#1Investor Day 13 December 2017 Melbourne 1 agl#2Disclaimer and important information The information in this presentation: Is not an offer or recommendation to purchase or subscribe for securities in AGL Energy Limited or to retain any securities currently held. - Does not take into account the potential and current individual investment objectives or the financial situation of investors; and was prepared with due care and attention and is current at the date of presentation. - • Actual results may materially vary from any forecasts (where applicable) in this presentation. Before making or varying any investment in securities in AGL Energy Limited, all investors should consider the appropriateness of that investment in light of their individual investment objectives and financial situation and should seek their own independent professional advice. Major expenditure remains subject to standard Board approval processes. Statutory Profit and Underlying Profit: Statutory Profit is prepared in accordance with the Corporations Act 2001 and Australian Accounting Standards, which comply with International Financial Reporting Standards. agl Underlying Profit is Statutory Profit adjusted for significant items and changes in fair value of financial instruments. Underlying Profit is presented with reference to the Australian Securities & Investments Commission's Regulatory Guide 230 "Disclosing non-IFRS financial information" issued in December 2011. AGL's policy for reporting Underlying Profit is consistent with this guidance. The Directors have had the consistency of the application of the policy reviewed by the external auditor of AGL Energy Limited. Amounts presented as Statutory Profit/(Loss) and Underlying Profit are those amounts attributable to owners of AGL Energy Limited. Investor Day | 13 December 2017 2#3Strategy and Business Update Andy Vesey#4Agenda 1200 - 1245 Lunch and booth interaction 1445-1530 agl Customer Markets Update Melissa Reynolds, Chief Customer Officer 1245-1330 Strategy and Business Update Andy Vesey, Managing Director & CEO 1530 - 1615 Capital Allocation through Transition Brett Redman, Chief Financial Officer 1330-1415 Wholesale Markets Update Richard Wrightson, Executive General Manager, Wholesale Markets 1615-1630 Closing remarks 1415 - 1445 Afternoon tea and booth interaction 1630-1800 Drinks Investor Day | 13 December 2017 4#5Delivering "safety and beyond" agl Safety comes first because physical and mental wellbeing are fundamental to a successful workplace We create a supportive environment, where we feel safe to challenge the norm, to speak up, to say what we mean Safety is a shared responsibility - by taking care of each other, AGL becomes a better business for all Per million hours worked 12 10 00 16 Total Injury Frequency Rate رياس 4 2 0 FY14 FY15 FY16 FY17 FY18 YTD Employees Contractors Investor Day | 13 December 2017 5#6Driving gender equality for sustainable performance TARGETING PAY DISPARITY AGL gender pay gap analysis to be undertaken twice yearly Analysis indicates no material gap exists that cannot be explained by experience, location or years of service Leaders required to consider gender equity relativities during remuneration review process WOMEN IN SENIOR LEADERSHIP PIPELINE Up 4 ppts to 38% in FY17 48% of FY17 internal appointments were women FY19 target: 40% 51% of FY17 external appointments were women Investor Day | 13 December 2017 agl 6#7We have refreshed AGL's values to support our ongoing transformation Investor Day | 13 December 2017 Safety and beyond Inclusive of all agl Sustainable thinking Focused on what matters 7#8Anticipating and responding to an industry in transition STRATEGIC IMPERATIVES & KEY OBJECTIVES FY18 PRIORITY FOCUS AREAS From Mass retailing To Personalised retailing Prosper in a carbon constrained future B From Operator of large assets To Orchestrator safety and diversity of large and small assets I বব From To High emissions Lower I emissions Reliability and security of our thermal fleet technology technology Build customer advocacy From Το Leveraging platforms in existing markets Leveraging platforms in new markets too I supply investments Continuing to drive Continued Renewed emphasis on cost discipline evaluation of energy Actions to address affordability Market design evolution: National Energy Guarantee Disciplined allocation of capital amid uncertainty Investor Day | 13 December 2017 agl 8#9Liddell replacement is AGL's preferred option compared with the proposal to extend the life of Liddell Liddell replacement Preferred option Liddell Power Station closed in 2022 and repurposed with series of investments in new, low