APA GROUP — Interim / Quarterly Report 2015

Mar 25, 2015

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ASX ANNOUNCEMENT

26 March 2015

APA Group (ASX: APA)

(also for release to APT Pipelines Limited (ASX: AQH))

APA Group Presentation

The APA Group investor information and 1H15 results highlights presentation is attached for release.

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Mark Knapman Company Secretary Australian Pipeline Limited

For further information please contact:

Investor enquiries: Media enquiries: Yoko Kosugi David Symons Telephone: (02) 9693 0049 Telephone: (02) 8306 4244 Mob: 0438 010 332 Mob: 0410 559 184 Email: yoko.kosugi@apa.com.au Email: media@apa.com.au

About APA Group (APA)

APA is Australia’s largest natural gas infrastructure business, owning and/or operating in excess of $12 billion of energy infrastructure assets. Its gas transmission pipelines span every state and territory on mainland Australia, delivering approximately half of the nation’s gas usage. APA has direct management and operational control over its assets and the majority of its investments. APA also holds minority interests in a number of energy infrastructure enterprises including SEA Gas Pipeline, Energy Infrastructure Investments and GDI.

APT Pipelines Limited is a wholly owned subsidiary of Australian Pipeline Trust and is the borrowing entity of APA Group.

For more information visit APA’s website, www.apa.com.au

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APA investor information and 1H15 result highlights

March / April 2015

Australia’s largest gas pipeline owner by pipeline length, capacity and volume

APA Overview (Ticker: APA AU)

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A$10.2 billion (as at 27 Feb 2015) S&P/ASX 50

Market capitalisation

ASX rank[(1) ]

Moody’s: Baa2 (outlook Stable), confirmed 10 Dec 2014

Rating

S&P: BBB (outlook Stable), confirmed 10 Dec 2014

Over $12 billion[(1) ]

Assets owned/ operated

Gas transmission

14,744[(2)] km transmission pipelines Underground & LNG gas storage

Gas distribution

27,100 km gas network pipelines 1.3 million gas consumers

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Other energy infrastructure 585 MW power generation 244 km HV electricity transmission Gas processing plants

Employees More than 1,600

• (1) Does not include QCLNG Pipeline – financial close pending

(2) Includes QCLNG Pipeline (543 km) – financial close pending Does not include Eastern Goldfields Pipeline (292 km)– under construction

APA Group, March / April 2015

 2

APA’s long term strategy

Consistent execution of a sustainable growth strategy since listing in 2000.

We’re focused on building and enhancing our core business of gas transmission and distribution assets.

Enhancing APA’s portfolio of Capturing revenue and gas infrastructure assets in operational synergies from Australia’s growing energy APA’s significant asset base market Facilitating development of gas related Pursuing opportunities projects that enhance APA’s that leverage APA’s infrastructure portfolio knowledge and skills base

Strengthening financial capability

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APA’s unrivalled asset portfolio across Australia and internal expertise, together with strong industry fundamentals, drive growth opportunities

APA Group, March / April 2015

 3

Successful strategy implementation

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2001 2004 2007 2010 2013 2014
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• Acquired minorities, achieving 100% ownership of major pipeline asset

• Acquisition – pipelines, distribution networks, electricity interconnects

• Development – gas power stations, processing plants

• Pipeline acquisitions

• Organic expansion and  Pipeline acquisitions pipeline development 

• Internal management and storage operation 

• Organic expansion – pipelines and gas storage

• Development of the east coast gas grid

• Development and investment in assets that protect and/or enhance APA’s gas portfolio

• Focused balance sheet – partial divestment of noncore assets

• Partial divestment of non-core assets

• 2014 – successful bid for QCLNG Pipeline provides a more direct access to LNG component of the east coast market

APA Group, March / April 2015

 4

Strategic development of pipeline grid

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NT link to east coast grid:
• Feasibility study

APA’s east coast grid:
• > 7,000 km of pipelines
APA’s WA infrastructure: • 5 major pipelines
• Servicing mining regions • 5 states and territories
• Gas transport and storage for Perth
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East coast grid

