APA GROUP — Interim / Quarterly Report 2016

Feb 23, 2016

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Financial Results Half year ended 31 December 2015

24 February 2016

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 nor does it contain all the information which a prospective investor may require in evaluating a possible investment in APA Group. 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 presentationis 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 can generally be identified by the use of forward‐looking words such as, 'expect', 'anticipate', 'likely', 'intend', 'could', 'may', 'predict', 'plan', 'propose', 'will', 'believe', 'forecast', 'estimate', 'target', 'outlook', 'guidance' and other similar expressions within the meaning of securities laws of applicable jurisdictions and include, but are not limited to, forecast EBITDA, operating cashflow, distribution guidance and estimated asset life. 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 and are subject to risk factors associated with the industries in which APA Group operates. Such forward‐looking statements, opinions and estimates are not guarantees or predictions of future performance and involve known and unknown risks and uncertainties and other factors, many of which are beyond the control of APA Group, and may involve significant elements of subjective judgement and assumptions as to future events which may or may not be correct. There can be no assurance that actual outcomes will not materially differ from these forward‐looking statements, opinions and estimates. A number of important factors could cause actual results or performance to differ materially from such forward‐looking statements, opinions and estimates.

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.

Non‐IFRS financial measures: APA Group results are reported under International Financial Reporting Standards (IFRS). However, investors should be aware that this presentation includes certain financial measures that are non‐IFRS financial measures for the purposes of providing a more comprehensive understanding of the performance of the APA Group. These non‐IFRS financial measures include EBIT, EBITDAand other “normalised” measures. Such non‐IFRS information is unaudited, however the numbers have been extracted from the audited financial statements.

Not an offer: This presentation does not constitute an offer, invitation or recommendation to subscribe for or purchase any security. In particular, this presentation does not constitute an offer to sell, or a solicitation of an offer to buy, any securities in the United States. Securities may not be offered or sold, directly or indirectly, in the United States or to persons that are acting for the account or benefit of persons in the United States, unless they have been registered under the U.S. Securities Act of 1933, as amended (the U.S. Securities Act), or are offered and sold in a transaction exempt from, or not subject to, the registrationrequirements of the U.S. Securities Act and any other applicable state securities laws.

Financial data: Investors should be aware that certain financial data included in this presentation are "non‐GAAP financial measures" under Regulation G of the U.S. Securities Exchange Act of 1934, as amended. These measures are EBITDA, normalised EBITDA and statutory EBITDA. The disclosure of such non‐GAAP financial measures in the manner included in the presentation may not be permissible in a registration statement under the U.S. Securities Act. These non‐GAAP financial measures do not have a standardised meaning prescribed by Australian Accounting Standards and therefore may not be comparable to similarly titled measures presented by other entities, and should not be construed as an alternative to other financial measures determined in accordance with Australian Accounting Standards. Although APA Group believes these non‐GAAP financial measures provide useful information to users in measuring the financial performance and condition of its business, investors are cautioned not to place undue reliance on any non‐GAAP financial measures included in this presentation.

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APA 1H 16 Results Presentation

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Results overview and strategic highlights

Mick McCormack Managing Director and CEO

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APA 1H 16 Results Presentation

Summary financial performance

$ million	1H 16	1H 15(5)	Change	Change
Normalised results(1)
EBITDA from continuing operations	667.6	401.3	Up	66.3%
Net profit after tax(2)	99.5	111.2	Down	10.5%
Operating cash flow(3)	462.1	263.2	Up	75.6%
Operating cash flow per security (cents)	41.5	30.0	Up	38.3%
Statutory results
EBITDA	667.6	849.6	Down	21.4%()
Net profit after tax	99.5	467.3	Down	78.7%(
Operating cash flow(3)	462.1	280.4	Up	64.8%
Operating cash flow per security (cents)	41.5	31.9	Up	30.1%
Distributions
Distribution per security (cents)	19.0	17.5	Up	8.6%
Distribution payout ratio (4)	45.8%	55.6%	Down	17.6%

• (1) Normalised results exclude one‐off significant items, reflecting APA’s core earnings from operations. There were no significant items for the period, therefore normalised and statutory results are the same for 1H16.

(2) Net profit after tax for the period was affected by increased depreciation, amortisation and interest costs.

