preliminary results

1

Preliminary ResultsYear ended 31 December 2010

All numbers in this presentation exclude exceptional items and specific IAS 39 mark to market movements, unless stated otherwise

2

IntroductionDirk Beeuwsaert, Chairman

INTERNATIONAL POWER Preliminary Results 2010 33

Introduction

Global leader in independent power generation

Well balanced portfolio

Strong committed growth profile

Ideally positioned to capture further growth in fast developing markets

Robust capital structure

Outstanding team

Integration on track

4

2010 IPR ResultsMark Williamson, Chief Financial Officer

All numbers in this presentation exclude exceptional items and specific IAS 39 mark to market movements, unless stated otherwise


2010 IPR financial highlights

Good financial performance

Profit from operations of £995m (20091: £1,030m)

EPS of 29.1 pence (20091: 26.3 pence)− earnings up 11%− favourable tax rate of 16%

Strong free cash flow of £708m (20091: £724m)

Net exceptional charge of £275m pre-tax(2009: £354m gain)

Full year dividend of 10.91p per share proposed (2009: 12.53p)

Underlying EPSup 11%

FX benefited EPS by 1.0p

2009

2010

Czech

26.3p 32.4p

29.1p

6.1p

1 2009 results stated excluding the Czech business that was sold during the year


NorthAmerica

(£8m)

Czech(£118m)

£1,148m

£1,030m

Corporate£4m

£995m

Europe (£61m)

MiddleEast£24m

Australia(£3m)

Asia£9m

Year-on-year PFO change

2009 20102009ex Czech


Strong free cash flow

Dividends JV&

Associates £8m

Czech (£67m)

PFO (£35m)

£708m

£724m

Workingcapital & other(£28m) Maintena

nceCapex (£32m)

Tax paid (net) £9m

Net interest

paid£62m

£791m

2009 20102009ex Czech

8

International Power - Post CombinationMark Williamson, Chief Financial Officer

Unaudited All numbers in this presentation exclude exceptional items and specific IAS 39 mark to market movements, unless stated otherwise


Pro forma Income Statement1

2010 Adjusted COI (£m)2,3

North America392

Asia260

Latin America967

META315

Europe491

Australia233

36%9%

10%

12%

18% 15%

2009£mYear ended 31 December

EBITDA

Depreciation, amortisation and other

Current Operating Income

Interest

Tax

Income from Associates

Profit for the year

Non controlling interests

Net income group share

EPS

Effective tax rate

3,081

(861)

2,220

(683)

(415)

168

1,290

(271)

1,019

20.1p

27%

%Change

13%

10%

7%

3,485

(1,137)

2,348

(746)

(381)

195

1,416

(326)

1,090

21.5p

23%

2010£m

1 The Preliminary Statement describes the assumptions used to derive the pro forma data, 2009 is adjusted to remove the Czech business2 Current Operating Income (COI), “Adjusted COI” is COI adjusted for results of Associates,3 Percentages stated before Corporate costs

2010£m

2009£m

2,348

195

2,543

COI

Associates

Adjusted COI

2,220

168

2,388


Pro forma 2010 Current Operating Income

2010£m

2009£m

Year ended 31 December

1

8

49

75

62

-

-

195

Latin America

North America

UK – Europe

META

Asia

Australia

Corporate costs

CurrentOperating

IncomeAssociates

PAT

AdjustedCurrent

OperatingIncome

966

384

442

240

198

233

(115)

2,348

967

392

491

315

260

233

(115)

2,543

1

8

39

54

66

-

-

168

CurrentOperating

IncomeAssociates

PAT

AdjustedCurrent

OperatingIncome

746

525

519

190

128

236

(124)

2,220

747

533

558

244

194

236

(124)

2,388


Latin America

703MW commissioned in 2009 and 2010

Good price environment for hydro in 2010

Technical issues at a Panama plant in 2010

Consolidation of assets in Northern Chile

Currency appreciation

2009

2010

PeruBrazil Chile

Other

Regional Adjusted COI contribution1

2010£m


966

1

967

COI

Associates

Adjusted COI

746

1

747

Change%

29

-

29

Pro forma

Contract type2

Long term100%

Adjusted COI

36%

1 Percentage of Adjusted COI stated before Corporate costs2 % of net capacity, where long term contracted > 3 years

82%

78%

14% 8%

11%8%3%

-4%

747

967


North America

Continued weak market conditions for merchant generation

Increased ownership of Astoria 1 from January 2010

Improved retail volumes and margins

Low US gas prices reduce LNG profitability− basis differential secures positive

margins− opportunity to divert uncommitted

LNG

2009

2010


2010£m


384

8

392

COI

Associates

Adjusted COI

525

8

533

Change%

(27)

