APA GROUP — Interim / Quarterly Report 2013

Mar 12, 2013

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more than... pipelines: redefining our potential

march 2013

APA Group 2013 Half Year Results Summary

AUSTRALIAN PIPELINE LTD ACN 091 344 704

AUSTRALIAN PIPELINE TRUST ARSN 091 678 778

APT INVESTMENT TRUST ARSN 115 585 441

Dear Securityholders

aPa has continued to deliver consistent performance and steady growth. The scale of our business and the diversity and strength of our portfolio provides earning stability and a platform for continued long-term growth.

SOLID FINaNcIaL PErFOrmaNcE

It’s been a busy and exciting first half of the year for APA, and I am pleased to report another solid result for the business. With the successful acquisition of Hastings Diversified Utilities Fund (HDF), APA has expanded its unique footprint of energy infrastructure assets, operated and managed by our highly skilled and experienced APA people.

The major achievements in this first half of the 2013 financial year include the deployment of $178 million in growth capital expenditure across our assets and the finalisation of the acquisition of HDF. This last milestone provides the final link in APA’s long term strategy of developing an interconnected pipeline network on Australia’s east coast. This will enable us to offer our customers greater flexibility and supply options, as well as encouraging greater competition between gas basins.

Result highlights for the six months to 31 December 2012 include a 29 per cent increase in net profit after tax and minorities before significant items of $98 million, with statutory net profit after tax increasing by 221 per cent to $212 million.

As a result of the HDF acquisition, APA’s statutory financial results are impacted by a number of significant items which include payment of fees made by HDF, costs in relation to the acquisition of HDF and a gain on APA’s previously held interest in HDF. In aggregate, the significant items have a net positive impact to profit of $114 million, but a negative impact to operating cash flow of $69 million. The HDF assets are now managed as part of APA’s business, eliminating

the payment of sizeable fees to the previous external manager of those assets.

I will therefore focus on the “normalised” results which underline the consistent and stable performance of APA’s business, notably:

• an increase of 20 per cent in earnings before interest, tax, depreciation and amortisation (EBITDA) to $324 million, which includes additional earnings from the Roma Brisbane Pipeline expansion and three months contribution from the newly acquired pipeline assets; and

• Operating cash flow excluding the significant one-off fee payments made by HDF of $69 million is up 35 per cent to $213 million.

An interim distribution of 17 cents per security has been declared in line with the previous corresponding period and, as has always been the case, distributions will be comfortably paid out of operating cash flows.

PrUDENT caPITaL maNaGEmENT

Capital management is always a priority for APA, and during the period we focused on ensuring appropriate funding was available to support the HDF acquisition and associated refinancing as well as APA’s ongoing growth requirements.

This included the issue of 183 million new APA securities, with 176 million forming part of the offer consideration for HDF, and the balance issued under the Distribution Reinvestment Plan in September 2012.

APA completed three debt financing programs, issuing $1.8 billion of new senior and subordinated debt. In September we issued $515 million in APA Group Subordinated Notes, our first issue of subordinated notes. Two series of senior guaranteed notes were issued in overseas debt markets on competitive terms – $735 million 10-year notes in October

and $536 million 12-year notes in November.

We strengthened our balance sheet, which is reflected in a number of key ratios such as interest cover ratio of 2.41 times, gearing of 64.2 per cent and average maturity of senior debt of 6.5 years.

DELIVErING GrOWTh PrOJEcTS

With increasing demand for gas transportation and storage services, APA continues to pursue attractive opportunities to invest in pipelines and related infrastructure. During the half year our growth capital expenditure of $178 million included pipeline capacity and storage expansion projects in Queensland, New South Wales, Victoria and Western Australia, as well as three months of growth capital expenditure on the South West Queensland Pipeline. The map overleaf highlights the key projects and initiatives undertaken and/or completed in the half year.

