APA GROUP — Investor Presentation 2018

Aug 21, 2018

financial results year ended 30 June 2018.

22 August 2018

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disclaimer

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This presentation has been prepared by Australian Pipeline Limited (ACN 091 344 704) as responsible entity of the Australian Pipeline Trust (ARSN 091 678 778) and APT Investment Trust (ARSN 115 585 441) (APA Group).

The information in this presentation does not contain all the information which a prospective investor may require in evaluating a possible investment in APA Group and should be read in conjunction with the APA Group’s other periodic and continuous disclosure announcements which are available at www.apa.com.au. All references to dollars, cents or ‘$’ in this presentation are to Australian currency, unless otherwise stated.

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 seek professional advice if necessary.

Past performance: Past performance information should not be relied upon as (and is not) an indication of future performance.

Forward looking statements: This presentation contains certain forward looking information, including about APA Group, which is subject to risk factors. “Forward-looking statements” may include 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 and include, but are not limited to, forecast EBIT and EBITDA, operating cashflow, distribution guidance and estimated asset life.

APA Group believes that there are reasonable grounds for these forward looking statements and due care and attention have been used in preparing this presentation. However, the 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. 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.

Non-GAAP financial measures: 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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results overview and stratresults overview and gic highlights strategic highlights Mick McCormack Managing Director and CEO.

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FY2018 highlights

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	$ million	FY2018	FY2017	change
	Statutory results
	Revenue excluding pass-through(1)	1,941.4	1,888.3	Up	2.8%
	EBITDA	1,518.5	1,470.1	Up	3.3%
	Net profit after tax	264.8	236.8	Up	11.8%
	Operating cash flow(2)	1,031.6	973.9	Up	5.9%
	Operating cash flow per security (cents)(3)	90.7	87.1	Up	4.1%
	Distributions
	Distributions per security (cents)	45.0	43.5	Up	3.4%
	Franking credits per security (cents)	6.33	4.0	Up	58.3%
	Distribution payout ratio(4)	51.5%	49.8%

Notes:

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

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

• (3) Operating cash flow per security has been adjusted for the rights issue completed on the 23 March 2018.

• (4) Distribution payout ratio = total distribution applicable to the financial year as a percentage of operating cash flow.

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investing in Australia’s energy future

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Solid results, further pipeline of opportunities announced to continue to deliver customer-centric energy solutions

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• Expanded network of integrated assets

• Enhanced services offering flexibility and reliability

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Badgingarra Wind Farm
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Existing assets

$1.4 billion plus of growth projects

• New flexible gas transportation contracts across APA’s East and West Coast Grids

• A new mining customer for the Diamantina Power Station

• Refreshed APA’s suite of services to better service our customers’ needs

• US CPI escalation and favourable USD/AUD exchange rates in relation to the Wallumbilla Gas Pipeline

• Part year contributions from newly commissioned organic growth assets including the Reedy Creek Wallumbilla Pipeline , Mt Morgans Gas Pipeline and the Emu Downs Solar Farm

• A 5 year extension to the original 12 year power purchase agreement for the Badgingarra Wind Farm

• A new 17.5 MW Badgingarra Solar Farm included in the BWF power purchase agreement

• $875.5 million capex and investments in FY18

• ~$425 million growth capex planned is underway for FY19

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record capex program – FY2017 to FY2019

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• growing portfolio of committed projects

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Yamarna Gas Pipeline (Commissioned)
Yamarna Power Station
Reedy Creek Wallumbilla Pipeline
- commissioned May 18
Emu Downs Solar Farm
– commissioned Dec/Jan 18
Darling Downs Solar Farm
Mt Morgans Gas Pipeline
- commissioned Jan 18
Badgingarra Wind & Solar Farms
Orbost Gas Processing Plant
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- our business doing deals with customers

Yamarna Gas Pipeline & Power Station

• ~1,500km from Carnarvon Basin to eastern Goldfields region

• Utilising APA’s Goldfields Gas Pipeline, Murrin Murrin Lateral, Eastern Goldfields Pipeline, Yamarna Gas Pipeline, generating electricity at Yamarna Gas Power Station