emissions generation and upgrades to existing generation Staged approach to bring new investment online ahead of Liddell retirement Each phase will track timing, deliverables and completion dates of each new investment Newcastle gas peaker 250MW or other NSW sites Liddell extension agl Work undertaken at Liddell Power Station to enable AGL to operate the station beyond 2022 - Extending Liddell's life by five years to deliver 1000MW of peak capacity at reduced availability Analysis has been done to examine the costs and other risks associated with extending Liddell 1600MW NSW gas peaker 500MW Demand response up to 150MW Liddell battery Renewables B Bayswater upgrade DOO 250MW NSW pumped hydro 100MW Feasibility Liddell synchronous condenser Inertia and reactive power Total capital investment: -$1,360m (-$490m in stage 1 projects) Levelised cost of energy: $83/MWh Asset life: 15 to 30 years Investor Day | 13 December 2017 اليم Total capital investment: -$920m Levelised cost of energy: $106/MWh Asset life: five years 9#10Projects to replace Liddell have been staged to adapt to an evolving market Stage Description Projects Approved Projects Projects are under construction having already achieved Final Investment Decisions Wind Coopers Gap| 453MW Silverton 200MW agl Cumulative capex¹ Cumulative LCOE² Committed $62/MWh Stage 1 Feasibility 2019 or earlier4 Stage 1 comprises projects required to balance AGL's committed customer needs consistent with the Government's proposed National Energy Guarantee Stage 2 Feasibility 20204 Stage 3 Feasibility 20214 Stage 1 and 2 comprise projects required to meet AGL's potential uncontracted customer demand (C&I) assuming that other market participants respond to market signals Stage 1, 2 and 3 comprise projects required to completely replace Liddell assuming no other market participants respond to the signal for investment Approved in NSW Generation Plan - - Bayswater upgrade | 100MW Solar offtake (NSW) | 300MW Synchronous condenser Liddell Demand response | up to 20MW Feasibility Newcastle gas peaker³ | 250MW NSW gas peaker | 500MW Renewables 500MW Demand response | up to 50MW Liddell battery| 250MW Renewables| 250MW Demand response | up to 30MW $490m $76/MWh Stages 1 and 2 $1,100m $83/MWh $1,360m Stages 1, 2 and 3 $83/MWh 1. Dollars are cumulative on the bundle of assets (Real $2017, pre-tax), Solar offtake is based on a 300MW, 15 year power purchase agreement, Renewables assets are modelled using wind assets using an off-balance sheet structure like PARF with AGL contributing capital equivalent to a 20% equity share 2. Levelised cost of energy (LCOE) is the average cost per MWh of production of the cumulative bundle of assets contained within each stage of the NSW generation plan. LCOES are based on information sourced by AGL. Dollars have been presented in real $2017, pre-tax. 3. Newcastle gas peaker to be located at Newcastle gas storage facility or another suitable location in NSW. 4. Feasibility will be subject to financial feasibility, planning approval, EPC contract and connection agreement. Investor Day | 13 December 2017 10#11Supplementary Information.#12Liddell replacement delivers a more affordable solution for customers LCOE ($/MWh real $2017) 150 100 50 Levelised Cost of Energy and portfolio contribution (by technology)1 Liddell Replacement Portfolio, $83/MWh Liddell Life Extension, $106/MWh Weighted levelised cost of energy (LCOE) for an equivalent level of energy production is lower for replacement than for lifetime extension Liddell replacement portfolio contains equivalent amount of energy and dispatchable power to extension, to deliver a similar level of reliability - Energy is sourced predominantly from renewable technologies and upgrades to Bayswater efficiency - Firming is provided through high-efficiency gas peakers, the Bayswater efficiency upgrade, storage (battery or pumped hydro) and demand response agl 0 Liddell Replacement Portfolio Dispatchable Energy Renewable Energy Investor Day | 13 December 2017 Liddell Life Extension Bayswater Efficiency Upgrade Liddell Life Extension 1. Levelised Cost of Energy based on information sourced by AGL including: the capital cost of the Liddell life extension works as advised by WorleyParsons (Advisian). AGL's discount rate in line with commercial target returns. Westpac Banking Corporation's forecast of the Newcastle coal price discounted based on the lower calorific value required for power station coal. A carbon emissions cost has been included as per AEMO's "Moderate" 2015 scenario. 