APA GROUP — Annual Report 2007

Aug 28, 2007

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Financial Results Full Year ended 30 June 2007

29 August 2007

Welcome

� FY07 Highlights Acquisition Strategy

• Analysis of Financials

• Operational Update

• Concluding Remarks

Mick McCormack Managing Director

Rick Francis Chief Financial Officer

Stephen Ohl Chief Operating Officer

Mick McCormack

APA Group Presentation � 2

2007 – Capitalising on Opportunities

• A watershed year for APA in terms of growth and diversification of its asset base

• Assets increased from $2.06bn to $4.2bn

• Majority of revenue now evenly sourced from VIC, QLD, WA and NSW

• Employee numbers increased from 45 to 700

• Internalisation of operating and maintenance services related to gas transmission and distribution

• Acquisition opportunities continue to arise from ongoing industry consolidation

• Increasing exposure to complementary assets

• Continued growth in volumes of gas through pipelines

• Raised over $600m in equity capital and negotiated over $2.8bn in new debt facilities

• Increased distribution per security by 16.7% on expanded capital base

• Defended securityholders’ rights against Alinta’s attempt to seize control of APA without offering value to all securityholders

• Substantial litigation costs

• Unproductive diversion of management time

APA Group Presentation � 3

FY07 Income Statement

Full Benefit from Acquisitions to be Realised in FY08

$ million	FY07	FY06	% Change
Revenue*	532.7	379.0	40.5
EBITDA*	296.8	200.4	48.1
NPAT*#	64.5	60.7	6.4
Cash Metrics
Underlying Operating Cash Flow1	157.0	112.2	39.9
Underlying Operating Cash Flow per security	41.4	38.7	6.8
Distribution cents per security	28.0	24.0	16.7

• Before significant items

After significant items – 2007: $56.8 million (2006: $62.6 million)

1 Underlying OCF = Net cash from operations after interest and tax payments, adjusted for significant and other one-off items

APA Group Presentation � 4

Total Assets

Scaling up the Business to Improve Competitiveness and Drive Cost Efficiency

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$bn
5
4.23
4
4
3
3
2.06
1.88
2
1.42 1.43
2
1
1
0
June 03 June 04 June 05 June 06 June 07
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APA Group Presentation � 5

FY Cash Flow & Distribution Growth

Growing Operating Cash Flow to Increase Distributions by at least CPI annually

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$m %
180 100
90
150
136.7 80
70
120 112.2
106.2
60
90.6
90 50
82.3
40
60
30
100.2
20
30 63.8 66.9
52.5 53.0
10
0 0
FY03 FY04 FY05 FY06 FY07
Distributions Operating CF Payout ratio (%)
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APA Group Presentation � 6

Acquisition Strategy

� Recap on APA’s strategy since 2002

• Strategic Objectives

• Asset Valuation

• Track Record on Bidding

APA Group Presentation � 7

Core Growth Strategy Unchanged

“ We remain committed to gas transmission, growing the business organically as well as targeting prudent acquisitions and “greenfields” projects, particularly those bringing gas to south east Australia eg Timor Sea/ PNG/ Northwest Shelf.

“In order to diversify asset and regulatory risk, APA will pursue investment opportunities in complementary industries including natural gas treatment and storage; power generation - and coal seam methane” 2002 Investor Briefing

� 2001 – 2004

acquisition of minority interests in existing pipelines

• 2002

commitment to investing in complementary assets

• 2003 – 2004

participate in first round of industry consolidation

• 2005 – 2007

first investments in complementary assets

• Electricity transmission

• Gas distribution

• Gas processing

• Gas fired power stations

■ Ongoing participate in continuing industry consolidation

APA Group Presentation � 8

Key Drivers of Acquisition Strategy

Diversification

• Strategy : broaden APA’s asset base beyond gas transmission and spread core asset risk geographically

