financ ial r e sults ye ar e nde d 30 June 2018. 22 August 2018 - - PowerPoint PPT Presentation

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financ ial r e sults ye ar e nde d 30 June 2018.

22 August 2018

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disc laime r

This presentation has been prepared by Australian Pipeline Limited (ACN 091 344 704) as responsible entity of the Australian Pipeline Trust (ARSN 091 678 778) and APT Investment Trust (ARSN 115 585 441) (APA Group). The information in this presentation does not contain all the information which a prospective investor may require in evaluating a possible investment in APA Group and should be read in conjunction with the APA Group’s other periodic and continuous disclosure announcements which are available at www.apa.com.au. All references to dollars, cents or ‘$’ in this presentation are to Australian currency, unless otherwise stated.

Not financ ial pr

• duc t advic e : Please note that Australian Pipeline Limited is not licensed to provide financial product advice in relation to securities in the APA Group. This

presentation is for information purposes only and is not financial product or investment advice or a recommendation to acquire APA Group securities and has been prepared without taking into account the objectives, financial situation or needs of individuals. Before making an investment decision, prospective investors should consider the appropriateness of the information having regard to their own objectives, financial situation and needs and seek professional advice if necessary.

Past pe r for manc e : Past performance information should not be relied upon as (and is not) an indication of future performance. F

• rward looking state me nts: This presentation contains certain forward looking information, including about APA Group, which is subject to risk factors. “Forward-looking

statements” may include indications of, and guidance on, future earnings and financial position and performance. Forward-looking statements can generally be identified by the use of forward-looking words such as, 'expect', 'anticipate', 'likely', 'intend', 'could', 'may', 'predict', 'plan', 'propose', 'will', 'believe', 'forecast', 'estimate', 'target', 'outlook', 'guidance' and other similar expressions and include, but are not limited to, forecast EBIT and EBITDA, operating cashflow, distribution guidance and estimated asset life. APA Group believes that there are reasonable grounds for these forward looking statements and due care and attention have been used in preparing this presentation. However, the forward looking statements, opinions and estimates provided in this presentation are based on assumptions and contingencies which are subject to change without notice, as are statements about market and industry trends, which are based on interpretations of current market conditions and are subject to risk factors associated with the industries in which APA Group operates. Forward-looking statements, opinions and estimates are not guarantees or predictions of future performance and involve known and unknown risks and uncertainties and other factors, many of which are beyond the control of APA Group, and may involve significant elements of subjective judgement and assumptions as to future events which may or may not be correct. There can be no assurance that actual outcomes will not materially differ from these forward-looking statements, opinions and estimates. A number of important factors could cause actual results or performance to differ materially from such forward-looking statements, opinions and estimates. Investors should form their own views as to these matters and any assumptions on which any forward-looking statements are based. APA Group assumes no obligation to update or revise such information to reflect any change in expectations or assumptions.

Inve stme nt r isk: An investment in securities in APA Group is subject to investment and other known and unknown risks, some of which are beyond the control of APA

• Group. APA Group does not guarantee any particular rate of return or the performance of APA Group.

Non-IF RS financ ial me asure s: APA Group results are reported under International Financial Reporting Standards (IFRS). However, investors should be aware that this

presentation includes certain financial measures that are non-IFRS financial measures for the purposes of providing a more comprehensive understanding of the performance of the APA Group. These non-IFRS financial measures include EBIT, EBITDA and other “normalised” measures. Such non-IFRS information is unaudited, however the numbers have been extracted from the audited financial statements.

Not an offe r: This presentation does not constitute an offer, invitation or recommendation to subscribe for or purchase any security. In particular, this presentation does

not constitute an offer to sell, or a solicitation of an offer to buy, any securities in the United States. Securities may not be offered or sold, directly or indirectly, in the United States or to persons that are acting for the account or benefit of persons in the United States, unless they have been registered under the U.S. Securities Act of 1933, as amended (the U.S. Securities Act), or are offered and sold in a transaction exempt from, or not subject to, the registration requirements of the U.S. Securities Act and any

• ther applicable state securities laws.

Non- GAAP financ ial me asur e s: Investors should be aware that certain financial data included in this presentation are "non-GAAP financial measures" under Regulation G

• f the U.S. Securities Exchange Act of 1934, as amended. These measures are EBITDA, normalised EBITDA and statutory EBITDA. The disclosure of such non-GAAP financial

measures in the manner included in the presentation may not be permissible in a registration statement under the U.S. Securities Act. These non-GAAP financial measures do not have a standardised meaning prescribed by Australian Accounting Standards and therefore may not be comparable to similarly titled measures presented by

• ther entities, and should not be construed as an alternative to other financial measures determined in accordance with Australian Accounting Standards. Although APA

Group believes these non-GAAP financial measures provide useful information to users in measuring the financial performance and condition of its business, investors are cautioned not to place undue reliance on any non-GAAP financial measures included in this presentation.

