Investor presentations3-us-west-2.amazonaws.com/brr-streamguys/files/LEI/LEI20110211downgrade.pdfAlthough Leighton Holdings Limited (the Company) believes the expectation s expressed

Investor presentation

April 2011

Leighton Holdings Limited 2

Important notices

Disclaimer Forward looking statements This presentation includes forward‐looking statements. Although Leighton Holdings Limited (the Company) believes the expectations expressed in such forward‐looking statements are based on reasonable assumptions, these statements are not guarantees or predictions of future performance, and involve both known and unknown risks, uncertainties and other factors, many of which are beyond the Company’s control. As a result, actual results or developments may differ materially from those expressed in the statements contained in this presentation. Investors are cautioned that statements contained in this presentation are not guarantees or projections of future performance and actual results or developments may differ materially from those projected in forward‐looking statements.

Reliance on third party information The information and views expressed in this presentation were prepared by the Company on a confidential basis. They may contain information that has been derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness or reliability of the information. No responsibility, warranty or liability is accepted by the Company, its officers, employees, agents or contractors for any errors, misstatements in or omissions from this presentation.

Not investment advice This presentation is not intended and should not be considered to be the giving of investment advice by the Company or any of its shareholders, directors, officers, agents, employees or advisers. The information provided in this presentation has been prepared without taking into account the recipient’s investment objectives, financial circumstances or particular needs. Each party to whom this presentation is made available must make its own independent assessment of the Company after making such investigations and taking such advice as may be deemed necessary.

No offer of securities Nothing in this presentation should be construed as either an offer to sell or a solicitation of an offer to buy or sell Company securities in any jurisdiction.

US Securities Act This presentation does not constitute an offer to sell, or a solicitation of an offer to buy, any securities in the United States. This presentation may not be distributed or released in the United States. The offer and sale securities referenced herein have not been, and will not be, registered under the U.S. Securities Act of 1933 (the “Securities Act”) or the securities laws of any state or other jurisdiction of the United States and such securities may not be offered or sold, directly or indirectly, in the United States absent registration except in a transaction exempt from, or not subject to, the registration requirements of the Securities Act and any other applicable securities laws.

Non‐GAAP Measures You should be aware that certain financial data included in this presentation are “non‐GAAP financial measures” under Regulation G under the United States Securities Exchange Act of 1934, including “EBITDA”. The disclosure of such non‐GAAP financial measures in the manner included in this presentation would not be permissible in a registration statement under the Securities Act. These non‐GAAP financial measures do not have a standardised meaning prescribed by AIFRS and, therefore, may not be comparable to similarly titled measures presented by other entities, nor should they be construed as an alternative to other financial measures determined in accordance with AIFRS. Although the Company believes these non‐GAAP financial measures provide useful information to users in measuring the financial performance and condition of our business for the reasons set out in this presentation, you are cautioned not to place undue reliance on any non‐ GAAP financial measures and ratios included in this presentation.

No liability To the maximum extent permitted by law, neither the Company nor its related bodies corporate, directors, employees or agents, nor any other person, accepts any liability, including without limitation any liability arising from fault or negligence, for any direct, indirect or consequential loss arising from the use of this presentation or its contents or otherwise arising in connection with it.


Agenda

Introduction

Airport Link Project

Victorian Desalination Project

Habtoor Leighton Group

Business outlook

Summary

Leighton Holdings Limited

Overview

Major review of business

Revised FY11 forecast due to:

— Airport Link Project (‘APL’)

— Victorian Desalination Project (‘VDP’)

— Habtoor Leighton Group (‘HLG’)

$757m capital raising

Outlook remains very positive

$46bn of work in hand

Expect NPAT of $600‐650m for FY12

Introduction

4


Reconciliation of FY11 statutory forecasts

Pre‐tax ($m)

NPAT ($m)