• For Gruyere Gold Project

• 15 year contract

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Incitec Pivot – 3,300km

• ~3,300 km from Mereenie Basin (NT) to Gibson Island (Qld)

• Utilising APA’s Amadeus Gas Pipeline, Carpentaria Gas Pipeline, South West Queensland Pipeline, Roma Brisbane Pipeline

• For Incitec Pivot’s fertiliser plant

• 1 year contract

• Gas industry working together to provide a solution for a key industrial customer

• Announced June 2018

• Announced June 2017

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Yamarna Power Station
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East Coast Grid – multiple customers

• ~3,000 km from Queensland (typically Wallumbilla) to Melbourne / Sydney

• Utilising APA’s South West Queensland Pipeline, Moomba Sydney Pipeline, Victorian-Northern Interconnect

• For various customers managing gas portfolios

• Various terms ~1 - 3 years

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TRIFR [(1)]
15
10.41
10 8.11 8.94
7.5
5
0
FY15 FY16 FY17 FY18
Notes:
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focused on delivering industry best practice

Health and safety

• Continue to target a zero harm workplace

• Injury rates increased in FY18, especially with contractors

• 2[nd] year of a new 3-year HSE Strategic Improvement Plan

• Focusing on safety leadership

• Developing initiatives on health and wellbeing

  • (1) Total reportable injury frequency rate (TRIFR) is measured as the number of lost time and medically treated injuries sustained per million hours worked. All data includes both employees and contractors.

• Improving and simplifying our safety system

• FY19 Target TRIFR of no more than 7

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Trevor Vaughan, welding inspector for APA
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• APA will use data analytics to target known injury drivers

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Environment

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• Environmental Management Plan improvement program commenced across the business:

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• Standardised compliance process and register

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• Improvement Program rollout including new risk assessment process

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• Review compliance tools to integrate with existing business systems and processes

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• Registered as a supporter of the Task Force on Climate-related Financial Disclosure initiative

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customer focus

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The Energy Charter – industry initiative

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Clarity Flexibility Simplicity
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• APA is one of 15 energy businesses from across the Australian energy supply chain to develop The Energy Charter

• Objective is to reconnect industry as a whole with its purpose and create collective accountability for better customer outcomes

• Charter Principles focus on:

Customer focus at APA

• Interconnected grid

• Seamless services

• Integrated Operations Centre

• Systems and technology

• Product and services refresh

• Customer relationships

• Embedding customer-minded culture for better customer outcomes

• Improving energy affordability

• Providing energy reliably, safety and sustainably

• Improving the customer experience

• Supporting customers in vulnerable circumstances

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putting customers at the centre of our decision-making

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results overview and financial performance strategic highlights Peter Fredricson Chief Financial Officer.

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summary results

$ million	FY2018 FY2017 Change
Revenue excluding pass-through(1)	1,941.4 1,888.3 2.8%
EBITDA Depreciation and amortisation	1,518.5 1,470.1 3.3% (578.9) (570.0) (1.6%)
EBIT Net interest expense	939.6 900.1 4.4% (509.7) (513.8) 0.8%
Pre-tax profit Tax	429.9 386.3 11.3% (165.1) (149.5) (10.4%)
Net profit after tax	264.8 236.8 11.8%
Operating cash flow(2)	1,031.6 973.9 5.9%
Operating cash flow per security (cents)(3)	90.7 87.1 4.1%
Distribution per security (cents)	45.0 43.5 3.4%
Distribution payout ratio(4)	51.5% 49.8%

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APA made the following contributions to the broader economy during FY2018:

• $1,600 million paid to Suppliers

• $188 million paid to Employees

• $239 million paid in Taxes

• $490 million paid to Securityholders

• $473 million interest paid to Lenders

Notes: Numbers in the table may not add due to rounding.

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

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

• (3) Operating cash flow per security has been adjusted for the rights issue completed on the 23 March 2018.

• (4) Distribution payout ratio = total distribution applicable to the financial year as a percentage of operating cash flow.

