APA GROUP — Interim / Quarterly Report 2009

Feb 24, 2009

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ASX RELEASE

25 February 2009

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:

• Interim Results Presentation

Yours sincerely

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Mark Knapman Company Secretary

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Financial Results Half year ended 31 December 2008

25 February 2009

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Result overview and strategic highlights

Mick McCormack Managing Director and CEO

Solid first half result

Continued strong underlying growth

$ million	1H09	1H08		Change
Underlying revenue1excluding pass-through	367.7	305.5	�	20%
Underlying EBITDA1	248.8	214.7	�	16%
Underlying NPAT1	56.7	44.7	�	27%
Reported NPAT	18.0	35.9	�	(50)%
Underlying OCF2	122.8	109.3	�	12%
Underlying OCF per security (cents)	25.8	25.0	�	3.3%
Interim distribution	15.0	14.5	�	3.4%
Distribution payout ratio	59.8 %	60.8 %

(1) Adjusted for significant items, and includes Envestra distributions and complementary asset finance leases.

(2) OCF (Operating Cash Flow) - Net cash from operations after interest and tax payments, adjusted for significant items.

Distributions fully funded by operating cash flow

1H09 Results Presentation � 3

Strategic and operational highlights

• Completed the establishment of Energy Infrastructure Investments (EII)

• Proceeds in excess of book value

• Costs to create EII shown as one-off significant items

• $647 million used to pay down debt

• Strong equity partners – Marubeni Corporation and Osaka Gas of Japan

• APA continues as asset manager for EII

• Construction of the Bonaparte Gas Pipeline

• Completed ahead of schedule and on budget

• Organic growth on gas transmission pipelines

• Goldfields Gas Pipeline, Carpentaria Gas Pipeline, Moomba Sydney Pipeline

� Attractive investments

• Central Ranges Pipeline – part of APA’s New South Wales pipeline system

• Increase in Envestra equity interest to 31% (Feb 09)

� Limited impact from Victorian bushfires

• All APA people safe and uninjured; no disruption to gas services; minor easement damage

Meeting strategic objectives and strengthening the business

1H09 Results Presentation � 4

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Financial performance

Ross Gersbach Chief Financial Officer

Solid first half result

	$ million 1H092 1H083 Change
	Revenue1 500.7 443.0 Revenue excluding pass-through1 367.7 305.5 EBITDA1 248.8 214.7 EBIT1 199.8 169.6 Net interest expense1 (121.9) (110.4) Tax1 (17.6) (13.2) (33.7)% 13.0% 15.9% 17.8% (10.4)% 20.4%
	NPAT – underlying 1 56.7 44.7 26.7%
	Reported NPAT 18.0 35.9 (50.0)%
	Underlying OCF 122.8 109.3 Underlying OCF per security (cents) 25.8 25.0 Distribution per security (cents) 15.0 14.5 3.3% 12.3% 3.4%

(1) Underlying results before significant items and AIFRS adjustments

(2) Includes contributions from assets acquired - 1H09: Central Ranges Pipeline (4 months) - and partial contributions from assets sold to EII, including X41 Power Station (5.3 months)

(3) Includes contributions from assets acquired - 1H08: Alinta O&M agreement (3 months), X41 Power Station (2 months)

Strong underlying cash flow supports distribution growth

1H09 Results Presentation � 6

Reconciling underlying result

	$ million Reported result Capital distributions1 Comp. assets2 Significant items Underlying result
	Revenue 490.0 7.1 3.6 - 500.7 EBITDA 238.2 7.1 3.6 - 248.8 NPAT 18.0 7.1 - 31.6 56.7 Operating cash flow 114.1 - - 8.8 122.8

(1) Capital distributions – Envestra ($6.7 m) and EPX ($0.4 m)

(2) Complementary assets – reclassification of principal repayments ($3.6m)

Adjusting for AIFRS impacts and significant items

1H09 Results Presentation � 7

Significant items

$ million
1H09
Revaluation gain/(loss) - GasNet hedges	(8.7)
Establishment of Energy Infrastructure Investments after transaction costs	(14.4)
Settlement of acquisition related liabilities	(1.5)
Income tax effect	(7.0)
Total after tax cost	(31.6)
1H08
Revaluation gain/(loss) - GasNet hedges	-
Acquisition integration costs	(3.1)
Unsuccessful acquisition due diligence costs	(1.3)
Income tax effect	1.3
Total after tax cost	(3.1)

1H09 Results Presentation � 8

Segment performance

$ million	1H09	1H08	Change
Gas transmission and distribution
Queensland	50.7	47.9	6%
New South Wales	44.0	31.7	39%
Victoria	50.5	35.1	44%
South Australia	10.8	11.0	(2)%
Western Australia	56.1	55.4	1%
Northern Territory	1.9	1.2	60%
Gas transmission and distribution - total	214.0	182.2	17%
Electricity transmission	8.5	10.1	(15)%
Asset management	15.1	12.8	18%
Complementary assets	11.2	9.5	18%
Total Underlying EBITDA	248.8	214.7	16%

