Tabcorp Holdings Limited 2011/12

Tabcorp Holdings Limited

ABN 66 063 780 709

2011/12

Full Year Results Presentation

9 August 2012

 Strong EBIT growth in challenging market conditions

 Key FY12 outcomes

 Completed demerger separation

 Awarded new Victorian Wagering and Betting Licence

 Launched new Victorian Keno licence

 Refinanced FY13 debt maturities

 Launched Premier Gateway International (Isle of Man)

 Well positioned for FY13 new Victorian gambling industry structure

 Transition out of Victorian Tabaret business progressing well

 Tabcorp Gaming Solutions ready for launch

 NPAT from continuing operations $340.0m, up 12.7%

 Reflects underlying earnings growth

 Benefited from lower interest expense following demerger

 EBITDA from continuing operations $725.2m, up 5.6%

 EBIT from continuing operations $591.7m, up 5.2%

 EPS from continuing operations 47.6 cents, up 4.6%

 Reflects NPAT growth

 Impacted by capital management activities in FY11 and FY12

 Full year dividend of 24 cents per share, fully franked

 50.9% of NPAT

FY12 financial results – continuing operations

 EBIT $591.7m, up 5.2%

 Revenues

$3,038.5m

 Variable contribution

$1,141.3m

 Operating expenses

$416.1m

 EBITDA

$725.2m

 Business performance (EBIT)

 Wagering

$242.2m

 Media & International

$57.1m

 Gaming

$244.1m

 Keno

$48.3m

 Solid revenue growth across W agering, Media & International and Keno

 Operating expenses include start up costs for Victorian Keno and TGS

FY12 financial results – continuing operations

1_{Prior year comparative from continuing operations excludes impairment of $358.0m}

up

up

up

up

up

up

up

down

3.1%

5.4%

5.2%

5.6%

10.0%

8.1%

1.1%

1.0%

Business results

1_{Variable contribution is non-IFRS financial information and has not been audited or reviewed in accordance with Australian Auditing Standards} 2_{Prior year comparative from continuing operations excludes impairment of $358.0m}

3_{Revenues and expenses do not aggregate to Group total due to intercompany eliminations between Wagering and Media and International businesses} 4_{Total group capex includes $12m of unallocated corporate capex. This is apportioned within segment reporting in the statutory accounts}

Wagering Change Media Change Gaming Change Keno Change Group3 Change

$m on pcp & Int'l on pcp on pcp on pcp on pcp Revenues 1,637.4 4.4% 190.2 6.1% 1,078.9 0.1% 183.1 8.0% 3,038.5 3.1% Variable contribution1 593.3 7.7% 179.1 6.5% 318.0 0.5% 102.0 7.6% 1,141.3 5.4% Operating expenses (279.8) 6.2% (113.4) 4.6% (35.4) (3.5%) (38.6) 12.9% (416.1) 5.2% EBITDA 313.5 9.0% 65.7 9.9% 282.6 1.1% 63.4 4.6% 725.2 5.6% D&A (71.3) 5.9% (8.6) 22.9% (38.5) 0.8% (15.1) 28.0% (133.5) 7.4% EBIT 242.2 10.0%2 57.1 8.1% 244.1 1.1% 48.3 (1.0%) 591.7 5.2%2 EBIT/Revenue (%) 14.8% 0.8% 30.0% 0.5% 22.6% 0.2% 26.4% (2.4%) 19.5% 0.4%2 Capex4 63.2 8.2% 16.0 52.4% 28.2 38.9% 30.2 108.3% 149.6 26.1%

Wagering: KPIs

 Fixed Odds delivered strong growth of 41.5%  Growth offsetting declines in totalisator

revenues

 Trackside growth continues in both NSW and Vic  Luxbet achieved revenue growth of 34.8%, driven

by improved yield and strong 2H turnover  Retail NSW growth driven by

 Fixed Odds racing and Trackside full year benefit

 Fixed Odds sports expanded product offering  Online turnover growth of 14.5%

 Self service turnover continues to grow  Expenses driven by

 Investment in technology to expand Trackside, Fixed Odds and self service terminals