Cash impact

FY11 FY12 FY13

Feb 2011 guidance 480

Airport Link (470) (329) (708) (94)

Victorian Desalination (282) (197) (282)

HLG equity impairment (200) (200)

HLG earnings reduction (120) (120)

Other (76) (61) 50

Tax impact 211 40

Total (1,148) (907) 50 (779) (54)

April 2011 guidance (427)

Reconciliation of FY11 statutory forecasts

Introduction

5


Recapitalisation of balance sheet

Covenant headroom maintained

Improves gearing

Supports credit rating metrics

No final FY11 dividend

Supports pursuit of growth opportunities

Expect to resume dividend in FY12

Balance sheet and credit rating Introduction


Indicative Project Cost Schedule

Why have issues emerged so quickly?

Time Original Cost D&C Revenue

Original Profit

Current time

Original budget completion

Contractual completion

Introduction

7




Time Original Cost Revised Cost Draft D&C Revenue

Revised Draft Profit

Current time



Introduction

8




Time Original Cost Revised Cost Draft Revised Cost Confirmed D&C Revenue

Revised confirmed loss

Current time



Introduction

9

New design introduced


Currently ~70% complete overall

TBM tunnel ~60% complete

Airport flyer completed 9 months ahead of schedule

Civil design 99% complete

Program targets completion 30 June 2012

— Commissioning targeted to commence mid April 2012

— Accelerated hours to meet target

Project status

Project status Airport Link


Key project challenges

Issue Impact/description

1. Access and approvals Authority approvals and access issues (including Clem7 interface) have significantly delayed the project These delays have added substantially to the forecast final cost

2. Ground conditions Some areas more difficult and variable than anticipated Has impacted tunnelling performance and productivity

3. Weather

Unprecedented wet weather conditions, particularly from October through January (Brisbane flooding), has severely hampered progress Impacted time and costs to complete

4. Design Completion of design has taken much longer than expected Actual design hours more than double tendered allowance

5. Materials

Construction complexity has resulted in material quantities significantly exceeding tender expectations 133k tonnes of reinforcing steel v 86k tendered, 945k m 3 of concrete v 820k m 3 tendered

Airport Link

11


Airport Link

Project cost review and financial impact

Further access and approval delays

Commissioning process

Weather (although less so as mainly underground)

Ability to successfully conclude claims

Retention of key staff

Remaining risks

— Very thorough bottom up analysis 1 — Realistic cost assessment 4

— Greater cost visibility, now 70% complete

2 — Tunnelling close to completion 5

— Design 99% complete 3 — Time and cost contingency reset 6

12


Delivering the project

Strategy Impact/description

1. Drive to completion Support construction activities to achieve earliest possible completion

2. Handover arrangements Work integrally with BrisConnections, Government authorities and Brisbane City Council on handover arrangements to minimise impacts to road opening

3. Insurance Progress policy claims wherever appropriate

4. Cost recoveries Identify and pursue entitlements for compensation where we have incurred additional cost and time overruns

Airport Link

13


Project status The project incorporates 4 components, 3 of which are progressing profitably

However, the reverse osmosis plant which is the largest component is facing challenges


Thiess share Thiess value Profitable

Marine 97% 100% $272m

Tunnels 90% 100% $150m

Pipeline to dams 74% 32.5% $155m

Plant 40% 65% $1.9bn


Key project challenges


1. Weather Has impacted the ability to construct the reverse osmosis building Lost 33% of available time causing lower productivity on site Flooding of pipeline

2. Labour Labour productivity on the project significantly less than budgeted Significant planning issues due to complexity

3. Design Design costs increased from $141m in tender to $200m Inconsistency and errors between tender and final design

4. Materials Final design has increased materials quantities from tender level: structural steel by 226%, bored piles by 226%, bulk earthworks by 149%, rebar by 181% , cables by 131% and pumps by 128%