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re sults ove rvie w and str ate gic highlights

Mic k Mc Cor mac k Managing Dir e c tor and CE O.

r e sults ove r vie w and str ate gic highlights

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F Y2018 highlights

$ million F Y2018 F Y2017 c hange Statutor y r e sults

Revenue excluding pass-through(1)

1,941.4

1,888.3 Up 2.8% EBITDA

1,518.5

1,470.1 Up 3.3% Net profit after tax

264.8

236.8 Up 11.8% Operating cash flow(2)

1,031.6

973.9 Up 5.9% Operating cash flow per security (cents)(3)

90.7

87.1 Up 4.1%

Distr ibutions

Distributions per security (cents)

45.0

43.5 Up 3.4% Franking credits per security (cents)

6.33

4.0 Up 58.3% Distribution payout ratio(4)

51.5%

49.8%

Note s:

(1) Pass-through revenue is revenue on which no margin is earned. (2) Operating cash flow = net cash from operations after interest and tax payments. (3) Operating cash flow per security has been adjusted for the rights issue completed on the 23 March 2018. (4) Distribution payout ratio = total distribution applicable to the financial year as a percentage of operating cash flow.

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inve sting in Austr alia’s e ne r gy futur e

Solid r e sults, fur the r pipe line of oppor tunitie s announc e d to c ontinue to de live r c ustome r

• c e ntr

ic e ne r gy solutions

E xisting asse ts

• Ne w fle xible gas tr

anspor tation c ontr ac ts

across APA’s East and West Coast Grids

• A ne w mining c ustome r

for the Diamantina

Power Station

• Re fr

e she d APA’s suite of se r vic e s to better

service our customers’ needs

• US CPI escalation and favourable USD/AUD

exchange rates in relation to the Wallumbilla

Gas Pipe line $1.4 billion plus of gr

• wth pr
• je c ts
• Part year contributions from newly commissioned
• rganic growth assets including the Re e dy Cr

e e k Wallumbilla Pipe line, Mt Mor gans Gas Pipe line

and the E

mu Downs Solar F ar m

• A 5 year extension to the original 12 year power

purchase agreement for the Badgingar

r a Wind F ar m

• A new 17.5 MW Badgingar

r a Solar F ar m included

in the BWFpower purchase agreement

• $875.5 million capex and investments in FY18
• ~$425 million gr
• wth capex planned is underway

for FY19

• Expanded network of integrated assets
• Enhanced services offering flexibility and

reliability

Badgingar r a Wind F ar m

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r e c or d c ape x pr

• gr

am – F Y2017 to F Y2019

• gr
• wing por

tfolio of c ommitte d pr

• je c ts

Badgingar r a Wind & Solar F ar ms Dar ling Downs Solar F ar m Yamar na Gas Pipe line (Commissione d) Yamar na Powe r Station Or bost Gas Pr

• c e ssing Plant
• c ommissione d Jan 18

Mt Morgans Gas Pipe line E mu Downs Solar F ar m – c ommissione d De c / Jan 18

• c ommissione d May 18

Re e dy Cr e e k Wallumbilla Pipe line

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7

• ur

busine ss - doing de als with c ustome r s

Inc ite c Pivot – 3,300km

• ~3,300 km from Me re e nie Basin (NT

) to Gibson Island (Qld)

• Utilising APA’s Amade us Gas Pipe line ,

Car pe ntar ia Gas Pipe line , South We st Que e nsland Pipe line , Roma Br isbane Pipe line

• F
• r

Inc ite c Pivot’s fe r tilise r plant

• 1 ye ar

c ontr ac t

• Gas industr

y wor king toge the r to pr

• vide a

solution for a ke y industr ial c ustome r

• Announc e d June 2018
• ~1,500km from Carnarvon Basin to

e aste r n Goldfie lds r e gion

• Utilising APA’s Goldfie lds Gas

Pipe line , Mur r in Mur r in L ate r al, E aste r n Goldfie lds Pipe line , Yamar na Gas Pipe line , ge ne r ating e le c tr ic ity at Yamar na Gas Powe r Station

• F
• r

Gr uye r e Gold Pr

• je c t
• 15 ye ar

c ontr ac t

• Announc e d June 2017

Yamar na Gas Pipe line & Powe r Station

• ~3,000 km from Que e nsland

(typic ally Wallumbilla) to Me lbour ne / Sydne y

• Utilising APA’s South We st

Que e nsland Pipe line , Moomba Sydne y Pipe line , Vic tor ian- Nor the r n Inte r c onne c t

• F
• r various c ustome rs managing

gas por tfolios

• Various te rms ~1 - 3 ye ar

s E ast Coast Gr id – multiple c ustome r s

Yamar na Powe r Station

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He alth and safe ty

• Continue to target a zero harm workplace
• Injury rates increased in FY18, especially with contractors
• 2nd year of a new 3-year HSE Strategic Improvement Plan
• Focusing on safety leadership
• Developing initiatives on health and wellbeing
• Improving and simplifying our safety system
• FY19 Target TRIFR of no more than 7
• APA will use data analytics to target known injury drivers

E nvir

• nme nt
• Environmental Management Plan improvement program

commenced across the business:

• Standardised compliance process and register
• Improvement Program rollout including new risk

assessment process

• Review compliance tools to integrate with existing

business systems and processes

• Registered as a supporter of the Task Force on

Climate-related Financial Disclosure initiative

foc use d on de live r ing industr y be st pr ac tic e

T RIF R

(1)

Note s: (1) Total reportable injury frequency rate (TRIFR) is measured as the number of lost time and medically treated injuries sustained per million hours worked. All data includes both employees and contractors.