EBITDA growth across business segments

1H09 Results Presentation � 9

Operating cash flow

$ million	1H09	1H08	Change
Underlying operating cash flow (OCF)	122.8	109.3	12.3%
Distributions(net of DRP) 1	43.7	19.4
Available OCF	79.1	89.9
Underlying OCF per security (cents)	25.8	25.0	3.3%
Distribution per security (cents)	15.0	14.5	3.4%
Distribution payout ratio	60%	61%
Capital expenditure	194.3	95.3
Investments: Envestra DRP	7.3	8.4
Acquisitions:
Origin Energy Network Assets	-	421.4
Alinta O&M agreement	-	206.2
Central Ranges Pipeline	23.5	-

(1) APA distributions changed from quarterly to semi-annually in FY08. Distributions paid in 1H08 were for the 3 months ending 30 June 2007

Growing distributions fully funded from operating cash flow

1H09 Results Presentation � 10

Major capital expenditure

$ million	1H09	1H08
Regulated
Victoria Transmission System	8.0	42.1	Includes Brooklyn Lara Pipeline
APA Gas Networks(Qld)	7.0	7.7	Includes southern network expansion(1H09)
	15.0	49.8
Major Projects
Queensland expansion	9.9	0.2	Davenport Downs
New South Wales expansion	21.1	4.3	MSP expansion (1H09); Culcairn
Western Australia expansion	21.1	6.6	Ned's Creek, Wyloo West and Gwalia lateral (1H09); Mondarra
Northern Territory	122.2	3.4	Bonaparte Gas Pipeline; Wickham Point Pipeline (1H09)
Complementaryassets	-	22.0	Tipton West,Daandine PS and X41 PS(1H08)
	174.3	36.6
Stay in business capex	5.0	9.0
Total	194.3	95.3

1H09 Results Presentation � 11

Continued distribution growth

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• 1H09 payout ratio 60% (on underlying OCF)

• 1H09 21.3% tax deferred component

• DRP continues at 2.5% discount

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On target to meet 5% growth guidance for 2009 full year distribution

1H09 Results Presentation � 12

Capital management

Strong balance sheet

• Cash and committed undrawn facilities of $710 million

• Improved gearing[*] of 69.7% - reduced from 72.0% at 30 June 2008

• Continue to target gearing in the range of 65-70%

• Equity raising totalled $57 million

• Security Purchase Plan ($30.4m)

• Distribution Reinvestment Plan ($26.5m)

• Interest Cover Ratio – 1.88x

� 489.9 million securities on issue

• Weighted average 475.8 million

• Gearing ratio determined in accordance with the syndicated loan facilities.

Committed facilities to support ongoing business growth

1H09 Results Presentation � 13

Capital management

Secure long term debt portfolio

• Refinanced $150 million MTNs in August 2008 (plus additional $15 million debt facility)

• Sub 100 bp average margin

• Refinancing requirement in 2009 to be repaid

• March 2009 – MTN $300 million

� Interest rates

• 80% fixed

• Portfolio average interest rate of 7.44% (1H09)

� Prudent management of debt portfolio

• Refinancing obligations are spread over 13 years

• Currently working on additional debt facilities for the next debt refinancing due in FY 2010

• Details in Appendix

Funding flexibility for future growth

1H09 Results Presentation � 14

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Outlook

Mick McCormack Managing Director and CEO

Quality gas infrastructure portfolio

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• Delivering gas from all major gas production sources to all major gas markets

• More than 50% of gas used in Australia is transported through APA’s pipelines

• Importance of APA infrastructure in the eastern states

• Transporting more than 70% of gas in this region

• Continue to progress new links for gas between east Australian states

• Queensland/NSW coal seam gas SOUTH

• Victorian conventional gas NORTH

APA is Australia’s major gas transporter

1H09 Results Presentation � 16

Responding to uncertain times

� Global financial crisis

• Inelastic gas demand

• Quality businesses and assets consuming gas

• Increasing borrowing costs

� Continue to diversify earnings portfolio and actively monitor risk exposures

� Regulatory environment

• ─ WACC decision doesn’t apply to gas assets

• ─ Mixture of contracted and regulated revenue

� Active participant in regulatory processes

� Emission Trading Scheme

• ─ Incentive for greater gas-fired power generation

� Continue to foster demand for gas

APA’s business is resilient in the face of uncertainty

1H09 Results Presentation � 17

Guidance and priorities

Guidance

• Underlying EBITDA guidance – $420-430 million for FY2009

• While APA will no longer earn EBITDA from the EII assets (other than through its 19.9% interest), APA will benefit from asset management fees and lower interest costs.

