APA GROUP — Annual Report 2011

Sep 4, 2011

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ASX RELEASE

5 September 2011

The Manager

Company Announcements Office Australian Securities Exchange 4[th] Floor, 20 Bridge Street Sydney NSW 2000

Electronic Lodgement

Dear Sir or Madam

Company Announcement

I attach the following announcement for release to the market:

• Presentation – APA investor information and FY2011 result highlights

Yours sincerely

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Mark Knapman Company Secretary

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APA investor information and FY2011 result highlights

September 2011

About APA Group

APA is Australia’s largest natural gas infrastructure business

 Energy Infrastructure:

• Own and operate gas pipelines and interconnected gas storage facilities across Australia

• Own and operate gas distribution networks in east Australia

• Own and operate a wind farm

 Asset Management:

Australian gas transmission pipelines owners by length (km)

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Prime
1,105 [(1)]
Infrastructure
DUET 1,480 [(1)]
Singapore
1,425
Power
Epic Energy [(2)] 2,340
SEA 12,800
APA APA ENV EII
Gas 10,890 [(1)]
2,000 4,000 6,000 8,000 10,000 12,000 14,000
Pipeline length (km)
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(1) Proportional ownership

• (2) APA has a 19.4% interest in HDF, owner of Epic Energy

• Provision of asset management, operating and maintenance services

• Services provided to the majority of APA’s energy investments

 Energy Investments:

– Minority interests in energy infrastructure investments, including Envestra, Energy Infrastructure Investments and Hastings Diversified Utilities Fund

APA (at 1 September 2011) Date listed 13 June 2000 ASX symbol APA AUD 2.58 bn Market capitalisation GBP 1.71bn; EUR 1.94 bn Rank S&P/ASX 100 69[th] Securities on issue 634,116,029 Fiscal year end 30 June

 2

APA, September 2011

APA well positioned in a growing industry

 Unrivalled gas asset footprint

• Largest transporter of natural gas across Australia[(1)]

• Stable and secure cash flow

• Regulated and contracted revenue

• Attractive growth opportunities

• Enhancing capacity in APA’s portfolio to meet increasing gas demand

• Integrated portfolio of assets

• Providing revenue and operating synergies

• Internally managed and operated business

• Highly skilled and experienced workforce

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• (1) APA’s 12,800 km of pipelines represents 65% of Australia’s gas transmission pipelines

APA’s national portfolio connects major gas sources to major markets

 3

APA, September 2011

Strategy for sustainable growth and security

Continue to maximise value for securityholders

• Enhancing APA’s portfolio of gas infrastructure assets in Australia’s growing energy market

• Abundant and growing gas reserves

• Increasing demand for natural gas, particularly for electricity generation

• Capturing revenue and operational synergies from APA’s significant asset base

• Facilitating the development of gas related projects that enhance APA’s infrastructure portfolio

• Pursuing opportunities that leverage APA’s knowledge and skills base

• Strengthening financial capability

Secure long‐term cash flow underpinned by contractual or

regulatory arrangements

 4

APA, September 2011

Stable and secure revenue

FY11 Revenue Split

• More than 95% of APA’s revenue is derived from either price regulated or contracted assets

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Other 1%
Subject to price
Contracted 49% Regulated regulation 50%
revenue
Contracted
revenue
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• Price regulated assets

• Tariffs on core services are set by regulation

• Retain ability to contract for services outside of the regulatory framework

• Staggered reset dates for APA’s regulated assets – access arrangements are generally set every 5 years

	Regulated Assets	APA’s Contracted Assets
Term	Perpetuity	Contract term In excess of 10 years
Counterparty credit	Broad population	For APA’s 4 major contracted assets, 85% of the contracted capacity is with investment grade counterparties
Volume risk	Assets exhibit little volume risk	≥ 80% of revenue is capacity based (ie ‘take or pay’)
Competition	Monopoly by definition	Some degree of competition

• Tariffs commercially negotiated for all other pipelines, new capacity on most pipelines and gas storage

• Contract terms are often for periods of in excess of 5 years, and APA’s current average contract length is in excess of 10 years

• Contracts structured so that the majority of revenue is ‘take or pay’ and therefore relatively unaffected by volume variability