• Leverage existing skills in complementary areas

• Diversify returns

• Provides ongoing growth path

Eastern Gas Grid

• Strategy : develop an integrated Eastern gas grid

• One stop shop for customers and producers

• Superior product creating greater flexibility for shippers

• – Improved diversity for APA on supply/demand shifts

Internalisation

• Strategy : ensure APA has direct operational control over its business

• No fee leakage

• Synergy benefits accrue to APA securityholders, not an external operator

APA Group Presentation � 9

Disciplined Approach to Pricing

• Acquisitions have met or exceeded internal financial hurdles including

• Targeted internal rate of return

• Long term discounted cash flow

• Short/medium term targeted cash yield

• RAB and EBITDA multiples paid by APA within range of recent transactions

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RAB multiples for APA Acquisitions EV/EBITDA multiples for APA Acquisitions 2006-2007
OEAM
Allgas
SEAGas (33.3%)
Allgas
Directlink
GasNet
Directlink
Murraylink
Murraylink
0 3 6 9 12 15 18
0 0.3 0.6 0.9 1.2 1.5 1.8
High/Low RAB multiples Transactions 2003-2007 High/Low Transaction Multiples 2003-2007
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Source of Transaction Multiples: publicly available information & APA estimates APA Group Presentation � 10

Valuation Metrics – Use with Caution

• RAB and EBITDA multiples limited by lack of recognition or measurement of:

• relative risk profile of different assets

• – remaining life of an asset

• integration benefits to acquirer

• For example Allgas and Murraylink have same RAB multiple but are fundamentally different businesses

  • growth profiles

• levels of guaranteed revenue

	Allgas	Murraylink
RAB Multiple	1.49x	1.47x
Asset Life Growth Prospects Guaranteed Floor to Revenue Synergy Benefits Meets Strategic Objectives	Long � x � �	Long x � x �

� EV/EBITDA multiples influenced by many factors including

• degree to which assets are contested in the market

• influence of existing majority owner

• cost of capital and access to funding

• market’s rating of earnings

� Value of an asset to bidding parties depends on their respective:

• cost of capital

• synergy benefits

• strategic fit with long term growth objectives

APA Group Presentation � 11

Track Record in Acquisition Bidding

Year		Successful	Comment
2004	Epic Energy Assets	x	�Outbid by a current owner
	DBNGP	x	�Outbid
	Duke Energy Assets	x	�Suite of assets sold for record price
	CMS	�	�Strongly accretive immediately
2006	Murraylink	�	�Low cost entry to complementary asset class �Very low risk asset �Fixed revenue stream
	GasNet	�	�Major step on Eastern Gas Grid �Revenue synergies not available to other bidders �$30m premium paid on EV of $1bn
	Other	x	�APA viewed gas supply risk as too high
2007	Allgas	�	�First step into gas distribution �A number of bidders within 5%
	Directlink	�	�Complementary to Murraylink �Lower multiple
	Origin Energy Network	�	�Cornerstone stake in Envestra �Major addition to APA in-house capabilities �Reinforces APA footprint across mainland Australia �Enhances development of Eastern Gas Grid
	Basslink	x	�Limited upside, significant downside risk

APA Group Presentation � 12

Strengthened Business Model

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“APA delivers because it has a lean, low-cost business model which maximises returns for securityholders”

APA Group Presentation � 13

Financial Review

• Income Statement

• Operating Cash Flow

• Capital Expenditure

• Earnings Analysis

• Capital Management

• Distributions

APA Group Presentation � 14

FY07 Income Statement

Current Year Impacted by Partial Contributions from Assets Acquired

• GasNet: nine months from October 2006

• Allgas: eight months from November 2006

• Directlink: four months from end-February 2007

• Murraylink: full twelve months (acquired end-March 2006)

Origin Energy Networks acquisition – no contribution in FY07

• SEAGas acquired 29 June 2007

• Balance of OEN acquired 2 July 2007

APA Group Presentation � 15

FY07 Income Statement

Strong Underlying Cash Flow Supports Growing Distributions – FY08 to Reap the Benefits

Y08 to Reap the Benefits
$ million	FY07	FY06	% Change
Revenue*	532.7	379.0	40.5
EBITDA*	296.8	200.4	48.1
EBIT*	227.1	161.6	40.6
Net Interest Expense*	(136.6)	(71.1)	92.1
Tax*	(25.8)	(29.4)	(12.4)
NPAT – recurring*	64.5	60.7	6.4
Non-recurring / significant items	(7.8)	1.9	n/a
Reported NPAT	56.8	62.6	(9.3)
Operating Cash Flow (OCF)	136.7	112.2	21.9
Underlying OCF	157.0	112.2	39.9
Underlying OCF per security (cents)	41.4	38.7	6.8
Distribution per security (cents)	28.0	24.0	16.7