8.11 10.41 7.5 8.94 5 10 15 F Y15 F Y16 F Y17 F Y18 Trevor Vaughan, welding inspector for APA

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c ustome r foc us

• Interconnected grid
• Seamless services
• Integrated Operations Centre
• Systems and technology
• Product and services refresh
• Customer relationships

putting c ustome r s at the c e ntr e of our de c ision-making

Custome r foc us at APA Custome r foc us at APA T he E ne r gy Char te r – industr y initiative

Clar ity Clar ity F le xibility F le xibility Simplic ity Simplic ity

• APA is one of 15 energy businesses from across

the Australian energy supply chain to develop The Energy Charter

• Objective is to reconnect industry as a whole

with its purpose and create collective accountability for better customer outcomes

• Charter Principles focus on:
• Embedding customer-minded culture for

better customer outcomes

• Improving energy affordability
• Providing energy reliably, safety and

sustainably

• Improving the customer experience
• Supporting customers in vulnerable

circumstances

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re sults ove rvie w and str ate gic highlights

Pe te r F r e dr ic son Chie f F inanc ial Offic e r .

financ ial pe r for manc e

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summar y r e sults

$ million F Y2018 F Y2017 Change

Revenue excluding pass-through(1)

1,941.4

1,888.3

2.8%

EBITDA

1,518.5

1,470.1

3.3%

Depreciation and amortisation

(578.9)

(570.0)

(1.6% )

EBIT

939.6

900.1

4.4%

Net interest expense

(509.7)

(513.8)

0.8%

Pre-tax profit

429.9

386.3

11.3%

Tax

(165.1)

(149.5)

(10.4% )

Net profit after tax

264.8

236.8

11.8%

Operating cash flow(2)

1,031.6

973.9

5.9%

Operating cash flow per security (cents)(3)

90.7

87.1

4.1%

Distribution per security (cents)

45.0

43.5

3.4%

Distribution payout ratio(4)

51.5%

49.8%

Note s: Numbers in the table may not add due to rounding.

(1) Pass-through revenue is revenue on which no margin is earned. (2) Operating cash flow = net cash from operations after interest and tax payments. (3) Operating cash flow per security has been adjusted for the rights issue completed on the 23 March 2018. (4) Distribution payout ratio = total distribution applicable to the financial year as a percentage of operating cash flow.

• $1,600 million

paid to Suppliers

• $188 million

paid to Employees

• $239 million

paid in Taxes

• $490 million

paid to Securityholders

• $473 million

interest paid to Lenders

APA made the following c ontr ibutions to the br

• ade r

e c onomy dur ing F Y2018:

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F Y2018 r e sult: E BIT DA by busine ss se gme nt

Note s: Numbers in the table may not add due to rounding.

(1) As a % of EBITDA before Corporate costs.

F Y2018 E BIT DA Br idge $ million F Y2018 F Y2017 Change % of F Y18 E BIT DA(1)

Energy Infrastructure Queensland 962.2 925.4

4.0%

60.7% New South Wales 147.1 149.5

(1.6%)

9.3% Victoria & South Australia 127.2 125.3

1.5%

8.0% Northern Territory 22.9 18.8

22.1%

1.4% Western Australia 237.6 234.7

1.2%

15.0% Energy Infra total 1,497.1 1,453.7

3.0%

94.4% Asset Management 66.2 58.7

12.7%

4.2% Energy Investments 23.1 24.4

(5.4%)

1.5% Corporate costs (67.9) (66.7)

(1.9%)

(4.3%)

T

• tal E

BIT DA

1,518.5 1,470.1

3.3%

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low r isk busine ss mode l

• APA has robust risk management processes in place
• Manage counterparty risks by:

 Diversification of customer & industry exposure  Assessment of counterparty creditworthiness  Putting in place appropriate credit support arrangements  Entering into long term contracts to support major capital spend

• Revenue weighted average contract tenor remaining in excess of 12 years

By r e ve nue type By c ustome r c r e dit r ating By c ustome r industr y se gme nt E ne r gy Infr astr uc tur e r e ve nue split

Contr a c ted fixed r evenue: 4.3% Ca pa c ity c ha r g e r evenue: 78.7% R eg ula ted r evenue: 9.0% T hr

• ug hput c ha r

g e & other va r ia ble r evenue: 6.8% Flexible shor t ter m ser vic es: 1.0% Other : 0.2% A- ra ted

• r better

44.9% BBB a nd BBB+ 27.8% Investment G ra de 22.9% Sub- investment g ra de 0.2% Not ra ted 4.2%

(1)

E nerg y 49.1% Utilities 24.3% R esouc es 21.6% Industria ls & O thers 5.0%

Note s:

(1) An investment grade credit rating from either S&P (BBB- or better) or Moody’s (Baa3 or better), or joint venture with an investment grade average rating across owners. Ratings shown as equivalent to S&P rating scale.