 5

APA, September 2011

Developing profitable growth opportunities

Growth capital expenditure

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Developing opportunities that
enhance the value of APA’s
energy infrastructure portfolio
Emu Downs
Further expansion of APA’s
wind farm
pipelines to meet growing demand
acquisition
for gas transportation and storage
services
Amadeus
Gas Pipeline
acquisition
Young Wagga lateral looping
Mondarra Gas Storage
Roma Brisbane Pipeline lateral Facility expansion
Central Ranges
Berwyndale Wallumbilla
Pipeline
Pipeline acquisition
acquisition
Mondarra Gas Storage Facility – initial works
Roma Brisbane
Carpentaria Gas Pipeline expansion Pipeline expansion
Goldfields Gas Pipeline expansion
Moomba Sydney Pipeline expansion – 5‐year program
APA Gas Network Queensland – expansion into new suburbs and housing development areas
Victorian Transmission System expansion – Brooklyn Lara looping – northern augmentation – Sunbury looping
FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 onwards
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$900 million of asset portfolio expansions over the last four years

 6

APA, September 2011

Maximising value for securityholders

Operating cash flow

 Four years of organic growth

• Operating cash flow CAGR of 17.8%[(1)]

• EBITDA CAGR of 13.5%[(1)]

• Total securityholder return of 46%

Total securityholder return

(4 financial years from 30 June 2007)

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150 APA total securityholder returns
S&P/ASX 200 accumulation index
Utilities accumulation index
100
50
0
Jun‐07 Jun‐08 Jun‐09 Jun‐10 Jun‐11
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Indexed to 100 from 30 June 2007 to 30 June 2011 Source: APA based on IRESS data

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290
300
250
200
150
100
50
0
2008 2009 2010 2011
EBITDA
492
500
400
300
200
100
0
2008 2009 2010 2011
$ million
$ million
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(1) Compound annual growth rate (CAGR) calculated from 2007 base year to 2011

 7

APA, September 2011

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FY2011 result highlights

 8

Solid, consistent result

	2011 $ million	2010 $ million	Change
Total revenue excluding pass‐through(1)	720.3	659.5	9.2 %
Total revenue	1,102.0	989.5	11.4 %
EBITDA(2)	492.1	460.0	7.0 %
EBIT	391.8	368.5	6.3 %
Net interest expense	(247.1)	(229.4)	(7.7%)
Tax	(35.9)	(38.7)	7.3 %
Net profit(3)	108.5	100.4	8.1 %
Operating cash flow	290.0	267.8	8.3 %
Operating cash flow per security (cents)	52.6	51.9	1.4 %
Distribution per security (cents)	34.4	32.75	5.0 %
Distributionpayout ratio	65.7%	64.4%

(1) Pass‐through revenue is revenue on which no margin is earned

• (2) EBITDA includes significant items pre tax of $2.5 million, made up of APA’s share of EII2 investment allowance concession benefit ($9.8 million), profit on the sale of APA’s investment in CAMS ($1.7 million), offset by transaction costs of the Emu Downs wind farm acquisition ($9.0 million)

• (3) Operating profit after tax and minorities, including loss from significant items after related income tax of $0.4 million

 9

APA, September 2011

Strategic and operational highlights

Expanding APA’s energy infrastructure and investments

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Amadeus Gas Pipeline Acquired (buy‐out of the residual balance of the lease)

Facilitating the development of gas‐fired power generation in Mt Isa

Roma Brisbane Pipeline Completed lateral to industrial customer Commenced major expansion project

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Mondarra Gas Storage Facility Completed initial design and assessment work Commenced next stage of expansion

APA Gas Network Continued expansion into new housing areas

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Moomba Sydney Pipeline Continued mainline capacity expansion program Completed compressor reconfiguration

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Emu Downs

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Acquired wind farm and development site in support of gas infrastructure

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SEA Gas Pipeline ‐ Increased to 50% interest

Completed Young Wagga looping project

Envestra ‐ Increased to 33.0% interest

APA energy infrastructure APA investments

Victorian Transmission System Completed northern section augmentation

HDF ‐ Increased to 19.4% interest

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EII2 ‐ Completion of North Brown Hill wind farm (20.2% equity contribution)

Other natural gas pipelines

Commenced ring main expansion

$500 million of growth capital expenditure and investments in FY2011

 10

APA, September 2011

Strategic and operational highlights

Secure revenue and operations, strong balance sheet

• Long term revenue agreements with highly credit‐worthy parties for expansion and acquisitions

