genesis energy limited bond offer limited (“genesis energy ... · 08-03-2016 · market release...
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MARKET RELEASE Date: 8 March 2016
Genesis Energy Limited Bond Offer Genesis Energy Limited (“Genesis Energy”) confirmed today that it is offering up to NZ$75 million (plus up to NZ$25
million of over-subscriptions) of 6 year fixed rate senior bonds to institutional investors and New Zealand retail
investors.
The offer opens today and will be made pursuant to the Financial Markets Conduct Act 2013 as an offer of debt
securities of the same class as existing quoted debt securities. The notice required by the Financial Markets Conduct
Regulations 2014 has been provided to NZX and is attached. The bonds are expected to be quoted on the NZX Debt
Market.
Full details of the bond issue are contained in the terms sheet which has been prepared for the offer and is also
attached, as is a presentation on the bond offer. The bonds are expected to be assigned a long term credit rating of
BBB+ by Standard and Poor’s.
The offer will open with an indicative margin range of 1.45 per cent to 1.60 per cent for the bonds, which mature on
18 March 2022. An announcement of the actual margin (which may be above or below the indicative margin range
mentioned above) and the interest rate on the bonds will be made following the bookbuild process, expected to be
on 14 March 2016. The terms sheet will be updated to include the interest rate and will be released on the same day.
There is no public pool for the offer, with all of the bonds being reserved for clients of Deutsche Craigs, Westpac
Banking Corporation (acting through its New Zealand branch) (as Joint Lead Managers), Forsyth Barr (as Co-Manager),
NZX participants and other approved financial intermediaries. The offer will close on 14 March 2016 following the
bookbuild process.
Interested investors, including those holders of the existing Genesis Energy bonds that mature on 15 March 2016,
should contact the Joint Lead Managers, the Co-Manager or their usual financial adviser for more details.
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For further information please contact:
Deutsche Craigs Westpac Forsyth Barr
0800 226 263 0800 942 822 0800 367 227 ENDS For media enquiries, please contact:
Richard Gordon
Public Affairs Manager
Genesis Energy
P: 09 951 9280 M: 021 681 305
For investor relations enquiries, please contact:
Rodney Deacon
Group Manager Strategy and Investor Relations
Genesis Energy
P: 09 571 4970 M: 021 631 074
About Genesis Energy Genesis Energy (NZX: GNE) is a diversified New Zealand energy company. It sells electricity, reticulated natural gas and LPG through its retail brands of Genesis Energy and Energy Online. It is New Zealand’s largest energy retailer with around 630,000 customer accounts. The Company generates electricity from a diverse portfolio of thermal and renewable generation assets located in different parts of the country. Genesis Energy also has a 31% interest in the Kupe Joint Venture, which owns the Kupe Oil and Gas Field offshore of Taranaki, New Zealand. Genesis Energy had revenue of NZ$2.2bn during the 12 months ended 30 June 2015. More information can be found at www.genesisenergy.co.nz
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MARKET RELEASE Date: 8 March 2016
Genesis Energy Limited (GNE): Unsubordinated, unsecured, fixed rate bond offer
Genesis Energy Limited ("Genesis Energy") gives notice under clause 20(1)(a) of schedule 8 to the Financial Markets Conduct Regulations 2014 ("Regulations") that it proposes to make an offer of unsecured, unsubordinated fixed rate senior bonds ("Bonds") in reliance upon the exclusion in clause 19 of schedule 1 to the Financial Markets Conduct Act 2013 ("FMCA"). Except for the redemption date and interest rate, the Bonds will have identical rights, privileges, limitations and conditions as Genesis Energy's NZ$105,000,000 unsubordinated, unsecured, fixed rate bonds maturing on 15 March 2016, which are quoted on the NZX Debt Market under the ticker code GNE020 ("GNE020 Bonds") and, therefore, are of the same class as the GNE020 Bonds for the purposes of the FMCA and the Regulations. The GNE020 Bonds have been continuously quoted on the NZX Debt Market over the preceding 3 months and trading in the GNE020 Bonds has not been suspended during that period. As at the date of this notice, Genesis Energy is in compliance with:
the continuous disclosure obligations that apply to it in relation to the GNE020 Bonds; and
its financial reporting obligations (as defined in the Regulations).
As at the date of this notice, there is no excluded information for the purposes of the Regulations. As at the date of this notice, there is no information that would be required to be disclosed under a continuous disclosure obligation or which would be excluded information for the purposes of the Regulations if the GNE020 Bonds had had the same redemption date or interest rate as the Bonds being offered. ENDS
For media enquiries, please contact: Richard Gordon Public Affairs Manager Genesis Energy P: 09 951 9280 M: 021 681 305
For investor relations enquiries, please contact: Rodney Deacon Group Manager Strategy and Investor Relations Genesis Energy P: 09 571 4970 M: 021 631 074
About Genesis Energy Genesis Energy (NZX: GNE) is a diversified New Zealand energy company. It sells electricity, reticulated natural gas and LPG through its retail brands of Genesis Energy and Energy Online. It is New Zealand’s largest energy retailer with around 630,000 customer accounts. The Company generates electricity from a diverse portfolio of thermal and renewable generation assets located in different parts of the country. Genesis Energy also has a 31% interest in the Kupe Joint Venture, which owns the Kupe Oil and Gas Field offshore of Taranaki, New Zealand. Genesis Energy had revenue of $NZ2.2bn during the 12 months ended 30 June 2015. More information can be found at www.genesisenergy.co.nz
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Genesis Energy Limited2016
Terms SheetFixed Rate Bonds Maturing 18 March 2022
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This terms sheet (‘Terms Sheet’) sets out the key terms of the offer by Genesis Energy Limited (‘Genesis Energy’) of up to NZ$75,000,000 with the ability to accept oversubscriptions up to NZ$25,000,000 at Genesis Energy’s discretion of fixed rate unsubordinated unsecured bonds maturing on 18 March 2022 (‘Bonds’) under a master trust deed dated 25 November 2008 (as amended from time to time) as modified and supplemented by a supplemental trust deed dated 8 March 2016 entered into between Genesis Energy as issuer and Trustees Executors Limited as supervisor (‘Supervisor’) (together, ‘Bond Trust Documents’).
Terms sheet8 March 2016
Important noticeThe offer of Bonds by Genesis Energy is made in reliance upon the exclusion in clause 19 of schedule 1 of the Financial Markets Conduct Act 2013 (‘FMCA’).