FULL YEar OUTLOOK

In the second half of this financial year we will continue the work of expanding our existing assets, complete the integration of the newly acquired assets and progress the sale of the Moomba Adelaide Pipeline System.

Based on our first half year results, APA expects EBITDA for the full year to fall within the range of $755 million to $770 million. This range includes the significant items reported in the first half year. Total distributions for the full year are expected to be at least equal to the 35 cents paid in the 2012 financial year.

Finally, I’d like to take this opportunity to welcome all new APA Securityholders and I look forward to reporting APA’s full year results to you in August.

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Len Bleasel AM, APA Group Chairman

Performance highlights

Performancehighlights
$ million	1h13	1H12	Change
NOrmaLISED rESULTS1
EBITDA	324	270	20%
Proft	98	76	29%
Operating cash fow	213	157	35%
Operating cash fow per security (cents)	29.8	24.7	21%
STaTUTOrY rESULTS
EBITDA	424	279	52%
Proft	212	66	221%
Operating cash fow	144	157	9%
Operating cash fow per security (cents)	20.2	24.7	18%
DISTrIbUTIONS
Distribution per security (cents)	17.0	17.0
Distribution payout ratio2	66.2%	69.2%

1 Normalised results exclude significant items. Significant items include payment of fees made by HDF, costs in relation to the acquisition of HDF, gain on APA’s previously held interest in HDF and reversal of some costs booked in relation to the sale of the Allgas business in 2011. In aggregate, the significant items have a net positive impact to profit of $114 million, but a negative impact to operating cash flow of $69 million.

Portfolio diversity

Total EbITDa by business segment

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----- Start of picture text ----- Energy Infrastructure 85%QLD 20%NSW 18%VIC & SA 25%WA & NT 22% Asset Management 5%Energy Investments 10%----- End of picture text -----

2 Based on normalised operating cash flow.

Expanding our assets and investments

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----- Start of picture text ----- a portfolio of interconnectedenergy infrastructure assetsNORTHERNGOLDFIELDS GaS PIPELINE AUSTRALIA2 x capacity expansion – QUEENSLANDcompressor stations andcompressor upgrades20 year and 15 year contracts WESTERNAUSTRALIAmONDarra GaS STOraGE FacILITYCapacity expansion SOUTH20 year contract AUSTRALIANEW SOUTHWALESAPA energy infrastructure VICTORIAAPA investmentsmoomba adelaide pipeline system TASMANIASale process has commenced----- End of picture text -----

DIamaNTINa POWEr STaTION

Joint development (APA/AGL) 242 MW gas-fired generation plus 60 MW back-up generation 17 year contract

WaLLUmbILLa cOmPrESSION

Expanded compression capacity and associated services 15 year contract with a further 5 to 10 year option

rOma brISbaNE PIPELINE

Capacity expansion completed 2 contracts up to 15 years

SOUTh WEST qUEENSLaND PIPELINE mOOmba cOmPrESSOr STaTION Capacity expansion 15 year contract

mOOmba SYDNEY PIPELINE Final year of 5 year capacity expansion program

VIcTOrIaN TraNSmISSION SYSTEm Eurora compressor station and Sunbury looping completed Regulated revenue

complete Interim Financial reports Information including webcast of the Interim results presentation is available under ‘Investor relations’ on our website www.apa.com.au

DIScLaImEr Australian Pipeline Limited (ACN 091 344 704), the responsible entity of Australian Pipeline Trust (ARSN 091 678 778) and APT Investment Trust (ARSN 115 585 441) (APA Group), is not licensed to provide financial product advice in relation to securities in APA Group and this publication does not constitute such advice. Before relying on any statements in this publication, you should consider the appropriateness of the information, having regard to your own objectives, financial situation and needs, and consult an investment adviser if necessary. Certain forward looking statements made in this publication are not based on historical fact and necessarily involve assumptions as to future events and analysis, which may or may not be correct. Such statements should not be relied on as an indication or guarantee of future performance.