• Four new contracts with average term of around 20 years

• Successful debt refinancing and equity raising to fund growth

– All debt maturing in 2011 repaid or refinanced

• $352 million equity raised

• Internal operations providing skills and resources

• Repair and remediate flood damaged assets

• Involved in all expansion projects

 11

APA, September 2011

Strategic and operational highlights

Creating value by maintaining or increasing earnings

 Developing total energy solutions for customers

• Using scale and industry expertise to provide customised services across assets

• Proposed gas fired power station for Mt Isa would provide cost effective energy solution (utilising the Carpentaria Gas Pipeline)

• Emu Downs wind farm and development site provides the potential for supporting gas‐fired generation (utilising the Parmelia Gas Pipeline and Mondarra Gas Storage Facility)

 Continued program of operational excellence

• Improving operations and maintenance services, reducing capital costs and long term operational costs

• Investing in people and systems to retain and further develop internal expertise and industry know‐how

 12

APA, September 2011

EBITDA by business segment

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|||||||
|---|---|---|---|---|---|
|2011|2010|EBITDA split by segment|
|$ million|$ million|Change|
|Energy Infrastructure|Energy|
|Investments|
|Queensland|106.8|103.3|3.4 %|Asset|5.5%|
|Management|
|New South Wales|101.3|96.8|4.6 %|
|7.9%|
|Victoria & South Australia|115.9|105.7|9.6 %|
|Qld|
|21.8%|
|Western Australia & Northern Territory|99.8|102.7|(2.9 %)|
|Energy Infrastructure total|423.8|408.6|3.7 %|WA & NT|
|20.4%|
|NSW|
|Asset Management|38.7|32.3|19.9 %|
|20.7%|
|Vic & SA|
|Energy Investments|27.1|19.1|42.1%|
|23.7%|
|Total segment EBITDA|489.6|460.0|6.4 %|
|‐|
|Significant items|2.5|Energy|
|Infrastructure|
|Total EBITDA|492.1|460.0|7.0%|
|86.6%|

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APA’s portfolio diversity provides stability

 13

APA, September 2011

Fully covered distributions

2011 distribution in line with guidance

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60
52.6
51.9
48.2
50
42.7
39.7
40
30 34.4
32.75
31.0
29.5
28.0
20
10
0
2007 2008 2009 2010 2011
Operating cash flow per security
Distribution per security
cents per security
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2011 distributions payout ratio[(1)] of 65.7% (2010: 64.4%)

(1) Distribution payout ratio:

total distribution payments as a percentage of operating cash flow

 14

APA, September 2011

Capital expenditure[(1)] and funding

	2011
	$ million
Growth capital expenditure
Regulated
Victoria Transmission System	33.4
APA Gas Networks(Qld)	16.1
Major Projects
Queensland expansion	19.6
New South Wales expansion	34.3
Western Australia expansion	39.8
Other	12.2
Acquisitions
Energy Infrastructure Energyinvestments	228.8 113.9
Total growth capex	498.0
Stay in business capex	18.0
Total	516.0

	2011 $ million
Funds Operating cash flow Less distributions, SIB capex, debt and security issue costs, and cash retained Cash	290 (227) 63 63 12%
DRP Institutional placement(2) New equity	52 300 352 352 71%
New debt	8317%
	498

• (1) Capital expenditure represents cash payments as disclosed in the cash flow statement for FY2011

• (2) Institutional placement further supports 2012 ongoing growth capex

 15

APA, September 2011

Prudent capital management

• Cash and committed undrawn facilities of $320 million at 30 June 2011

• Reduced debt headroom by cancelling $412 million undrawn syndicated bank facilities

	.	2011 metrics	2011	2010
		Gearing(1) at 30 June	66.2 %	69.8 %
		Interest cover ratio at 30 June	2.03 times	2.11 times
		Average interest rate applying to drawn debt	7.47 %	7.52 %
		Interest rate exposure fixed or hedged	73.5 %	78.7 %

• $352 million equity raised through the Distribution Reinvestment Plan and institutional placement

• $525 million of new facilities (including 10 year AMTN) put in place as part of 2011 refinancing and funding process

• APA funding efficiently and cost effectively, even in current volatile markets

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

 16

APA, September 2011

Capital management strategy

 Managing balance sheet to maintain minimum investment grade credit rating metrics

• Standard & Poor’s BBB; Moody’s Baa2

• Refinancing program focused on extending debt maturity, diversifying funding sources and reducing borrowing costs