• Interconnected transmission pipelines operating as one system

• Seamless service capability across 30 receipt points and 100 delivery points

• QCLNG Pipeline acquisition

• Attractive growth and revenue opportunities

• West Australian infrastructure

• Interconnected gas storage and transportation to Perth

• Pipeline infrastructure serving mining regions

• NT Link - APA feasibility study

• Connecting APA’s infrastructure to facilitate gas flow across regions

Transformational change in gas delivery and storage services

APA Group, March / April 2015

 5

QCLNG – long term contract gives access to new volumes

• Acquisition complements APA’s existing east coast grid

• Long term contracts with two highly credit-worthy counterparties

• Immediate access to new volumes and full

  • revenue upon commissioning

• Possibility of additional interconnection points with APA’s east coast grid

• Potential for APA to further enhance efficiency with operatorship

• Acquisition financing complete

• $1.8bn equity raising successfully completed in January 2015

Delivery station for BG Group’s Curtis Island LNG Facility

• US$3.7bn debt issuance in Euro, Sterling and

• US144a markets completed successfully in March 2015 with tenors ranging 7 years to 20 years

APA Group, March / April 2015

 6

QCLNG Pipeline acquisition overview

Acquisition		US$5bn, representing an FY16 EV / EBITDA multiple of 13.0x
Contract		20 year take-or-pay(1)arrangements with primary tariff
		components linked to US CPI and revenue paid in US$
Length		543km
		Comprises Export Pipeline (346km) and Gas Collection
		Header (196km)
Capacity		Supports a total MDQ(2)of 1,510TJ/day under the various
		GTAs(3)
Milestones		Construction completed in December 2013
		Financial close is expected in 2Q 2015
Operation		QGC Pty Ltd (QGC) (a BG Group entity) will operate the
		pipeline under an agreement with an initial term of 3 years
		APA may assume operatorship of the pipeline after 12
		months following the acquisition(4)

QCLNG Pipeline location

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(1) The development capex recovery charges are payable irrespective of volume transported whilst volume-related operating charges are passed through to the Shippers (2) Maximum Daily Quantity

(3) Gas Transportation Agreement

(4) Subject to Shipper consent requirements, not to be unreasonably withheld

APA Group, March / April 2015

 7

QCLNG Pipeline acquisition highlights

Revenue stability		Revenues fully contracted on a take-or-pay basis(1)for a period of 20 years, calculated based on a fixed rate of
		return on the contracted asset base, together with an operating cost pass-through
		Expected to contribute an additional EBITDA of US$383 million to APA’s business in FY16
		Contracted tariffs under the GTAs have primary tariff components escalated at US CPI
		Expands contracted customer base with revenues provided by highly creditworthy counterparties
		− ~75% of revenue: BG Group Shipper entities backed by guarantee from BG Group’s rated entity, BGEH(2)
		− ~25% of revenue: CNOOC owned QCLNG Project entity
Long-term contracts		Revenues principally derived across 3 GTAs(3), each for an initial 20 year period
		2 x 10 year options for the Shippers to extend
Cost pass-through		Operating costs are passed through to Shippers
Brand new pipeline		Pipeline is operational and has undergone significant testing
that is the essential		Essential component of LNG production process. GTA counterparties (BG and CNOOC) reliant on this
middle piece of a		infrastructure to deliver under off-take agreements and generate project cash flow
much larger overall
project
Strong, inflation-linked		High margins and minimal capex requirements result in strong free cash flows to APA
cashflow profile
Alignment with APA		Satisfies APA’s key investment criteria and risk profile
strategy		Interconnects with the East coast grid
		Acquisition financing supports maintaining APA’s current credit ratings

(1) The development capex recovery charges are payable irrespective of volume transported whilst volume-related operating charges are passed through to the Shippers (2) BG Energy Holdings Ltd

(3) There is also an agreement to transport gas for use in the domestic market (variable operating charge tariff only) and a storage services agreement

APA Group, March / April 2015

 8

Australian gas industry – abundant supply and growing consumption

• Proven and probable gas reserves total approximately 136,639 PJ[(1) ]

• There is an estimated proved and probable reserves of approximately 49,207PJ[(1) ] in east Australia; gas reserves are dominated by large coal seam gas resources in Queensland and New South Wales

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• (1) Reserves (natural gas and ethane 2P), EnergyQuest, March 2015

• (2) Sourced from the Australian Energy Market Operator’s (“AEMO”) 2014 National Gas Forecasting Report

• (3) EnergyQuest March 2015

• Total consumption of gas in Australia (including LNG exports) is expected to increase at an annual rate of 23.0% in the short term (2014-2019)[(2) ]