-

(26)

Pro formaAdjusted COI3

15%

Longterm20%

Short term/uncontracted69%

PS 9%Wind 2%

GasGeneration Retail

1 Percentage of Adjusted COI stated before Corporate costs2 % of net capacity, “PS” Pumped Storage, where long term contracted > 3 years3 Excludes regional operating costs and trading

Contract type2

66% 21% 13%

54% 6%40% 533

392


UK - Europe

Lower spreads due to high reserve margins in the UK

Lower system volatility – reduced contribution from First Hydro

Rugeley improved availability in 2010

- extended outage in 2009

Improved retail margins

2009

2010


2010£m


442

49

491

COI

Associates

Adjusted COI

519

39

558

Change%

(15)

26

(12)

Pro formaAdjusted COI3

18%

Long term19% Short term/

uncontracted 50%

PS 17%

Wind 14%

Generation3 Retail

1 Percentage of Adjusted COI stated before Corporate costs2 % of net capacity, “PS” Pumped Storage, where long term contracted > 3 years3 net of regional operating costs

Contract type2

89% 11% 13%

92% 8% 558

491


Middle East, Turkey and Africa

First time contributions from Fujairah F2, Al Dur, Ras Laffan C and Marafiq

5.5GW3 expected to enter service in 2011

Riyadh IPP and Barka 3/Sohar 2 signed in 2010

2009

2010


2010£m


240

75

315

COI

Associates

Adjusted COI

190

54

244

Change%

26

39

29

Pro formaAdjusted COI

12%

Long term100%

1 Percentage of Adjusted COI stated before Corporate costs2 % of net capacity, where long term contracted > 3 years3 Gross capacity ( 1.4GW Net)

Contract type2

244

315


Asia

Glow, Thailand− higher availability− additional 115MW commissioned

in November

Singapore strong demand recovery

Gas distribution business proportionately consolidated from July 2010

2009

2010


2010£m


198

62

260

COI

Associates

Adjusted COI

128

66

194

Change%

55

(6)

34


10%

Long term79%

Short term/uncontracted21%


Contract type2

194

260


Australia

Hazelwood 2010 – outages on 2 units

Strengthening Australian Dollar

SEAGas disposal

2009

2010


2010£m


233

-

233

COI

Associates

Adjusted COI

236

-

236

Change%

(1)

-

(1)


9%

Long term24%

Short term/ Uncontracted74%

Wind 2%


Contract type2

236

233


Capital structure & liquidity

Strong credit metrics− debt capitalisation 38%− net debt to EBITDA 3.2x

Investment Grade credit rating confirmed by Moody’s (Baa3), Standard and Poor’s (BBB-)

GDF SUEZ financing facility operational - £3.1bn− £944m to refinance existing project finance and subordinated facilities− £1,211m to refinance existing project finance facilities at maturity

2010 net debt standalone

Al Hiddconsolidation

£0.6bn

2010 net debt combined

GDF SUEZ EI £5.4bn

CashInjection (£1.9bn)

SpecialDividend

£1.4bn

£5.6bn

£11.0bn

IPRCombinedYear ended 31 December

0.9 0.2 4.2

10.1 15.4

(4.4)11.0

Gross DebtConvertible Bonds Senior NotesDebt in listed subsidiaries Other DebtGross DebtCashTotal Net Debt

Pro forma net debt £bn

Net debt excludes derivatives, cash collateral and the impact of measurement at amortised cost


Pro forma free cash flow

2010Year ended 31 December 2010 (£m)

3,458

114

3,572

(586)

(415)

71

(411)

2,231

Operating cash flows from Subsidiaries and JVs

Dividends – Associates

Cash generated from operations1

Net interest paid

Tax paid

Change in working capital requirements

Maintenance capex

Free cash flow

2009 Movement

3,048

108

3,156

(583)

