APA GROUP — Investor Presentation 2016

Mar 6, 2016

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Takeover Offer for Ethane Pipeline Income Fund (EPX)

7 March 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. Further details of the takeover offer will be contained in the bidder’s statement. EPX securityholders should read the bidder’s statement in its entirety before making a decision whether or not to accept the offer. Further, this presentation should be read in conjunction with 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. Forwardlooking 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, EBITDA and 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 registration requirements 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 March 2016, EPX Offer Presentation  2 and condition of its business, investors are cautioned not to place undue reliance on any non-GAAP financial measures included in this presentation.

Agenda

 Overview of APA’s Takeover Offer

 Strategic rationale for the acquisition

 EPX Securityholder benefits

 3

March 2016, EPX Offer Presentation

Takeover Offer summary

• Recommended Takeover Offer for Ethane Pipeline Income Fund (EPX)

Transaction

• Unanimous recommendation by the EPX independent directors, subject to no superior offer and an Independent Expert opinion that the Offer is fair and reasonable

• APA currently owns 6.08% of EPX securities

• Takeover Offer applies to all EPX securities that APA does not already own

• EPX Securityholders will receive all-cash consideration

Offer

consideration

• Offer Price of $1.88 per EPX Security PLUS retain 3.25 cents per security of declared distribution for the March 2016 quarter if eligible on the distribution record date

• Total cash consideration of $122 million (net of APA’s 6.08% securityholding) funded from APA cash and available funding sources

Conditions

• APA’s offer is unconditional

Timing

• Bidder’s Statement to be lodged with ASIC shortly

• Bidder’s Statement dispatch to EPX Securityholders mid to late March

 4

March 2016, EPX Offer Presentation

Strategic rationale for the Takeover Offer

• APA’s core business is the ownership and operation of transmission pipeline assets

Moomba Sydney Pipeline & Ethane Pipeline side-by-side

• The Ethane Pipeline acquisition offers APA the opportunity to increase its equity position in a long term ethane pipeline asset

• APA currently has an operating agreement over the Ethane Pipeline

• APA operates and maintains the Ethane Pipeline - Quarry View Scraper Station

• EPX has a long term contract in place with Qenos, which does not expire until 2030[(1)]

• In the longer term, alternative for the pipeline would be to convert to transporting liquids from the prospective Cooper Basin oil fields

• (1) Qenos may terminate this contract at any time by providing at least 12 months’ notice provided termination cannot occur before 1 January 2019

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The proposed acquisition satisfies APA’s investment criteria and
delivers growth, security and value to APA securityholders
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March 2016, EPX Offer Presentation

Benefits for EPX Securityholders

 Offer Price of $1.88 per EPX Security PLUS retain 3.25 cents per security of declared distribution for the March 2016 quarter if eligible on the distribution record date

• Comparison to current trading prices:

Offer Price PLUS Premium to: declared distribution Offer Price only

Last closing price(1)	30.1%	27.9%
1 week VWAP(2)	33.7%	31.5%
1 month VWAP	37.6%	35.3%

 Cash consideration provides certainty compared to the uncertainty of EPX’s business and future distribution profile which is dependent on a single customer

 APA Group is best placed to offer full value to EPX

• ownership and operation of transmission pipelines is APA’s core business

• Unconditional offer with accelerated payment

(1) Last closing price of $1.47 on 4 March 2016

(2) Based on the volume weighted average price of EPX Securities up to 4 March 2016, being the last trading day before the announcement of the Offer

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The proposed acquisition provides EPX Securityholders with certainty and full value for their securities
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March 2016, EPX Offer 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