• 65.1%[(3)] of domestic gas consumption in CY14 was in the east Australian markets of QLD, NSW, SA, VIC and TAS

APA Group, March / April 2015

 9

Proven growth and value creation

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Revenue
A$
$1,200m Full years Half years
$993
$1,000m $920
$758
$800m $720
$673 $660
$600m $510 $523
$400m
$200m
$0m
FY09 FY10 FY11 FY12 FY13 FY14 1H14 1H15
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EBITDA
A$
Full years Half years
$1,000m
(1)
$850
$800m $764 $747
EBITDA from
$600m $447 significant
$526
$492 items
$444 $460
$399
$400m
$200m
$0m
FY09 FY10 FY11 FY12 FY13 FY14 1H14 1H15
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Operating Cash Flow

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A$ Full years Half years
$500m
$432
$400m $374
$336
$290
$300m $268 $280
$226
$208
$200m
$100m
$0m
FY09 FY10 FY11 FY12 FY13 FY14 1H14 1H15
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Total Assets
A$ Full years Half years
$8,751
$9,000m
$7,699 $7,973 $7,826
$8,000m
$7,000m
$6,000m $5,428 $5,496
$4,982
$4,747
$5,000m
$4,000m
$3,000m
$2,000m
$1,000m
$0m
FY09 FY10 FY11 FY12 FY13 FY14 1H14 1H15
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• (1) Includes a A$430 million net pre-tax profit on the sale of APA’s equity holding in AGN (formerly Envestra) and the one-off receipt of $17 million relating to certain performance fees being refunded to APA

 10

Maximising value for securityholders

Total securityholder returns since listing

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1600
1500 APA TSR: 1,396%
1400 APA CAGR: 20.1%
1300
1200
1100
1000
900
800
700
600
500
400
300
200
100
0
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Indexed to 100 from listing date, 13 June 2000 to 11 March 2015 Source: APA based on IRESS data

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Total annual returns
50% 43%
40%
31%
29%
30% 23% 22%
18%
20%
10%
0%
2009 2010 2011 2012 2013 2014
-10%
-20% APA Total Securityholder Return
S&P/ASX200 Accumulation Index
-30%
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APA Group, March / April 2015

 11

APA investment summary

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Largest gas infrastructure portfolio in Australia in terms of scale and geographic diversity

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Quality assets with long expected lives requiring a relatively low level of maintenance capital expenditure

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Stable and predictable cash flow from price regulated assets and long term contracts

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Quality customer base and diversified asset footprint

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Strong balance sheet and prudent capital management

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Integrated in-house management and experienced executive management team

APA Group, March / April 2015

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1H15 result highlights

 13

APA Group, March 2013

Sound financial performance

$ million	1H 15	1H 14	Change	Change
Statutory results
EBITDA	849.6	398.9	up	113%(4)
Net profit after tax	467.3	120.7	up	287%(4)
Operating cash flow(1)	280.4	208.3	up	35%(4)
Operating cash flow per security (cents)	31.9	24.1	up	32%(4)
Normalised results(2)
EBITDA from continuing operations	401.3	369.2	up	9%(4)
Net profit after tax	111.2	120.7	down	8%(4)
Operating cash flow(1)	263.2	216.6	up	22%(4)
Operating cash flow per security (cents)	30.0	25.0	up	20%(4)
Distributions
Distribution per security (cents)	17.5	17.5
Distribution payout ratio(3)	55.6%	67.5%

(1) Operating cash flow = net cash from operations after interest and tax payments.

(2) Normalised results exclude one-off significant items, reflecting APA’s core earnings from operations .

(3) Distribution payout ratio = total distribution payments as a percentage of normalised operating cash flow.

• (4) Primarily as a result of exclusion of earnings and tax on distributions from Envestra.