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FY2018 result: EBITDA by business segment

$ million	**FY2018 **	**FY2017 **	Change	% of FY18 EBITDA(1)
Energy Infrastructure Queensland 962.2 925.4 4.0% 60.7% New South Wales 147.1 149.5 (1.6%) 9.3% Victoria & South Australia 127.2 125.3 1.5% 8.0% Northern Territory 22.9 18.8 22.1% 1.4% Western Australia 237.6 234.7 1.2% 15.0%
Energy Infra total 1,497.1 1,453.7 3.0% 94.4% Asset Management 66.2 58.7 12.7% 4.2% Energy Investments 23.1 24.4 (5.4%) 1.5% Corporate costs (67.9) (66.7) (1.9%) (4.3%)
Total EBITDA 1,518.5 1,470.1 3.3%

FY2018 EBITDA Bridge

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Notes: Numbers in the table may not add due to rounding. (1) As a % of EBITDA before Corporate costs.

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low risk business model

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• APA has robust risk management processes in place

• Manage counterparty risks by:

• Diversification of customer & industry exposure

• Assessment of counterparty creditworthiness

• Putting in place appropriate credit support arrangements

• Entering into long term contracts to support major capital spend

• Revenue weighted average contract tenor remaining in excess of 12 years

Energy Infrastructure revenue split

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By revenue type By customer industry segment
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By customer credit rating
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Flexible short term Industrials & Others Not rated Sub-investment grade
Throughput charge & other services: 1.0% 4.2% 0.2%
5.0%
variable revenue: 6.8% Other: 0.2%
Contracted fixed
revenue: 4.3%
Regulated Investment
revenue: 9.0% Resouces Grade (1)
21.6%
Energy 22.9% A- rated
49.1% or better
44.9%
Capacity
charge Utilities BBB and
revenue: 78.7% BBB+
24.3%
27.8%
Notes:
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• (1) An investment grade credit rating from either S&P (BBB- or better) or Moody’s (Baa3 or better), or joint venture with an investment grade average rating across owners. Ratings shown as equivalent to S&P rating scale.

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capital expenditure and investment cash flows

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	$ million	FY18	FY17
	Growth capex
						Acquisitions		& other investment cash flows
	Regulated – Victoria	33.0	106.1			Growth capex SIB capex
	Non-regulated			1,600 A$ m
	East Coast	326.6	78.7	1,400 6,000	6,284.4 6, 0		6, 00
					0		0
	Western Australia & Northern Territory	369.1	30.6	1,200	0
	Other	14.2	56.5	1,000							875.5
	Total growth capex	742.9	271.9	800				673.6
	Stay-in business capex	112.6	68.8	600
	Total capex	855.5	340.7	400						377.5
	Investments & acquisitions(1)	20.0	36.8	200
	Total capital & investment expenditure(2)	875.5	377.5	0		FY15		FY16		FY17	FY18

Notes: Numbers in the table may not add due to rounding.

(1) Represents the share purchase price for the Orbost Gas Processing Plant.

(2) Capital expenditure (“capex’) represents net cash used in investing activities as disclosed in the cash flow statement, and excludes accruals brought forward from the prior period and carried forward to next period.

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growth projects schedule

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Project (% spent) Pipeline projects Renewables projects Midstream projects
Projects FY17 FY18 1H FY19 2H FY19 1H FY20 2H FY20 Customer
Emu Downs Solar Farm
100% 13-year contract Synergy
(incl. $5.5m ARENA funding)
Reedy Creek Wallumbilla
100% 20-year contract APLNG
Pipeline
Darling Downs Solar Farm
~88% 12-year contract Origin
(incl. $20m ARENA funding)
Yamarna Pipeline & Power Gold Road/
~91% 15-year contract
Station Gold Fields JV
Badgingarra Wind & Solar Farm ~66% 17-year contract Alinta
Orbost Gas Processing Plant ~50% Multi year contract Cooper
Other Projects Various
Total growth capex FY17: FY18: FY19: FY20:
(‘in-flight’ to date) $272m $743m ~$425m ~$300-400m
$1.4 billion plus
FY18: FY19: FY20:
Total revenue contribution
<$5m ~$75m+ ~$215m+
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Note: diagram is illustrative only.