• Before significant items

APA Group Presentation � 16

FY07 Operating Cash Flow

Cash Flows Affected by Transitional Impacts, but Strong Fundamentals

EBITDA (pre-significant items) Non-cash movements Net working capital movements SCC payments Net interest paid Tax refunds/(payments) OCF (pre-significant items) GTD timing difference Acquisition K factor release Underlying OCF Weighted average securities on issue (millions) Underlying OCF per security (cents)	FY07 $m FY06 $m % 296.8 200.4 48.1 (7.2) 4.0 (5.8) (5.9) (13.3) (14.9) (127.0) (72.6) 0.2 1.2 143.7 112.2 28.1 6.9 - 6.4 - 157.0 112.2 39.9 379.6 289.6 41.4 38.7 6.8

APA Group Presentation � 17

FY07 Capital Expenditure

Acquisitions - Expanding the National Footprint

GasNet (net of cash acquired) Murraylink Allgas Directlink (net of cash acquired) SEAGas (equity investment) Settlement of acquisition liabilities Post 30 June 2007: Envestra investment (17.2%) Asset Management business	FY07 FY06 $m $m 409.5 22.5 - 158.1 538.4 - 173.1 - 135.6 - 8.0 45.7 1,264.6 226.3 170.4 - 252.9 - 423.3

• Excludes transaction costs

APA Group Presentation � 18

FY07 Capital Expenditure

Growing the Business

Regulated: - Victoria - Queensland Major Projects: Tipton West gas processing facility - QLD Daandine power station – QLD Mt Isa power station – QLD (under construction) Kogan North - QLD Compressor – WA Mondarra gas storage - WA Bonaparte - NT Other Disposal - Dongara assets Other: Total	FY07 FY06 $m $m 24.9 - 10.9 - 35.8 - 30.5 - 23.3 5.9 13.2 - - 8.0 9.8 10.1 10.7 - 4.6 - 1.6 2.0 - (2.5) 93.7 23.5 9.0 5.7 138.5 29.2

APA Group Presentation � 19

FY07 Analysis of Total Revenue

Acquisitions Drive Growth in Revenue

0 50 100 150 200 250 300 350 400 450 500 550 $m		265.4 271.2	APA Group Presentation�20 265.1 278.8 283.7 15.2 10.0 12.8 95.9 89.3 86.7 0.4 ~~4.0~~ ~~2.1~~ 17.2 ~~3.2~~ 89.2 27.5 FY05 FY06 FY07 Allgas GasNet Electricity Transmission SCP Equity Contribution Gas Transportation Other Tolling Passthrough Revenue Interest & Other Revenue 369.3 379.0 532.7
			27.5
			89.2
			17.2
			~~2.1~~ ~~3.2~~
		22.9 13.5	283.7
			265.1 278.8
		175.7 162.7
			04 ~~4.0~~
		746	95.9 89.3 86.7 .
		11.1 8.2 68.0 .	15.2 10.0 12.8
		FY03 FY04

Year on Year Movement in EBITDA

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$m
300 1.1
290
280
270
62.3
260
250
240
230
12.9
3.4
296.8
220 6.3
2.5
1.9
7.4
210
(3.5) 5.1
200 (7.6)
4.6
190
180
200.4
170
160
150
2006 M SP A GT R B P C GP GGT P GP C o mp M urraylink D irectlink A llgas GasN et C OR P 2007
EB IT D A A ssets EB IT D A
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EBITDA movements are before significant items

APA Group Presentation � 21

FY07 Proforma Results

Full Year Revenue and EBITDA

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$m $m
532.7 589.5 296.8 338.8
600 350
44.3
24.0
550
27.5 300
500 12.9
121.3
89.2 86.8
450
62.3
250
4.1 12.0
400
3.4 9.8
350
200
300
150
250
411.9 411.9
200
218.2 218.2
100
150
100
50
50
0 0
FY07 REVENUE PROFORMA REVENUE FY07 EBITDA PROFORMA EBITDA
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Existing Business Directlink GasNet Allgas Existing Business Directlink GasNet Allgas