APA Group, March / April 2015

 14

1H15 result: EBITDA by business segment

$ million	1H15	1H14	Change
Energy Infrastructure
Queensland	136.4	108.8	25%
New South Wales	59.6	62.2	(4)%
Victoria & South Australia	70.3	62.4	13%
Western Australia & Northern Territory	107.3	92.6	16%
Energy Infrastructure total	373.6	326.0	15%
Asset Management	20.1	34.5	(42)%
Energy Investments	7.6	8.7	(12)%
Continuing business EBITDA(1) Divested business(2)	401.3 1.0	369.2 29.7	9% nm
Significant items	447.2	-	nm
Total EBITDA	849.6	398.9	1%

1H15 EBITDA by business segment[(1)]

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Energy Investments
Asset Management 1.9%
5.0%
Western Queensland
Australia & 34.0%
Northern
Territory
26.7%
Victoria &
South New South
Australia Wales
17.5% 14.9%
Energy Infrastructure
93.1%
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• (1) Continuing business EBITDA

• (2) Investment in AGN formerly (Envestra ) sold in August 2014

Reporting segments

• Energy Infrastructure : APA’s wholly or majority owned energy infrastructure assets

• Asset Management : provision of asset management and operating services for the majority of APA’s investments

• Energy Investments : minority interests in energy infrastructure investments

APA Group, March / April 2015

 15

Fully covered distributions

On target to deliver distribution guidance for FY 2015

cents

 1H 15 distribution payout ratio[[(1,2) ]] of 55.6%

60 56.0 ratio[[(1,2) ]] of 55.6% 51.9 52.6 52.5 52.6 48.2  Distribution components: 50 17.5 cents profit distribution 40 nil capital distribution 31.9 17.5 cents 36.3 34.4 35.0 35.5 30 32.8 31.0  FY15 distribution guidance remains “at least 36.25 cents” 17.5 20 10 0 FY09 FY10 FY11 FY12 FY13 FY14 1H15 (1) Distribution payout ratio: distribution payments as a ) Distribution payout ratio: distribution payments as a percentage of operating cash flow. Operating cash flow per security Distribution per security (2) Based on normalised operating cash flow.

(1) Distribution payout ratio: distribution payments as a ) Distribution payout ratio: distribution payments as a percentage of operating cash flow.

APA Group, March / April 2015

 16

Developing growth capital projects across Australia

 Continued expansion and enhancement of APA’s gas infrastructure portfolio, with many growth opportunities unique to APA

 Committed projects underwritten by long term revenue contracts and/or regulatory arrangements

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NT Link
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Feasibility study in progress

Eastern Goldfields Expansion APA assets and investments New 292 km pipeline under APA pipeline under development construction APA pipeline (financial close pending) APA operated assets Other natural gas pipelines Gas storage Wind Farm

Victorian Transmission System Capacity expansion

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Gas-fired power station

QCLNG Pipeline Financial close pending

Berwyndale Wallumbilla Pipeline Bi-directional capability

Roma Brisbane Pipeline Bi-directional capability

Moomba Sydney Pipeline Bi-directional capability

Moomba Sydney Pipeline southern lateral Capacity expansion

APA Group, March / April 2015

 17

Gas processing plant

Capital expenditure

$ million	$0m $100m $200m $300m $400m 1H15(1) 1H14(1) 55.5 14.9 78.5 93.6 0.6 4.8 14.1 39.1 13.3 11.4 162.0 163.8 28.1 20.6 1.6 16.4 191.7 200.7 20.9 212.6 200.7	Committed growth capex
Growth capex	55.5 14.9 78.5 93.6 0.6 4.8 14.1 39.1 13.3 11.4
Regulated- Victoria
Major Projects Queensland
New South Wales
Western Australia
Other
Total growth capex
Stay in business capex	28.1 20.6 1.6 16.4 191.7 200.7 20.9
Customer contributions
		FY15 FY16 FY17 FY18 Guidance Committed
Total capex
Investments and acquisitions
Total capital & investment expenditure

• (1) Capital expenditure represents cash payments as disclosed in the cash flow statement for 1H15 and 1H14.

APA Group, March / April 2015

 18

Capital management

 Cash and committed undrawn facilities of around $2,400 million as at 31 December 2014

.	.	Metrics	31 Dec 2014	30 Jun 2014
		Gearing(1,2,3)	44.5%	64.2%
		Interest cover ratio	2.48 times	2.31 times
		Average interest rate applying to drawn debt(2)	7.07%	7.12%
		Interest rate exposure fixed or hedged	84.6%	72.8%
		Average maturity of senior facilities	5.3 years	5.4 years

 Credit ratings

In December 2014, post announcement of the QCLNG Pipeline acquisition, both S&P and Moody’s confirmed APA’s long-term corporate credit ratings of BBB and Baa2 respectively, each with Stable outlook

 Gearing

Expected to settle at approximately 65% post completion of the QCLNG Pipeline acquisition

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

(2) Includes $515 million of Subordinated Notes.