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

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

(5) Statutory results for 1H15 included significant items relating mainly to profit on the sale of APA’s shareholding in Australian Gas Networks Limited.

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APA 1H 16 Results Presentation

APA – an infrastructure success story

 Ready and responding to the dynamic gas market

HY16 highlights

• Enhancing our infrastructure

• Inter‐connecting markets

• Bi‐directional capability

• East Coast Grid continues to evolve and deliver for customers:

• WGP full period contribution

 Providing customer focused solutions

• Innovative energy solutions

• Delivering essential services

• Investing in systems capability

• Major bi‐directional pipeline projects completed

• VNI expansion continues

• West Coast Grid on a steady path

 Industry leading expertise

• Comprehensive in‐house infrastructure expertise and skills – infrastructure development, engineering, operations, commercial – across all of the assets we own and operate

• EGP commissioned ahead of planned schedule

• IOC transition complete

• $147.2 million organic growth projects

• Gas connection growth drove Asset Management earnings

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APA 1H 16 Results Presentation

Connecting Australia to its energy future

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 Continue to connect
EGP
commissioned resources to markets by
working with our
Mondarra RBP bi‐
expansion directional customers
capability
 Committed projects
transition Full IOC underwritten by long
completed term revenue contracts
and/or regulatory
Systems upgrades
ongoing: arrangements
• APA Grid
• Enterprise Asset
 System upgrades in
Management
system
pursuit of more efficient
• Online Simulator
MSP bi‐
operations
directional
capability  Achieved through funding
Completed projects
from a solid balance sheet
Ongoing projects
VNI expansion
Unique, interconnected footprint with sustainable growth opportunities
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• System upgrades in pursuit of more efficient operations

• Achieved through funding from a solid balance sheet

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APA 1H 16 Results Presentation

End to end customer commitment

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Customer focused investments in:

 Assets

• Interconnected network (WGP, SWQP)

• Expansions (East Coast Grid, EGP, compressor stations)

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• Augmentations (bi‐directional flows, storage capabilities)

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 Systems

• Integrated Operations Centre

• Enterprise Asset Management System

• APA Grid, enabling managing of complex services such as multi‐asset services, bi‐directional services, capacity trading and in‐pipe trades

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• Online simulator

 People

• Targeted leadership development and technical training

• Cross functional development opportunities

• Focus on health and safety continues

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APA 1H 16 Results Presentation

East coast gas market undergoing transformation

 Significant volumes required to keep the LNG trains running

 Gas volumes will not always be steady

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PJs
2500 Annual East Coast Gas Consumption
Example gas volume profile
of LNG train ramp up 2000
1500
1000
500
0
Residential & Commercial Industrial GPG LNG
Source: AEMO National Gas Forecasting Report Dec 2015
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Example gas volume profile of 4 LNG trains ramping up

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APA 1H 16 Results Presentation

Providing optionality for customers delivers opportunities

 Some can be planned, others may not be

Example gas profile of 4 LNG trains ramping up

Sample gas profile of 4 LNG trains ramping up, with 1 train down for 2 weeks

Options for the customer/opportunities for APA:

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Flare it
Loss of
or
resource
and revenue
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Store it
Take it
Park &
elsewhere
Loan it
100+ delivery
Available Sell it points on the
when Earn Grid
needed revenue
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APA services

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APA 1H 16 Results Presentation

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Financial performance

Peter Fredricson Chief Financial Officer

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APA 1H 16 Results Presentation

Reconciliation – statutory and normalised results

$ million 1H 16 1H 15 Change	$ million 1H 16 1H 15 Change
Normalised Significant items Statutory Normalised Significant items Statutory Normalised Revenue excluding pass‐through(1) 812.5 ‐ 812.5 522.7 ‐ 522.7 55.5 %(3)
EBITDA – continuing businesses 667.6 ‐ 667.6 401.3 17.2 418.5 66.3 %(3)
EBITDA – divested business(2) ‐ ‐ ‐	1.0 430.0 431.0 n/m(3)
EBITDA 667.6 ‐ 667.6 402.3 447.2 849.6 65.9%(3) Depreciation and amortisation(3) (250.5) ‐ (250.5) (88.5) ‐ (88.5) (183.1)%(3)
EBIT 417.1 ‐ 417.1 313.8 447.2 761.1 32.9%(3) Net interest expense(4) (253.3) ‐ (253.3) (151.3) ‐ (151.3) (67.4)%(3)
Pre‐tax profit 163.8 ‐ 163.8 162.6 447.2 609.8 0.8%(3) Tax (64.2) ‐ (64.2) (51.3) (91.2) (142.5) (25.2)%(3) Non‐controlling interests (0.0) ‐ (0.0) (0.0) ‐ (0.0) n/m(3)
Net profit after tax 99.5 ‐ 99.5 111.2 356.0 467.3 (10.5)%(4)
Operating cash flow 462.1 ‐ 462.1 263.2 17.2 280.4 75.6%(3)