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c apital e xpe nditur e and inve stme nt c ash flows

$ million F Y18 F Y17 Gr

• wth c ape x

Regulated – Victoria 33.0 106.1 Non-regulated East Coast 326.6 78.7 Western Australia & Northern Territory 369.1 30.6 Other 14.2 56.5

T

• tal gr
• wth c ape x

742.9 271.9

Stay-in business capex 112.6 68.8

T

• tal c ape x

855.5 340.7

Investments & acquisitions(1) 20.0 36.8

T

• tal c apital & inve stme nt

e xpe nditur e (2) 875.5 377.5

Note s: Numbers in the table may not add due to rounding.

(1) Represents the share purchase price for the Orbost Gas Processing Plant. (2) Capital expenditure (“capex’) represents net cash used in investing activities as disclosed in the cash flow statement, and excludes accruals brought forward from the prior period and carried forward to next period.

6,284.4 673.6 377.5 875.5 200 400 600 800 1,000 1,200 1,400 1,600 FY15 F Y16 F Y17 FY18 A$ m Ac quisitions & o ther investme nt c ash flows Growth c apex SIB c apex 6, 6, 00 6,000

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Pr

• je c ts

F Y17 F Y18 1H F Y19 2H F Y19 1H F Y20 2H F Y20 Custome r

gr

• wth pr
• je c ts sc he dule

T

• tal gr
• wth c ape x

(‘in-flight’ to date)

F Y18: $743m F Y19: ~$425m Pr

• je c t (% spe nt)

Pipe line pr

• je c ts

Re ne wable s pr

• je c ts

Midstr e am pr

• je c ts

Note : diagram is illustrative only.

13- ye ar c ontr ac t

Synergy Emu Downs Solar Farm (incl. $5.5m ARENA funding)

100%

APLNG Reedy Creek Wallumbilla Pipeline

100% 20- ye ar c ontr ac t 12- ye ar c ontr ac t

Origin Darling Downs Solar Farm (incl. $20m ARENA funding)

~88%

Gold Road/ Gold Fields JV Yamarna Pipeline & Power Station

~91% 15- ye ar c ontr ac t 17- ye ar c ontr ac t

Alinta Badgingarra Wind & Solar Farm

~66%

Orbost Gas Processing Plant

Multi ye ar c ontr ac t

Cooper

~50% T

• tal r

e ve nue c ontr ibution F Y18: <$5m F Y19: ~$75m+ F Y20: ~$215m+ F Y17: $272m F Y20: ~$300-400m

Other Projects Various $1.4 billion plus

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c apital manage me nt

Capital manage me nt:

• Retain our 2 credit ratings at Baa2/Stable (Moody’s) and BBB/Stable (S&P) to facilitate

access to global debt capital markets

• Maintain gearing(1)~65-68%
• Fund growth with an appropriate mix of retained funds in the business, debt and equity
• Minimise impacts from adverse movements in interest rates through a combination of

hedging and raising debt at fixed interest rates

Distr ibution Polic y:

• Fully covered by operating cash flow
• Grow generally in line with operating cash flow
• Sustainable over the long term
• Considered in the context of the capital needs of the business and economic conditions

APA’s par ame te r s for c apital manage me nt and distr ibutions

Note s:

(1) Ratio of net debt to net debt plus book equity.

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c apital manage me nt

• Credit ratings: S&P BBB (CreditWatch Positive, Aug 2018), Moody’s Baa2 (outlook Stable, affirmed

Aug 2018)

• Majority of interest cost obligations known today are hedged – 97.7% as at 30 June 2018
• APA completed ~$500 million capital raising by way of a PAITREO Entitlement Offer, March 2018
• Redeemed $515 million of Subordinated Notes at the first-call date of 31 March 2018 and repaid the

$125.8 million (JPY 10 billion) Japanese MTNs at maturity on 22 June 2018

• A new $1,000 million Syndicated Bank Facility came into effect on 2 July 2018, with two $500 million

tranches maturing on 30 June 2023 and 31 December 2023

• All capital markets debt issuance out to 2035 are fully hedged at fixed rates

Me tr ic s Jun 2018 Jun 2017

Gearing(1, 2) 65.4% 67.4% Interest cover ratio 2.7 times 2.8 times Average interest rate applying to drawn debt 5.65% 5.56% Interest rate exposure fixed or hedged 97.7% 94.5% Average maturity of senior facilities 6.9 years 7.5 years

Note s:

(1) For the purpose of the calculation, drawn debt that has been kept in USD (rather than AUD) has been nominally exchanged at AUD/USD exchange rates of 0.7772 for Euro and GBP MTN issuances and 0.7879 for the US144A notes at the respective inception dates. (2) Ratio of net debt to net debt plus book equity.

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de bt matur ity pr

• file

APA maintains dive r sity of funding sour c e s and spr e ad of matur itie s(1)

Note :

(1) APA debt maturity profile as at 2 July 2018. (2) USD denominated obligations translated to AUD at the prevailing rate at inception (USD144A - AUD/USD=0.7879, EMTN & Sterling AUD/USD=0.7772).