• Distribution guidance – growth target of at least 5% for FY2009 distribution

• Underlying cash flow per security increasing in line with distribution growth

Priorities

• Maintaining focus on enhancing APA’s gas infrastructure portfolio across Australia

• Continue development of committed greenfield and brownfield projects

• Positioning to capture gas transportation opportunities with growing gas demand

• Further strengthen APA’s balance sheet/prudent capital management

• Leveraging internal commercial and operational knowledge and skill base

• Improving business operations

1H09 Results Presentation � 18

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Supplementary information

Financials

Key financial ratios

$ million	1H09	1H08	Comments
Underlying operating cash flow (cps)	25.8	25.0
Weighted average securities on issue (m)	475.8	437.4
Payout ratio	59.8%	60.8%
EPS (cps)
underlying	11.9	10.2
including significant items	3.8	8.2
Interest cover ratio (times)	1.88	1.88
Gearing ratio	69.7%	71.6%
Total assets ($m)	4,858	4,918
Net tangible asset backing per security ($)	0.88	1.36	Movement in reserves and increase in securities on issue

1H09 Results Presentation � 20

Financials

Revenue analysis by business segment

	$ million	1H09	1H08	Change
	Revenue
	Gas transmission and distribution
	Queensland	70.5	67.4	5%
	New South Wales	54.4	42.5	28%
	Victoria	66.0	47.5	39%
	South Australia	11.3	11.1	2%
	Western Australia	74.3	71.1	4%
	Northern Territory	11.1	9.8	13%
	Gastransmissionand distribution - total	287.6	249.5	15%
	Electricitytransmission	11.4	12.6	(9)%
	Asset management	34.5	23.4	48%
	Complementary assets	19.7	15.7	26%
	Total	353.2	301.2	17%
	Pass-through revenue
	Northern Territory	42.9	48.0	(11)%
	South Australia	90.1	89.5	1%
	Totalpass-through	133.0	137.5	(3)%
	Unallocatedrevenue	14.4	4.3	234%
	Total underlying revenue	500.7	443.0	13%

1H09 Results Presentation � 21

Financials

Total committed debt facilities

Facility Facility amount Tenor Medium term notes $300 million March 2009 Bilateral borrowings[1] $165 million July 2011 2003 US private placement $496 million 7, 10, 12 and 15 year tranches September 2010, 2013, 2015 and 2018 2007 Syndicated facility[2] $1,800 million Equal 3 year and 5 year tranches June 2010 and 2012 2007 US private placement $811 million 10, 12 and 15 year tranches May 2017, 2019 and 2022

• (1) Facility is undrawn

(2) Amount drawn at 31 December 2008 was $1,655 million

1H09 Results Presentation � 22

APA Group business segments

Gas Transmission and Distribution

Electricity Transmission

APA Asset Management

Complementary Energy Assets

Queensland:

• Roma Brisbane Pipeline - Carpentaria Gas Pipeline

• APA Gas Network

New South Wales:

• Moomba Sydney Pipeline - Central West Pipeline - Central Ranges Pipeline - Ethane Pipeline Fund (6% equity)

Victoria:

Interstate connectors:

• Murraylink (SA-Vic) - Directlink (NSW-Qld)

Envestra assets:

• 19,100 km gas network (SA, Vic, Qld, NSW, NT)

• 1,029 km gas pipelines (SA, Vic, Qld)

EPX asset:

• 1,375 km ethane pipeline (NSW)

Other:

• Victorian metering (unregulated) - CAMS (Vic)

Gas fired generation (Qld):

• Daandine

• X41 (Mt Isa)

Gas processing (Qld):

• Kogan North

• Tipton West

Other:

• Cogeneration (Vic, Qld)

• NGV (WA, SA, Vic)

• Service & Installation (SA)

• Victorian Transmission System - Victorian LNG Facility

South Australia:

• SESA Pipeline - SEA Gas Pipeline (33.3%) - Envestra ( 19.1% equity)

Western Australia:

• Goldfields Gas Pipeline (88.2%) GGP laterals (100%) - Parmelia Gas Pipeline - Midwest Pipeline (50%) - Mondarra Gas Storage Facility - Telfer/Nifty Pipeline

Northern Territory:

• Amadeus Gas Trust (96%) - Bonaparte Gas Pipeline - Wickham Point Pipeline

Assets sold to Energy Infrastructure Investments

1H09 Results Presentation � 23

Regulatory update

Regulatory resets over the next five years

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• The Carpentaria Gas Pipeline and Moomba Sydney Pipeline are now both Light Regulation pipelines.

• Murraylink and Directlink assets were sold to EII. The current regulatory revenue arrangements for these electricity transmission assets are due for reset in 2013 and 2015 respectively.

1H09 Results Presentation � 24

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1H09 Results Presentation � 25

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.

1H09 Results Presentation � 26