APA Group Presentation � 22

Revenue & Asset Charts

Diversification Underpins Stability of Income and Strengthens Asset Base

REVENUE 2001 FY

REVENUE 2007 FY

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2%
16%
24%
27%
NSW 3% NSW
NT NT
QLD QLD
2% WA WA
69% VIC 29% VIC
28%
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ASSET VALUE 2001 FY

ASSET VALUE 2007 FY

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3%
25%
NSW
NT
QLD
1%
WA
VIC
71%
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21%
29%
NSW
NT
QLD
WA
VIC
31%
19%
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Excludes any impact from Origin Networks acquisition in June/July 2007

APA Group Presentation � 23

FY07 Significant Items

SCC repair and investigative work FY2007 Alinta related costs SCC repair and investigative work Revaluation gain – GasNet hedges Total FY2006 Tariff dispute resolution Tax consolidation benefit – APA Total	Pre-Tax $m Tax $m After Tax $m (7.0) 2.1 (4.9) (5.3) 1.6 (3.7) 1.2 (0.4) 0.8
	(11.1) 3.3 (7.8)
	(11.3) 3.4 (7.9) 3.3 (1.0) 2.3 0 7.5 7.5
	(8.0) 9.9 1.9

APA Group Presentation � 24

FY07 Capital Management

Strong Balance Sheet

• Gearing 69.0% (covenant 75.0%)

• Post-OEN 72.4%

• ICR – 2.0x for FY07

• Complied with all covenants during period

• Committed, undrawn facilities $1,120m (30 June 2007)

• Post-OEN $670m

Debt Portfolio

• Refinancing of all bridges completed in 2H FY07

• May 07 – USPP A$811m – 10, 12 and 15 year terms (100% hedged for duration)

• June 07 – syndicated debt facility $2.0bn; 50/50 split between 3 and 5 year terms

• No current debt refinancing requirements until FY09

• Hedged / fixed 84.2% – 50% hedged out to FY15

• Post-OEN 71.6%

• Average interest rate 7.1% (at 30 June 2007)

APA Group Presentation � 25

FY07 Capital Management

Substantial Investor Support during FY07

• Successfully raised $610m of equity

• Institutional placement @ $4.55 ($190m)

• Security purchase plan @ $4.50 ($40m)

• Renounceable rights issue @ $3.75 ($356m)

• Continued operation of DRP ($24m)

• Implemented stapled structure (APTIT) – 3.5c tax deferred component in FY07 distributions (12.5%)

• 431,701,000 securities on issue

• Weighted average 379,551,000 (2006: 289,614,000)

APA Group Presentation � 26

Increasing Distributions by at least CPI

FY07 Annual Distribution up 16.7%

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cents
0% 4.7% 6.7% 16.7%
32
Q4
28
3.5 2.0c
24
20
6.4 3.0c
16
24.5
12 24.0 2.0c
22.5
8 15.1
4 Distribution – Q4
0 APTIT – Capital
FY04 FY05 FY06 FY07 APTIT – income,
unfranked
Tax deferred distribution Income distribution APT – income,
unfranked
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• DRP continues in operation at 2.5% discount

• FY07 payout ratio 72.3% (on underlying OCF)

• Distributions to move from quarterly to half yearly in FY08

APA Group Presentation � 27

Operational Update

• Gas Transmission

• Gas Distribution

• Gas Facilities

• Gas Fired Generation

• Electricity Transmission

APA Group Presentation � 28

APA Operations Structure

BUSINESS AREA STATE	QLD	NSW	VIC	SA	WA	NT
APA Gas Transmission	�	�	�	�	�	�
APA Gas Distribution	�					�
APA Gas Facilities	�		�	�	�
APA Gas Fired Generation	�
APA Electricity Transmission	�
APA Asset Management (Envestra Assets)	�	�	�	�		�

APA Group Presentation � 29

Gas Transmission

Acquisitions

• GasNet

• Main pipeline asset is the 1,935 km Victorian Transmission System that connects with the Moomba to Sydney Pipeline at Culcairn.

