APA GROUP — Investor Presentation 2008

Aug 25, 2008

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ASX RELEASE

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26 August 2008

26 August 2008

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:

• APA FY08 Results Presentation

Yours sincerely

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Mark Knapman

Company Secretary

Page 1

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Financial Results Full Year ended 30 June 2008

26 August 2008

Agenda

• Results overview

• Financial performance

• Operating performance

• Priorities and outlook

Mick McCormack MANAGING DIRECTOR Rick Francis CHIEF FINANCIAL OFFICER

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FY08 Results Presentation � 2

Record financial results

Strong growth in revenue, EBITDA, cash flow and cash flow per security

$ million	FY08	FY07	Change	Change
Underlying revenue1excluding pass-through	614.9	436.8	�	41%
Underlying EBITDA1	430.5	296.8	�	45%
Underlying NPAT1	82.2	64.5	�	27%
Reported NPAT	67.2	56.8	�	18%
Underlying OCF2	192.1	150.6	�	28%
Underlying OCF per security (cents)	42.7	39.7	�	8%
Distribution payout ratio	71.2 %	72.3 %

(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

FY08 Results Presentation � 3

Cash flow supports distribution growth

Achieved target of at least 5% distribution growth for FY08

Operating cash flow and distribution per security

Total operating cash flow and distributions

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APA distributions are well covered by operating cash flow, with cash remaining to fund further business growth and debt reduction

FY08 Results Presentation � 4

Strategic and operational highlights

Completed the transition from infrastructure owner to an operating business

� Acquired and integrated the Asset Management business from Origin Energy.

• Asset management of Envestra assets with addition of 488 skilled gas network and pipeline personnel to APA’s workforce.

� Transfer to APA of Alinta O&M agreements on APA’s foundation pipelines

• Removal of fees and integration of 263 employees, highly experienced in APA’s gas transmission pipelines. Includes transfer of the O&M contract on the Moomba Sydney Ethane Pipeline

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APA has direct operating control of its businesses and alignment of commercial and operational functions to drive growth and financial performance

FY08 Results Presentation � 5

Strategic and operational highlights

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Enhancing APA’s gas infrastructure portfolio

• Continued greenfield and brownfield growth on core gas infrastructure assets, all underpinned by long term agreements

• Completed the Culcairn compressor (NSW), Brooklyn-Lara pipeline (Vic) and X41 Power Station (Qld)

• Construction commenced on the Bonaparte Gas Pipeline and Wickham Point Pipeline (NT)

• Construction commenced on new compressor stations on the Carpentaria Gas Pipeline (Qld) and Goldfields Gas Pipeline (WA)

• Added 5,750 connections to APA Gas Network (Qld)

• Acquired interconnected infrastructure and investments

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• ─ One third SEA Gas Pipeline, SESA Pipeline, Murrin Murrin lateral and 17% stake in Envestra

• ─ Central Ranges Pipeline (Aug 08) and 6% stake in the MIT (Ethane Pipeline fund)

APA transports gas from every major gas source to every major gas market, delivering more than 50% of the nation’s domestic gas use annually

FY08 Results Presentation � 6

APA’s businesses and management deliver financial stability and growth

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STABILITY GROWTH
Capacity expansion underpinned by
agreements
Long term contracts, CPI indexed
Extension of gas network into growth areas
Capacity based agreements
Gas transmission Interconnected portfolio – synergy benefits;
Credit worthy customers/shippers
and distribution adaptable to market changes and shipper
Regulatory certainty
needs
Direct control of operating costs
New projects driven by gas demand growth
and shifting gas source dynamics
Skills and experience transfer to APA
Asset management Long term contracts
businesses
Electricity transmission Long term contracts or regulated return
Contribute additional throughput/capacity
and complementary Similar operating regime
on APA’s gas transmission assets
assets Credit worthy customers
Long range debt portfolio
Capital management Interest rate hedges Competitive capital projects
Portfolio of regulatory resets
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FY08 Results Presentation � 7

Financial performance

Delivering financial stability and growth

• Income statement

• Earnings analysis

• Operating cash flow

• Distributions

• Capital management

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FY08 Results Presentation � 8

Increasing income

Strong underlying cash flow supports distribution growth

$ million	FY082	FY073	Change	Change
Revenue1	897.8	532.7	�	68.5%
EBITDA1	430.5	296.8	�	45.0%
EBIT1	330.8	227.1	�	45.7%
Net interest expense1	(223.8)	(136.6)	�	63.8%
Tax1	(24.8)	(25.8)	�	3.9%
NPAT – underlying 1	82.2	64.5	�	27.4%
Reported NPAT	67.2	56.8	�	18.3%
Underlying OCF	192.1	150.6	�	27.6%
Underlying OCF per security (cents)	42.7	39.7	�	7.6%
Distribution per security (cents)	29.5	28.0	�	5.4%