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

(2) EBITDA – divested business includes the net profit on the sale of Australian Gas Networks for 1H15.

• (3) Increased depreciation and amortisation due to the acquisition of the Wallumbilla Gladstone Pipeline, adding further significantfixed and intangible assets that are depreciated and amortised for the full six month period.

(4) Increased net interest expense due to the increased amount of debt included in the funding of the acquisition of the WallumbillaGladstone Pipeline.

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APA 1H 16 Results Presentation

1H16 result: EBITDA by business segment

% of

$ million

2015 2014 Change

$ million	2015	2014	Change	EBITDA(2)	Historical EBITDA by business segment(1)
Energy Infrastructure
Queensland	426.7	146.5	191.2%	59.9%
New South Wales	63.3	63.7	(0.6%)	8.9%
Victoria & South Australia	69.8	76.2	(8.4%)	9.8%
Northern Territory	9.9	9.4	5.2%	1.4%
Western Australia	101.5	106.2	(4.5%)	14.2%
Energy Infrastructure total	671.1	402.0	66.9%	94.1%
Asset Management	27.9	24.9	12.0%	3.9%
Energy Investments	14.0	7.6	82.7%	2.0%
Corporate Costs (‘CC’)	(45.4)	(33.2)	36.7%	(6.4%)
Continuing business
EBITDA(1)	667.6	401.3	66.3%
CC/EBITDA(2)	6.4%	7.6%	(1.3%)
Divested business(3)	0.0	1.0	(100.0%)
Significant items	0.0	447.2	(100.0%)
Total EBITDA	667.6	849.6	(21.4%)
Notes: Numbers in the table may not add due to rounding.
(1) Continuing business EBITDA.

(2) As a % of Continuing business EBITDA before Corporate costs.

(3) Investment in AGN (formerly Envestra) sold in August 2014.

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Expansion projects delivering ongoing earnings increases
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APA 1H 16 Results Presentation

1H16 EBITDA Bridge

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APA 1H 16 Results Presentation

1H16 Operational summary – Energy Infrastructure

• Expansion of the East Coast Grid (‘ECG’) capacity and service offerings continues:

Revenue Split by Contract Type

• EBITDA from APA’s ECG increased by 13.5% (excl. WGP) or 95.5% (incl. WGP)

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• WGP contributed $235 million

• Organic growth due to contribution from the expanded ECG, in particular into Queensland to support LNG

• Moomba Sydney Pipeline bi‐directional capability installed, along with Roma Brisbane Pipeline

• West Coast Grid (‘WCG’) continues on‐track performance:

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• Eastern Goldfields Pipeline commissioned in December 2015, ahead of schedule

• Mondarra Gas Storage Facility and Emu Downs Wind Farm solid contributors

• EBITDA from WCG decreased by 4.5% mainly due to the possible reduction in tariff on Goldfields Gas Pipeline, in anticipation of the regulator’s draft decision becoming operative

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WGP contributed to nearly double ECG EBITDA
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APA 1H 16 Results Presentation

EBITDA by pipeline

East Coast Grid + Northern Territory

West Coast Grid

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APA 1H 16 Results Presentation

1H16 Operational summary – Asset Management

& Energy Investments

Asset Management

• Underlying earnings continue to grow

• One‐off customer contributions for the period were similar to previous period

Energy Investments

• Increased contribution from EII, GDI (EII), and SEA Gas Pipeline

• Positive contribution from DPS

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Asset Management and Energy Investments earnings increased period to period
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APA 1H 16 Results Presentation

Corporate overheads remain under control

• Corporate costs have remained relatively flat over the last 5 years vis‐à‐vis growth of the business

• Increase for the period relate to a number of one‐off items including cost of APA’s unsuccessful bids for NEGI and Iona

