-1 21-2F Source: Antaike, ICSG, ILZSG, INSG, IAI, Brook Hunt, Macquarie Research, September 211 Page 12

' Ni mt Zn % of total mt Cu mt Pb Summary of demand forecasts to 22 still lots of growth 6 5 4 3 2 1-1 -2 Copper demand growth by decade 2-1 21-2F China World Ex-China Total 6 5 4 3 2 1-1 -2 Lead demand growth by decade 2-1 21-2F China World Ex-China Total China's share of global consumption 7% 59% 6% 58% 57% 53% 49% 42% 43% 41% 4% 38% 4% 3% 8 6 4 2-2 -4 Nickel demand growth by decade 2-1 21-2F China World Ex-China Total 6 5 4 3 2 1-1 -2 Zinc demand growth by decade 2-1 21-2F China World Ex-China Total 2% 12% 13% 1% 6% % Copper Aluminium Zinc Nickel 2 21 22F 1% Lead Source: Antaike, ICSG, ILZSG, INSG, Macquarie Research, September 211 Page 13

195 1954 1958 1962 1966 197 1974 1978 1982 1986 199 1994 1998 22 26 21 214 218 195 1955 196 1965 197 1975 198 1985 199 1995 2 25 21 215 22 kg/person kg/person 195 1954 1958 1962 1966 197 1974 1978 1982 1986 199 1994 1998 22 26 21 214 218 195 1954 1958 1962 1966 197 1974 1978 1982 1986 199 1994 1998 22 26 21 214 218 kg/person kg/person Per capita consumption still has some way to go 35 Aluminium consumption per capita since 195 25 Copper consumption per capita since 195 3 25 2 2 15 1 5 15 1 5 China Japan India Korea USA China Japan India Korea USA ZInc consumption per capita since 195 Steel consumption per capita since 195 11 1 9 8 7 6 5 4 3 2 1 16 14 12 1 8 6 4 2 China Japan India Korea USA China Japan India Korea USA Source: Antaike, ICSG, ILZSG, INSG, IAI, world steel, World Bank, Macquarie Research, September 211 Page 14

mt refined zinc 't refined nickel mt refined copper mt refined lead More supply required over the next decade than in previous decades and now mostly Greenfield Actual and "needed" supply growth for copper Actual and "needed" supply growth for lead 7 6 5 4 3 2 1 1.5 4. 4. 6.2 Mine and scrap 198-9 199-2 2-1 21-2F 5. 4.5 4. 3.5 3. 2.5 2. 1.5 1..5..1 1.1 2.3 4.5 Mine and scrap 198-9 199-2 2-1 21-2F Actual and "needed" supply growth for zinc Actual and "needed" supply growth for nickel 5. 4.5 4. 3.5 3. 2.5 2. 1.5 1..5. 4.4 3.7 2.2.6 198-9 199-2 2-1 21-2F 9 8 7 6 5 4 3 2 1 88 328 183 166 198-9 199-2 2-1 21-2F Source: Antaike, ICSG, ILZSG, INSG, IAI, Brook Hunt, Macquarie Research, September 211 Page 15

2 21 22 23 24 25 26 27 28 29 21 211 % change yoy: M2 $ chnage yoy: CPI % chnage yoy China normalises monetary policy after 29 stimulus object to get CPI down 3% 28% Chinese money supply growth (M2) 12. 1.% 3 3% China new loan growth - % change YoY 32% 26% 24% 7. 2 22% 5.% 2% 2% 2% 18% 16% 2..% 1% 9% 16% 16% 16% 14% 14% 12% -2. -5.% Money supply growth (M2) Inflation (CPI) % 25 26 27 28 29 21 211 YTD Source: NBS, Macquarie Research, September 211 Page 16

% chnage yoy % chnage yoy Chinese growth is still strong in 211 2% 18% 16% 14% 12% Chinese industrial production - % change YoY 18. 16.4% 16.6% 14.4% 14.1% 12.9% 11.% 16% 14% 12% 1% 1.4% Chinese real GDP- % change YoY 14.2% 12.7% 1.3% 9.6% 9.7% 9.1% 1% 8% 8% 6% 6% 4% 4% 2% 2% % 25 26 27 28 29 21 211 YTD % 25 26 27 28 29 21 211 YTD Source: NBS, Macquarie Research, September 211 Page 17