(1) Underlying results before significant items and AIFRS adjustments

(2) Includes contributions from assets acquired: FY08 - Origin Energy Networks assets (12 months) and Alinta O&M agreement (9 months)

(3) Includes contributions from assets acquired: FY07 – GasNet (9 months), Allgas (8 months) and Directlink (4 months)

FY08 Results Presentation � 9

Reconciling underlying result

Adjusting for AIFRS impacts

	Reported	Capital	Comp.	Significant	Underlying
$ million	result	distributions1	assets2	**items3 **	result
Revenue	881.7	10.8	5.3	-	897.8
EBITDA	414.5	10.8	5.3	-	430.5
NPAT	67.2	10.8	-	4.2	82.2
Operating cash flow	186.4	-	-	5.7	192.1

(1) Capital distributions – Envestra ($10.6 m) and MIT ($0.2 m)

(2) Complementary assets – reclassification of principal repayments ($5.3m)

(3) One-off significant items – $6.0 m ($4.2 m after tax), cash impact ($5.7 m)

FY08 Results Presentation � 10

Segment performance

EBITDA growth across all business segments

$ million	FY08	FY07	Change
Gas transmission and distribution
Queensland	95.8	73.8	30%
New South Wales	66.8	46.5	44%
Victoria	75.2	50.3	49%
South Australia	19.5	-	-
Western Australia	107.9	100.7	7%
Northern Territory	3.0	4.4	(31%)
Gas transmission and distribution - total	368.3	275.8	34%
Electricity transmission	18.9	12.8	47%
Asset management	25.5	5.7	346%
Complementary assets	17.9	2.5	612%
Total Underlying EBITDA	430.5	296.8	45%

FY08 Results Presentation � 11

Operating cash flow

Growing distributions fully funded from operating cash flow

$ million	FY08	FY07	Change
Underlying operating cash flow (OCF)	192.1	150.6	27.6%
Distributions (net of DRP)	82.0	83.5	(1.8%)
Available OCF	110.1	67.1	64.1%
Underlying OCF per security (cents)	42.7	39.7	7.6%
Distribution per security (cents)	29.5	28.0	5.4%
Distribution payout ratio	71.2%	72.3%	(1.1%)
Weighted average securities on issue (millions)	450.3	379.6	+70.7
Growth capital expenditure	193.8	138.5
Investments: Envestra DRP; MIT	25.9	-
Acquisitions:
Origin Energy Network Assets	421.4
Alinta O&M agreement	206.2

FY08 Results Presentation � 12

Continued distribution growth

FY08 annual distribution, up 5.4%

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• FY08 18.6% tax deferred component

• DRP continues at

• 2.5% discount

Distributions fully covered by operating cash flow

FY08 Results Presentation � 13

Capital management in FY08

Strong balance sheet

• ICR – 1.86x for FY08

• Cash and committed undrawn facilities $525 million

• Gearing 72.0% (unchanged from FY07)

• Raised $124 million in equity

• Security purchase plan ($85m)

• Continued operation of DRP ($39m)

• 468.2 million securities on issue

• Weighted average 450.3 million

Committed facilities to support ongoing business growth

FY08 Results Presentation � 14

Capital management in FY08

Secure long term debt portfolio

• Refinancing of $2 billion syndicate completed July 2007

• Refinanced $150 million MTNs in August 2008

• Sub 100 bp average margin

• Only refinancing requirement in 2009

• March 2009 – MTN $300 million

• Interest rates fixed – 66%

• All margins fixed

• Long term maturity

• Refinancing obligations are spread over 14 years with no significant debt refinancing until FY 2010

• Weighted average term of debt 5.0 years

• Details in Appendix

Recent refinancing indicates continuing strong support for APA

FY08 Results Presentation � 15

FY08 Capital expenditure growth

Capturing organic growth opportunities

$ million	FY08	FY07
Regulated
Victoria Transmission System	79.1	24.9
APA Gas Networks(Qld)	15.9	10.9
	95.0	35.8
Major Projects
Pipeline expansion (compressors WA, NSW)	12.4	9.8
Gas storage expansion (Mondarra WA)	7.5	10.7
Bonaparte Gas Pipeline (NT)	36.1	4.6
Tipton West gas processing facility (Qld)	1.6	30.5
Daandine Power Station (Qld)	0.5	23.3
X41 Power Station (Qld)	19.0	13.2
NGV facilities (WA)	2.7	-
Other	7.0	1.6
	86.8	93.7
Stay in business capex	12.0	9.0
Total	193.8	138.5