2. Removal of the cost of carbon from the LCOE has the effect of reducing the Liddell Replacement portfolio to $82/MWh and the Liddell lifetime extension portfolio to $92/MWh. 12#13Plan to transform our options into commercial solutions Stage 1 (feasibility during 2019 or earlier) TECHNOLOGY GAS PROJECT NSW | Flexible gas peaker 250MW Announced closure date for Liddell Project delivery Bayswater | Efficiency upgrade 100 MW Development undertaken during existing outage schedule UPGRADE EXISTING Liddell | Synchronous condenser Ongoing generation Delivery DEMAND RESPONSE Up to 20MW Progressive trials & pilots Coopers Gap | 453MW RENEWABLES Silverton 200MW Project delivery Delivery agl Solar offtake (NSW) | 300MW Project delivery 2017 2018 2019 2020 2021 2022 2023 2024 FID (conditional¹) Delivery Approved 1. Conditional final investment decisions will be subject to planning approval, EPC contract and connection agreement. Offtake approved 13#14Plan to transform our options into commercial solutions Stage 2 (feasibility in 2020 or earlier) TECHNOLOGY PROJECT GAS NSW | Gas peaker (500MW) RENEWABLES 500MW B DEMAND Up to 50MW RESPONSE Stage 3 (feasibility in 2021 or earlier) BATTERY Liddell | 250MW ** RENEWABLES 250MW DEMAND RESPONSE Up to 30MW 2017 2018 2019 اليم Announced closure date for Liddell Project delivery Project delivery Progressive trials & pilots Delivery agl Project delivery Progressive trials & pilots 2020 2021 2022 2023 2024 Delivery Approved AGL is considering the feasibility of pumped hydro assets in New South Wales in Stage 2 & 3 FID (conditional¹) Offtake approved 1. Conditional Final Investment Decisions will be subject to planning approval, EPC contract and connection agreement. 14#15Wholesale Markets Update Richard Wrightson#16Three key topics of discussion... 1 Key market design issues today 2 Bringing on new supply 3 C Longer-term perspective National Energy Guarantee Five-minute pricing - Crib Point LNG import jetty Barker Inlet Power Station, Firming costs Grid-scale batteries Distributed energy orchestration Investor Day | 13 December 2017 agl 16#17Potential implications of the National Energy Guarantee The electricity system is relatively well equipped to meet a dispatchability mechanism 2019 NEM - forecast extreme day capacity reserve Demand/capacity (MW) 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 NSW 10 PoE residential estimate QLD SA 10 PoE business esimate plus minimum reserve level Source: AEMO, AGL; 10 POE = 10% probability of demand exceeding this number Investor Day | 13 December 2017 VIC Available capacity 17 agl#18Potential implications of the National Energy Guarantee AGL's positioning relative to a dispatchability mechanism reflects its generation footprint by state 2019 AGL - forecast extreme day capacity reserve Demand/generation (MW) 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 NSW 2019 AGL 10 POE QLD SA VIC 2019 AGL dispatchable generation Source: AEMO, AGL; 10 PoE = 10% probability of demand exceeding this number Investor Day | 13 December 2017 agl 18#19Potential implications of the National Energy Guarantee Emissions mechanism will support development of new renewables projects Estimated AGL emissions intensity for consumer market customers 14,000 12,000 10,000 8,000 Mass-market demand/generation (GWh) 6,000 4,000 2,000 0 New South Wales AGL renewable generation energy Source: AEMO, AGL; includes Silverton and Coopers Gap wind farms currently under construction Investor Day | 13 December 2017 Queensland South Australia Non-renewable energy Victoria Total Effective mass-market carbon intensity 0.80 0.70 0.60 0.50 0.40 0.30 0.20 0.10 19 agl Carbon intensity (tonnes CO2-e/MWh)#20Implications of introduction of five-minute pricing rule Ability to run for high prices critical to selling insurance products Start-up times by energy source Capturing high prices: South Australian example 120 100 Generator output (MW) agl 100% T 90% I 80% × % of spike captured 70% 60% 50% 40% 30% 05 10 15 20 25 Time elapsed (minutes) 30 35 55 40 40 20% 10% 0% Coal generation Battery -Open-cycle gas turbine Reciprocating engine Reciprocating Engine Coal OCGT Battery 86220 Source: AEMO for South Australian market data; all other data illustrative Investor Day | 13 December 2017 20 20#21Crib Point LNG import jetty Feasibility study under way for FY19 decision Why it makes sense Victorian gas market reliant on production from declining Gippsland basin East Coast gas market restricted to four main producers, not all of which are actively selling to other wholesale participants - Domestic gas being priced at premium to international LNG - Gas being transported from Queensland to satisfy southern market demands Limited financial signals being sent to the domestic gas