APA GROUP — Investor Presentation 2015

May 5, 2015

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Connecting opportunities Connecting resources to markets through a sustainable strategy

Peter Fredricson, Chief Financial Officer Macquarie Australia Conference, Sydney 7 May 2015

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 │ Macquarie Conference May 2015 │ 

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

APA Overview (Ticker: APA AU) APA assets and investments Market capitalisation A$10.7 billion (as at 30 April 2015) Under development Acquisition - financial close pending ASX rank[(1) ] S&P/ASX 50 APA operated assets Other natural gas pipelines Rating - Moody’s: Baa2 (outlook Stable) - S&P: BBB (outlook Stable) Gas production Assets owned/ Over $12 billion[(1) ] 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 Other energy infrastructure 585 MW power generation 244 km HV electricity transmission Gas processing plants Employees More than 1,600

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(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 │ Macquarie Conference May 2015 │  3

Stable and predictable cashflows

 Customers associated with many contracted assets provide essential services:

• Regulated gas distribution systems

• Major power generation facilities

Counterparty credit ratings by contracted volumes[(1)] for major contracted assets - Illustrative Post QCLNG

1H 15 Revenue split by contract type

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Not rated 5% Sub-investment grade
Investment 1%
grade JV
2%
A– rated
BBB– to BBB+
or better
rated
50%
42%
(1) Based on Maximum
Daily Quantity (“MDQ”)
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Other 1%
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Contracted
(light regulation and
non-regulated assets)
67%
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Regulated (revenue subject to price regulated tariffs) 18%

Contracted

(regulated assets with negotiated tariffs)

14%

APA Group │ Macquarie Conference May 2015 │  4

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 infrastructure assets

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Continuing to grow our
Leveraging our asset
ownership interests in
management,
transmission pipelines
development and
through further expanding
operational capabilities
the east and west coast grids
Growing other energy Delivering responsive,
infrastructure midstream valuable solutions to our
assets customers
Maintaining financial flexibility
APA’s unrivalled asset portfolio across Australia and internal expertise,
together with strong industry fundamentals, drive growth opportunities
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APA listing - June 2000

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Responding to market demands - May 2015

APA Group │ Macquarie Conference May 2015 │ 

Where to from here – strategic development

 Continue to connect resources to markets, by working with our customers  New pipelines and expansions are underwritten by customer contracts  Provision of new services responding to customers’ needs and developing new opportunities  Can only be achieved by having a solid balance sheet

APA Group │ Macquarie Conference May 2015 │ 

Key initiative – east coast grid innovation

• Transformational change

in service provision - seamless, flexible, new options/solutions

• Ongoing development and growth opportunities

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Production vs Consumption in the east

APA provides services to satisfy market demands, which enables:  Supply to meet demand, and

 Demand encouraging new supply

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One GTA
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Source: EnergyQuest quarterly report, (Mar 2015)
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800 PJ
Gas Consumption
TAS
by Eastern States
SA
Gas Production
by Eastern regions
Otway / Bass / Gippsland VIC
Sydney NSW
Cooper
Bowen / Surat QLD
2010 2010 2011 2012 2013 2014
2010 2011 2012 2013 2014
Source: EnergyQuest quarterly reports (Feb ‘11, Feb ‘12, Feb ‘13, Feb ‘14, Mar ‘15)
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QCLNG Pipeline acquisition - adds 543 km and - access to Gladstone

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Emerging opportunity – NT Link

Options

• Short/quick - Mount Isa: 600 km

• Long/ $$$ - Moomba: 1,175 km

• …or somewhere in between

Why link?

• NT has >200,000 PJ of gas resources[1 ]

 Seamless transport between Timor Sea, Bass Strait, Sydney and Gladstone

 Long term additional security of supply for both the east coast and the Northern Territory

(1) NT Government media release 19 February 2014. Potential reserves of approximately 240 TCF across 6 basins

APA one of four final shortlisted entities – final bids due September 2015

APA Group │ Macquarie Conference May 2015 │  12

Opportunities in the West

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 GGP expansion projects complete

• Eastern Goldfields Pipeline

• greenfield

• long term GTAs with AngloGold

• using 3 interconnected

APA pipelines

• replace diesel with gas

• completion due by Jan 2016

 Customers that take long term view of their energy needs continue to have discussions with us

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Further growth – Australian midstream sector

APA will actively pursue increased investment opportunities in the midstream sector

• North American oil and gas industry has distinct upstream and midstream sectors

• Opportunities for the Australian upstream sector to pursue a similar approach

• APA already has a long involvement in owning and operating gas mid-stream assets

• Moomba and Wallumbilla compressor facilities

• Mondarra Gas Storage Facility

• Gas processing plants at Tipton West and Kogan North

Mondarra Gas Storage Facility

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Operational excellence - IOC

APA’s new Integrated Operations Centre will provide seamless services to our customers on the East Coast Grid

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• Better response to market changes

• Holistic management of the Grid

• Standardised and consistent processes and procedures

• Real-time environment

• Single point of contact for customers

• Currently controls pipelines in Qld and NT

• Other pipelines to be transitioned over the next 12 months

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Maintaining a strong balance sheet

APA’s Distribution Policy

Growth needs to be sustainably funded with appropriate capital structure

• Fully covered by OCF

• Sustainable over the long term

• Grow generally in line with OCF

• Regard for capital needs of the business and economic conditions

	Capital Management	31 Dec 2014	30 Jun 2014
	Gearing(1,2,3)	44.5%	64.2%
	Interest cover ratio	2.48x	2.31x
	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

• Soft target of 60 - 70% payout

• Balance between maintaining BBB/Baa2 rating metrics and funding growth by appropriate mixture of debt and equity

• (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.

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Long term, diverse debt portfolio

• March 15 issuance – ongoing access to global markets: – EUR700m 7yr notes @1.375% coupon

• – EUR650m 12yr notes @2.0% coupon

• – GBP600m 15yr notes @3.5% coupon

• – USD1,100m 10yr notes @4.2% coupon

• – USD300m 20yr notes @5.0% coupon

• Weighted average interest rate applying to drawn debt reduced to 5.6%[* ]

• Average maturity of senior drawn facilities extended to 8.8 years[* ]

• USD obligations translated, for the purposes of the calculation and the chart below, at the spot exchange rate on 16 March 2015 of A$=US$0.7642

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Maturity Profile of Drawn Debt as at 16 March 2015 chart below, at the spot exchange rate on 16 March 2015 of A$=US$0.7642
A$1,600m
Bank borrowings Australian MTN
First Call Date – Japanese MTN
A$1,200m
60 yr Sub Notes Canadian MTN
Euro MTN US 144a Notes
A$800m USPP notes Sterling MTN
A$400m
A$0m
962 1,439
1,159
515 735 894
536
295 318 289 300 296 393
186 86 175 126 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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APA – Connecting Resources to Markets

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

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

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Quality customer base and diversified asset footprint

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

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Strong balance sheet and prudent capital management

Integrated in-house management and experienced executive management team

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

or visit APA’s website www.apa.com.au

APA Group │ Macquarie Conference 2015 │ May 2015