• (3) After receipt of $958 million proceeds from Institutional and Early Retail Entitlement Offer.

APA Group, March / April 2015

 19

East coast grid – connecting multiple markets with multiple resources

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Darwin
Gladstone
Wall um billa
Moomba Brisbane
Sydney
Adelaide
APA natural gas pipelines
QCLNG Pipeline
Other natural gas pipelines
Melbourne
Gas storage
Gas production
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• Provision of flexibility during dynamic market conditions for gas

• SWQP expansion already delivering

• NSW – VIC connection expansion under way

• Flexible services to move gas where it is needed on the east coast

• Feasibility study continues on NT Link

• Bi-directional capability being implemented

• QCLNG Pipeline acquisition enhances footprint and provides access to new volumes to Gladstone

• Connection points with the existing APA grid will provide further flexibility for foundation shippers and future opportunities for APA

APA Group, March / April 2015

 20

Connecting gas markets and resources

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Darwin
Gladstone
Brisbane
Moomba
Perth
APA natural gas pipelines
Sydney
under development
Adelaide
QCLNG Pipeline
Other natural gas pipelines
Gas storage
Melbourne
Gas production
Gas resource
NT link potential pipeline routes
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 Organic growth

• Capacity expansions, enhancements and new services, provide flexibility and new opportunities for customers

• New services and more flexible contracts supplement traditional take-or-pay

 East coast LNG

• QCLNG Pipeline acquisition enhances the east coast grid and is underwritten by 20-year take-or-pay contracts with two highly credit-worthy counterparties

 Greenfield developments

• Eastern Goldfields Pipeline

• NT – east coast grid pipeline link (feasibility study continues)

• Interconnected and flexible portfolio allows APA to assist customers to prevail in dynamic gas market environment

  • Maintaining financial flexibility and strength is integral to delivering APA’s strategy

APA Group, March / April 2015

 21

Focus on safety and operational excellence

 Health and safety

• Long-term safety goal of Zero Harm – a program of continuous improvement

• Decrease of LTIFR[ (1)] to 0.7 (FY14), down from 2.1 (FY13)

• LTIFR as at 31 Dec 2014 is 0.3

• Second year of 3 year HSE Strategic Improvement Plan

 Enhancing infrastructure operations and maintenance

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LTIFR
7.3
6.1
4.9
2.2 2.1
0.7
0.3
FY09 FY10 FY11 FY12 FY13 FY14 1HY15
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• Consolidating pipeline control and monitoring operations to better manage grid operations

• Improving asset maintenance management systems and processes across the portfolio

• Progressively adopting global industry best practice

These and other initiatives are focused on improving service safety and reliability, operational efficiency and extending the economic life of the assets

(1) Lost time injury frequency rate (LTIFR) is measured as the number of lost time injuries per million hours worked

Damian Both and Jeff Jackson, Network Operations, Queensland

APA Group, March / April 2015

 22

Outlook for FY 2015

Outlook

• Continued construction and development to increase flexibility and capacity of our infrastructure footprint on both east and west coasts

• Transaction completion and integration of QCLNG Pipeline

• Continued Northern Territory – east coast interconnection feasibility study

Stage 2 looping of VNI Expansion project is underway, VIC

APA’s Control Room at Wallumbilla, QLD

Pipe laydown site for the Eastern Goldfields Pipeline, WA

APA Group, March / April 2015

 23

FY 2015 Guidance

• APA standalone (pre-acquisition) guidance for EBITDA and net interest cost for FY 2015 is revised as follows:

• Statutory EBITDA is expected within a range of $1,222 million to $1,237 million[(1)]

• Normalised continuing business EBITDA within a range of $775 million to $790 million[(2)] up from previous guidance of $740 million to $760 million

• Net interest cost expected within a range of $320 million to $355 million

• In addition for FY 2015, the acquisition of the QCLNG Pipeline is expected to generate additional EBITDA within a range of A$41 million to $83 million[(3)]

FY 2015 Guidance	Statutory EBITDA(1)	Normalised EBITDA(2)
FY 2015 (APA standalone)	$1,222 – $1,237	$775 – $790
QCLNG Pipeline acquisition(3)	$41 – $83	$41 – $83
APA Group Total	$1,263 – $1,320	$816 – $873

• (1) Statutory EBITDA includes significant items recorded in 1H 2015.