• Over 230PJ of gas transported in Victoria.

• The 488 km Telfer-Nifty pipeline system in WA that transports gas from Port Hedland to these minesites principally for power generation use.

• Origin Energy

• A one third interest in the 680 km SEAGas pipeline and laterals that transport natural gas from the Otway Basin region of Victoria to major power stations and other users in SA.

• The 88 km Murrin Murrin pipeline in WA that branches off the Goldfields Gas Pipeline.

• The 45 km SESA pipeline that branches off the SEAGas pipeline in Victoria to users in south-east SA.

APA Group Presentation � 30

Gas Transmission

Operations

• Queensland

• Revenue and throughput up on both Roma to Brisbane and Carpentaria Gas Pipelines

• • Volumes driven by Coal Seam Gas and Gas Fired Power Generation.

• New South Wales

• Agreement reached with AGL on future contracts including capacity reservation to 31 December 2016.

• • Stress Corrosion Cracking (SCC) pigging and repair program continuing.

• Victoria

• Added 104 employees to the APA Group.

• • Throughput up due to cooler weather and Gas Fired Power Generation.

• Western Australia

• DBP Interconnect and Paraburdoo Compressor Station upgrade completed on the Goldfields Gas Pipeline (GGP).

• • The added GGP capacity fully contracted.

• Northern Territory

• Throughput up to meet increased electricity demand.

APA Group Presentation � 31

Gas Transmission

Developments

� National

• Terminate PMA and add 300 transmission employees to APA Group.

� Queensland

• Meter station and lateral constructed off Mt Isa lateral to service X41 Gas Fired Power Station.

� New South Wales

• Culcairn compressor station under development to meet NewGen contract.

• Investigating a Wallumbilla to Bulla Park interconnect.

� Victoria

• Brooklyn-Lara looping and compressor station upgrades underway.

• Access Arrangement for 2007-2012 submitted and includes over $300 million proposed capex.

� Western Australia

• Engineering underway for further new compression on the Goldfields Gas Pipeline subject to contracting additional demand.

� Northern Territory

• Bonaparte Gas Pipeline project approvals substantially complete and procurement and construction contracting underway.

APA Group Presentation � 32

Gas Distribution

Acquisitions

� Allgas Gas Distribution Business

• Over 2,300 km of distribution networks that services 65,000 gas users in the high growth areas south of the Brisbane River to Northern NSW, Toowoomba and Oakey.

• Includes 65 employees who manage and operate the business.

� Origin Energy Asset Management

• A 17.2% interest in Envestra which owns 19,100 kms of distribution networks that service over 970,000 gas users in South Australia, Victoria, Queensland and the Northern Territory.

• Employed 488 staff who principally provide all services for the Envestra assets under two Operating and Management Agreements.

APA Group Presentation � 33

Gas Distribution

Operations

� APA Queensland Gas Distribution

• Complete Full Retail Contestability (FRC) system scoped, contracted, developed and commissioned in 7 months for 1 July 2007 FRC start date.

• Tendered and awarded contracts to establish a panel of contractors to provide connections, rehabilitation and mains extension services for the next three years.

� APA Asset Management

• Establishment of APA Group systems and processes well advanced.

• Origin Energy providing support services under a Transitional Services Agreement.

• Principle focus is to ensure that the level of service provision to Envestra is maintained in accordance with the O&M Agreements.

APA Group Presentation � 34

Gas Distribution

Developments

� APA Queensland Gas Distribution

• Expansion program underway to achieve Regulated Asset Base growth from $303 million to $447 million for the period 2006 to 2011.

• Queensland Government announced its Climate Smart 2050 policy which will further encourage the use of gas for domestic hot water systems.

• Working with industry stakeholders to promote increased gas utilisation throughout southeast Queensland.

� APA Asset Management

• A much increased forward capital expenditure program has commenced to meet Envestra growth and Access Arrangement outcomes.

• Strong future focus on working with Envestra to provide the best service while rationalising systems and processes and reducing duplication.

APA Group Presentation � 35

Gas Facilities

Acquisitions

• GasNet

• Included the 12,000 tonne Dandenong Liquefied Natural Gas (LNG) storage, vapourisation and truck loading facility that provides gas supply peak shaving capacity and LNG for trucking to endusers.