% chnage yoy % chnage yoy Chinese investment spending (FAI) 3 Total Fixed Asset Investment - % change YoY 4 Investment in infrastructure - % change YoY 42% 3% 3% 4% 2 26% 24% 2 26% 24% 2 3 3% 28% 2% 2 22% 23% 1% 2% 1% 16% 16% 11% % 25 26 27 28 29 21 211 YTD % 25 26 27 28 29 21 211 YTD Source: NBS, Macquarie Research, September 211 Page 18

% chnage yoy % chnage yoy % change YoY % chnage yoy Main demand indicators in China still growing strongly in 211 Housing: Square metres completed - % change YoY 3% 24% 2 2% 13% 1% 1% 9% % % 25 26 27 28 29 21 211 YTD 1% 9% 8% 7% 6% 4% 3% 2% 1% % Production of ships - % change YoY 86% 53% 47% 42% 32% 29% 22% 25 26 27 28 29 21 211 YTD 4 4% 3 3% 2 Production of passenger cars - % change YoY 43% 34% 32% 27% 2 3% 2 2% Production of white goods - % change YoY 24% 21% 19% 14% 14% 2% 1% 7% 11% 1% 1% 9% % 25 26 27 28 29 21 211 YTD % 25 26 27 28 29 21 211 YTD Source: NBS, Macquarie Research, September 211 Page 19

Power cable 1,km Transformer output 1,KVA Power transformer and cable output has been growing up strongly year to July in 211 3.5 28 29 21 211 16 28 29 21 211 3. 14 2.5 12 2. 1 1.5 8 1. 6.5 1 2 3 4 5 6 7 8 9 1 11 12 4 1 2 3 4 5 6 7 8 9 1 11 12 Source: NBS, Macquarie Research, September 211 Page 2

21 22 23 24 25 26 27 28 29 21 211 % change yoy - 3MMA A weaker ex-china just means more material available to China without the same level of inflation worry 6% 4% 3% 2% 1% Year-on-year changes in base metals' demand Chart shows year-onyear changes in monthly base metals demand (average of cu/al/zn/ni) % -1% -2% -3% World China World Ex-China China's share of global demand China and ex-china demand has been highly counter-cyclical Source: INSG, ICSG, ILZSG, IAI, Macquarie Research, Ecowin, September 211 Page 21

% change YoY Chinese growth offset decline elsewhere in 29 Summary of metals/steel demand Jan-Dec Jan-Dec % Change 29 28 Y-o-Y Aluminium (mt) China 14269 1222 16.9% World Ex-China 19891 2446-18.7% Total World 3416 36662-6.8% Copper ('t) China 655 518 26.4% World Ex-China 11713 12361-5.2% Total World 18263 17541 4.1% Zinc ('t) China 43 3845 11.8% World Ex-China 6327 7429-14.8% Total World 1627 11274-5.7% Lead ('t) China 347 2553 35.9% World Ex-China 4857 5942-18.3% Total World 8327 8495-2.% Nickel ('t) China 484 36 34. World Ex-China 797 916-13.% Total World 1282 1277.4% Steel (crude basis-mt) China 538 475 13.3% World Ex-China 171 176-2.8% Total World 124 135-1.8% 4% 3% 2% 1% % -1% -2% -3% -13.% -14.8% Changes in apparent demand, Jan-Dec 29/28 35.9% 34. 26.4% 16.9% 11.8% 13.3% -5.2% -2.8% -18.7% -18.3% Aluminium Copper Zinc Lead Nickel Steel China Ex-China Source: Macquarie Research, INSG, ICSG, IAI, ILZSG, worldsteel, China Metals, September 211 Page 22