• (2) Excludes one-off significant items (being the pre-tax profit of A$430m from the sale of APA’s stake in Envestra and $17m recovered by HDF from Hastings Funds Management Limited), reflecting APA’s core earnings from operations.

• (3) QCLNG Pipeline acquisition metrics are in addition to APA standalone.

Note: All conversions are based on AUD/USD exchange rate of 0.7804 as at 12.00pm 24 February 2015.

APA Group, March / April 2015

 24

FY15 Guidance bridge - normalised

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$41-83m
$78-93m
$(50m) $816-873m
$747m • Asset
Management $697m
FY14 Less Envestra FY14 continuing Organic growth Plus QCLNG FY15 Guidance
equity earnings business EBITDA Pipeline
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Note: All conversions are based on AUD/USD exchange rate of 0.7804 as at 12.00pm 24 February 2015.

APA Group, March / April 2015

 25

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Supplementary information

 26

APA Group, March 2013

APA asset and investment portfolio

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APA Group, March / April 2015

 27

APA Group structure

• APA is a stapled vehicle comprising two registered managed investment schemes:

• Australian Pipeline Trust (ARSN 091 678 778)

APA Group Securityholders

• APT Investment Trust (ARSN 115 585 441) is a tax pass-through trust

• Australian Pipeline Limited (ACN 091 344 704) is the responsible entity of the Trust and APT

• APA is listed as a stapled structure on the Australian Securities Exchange

• The units of the Trust and APT 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 owned by APT

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Australian Pipeline Trust APT Investment Trust
(APT) (APTIT)
100%
100%
APT Pipelines Ltd
100%
Infrastructure
Australian Pipeline assets and
Limited
investments
(Responsible Entity)
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• Reporting segments

• Energy Infrastructure : APA’s wholly or majority owned energy infrastructure assets

• Asset Management : provision of asset management and operating services for the majority of APA’s investments

• Energy Investments : minority interests in energy infrastructure investments

APA Group, March / April 2015

 28

Quality customer base

• Customers associated with many contracted assets provide essential services:

Counterparty credit ratings by contracted volumes[(1)] for major contracted assets

• Regulated gas distribution systems

• Major power generation facilities

• Key long term contract counterparties are credit-worthy entities

• Utilities (e.g. AGL, Origin, EnergyAustralia)

• Government owned entities (e.g. Synergy)

• Resources (e.g. BHP, Rio Tinto)

As at 31 Dec 2014 Illustrative Post QCLNG

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Sub-investment
Not rated
grade Sub-investment
A– rated or Investment 5%
2% grade
Not rated 9% better grade JV 1%
8% 2%
Investment
grade JV
3%
A– rated
BBB– to BBB+
or better
rated
BBB– to BBB+ rated
50%
42%
78%
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(1) Based on Maximum Daily Quantity (“MDQ”)

Majority of APA’s counterparties are investment grade

APA Group, March / April 2015

 29

Energy Infrastructure

Queensland

South West Queensland Pipeline Expanded capacity Moomba compression Complete Sep 2014 and operational Wallumbilla compression Long-term agreement for compression services Construction completed in Dec 2014 Eastern Haul completed Dec 2014 Berwyndale Wallumbilla Pipeline Bi-directional capability completed EBITDA $0 $20 $40 $60 $80 $100 $120 $140 $160	$136.4m 1H12 1H13 1H14 1H15 South West Queensland Pipeline Other Queensland assets Carpentaria Gas Pipeline Roma Brisbane Pipeline

APA Group, March / April 2015

 30

Energy Infrastructure

EBITDA

New South Wales

• Three agreements to transport increased gas volumes north from Victoria, two commencing in Jan 2015 and one in May 2015

• New 7-year grid services agreement from Sep 2015, mainly utilising Moomba Sydney Pipeline capacity

• Capacity expansion on southern lateral

Victoria & South Australia

• Capacity expansion of northern interconnect commenced, underpinned by regulated and contracted revenue

• Expansion of the South West Pipeline into Melbourne, completed and commenced operation in Jan 2015

$80m $59.6m $60m $40m Moomba Sydney Pipeline $20m System $0m 1H12 1H13 1H14 1H15 EBITDA

$80m $70.3m $60m SESA Pipeline $40m Victorian $20m assets $0m 1H12 1H13 1H14 1H15