$0m $200m $400m $600m $800m $1,000m $1,200m $1,400m $1,600m Hea dr

• om (ba nk bo r

r

• wing s)

Ba nk bor r

• wings

Ster ling MT N E ur

• MT

N US 144A Notes Ca nadian MT N Austr a lian MT N US Pr ivate Plac ement Notes USD denom ina ted

• blig a tions(2)

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19

fully c ove r e d distr ibutions

• FY2018 distribution payout ratio(1) of 51.5%
• Components for FY18 distribution:

Note s:

(1) Distribution payout ratio: total distribution applicable to the financial year as a percentage

• f operating cash flow.

(2) Operating cash flow per security has been adjusted for the rights issue completed on the 23 March 2018.

F r anking Cr e dits

• $52 million tax payable for FY18
• Franking credits of 3.83 cents per

security allocated to the final APT profit distribution, taking the FY18 franking credits to 6.33 cents per security

• Expect future profits from APT to

be distributed with some level of franking credits

• Third year in providing the

voluntary Tax Transparency Report

50.6 54.6 77.1 87.1 90.7 36.3 38.0 41.5 43.5 45.0 0 c ents 20 c ents 40 c ents 60 c ents 80 c ents 100 c e nts F Y14 F Y15 F Y16 F Y17 F Y18 O CF pe r sec urity (no rma lised) Distributio ns

(2)

8.93 cents APT profit distribution 9.03 cents APT capital distribution 2.90 cents APTIT profit distribution 3.14 cents APTIT capital distribution 24.00 cents

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F Y19 guidanc e

• Based on current operating plans and available information, EBITDA for FY2019 is expected to be in the

range of $1,550 million to $1,575 million

• Net interest costs for FY2019 expected within a range of $500 million to $510 million
• In the event that the CKI proposal does not proceed and APA remains as a stand-alone listed

company for the full financial year, distributions per security for FY2019 are expected to be in the or

de r

• f 46.5 c e nts pe r se c ur

ity, cash payout, franking credits may be allocated to the distributions based on

corporate tax paid during FY2019

• Capital expenditure update:

― APA’s now $1.4 billion plus of growth projects from FY2017 to FY2019 ― To date, APA has spent in excess of $1 billion on these projects ― Growth capital expenditure on these projects over the 3-year period is expected to be: ― Expected incremental revenue per annum as a result of capital expenditure: ~$75m plus in FY2019 and ~$215m plus in FY2020 ― Stay-in-business capex is expected to be in the order of $100 million p.a. going for

war d

― Growth capex: beyond FY2019, APA expects $300 to $400 million p.a. for

the ne xt 2-3 ye ar s

FY2018(Actual): $742.9 million

F Y2019(F

• r

e c ast): appr

• x.

$425 million (r e ve nue to flow fr

• m F

Y2020)

FY2020(Forecast): approx. $300-400 million

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re sults ove rvie w and str ate gic highlights

Mic k Mc Cor mac k Managing Dir e c tor and CE O.

• utlook

SLIDE 22

22

imple me nting e ne r gy polic y c hange s

• Pricing principles
• Pipeline schematics
• Standard Gas Transportation Agreement
• Standing tariffs
• Uncontracted capacity outlook
• Service usage information

Infor mation disc losur e and ar bitr ation fr ame wor k Infor mation disc losur e and ar bitr ation fr ame wor k

 East Coast and Central Region disclosure on 31 Jan 2018  Western Australian information disclosure on 19 Jun 2018  100% of contracts negotiated non scheme assets since 1 Aug 2017

• Pipeline financial statements
• Weighted average tariffs

Additional financ ial infor mation Additional financ ial infor mation

• Due 31 Oct 2018
• Trading of firm transport, compression and park

capacity between shippers

• Auction of contracted but un-nominated

capacity

Capac ity tr ading & auc tion Capac ity tr ading & auc tion

• Commence 1 Mar 2019

APA suppor ts Gove r nme nt initiative s to impr

• ve infor

mation tr anspar e nc y and inc r e ase mar ke t liquidity

SLIDE 23

23

APA’s str ate gy

Sour c e :

Demand – AEMO GSOO 2018 Supply - EnergyQuest (actuals); AEMO 2017 GSOO (forecast)

E ast c oast gas de mand & pr

• duc tion by fie ld

Austr alian e le c tr ic ity supply by fue l sour c e

APA is c ommitte d to de live r ing to c ustome r s e ne r gy solutions that ar e safe , r e liable , innovative and c ost-e ffe c tive

• Our growth focus is to enhance our portfolio:

― of gas transmission pipelines ― of power generation: gas-fired and renewable energy ― of midstream energy infrastructure assets, including gas storage and gas processing

• We will continue to strengthen asset management,

development and operational capabilities

• We will maintain APA’s financial strength

APA c ontinue s to se e signific ant oppor tunitie s for gr

• wth

c ape x - possible oppor tunitie s ide ntifie d of >$4 billion ove r the ne xt 5 ye ar s.