The offer contained in this Terms Sheet is an offer of bonds that have identical rights, privileges, limitations and conditions (except for the interest rate and maturity date) as Genesis Energy’s NZ$105,000,000 fixed rate unsubordinated unsecured bonds maturing on 15 March 2016 which are currently quoted on the NZX Debt Market under the ticker code GNE020 (‘GNE020 Bonds’). The Bonds are of the same class as the GNE020 Bonds for the purposes of the FMCA and the Financial Markets Conduct Regulations 2014 (‘FMC Regulations’).
Genesis Energy is subject to a disclosure obligation that requires it to notify certain material information to NZX Limited (‘NZX’) for the purpose of that information being made available to participants in the market and that information can be found by visiting www.nzx.com/companies/GNE.
The GNE020 Bonds (which have a fixed interest rate of 7.65% per annum and a redemption date of 15 March 2016) are the only debt securities of Genesis Energy that are in the same class as the Bonds and are currently quoted on the NZX Debt Market.
Investors should look to the market price of the GNE020 Bonds referred to above to find out how the market assesses the returns and risk premium for those bonds.
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Issuer Genesis Energy Limited
Description The Bonds are fixed rate, unsubordinated, unsecured interest bearing debt securities.
Ranking The Bonds rank equally and without preference among themselves and equally with any other unsecured, unsubordinated indebtedness of Genesis Energy (except indebtedness preferred by law). The Bonds rank ahead of Genesis Energy’s subordinated capital bonds which are quoted on the NZX Debt Market under ticker code GPLFA.
Purpose The proceeds from the issue of the Bonds will be used for general corporate purposes.
Guaranteeing Subsidiaries Certain wholly-owned subsidiaries of Genesis Energy guarantee the obligations of Genesis Energy in relation to the Bonds pursuant to a subsidiary guarantee dated 8 March 2016 (‘Guarantee’). The guaranteeing subsidiaries are:• Genesis Power Investments Limited• GP No.2 Limited• GP No.5 Limited• Kupe Holdings Limited,(together, the ‘Guaranteeing Subsidiaries’). Each Guaranteeing Subsidiary guarantees the due and punctual payment of all amounts payable by Genesis Energy to holders of Bonds (‘Bondholders’) in respect of the Bonds and there are no limits on the obligations of the Guaranteeing Subsidiaries in respect of the amounts owing under the guarantee. The Guarantee is unsecured.
Negative Pledge The Bonds are unsecured but have the benefit of the negative pledge deed dated 12 August 2004 (as amended on 5 October 2006) (‘Negative Pledge Deed’). Under the Negative Pledge Deed, Genesis Energy and the Guaranteeing Subsidiaries are restricted from creating, or permitting to subsist, security over the whole or any part of their assets, other than certain permitted security interests. Genesis Energy and the Guaranteeing Subsidiaries are also required under the Negative Pledge Deed to ensure that no less than 85 per cent of the EBITDA of the consolidated Genesis Energy group are generated by Genesis Energy and the Guaranteeing Subsidiaries.
Event of Default Upon the occurrence of an event of default as set out in the Bond Trust Documents, the Supervisor may in its discretion, and it must, upon being directed to do so by an extraordinary resolution of Bondholders, declare the principal amount, all accrued interest and any other amounts due and payable on the Bonds to be immediately due and payable. You should refer to the Bond Trust Documents for a description of the specific events which constitute events of default.
Further Indebtedness Genesis Energy and the Guaranteeing Subsidiaries may incur finance debt (including bank debt or debt in respect of new bonds or new US private placement notes), without the consent of Bondholders.
Credit Ratings Genesis Energy credit rating: BBB+ (Standard & Poor’s)Expected issue credit rating: BBB+ (Standard & Poor’s)A credit rating is not a recommendation by any organisation to buy, sell or hold the Bonds and the rating may be subject to revision or withdrawal at any time. Any downward revision or withdrawal of the rating may have an effect on the ability of investors to sell the Bonds and the price at which the Bonds may be sold.
Issue Amount Up to NZ$75,000,000 (with the ability to accept up to a further NZ$25,000,000 in oversubscriptions at Genesis Energy’s discretion).The offer is not underwritten.
Series Identifier Tranche 01 of Series 03
Opening Date Tuesday, 8 March 2016, immediately following release on the NZX Debt Market of the notice required by the FMC Regulations in connection with the offer.
Closing Date 12.00pm on Monday, 14 March 2016
Rate Set Date Monday, 14 March 2016
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Issue Date Friday, 18 March 2016
Maturity Date Friday, 18 March 2022
Early Repayment Other than following an Event of Default, Bondholders have no right to require Genesis Energy to redeem the Bonds prior to the Maturity Date. Genesis Energy does not have the right to redeem the Bonds early.
Interest Rate The Interest Rate will be set on the Rate Set Date as being equal to the Base Rate plus the Margin.The Interest Rate will be announced by Genesis Energy via NZX on the Rate Set Date.
Indicative Issue Margin Indicatively, 1.45 to 1.60 per cent per annum
Margin The Margin (which may be above or below the Indicative Issue Margin range) will be determined by Genesis Energy in consultation with the Joint Lead Managers following a bookbuild process and announced via NZX on the Rate Set Date.
Base Rate The semi-annual mid-market rate for an interest rate swap of a term matching the period from the Issue Date to the Maturity Date as calculated by the Joint Lead Managers in consultation with Genesis Energy, according to market convention, with reference to Reuters page 'ICAPAUKIWISWAP2' on the Rate Set Date (rounded to 2 decimal places, if necessary, with 0.005 being rounded up).
Interest Payments Semi-annually in arrear
Interest Payment Dates 18 March and 18 September of each year up to and including the Maturity Date.The first Interest Payment Date is Sunday, 18 September 2016. Accordingly, payment in respect of that Interest Payment Date will be made on Monday, 19 September 2016 (being the next following Business Day).
Payment of Interest Interest will be payable on an Interest Payment Date to the Bondholder as at the Record Date immediately preceding the relevant Interest Payment Date.
Record Date The record date for Interest Payment Dates (other than the final Interest Payment Date) is 5.00pm on the tenth calendar day before the relevant Interest Payment Date or, if that day is not a Business Day, the immediately preceding Business Day. The record date for the Maturity Date and the final Interest Payment Date is 5.00pm on the fifth calendar day before the Maturity and final Interest Payment Date or, if that day is not a Business Day, the immediately preceding Business Day.