 Increased costs for promotional and sponsorship activities due to competition  Increased contributions to the Racing Industry

$m 1H12 Change 2H12 Change FY12 Change

Revenues by product Totalisator Vic 325.1 (5.5%) 286.0 (1.2%) 611.1 (3.6%) Totalisator NSW 384.3 (7.2%) 335.4 (5.3%) 719.7 (6.3%) Fixed Odds 152.3 39.5% 169.1 43.3% 321.4 41.5% Trackside 41.8 95.3% 40.5 43.1% 82.3 65.6% Luxbet 12.3 28.1% 15.6 40.5% 27.9 34.8% Turnover by distribution Retail Vic 1,598.6 0.9% 1,449.2 1.0% 3,047.8 0.9% Retail NSW 2,023.5 6.6% 1,887.5 6.3% 3,911.0 6.5% Online 1,081.3 15.1% 1,077.9 13.8% 2,159.2 14.5% Call Centre 429.8 (7.7%) 395.8 (5.9%) 825.6 (6.8%) Oncourse 446.9 (7.5%) 391.2 (4.8%) 838.1 (6.3%) Luxbet 266.6 (17.6%) 305.6 29.9% 572.2 2.5% Retail

Self service turnover Vic 47.7% 5.0% 51.2% 5.6% 49.4% 5.1% Self service turnover NSW 28.7% 12.1% 35.3% 12.2% 31.9% 12.7%

Racing Industry contributions

Victoria (incl. Gaming) 173.0 (0.5%) 151.2 1.8% 324.2 0.6% New South Wales 126.3 1.4% 112.3 0.7% 238.6 1.0% Race fields 18.3 8.3% 19.7 11.3% 38.0 10.0% Note: Victorian revenue includes JV partner 25% interest, NSW represents 100% of revenue

Wagering highlights

 New Victorian Wagering and Betting licence

 Transition activities on track

 Retail

 Expansion program increased the network size by 186 sites

 Retail growth achieved in challenging market conditions

 Online

 New tab.com.au website launched

 Streaming vision on iPads/iPhones via apps

 New account openings up 21% on prior period

 Customer loyalty

 Over 92,000 members, up 22% on prior period

 Super Multi Fixed Odds product launched

 Launched Premier Gateway International (Isle of Man)

 WA and ACT pooling arrangements agreed

Media & International

 Revenue growth due to subscription

revenue and increased export

 Expenses driven by outside broadcast TV

production, rights fees and digital

investments

 International growth

 Export to 31 countries

 Racing World Australia extended

coverage into 14 million UK homes

 Media rights retained including:

 Tasmanian thoroughbreds

 South Australian thoroughbreds

 Continued focus on securing NSW and Vic

thoroughbred media rights

$m FY12 FY11 Change

Revenues 190.2 179.3 6.1%

Operating expenses (113.4) (108.4) 4.6%

EBITDA 65.7 59.8 9.9%

EBIT 57.1 52.8 8.1%

Broadcast Rights and Racing Industry contributions from International business

Gaming: KPIs

Victorian Tabaret



Managing transition for end of licence in

August 2012. Operating expenses well

controlled.