0PJ 500PJ 1,000PJ 1,500PJ 2,000PJ 2,500PJ

2000 2005 2010 2015 2020F 2025F 2030F 2035F

Undeve loped Rese rves Surat/ Bowen 2P Developed Gippsla nd 2P Develope d Coope r 2P De ve lo ped AE MO g as dema nd forec a st 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2006 2017e NSW VIC QL D WA SA T AS NT Oil P r

• duc ts

& Other s Solar PV Wind Hydr

• Na tur

a l g as Blac k c oal Brown coa l Sour c e :

Department of the Environment and Energy, Australian Energy Statistics, Table O, April 2018

SLIDE 24

24

Imple me ntation Agr e e me nt - APA and CKI Consor tium

• Conditional Implementation Agreement announced 13 August 2018
• A$11.00 per security cash offer and no change to FY18 final distribution (due 12 September 2018)
• Compelling offer:

– >30% premium (5 day, 1 month, 3 month VWAPs) – 15.3x FY2017 EV/EBITDA and 14.8x FY2018 EV/EBITDA(1)

• APA Board unanimously recommends the transaction
• Subject to a number of conditions, including approval from
• ACCC (mid-September) followed by FIRB decision
• CKA shareholders
• APA Securityholders
• Additional 4.0 cents per security for each full month in calendar 2019 which elapses post

31 December 2018 and prior to implementation (up to 31 March 2019)

• Securityholders do not need to take any action at this time – Scheme booklet is targeted to be

sent to Securityholders by the end of October 2018

We r e main foc use d on managing our busine ss and e xe c uting on our str ate gy thr

• ughout this pr
• c e ss……it is busine ss as usual at APA

Note (1): Based on 1,179,893,848 APA stapled securities on issue, APA net debt as at 30 June 2018 as per Note 18 of the FY2018 financial statements, APA

FY2017 EBITDA of A$1,470.1 million for the FY2017 multiple and APA FY2018 EBITDA of A$1,518.5 million for the FY2018 multiple.

SLIDE 25

25

APA’s unique ly inte gr ate d e ne r gy infr astr uc tur e

Asse ts and Inve stme nts Glossary AGPGL OS Amadeus Gas Pipeline BGP

Bonaparte Gas Pipeline

BWSF

Badgingarra Wind and Solar Farm

BWP

Berwyndale Wallumbilla Pipeline

CGP

Carpentaria Gas Pipeline

CRP

Central Ranges Pipeline & distribution network

CWP

Central West Pipeline

DDSF

Darling Downs Solar Farm

DPS & L PS Diamantina & Leichhardt

Power Stations

E GP

Eastern Goldfields Pipeline

E DWSF

Emu Downs Wind and Solar Farms

E P

Ethane Pipeline

GGP

Goldfields Gas Pipeline

IOC

Integrated Operations Centre

KKP

Kalgoorlie Kambalda Pipeline

MP

Mid west Pipeline

MGP

Mortlake Gas Pipeline

MGPSF

Mondarra Gas Processing & Storage Facility

MMGP

Mt Morgans Gas Pipeline

MSP

Moomba Sydney Pipeline

NGP

Nifty Gas Pipeline

OGPP

Orbost Gas Processing Plant

PGP

Parmelia Gas Pipeline

PPS

Pilbara Pipeline System

RBP

Roma Brisbane Pipeline

RCWP

Reedy Creek Wallumbilla Pipeline

SE SA

South East South Australia Pipeline

SGP

SEA Gas Pipeline

SWQP

South West Queensland Pipeline

T GP

Tipton Gas Pipeline

VT S

Victorian Transmission System

WGP

Wallumbilla Gladstone Pipeline

WPP

Wickham Point Pipeline

X41

X41 Power Station

YGP

Yamarna Gas Pipeline

YPS

Yamarna Power Station

SLIDE 26

26

supple me ntar y infor mation

SLIDE 27

27

snapshot of APA

Note : * includes SEA Gas Pipeline and Mortlake Pipeline Sour c e : AER State of the Energy Market Dec 2017; Company reports; APA data as

at 30 Jun 2018 and includes the Ethane Pipeline.

APA Ove rvie w (T ic ke r: APA AU) Mar ke t c ap

A$ 11.8 billion (as at 20 Aug 2018)

ASX r ank

S&P/ASX 50

Cr e dit r ating

Moody’s: Baa2 (outlook Stable) S&P: BBB (CreditWatch Positive)

Asse ts

• wne d/
• pe r

ate d

approximately $20 billion

Gas tr ansmission(1)

15,400km transmission pipelines Underground & LNG gas storage

Gas distr ibution(2)

~28,600 km gas mains & pipelines ~1.4 million gas consumers

Othe r e ne r gy infr astr uc tur e

605 MW power generation 244 km HV electricity transmission Gas processing plants

E mploye e s

~1,700

Austr alian gas tr ansmission pipe line owne r ship by kilome tr e s ~ APA is Austr alia’s lar ge st gas pipe line owne r ~ T

• tal se c ur

ityholde r r e tur ns sinc e listing vs inde x ~ Str

• ng tr

ac k r e c or d of de live r ing se c ur ityholde r r e tur ns ~

Sour c e : IRESS, TSR performance to 20 August 2018 Note s:

(1) Includes 100% of pipelines operated by APA Group, which form part of Energy Investments segment, including SEA Gas and EII. (2) Includes 100% of assets operated by APA Group in Queensland, New South Wales, Victoria and South Australia.