market What the impact could be -> Establishment of forward price for gas Removal of premium to international markets Wholesale competition in the gas market Investor Day | 13 December 2017#22Cost of gas-fired generation continues to set wholesale electricity price agl Victoria Queensland 50% 50% $100 $100 40% 40% $80 $80 30% 30% $60 $60 20% $40 20% $40 10% $20 10% $20 0% $0 0% $0 1-Jan-10 1-Jul-11 1-Jan-13 1-Jul-14 1-Jan-16 1-Jul-17 1-Jan-10 1-Jul-11 1-Jan-13 1-Jul-14 1-Jan-16 1-Jul-17 New South Wales South Australia 50% 50% $100 $100 40% 40% $80 $80 30% 30% $60 $60 20% $40 20% $40 10% $20 10% $20 0% $0 0% $0 1-Jan-10 1-Jul-11 1-Jan-13 1-Jul-14 1-Jan-16 1-Jul-17 1-Jan-10 1-Jul-11 1-Jan-13 1-Jul-14 1-Jan-16 1-Jul-17 Gas price setter (%) Average pool price ($/MWh) Gas setter spot price ($/MWh) Source: AGL, AEMO Investor Day | 13 December 2017 222 22#23Barker Inlet Power Station Construction set to begin early in 2018 calendar year ag agl - Improved efficiency, reducing AGL total gas usage Dual fuel operations driving down fixed cost of gas haulage and swing Option to running on diesel caps cost of gas for generation Step change in reliability through multiple newer units, improving contracting ability Extremely rapid start up times to balance high penetration of renewables in South Australian market Reciprocating engine technology is best suited to five-minute market Investor Day | 13 December 2017 23#24Firming costs will become a more critical component of market pricing Five key considerations go into estimation of costs 1 2 3 4 agl 5 Diversity of renewable resources (source and location) Concentration of renewables in state (e.g. wind in South Australia and solar in Queensland) Flexibility of existing portfolio, including generation and demand-side management Ability to contract insurance products with third parties Development of new assets (gas peaking plant versus storage) Investor Day | 13 December 2017 24 24#25What does large-scale battery technology mean for the National Electricity Market? Five potential areas of impact across the system; renewables integration most interesting Wind curtailment case study: North Brown Hill, 11 October 2017 1 Renewables integration 2 Capacity Frequency 3 control Generation output (MW) 120 100 80 4 Price arbitrage 40 42 20 Approximately 236 MWh of wind generation curtailed 0 Transmission 5 and distribution Curtailed generation Actual generation Potential generation Source: AGL Investor Day | 13 December 2017 agl 25#26We are preparing for the integration of small-scale batteries Virtual Power Plant in South Australia is about leading and learning Aggregation of distributed energy assets and the dynamics of the NEM agl 000 Distributed energy assets include aggregation of supply (e.g. solar generation, diesel generators for C&I, battery storage) and of demand response (residential and C&I) Flexibility of control of decentralised assets could increase the number of participants active in the market ӨӨ Overall shape of system demand may flatten, smoothing peaks and increasing demand during troughs (when excess solar or wind is used to charge batteries) Investor Day | 13 December 2017 26#27In conclusion... Investor Day | 13 December 2017 1 2 3 Our portfolio is well positioned for changes on near-term horizon Key energy supply projects will aid portfolio efficiency and flexibility We are making sure we are prepared for the longer-term market transition agl 27#28Supplementary Information.#29LRECS: from under-supply to over-supply Renewable generation certificate surrenders by type: Australia-wide Certificates (thousands) 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 1 agl 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Onwards Large-scale Source: Clean Energy Regulator, AGL Investor Day | 13 December 2017 Existing small-scale -Current Target 29#30Customer Markets Update Melissa Reynolds#31Three key topics of discussion... 1 Customer Markets strategy 2 Affordability, market context and pricing 3 Customer Experience Transformation progress and targets Investor Day | 13 December 2017 agl 31#32до Voice of the Customer Our customers are at the centre of everything we do It's important that I'm dealing with a bigger company... It gives me peace of mind agl If I were to look in the future, I think service providers would be more focused on the technology side You want a company that's looking at the present and into the future... thinking about what's next I would like more energy efficient functionality within my home Investor Day | 13 December 2017 32#33Customer Markets strategy aligned to Strategic Imperatives Build long-term sustainable value by