FY08 Results Presentation � 16

FY09 Growth capex & capital management

Existing capital projects across all states exceed $325 million, supported by long term contracts and approved regulatory decisions

• NSW ($65m), WA ($50m), NT ($165m), Vic ($20m), Qld ($25m)

Existing facilities and options are sufficient to fund organic growth

• Surplus operating cash flow – 30% available for reinvestment

• Committed undrawn facilities

• Continued operation of DRP – average participation 38%

• Security Purchase Plan

• APA Unlisted Energy Fund - unlisted investment vehicle for annuity-style assets:

• Expected release of funds of at least $500 million

FY08 Results Presentation � 17

Operating performance and priorities and guidance for FY09

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• APA people

• Integration update

• Operations review

• Priorities and guidance

FY08 Results Presentation � 18

APA people

Valuable internal resource of skills and experience

� Expanded our management and operating capability through

• Acquisition of Origin’s asset management business (488 people) and

• Transfer of Alinta O&M agreements (263 people)

� Engineering and technical management expertise in house

• Positions APA to maximise the operating life and utilisation of assets

� Wider platform for skills and experience

• National focus, with work teams across states and assets

• Cross fertilisation of operation and commercial streams

� Safety a high priority

• HS&E management program implemented across the group

• – Improved reporting and managing of incidents

Leveraging APA’s internal capabilities to achieve unique outcomes

FY08 Results Presentation � 19

Integration progress

Transition and integration on track

• Restructured the business in closer alignment with strategy

• Moved from state based to nationally operated business on functional lines

• Established Commercial and Operations groups headed by Ross Gersbach and Stephen Ohl

• Moved to common system platforms and management processes

• Synergy benefits reflected in financial performance

• Improved EBITDA margin, particularly gas transmission and distribution business

Developing consistency, capturing synergy benefits and creating opportunities

FY08 Results Presentation � 20

Gas transmission and distribution

West Australia

• Point to point pipelines

• Shippers unique to pipelines

• Few gas sources

East Australia

• Interconnected pipelines and networks

• Common shippers on pipelines

• Multiple gas sources

• Multiple gas users

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$m
499
394
368
276
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Financial performance

• Revenue up 27% to $499m

• EBITDA up 34% to $368m

• EBITDA margin 74%, up from 70%

Revenue

EBITDA

FY08 Results Presentation � 21

Gas transmission and distribution

Key performance	�Increased revenue on all pipelines	�Operating expenses decrease due
drivers	from existing and new agreements,	to internal management and synergy
	and peak services on Moomba	benefits
	Sydney Pipeline System	�First full year contribution of APA
	�Increased tariffs on the Victorian	Gas Network, SEA Gas Pipeline,
	Transmission System applied from	SESA Pipeline, Murrin Murrin lateral
	1 January 2008
Achievements and	�Completion of Brooklyn Lara	�Commenced 5-year expansion
future developments	pipeline, part of the Victorian	program on the Moomba Sydney
	Transmission System, and Culcairn	Pipeline, underwritten by peak
	compressor on the Moomba Sydney	service agreements
	Pipeline	�APA Gas Network expansion into
	�Construction of Bonaparte Gas	adjacent regions
	pipeline commenced March 2008 and on schedule to complete in early 2009	�Acquisition of Central Ranges Pipeline and Heads of Agreement with Eastern Star Gas
	�Development of compressor stations
	on the Goldfields Gas Pipeline and
	Carpentaria Gas Pipeline,
	underwritten by long term contracts

FY08 Results Presentation � 22

Other business segments

Electricity transmission

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$m
25
19
17
13
Revenue EBITDA
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Asset management

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$m 43
25
7
6
Revenue EBITDA
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Complementary assets

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$m
35
18
4
3
Revenue EBITDA
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FY08 Results Presentation � 23

Establishment of APA Unlisted Energy Fund

Selling down APA’s position in assets that have annuity-style income streams

• APA Unlisted Energy Fund - unlisted vehicle to hold a number of APA’s annuity-style assets

