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Chairman's Message

In March this year, Brisbane Airport Corporation's (BAC) CEO and CFO travelled to the US, seeking finance to fund future capital expenditure. The two were not sure how their proposals would be received, especially in the existing cautious, riskaverse world economy, where even the most certain and stable of global markets, have become unpredictable. It is the result of this trip, which I consider to be one of the strongest indications of BAC's past achievements and its optimistic future prospects.

$600 million was raised.

$400 million was raised in the US Private Placement market: US$150 million in 10-year; US$150 million in 12-year; and AUD$100 million in 15-year fixed rate bonds. Coupons were 5.24% and 5.34% in US dollars in the 10 and 12-year issues and 8.25% in a 15-year Australian dollar issue.

In the Australian market, $200 million eight-year BBB/Baa2 bonds were issued at a fixed rate of 8.03%.

This money will be used to repay maturing bank facilities and fund capital expenditure and working capital.

What is most significant about the fund raising is the confidence shown by overseas lenders in BAC as a company, demonstrating a strong return on investment, and the airport as a world-class, piece of infrastructure critical to the future growth of Queensland.

BAC made a profit of $154.6 million after tax, which is a reflection of the company's strength during difficult times. The airport saw 20 million passengers through the terminals - a record, despite world and local turmoil - continuing the strong and sustained role the airport is playing in generating jobs, investment and opportunity for Queensland.

To further deliver on its proud role as the Gateway to Queensland, BAC continues to roll out a multi-billion dollar infrastructure upgrade. Previous years have seen the opening of the International Terminal expansion and Moreton Drive, Brisbane Airport's second major access road. This year BAC opened the $43 million Domestic Terminal Common User Satellite expansion, which has seen an increase in passenger gate lounges from two to seven, two additional aircraft parking bays, new food and beverage facilities, airline offices and improved operational efficiencies.

The Common User Satellite Upgrade was the first part of a much larger upgrade to the Domestic Terminal precinct, which is still currently underway. With more than 15.5 million people travelling through this precinct each year, the Brisbane Domestic Terminal now facilitates the same number of passengers as Heathrow Airport's Terminal 3. This is a long way from the one million passengers travelling through the terminal back in 1988 when it was first built. The Domestic Terminal needs to be upgraded to ensure passengers have access, amenity and choice as they travel to, from and around the precinct. Once complete in early 2012, there will be a new 5,300 space, nine-storey car park, upgrades to the road network including a free public pick-up area, and an undercover, elevated walkway over the terminal road system. These upgrades will provide significant additional capacity to the road network and car parking facilities, reducing congestion in the precinct and improving the passenger experience overall.

Planning and design has also been underway this year as BAC completes its final preparatory stages before embarking on early works for the delivery of the New Parallel Runway. With 43 million passengers expected to be travelling through the airport by 2029, Brisbane Airport must upgrade its runway system as well as terminals, roads and other aeronautical facilities to meet this demand. Early works are planned to start in 2012 and the runway is expected to be operational in 2020, ensuring Brisbane Airport is capable of servicing the state as it grows and develops as a region.

BAC enjoys and takes its role seriously as a key partner in Queensland's path to growth and prosperity. Throughout the coming years we will continue to work with enthusiasm, thoughtful consideration and pride in order to deliver an airport that Queenslanders can also be proud of, and is recognised as world class.

Bill Grant