(363)

(22)

(414)

1,774

410

6

416

(3)

(52)

93

3

457

High quality earnings with strong cash conversion

Strong cash flow to fund growth and service dividend

1 Before income tax and working capital requirements


Key financial assumptions - 2011

Effective interest rate on gross debt− after capitalisation of interest− after synergies of £35m anticipated in 2011

Non controlling interests charge in 2010 amounts to £326m (2009: £271m)

Fair value exercise to be concluded for the half year

Presentation currency Euro from Q1 2011

2010Pro forma

£1.9bn

£412m

5.8%

23%

Growth capex1 - committed cash flow

Maintenance capex1

Effective interest rate on Gross Debt

Effective tax rate

£2.0bn

£450m

5.5%

27%

2011Forecast

1 Includes proportionate consolidation of JVs, excludes associates. Also excludes expenditure incurred by assets accounted for as finance leases or service concession arrangements


Conclusion

Highly visible earnings and cash flow− 50% of capacity long term contracted− adjusted COI of £2,543m (2009: £2,388m)− strong free cash flow of £2,231m (2009: £1,774m)

Strong balance sheet− Investment Grade rating achieved− competitive cost of capital

Well positioned for continuing growth

21

Regional Review and Integration UpdatePhilip Cox


Enlarged International Power Well balanced portfolio Significant capacity under

construction Access to high growth markets

Financial strength

Strong operational expertise Highly experienced management team

AustraliaMelbourne

Total power capacity

3.0GW

0.0GW

in operation

under construction

UK-Europe London


9.0GW

0.3GW

in operation

under construction

North AmericaHouston


13.0GW

0.3GW

in operation

under construction

Middle East,Turkey & AfricaDubai


6.7GW

1.9GW

in operation

under construction

Latin AmericaFlorianópolis


6.1GW

2.8GW

in operation

under construction

AsiaBangkok


3.7GW

1.5GW

in operation

under construction

All GW numbers are on a net (by ownership) basis as at 31 December 2010

World leading IPP


Countries included in the graph above include: UK-Europe (UK, France, Germany, Italy and Spain), North America (United States, Canada and Mexico), Latin America (Brazil, Chile and Peru), Middle East Turkey and Africa (GCC states, Morocco and Turkey), Asia (Indonesia, Thailand, Pakistan and Singapore).

New-build heavily focused in contracted markets

Electricity Demand Growth (%)8

-6

0

-2

6

2

4

Asia Australia LatinAmerica

MiddleEast,Turkey & Africa

UK-Europe

-4

20092010-15

NorthAmerica

Well positioned to benefit from strong growth in developing economies


Projects in high growth markets - online in the next 3 years(1)

Jirau1,127MW

1 MW stated on a net capacity basis as at 31 December 2010

Projects under construction(cumulative net GW)

2011

2.2

2012 2013

4.0

6.7

HUBCO - Laraib11MW

Ilo 2247MW

Sohar 2342MW

Barka 3342MW

Riyadh346MW

Uch 2281MW

Laja37MW

TNP2110MW

Paiton III253MW

Jirau601MW

Gheco One (Glow)297MW

Senoko258 MW

Chilca Uno164MW

2011 2012 2013

Ras Laffan C179MW

Elecgas210MW

Estreito224MW

Shuweihat 2302MW

Astoria 2173MW

Phase 5 (Glow)236 MW

Al Dur373MW

T-Power140MW

Dos Mares90 MW

E-CL Andina (CTA)79MW

PAR49MW

E-CL Hornitos (CTH)47MW

HUBCO Narowal36MW

Synergen24MW

Monte Redondo10MW

Bahia las MinasConventional4MW

IPR Europe Wind2MW

Estreito75MW

Asia

Australia

Latin America

META

North America

UK - Europe


Significant development pipeline

Significant current pipeline of bidding activity− 18GW gross, 8GW net projects in development across core regions− principally Latin America, META and Asia− focused on contracted markets− broad fuel mix leveraging technical expertise

Competitive advantage through wide geographic footprint and lower cost of finance

