13 AGL Energy Limited 2011 Annual Report Vision Target FY2011 Performance FY2011 Target FY2012 Ongoing profitability Industry leading earnings  profile based on sustainable  business practices. Underlying profit: $450-480m Underlying profit: $431.1m Underlying profit: As per guidance to be  issued at AGL’s Annual  General Meeting on  27 October 2011. Sustainable growth Solid credit rating refl ecting  underlying cash-fl ow  potential. Credit rating: BBB Credit rating: BBB Credit rating: BBB Sustainable Growth Ongoing Profi tability AGL has a long pipeline of development projects which offer  the potential for future growth such as new gas-fired power  stations; wind farms and other renewable generation assets;  gas exploration and development activities; and gas production  and gas storage facilities. AGL will commit the substantial capital associated with these  projects when the Board is satisfied there will be real growth in  shareholder wealth measured by increasing dividends and share  price increases. Continued improvement in AGL’s profitability will be a key driver  of providing shareholders with the investment returns they  need to continue investing in AGL. It will also be essential if  we are to continue to be able to borrow money from our lenders  on satisfactory terms. AGL’s underlying profit for FY2011 was $431.1 million, up only  0.5% on FY2010. This is in line with revised earnings guidance  provided to the share market following a combination of severe  summer weather conditions in eastern and southern Australia.  Although the underlying profit was relatively flat, operating  cash-flow increased by more than 7% to $676 million,  demonstrating the strength of AGL’s core business. Dividends paid to shareholders totalled 60 cents per share, an  increase of 1 cent on FY2010. It is crucial that AGL maintains a solid investment grade credit rating  to operate effectively in Australia’s energy markets. Wholesale  contracts are an important element of managing the cost of  procuring energy. An investment grade credit rating allows AGL to  enter into these high value contracts on the terms necessary to  effectively manage risk. An investment grade credit rating is also  important in securing access to long-term debt on acceptable terms  and conditions. Standard & Poor’s (S&P) have reaffirmed AGL’s long-term credit  rating of BBB/stable. Current debt levels and capital expenditure  expected to be incurred in FY2012 provide AGL with debt headroom  of approximately $500 million to maintain a BBB credit rating.