APA Group, March / April 2015

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Energy Infrastructure

Western Australia & Northern Territory

Goldfields Gas Pipeline EBITDA  Expansion project completed $120m Pilbara Pipeline System $100m  Full HY contribution of a new contract  Additional revenue agreement $80m  Cost benefits of in-house operations Eastern Goldfields Pipeline $60m  Long term gas transportation agreements to mines in the Goldfields region - seamless service across 3 pipelines $40m  Construction begins on a new 292 km pipeline $20m  On track to meet completion during mid FY2016 $0m 1H12 1H13 1H14 1H15

$107.2m	Amadeus Gas Pipeline
	Emu Downs
	wind farm
	Mondarra Gas
	Storage
	Facility
	Other WA assets
	Pilbara Pipeline
	System
	Goldfields Gas Pipeline

APA Group, March / April 2015

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Asset Management and Energy Investments

EBITDA

Asset Management

$40m One-off customer Reduction in one-off customer contributions contributions for relocating APA infrastructure Contracted $20.1m services One-off customer contributions $20m $30m $20m Average ~$10m/a $10m $0m $0m FY09 FY10 FY11 FY12 FY13 FY14 1H15 1H12 1H13 1H14 1H15 EBITDA $60m Divested & Energy Investments transferred investments (1) Sale of shares in Envestra $40m Continuing Diamantina Power Station commissioning investments and start up costs $20m $8.6m $0m 1H12 1H13 1H14 1H15

• Reduction in one-off customer contributions for relocating APA infrastructure

Energy Investments

• Sale of shares in Envestra

• Diamantina Power Station commissioning and start up costs

(1) Includes HDF income (1H 12) now reported under Energy Infrastructure, and Envestra equity earnings (1H15: $1.0m, 1H14: $29.7m)

APA Group, March / April 2015

 33

Revenue by business segment

$ million	1H 15	1H 14	Change
Energy Infrastructure
Queensland	161.4	132.3	22%
New South Wales	71.9	74.1	(3%)
Victoria & South Australia	94.7	81.0	17%
Western Australia & Northern Territory	143.8	127.1	13%
Energy Infrastructure total	471.8	414.5	14%
Asset Management	38.4	56.1	(31%)
EnergyInvestments	7.7	8.7	(11%)
Total segment revenue	517.9	479.3	8%
Pass-through revenue	217.4	201.7	8%
Unallocated revenue	3.8	0.7	n/m
Divested business	1.0	29.7	n/m
Total revenue	740.1	711.4	4%

1H 15 Revenue split

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Other 1%
Regulated
(revenue subject to
price regulated tariffs)
18%
Contracted
(regulated assets with
Contracted negotiated tariffs)
(light regulation and
14%
non-regulated assets)
67%
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(1) Equity accounted earnings from APA’s 33.05% stake in Envestra.

APA Group, March / April 2015

 34

Balance sheet

$ million	31 Dec 2014 30 Jun 2014 Change
Current assets Property, plant and equipment Other non-current assets	1,114(1) 203 449 % 5,677(1) 5,574 2 % 1,959(1) 2,195 (11) %
Total Assets	8,750(1) 7,972 10 %
Current debt Other current liabilities Total current liabilities Long term debt	149(1) - - 364(1) 374 (3) %
	513(1) 374 (37) %
	4,125(1) 4,708 12 %
Other long term liabilities	389(1) 394 (1) %
Total long term liabilities	4,514(1) 5,102 12 %
Total Liabilities	5,026(1) 5,476 (8) %
Net Assets	3,724(1) 2,496 49 %

(1) Includes cash of $913.8m.

APA Group, March / April 2015

 35

Capital management

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----- Start of picture text -----

Bank borrowings
Maturity Profile of Drawn Debt as at 16 March 2015
First Call Date - 60 year
Sub Notes
A$1,600m
Euro MTN
US Private Placement
Notes
Australian MTN
A$1,200m
Japanese MTN
Canadian MTN
A$800m
US 144a Notes
Sterling MTN
A$400m
A$0m
962
1,439
1,159
894
515
735
536
393
295 318 289 300 296
186 175
86 126 96
Jun-15 Jun-16 Jun-17 Jun-18 Jun-19 Jun-20 Jun-21 Jun-22 Jun-23 Jun-24 Jun-25 Jun-26 Jun-27 Jun-28 Jun-29 Jun-30 Jun-31 Jun-32 Jun-33 Jun-34 Jun-35
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*** USD obligations translated, for the purposes of this chart, at the spot exchange rate on 16 March 2015 of A$=US$0.7642**