SE A Gas* E II

1,500 3,000 4,500 6,000 7,500 9,000 10,500 12,000 13,500 15,000 APA Group AGIG Je mena 15,400 km 2,344 km 3,622 km

400 800 1,200 1,600 2,000 2,400 AP A tota l sec ur ityholder r e tur n Utilities a c c umulation index S&P/ ASX 200 a c c umulation inde x T SR CAGR: 17.8% over 18 Yea r s

SLIDE 28

28

gr

• up str

uc tur e

• APA is a stapled structure comprising two

registered managed investment schemes:  Australian Pipeline Trust (ARSN 091 678 778)  APT Investment Trust (ARSN 115 585 441) is a pass-through trust

• Australian Pipeline Limited (ACN 091 344 704)

is the responsible entity of APT and APTIT

• APA is listed as a stapled structure on the

Australian Securities Exchange

• The units of APT and APTIT are stapled and

must trade and otherwise be dealt with together

• APT Pipelines Limited (ABN 89 009 666 700) is

APA’s borrowing entity, a company wholly

• wned by APT, and the owner of the majority
• f APA’s operating assets and investments
• Reporting business segments

 E

ne r gy Infr astr uc tur e: APA’s wholly or majority owned energy infrastructure assets

 Asse t Manage me nt: provision of asset management and operating services for the majority of APA’s investments  E

ne r gy Inve stme nts: interests in energy infrastructure investments

SLIDE 29

29

34.4 35.0 35.5 36.3 38.0 41.5 43.5 45.0 0c 5c 10c 15c 20c 25c 30c 35c 40c 45c 50c F Y11 F Y12 F Y13 F Y14 F Y15 F Y16 F Y17 F Y18 $490 $535 $662 $747 $822 $1,331 $1,470 $1,518 $0m $200m $400m $600m $800m $1,000m $1,200m $1,400m $1,600m F Y11 F Y12 F Y13 F Y14 F Y15 F Y16 F Y17 F Y18 $5,428 $5,496 $7,699 $7,973 $14,653 $14,843 $15,046 $15,227 $0m $2,000m $4,000m $6,000m $8,000m $10,000m $12,000m $14,000m $16,000m F Y11 F Y12 F Y13 F Y14 F Y15 F Y16 F Y17 F Y18

solid histor ic al pe r for manc e

Nor malise d E BIT DA Nor malise d ope r ating c ash flow T

• tal asse ts

Distr ibutions

$290 $336 $433 $440 $545 $862 $974 $1,032 $0m $200m $400m $600m $800m $1,000m $1,200m F Y11 F Y12 F Y13 F Y14 F Y15 F Y16 F Y17 F Y18

SLIDE 30

30 150 300 450 600 750 900 1,050 1,200 1,350 1,500 1,650 F Y14 F Y15 F Y16 F Y17 F Y18 A$ m Wallumbilla Gla dstone P ipeline South West Quee nsla nd Pipeline R

• ma Br

isbane Pipe line Ree dy Cr eek Wa llumbilla P ipe line Car pe ntar ia Gas P ipe line Diama ntina P

• wer

Station Other Qld a sse ts Moomba Sydney Pipeline Victor ia n T r ansmission Syste m SE SA Pipe line Ama de us Ga s P ipeline Goldfie lds Gas P ipeline E aste r n Goldfields Pipeline E mu Downs Wind a nd Sola r F ar m P ilbar a P ipeline System Monda r r a Gas Stor age Other WA

• EBITDA increased by 3.0% for East Coast, 22.1% for NT
• Early contributions from recently completed and

commissioned Reedy Creek Wallumbilla Pipeline

• Continued demand for bi-directional services
• Benefit from the US CPI increase on the Wallumbilla

Gladstone Pipeline contract, along with a favourable USD/AUD exchange rate as the majority of contract revenues are in USD

F Y2018 ope r ational summar y – E ne r gy Infr astr uc tur e

• EBITDA from WA assets increased by 1.2%
• Early contributions from the Mt Morgans

Gas Pipeline and the Emu Downs Solar Farm completed during the year

E ast Coast + Nor the r n T e r r itor y We ste r n Austr alia

SLIDE 31

31

20 40 60 80 100 F Y15 F Y16 F Y17 F Y18 A$ m

Note : From FY17 onwards, DPS and the Ethane Pipeline became fully owned

assets and are managed within APA’s Energy Infrastructure segment and therefore no asset management fees earnt.

15 20 25 FY15 FY16 F Y17 F Y18 A$ m Divested & tr ansfer r ed inve stm ents Co ntinuing inve stm ents 10 20 30 40 50 60 70 FY15 FY16 FY17 FY18 A$ m One- off Customer Co ntr ibutions Unde r lying Asset Ma nag ement E BIT DA

Asse t Manage me nt

• Connections continued to grow, as natural gas remains

a fuel of choice for cooking in APA’s network areas

• Customer contribution average increased to ~$12m p.a.