Goodwill write-off expected to be $47m in

1H13

Tabcorp Gaming Solutions



On track for 16 August 2012 launch



Sign-ups over 8,500 EGMs



Diamond Rewards loyalty launched with

over 100 live venues



Expected EBITDA approximately $55m

per annum from August 2012



Start up expenses $8m in FY12

Note: Statistics relate to Vic Tabaret only

Vic Tabaret revenues and expenses are net of 25% allocation to JV partner

$m FY12 FY11 Change

Revenues 1,078.9 1,077.4 0.1%

Operating expenses (35.4) (36.7) (3.5%)

EBITDA 282.6 279.6 1.1%

EBIT 244.1 241.4 1.1%

Venues (period end) 255 263 (3.0%)

EGMs (average) 13,107 13,303 (1.5%)

NMR/EGM/Day ($) 298.1 294.2 1.3%

Keno: KPIs



Strong performance



Qld revenues up 6.9%



NSW revenues up 7.6%



Expenses driven by



Start up costs $4m for new Victorian

Keno



Continued focus on advertising and

promotions



NSW hotel expansion nearing conclusion

with 761 live venues, up 74 on prior year



Victorian Keno successfully launched in

April 2012



Over 600 venues live



Over 700 venues signed up to date

1_{Ticket count and average ticket size prior year restated due to change in Qld Keno Bonus reporting methodology}

$m FY12 FY11 Change

Revenues 183.1 169.6 8.0% Operating expenses (38.6) (34.2) 12.9% EBITDA 63.4 60.6 4.6% EBIT 48.3 48.8 (1.0%) Venues (Qld, NSW) 2,833 2,735 3.6% Ticket Count (m) (Qld, NSW) 1 94.6 92.0 2.8%

Avg ticket size ($) (Qld, NSW) 1 10.4 10.1 3.0%

Capital expenditure and investments

Major capex projects

Capex trend

 Major capex projects in FY12

 New Victorian Keno roll out

 TGS loyalty system and EGMs

 New tab.com.au website

 Venue expansion

 Trackside NSW

 Outside broadcast infrastructure

 FY13 D&A expense ~ $150m - $160m

121

139

150 119

FY09 FY10 FY11 FY12

Wagering Media & Int'l Gaming Keno Corporate

 Key focus in FY13

 Continuing investment in Wagering multi-channel

strategy

 TGS business roll out

 Expansion of Keno

 Final Trackside NSW instalment of $75m, paid in

July 2012

Key capital features



Refinancing of FY13 maturities completed



Gross Debt/EBITDA 1.7x (includes Victorian Tabaret earnings)



FY13 average interest rate expected to be approximately 8.25% p.a.



FY13 target dividend payout 80% of NPAT

 Excluding expected write-off of Gaming goodwill in 1H13

250 450 400 400 400 150 284 211 0 100 200 300 400 500 600 700 800 900 1,000

FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19+ $m

Draw n bank facility Medium term notes Tabcorp Retail Bonds Tabcorp Subordinated Notes 12 month bridge facility US Private Placement

Summary

 A successful year

 EBIT $591.7m, up 5.2%

 Solid revenue growth across W agering, Media and International and Keno

 Operating expenses well managed

 Full year dividend of 24 cents per share, fully franked

 50.9% of NPAT

 Transition plans on track for new Victorian W agering and Betting Licence and Victorian

Tabaret

 Refinancing of FY13 debt maturities completed

 Investment plans on track

 Launched Premier Gateway International (Isle of Man)

 Tabcorp Gaming Solutions sign-ups over 8,500 EGMs

 Successfully launched new Victorian Keno

Appendices

1. Group results

2. Wagering: Financial data

3. Wagering: Revenues by state and product

4. Gaming: Financial data

5. Keno: Financial data

6. Balance sheet

7. Cashflow

1. Group results

$m FY12 FY11 Change

on pcp

Revenues 3,038.5 2,947.5 3.1%

Government taxes & levies (892.8) (887.5) 0.6%

Operating commissions (544.2) (523.0) 4.1%

Racing industry fees (460.2) (454.5) 1.3%

Variable contribution 1,141.3 1,082.5 5.4%

Operating expenses (416.1) (395.7) 5.2%

EBITDA before impairment 725.2 686.8 5.6%

D&A (133.5) (124.3) 7.4%

EBIT before impairment 591.7 562.5 5.2%

Interest (94.7) (134.4) (29.5%)