% change YoY Chinese 211 apparent demand has been slower than expected (except for Ni/Pb) due to destocking Summary of metals/steel demand Jan-July Jan-July % Change 211 21 Y-o-Y Aluminium (mt) China 1346 9223 12.2% World Ex-China 14818 14318 3. Total World 25163 23541 6.9% Copper ('t) China 482 442-7.3% World Ex-China 7616 6882 1.7% Total World 11698 11285 3.7% Zinc ('t) China 39 2953 1.9% World Ex-China 434 4222 1.9% Total World 7313 7175 1.9% Lead ('t) China 2542 2149 18.3% World Ex-China 3134 311 1.1% Total World 5676 525 8.1% Nickel ('t) China 394 37 28. World Ex-China 54 52-3.1% Total World 898 827 8.7% Steel (crude basis-mt) China 39 355 9.9% World Ex-China 58 478 6.3% Total World 898 832 7.8% Source: Macquarie Research, INSG, IAI, ICSG, ILZSG, China Metals, September 211 3 3% 2 2% 1% % - -1% Page 23 Year-on-Year changes in apparent demand Jan-July 211/21 12.2% 3. -7.3% 1.7% 18.3% 1.9% 1.9% 1.1% 28. -3.1% 9.9% Aluminium Copper Zinc Lead Nickel Steel China ` Ex-China 6.3%

Why the inverse relationship between Chinese and rest of world growth? Chinese potential growth always exceeds the capacity for it to grow due to bottlenecks including energy and resources When the rest of world and China grow strongly together, inflationary pressures become a worry in China and the authorities move quickly to slow growth; when the rest of the world is weak, resource availability rises and inflationary pressures dissipate (the rest of the world exports disinflation pressures to China) and the Chinese authorities allow growth to accelerate again China responds more quickly than the rest of the world because: 1. Monetary policy is direct (banks told directly to start and stop lending rather than via long lead-time interest rate changes) 2. Infrastructure and other construction expenditures can be turned on and off quickly due to long term planning (engineering and planning for projects done years in advance), a flexible, mobile, non-unionised work force and short-circuited approval procedures for projects (for EIAs, getting finance, approving projects, clearing construction sites, etc) Page 24

So what did China do as the 28/9 crisis unfolded? Chinese authorities, faced with rapid inflationary pressures in 1H 28 had tightened to slow growth and then when the global financial crisis unfolded (exports collapsed), a sharp slowdown ensued in China; after a short period of panic, the authorities moved quickly to massively ease monetary and fiscal policy. Short-term collapse in commodity markets provided China with opportunities: Shortages of key commodities that were bottlenecks in China s growth process eased Chinese government could accelerate its infrastructure build in a non-inflationary way rest of world exported deflation to China Chinese government and other market participants bought cheap commodities for stockpile, in part replacing expensive domestic production Chinese government encouraged restructuring of its own domestic industries by using availability of cheap imports to close inefficient and dangerous small producers Sounds familiar?! Page 25

-74 317 3477 3548 352 253 295-344 -38 3459 3952 491 4234 4115 3735-289 -265-398 -422-431 -484 474 't 4617 cents/lb -82-215 -195-94 -122 117-156 -249-285 -336 't 25 5-131 -127-139 -58-129 343 cents/lb 937 Chinese producers are cost and price sensitive the case of aluminium 5 45 4 35 3 25 2 15 1 5 Chinese production of aluminium and price Q1 Q2 Q3 Q4Q1 Q2 Q3Q4 Q1 Q2 Q3Q4 Q1 Q2 28 29 21 211 14 13 12 11 1 9 8 7 6 1 8 6 4 2-2 -4-6 -8-1 Chinese net imports of aluminium Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 28 29 21 211 14 13 12 11 1 9 8 7 6 Production Price Metal/alloy Semis Price Source: CNAI, Chinese Customs, LME, Macquarie Research, September 211 Page 26

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 7 27 4 59 54 76 73 73 12 94 78 894 132 18 981 823 137 1191 135 1169 137 1292 1393 1238 1292 26 't cents/lb 't 267 cents/lb The case of zinc supply adjusts to price Chinese production of refined zinc and price 16 12 14 11 12 1 1 9 8 6 8 4 7 2 6 5 275 25 225 2 175 15 125 1 75 5 25 Chinese net imports of refined zinc 12 11 1 9 8 7 6 5 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 28 29 21 211 28 29 21 211 Production Price Net imports Price Source: CNAI, Chinese Customs, LME, Macquarie Research, September 211 Page 27