Business Days A day (other than a Saturday or Sunday) on which registered banks are generally open for business in Auckland and Wellington.If an Interest Payment Date or the Maturity Date falls on a day that is not a Business Day, the due date for any payment to be made on that date will be the next following Business Day.
Principal Amount $1.00 per Bond
Minimum Application Amount and Minimum Holding
Minimum application of $5,000 with multiples of $1,000 thereafter
Registrar and Paying Agent Computershare Investor Services Limited
Transfer Restrictions As a Bondholder, you may only transfer Bonds if the transfer is in respect of Bonds having an aggregate Principal Amount that is an integral multiple of $1,000. However, Genesis Energy will not register any transfer of Bonds if the transfer would result in the transferor or the transferee holding or continuing to hold Bonds with an aggregate Principal Amount of less than $5,000, unless the transferor would then hold no Bonds.
NZX Debt Market Quotation Application has been made to NZX for permission to quote the Bonds on the NZX Debt Market and all the requirements of NZX relating thereto that can be complied with on or before the distribution of this Terms Sheet have been duly complied with. However, NZX accepts no responsibility for any statement in this Terms Sheet. NZX is a licensed market operator, and the NZX Debt Market is a licensed market under the FMCA.
Expected Date of Initial Quotation and Trading on NZX Debt Market
Monday, 21 March 2016
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NZX Debt Market Ticker Code
GNE030
ISIN NZGNEDG001C1
Repo-eligibility Genesis Energy intends to apply to the Reserve Bank of New Zealand for the Bonds to be included as eligible securities for domestic market operations.
Who May Apply for Bonds All of the Bonds are reserved for subscription by clients of the Joint Lead Managers, the Co-Manager, institutional investors and other Primary Market Participants invited to participate in the bookbuild. There will be no public pool for the Bonds.Retail investors should contact any Joint Lead Manager, the Co-Manager, their financial adviser or any Primary Market Participant for details on how they may acquire Bonds. You can find a Primary Market Participant by visiting www.nzx.com/investing/find_a_participantEach investor’s broker or financial adviser will be able to advise them as to what arrangements will need to be put in place for the investor to trade the Bonds including obtaining a common shareholder number (‘CSN’), an authorisation code (‘FIN’) and opening an account with a primary market participant, as well as the costs and timeframes for putting such arrangements in place.
NZX Approval NZX has granted approval under NZX Listing Rule 11.1.5 to enable Genesis Energy to include transfer restrictions in the Bond Trust Documents permitting Genesis Energy to refuse a transfer of the Bonds if the transfer is not in multiples of $1,000 and/or results in the transferor or the transferee holding an aggregate principal amount of less than the minimum holding of $5,000, unless the transferor would then hold no Bonds.
NZX Waivers NZX has granted Genesis Energy a waiver from NZX Listing Rule 5.2.3 to enable Genesis Energy to apply for quotation on the NZX Debt Market even though the Bonds may not initially be held by at least 100 members of the public holding at least 25 per cent of the Bonds issued. The waiver has been granted for a period of six months from the quotation date of the Bonds. The effect of the waiver from NZX Listing Rule 5.2.3 is that initially the Bonds may not be widely held and there may be reduced liquidity in the Bonds. To the extent that the Bonds meet the spread requirements of NZX Listing Rule 5.2.3, Genesis Energy will notify NZX accordingly.Genesis Energy has agreed to notify NZX as soon as practicable if there is a material reduction to the total number of members of the public holding Bonds, and/or the percentage of Bonds held by members of the public holding at least a Minimum Holding. Genesis Energy has also agreed to clearly and prominently disclose this waiver, its conditions and their implications in each offer document relating to the Bonds and in its half-year report and its annual report for the six months the waiver is relied on.
Governing Law New Zealand
Organising Participant Craigs Investments Partners Limited
Joint Lead Managers Deutsche Craigs Limited and Westpac Banking Corporation (ABN 33 007 457 141) (acting through its New Zealand branch)
Co-Manager Forsyth Barr Limited
Fees Brokerage: 0.50%Firm Fee: 0.25%
Selling Restrictions The selling restrictions set out in the Schedule to this Terms Sheet apply.
The dates set out in this Terms Sheet are indicative only and Genesis Energy, in conjunction with the Joint Lead Managers, may change the dates set out in this Terms Sheet. Genesis Energy has the right in its absolute discretion and without notice to close the offer early, to extend the Closing Date, or to choose not to proceed with the offer. If the Closing Date is changed, other dates (such as the Issue Date, the Maturity Date and the Interest Payment Dates) may be changed accordingly.
Any internet site addresses provided in this Terms Sheet are for reference only and, except as expressly stated otherwise, the content of any such internet site is not incorporated by reference into, and does not form part of, this Terms Sheet.
Copies of the Bond Trust Documents will be made available by Genesis Energy for inspection during usual business hours by any Bondholder at Genesis Energy’s registered office listed below (or such office as Genesis Energy may notify the Bondholders from time to time).
Investors should seek qualified, independent financial and taxation advice before deciding to invest.
For further information regarding Genesis Energy, visit www.nzx.com/companies/GNE
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Issuer
Genesis Energy Limited 660 Great South Road Auckland 2025
PO Box 17188 Auckland 1546
P: 64 9 580 2094 F: 64 9 580 4894 E: [email protected]
Address details
Joint Lead Manager
Deutsche Craigs Limited Level 36, Vero Centre 48 Shortland Street Auckland 1010
Joint Lead Manager
Westpac Banking Corporation (ABN 33 007 457 141) (acting through its New Zealand branch) Westpac on Takutai Square Level 8, 16 Takutai Square Auckland 1010
Supervisor
Trustees Executors Limited Level 5, 10 Customhouse Quay Wellington 6011
P: 0800 878 783 E: [email protected]
Co-Manager
Forsyth Barr Limited Level 9, Forsyth Barr House The Octagon Dunedin 9054
Registrar
Computershare Investor Services Limited Level 2, 159 Hurstmere Road Takapuna Auckland 0622
Toll Free: 0800 359 999 P: 09 488 8777 E: [email protected]
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Schedule – Selling restrictions
The Bonds may only be offered in New Zealand in conformity with all applicable laws and regulations in New Zealand. In respect of the initial offer of Bonds by Genesis Energy under this Terms Sheet (‘Initial Offer’), no Bonds may be offered in any other country or jurisdiction except in conformity with all applicable laws and regulations of that country or jurisdiction and the selling restrictions set out below in this Part A.