Structure of APA Unlisted Energy Fund

• Electricity cables Murraylink and Directlink

• Other APA assets with long term stable annuity-style revenue streams

• Vehicle may acquire other annuity style assets

• APA’s continued involvement

• Retain minority interest in the vehicle

• Provide long term management and operation of the assets

• Funds of at least $500 million released to focus on greenfield and brownfield growth opportunities

� Transaction status:

• Advanced stage of discussion with both debt and equity participants

• Completion targeted within the current calendar year

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APA Group Third party equity
minority interest
Holding company
Asset company
Debt finance
APA electricity
transmission assets
APA Group
management Other APA
and operation annuity-style assets
services
Other annuity-
style assets
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FY08 Results Presentation � 24

Expansion and development projects for FY09

Committed expansion projects underpinned by secure agreements

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FY08 Results Presentation � 25

Priorities and guidance

Priorities

• 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

• Completion of APA Unlisted Energy Fund transaction

• Redirect funds to debt reduction and growth opportunities

• Leveraging internal commercial and operational knowledge and skill base

• Completion of integration program

Guidance

• Distribution guidance – maintain growth target of at least 5% in the medium term

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

FY08 Results Presentation � 26

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delivering Australia’s energy

For more information on APA Group visit our website www.apa.com.au

FY08 Results Presentation � 27

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.

FY08 Results Presentation � 28

Supplementary information

• Financials

• APA business segment

• Regulation update

FY08 Results Presentation � 29

FY08 Income Statement

Full year contributions impacting positively

FY08

• Origin Energy Network Assets (includes Envestra equity, Asset management, SEA Gas Pipeline) - full 12 months

• Alinta O&M contract termination

• nine months

FY07

• Victorian Transmission System and Telfer Gas Pipeline (GasNet) - nine months from October 2006

• APA Gas Network (Allgas)

• eight months from November 2006

• Directlink

• four months from March 2007

FY08 Results Presentation � 30

Financials

Key financial ratios

$ million	FY08	FY07	Comments
Underlying operating cash flow (cps)	42.7	39.7
Weighted average securities on issue (m)	450.3	379.6
Payout ratio	71.2%	72.3%
EPS (cps)
underlying	18.3	17.0
including significant items	14.9	15.0
Interest cover ratio (times)	1.86	1.98
Average interest rate at end of period	7.61%	7.06%
Gearing ratio	72.0%	72.4%	Post Origin Energy Networks acquisition 2 July 2007
Total assets ($m)	5,083	4,238
Net tangible asset backing per security ($)	1.24	1.99	Increase in goodwill/intangibles post 2008 acquisitions

FY08 Results Presentation � 31

Financials

Revenue analysis by business segment

	$ million	FY08	FY07	Change
	Revenue
	Gas transmission and distribution
	Queensland	133.6	108.2	23%
	New South Wales	82.3	75.4	9%
	Victoria	102.0	66.6	53%
	South Australia	19.7	-	-
	Western Australia	142.5	128.7	11%
	Northern Territory	18.4	15.2	22%
	Gas transmission and distribution - total	498.6	394.1	27%
	Electricitytransmission	25.2	17.2	47%
	Asset management	42.9	6.7	537%
	Complementaryassets	34.9	4.0	766%
	Total	601.6	422.0	43%
	Pass-through revenue
	Northern Territory	95.9	95.9	0%
	South Australia	186.9	-	-
	Totalpass-through	282.9	95.9	195%
	Unallocatedrevenue	13.3	14.8	(10%)
	Total underlying revenue	897.8	532.7	69%

FY08 Results Presentation � 32

Financials

Significant items

$ million	Pre tax	Tax	After tax
FY08
Acquisition integration costs	(4.4)	1.3	(3.1)
Unsuccessful acquisition due diligence costs	(1.3)	0.4	(0.9)
Revaluation gain – GasNet hedges	(0.3)	0.1	(0.2)
Total	(6.0)	1.8	(4.2)
FY07
Advisory and legal costs	(7.0)	2.1	(4.9)
SCC repair and investigative work	(5.3)	1.6	(3.7)
Revaluation gain – GasNet hedges	1.2	(0.4)	0.8
Total	(11.1)	3.3	(7.8)

FY08 Results Presentation � 33

Financials

Operating cash flow

$ million	FY08	FY07
Underlying EBITDA (pre-significant items)	430.5	296.8
Non-cash movements and provisions	3.5	(7.2)
Dividends received	7.4	-
Net working capital movements	(34.1)	(5.8)
SCC payments	(7.6)	(13.3)
Net interest paid	(208.2)	(127.0)
Tax refunds / (payments)	0.6	0.2
OCF (pre significant items)	192.1	143.7
GTD timing difference	-	6.9
Underlying OCF	192.1	150.6
Weighted average securities on issue (millions)	450.3	379.6
Underlying OCF per security (cents)	42.7	39.7