• Next refinancing obligation in June 2012

• AMTN and EMTN programs in place, and preparations advanced for a possible debt offering in another major market

• Optionality available in volatile markets

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FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25

 17

APA, September 2011

FY2012 guidance

• EBITDA – expected within a range of $530 million to $540 million

• Net interest cost – expected within a range of $260 million to $265 million

• Distribution – at least equal to FY2011 total distributions per security

APA ‐ developing attractive growth projects and enhancing its position in the fast‐growing energy infrastructure industry

 18

APA, September 2011

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Drivers underpinning APA’s long term growth

 19

Opportunities in the energy landscape

Growth catalysts

Carbon

reduction policy

• Carbon reducing measures increase price competitiveness of natural gas

  • Natural gas produces 30 to 50 per cent of the carbon emissions produced by current coal technologies in generating electricity

  • New electricity demand to be met by gas‐fired generation and renewables

• Renewable energy targets

  • Gas fired generation supporting intermittent renewable generation, such as wind and solar

• Gas  Further discoveries of gas, and improved technologies to extract coal seam developments gas, tight gas and shale gas

developments

• Additional infrastructure required to move new gas to markets

 Supply security Measures to minimise gas supply interruptions

• Development of gas storage and interconnected pipeline grid

Retailer activity

• Increasing diversity of customer base

• Services to optimise customers’ supply and demand portfolios

• Gas storage and flexible service options

Investment in gas infrastructure imperative to deliver policy and market outcomes

 20

APA, September 2011

Abundant east coast gas supply

East Australia proven and probable gas reserves (PJ)	East Australia proven and probable gas reserves (PJ)	East Australia proven and probable gas reserves (PJ)
	End 2000	Mid 2011
Vic (Gippsland, Bass, Otway)	5,907	5,778
SA (Cooper)	3,435	1,373
Qld (Bowen/Surat)	108	183
Qld coal seam gas	0	34,986
NSW coal seam gas	0	2,910
TOTAL	9,450	45,230

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End 2000
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108
3,435 PJ PJ
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• In 11 years east Australia gas reserves have more than quadrupled

 Areas of growth

• Queensland/New South Wales CSG reserves

• Potential development of Cooper Basin tight gas and shale gas

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32
PJ 5,875 PJ
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• Conventional gas in the Gippsland and Otway basins

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 21

APA, September 2011

Electricity generation driving gas demand

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• (1) ABARE, “Australian energy projections to 2029‐30”, March 2010

 Growth in gas volumes[(1)]

• Average annual growth rate of 3.4% pa over the next 20 years (compared with 1.4% for primary energy)

• 1,240 PJ in 2007‐08, doubling to 2,570 PJ in 2029‐30

 Factors influencing gas demand increase

• Investments in new gas‐fired electricity generation

• Mining sector (gas mainly used for electricity generation)

• Government policies supporting gas uptake as relatively clean energy source

• Population growth of 1.3% pa and GDP growth of 2.9% pa

 Growth in gas‐fired electricity generation[(1)]

• Average growth rate of 5% pa

• Share of total generation: 19% in 2007‐08 increasing to 37% in 2029–30.

APA infrastructure is ideally positioned to participate in this growth through the sale of transport, load shaping and storage services

 22

APA, September 2011

Good reasons for gas‐fired generation

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 Reduced carbon emissions

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• Produces 30 to 50 per cent of the emissions produced by current coal technologies in generating electricity

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 Quick start generation

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• Suitable for managing peak demand

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• Provides ‘natural hedge’ for electricity retailers

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• Provides back‐up power for intermittent wind generation

Capital cost ‐ electricity generation

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6,000
5,000
4,000
3,000
2,000
1,000
0
Gas Gas SC SC USC USC IGCC USC USC Nuclear
CCGT OCGT black brown black brown CCS CCS
coal coal coal coal black brown
coal coal
$/kW (2009$)
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 Fuel availability

• Relatively cheap fuel source

• Abundant indigenous gas supply

 Mature technology, competitive capital cost

• Proven performance

• Lower capital cost and construction lead time

Natural gas ‐ the optimum transition fuel

Source: ACIL Tasman, "Fuel resource, new entry and generation costs in the NEM”, April 2009

for lower carbon emissions

 23

APA, September 2011

A well positioned portfolio

 APA infrastructure benefit

– Incrementally expand pipeline capacity

• Deliver gas from multiple sources

• Supply security

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Generation (MW)		Eastern market	WA & NT market
Gas generation
Existing ‐ network		8,446	4,122
Existing ‐ non network		333	1,495
Under construction/ planned		4,597	1,248
Proposed		14,622	528
Wind generation
Existing ‐ network		493	191
Existing ‐ non network		998	‐
Under construction/ planned/proposed		10,644	647