15

15


Delivering the project


1. Timeframe Final project commissioning and handover is targeted for June 2012 with acceleration

2. Weather Allowances made for further bad weather but expect improvement in productivity and increased production with night shift operation and roofed structure

3. Labour Extending 4‐on/4‐off roster to accelerate program Working night shift for additional production


Risks

Failure to achieve improved productivity — Further costs and risk to timeline

Extreme weather Timely completion of final design tasks

16



Investment overview

Investment in HLG($m) 31 December 2010

$299m reduction in book value due to operating losses, FX and $100m impairment

impairment reflected lack of new work and losses on pre‐acquisition projects

1144

845

525

320

299

Jun‐10 Impairment Dec‐10 Impairment Apr‐11

Book value Impairment

Operating loss FX Impact

17

Note: Leighton has provided $289m of shareholder loans to HLG and pledged cash as security against a AED500m bank loan facility

Current valuation

Further $320 million reduction in book value

— $200m Leighton corporate impairment

— $120m operating loss reflects Leighton’s share of HLG result

— Underlying business operating profitably, result impacted by provisioning

Request for further AED1bn in funding

17



The new HLG business is performing

Contract Value to LHL ($m) % Complete Profitable

Dubai Pearl, Dubai 1084 2

Al Shaqab, Qatar 340 93

City Centre expansion, Qatar 275 89

KPIZ Industrial Zone, Abu Dhabi 264 9

Al Bustan Mixed Use, Abu Dhabi 218 67

Zayed University 183 76

Ritz‐Carlton, Abu Dhabi 175 71

Al Ghurair City expansion, Dubai 158 81

JAFZA Convention Centre 158 83

P9 Development 150 85

Top Ten Contracts by Value to HLG

18


Repositioning Habtoor Leighton Group

Increase diversification of business

Geographic diversification

— Increasing focus outside UAE (Dubai and Abu Dhabi) and Qatar

— Saudi Arabia, Kuwait, Iraq are key growth markets

Sector diversification

— Increased focus on infrastructure

— Opportunities in oil & gas

Business improvement and efficiency

— Reduced workforce numbers but increased productivity

— Improved worker accommodation and morale

— Introduce Leighton management systems and processes

— Greater accountability for performance

— More selective with clients

Key business improvement initiatives


Zayed University, Abu Dhabi



Market conditions looking positive in the longer term

Market conditions

Recent new work includes

— AED2.2bn JV to build the Al Mafraq Hospital in Abu Dhabi

— AED400m Abu Dhabi Islamic Bank’s new headquarters in Abu Dhabi

Short term outlook remains challenging

Gulf Cooperative Council (GCC) economies expected to grow at average 5% p.a. from 2011 to 2015

Award to Qatar of the 2022 FIFA World Cup will stimulate development in the medium to longer term