FY08 Results Presentation � 34

Financials

Composition of FY08 distributions

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FY08 Results Presentation � 35

Financials

Total committed debt facilities

Facility	Facility amount	Tenor
Medium term notes	$300 million	March 2009
Bilateral borrowings	$165 million	July 2011
Project debt	$80 million	December 2011
2003 US private placement	$496 million	7, 10, 12 and 15 year tranches
		September 2010, 2013, 2015 and 2018
2007 Syndicated facility	$2.0 billion1	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) Amount drawn at 30 June 2008 was $1.57 billion

FY08 Results Presentation � 36

APA Group business segments

Gas Transmission and Distribution

Queensland:

• Roma Brisbane Pipeline

• Carpentaria Gas Pipeline

• APA Gas Network

New South Wales:

• Moomba Sydney Pipeline

• Central West Pipeline

• Central Ranges Pipeline

• Mariner Pipeline Fund (6% equity)

Victoria:

Electricity Transmission

Interstate connectors:

• Murraylink (SA-Vic)

• Directlink (NSW-Qld)

APA Asset Management

Envestra assets:

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

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

MIT asset:

• 1,375 km ethane pipeline (NSW)

Other:

• Victorian metering (unregulated)

• CAMS (Vic)

Complementary Energy Assets

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 ( 18.3% equity)

Western Australia:

• Goldfields Gas Pipeline (88.2%) GGP laterals (100%) - Parmelia Gas Pipeline

• Midwest Pipeline (50%)

• Telfer/Nifty Pipeline

• Mondarra Gas Storage Facility

Northern Territory:

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

FY08 Results Presentation � 37

Regulatory update

Regulatory resets over the next five years

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2008 2009 2010 2011 2012
Moomba Sydney Pipeline [1, 2]
Goldfields Gas Pipeline
Central West Pipeline
Amadeus Gas Pipeline
Roma Brisbane Pipeline
Victorian Transmission System
Carpentaria Gas Pipeline [3]
APA Gas Network (Allgas)
Murraylink
Directlink
Current regulatory period Next regulatory period
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• (1) Approximately half the Moomba Sydney Pipeline is regulated.

• (2) APA is exploring light regulation option for the regulated section of the Moomba Sydney Pipeline, which may mean there will be no reset. This process is in its early stage.

• (3) Carpentaria Gas Pipeline Access Arrangement has expired and was replaced with light regulation under the new Gas Law.

National Gas Law and Rules

• Introduced 1 July 2008, replacing Gas Pipelines Access Law and Gas Code.

• The new Law and Rules introduce a light regulation option for some pipelines, and regulatory holidays for new pipelines.

• Under the new Law, the Access Arrangement for the Carpentaria Gas Pipeline expired and has been replaced by the light regulation option. APA is also exploring this option for the Moomba Sydney Pipeline.

FY08 Results Presentation � 38

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FY08 Results Presentation � 39
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ASX RELEASE

26 August 2008

For further information please contact:

Chris Kotsaris, Investor Relations APA Group Joanne Collins, Gavin Anderson & Company Telephone: (02) 9693 0049 or Mob: 0402 060 508 Telephone: (02) 9552 8939 or Mob: 0423 029 932 Email: chris.kotsaris@apa.com.au Email: jcollins@gavinanderson.com.au

About APA Group (APA)

APA Group, comprised of Australian Pipeline Trust and APT Investment Trust, is the major ASX-listed energy transmission company in Australia with interests in almost 12,000 km of natural gas pipeline infrastructure, over 2,300 km of gas distribution networks in south east Queensland, Coal Seam Gas processing plants, gas fired power stations, gas storage facilities and two high voltage direct current interconnector systems.

APA manages and operates all its assets and also provides management and operation services to gas distribution and transmission company Envestra (which owns 19,100 km of natural gas distribution networks and 1,029 km of natural gas transmission pipelines). It also holds an 18 percent stake in Envestra and a one-third interest in the SEAGas pipeline. APA Group has a varied and quality customer base including AGL Energy, Cooper Eromanga Basin Producers, Xstrata, Newmont, CS Energy, BHP Billiton, Zinifex, Incitec Pivot, Origin, RioTinto, Newcrest, Nickel West, Synergy and Verve Energy.

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