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capital management

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APA’s parameters for capital management and distributions

Capital management:

• Retain our 2 credit ratings at Baa2/Stable (Moody’s) and BBB/Stable (S&P) to facilitate access to global debt capital markets

• Maintain gearing[(1)] ~65-68%

• Fund growth with an appropriate mix of retained funds in the business, debt and equity

• Minimise impacts from adverse movements in interest rates through a combination of hedging and raising debt at fixed interest rates

Distribution Policy:

• Fully covered by operating cash flow

• Grow generally in line with operating cash flow

• Sustainable over the long term

• Considered in the context of the capital needs of the business and economic conditions

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

Notes:

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capital management

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• Credit ratings: S&P BBB (CreditWatch Positive, Aug 2018), Moody’s Baa2 (outlook Stable, affirmed Aug 2018)

• Majority of interest cost obligations known today are hedged – 97.7% as at 30 June 2018

• APA completed ~$500 million capital raising by way of a PAITREO Entitlement Offer, March 2018

• Redeemed $515 million of Subordinated Notes at the first-call date of 31 March 2018 and repaid the $125.8 million (JPY 10 billion) Japanese MTNs at maturity on 22 June 2018

• A new $1,000 million Syndicated Bank Facility came into effect on 2 July 2018, with two $500 million tranches maturing on 30 June 2023 and 31 December 2023

• All capital markets debt issuance out to 2035 are fully hedged at fixed rates

Metrics	Jun 2018	Jun 2017
Gearing(1, 2) 65.4% 67.4% Interest cover ratio 2.7 times 2.8 times Average interest rate applying to drawn debt 5.65% 5.56% Interest rate exposure fixed or hedged 97.7% 94.5% Average maturity of senior facilities 6.9 years 7.5 years

Notes:

• (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 rates of 0.7772 for Euro and GBP MTN issuances and 0.7879 for the US144A notes at the respective inception dates.

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

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debt maturity profile

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APA maintains diversity of funding sources and spread of maturities[(1)]

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$1,600m
Headroom (bank borrowings)
$1,400m
Bank borrowings
$1,200m
Sterling MTN
Euro MTN
$1,000m
US 144A Notes
$800m
Canadian MTN
Australian MTN
$600m
US Private Placement Notes
$400m
USD denominated
obligations [(2)]
$200m
$0m
Note:
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(1) APA debt maturity profile as at 2 July 2018.

(2) USD denominated obligations translated to AUD at the prevailing rate at inception (USD144A - AUD/USD=0.7879, EMTN & Sterling AUD/USD=0.7772).

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fully covered distributions

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• FY2018 distribution payout ratio[(1)] of 51.5%

• Components for FY18 distribution:

8.93 cents APT profit distribution 9.03 cents APT capital distribution 2.90 cents APTIT profit distribution 3.14 cents APTIT capital distribution 24.00 cents

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OCF per security (normalised)(2) Distributions
100 cents
90.7
87.1
80 cents 77.1
60 cents 54.6
50.6
43.5 45.0
41.5
40 cents 36.3 38.0
20 cents
0 cents
FY14 FY15 FY16 FY17 FY18
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Franking Credits

• $52 million tax payable for FY18

• Franking credits of 3.83 cents per security allocated to the final APT profit distribution, taking the FY18 franking credits to 6.33 cents per security

• Expect future profits from APT to be distributed with some level of franking credits

• Third year in providing the voluntary Tax Transparency Report

Notes:

• (1) Distribution payout ratio: total distribution applicable to the financial year as a percentage of operating cash flow.

• (2) Operating cash flow per security has been adjusted for the rights issue completed on the 23 March 2018.