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(1)
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Source: APA data; ESAA, “Electricity Gas Australia 2010 Report”

 24

APA, September 2011

APA’s storage capability

Current storage capability and expansion opportunities

 Mondarra Gas Storage Facility (Western Australia)

• Underground gas storage (depleted gas reservoir) connected to Parmelia Gas Pipeline (APA) and Dampier Bunbury Pipeline

• Capacity expansion project, increasing commercial storage capacity to 15 PJ and withdrawal rates above 120 TJ/d – due for completion 2013

• Foundation customer – Verve Energy (GOC)

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 LNG storage facility (Victoria)

• Originally designed for system security

• Further development opportunities

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 Linepack (pipeline) storage

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• Well suited to peaking power stations

• Various pipeline expansion projects commenced or in planning stage

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 25

APA, September 2011

Discretionary capital expenditure

• Growth capex enables APA to leverage additional value from its existing assets

• APA maintains flexibility in relation to the amount and timing of larger growth capex projects

• All growth capex is underpinned by regulatory framework or long term contractual arrangements

• APA has a low level of stay‐in‐business capex which is required annually – up to $20 million per annum

• Bulk of the assets are underground and require a minimal level of maintenance capex

• APA controls the timing of non‐critical capital expenditure

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APA’s infrastructure is underground and requires minimal maintenance capex

 26

APA, September 2011

Summary ‐ delivering growth, security and value

• APA’s energy infrastructure portfolio is well positioned in the Australian market

• Connected to all major gas sources and gas markets

• Enhancing our position in a growing market

• Expanding our energy infrastructure portfolio across Australia in line with increasing demand for gas and energy

 Secure operations and earnings

• Revenue underpinned by long term contracts or regulatory arrangements

• Internal capability managing and operating assets and investments and delivering on projects

• Balance sheet strength to fund growth sustainably

 Creating value for the long term

• Preserving or increasing the value of APA’s energy infrastructure portfolio through strategic development and acquisition of related projects

• Developing responsive energy infrastructure and service solutions to meet the requirements of our customers in a dynamic energy market

 27

APA, September 2011

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Supplementary information

 28

APA asset and investment portfolio

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 29

APA, September 2011

Financials

Total committed debt facilities at 30 June 2011

		Facility
	Facility	amount(1)	Tenor
	2009 Bilateral borrowing(2)	$150 million	August 2014
	2011 Bilateral borrowings(3)	$225 million	July 2014
	2007 Syndicated facility(2)	$900 million	June 2012
	2009 Syndicated facility(4)	$618 million	2 and 4 year tranches maturing July 2011 and July 2013
	2003 US private placement(5)	$394 million	10, 12 and 15 year tranches maturing Sept 2013, 2015 and 2018
	2007 US private placement	$811 million	10, 12 and 15 year tranches maturing May 2017, 2019 and 2022
	2009 US private placement	$185 million	7 and 10 year tranches maturing July 2016 and 2019
	2010 Medium Term Notes	$300 million	10 year tranche maturing July 2020

• (1) Australian dollars. Any USPP notes issued in US dollars have been hedged into fixed‐rate Australian dollar obligations.

• (2) These facilities fully drawn at 30 June 2011.

• (3) Comprises three facilities of $75 million each. Undrawn at 30 June 2011 but since fully drawn.

• (4) Comprised a $103 million commitment maturing in July 2011 and a $515 million commitment maturing in July 2013. Nil drawn under the July 2011 tranche. Amount drawn under the July 2013 tranche was $506 million at 30 June 2011, but reduced to $230 million in August 2011.

• (5) $102 million of 7 year notes were repaid upon maturity on 9 September 2010.