Latin America− hydro, thermal, wind –

opportunities across core markets

Middle East, Turkey & Africa− CCGTs in Gulf States− renewables and coal in

Morocco− peaking plants in South Africa

Asia− high efficiency coal and

geothermal in Indonesia− thermal projects in Vietnam

North America− renewables, particularly

Canada− generation and gas

distribution in Mexico

Examples of development projects – all long-term contracted

26

Regional Review


Latin America

Committed Growth(based on net MW ownership)

Strong demand growth across the region 3 listed companies: Tractebel Energia, E-CL and

Enersur Output largely contracted through mid to long-term

offtake arrangements− contracts include inflation or fuel price

escalators Tractebel Energia - the largest private power

generator in Brazil− Estreito construction programme on track

− first unit to commence operation in H1 2011

− expected output sold under 30 year contract

− Jirau under construction− first unit to commence operation in 2012,

ramping up in 2013 and 2014− 30 year PPA from 2013 for 70% of

originally expected output/assured energy Chilean E.CL new coal capacity to commence in H2

2011 Currently 10 sites under construction in Brazil, Chile,

Peru and Panama on hydro, thermal and LNG Pipeline of further opportunities across Brazil, Chile,

Peru and Panama under development

Brazil, Chile, Peru1

Projected demandgrowth 2010-2015 p.a.2

Per capita consumption

6%

2,100kWh*

Demand data

1 Aggregate figures for 3 countries / weighted averages2 Sources: Brazil: EPE, Peru: COES-SINAC, Chile: CNE/CDEC, Per capita based on EIA Energy Statistics

GW

5

6

9

10

2011

2013

2012

02010 2011 2012 2013

8

7

GROWTH

*UK per capita consumption = 5,600kWh

Existing


North America

United States

2011 average contracted position1

Texas 60% New England 70% NYC 90%North Eastern LNG business 90%

Merchant market data

Texas and New England – well positioned to capture value from market recovery

Growing retail business to commercial and industrial customers in the US

– serving 60,000 customer accounts across 10 US states and Washington, DC

– supplied 30.7TWh of electricity in 2010 LNG business

– located in premium North Eastern market in the US

− winter sales from Everett Terminal made at attractive premiums

− diversion deals to Far East and Europe supplement sales in the North Eastern US

Astoria Phase II - expected to commence operations in H2 2011

Renewables in Canada– Pointe-Aux-Roches expected to commence

operation in H2 2011– pipeline of further opportunities backed by long-

term PPAs and feed-in tariffs Power and gas opportunities in Mexico

Sources: ERCOT Capacity Demand Report and Company estimates

%

15

25

2011 2012 2013 20160 2014

20

10

5

2015

Target reserve

Reserve Margin (Texas ERCOT)

1 Represents total contracted generation as a % of forecast generation for the year


UK-Europe

United Kingdom

Merchant market data2011 average contracted position1

Rugeley 75% Saltend 90% Deeside, Teesside and Shotton 15%

United Kingdom IPR assets represent 7% of total UK installed

generation capacity Growing commercial and industrial retail business

provides route to market− electricity and gas

− 11.5TWh electricity sales in 2010 Strong, diversified generation portfolio

− well positioned to benefit from market recovery

Electricity Market Reform− IPR actively engaged

Continental Europe Consistent performance from contracted assets Elecgas CCGT (Portugal) now operational T-Power (Belgium) to commence operations in

2011− IPR equity interest (33%) to be sold

Reserve Margin

%

15

25

2011 2012 2013 20150

2014

20

10

5


Target reserve


Middle East, Turkey & Africa

GCC, Turkey and Morocco

Projected demandgrowth 2010-2015 p.a.


7%

3,300kWh*


Demand data

1 Cooperation Council for the Arab States of the Gulf: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE.

Stronger GCC1 position following combination

Delivery of 4 major growth projects in 2011− Fujairah F2 (UAE) contributing to

profitability− Al Dur, Ras Laffan C and Shuweihat S2

Further growth across the META region− Morocco - preferred bidder for 2

projects (Safi and Tarfaya)− South Africa - preferred bidder for

1,000MW oil-fired peakers− Turkey - additional growth potential

through 16GW privatisation process− 5GW of greenfield opportunities visible

in 2011 within META region

Committed Growth(based on net MW ownership)GW

5

6

9

10

02010 2011 2012 2013

8

7

Existing

2011

2013

GROWTH


Australia

Australia

2011 average contracted position1

Hazelwood 70% Loy Yang B 85% Pelican Point 85%

Merchant market data

Spot and forward prices affected by: − mild weather− low electricity price volatility