This Terms Sheet may not be published, delivered or distributed in or from any country or jurisdiction except under circumstances which will result in compliance with all applicable laws and regulations in that country or jurisdiction and the selling restrictions set out below in this Part A. For the avoidance of doubt, the selling restrictions set out below in this Part A apply only in respect of the Initial Offer.
United States of AmericaThe Bonds have not been and will not be registered under the Securities Act of 1933, as amended (‘Securities Act’) and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons (as defined in Regulation S under the Securities Act) except in accordance with Regulation S or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.
None of Genesis Energy, any Joint Lead Manager, the Co-Manager nor any person acting on its or their behalf has engaged or will engage in any directed selling efforts in relation to the Bonds, and each of Genesis Energy, any Joint Lead Manager and the Co-Manager have complied and will comply with the offering restrictions requirements of Regulation S under the Securities Act.
The Bonds will not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons (i) as part of their distribution at any time, or (ii) otherwise until 40 days after the completion of the distribution of all Bonds of the Tranche of which such Bonds are part, as determined and certified by any Joint Lead Manager or the Co-Manager, except in accordance with Rule 903 of Regulation S under the Securities Act. Any Bonds sold to any distributor, dealer or person receiving a selling concession, fee or other remuneration during the distribution compliance period require a confirmation or notice to the purchaser at or prior to the confirmation of the sale to substantially the following effect:
‘The Bonds covered hereby have not been registered under the United States Securities Act of 1933, as amended (the ‘Securities Act’) or with any securities regulatory authority of any state or other jurisdiction of the United States and may not be offered
or sold within the United States, or to or for the account or benefit of, U.S. persons (as defined in Regulation S under the Securities Act) (i) as part of their distribution at any time or (ii) otherwise until 40 days after the later of the commencement of the offering of the Bonds and the closing date except in either case pursuant to a valid exemption from registration in accordance with Regulation S under the Securities Act. Terms used above have the meaning given to them by Regulation S.’
Until 40 days after the completion of the distribution of all Bonds of the Tranche of which those Bonds are a part, an offer or sale of the Bonds within the United States by any Joint Lead Manager, the Co-Manager or any dealer or other distributor (whether or not participating in the offering) may violate the registration requirements of the Securities Act if such offer or sale is made otherwise than in accordance with Regulation S.
Part A Initial Selling Restrictions
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Relevant Member States of the European Economic Area
In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a ‘Relevant Member State’), with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the ‘Relevant Implementation Date’) no Bonds have been offered and no Bonds will be offered that are the subject of the offering contemplated by this Terms Sheet in relation thereto to the public in that Relevant Member State except that an offer of Bonds to the public in the Relevant Member State may be made with effect from the Relevant Implementation Date:
(a) to any legal entity which is a qualified investor as defined in the Prospectus Directive;
(b) to fewer than 150 natural or legal persons (other than qualified investors as defined in the Prospectus Directive) subject to obtaining the prior consent of the relevant Joint Lead Manager or Joint Lead Managers and/or Co-Manager nominated by Genesis Energy for any such offer; or
(c) in any other circumstances falling within Article 3(2) of the Prospectus Directive,
provided that no such offer of the Bonds shall require Genesis Energy, any Joint Lead Manager or the Co-Manager to publish a prospectus pursuant to Article 3 of the Prospectus Directive or supplement a prospectus pursuant to Article 16 of the Prospectus Directive.
For the purposes of this provision, the expression an offer of the Bonds to the public in relation to any Bonds in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the Bonds to be offered so as to enable an investor to decide to purchase or subscribe for the Bonds, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State, and the expression Prospectus Directive means Directive 2003/71/EC (and amendments thereto, including by Directive 2010/73/EU) and includes any relevant implementing measure in the Relevant Member State.
United Kingdom
No communication, invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000 (‘FSMA’)) has been or may be
made or caused to be made or will be made in connection with the issue or sale of the Bonds in circumstances in which section 21(1) of the FSMA applies to Genesis Energy.
All applicable provisions of the FSMA with respect to anything done in relation to the Bonds in, from or otherwise involving the United Kingdom must be complied with.
Japan
The Bonds have not been and will not be registered in Japan pursuant to Article 4, Paragraph 1 of the Financial Instruments and Exchange Act of Japan (Act No. 25 of 1948, as amended, the ‘FIEA’) in reliance upon the exemption from the registration requirements since the offering constitutes
the small number private placement as provided for in ‘ha’ of Article 2, Paragraph 3, Item 2 of the FIEA. A Japanese Person who transfers the Bonds shall not transfer or resell the Bonds except where the transferor transfers or resells all the Bonds en bloc to one transferee.
For the purposes of this paragraph, Japanese Person shall mean any person resident in Japan, including any corporation or other entity organised under the laws of Japan.
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Singapore
This Terms Sheet has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this Terms Sheet and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the Bonds may not be circulated or distributed, nor may the Bonds be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to any person in Singapore other than (a) to an institutional investor (as defined in Section 4A of the Securities and Futures Act (Chapter 289 of Singapore) (‘SFA’)) pursuant to Section 274 of the SFA, (b) to a relevant person (as defined in Section 275(2) of the SFA) pursuant to Section 275(1) of the SFA, or any person pursuant to Section 275(1A) of the SFA, and in accordance with the conditions specified in Section 275 of the SFA or (c) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.
Where the Bonds are subscribed or purchased under Section 275 of the SFA by a relevant person which is:
(a) a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or
(b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor,
securities (as defined in Section 239(1) of the SFA) of that corporation or the beneficiaries’ rights and interest (howsoever described) in that trust shall not be transferred within six months after that corporation or that trust has acquired the Bonds pursuant to an offer made under Section 275 of the SFA except:
(1) to an institutional investor or to a relevant person defined in Section 275(2) of the SFA, or to any person arising from an offer referred to in Section 275(1A) or Section 276(4)(i)(B) of the SFA;
(2) where no consideration is or will be given for the transfer;
(3) where the transfer is by operation of law;
(4) as specified in Section 276(7) of the SFA; or
(5) as specified in Regulation 32 of the Securities and Futures (Offers of Investments) (Shares and Debentures) Regulations 2005 of Singapore.
