Price & Performance

Time Period:

Highlights for HDF in 2009

FINANCIAL RESULTS

HDF reported revenues from ordinary activities (excluding non-operating items(1)) of $132.1 million for the year ended 31 December 2009, 12.2 percent higher than the prior corresponding period. Earnings before Interest, Taxes, Depreciation and Amortisation (EBITDA), excluding non-operating items (1), was $94.8 million, 16.4 percent higher than the comparable EBITDA figure in 2008. The results achieved reflect the following:

- solid operating performance from Epic Energy, with operating income for the year of $119.7 million, 25.2 percent ahead of the 31 December 2008 result, primarily due to the commencement of gas haulage on the newly completed QSN Link. The QSN Link, which is underpinned by long-term contracts, represents a permanent step-change in Epic Energy's operating performance. Due to the QSN Link being debt funded, Epic Energy finance costs also increased over the year;

- notwithstanding a 10.4 percent rise in EBITDA for the half year to 30 September 2009 cash receipts (including capital items) from South East Water (UK) for the year ended 31 December 2009 were approximately 28.5 percent lower than the previous corresponding period. This was largely due to the unprecedented decline in UK inflation from September 2008 to June 2009, which resulted in South East Water shareholders agreeing to a reduced dividend and the provision of $30 million capital from HDF. A subsequent return to more normal inflation levels has reversed much of the effect reducing the prospect of further capital injections being required. Net realised gains from cross currency swaps relating to South East Water were also lower than for the previous corresponding period due to declines in the Bank Bill Swap Rate; however, this reduction was offset by a corresponding reduction in TAPS Trust distribution payments and HDF debt facility interest payments over the period; and

- cash distributions of $42.3 million were paid to HDF securityholders during 2009, 158 percent covered by net operating cash flows from its assets.(2)

Financial highlights in 2009

	Actual year ended 31 December 2009 ($'000)	Actual year ended 31 December 2008 ($'000)	Change (%)
Total income (1)	132,123	117,791	12.2
EBITDA (1) (2)	94,792	81,454	16.4
Net profit after tax (1) (2)	30,030	24,842	20.9
Net cash flows from operating activities	65,934	59,947	10.0
Cash balance at year end	202,594	59,316	>100.0
Distributions per stapled security (cents)	12.0	28.0	(57.1)

To allow comparisons with prior year's operational performance, the presentation of key financials excludes the following items:

(1) Unrealised revaluations, unrealised foreign exchange rate movements and other accounting revaluations (2009: loss of $71.7 million, 2008: loss of $18.3 million).

(2) A responsible entity incentive fee of $18.4 million in 2008.