• Corporate costs as a portion of EBITDA from continuing operating businesses is at 6.4%

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Corporate costs remain relatively flat, reflective of the benefits of economies of scale
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APA 1H 16 Results Presentation

Capital expenditure

$ million	1H16(1) 1H15(1)
Growth capex	36.0 55.5 12.6 78.5 7.1 0.6 79.1 14.1 12.5 13.3
Regulated‐ Victoria
Major Projects Queensland
New South Wales
Western Australia
Other
Total growth capex
Stay in business capex
Customer contributions
Total capex
Investments and acquisitions
Total capital & investment expenditure

Committed growth capex

(1) Capital expenditure represents cash payments as disclosed in the cash flow statement.

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Growth capital expenditure is expected to be at the lower end of guidance range
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APA 1H 16 Results Presentation

Capital management

 Cash and committed undrawn facilities of around $1.1 billion as at 31 December 2015

~~.~~	~~.~~
	Metrics(1)	Dec 2015	Jun 2015
	Gearing(1, 2)	63.7%	63.4%
	Interest cover ratio	2.52 times	2.59 times
	Average interest rate applying to drawn debt(1, 3)	5.69%	6.76%
	Interest rate exposure fixed or hedged	93.9%	94.0%
	Average maturity of senior facilities	8.2 years	8.5 years

(1) For the purpose of the calculation, drawn debt that has been kept in USD (rather than AUD) has been nominally exchanged at AUD/USD exchange rate at respective inception date of 0.7772 for Euro and GBP MTN issuances and 0.7879 for US144A notes.

(2) Ratio of net debt to net debt plus book equity.

(3) Includes $515 million of Subordinated Notes.

 Credit ratings – S&P: BBB (outlook Stable), Moody’s: Baa2 (outlook Stable)

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APA remains well positioned to fund its planned organic growth activities
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APA 1H 16 Results Presentation

Debt maturity profile

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(1) Does not include the US$4 billion syndicated bridge facility executed in November 2014 which is, as yet, undrawn Maintaining diversity of funding sources and spread of maturities

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APA 1H 16 Results Presentation

Fully covered distributions

On target to deliver increased distribution guidance

 1H 16 distribution payout ratio[(1,2) ] of 45.8%

 Distribution components: 19.0 cents profit distribution nil capital distribution 19.0 cents  FY16 distribution guidance of 41.5 cents per security, a 9% increase over FY15

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

• (2) Based on normalised operating cash flow.

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APA 1H 16 Results Presentation

Outlook and FY2016 Guidance

• Based on current operating plans and available information, EBITDA for FY2016 expected within a range of $1,275 million to $1,310 million

• Includes US$ denominated contribution from Wallumbilla Gladstone Pipeline of approximately $470 million

• Net interest costs for FY2016 expected within a range of $500 million to $510 million

• Growth capital expenditure expected to fall within the $300 million to $400 million range, based on projects that are currently under construction or under discussion Asset

• Distribution per security expected to be in the order of 41.5 cents per security

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$1,275m to $1,310m
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3% to 7%
Organic growth
$821.3m
FY15 EBITDA from Continuing Organic growth Full year WGP contribution FY16 EBITDA guidance
businesses
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• Note: WGP revenues are denominated in US$. Net cashflow after servicing US$ denominated interest costs has been hedged to A$.

• Expected US$ denominated EBITDA and Net interest costs have been converted at the same exchange rate for the purpose of the guidance estimation.

Note: All conversions are based on AUD/USD exchange rate of 0.7804 as at 12.00pm 24 February 2015. FY2016 guidance includes 3% to 7% of organic growth plus full year contribution from WGP

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APA 1H 16 Results Presentation

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Outlook

Mick McCormack Managing Director and CEO

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APA 1H 16 Results Presentation

Connecting gas markets and resources

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• Stand ready to assist customers navigate dynamic markets

• Investments to enhance our

  • infrastructure

• Delivery of flexible and innovative

  • services to supplement traditional take‐ or‐pay contracts

• Delivery of reliable and secure source of energy

• Maintain prudent capital structure to retain flexibility and to continue to invest in a capital intensive sector

 Customer‐led growth

• Additional gas receipt and delivery points

• Energy infrastructure complementary to

• APA’s existing asset footprint

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APA has an outstanding track record of successfully delivering reliable quality energy infrastructure to its clients
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APA 1H 16 Results Presentation