Hong Kong
No Bonds have been offered or sold or will be or may be offered or sold in Hong Kong, by means of any document other than (a) to professional investors as defined in the Securities and Futures Ordinance (Cap. 571) of Hong Kong and any rules made under that Ordinance; or (b) in other circumstances which do not result in the document being a Prospectus as defined in the Companies (Winding Up
and Miscellaneous Provisions) Ordinance (Cap. 32) of Hong Kong or which do not constitute an offer to the public within the meaning of that Ordinance.
No advertisement, invitation or document relating to the Bonds may be issued or in the possession of any person or will be issued or be in the possession of any person in each case for the purpose of issue, whether in Hong Kong or elsewhere, which
is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to the Bonds which are or are intended to be disposed of only to persons outside Hong Kong or only to professional investors as defined in the Securities and Futures Ordinance and any rules made under that Ordinance.
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Part B General Selling Restrictions
Switzerland
The Bonds shall not be publicly offered, sold, advertised, distributed or redistributed, directly or indirectly, in or from Switzerland, and neither this Terms Sheet nor any other solicitation for investments in the Bonds may be communicated, distributed or otherwise made available in Switzerland in any way that could constitute a public offering within the meaning of Articles 652a and 1156 of the Swiss Code of Obligations (‘CO’) or of Article 3 of the Swiss Federal Act on
Collective Investment Schemes (‘CISA’) unless the legal and regulatory conditions imposed on a public offering under the CO or CISA are satisfied. This Terms Sheet does not constitute a public offering within the meaning of Articles 652a, respectively 1156, of the CO and of Article 5 of the CISA and may not comply with the information standards required thereunder, and in particular with the guidelines on informing investors about structured products as
published in September 2014 by the Swiss Bankers Association, as applicable.
The Bonds do not constitute collective investments within the meaning of the CISA. Accordingly, holders of the Bonds do not benefit from protection under the CISA or from the supervision of the Swiss Financial Market Supervisory Authority. Investors are exposed to the default risk of Genesis Energy.
Australia
No prospectus or other disclosure document (as defined in the Corporations Act 2001 of Australia (Corporations Act)) in relation to the Bonds has been, or will be, lodged with, or registered by, the Australian Securities and Investments Commission (ASIC) or any other regulatory authority in Australia. No person may:
(a) make or invite (directly or indirectly) an offer of the Bonds for issue, sale or purchase in, to or from Australia (including an offer or invitation which is received by a person in Australia); and
(b) distribute or publish, any Terms Sheet, information memorandum, prospectus or any other offering material or advertisement relating to the Bonds in Australia,
unless:
(i) the aggregate consideration payable by each offeree or invitee is at least A$500,000 (or its equivalent in an alternative currency and, in either case,
disregarding moneys lent by the offeror or its associates) or the offer or invitation otherwise does not require disclosure to investors in accordance with Part 6D.2 or Part 7.9 of the Corporations Act;
(ii) the offer or invitation is not made to a person who is a ‘retail client’ within the meaning of section 761G of the Corporations Act;
(iii) such action complies with all applicable laws, regulations and directives; and
(iv) such action does not require any document to be lodged with ASIC or any other regulatory authority in Australia.
By applying for the Bonds under this Terms Sheet, each person to whom the Bonds are issued (an ‘Investor’):
(a) will be deemed by Genesis Energy, any Joint Lead Manager and the Co-Manager to have acknowledged that if any Investor on-sells the Bonds within 12 months from their issue,
the Investor will be required to lodge a prospectus or other disclosure document (as defined in the Corporations Act) with ASIC unless either: (i) that sale is to an investor within
one of the categories set out in sections 708(8) or 708(11) of the Corporations Act to whom it is lawful to offer the Bonds in Australia without a prospectus or other disclosure document lodged with ASIC; or
(ii) the sale offer is received outside Australia; and
(b) will be deemed by Genesis Energy, any Joint Lead Manager and the Co-Manager to have undertaken not to sell those Bonds in any circumstances other than those described in paragraphs (a)(i) and (a)(ii) above for 12 months after the date of issue of such Bonds.
This Terms Sheet is not, and under no circumstances is to be construed as, an advertisement or public offering of any Bonds in Australia.
The Bonds may only be offered for sale or sold in New Zealand in conformity with all applicable laws and regulations in New Zealand. No Bonds may be offered for sale or sold in any other country or jurisdiction except in conformity with all applicable laws and regulations of that country or jurisdiction. This terms sheet may not be published, delivered or distributed in or from any country or jurisdiction except under circumstances which will result in compliance with all applicable laws and regulations in that country or jurisdiction.
Genesis Energy Bond Offer 2016 10F
or p
erso
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Genesis Energy Limited
Genesis Energy Six year bonds offer March 2016 Investor Presentation
Albert Brantley – Chief Executive Dan Dillane – Capital Structure Manager
1
Joint Lead Managers Co-Manager
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Important Information and Disclaimer
March 2016
2
Important Information The offer of Bonds by Genesis Energy is made in reliance upon the exclusion in clause 19 of schedule 1 of the Financial Markets Conduct Act 2013 (“FMCA”). The offer contained in this Terms Sheet is an offer of bonds that have identical rights, privileges, limitations and conditions (except for the interest rate and maturity date) as Genesis Energy's $105,000,000 fixed rate unsubordinated unsecured bonds maturing on 15 March 2016 which are currently quoted on the NZX Debt Market under the ticker code GNE020 (“GNE020 Bonds”). The Bonds are of the same class as the GNE020 Bonds for the purposes of the FMCA and the Financial Markets Conduct Regulations 2014 (“FMC Regulations”). Genesis Energy is subject to a disclosure obligation that requires it to notify certain material information to NZX Limited (“NZX”) for the purpose of that information being made available to participants in the market and that information can be found by visiting www.nzx.com/companies/GNE. The GNE020 Bonds (which have a fixed interest rate of 7.65% p.a. and a redemption date of 15 March 2016) are the only debt securities of Genesis Energy that are in the same class as the Bonds and are currently quoted on the NZX Debt Market. Investors should look to the market price of the GNE020 Bonds referred to above to find out how the market assesses the returns and risk premium for those bonds. Disclaimer This presentation is for preliminary information purposes only and is not an offer to sell or the solicitation of any offer to purchase or subscribe for any financial products and no part of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever. The information in this document is given in good faith and has been obtained from sources believed to be reliable and accurate at the date of preparation, but its accuracy, correctness and completeness cannot be guaranteed. All of the data provided in this document is derived from publicly available information in relation to Genesis Energy (including the interim report of Genesis Energy for the six months to 31 December 2015), unless otherwise indicated. Unless otherwise indicated, all of the numerical data provided in this presentation is stated as at 31 December 2015. All figures are rounded. A Terms Sheet dated 8 March 2016 (“Terms Sheet”) has been prepared in respect of the offer of the Bonds. Investors should not purchase the Bonds until they have read the Terms Sheet. Investors should consider the risks that are associated with an investment in the Bonds, particularly with regard to their personal circumstances (including financial and tax issues). The selling restrictions set out in the schedule to the Terms Sheet apply to the Bonds. This presentation is dated March 2016.