Tax expense (157.0) (126.5) 24.1%

NPAT from continuing operations before impairment 340.0 301.6 12.7%

Impairment - (358.0) (100.0%)

NPAT from discontinued operations - 591.2 (100.0%)

2. Wagering: Financial data

Note: Victorian revenue and expenses are net of 25% allocation to JV partner

NSW represents 100% of revenue and expenses with an incentive fee equivalent to 25% of profits included in ‘Taxes, levies, commissions and fees’

$m

FY12

FY11

Change

Totalisator - Vic

464.3

481.5

(3.6%)

Totalisator - NSW

719.7

768.2

(6.3%)

Fixed Odds

289.3

204.0

41.8%

Trackside

70.1

39.5

77.5%

Luxbet

27.9

20.7

34.8%

Other

66.1

55.2

19.7%

Revenues

1,637.4

1,569.1

4.4%

Taxes, levies, commissions and fees

(1,044.1)

(1,018.1)

2.6%

Operating expenses

(279.8)

(263.5)

6.2%

EBITDA before impairment

313.5

287.5

9.0%

D&A

(71.3)

(67.3)

5.9%

EBIT before impairment

242.2

220.2

10.0%

3. Wagering: Revenue by state and product

Note: Victorian revenue is net of 25% allocation to JV partner, NSW represents 100% of revenue

NSW

Change

Vic

Change

Total

Change

$m

FY12

on pcp

FY12

on pcp

FY12

on pcp

Thoroughbred

468.7

(7.9%)

304.8

(4.1%)

773.5

(6.5%)

Harness

91.4

(8.8%)

65.8

(6.3%)

157.2

(7.7%)

Greyhound

159.6

0.4%

93.7

0.3%

253.3

0.3%

Totalisator

719.7

(6.3%)

464.3

(3.6%)

1,184.0

(5.3%)

Fixed Odds

289.3

41.8%

Trackside

70.1

77.5%

Luxbet

27.9

34.8%

Other

66.1

19.7%

Revenue

719.7

(6.3%)

464.3

(3.6%)

1,637.4

4.4%

4. Gaming: Financial data

Note: Vic Tabaret revenues and expenses are net of 25% allocation to JV partner

$m

FY12

FY11

Change

Victorian network - Hotel

708.5

704.3

0.6%

Victorian network

- Clubs

364.1

367.2

(0.8%)

Total Victorian EGMs

1,072.6

1,071.5

0.1%

Other revenue

6.3

5.9

6.8%

Revenues

1,078.9

1,077.4

0.1%

Taxes, levies, commissions and fees

(760.9)

(761.1)

(0.0%)

Operating expenses

(35.4)

(36.7)

(3.5%)

EBITDA

282.6

279.6

1.1%

D&A

(38.5)

(38.2)

0.8%

EBIT

244.1

241.4

1.1%

5. Keno: Financial data

$m

FY12

FY11

Change

Keno

153.4

141.5

8.4%

Other revenue

29.7

28.1

5.7%

Revenues

183.1

169.6

8.0%

Taxes, levies, commissions and fees

(81.1)

(74.8)

8.4%

Operating expenses

(38.6)

(34.2)

12.9%

EBITDA

63.4

60.6

4.6%

D&A

(15.1)

(11.8)

28.0%

EBIT

48.3

48.8

(1.0%)

6. Balance Sheet

As at

As at

Change

$m

30 Jun 12

30 Jun 11

on pcp

Total current assets

228.2

250.9

(9.0%)

Licences

814.8

430.2

89.4%

Other intangible assets

1,803.2

1,805.7

(0.1%)

Property, plant and equipment

313.3

280.5

11.7%

Other non current assets

89.5

71.2

25.7%

T otal assets

3,249.0

2,838.5

14.5%

Total liabilities

1,843.2

1,627.6

13.2%

Shareholders’ funds

1,405.8

1,210.9

16.1%

Net debt

1,072.6

817.9

31.1%

Shares on issue (m)