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Questions

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APA 1H 16 Results Presentation

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Supplementary information

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APA 1H 16 Results Presentation

APA Group structure

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

• Australian Pipeline Trust (ARSN 091 678 778)

• 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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• 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 : interests in energy infrastructure investments

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APA 1H 16 Results Presentation

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

APA Overview (Ticker: APA AU)

Normalised Continuing Business EBITDA[(1)]

Market capitalisation A$9.9 billion (as at 22 February 2016)

S&P/ASX 50

ASX rank

Moody’s: Baa2 (outlook Stable) S&P: BBB (outlook Stable)

Credit Rating

Assets owned/ ~ $19 billion operated

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Gas transmission

15,051[(2)] km transmission pipelines Underground & LNG gas storage

Gas distribution[(3)]

28,659 km gas mains & pipelines 1.3 million gas consumers

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

Australian gas transmission pipeline ownership

Employees ~1,600

• (1) Normalised results exclude one‐off significant items, reflecting APA’s core earnings from operations.

• (2) Includes 100% of the pipelines operated by APA Group which form part of its energy investments including Ethane Pipeline Income Fund, SEA Gas and EII.

Source: AER State of the Energy Market Dec 2015 ; Company reports; APA data as at 31 Dec 2015.

• (3) Includes 100% of assets operated by APA Group in Queensland, New South Wales, Victoria and South Australia

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APA 1H 16 Results Presentation

Stable and predictable cashflows

1HY16 Revenue by Customer Credit Rating

1H16 Revenue by Customer Industry Segment

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Stable and predictable cash flow from regulated assets and long term contracts with quality customers
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APA 1H 16 Results Presentation

Balance sheet

$ million	31 Dec 2015 30 Jun 2015 Change
Current assets Property, plant and equipment Goodwill and other intangibles Other non‐current assets	438.0 721.3 (39.3%) 8,329.7 8,355.2 (0.3%) 4,598.9 4,696.7 (2.1%) 873.9 879.7 (0.7%)
Total Assets	14,240.5 14,652.9 (2.8%)
Current debt Other current liabilities Total current liabilities Long term debt	95.8 164.4 (41.7%) 482.1 644.4 (25.2%)
	577.9 808.8 (28.6%)
	9,301.7 9,141.5 1.8%
Other long term liabilities	342.7 320.0 7.1%
Total long term liabilities	9,644.4 9,461.5 1.9%
Total Liabilities	10,222.3 10,270.2 (0.5%)
Net Assets	4,018.2 4,382.7 (8.3%)

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APA 1H 16 Results Presentation

Debt facilities

Total committed debt facilities at 31 December 2015

$million	Facility amount	Drawn amount	Tenor
2015 Bilateral bank facilities	200	0	4.2 and 5.2 year tranches maturing December 2019 and 2020
2015 Syndicated bank facilities	830	125	2.25, 3.25 and 5.25 year tranches maturing September 2017, 2018 and 2020
2003 US Private placement	96	96	15 year tranche maturing September 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 US144a/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
2012 Subordinated Notes	515	515	60 year term, first call date March 2018
2015 US144a/Reg S Notes(1)	1,777	1,777	10 and 20 year tranches maturing March 2025 and March 2035
2015 GBP Medium Term Notes(1)	1,140	1,140	15 year tranche maturing March 2030
2015 EUR Medium Term Notes(1)	1,826	1,826	7 and 12 year tranches March 2022 and 2027
Total	9,366	8,461

(1) Notes have been hedged into fixed rate US dollar obligations.

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APA 1H 16 Results Presentation

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

• WA regulator issued a draft decision in December 2015. APA has responded and challenged the regulator’s position that would result in a significant reduction in the regulated tariff. Less than 25% of the Goldfields’ capacity is sold subject to the regulated tariff.

 Amadeus Gas Pipeline Access Arrangement Review

• A response to the regulator’s draft decision was lodged on 6 January 2016. A final decision is expected in April 2016. Application lodged 15 August 2014. The final decision will have minimal impact on APA’s revenue as the vast majority of service is provided at rates determined under contract.

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APA 1H 16 Results Presentation

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

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APA 1H 16 Results Presentation

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APA 1H16 Results Presentation APA 1H 16 Results Presentation

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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