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Strategic Overview and Operational Review Albert Brantley Chief Executive
March 2016
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Strategic Overview
March 2016
4
Company strategy is focused on five areas
• The Customer’s Experience • Increasing value by delivering the right personalised experiences through differentiated
brands, products and service
• Portfolio Transition • Positioning the generation fleet and fuel portfolio to meet the changing New Zealand
wholesale electricity market
• Kupe • Proving up reserves, assessing options for increasing production capacity, and finalising
the Phase II Field Development Plan
• Digital Acceleration • Utilising digital tools to engage and add value to customers while reducing costs to deliver
• New Ventures • Pursuing new business activities with a long term focus on adding revenues and delivering
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H1 2016 Highlights
March 2016
5
Six months of resilient operations
• Improvement in electricity customers despite strong retail competition
• Steady gas customers after increase in first three months of the year
• Continued growth of the retail LPG book • Increases in thermal and renewable
generation output despite a volatile wholesale electricity market
• Reduction in Kupe contribution due to planned plant outage which reduced production levels
• Careful management of the impact of significant changes in commodity prices (oil, LPG, methanol)
• Continued focus on reducing operating costs
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H1 2016 Results Summary
March 2016
6
• EBITDAF consistency highlights portfolio resilience to variable operating conditions
• Total revenue down 2% due to reduced GWAP, lower gas pricing and planned Kupe outages
• EBITDAF up 2% to $175.5m due to lower electricity and gas purchase costs, offsetting lower Kupe EBITDAF
• Significant negative fair value swing due to hedge contracts and swaption led to 47% decline in NPAT to $35.9m
• Strength of operating earnings and reduction in Stay in Business capex highlighted in 25% increase in Free Cash Flow (FCF)
• Good dividend coverage and reduction in Net Debt
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FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016
$m
Genesis Energy 6 Monthly EBITDAF
H1
H2
One-offitems
EBITDAF consistency
Revenue 1041.6 1067.8 -2%Total operating expenses 866.1 895.0 -3%EBITDAF* 175.5 172.8 2%Depreciation depletion & amortisation 73.1 75.7 -3%Impairment 0.0 3.3 -100%Fair value change (gains)/ losses 21.0 (34.6) -161%Other (gains)/ losses (0.1) (0.9) -89%Earnings before interest and tax 81.5 129.3 -37%Interest 31.4 33.9 -7%Tax 14.2 27.2 -48%Net profit after tax 35.9 68.2 -47%Earnings per share (cents per share) 3.6 6.8 -47%
Stay in business capital expenditure 15.7 20.2 -22%Free cash flow 114.2 91.5 25%Dividends declared 82.0 80.0 3%Dividends per share (cents per share) 8.2 8.0 3%Dividends declared as a % of FCF 72% 87% -18%Net debt 901.3 959.0 -6%
changes and other gains and losses* Earnings before net finance expense, tax, depreciation, amortisation, fair value
$m H1 2015 % changeH1 2016
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Health and Safety
March 2016
7
The safety of our employees and workplace remains a priority
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Genesis Energy Safety Statistics
Medically Treated Injuries Lost Time Injuries 12 Month Rolling Total Recordable Incident Frequency Rate (RHS)
Source: Genesis Energy, TRIFR is measured by number of incidents per million man hours worked
• Genesis Energy is committed to a zero harm work environment
• 1 lost time injury and 3 medically treated incidents in H1 2016 (versus 1 lost time injury in H1 2015)
• Maintenance work during major plant outages completed without any serious incidents
• TRIFR* of 4.28 at 31 December 2015 was up versus 0.54 at 31 December 2014 • Good improvement over last 5 years, but vigilance still needed
*Total Recordable Injury Frequency Rate per million man hours
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Capital Structure and Financial Performance Dan Dillane Capital Structure Manager
March 2016
8
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Balance Sheet
March 2016
9
Net debt reducing and credit metrics remain strong
Total Debt 938.8 958.2 -2%Cash and cash equivalents 37.5 21.0 79%Headline Net Debt 901.3 937.2 -4%USPP FX and FV adjustments -37.0 -32.1 15%Adjusted Net Debt 864.3 905.1 -5%
Headling Gearing 33.7% 33.9% -1%Adjusted Gearing 32.8% 33.1% -1%
As at ($m) 31 Dec 2015
30 Jun 2015 % change
• Improvement in earnings and cashflow has helped to reduce Net Debt and gearing • After adjusting for USPP movements
Net Debt of $864m is 5% lower than 30 June 2015 and 10% lower than a year ago
• Gearing now at 32.8% • Key credit rating metric of Net Debt to
EBITDAF currently at 2.5x which is at bottom end of range to maintain BBB+ rating • No motivation to seek an upgraded
credit rating • Currently assessing best use of future
cashflows and funding headroom • Strict return thresholds to be met for
any use of funds
As at ($m) 31 Dec 2015
30 Jun 2015 % change
Cash and cash equivalents 37.5 21.0 79%Other current assets 298.2 325.5 -8%Non-current assets 3,097.5 3,181.5 -3%Total assets 3,433.2 3,528.0 -3%
Total borrowings 938.8 958.2 -2%Other liabilities 724.8 744.4 -3%Total equity 1,769.6 1,825.4 -3%
Adjusted Net debt (1 ) 864.3 905.1 -5%Gearing 32.8% 33.1% -1%EBITDAF interest cover 6.6 6.1 8%Net debt: EBITDAF(2 ) 2.5 2.6 -6%NTA per share $1.64 $1.70 -3%
(2) H1 2016 EBITDAF annual i sed for ca lculation
(1) H1 2016 net debt of $901.3m has been adjusted for $37m of foreign currency trans lation and fa i r va lue movements related to USD denominated borrowings which have been ful ly hedged with cross currency interest rate swaps .