E ne r gy Inve stme nts

• EBITDA from Energy Investments was marginally reduced

Cor por ate c osts

• Slightly increased due to additional costs associated with

the new Part 23 compliance requirements

• Contained despite the significant organic growth cycle

F Y2018 ope r ational summar y – Asse t Manage me nt, E ne r gy Inve stme nts and Cor por ate c osts

E ne r gy Inve stme nts E BIT DA Cor por ate c osts

Note : Historical earnings from EP and DPS in this graph are classified as

Divested & transferred investments.

Asse t Manage me nt E BIT DA

SLIDE 32

32

de bt fac ilitie s

$ million F ac ility amount Dr awn amount T e nor

2015, 2016, 2017 & 2018 Bilateral bank facilities 550 200 2 to 4.6 year facilities maturing between May 2019 to July 2022 2018 Syndicated bank facilities 1,000

• 5 and 5.5 year tranches maturing June and December 2023

2003 US Private placement 96 96 15 year tranche maturing September 2018 2007 US Private placement 516 516 12 and 15 year tranches maturing May 2019 and May 2022 2009 US Private placement 99 99 10 year tranche maturing July 2019 2010 AUD Medium Term Notes 300 300 10 year tranche maturing July 2020 2012 CAD Medium Term Notes 289 289 7.1 year tranche maturing in July 2019 2012 US144a/Reg S Notes 735 735 10 year tranche maturing October 2022 2012 GBP Medium Term Notes 536 536 12 year tranche maturing in November 2024 2015 US144a/Reg S Notes(1) 1,777 1,777 10 and 20 year tranches maturing March 2025 and March 2035 2015 GBP Medium Term Notes(1) 1,140 1,140 15 year tranche maturing March 2030 2015 EUR Medium Term Notes(1) 1,826 1,826 7 and 12 year tranches March 2022 and 2027 2016 AUD Medium Term Notes 200 200 7 year tranche maturing October 2023 2017 US144a/Reg S Notes 1,109 1,109 10.3 year tranche maturing July 2027

T

• tal

10,173 8,823

Total committed debt facilities at 2 July 2018

Note : (1) USD denominated obligations translated to AUD at the prevailing rate at inception (USD144A - AUD/USD=0.7879, EMTN & Sterling - AUD/USD=0.7772)

SLIDE 33

33

r e gulator y update

• Approximately 9.0% of APA’s Energy Infrastructure revenue in FY18 was regulated revenue
• APA’s major regulatory resets over the next few years are as follows:

Note : *Asset will cease to be covered as of 1 July 2019 in accordance with the

National Gas Law and Rules

• Roma Brisbane Pipeline access arrangement review

 New Access Agreement from 1 January 2018  Recognised changes in the pipeline configuration and demand profile through the approval of a bi-directional postage stamp tariff structure  The new tariff is in line with that applying in the previous period

• Victorian Transmission System access arrangement review

 New Access Agreement from 1 January 2018  The Australian Energy Regulator approved APA’s recent significant expansions that enabled more gas flows between Victoria and NSW  Average tariffs are largely unchanged from the previous period

SLIDE 34

34

e c onomic r e gulation of gas pipe line s and ne twor ks

Re gulator

• The Australian Energy Regulator (AER) is responsible for the economic regulation of gas

transmission and distribution networks and enforcing the National Gas Law and National Gas Rules in all jurisdictions except Western Australia

• The Economic Regulation Authority of Western Australia (ERA) is the independent economic

regulator for Western Australia

Ac c e ss ar r ange me nt

• Apply for a term, generally 5 years
• Set out the terms and conditions of third party access, including

― At least one reference service that is commonly sought by customers – for pipelines, this is generally firm forward-haulage services ― A reference (benchmark) tariff for the reference service

Re fe r e nc e tar iff

• Provides a default tariff for customers seeking the reference service but tariffs can also be

negotiated for other services

• Determined with reference to regulated revenue, capacity and volume forecasts

Re gulate d r e ve nue

• Determined using the building block approach to recover efficient costs

― Forecast operating and maintenance costs ― Regulatory asset depreciation and ― Return on value of regulated assets (regulated asset base) based on WACC determination

• WACC based on 60:40 debt equity split

Re gulate d asse t base (RAB)

• Opening RABs have been settled with the regulator; there are no reassessments for approved

RABs

• RABs updated every access arrangement period

― Increased by capital invested into the asset and reduced by regulatory depreciation costs

Re gulator y c ove r age

• The larger distribution networks and some transmission pipelines are price regulation
• Price regulated assets are those which the regulatory authorities have determined, among other

things, demonstrate natural monopoly characteristics and a degree of market power

• Coverage can be revoked
• “Light-handed” regulation, where tariffs are negotiated with users and are

subject to determination by the regulator only where the customer initiates a dispute

SLIDE 35

35

F

• r

fur the r infor mation c ontac t: Je nnife r Blake Gr

• up He ad of Inve stor

Re lations T e l: +61 2 9693 0097 E

• mail: je nnife r

.blake @apa.c om.au

Or visit the APA we bsite at:

www.apa.c om.au