Longer term outlook for Middle East region is positive

Approx US$1.1tn worth of projects to be awarded in region over next 5‐10 years

Upcoming projects by Geography (~US$1 trillion)* —next 5 years

KSA 32%

Levant + Libya 16%

UAE 15%

Iraq 15%

Qatar 8%

Bahrain 4%

Oman 4%

Kuwait 6%

* Includes all projects yet to be awarded

20



Identified regional opportunities

Saudi Arabia AEDm

Ministry of Interior hospitals program

10,000

Water Projects 3,000

Jeddah Airport Hangers 2,000

Ma’adanMine 2,000

Kuwait AEDm

Sabah Al Salam University 1,500

Kuwait Airport Runway 1,385

KOC Small Boat Harbour 750

Oman AEDm

Sohar Airport Terminal 3,000

Ras Al Hadd Airport 2,000

Oman Convention Centre 2,000

Bidbid Sur Road 1,400

Qatar AEDm

Lusail Expressway 3,300

Doha Metro 2,000

Musheireb Phase 2 1,500

Northgate Mall 1,200

Qatar Education City 500

21

UAE AEDm

Midfield Terminal 10,000

Union Railway 4,000

Louvre Abu Dhabi Museum 2,000

Sweihan airside works 400


Major projects worth more than $1bn

Total contract value 1 Type of project Location

Airport Link $4.2bn Design and construct Queensland

Senakin & Satui Coal Mines $3.9bn Contract mining Indonesia

Area C Iron Ore Mine $3.6bn Contract mining Western Australia

Mt Owen Coal Mine $3.4bn Contract mining New South Wales

Sangatta Coal Mine $2.6bn Contract mining Indonesia

Victorian Desalination Project $2.5bn Design and construct Victoria

Burton Coal Mine $2.2bn Contract mining Queensland

Wahana Coal Mine $2.2bn Contract mining Indonesia

Yandi Iron Ore Mine $2.1bn Contract mining Western Australia

Metro Trains $1.2bn Operation & maintenance Victoria

Dubai Pearl $1.1bn Design and construct Dubai

UHG Coal Mine $1.0bn Contract mining Mongolia

MSJ Coal Mine $1.0bn Contract mining Indonesia

Note: 1:‐ For long term contracts extending beyond five years, the total contract value shown includes the value of work completed to date plus five years worth of work in hand.

Business outlook

22


Group risk profile

Construction contracts >$500m

Total Work in Hand ($46bn)

Note: All figures as of 31 Dec 2010

Contract

Dubai Pearl

Barrow Island (civil)

Barrow Island (jetty)

Hunter Expressway

Royal North Shore Hospital

Iraq—offshore oil pipeline

M80 Ring Road

Barrow Island (site prep)

Leppington rail line

Ballina Bypass

PPP Structure

D&C

Alliance

D&C

Alliance

D&C

D&C

Alliance

D&C

D&C

Alliance

Size

$1bn

$814m

$768m

$757m

$729m

$733m

$558m

$541m

$530m

$527m

Complete

2%

1%

11%

5%

38%

16%

18%

25%

0%

83%

Profitable

Contract mining/ services/ development contracts

Construction contracts <$500m

Construction contracts >$500m

Airport Link/ VDP

57%

23%

15%

6% ‐ 2 contracts

Outside of the two large PPP projects, Leighton has a well diversified and performing portfolio

Business outlook

23


Business outlook

Portfolio effect of diverse work load spreads risk

Diversification by activity Diversification by geography (work in hand)

Record $46bn of work in hand

31%

3%

36%

2% 3% 2%

3%

6%

14%

Aust ‐ infrastructure

Aust ‐ resources

Aust ‐ property

Indonesia

Middle East

India

Hong Kong/Macau

Mongolia

Other

Australia = 70% RoW = 30%

Construction

Contract mining

Services

43% of work in hand

Half of construction is fixed price‐ fixed time

Shares some or all risks with client on balance

42% of work in hand

Different and lower risk profile

Longer term contracts

13% of work in hand

Lower risk profile

24


Lessons learnt Business outlook

Increased focus on:

— Tender accuracy and risk identification

— Adequate time allowances

— Adequate pricing of risk

— Project delivery and risk management

— Client cooperation and issues that could impact performance

Senior manager to oversee APL and VDP


Positive outlook across major markets

Infrastructure market to remain strong

Good contract mining outlook

LNG and coal seam gas to drive construction work

Good opportunities in Asia

Record $46bn of work in hand

Diversification strategy remains sound

Business outlook


Summary

Addressing issues — Airport Link — Victorian Desalination Project — Habtoor Leighton Group

Undertaking review of major projects

Recapitalisation underway

No final FY11 dividend

Position for growth, outlook remains very positive

Expect NPAT of between $600‐650m in FY12

27


Investor presentation

April 2011

Investor presentations3-us-west-2.amazonaws.com/brr-streamguys/files/LEI/LEI20110211downgrade.pdfAlthough Leighton Holdings Limited (the Company) believes the expectation s expressed

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