Simply Energy (retail) benefitting from improved margins

Australian Government has announced a ‘framework for discussion’ for a CO2 price

− indicates potential to start from July 2012− subject to political agreement and

industry consultation Reserve Margin Chart(VIC and SA)

%

15

25

2011 2012 2013 20150

2014

20

10

5


Target reserve


Asia

Indonesia, Pakistan, Singapore, Thailand

Projected demandgrowth 2010-2015 p.a.


4%-5%

750kWh*

Demand data

All long-term contracted markets, except Singapore

Senoko output highly contracted for 2011 Projects under construction across Thailand,

Indonesia, Singapore and Pakistan− Glow CCGT project to commence operations

in 2011− Glow coal project (Gheco-1) under

construction to commence operations 2012

− Paiton III on track to commence operation in 2012

− Senoko CCGT to commence operations in 2012

− Uch II to commence operation in 2013 Pipeline of further opportunities

− in Indonesia, Philippines and Vietnam

Committed Growth(based on net MW ownership)GW

4

6

02010 2011 2012 2013

3

5

Existing

2011

2013

2012

GROWTH



Integration and Synergies

Integration progressing well− management team in place

Operational synergies− progress on operational

synergies− O&M, insurance, procurement− planned closure of regional

offices Financial synergies

− US$395m of IPM debt repaid− US$780m corporate revolver

cancelled − US$807m Coleto and US$319m

US peakers project debt repayment

One off cost of implementation £130m

Projected synergies (£m)

2012

129

77

52

2013

140

82

58

2014

148

87

61

2015

154

93

61

2016

165

104

61

76

2011

43

33Operating

Financing


2011 outlook

Portfolio 50% long-term contracted Good visibility of growth in 2011, in particular driven by Latin America Key regional factors

− Latin America – capacity growth in 2011, inflation escalation, one-off unplanned outage in 2010, strengthening currency

− North America – merchant market conditions largely unchanged, 2011 will benefit from LNG diversion to Asia

− UK-Europe – 2010 benefitted from higher price contracts placed in prior years, reduction in forward spreads

− META – all capacity under long-term contracts− Australia – forward prices softer, Hazelwood 70% contracted − Asia – all long-term contracts, capacity growth in 2011

Good progress on integration and synergies


Delivering value for shareholders

Significant capacity under construction Extensive development pipeline Exposure to growth markets

Growth

Balanced generation portfolio – geography, fuel and contract Backed by strong free cashflow

High qualityearnings

Integration underway and on track Projected synergies of £165 million per annumSynergies

Robust capital structure and low cost of debt Investment grade credit rating

Access tocapital

Targeting an EPS payout ratio of 40 per centDividends

36

Appendix


Merchant historic performance

Gas hedges in place at Hays and Midlothian to protect from further reduction in gas prices

Dark spread excludes the cost of SO2 credits and non-cash write back of fair value provisions

ISO-NE spark spreads include income from the Forward Capacity Market and exclude the cost of CO2

Spark spread ($/MWh)

Load factor

2010Midlothian

$9

25%

North America


Load factor

2010Hays

$10

35%

Dark spread ($/MWh)

Load factor

2010Coleto Creek

$32

80%


Load factor

2010New England

$23

40%

2009

$13

30%

2009

$27

95%

2009

$14

50%

2009

$24

35%


Merchant historic performance

Stated spreads exclude the cost of CO2 and are adjusted to reflect the fuel optimisation achieved by trading our coal and gas assets as a portfolio

Spark / dark spread (£/MWh)

Load factor

2010

Deeside

£12

65%

UKSaltend

£22

85%

Rugeley

£26

60%

Australia

Average price (A$/MWh)

Load factor

2010Victoria, Hazelwood

$42

80%

2009

£16

65%

2010 2009 2010 2009

£25

85%

£42

45%

2009

$45

80%

preliminary results

Documents

results of associates

preliminary statement

exceptional items

specific ias

market movements

coi m2

mnet exceptional charge

income statement12010