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Cashflow and Dividends
March 2016
10
Cashflow generation improvement
• Operating cashflows higher primarily due to improvement in working capital given lower coal stockpile
• Investing cash outflows lower due to 22% reduction in stay in business capex • Timing and magnitude of projects affect
H1 2016 capex • Expect stay in business capex for FY2016
of $30m to $40m versus $43.6m in FY2015
• FCF increased 25% to $114.2m • Interim dividend of $82m or 8.2cps
declared • Represents a 72% payout as a proportion
of FCF
$m H1 2016 H1 2015 % change
Net operating cashflow 162.5 136.2 19%Net investing cashflow -13.0 -25.6 -49%Net financing cashflow -133.0 -103.5 29%Net increase (decrease) in cash 16.5 7.1 132%
Stay in business capex 15.7 20.2 -22%Total capex 14.9 22.7 -34%Free cash flow 114.2 91.5 25%
$64m $66m
$80m $80m $82m$83m $79m
$92m
$106m$114m
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$0m
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$40m
$60m
$80m
$100m
$120m
H1 2014 H2 2014 H1 2015 H2 2015 H1 2016
Dividends Declared and Free Cash FlowDividends Free Cash Flow Payout as % of FCF (RHS)
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Net Debt to EBITDAF ratio
March 2016
11
• Net Debt to EBITDAF ratio is the key metric focused on by credit ratings agencies, including Standard and Poor’s (S&P)
• In order to maintain a BBB+ rating the target range for the Net Debt to EBITDAF ratio is 2.5 to 2.8
• Note that S&P calculation of Net Debt to EBITDAF includes a number of adjustments to reported numbers e.g. USPP foreign currency translation
* Net Debt adjusted for USPP FX and FV adjustments
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H1 2014 H2 2014 H1 2015* H2 2015* H1 2016*
Net
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DAF
ratio
Genesis Energy Net Debt to EBITDAF
Target range
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Debt Profile
March 2016
12
• Recent restructuring of revolving credit facilities has led to reduced finance expenses
• Capital Bonds were modified in July 2013: • Amount reduced from $275 million
to $200 million • Coupon reduced from 8.50% to
6.19%
• US$150 million (NZ$193 million) raised in first USPP in October 2014 at an average coupon of 3.67%
• Average maturity tenor is 8.0 years
• $350m of revolving cash facilities were undrawn at 31 December 2015
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FY2016
FY2017
FY2018
FY2019
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FY2021
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FY2027
FY2042
$m
Genesis Energy Debt Profile
Retail Bonds Wholesale Domestic Revolving Credit Capital Bonds USPP
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Key Credit Highlights
March 2016
13
New Zealand’s largest electricity and gas retailer
Diversified portfolio of
generation assets
EBITDAF resilient to variable operating
conditions
Strong free cash flow and no major capex
projects planned
Net debt reducing and strong BBB+
rating
Diversified and stable funding
position
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Bond offer
March 2016
14
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Key Terms of the Bonds
March 2016
15
Description of Bonds Fixed rate, unsubordinated, unsecured, interest bearing debt obligations of Genesis Energy ranking equally and without preference among themselves and equally with any other unsubordinated, unsecured indebtedness of Genesis Energy (except indebtedness preferred by law). The Bonds rank ahead of Genesis Energy's subordinated capital bonds which are quoted on the NZX Debt Market under ticker code GPLFA
Guarantee Genesis Energy’s obligations in relation to the Bonds are guaranteed on an unsecured basis by certain wholly-owned subsidiaries of Genesis Energy
Credit Ratings (S&P) Issuer Long-Term Credit Rating – BBB+ Expected Long-Term Issue Credit Rating – BBB+
Issue amount Up to $75 million with the ability to accept oversubscriptions of up to $25 million
Use of proceeds General corporate purposes
Tenor 6 years, maturing 18 March 2022
Interest rate Interest rate to be set on the Rate Set Date as being equal to the Base Rate plus the Margin
Base Rate The semi-annual mid-market rate for an interest rate swap of a term matching the period from the Issue Date to the Maturity Date
Interest payments Semi-annually in arrear on 18 March and 18 September
Minimum Denomination $5,000 and multiples of $1,000 thereafter
Issue price $1 per Bond
Listing NZX Debt Market under the ticker GNE030 For
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Key Dates
March 2016
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Opening Date Tuesday, 8 March 2016
Closing Date 12.00pm on Monday, 14 March 2016
Rate Set Date Monday, 14 March 2016
Existing GNE020 Bonds – Maturity Date Tuesday, 15 March 2016
Issue Date Friday, 18 March 2016
First Interest Payment Date Monday, 19 September 2016
Maturity Date Friday, 18 March 2022
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Thank you
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March 2016
18
APPENDIX
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Customer Experience
March 2016
19
Growth in Customer Experience earnings
• Despite fierce competition in the New Zealand retail electricity and gas markets, Customer Experience EBITDAF increased
• Steady improvement in EBITDAF contribution over last four years
• EBITDAF helped by: • Lower electricity purchase costs
(LWAP) • Deferral of acquisition costs and
retail incentives • Changes in gas and electricity
transfer pricing
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35%
$0m
$10m
$20m
$30m
$40m
$50m
$60m
H1 2012 H1 2013 H1 2014 H1 2015 H1 2016
EBIT
DAF
$m
Customer Experience Contribution to EBITDAFCustomer Experience EBITDAF Percent of Group EBITDAF
6 months to 31 December 2015 2014 % change
Electricity Customers 522,586 517,492 1%Gas Customers 106,809 108,217 -1%Total Customers ex LPG 629,395 625,709 1%LPG Customers 14,326 13,081 10%Total Customer Accounts 643,721 638,790 1%
Total Advanced Meters Installed 368,500 370,734 -1%12 months annualised churn rate 19.8% 20.3% -2%
Mass Market Electricity Sales (GWh) 2,394 2,373 1%TOU Electricity Sales (GWh) 621 453 37%Retail Electricity Sales (GWh) 3,015 2,825 7%
Mass Market Gas Sales (PJ) 2.6 2.5 3%TOU Gas Sales (PJ) 1.7 1.5 11%Retail Gas Sales (PJ) 4.2 4.0 6%
Retail LPG Sales (tonnes) 2,202 1,944 13%Average Retail Electricity Purchase Price- ($ / MWh) $61.90 $72.45 -15%
LWAP/ GWAP ratio* 100.2% 101.0% -1%Customer Experience EBITDAF ($m) 57.0 44.2 29%