• Origin Energy

• Ownership and operation of hospital cogeneration facilities at Redcliffe in Queensland and Geelong in Victoria and operation of Toowoomba facilities.

• BOOT contracts for six Compressed Natural Gas (CNG) bus refueling depots with the Perth Transit Authority

• Ownership and operation of two CNG bus refueling depots in South Australia.

• Ownership and operation of four LNG forklift refueling depots in Victoria and ten in South Australia.

APA Group Presentation � 36

Gas Facilities

Operations

• Queensland

• Kogan North CSG processing plant throughput continuing to increase.

• Tipton West CSG processing plant commenced full commercial operation in March 2007.

• Victoria

• • LNG demand increased both for peak shaving use and trucking.

• Western Australia

• Additional Gas Storage contracts entered into subject to storage capacity being available from the Mondarra upgrade project.

Developments

• Victoria

• LNG Storage agreements to be negotiated.

• LNG truck loading business to be further developed.

APA Group Presentation � 37

Gas Fired Generation

Operations

� Queensland

• Daandine power station first unit commissioned in December 2006 and fully operational by April 2007.

Developments

� Queensland

• Mt Isa X41 power station under construction and due to be fully operational 1 November 2007.

• Continue to work with a variety of companies on a range of gas fired power station developments consistent with our strategy.

APA Group Presentation � 38

Electricity Transmission

Acquisitions

� Directlink

• High Voltage Direct Current Interconnect acquisition completed 28 February 2007.

• One of two links between the NSW and Queensland electricity systems and provides low risk, fixed revenues to 2015.

Operations

� Murraylink and Directlink

• Tendered and awarded one contract for the maintenance of both Interconnects.

• Country Energy providing Directlink services under a Transitional Services Agreement.

APA Group Presentation � 39

Concluding Remarks

• Alinta

• Future Gas Supply

• Priorities and Guidance for FY08

• Board Changes

• Summary

APA Group Presentation � 40

Alinta Issues Resolved

• On 29 June Alinta and APA announced the conclusion of all operating and equity relationships and termination of legal proceedings

• One-off expenses incurred of $7.0 million

• All rights and assets acquired from Alinta for $210m

• Completes internal management capability and complements purchase of OEAM and GasNet businesses/capability

• The Alinta/Babcock & Brown/Singapore Power scheme is being implemented on 31 August including:

• • In specie distribution of Alinta’s 35% interest in APA to Alinta shareholders

• Sale of certain small parcels via bookbuild

• Allocation of securities to occur on, or shortly after, 31 August

• Immediate increase in APA’s free float and weighted market capitalisation

• Continued support from long term securityholder Petronas (16.7%)

• Possible inclusion in ASX100 index

• Possible short term security price instability as former Alinta shareholders may seek to exit their newfound holdings in APA

APA Group Presentation � 41

Future Gas Supply and Carbon Trading

• Gas supply to eastern Australia remains an important issue for the next decade

� Northern Gas:

• PNG, Timor Sea and North-West Shelf remain long-term options

• CSG is a significant and developing supply option for eastern Australia in the medium term

� Eastern Gas Grid

• Development of Ballera to Moomba interconnect a key step forward with Moomba to Sydney Pipeline a direct beneficiary via increased throughput

• Greater capacity required to meet expected demand from base load power stations

• Carbon trading will increase competitiveness of gas-fired power generation over coal-fired

• State and Federal governments reviewing economically viable greener power generation alternatives

• Gas as a transition fuel for at least the next 25 years

APA Group Presentation � 42

Priorities and Guidance for FY08

• Integration of new businesses into the Group

• Pursue new opportunities if they fit with our long term goals and satisfy strict return criteria

• Invest in complementary assets that will contribute to increasing volumes of gas through our pipelines

• Continue organic growth and green and brownfields opportunities

• Capital management focus on maintaining gearing around 65-70%

• Guidance– confirm market consensus of EBITDA of $380-$390 million

• distribution growth, by at least CPI

APA Group Presentation � 43

Board Changes

• Mr George Ratilal appointed as an Independent Non-Executive Director effective 31 July 2007