52 47 44 53 56 5 47 41 38 52 44 75 68 65 59 55 6 55 72 79 75 87 8 88 94 't 115 cents/lb 't 12 114 cents/lb and for nickel Chinese production of primary nickel and price Chinese net imports of primary nickel 12 11 1 9 8 7 6 5 4 3 2 1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 14 13 12 11 1 9 8 7 6 5 4 125 1 75 5 25 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 14 13 12 11 1 9 8 7 6 5 4 28 29 21 211 28 29 21 211 Production Price Net imports Price Source: CNAI, Chinese Customs, LME, Macquarie Research, September 211 Page 28

Medium term challenges and concerns Rising costs in China: China s dominance in supply (except for copper) means that Chinese costs matter and we think that due to rising labour, energy, transport costs in RMB terms and a 3- a year revaluation of the RMB against the US dollar, Chinese costs can rise by 7-1% a year in US dollar terms (before offsetting efficiencies) Ongoing economic and political reform needed to sustain growth Page 29

Summary China has been dominant in supply and demand growth over the past decade it will continue over this decade Short term correction in Chinese demand is similar to previous ones and reflects prudent monetary and fiscal policy adjustment in China to make growth more sustainable Marked inverse relationship between Chinese and non-chinese growth China will do its best to save the commodities world in 212 Page 3

Important disclosures: Recommendation definitions Macquarie - Australia/New Zealand Outperform return > in excess of benchmark return (>2. in excess for listed property trusts) Neutral return within of benchmark return (within 2. for listed property trusts) Underperform return > below benchmark return (>2. below for listed property trusts) Macquarie - Asia Outperform expected return >+1% Neutral expected return from -1% to +1% Underperform expected <-1% Macquarie First South - South Africa Outperform return > 1% in excess of benchmark return Neutral return within 1% of benchmark return Underperform return > 1% below benchmark return Macquarie - Canada Outperform return > in excess of benchmark return Neutral return within of benchmark return Underperform return > below benchmark return Macquarie - USA Outperform (Buy) return > in excess of benchmark return Neutral (Hold) return within of benchmark return Underperform (Sell) return > below benchmark return Recommendation 12 months Note: Quant recommendations may differ from Fundamental Analyst recommendations Volatility index definition* This is calculated from the volatility of historic price movements. Very high highest risk Stock should be expected to move up or down 6-1% in a year investors should be aware this stock is highly speculative. High stock should be expected to move up or down at least 4-6% in a year investors should be aware this stock could be speculative. Medium stock should be expected to move up or down at least 3-4% in a year. Low medium stock should be expected to move up or down at least 25-3% in a year. Low stock should be expected to move up or down at least 15-2 in a year. * Applicable to Australian/NZ stocks only 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 31 December 29 AU/NZ Asia RSA USA CA EUR Outperform 47.94% 6.52% 37. 43.42% 65.26% 41.6% (for US coverage by MCUSA, 3.76% of stocks followed are investment banking clients) Neutral 35.58% 18.7% 53.13% 49.6% 29.11% 36.8% (for US coverage by MCUSA, 4.51% of stocks followed are investment banking clients) Underperform 16.48% 2.79% 9.38% 7.52% 5.63% 21.6% (for US coverage by MCUSA,.% of stocks followed are investment banking clients) Page 31

Company Specific Disclosures: Important disclosure information regarding the subject companies covered in this report is available at www.macquarie.com/research/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. 31862) (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; Macquarie Capital Securities (Singapore) Pte Ltd; Macquarie Securities (NZ) Ltd; and Macquarie First South Securities (Pty) Limited 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 8 583 542 (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. 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. Page 32

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 broker-dealer 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 distributed by Macquarie Capital (Europe) Ltd, which is authorised and regulated by the Financial Services Authority (No. 19395). Hong Kong: In Hong Kong, research is issued and distributed by Macquarie Capital Securities Ltd, which is licensed and regulated by the Securities and Futures Commission. Japan: In Japan, research is Issued and distributed by Macquarie Capital Securities (Japan) Limited, a member of the Tokyo Stock Exchange, Inc., Osaka Securities Exchange Co. Ltd, and Jasdaq Securities Exchange, Inc. (Financial Instruments Firm, Kanto Financial Bureau (kin-sho) No. 231, a member of Japan Securities Dealers Association and Financial Futures Association of Japan). 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: 19872912C), 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 25, 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 119. Macquarie Group Page 33