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APA, September 2011

Economic regulation

APA’s major price regulated assets

 Regulatory resets over the next five years

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• Regulatory resets are spread out over five years, with on average one reset per year

• Goldfields Gas Pipeline new access arrangement commenced on 20 August 2010

• APA Gas Network (Queensland) new access arrangement commenced on 1 July 2011

• Roma Brisbane Pipeline proposed access arrangement to be submitted October 2011

 Merits Review

• Goldfields Gas Pipeline written and oral submission to Western Australian Electricity Review board completed – decision expected by end 2011

• APA Gas Network (APT Allgas) has commenced merit review proceedings on AER’s –

• determination of the debt risk premium parameter within the WACC hearings expected within 2011 calendar year

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APA, September 2011

Economic regulation of gas pipelines and networks

Regulator	 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
Access	 Apply for a fixed term, generally 5 years
arrangement	 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
Reference	 Provides a default tariff for customers but tariffs can also be negotiated
tariff	 Determined with reference to regulated revenue, capacity and volume forecasts
Regulated	 Determined using the building block approach to recover efficient costs
revenue	–Forecast operating and maintenance costs
	–Asset depreciation costs and
	–Return on asset capital (regulated asset base) based on WACC determination
	 WACC based on 60:40 debt equity split
Regulated	 Opening RABs have been settled with the regulator; there are no reassessments for approved RABs
asset base	 RABs adjusted every access arrangement period
(RAB)	–Increased by capital added to the asset and reduced by regulatory depreciation costs
	 RAB is maintained in read dollar terms
Regulatory	 All distribution networks and some transmission pipelines are covered by economic regulation
coverage	 Test of coverage is whether a pipeline is a natural monopoly bottleneck facility
	 Coverage can be revoked
	 Light regulation with no tariff regulation is also available for pipeline with lower levels of market power

 32

APA, September 2011

APA business segments

• FY2011 EBITDA %

• Australia’s largest gas pipeline owner, present in each mainland state and 86.6%

• territory

• APA manages and operates all its energy infrastructure assets  Gas transmission pipelines: – Approximately 10,400 km of high pressure gas transmission pipelines across

• Energy Australia

• Infrastructure  Gas distribution networks: – 2,800 km of distribution network, 85,000 gas users in Queensland and New South Wales

• Gas storage: – Mondarra gas storage facility (WA) and Dandenong LNG storage facility (Vic)

• Emu Downs 80 MW wind farm and 130 MW adjacent development site 7.9%

• Provision of asset management, operating and maintenance services to the

• Asset majority of APA’s energy investments (e.g. Envestra, Energy Infrastructure

• Management Investments and Ethane Pipeline Fund) and to other third parties on a contract basis

• Envestra Limited (33.0% interest)  SEA Gas Pipeline (50% interest) 5.5%

• Energy  Energy Infrastructure Investments Pty Limited (19.9% interest)

• Investments  Ethane Pipeline Fund (6.1% interest)  EII2 (20.2% interest)  Hastings Diversified Utilities Fund (19.4% interest)

 33

APA, September 2011

FY11 performance: Energy Infrastructure

Queensland

 Roma Brisbane Pipeline

• Completion of lateral to large industrial customer

• Commenced major expansion project, underpinned by revenue agreements

• Flood damage and repairs

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Repairing the Roma Brisbane Pipeline post floods

 Berwyndale Wallumbilla Pipeline

• 12 month revenue contribution (2010: 3 month)

 APA Gas Network

• 35 km new gas mains, 3,200 additional connections

• Access arrangement final decision

 Carpentaria Gas Pipeline

• Increased gas volumes and peak gas flow

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120
106.8
100
80 Berwyndale
Pipeline
60 APA Gas
Network
40
Carpentaria
Gas Pipeline
20
Roma Brisbane
‐ Pipeline
2008 2009 2010 2011
EBITDA $ million
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APA, September 2011

FY11 performance: Energy Infrastructure

New South Wales

 Moomba Sydney Pipeline expansion

• 3[rd] year in 5‐year expansion program (FY11 capex $8 million, with total spend to date of $59 million)

• Compressor reconfiguration ($6 million)

• Fully contracted – gas transportation and storage services

• Young to Wagga lateral

• Commissioned November 2010 ($38 million)

• Short Term Trading Market (Sydney hub)

• Commenced 1 September 2010

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Young Wagga looping project ‐ construction

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120
101.3
100
80
60 Central Ranges
Pipeline
40 Central West
Pipeline
20
Moomba
Sydney Pipeline
‐
2008 2009 2010 2011
EBITDA $ million
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APA, September 2011

