Price & Performance

Time Period:

Highlights for HDF in 2010

FINANCIAL RESULTS

The operating performance for the year was underpinned by our pipeline's underlying contracted revenue and cash flow, as well as a modest increase in cash receipts from our investment in South East Water (SEW). Revenues from ordinary activities (excluding non-operating items) totalled $154.2 million for the year ended 31 December 2010, 16.8 percent higher than the prior corresponding period. Cash flows from operating activities were $81.8 million for the year ended 31 December 2010, 24.1 percent higher than the comparable figure of $65.9 million for the previous corresponding period. The results achieved reflect:

      •   The solid operating performance from Epic Energy, with EBITDA for the year of
           $98.7 million, 10.4 percent ahead of the previous corresponding period. This
           increase reflects the increase in revenue associated with annual inflation
           adjustment to our transmission agreements across the pipelines, as well
           additional uncontracted revenues associated with additional gas transportation
           provided to help meet the unplanned demands of our transmission customers.
           The EBITDA increase also reflects a full 12 months of revenue from the
           Karratha lateral on the Pilbara Pipeline System.

      •   Operating cash receipts from the SEW investment of $24.5 million were up
           14.6 percent on the previous corresponding period, with higher cash receipts
           received as scheduled.

• Distributions of $60.9 million were declared during 2010, which were 136
percent covered by free operating cash flows.

Financial highlights in 2010

	Actual year ended 31 December 2010 ($'000)	Actual year ended 31 December 2009 ($'000)	Change (%)
Total income (1) (2)	154,161	132,038	16.8
EBITDA (1) (2) (3)	108,916	94,706	15.0
Net profit after tax (1) (2) (3)	39,904	29,944	33.3
Net cash flows from operating activities	81,821	65,934	24.1
Cash balance at year end	259,937	202,594	28.3
Distributions per stapled security	12.0	12.0	0.0

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

(1) Realised and unrealised revaluation losses of $35.1 million in 2010 and $58.5 million in 2009.
(2) Unrealised revaluation losses on warrants of $19.5 million.
(3) A responsible entity performance fee expense of $22.4 million in 2010.