helping customers through an increasingly complex energy market Prosper in a carbon constrained future Build customer advocacy Investor Day | 13 December 2017 ())))) dl agl Personalised, digital-led customer experiences Lean, low-cost operations Innovative products and services agl A leading, distinctive customer brand W 33#34Addressing affordability Fairness, simplicity and transparency are key - Clear focus on transparency, simplicity and fairness - Industry-leading Fairer Way package - - - - No fees charges to concession and hardship customers More hardship customers with access to exclusive guaranteed discounts More concessions customers on market offers Communication to all standing offer customers Over 1.1 million customers accessing loyalty programs Reducing bill shock for customers Helping manage budgets through product innovation Providing customer choice in billing and payment options Usage alerts and insights into energy usage Investor Day | 13 December 2017 34#35Intense competition with informed customers accessing better deals Proactive intervention and rewarding loyalty to defend market share Market activity has driven 32% increase in acquisitions and retentions Acquisitions and Retentions A Increased churn spread to rest of market to 7ppts from 4ppts Customer Churn agl Customers accessing competitive market offers up year on year Only 14% of customers remain on standing offers Standing Offer vs. Market Offer 25% 814k 592k 616k 20% 15% 80% 81% 84% 86% 10% 5% 20% 19% 16% 14% 0% FY16 Oct YTD FY17 Oct YTD FY18 Oct YTD Oct-14 Apr-15 Oct-15 Apr-16 Oct-16 Apr-17 Oct-17 Oct-14 Oct-15 Oct-16 Oct-17 Acquisitions Retentions - AGL Actual Rest of Market Standing Offer Market Offer Investor Day | 13 December 2017 35#36Customer Experience Transformation Investing in capability to drive value, productivity and personalised customer experiences Enabling Technologies SAP HANA Cultural DNA Customer journeys Capability streams Agile@ Scale CX and UX -Human-centred design A Adobe Azure PEGA Phadoop Signature Moments Easy Move agl - Self-Service Meter Read Energy Insights - One Touch Pay Simple Sign-On Investor Day | 13 December 2017 36#37Driving results through digital adoption MY ACCOUNT REGISTRATIONS 24% 50% FY20 target 21% MOBILE APP DOWNLOADS 1m FY20 366k target 184k agl MY ACCOUNT & APP INTERACTIONS (MONTHLY AVG,) 2.5m FY20 target 986k 563k Oct YTD FY17 Oct YTD FY18 NET PROMOTER SCORE (DIGITAL) +39 +45 FY20 target Oct YTD FY17 Oct YTD FY18 Personalised Retailer Oct YTD FY17 Oct YTD FY18 COMPLAINTS PER '000 CUSTOMERS DIGITAL BILLING 60% FY20 2.1 43% target 1.5 38% 1.2 1.1 Oct YTD FY17 Oct YTD FY18 Customer Experience Transformation FY15 FY16 FY17 FY18 Data Analytics and Insights#38Customer Experience Transformation Benefits to net operating costs as productivity improves with digital adoption and self-service CONSUMER NET OPERATING COSTS (EXC. DEPRECIATION & AMORTISATION: $328M Other Campaigns and advertising Bad and doubtful debts Labour and contractor services -5-10% ~10-15% reduction reduction opportunity opportunity by FY20 longer term - 60% of calls relate to billing, moving and paying Customers with digital ID interact more than non- registered customers - - - Digital interactions increase customer awareness, reduce bill shock and drive down call volume agl For example: Easy Move has reduced 15-min call time to 3-min digital experience For example: 134k customer meter reads reducing transactions/calls related to estimations Digital wallet to drive down payment channel costs ($6m transacted to date on 36k payments) - Digital sales and decisioning optimising channel, campaign and advertising costs FY17 Investor Day | 13 December 2017 FY20 ---> 38#39Our personalised retailing model will meet the needs of customers today and into the future agl Home energy management solutions Solar Command Home batteries Energy plus assets Solar PV EV charging AGL Rewards Energy plans Base energy plans Dual fuel Simple propositions Green power/carbon offsets Virtual and community distributed energy Smart home EV charging infrastructure Peer-to-peer Free energy days Managed demand Complex propositions Core value creation today Current adjacent offers Evolving position Investor Day | 13 December 2017 39#40In conclusion... 1 2 3 4 5 agl Affordability is a key issue: we are addressing it on multiple fronts Technology investment will drive productivity and deliver sustainable margins over time We are defending market share amid unprecedented market activity CXT is delivering digital adoption and great customer experiences We are building brand leadership in the energy sector Investor Day | 13 December 2017 40 40#41Capital Allocation through Transition Brett Redman#42Three key topics of discussion... 