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Customer Experience
March 2016
20
Electricity customers and market share
• Electricity customer numbers have increased 1.0% compared to H1 2015, and 1.2% since recent downturn in Q3 2015
• Reflects strength in Energy Online which has delivered 14 consecutive months of growth
• Stabilisation of Genesis Energy brand through focus on pricing, incentives and acquisition strategy
• 12 month rolling switching rate of 19.8% now 0.7% points lower than that of broader electricity market
• Improving momentum in electricity sale volumes driven by Time of Use (TOU) improvement and increased demand per customer in winter months
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0200400600800
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GW
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GW
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Electricity Sales Volumes (GWh)Quarterly TOU Sales Volumes Quarterly Mass Market Sales Volumes
Rolling 12 months sales volumes (RHS)
24.5%
25.0%
25.5%
26.0%
26.5%
27.0%
27.5%
500,000
505,000
510,000
515,000
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525,000
530,000
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Q1
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2
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12/1
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4
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Q1
15/1
6
Q2
Mar
ket S
hare
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omer
s by
ICP
Electricity Customers & Market ShareCustomer Numbers Share of Total Market (RHS)
Source: Company data, Electricity Authority
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Customer Experience
March 2016
21
Gas customers remaining steady
• Reticulated gas customer base has been lower on back of competition for dual fuel customers
• After growth in Q1, Genesis Energy brand losses have reduced group ICP count in Q2, while Energy Online continues to grow
• New, flat rate gas plans gaining traction and are a good acquirer of dual fuel customers
• Gas sales volumes also benefitted from cold winter months in Q1, plus TOU momentum
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15/1
6
Q2
PJPJ
Retail Gas Sales Volumes (PJ)Quarterly TOU Sales Volumes Quarterly Mass Market Sales Volumes
Rolling 12 months sales volumes (RHS)
36%
37%
38%
39%
40%
41%
42%
43%
44%
45%
100,000
102,000
104,000
106,000
108,000
110,000
112,000
114,000
116,000
118,000
Q1
11/1
2
Q2
Q3
Q4
Q1
12/1
3
Q2
Q3
Q4
Q1
13/1
4
Q2
Q3
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14/1
5
Q2
Q3
Q4
Q1
15/1
6
Q2
Mar
ket S
hare
Cust
omer
s by
ICP
Natural Gas Customers and Market ShareCustomer Numbers Share of Total Market (RHS)
Source: Company data, Gas Industry Co
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Fuel Management
March 2016
22
Fuel remains an important consideration
• Reductions in wholesale gas sales offset by gas used in thermal generation
• Slide in methanol prices negatively impacted on prices received for gas sold to Methanex, but contracted gas volumes are decreasing, and Methanex contract has “floor” pricing
• Last coal delivered to Huntly on 25 October 2016
• Use of coal in Huntly Rankine units now reducing coal stockpile • Currently at 600kt, 31% lower than a
year ago • Careful management of stockpile will
be required coming into key dry summer months
6 months to 31 December 2015 2014 % change
Wholesale Gas Sales (PJ) 8.7 10.7 -19%Total Gas Purchases (PJ) 24.3 24.2 1%Gas Used in Internal Generation. (PJ) 11.3 9.6 18%Wholesale Coal Sales (PJ) 0.5 0.2 186%Coal Purchases (PJ) 5.4 5.4 0%Coal Used in Internal Generation (PJ) 5.1 7.2 -29%
Coal Stockpile (kilotonnes) 600 870 -31%
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Huntly Coal Stockpile and Coal Used in GenerationCoal stockpile (ktonnes) Coal used in generation (PJ)
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Generation
March 2016
23
Total generation increased 3%
• Despite Unit 5 outage for 12 days in November 2015, gas generation output was up 16% on H1 2015: • Due to a weaker comparable period
and higher spot prices in November and December 2015
• Coal generation down 29% as Rankine units were used sparsely in August and September 2015 when wholesale prices were generally lower
• Timing of hydro inflows into each of three hydro schemes offset impact of lower hydro storage, so renewable generation up 6% year on year
• GWAP was down 14% but pockets of firm pricing as thermal capacity tightened
0
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H1 2011 H1 2012 H1 2013 H1 2014 H1 2015 H1 2016
GW
h
First Half Year Generation Profile
Hau Nui Wind
Tekapo A & B
Waikaremoana
Tongariro
Huntly Unit 6
Huntly Unit 5
Huntly Rankine Units
6 months to 31 December 2015 2014 % change
Gas (GWh) 1,476 1,277 16%Coal (GWh) 458 641 -29%Total Thermal (GWh) 1,933 1,918 1%Hydro (GWh) 1,431 1,351 6%Wind (GWh) 13 11 16%Total Renewable (GWh) 1,444 1,363 6%Total Generation (GWh) 3,377 3,280 3%Average Price Received for Generation($/ MWh)
$61.78 $71.75 -14%
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Kupe
March 2016
24
Managing the fall in oil and LPG prices • Production at Kupe processing facility down
materially on H1 2015 due to 26 day planned maintenance outage • Oil production down 13% and timing of oil
shipments meant oil sales down 32% • Likely to be some acceleration of gas in H2
2016 due to favourable pricing – on track for another year of 23 to 24PJ of gas
• Hedging policy has helped contain impact of record lower oil prices, with 92% of volumes at US$86.10/bbl
• In December 2015 announced upgrade to Kupe developed reserves for oil and gas
• Phase II Development Plan expected to be finalised in Q4 FY2016, and will determine timing and magnitude of capex and confirm undeveloped reserves
060120180240300360420480540600
020406080
100120140160180200
Q1
11/1
2
Q2
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12/1
3
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Kupe Oil Production Volumes (kbbl)Quarterly Production Volumes Rolling 12 months production volumes (RHS)
Kupe: 6 months to 31 December 2015 2014 % change
Gas Sales (PJ) 3.4 3.5 -1%Oil Production (kbbl) 207.3 238.9 -13%Oil Sales (kbbl) 158.6 233.4 -32%LPG Sales (kilotonnes) 14.1 15.2 -7%Oil and Gas EBITDAF 39.4 46.9 -16%
Percentage hedged
Rate (US$/bbl)
Percentage hedged
Rate (NZD/USD)
H2 2016 85% $81.00 62% 70.0cFY 2017 49% $67.00 60% 64.4c
Oil hedging FX hedging of oil sales
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