• Petronas increased its holding in APA from 14.1% to 16.7% on 20 August 2007

• Second representative for Petronas, a long standing significant securityholder in APA

• Mr George Bennett announced on 28 August 2007 his intention to retire as Director and Chairman of the Australian Pipeline Limited Board, following the APL Annual General Meeting on 30 October 2007

• Mr Leonard Bleasel AM appointed to the Board as an Independent Non-Executive Director and Chairman Elect on 28 August 2007

• Appointment as Chairman at the conclusion of the APA Group Annual Meeting

APA Group Presentation � 44

Summary

• A watershed year for APA in achieving significant growth and diversification of its asset base

• Industry consolidation has, and will continue to, generate attractive acquisition opportunities

• Maintained a disciplined approach to bidding for acquisitions with strict adherence to internal financial hurdles including

• • Target IRR

• Long term discounted cash flows

• Ability of asset to meet short/medium term targeted cash yield

• Strong support from investors with over $600m raised from equity markets and $2.8bn in new debt facilities negotiated

• Increased distribution by 16.7% on a significantly expanded capital base

• 40% increase in underlying operating cash flow underpins strategy to increase distributions annually by at least CPI

• Settlement of all outstanding issues with Alinta

APA Group Presentation � 45

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APA Group Presentation � 46
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We Deliver Energy

www.pipelinetrust.com.au

APA Group Presentation � 47

Disclaimer

The information contained in this presentation is given without any liability whatsoever to Australian Pipeline Trust or APT Investment Trust or any of its related entities (collectively “APA Group”) or their respective directors or officers, and is not intended to constitute legal, tax or accounting advice or opinion. No representation or warranty, expressed or implied, is made as to the accuracy, completeness or thoroughness of the content of the information. The recipient should consult with its own legal, tax or accounting advisers as to the accuracy and application of the information contained herein and should conduct its own due diligence and other enquiries in relation to such information.

The information in this presentation has not been independently verified by APA Group. APA Group disclaims any responsibility for any errors or omissions in such information, including the financial calculations, projections and forecasts set forth herein. No representation or warranty is made by or on behalf of APA Group that any projection, forecast, calculation, forward-looking statement, assumption or estimate contained in this presentation should or will be achieved.

Please note that, in providing this presentation, APA Group has not considered the objectives, financial position or needs of the recipient. The recipient should obtain and rely on its own professional advice from its tax, legal, accounting and other professional advisers in respect of the addressee’s objectives, financial position or needs.

This presentation does not carry any right of publication. This presentation is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by APA Group. Neither this presentation nor any of its contents may be reproduced or used for any other purpose without the prior written consent of APA Group.

APA Group Presentation � 48

Appendix 1

FY07 Analysis of Revenue by Asset

Gas Transportation Passthrough Revenue Electricity Transmission Complementary Assets Other Revenue

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$m
110 0.1
100 0.2
90
5.2
80
0.1
70
82.8 95.5
60
50 99.8
0.1 92.3
82.4 0.2 82.8
40
75.4 0.1
30
0.4
42.8
20 0.6
37.2 37.4
31.9 0.2
2.9
0.6 27.0
2.8
10 21.7
15.2 13.2 13.0 13.0 1.2
1.2
3.2 4.0
0
2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007
MSP AGT RBP CGP GGT Other Murraylink Directlink Comp Allgas GasNet
WA Assets
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APA Group Presentation � 49

Appendix 2

FY07 Key Financial Ratios

Sound Fundamentals

	FY07	FY06	% Change
Underlying operating cash flow (cps)	41.4	38.7	6.8%
Weighted average units on issue (m)	379.6m	289.6m	31.1%
Payout ratio (vs underlying OCF)	72.3%	59.7%	+12.6%
EPS (cps)
-recurring	17.0c	20.9c	(18.8)%
-including significant items	15.0c	21.6c	(30.8)%
Interest cover ratio (times)	2.0x	2.3x	-0.3x
Average interest rate at YE (%)	7.06	6.85	+0.21%
Gearing / capitalisation ratio (%)	69.0	67.9	+1.1
Total assets	$4.23bn	$2.06bn	105%
Net tangible asset backing per unit	$1.99	$2.09	-4.8%

APA Group Presentation � 50