1 Current capital expenditure plans 2 3 Scale of potential investment opportunity to FY20 Capital allocation framework and principles Investor Day | 13 December 2017 agl 42#43Strategic imperatives drive capital allocation Prosper in a carbon constrained future B From To Mass Personalised retailing retailing From Operator of large assets To Orchestrator of large and small assets From High Το Lower emissions emissions technology technology Build customer advocacy Investor Day | 13 December 2017 From Leveraging platforms in existing markets Το Leveraging platforms in new markets too agl 43#44Strategic imperatives drive capital allocation. Strong cash flow today supports transition to the asset base of the future. Coal-fired generation remains a strong feature of today's asset base and has underpinned recent shareholder returns Delivering our strategy requires investment in energy supply, systems and customer experiences New growth opportunities are being considered and there is scope to return excess cash to shareholders Legend Current asset base including renewables PPAs Conceptual future asset base Upstream Gas Upstream Gas Storage Coal Generation Gas Generation Renewables Generation AGL direct and indirect investment Note: Renewables PPAs calculated as net present value of expected future payments; not included on balance sheet Investor Day | 13 December 2017 agl Renewables PPAs Electricity Storage Customer Downstream 44#45Strategic imperatives drive capital allocation Transformation investments to FY19 to drive returns from FY20 onwards Current investment scope ($m, approximate) Prosper in a carbon constrained future Build customer advocacy Investor Day | 13 December 2017 From Mass To 600 Personalised retailing retailing 500 400 300 200 100 0 FY16 FY17 FY18F FY19F FY20F Customer Experience Transformation agl 45 55#46Strategic imperatives drive capital allocation. Investment to date primarily focused on smart home and distributed energy investments Current investment scope ($m, approximate) Prosper in a carbon constrained future Build customer advocacy 600 500 400 B From To Operator of large assets Orchestrator of large and 300 small assets 200 Investor Day | 13 December 2017 100 FY16 FY17 FY18F FY19F FY20F ActiveStream Venture investments I New Energy Services Other agl 46#47Strategic imperatives drive capital allocation. Energy supply investments under assessment subject to meeting required rates of return Current investment scope ($m, approximate) Prosper in a carbon constrained future From Build customer advocacy High emissions technology Other gas storage 600 500 400 300 agl 200 Το 100 Lower emissions 0 technology FY16 FY17 FY18F FY19F FY20F Crib Point LNG import jetty - subject to feasibility study NSW Generation Plan - approved PARF Investor Day | 13 December 2017 Silver Springs gas storage expansion - subject to feasibility study NSW Generation Plan - subject to feasibility study Barker Inlet Power Station 47#48Strategic imperatives drive capital allocation. Prosper in a carbon constrained future Build customer advocacy From Leveraging platforms in To existing markets Leveraging platforms in new markets too -> Expansion into Western Australian gas retail market progressing well: customer acquisitions ahead of plan agl New Energy: continued opportunity for technology- based investments and partnerships with global leaders Opportunities for further offshore growth at appropriate level of risk and return have not been found to date ... but parameters for assessment of potential opportunity unchanged: Developed economies only Deregulated or deregulating markets Cultural and legal alignment Ability for AGL to leverage platform advantage Investor Day | 13 December 2017 48#49Summary of current investment plans Investment approved or subject to feasibility (approximate, includes capex and equity investments) agl $590m $475m $468m $444m $200m $390m $195m $450m FY18 approved - sustaining FY18 approved - FY19 approved - sustaining growth and transformation Recurring sustaining capex PT3 (ERP upgrade) Barker Inlet Power Station Silver Springs Investor Day | 13 December 2017 Major outages Active Stream FY19 approved - growth and transformation NSW Generation Plan - approved Other gas storage FY19 feasibility- growth and transformation Life attainment New Energy FY20 approved - sustaining FY20 approved - FY20 feasibility - growth and transformation NSW Generation Plan - feasibility Other growth and transformation Customer Experience Transformation PARF ■Crib Point LNG import jetty 49#50Disciplined