730.1

688.0

6.1%

Ratios

Gross debt / EBITDA (x)

1.7

EBIT/Net interest (x)

6.2

7. Cashflow

Actual

$m

FY12

Net operating flows

788.7

Net interest payments

(104.9)

Income tax paid

(158.3)

Payments for PP&E and licences

(631.0)

Sub-total

(105.5)

Dividends paid

(111.4)

Payment of restructuring costs for demerger

(34.7)

Others

(4.6)

Net debt at beginning of perio d

817.9

Non cash movements

(1.5)

8. FY13 financial reporting considerations

(a) FY13 comparative financial results

(b) Wagering: Pro-forma impact of new Victorian licence terms

8. (a) FY13 comparative financial results

Notes:

1. FY12 corporate and IT costs of $17.3m, comprising expenses of $16.1m and D&A of $1.2m, have been re-allocated to Wagering $13.2m, Media and International $2.0m and Keno $2.1m based on proportionate EBITDA in FY12

2. FY12 Gaming segment results represent the start-up of the new Tabcorp Gaming Solutions business, which commences on 16 August 2012

* Revenues and expenses do not aggregate to Group total due to intercompany eliminations between Wagering and Media and International businesses

6 months ended 31 December 2011 12 months ended 30 June 2012

$m Wagering Media &

Int'l Gaming Keno Total* Wagering

Media &

Int'l Gaming Keno Total*

Revenues 850.1 93.9 2.7 92.4 1,014.2 1,637.4 190.2 5.3 183.1 1,965.0

Taxes, levies, commissions and fees (542.6) (5.5) (0.3) (40.7) (589.3) (1,044.1) (11.1) (0.4) (81.1) (1,136.7)

Operating expenses (143.8) (57.1) (3.8) (19.7) (199.3) (292.1) (115.3) (7.9) (40.6) (404.9) EBITDA 163.7 31.3 (1.4) 32.0 225.6 301.2 63.8 (3.0) 61.4 423.4 D&A (37.0) (3.9) (0.5) (6.7) (48.1) (72.2) (8.7) (1.0) (15.3) (97.2) EBIT 126.7 27.4 (1.9) 25.3 177.4 229.0 55.1 (4.0) 46.1 326.2 Interest (42.6) (94.7) Tax (40.5) (71.9)

NPAT continuing operations 94.4 159.6

NPAT discontinued operations 94.9 180.4

Group reported NPAT 189.3 340.0

The Victorian Gaming licence expires on 15 August 2012. Earnings from the Victorian Gaming business will be reported as “discontinued operations” in the FY13 accounts, and FY12 will be presented on a comparable basis. “Discontinued operations” will not include allocated corporate and IT costs which are regarded as continuing. These costs have been re-allocated to the Wagering, Media & International and Keno segments to assist in the comparability of results to be reported in FY13. Set out below are the restated comparatives for FY13 reporting.

8. (b) Wagering: Pro-forma impact of new Vic licence terms

The terms of the new Victorian Wagering & Betting Licence and associated arrangements with the Victorian racing industry which commence on 16 August 2012 are significantly different from the current arrangements. To assist investors in understanding the impact of these changes, pro-forma adjustments have been made to the earnings of the Wagering segment as if the new terms had applied in FY12. The FY12 pro-forma does not represent a forecast of FY13 results.

Notes:

1. Minimum Performance Obligation: FY12 pro-forma includes an expense of $2.0m assuming the FY13 MPO of $337m had applied 2. Race fields expense increases by $9.0m in the FY12 pro-forma due to

 Current arrangements: Race fields fees on non-Victorian product effectively borne by the Victorian racing industry, other than for an amount of $7.1m in FY12

 New arrangements: The new Victorian Joint Venture will bear race fields fees on non-Victorian product. In FY12, these fees were $32.2m. Therefore, FY12 pro-forma includes Tabcorp’s share of $16.1m (being 50% of the $32.2m).