APA Group, March / April 2015

 36

Debt facilities

Total committed debt facilities at 16 March 2015

$million(1)	Facility amount	Drawn amount	Tenor
2011 Bilateral borrowings(2)	200	0	5 years maturing December 2018
2014 Syndicated facilities(3)	1,100	175	2.25,3.25 and 5.25year trances maturingSeptember 2016,2017 and 2019
2003 US Private placement	281	281	12 and 15 year tranches maturing September 2015 and 2018
2007 US Private placement	811	811	10, 12 and 15 year tranches maturing May 2017, 2019 and 2022
2009 US Private placement	185	185	7 and 10 year tranches maturing July 2016 and 2019
2010 AUD Medium Term Notes	300	300	10 year tranche maturing July 2020
2012 JPY Medium Term Notes	126	126	6.5 year tranche maturing in June 2018
2012 CAD Medium Term Notes	289	289	7.1 year tranche maturing in July 2019
2012 USD 144a/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 USD 144a/Reg S Notes(4)	1,439	1,439	10 year tranche maturing March 2025
2015 USD 144a/Reg S Notes(4)	393	393	20 year tranche maturing March 2035
2015 EUR Medium Term Notes(4)	962	962	7 year tranche maturing March 2022
2015 EUR Medium Term Notes(4)	894	894	12 year tranche maturing March 2027
2015 GBP Medium Term Notes(4)	1,159	1,159	15 year tranche maturing March 2030
2012 Subordinated Notes	515	515	60 year term, first call date March 2018
Total	9,925	8,800

(1) Australian dollars. Unless otherwise noted, foreign notes issued have been hedged into fixed-rate Australian dollar obligations.

(2) Comprises four facilities of $50 million each.

(3) Comprises three facilities, one of $425million, one of $400 million and one of $275 million.

(4) Foreign notes either issued in or hedged into fixed-rate USD obligations. Amount shown is the USD principal obligation translated at the spot exchange rate on 16 March 2015 of A$=US$0.7642

APA Group, March / April 2015

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Regulatory update

APA’s major price regulated assets

 Regulatory resets over the next five years

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 Goldfields Gas Pipeline Access Arrangement Review

• Application lodged 15 August 2014

• Western Australian Economic Regulation Authority (“ERA”) has commenced its review, with a draft decision expected Q1 2015 and the final decision is expected by end FY2015

• Existing arrangements remain in place until final determination of the new Access Arrangement

APA Group, March / April 2015

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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 seeking the reference service but tariffs can also be negotiated for other services
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
	– Regulatory 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
Regulatory	The larger distribution networks and some transmission pipelines are covered by economic regulation
coverage	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 is effectively a negotiate/arbitrate regime, where tariffs are negotiated with users and are
	subject to determination by the regulator only where the customer initiates a dispute

APA Group, March / April 2015

 39

Australian gas industry – domestic and export demand

• Australia’s gas production, consumption and exports are all projected to grow over the period to 2048-49

• Growth underpinned by:

• Domestic consumption will be driven by gas-fired electricity generation and expected to grow by 35% from 999 PJ in 2014/15 to 1,346PJ in 2049/50

• LNG export from Queensland and WA/NT

• Production is forecast to constantly grow as LNG projects, particularly in Queensland, currently under construction ramp up to full operations during 2015

Australian primary gas use by sector (2012-13)

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Construction, Agriculture,
Other, 1.1% 0.4% 1.7%
Mining, 8.3%
Residential,
7.7%
Transport,
26.3% Commercial
and services,
5.2%
Manufacturing,
Electricity 21.7%
generation,
27.6%
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Australian natural gas balance (PJ)

Primary energy consumption in Australia (2012-2013)

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----- Start of picture text -----

Renewables,
5.6%
Coal, 33.1%
Gas, 23.6%
Oil, 37.7%
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Source: BREE “Australian Energy Projections 20149 -50” Report, November 2014

APA Group, March / April 2015

 40

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.

APA Group, March / April 2015

 41

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For further information contact Yoko Kosugi Investor Relations, APA Group Tel: +61 2 9693 0049 E-mail: yoko.kosugi@apa.com.au

Delivering Australia’s energy

or visit APA’s website www.apa.com.au