AGL’s disciplined approach is critical to the creation of shareholder value and to ensuring that investments are made in projects that provide sustainable earnings.  AGL continues to pursue a capital management program that focuses on investments in core assets that generate positive cash flows. Over the past 12 months we have undertaken a number of divestments to dispose of assets that do not fully align with our integrated strategy:

• We completed the sale of our 33% stake in AlintaAGL in November 2007;

• We completed the sale of Gas Valpo (a gas distribution business in Chile) for US$90 million in May 2008;

• We signed an agreement to sell our interests in the North Queensland Gas Pipeline for A$102 million; and

• We have commenced a sale process to divest our interests in oil and gas fields in Papua New Guinea, which will be completed in 2008/09.

We strengthened our balance sheet, reducing our debt by $697 million from its peak in 2007/08 and have no further re-financing requirements until October 2009. Ongoing non-core asset sales will add further balance sheet strength.  The company anticipates it will retain a BBB stable credit rating with Standard and Poor’s.

Financial Summary	2007/08	2006/07
Revenue	$5.7b	$4.8b 1
Operating Earnings Before Interest and Tax	$703.2m 2	$574.7m 1,2
Net Finance Costs	$175.9m	$98.7m 1
Underlying Net Profit After Tax	$355.5m 2	$330.4m 1,2
Underlying Basic Earnings Per Share	81.6 cps	78.4 cps 1
Total Annual Dividend (fully franked)	53.0 cps	35.5 cps 3
Total Assets	$9.5b 4	$14.1b 4
Shareholders’ Equity	$5.0b	$6.5b
Operating Cash Flow	$461.5m	n/a
Total Capital Expenditure	$324.6m	$357.8m
Gearing (Net Debt / Net Debt + Equity)	31.3% 5	33.1% 5
EBIT to Average Funds Employed return	10.7%	10.7%

 

Distribution of Revenue	2007/08	2006/07
Suppliers	83%	83%
Employees	4%	5%
Funding Equity	4%	1%
Funding Debt	2%	2%
Australian Taxes	1%	1%
Residual	6%	7%

 

Australian Tax Paid	2007/08	2006/07
Income Tax	72.1 m	27.6 m
Payroll Tax	9.3 m	9.2 m
Fringe Benefits Tax	1.9 m	1.9 m
Total	83.3 m	38.8 m
Note	Total Australian tax paid was incorrectly stated in AGL’s 2007 Sustainability Report. The correct breakdown and total are given above.

¹ AGL Energy Limited was listed in October 2006 following the demerger from The Australian Gas Light Company. Accordingly pro forma numbers are reported for the financial period ended 30 June 2007.

² Excluding significant items and fair value movements of financial instruments.

³ In the 2006/07 Sustainability Report, dividends were reported as 26.0 cents per share. This represented the final dividend and did not include the interim dividend of 9.5 cents per share. The total dividend for the financial period was therefore 35.5 cents per share.

⁴ Includes derivative financial instrument contracts at fair value.

⁵ Equity excludes financial instrument hedging reserve.