Wagering $m

FY12 Restated Comparative

New Vic Wagering Licence

FY12 Pro-forma

Revenue 1,637.4 (199.4) 1,438.0

Taxes, commissions and fees (1,044.1) 123.4 (920.7)

Operating expenses (292.1) 29.3 (262.8)

EBITDA 301.2 (46.7) 254.5

D&A (72.2) (32.1) (104.3)

EBIT 229.0 (78.8) 150.2

Racing Industry Contributions

Vic 324.2 12.8 337.0

8. (c) Wagering: Other information

 Race fields expenses

 Race fields expenses will increase from 15 August 2012. Had the increase applied in FY12, additional race fields expense of $23m would have been incurred.

 This would have been in addition to the FY12 pro-forma amount of $47m shown on Appendix 8.(b), which includes an amount for the new Victorian Joint Venture.

 GST refund:

 On 24 July 2012 Tabcorp announced the ATO had allowed a claim for refunds of GST paid by Tabcorp’s Victorian and NSW wagering businesses in respect of wagering turnover derived from overseas based customers, and that a gain of $14.3m NPAT will be recorded in FY13. The refunds relate to GST paid between May 2006 and March 2010.

 Tabcorp intends to record the EBIT benefit of $20.4m as an “Unallocated item” for segment reporting in FY13 Set out below is information that will be relevant to Wagering segment earnings in FY13

Disclaimer

This Presentation contains summary information about the current activities of Tabcorp Holdings Limited and its subsidiaries (Tabcorp Group). It should be read in conjunction with Tabcorp Group’s other periodic and continuous disclosure announcements lodged with the Australian Securities Exchange (ASX), which are available at www.asx.com.au.

No member of the Tabcorp Group gives any warranties in relation to the statements or information contained in this Presentation. The information contained in this Presentation is of a general nature and has been prepared by Tabcorp in good faith and with due care but no representation or warranty, express or implied, is provided in relation to the accuracy or completeness of the information.

This Presentation is for information purposes only and is not a prospectus, product disclosure statement or other disclosure or offering document under Australian or any other law. This Presentation does not constitute an offer, invitation or recommendation to subscribe for or purchase any security and neither this presentation nor anything contained in it shall form the basis of any contract or

commitment.

This Presentation is not a recommendation to acquire Tabcorp shares. The information provided in this Presentation is not financial product advice and has been prepared without taking into account any recipient's investment objectives, financial circumstances or particular needs, and should not be considered to be comprehensive or to comprise all the information which recipient may require in order to make an investment decision regarding Tabcorp shares.

All dollar values are in Australian dollars (A$) unless otherwise stated.

Neither Tabcorp nor any other person warrants or guarantees the future performance of Tabcorp shares or any return on any investment made in Tabcorp Shares. This Presentation may contain certain 'forward-looking statements'. The words 'anticipate', 'believe', 'expect', 'project', 'forecast', 'estimate', 'likely', 'intend', 'should', 'could', 'may', 'target', 'plan' and other similar expressions are intended to identify looking statements. Indications of, and guidance on, financial position and performance are also forward-looking statements. Any forecasts or other forward forward-looking statements contained in this Presentation are subject to known and

unknown risks and uncertainties and may involve significant elements of subjective judgement and assumptions as to future events which may or may not be correct. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of Tabcorp, that may cause actual results to differ materially from those expressed or implied in such statements. There can be no assurance that actual outcomes will not differ

materially from these statements. You are cautioned not to place undue reliance on forward looking statements. Except as required by law or regulation (including the ASX Listing Rules), Tabcorp undertakes no obligation to update these forward-looking statements. Past performance information given in this Presentation is given for illustrative purposes only and should not be relied upon as (and is not) an indication of future performance.