FY11 performance: Energy Infrastructure

Victoria & South Australia

• Increased gas flow due to a cooler winter

• 8% increase in gas flows to 246 PJ

• Northern augmentation program completed

• Wollert compressor station upgrade, Springhurst and flow reversal

• Increased capacity for gas movement between Victoria and New South Wales

• Western outer ring main expansion, Sunbury

• Commenced first stage of expansion

• LNG storage facility capacity contract renegotiation (annual)

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Wollert compressor station, northern Victoria

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115.9
120
100
80
60 South
Australian
40 assets
Victorian
20
assets
‐
2008 2009 2010 2011
EBITDA $ million
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APA, September 2011

FY11 performance: Energy Infrastructure

Western Australia & Northern Territory

 Goldfields Gas Pipeline

• 10% reduction in access arrangement reference tariffs (from August 2010), affecting ~40% of APA’s GGP revenue

• Merits review process underway

• Mondarra Gas Storage Facility

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Darwin city gate, Northern Territory
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• Commenced next stage of expansion

• 20 year agreement with Verve Energy

• Emu Downs wind farm acquisition ($172 million)

• Revenue contract for all output for remaining asset life (~20 years)

• Located near Parmelia Gas Pipeline and Mondarra Gas Storage Facility

• Amadeus Gas Pipeline acquisition ($63 million)

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120
99.8
100
Amadeus Gas
80
Pipeline
NGV WA
60
40 Parmelia Gas
Pipeline
20
Goldfields Gas
‐ Pipeline
2008 2009 2010 2011
EBITDA $ million
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APA, September 2011

FY11 performance: Asset Management, Energy Investments

Asset Management

• Increased revenue from Envestra asset management and additional third party work

• Added asset management of Wagga Wagga gas network acquired by Envestra

Energy Investments

• Increased investment in

• Envestra from 31.7% to 33.0%

• Hastings Diversified Utilities Fund from 16.8% to 19.4%

• SEA Gas Pipeline from 33.3% to 50%

• Completion of the North Brown Hill wind farm

• Asset owned by EII2

• APA 20.2% equity contribution of $20 million

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38.7
40
20
‐
2008 2009 2010 2011
EBITDA $ million
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Calibrating Envestra gas meters
40
27.1
20
‐
2008 2009 2010 2011
EBITDA $ million
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APA, September 2011

11 year history of delivering growth and value

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Total securityholder returns since listing
600
APA total securityholder returns TSR of 427%,
500 CAGR of 16.2%
ASX All Ords accumulation index
Utilities accumulation index
400
300
200
100
0
Jun‐00 Jun‐01 Jun‐02 Jun‐03 Jun‐04 Jun‐05 Jun‐06 Jun‐07 Jun‐08 Jun‐09 Jun‐10 Jun‐11
Indexed to 100 from listing date, 13 June 2000 to 30 June 2011
Source: APA based on IRESS data
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APA, September 2011

11 year history of delivering growth and value

Operating cash flow

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290
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300
250
200
150
100
50
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
$ million
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Operating cash flow per security

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60
52.6
50
40
30
20
10
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
cents
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EBITDA
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492
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500
400
300
200
100
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
$ million
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Distribution per security

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34.4
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35
30
25
20
15
10
5
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
cents
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APA, September 2011

Disclaimer

This presentation has been prepared by Australian Pipeline Limited (ACN 091 344 704) the responsible entity of the Australian Pipeline Trust (ARSN 091 678 778) and APT Investment Trust (ARSN 115 585 441) ( APA Group ).

Summary information

This presentation contains summary information about APA Group and its activities current as at the date of this presentation. The information in this presentation is of a general background nature and does not purport to be complete. It should be read in conjunction with the APA Group’s other periodic and continuous disclosure announcements which are available at www.apa.com.au.

Not financial product advice

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 consult an investment adviser if necessary.

Past performance

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.

Future performance

This presentation contains certain “forward‐looking statements” such as indications of, and guidance on, future earnings and financial position and performance. 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.

This presentation contains such statements that are subject to risk factors associated with the industries in which APA Group operates which may materially impact on future performance. 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.

Investment risk

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.

Not an offer

This presentation does not constitute an offer, invitation or recommendation to subscribe for or purchase any security.

 41

APA, September 2011

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For further information contact Chris Kotsaris Investor Relations, APA Group Tel: +61 2 9693 0049 E‐mail: chris.kotsaris@apa.com.au

Delivering Australia’s energy

or visit APA’s website www.apa.com.au