capital allocation in a transforming market 1 3 Maintain balance sheet strength consistent with Baa2 credit rating to enable optimal response to opportunities as they emerge Agile Capital approach to drive improved return on equity over time amid rapidly evolving business environment... Optionality: maintain and maximise ability to pivot/exit as objectives evolve Quantum: AGL capital deployed only to level required to achieve strategic objectives Time to value: within appropriately short time-frame relative to uncertainty 2 4 5 agl Maintain target dividend payout ratio of 75 percent of Underlying Profit after tax, franked to 80 percent Continued application of threshold hurdle rate supported by ongoing analysis of cost of capital and appropriate risk adjustment for competing investment classes Return excess cash to shareholders if more accretive opportunities are not identified within reasonable time-frame Investor Day | 13 December 2017 50 50#51Flexibility to fund growth and capital management agl Debt maturity profile ($m) Significant headroom remains, with no major re-financing until hybrid call in June 2019 Adjusted funds from operations/net debt 50% ~$0.5b head- ~$2.5b head- ~$2.4b 900 head- 45% room room room 800 40% 700 35% 600 30% 500 25% Internal target range determined by credit rating 400 20% 300 15% 10% 200 5% 100 0% 0 FY15 FY16 FY17 Investor Day | 13 December 2017 Bond Debt Drawn Bank Debt Undrawn Bank Debt Hybrid Notes 51#52Broad scope of investment opportunities Continued assessment and development relative to risk and uncertainty More advanced/requires less risk premium Powering Australian Renewables Fund Customer Experience Transformation PT3 (ERP upgrade) WA retail gas entry NEM re-investment: Barker Inlet Power Station NEM re-investment: NSW Generation Plan stage 1 New Energy investments Crib Point LNG import jetty NEM re-investment: NSW Generation Plan stage 2 Silver Springs gas storage expansion NEM re-investment: NSW Generation Plan stage 3 Expansion into offshore developed markets Less advanced/likely to require greater risk premium Investor Day | 13 December 2017 agl Already underway and/or approved by AGL Board Currently pending feasibility studies and/or investment decision Currently at earlier stage Other opportunities have been assessed and rejected: (e.g. entry into broadband retailing) 52#53Allocating capital to drive shareholder returns. Prosper in a carbon constrained future Build customer advocacy Investor Day | 13 December 2017 SHORT-TERM PRIORITIES CAPITAL ALLOCATION FRAMEWORK Increased agl SHAREHOLDER OUTCOMES Management of key uncertainties affecting capital allocation decisions Exploration of potential risks and opportunities associated with expansion Investment in new products/markets Investment in existing business Return of excess capital to shareholders premium required as risk goes up Disciplined allocation of capital at threshold hurdle rate Excess cash returned if investment opportunity not identified Improved ROE as embedded in LTIP targets Dividends at 75% of Underlying Profit after tax 53#54In conclusion... Investor Day | 13 December 2017 1 2 3 Current capex plans reflect broad spectrum of investment opportunities Capital allocation principles governing approach to new investment and capital management Targeting improved return on equity and 75% payout ratio on Underlying Profit after tax agl 54#55Supplementary Information.#56Guidance unchanged from FY17 result/AGM Positioned for further profit growth in FY18 agl Underlying Profit after tax expected to be $940 million to $1,040 million Wholesale Electricity and Gas improvements to outweigh impact of reduced Eco Markets Subject to normal trading conditions Subject to any adverse impacts arising from policy and regulatory uncertainty Investor Day | 13 December 2017 56#57Potential timeframe of capex and investment Prosper in a carbon constrained future Time frame of key capex and investment committed or under consideration Customer Experience Transformation PT3 Program B New Energy Build customer advocacy == agl New Energy New Energy New Energy New Energy Barker Inlet Power Station WA Gas Retail FY18 Investor Day | 13 December 2017 NSW Generation Plan Crib Point LNG Import Jetty Silver Springs Storage Expansion FY19 FY20 FY21 FY22 57 57#58Contact Information agl James Hall General Manager, Capital Markets Phone: +61 2 9921 2789 Mobile: +61 401 524 645 Email: [email protected] Chris Kotsaris Senior Manager, Investor Relations Phone: +61 2 9921 2256 Mobile: +61 402 060 508 Email: [email protected] Blathnaid Byrne Group Treasurer Phone: +61 2 9921 2255 Mobile: +61 424 644 947 Email: [email protected]