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FY19 guidance

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• Based on current operating plans and available information, EBITDA for FY2019 is expected to be in the range of $1,550 million to $1,575 million

• Net interest costs for FY2019 expected within a range of $500 million to $510 million

• In the event that the CKI proposal does not proceed and APA remains as a stand-alone listed company for the full financial year, distributions per security for FY2019 are expected to be in the order of 46.5 cents per security , cash payout, franking credits may be allocated to the distributions based on corporate tax paid during FY2019

• Capital expenditure update:

• APA’s now $1.4 billion plus of growth projects from FY2017 to FY2019

• To date, APA has spent in excess of $1 billion on these projects

• Growth capital expenditure on these projects over the 3-year period is expected to be:

FY2018(Actual): $742.9 million

FY2019(Forecast): approx. $425 million (revenue to flow from FY2020) FY2020(Forecast): approx. $300-400 million

• Expected incremental revenue per annum as a result of capital expenditure: ~$75m plus in FY2019 and ~$215m plus in FY2020

• Stay-in-business capex is expected to be in the order of $100 million p.a. going forward

• Growth capex: beyond FY2019, APA expects $300 to $400 million p.a. for the next 2-3 years

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ou lookresults overview and strategic highlights Mick McCormack Managing Director and CEO.

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implementing energy policy changes

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APA supports Government initiatives to improve information transparency and increase market liquidity

• Pricing principles

• • Pipeline schematics

• Information •

• disclosure and Standard Gas Transportation Agreement arbitration • Standing tariffs

• framework • Uncontracted capacity outlook

• • Service usage information

• East Coast and Central Region disclosure on 31 Jan 2018

• Western Australian information disclosure on 19 Jun 2018

• 100% of contracts negotiated non scheme assets since 1 Aug 2017

• Additional • Pipeline financial statements

• financial • Weighted average tariffs

• information

• Due 31 Oct 2018

• Trading of firm transport, compression and park

• Capacity capacity between shippers •

• trading & Commence 1 Mar 2019 • Auction of contracted but un-nominated

• auction capacity

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APA’s strategy

APA is committed to delivering to customers energy solutions that are safe, reliable, innovative and cost-effective

• Our growth focus is to enhance our portfolio:

• of gas transmission pipelines

• of power generation: gas-fired and renewable energy

• of midstream energy infrastructure assets, including gas storage and gas processing

• We will continue to strengthen asset management, development and operational capabilities

• We will maintain APA’s financial strength

APA continues to see significant opportunities for growth capex - possible opportunities identified of >$4 billion over the next 5 years.

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East coast gas demand & production by field

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2,500PJ Undeveloped Reserves
Surat/Bowen 2P Developed
2,000PJ Gippsland 2P Developed
Cooper 2P Developed
AEMO gas demand forecast
1,500PJ
1,000PJ
500PJ
0PJ
2000 2005 2010 2015 2020F 2025F 2030F 2035F
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Source: Demand – AEMO GSOO 2018 Supply - EnergyQuest (actuals); AEMO 2017 GSOO (forecast)

Australian electricity supply by fuel source

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100% Oil Products
& Others
90%
Solar PV
80%
70%
Wind
60%
50% Hydro
40%
Natural gas
30%
20% Black coal
10%
Brown coal
0%
20062017e NSW VIC QLD WA SA TAS NT
Source: Department of the Environment and Energy, Australian Energy
Statistics, Table O, April 2018
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Implementation Agreement - APA and CKI Consortium

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• Conditional Implementation Agreement announced 13 August 2018

• A$11.00 per security cash offer and no change to FY18 final distribution (due 12 September 2018)

• • Compelling offer:

• 30% premium (5 day, 1 month, 3 month VWAPs)

• 15.3x FY2017 EV/EBITDA and 14.8x FY2018 EV/EBITDA[(1)]

• APA Board unanimously recommends the transaction

• Subject to a number of conditions, including approval from

• ACCC (mid-September) followed by FIRB decision

• CKA shareholders

• APA Securityholders

• Additional 4.0 cents per security for each full month in calendar 2019 which elapses post 31 December 2018 and prior to implementation (up to 31 March 2019)

• Securityholders do not need to take any action at this time – Scheme booklet is targeted to be sent to Securityholders by the end of October 2018

We remain focused on managing our business and executing on our strategy throughout this process……it is business as usual at APA

Note (1): Based on 1,179,893,848 APA stapled securities on issue, APA net debt as at 30 June 2018 as per Note 18 of the FY2018 financial statements, APA FY2017 EBITDA of A$1,470.1 million for the FY2017 multiple and APA FY2018 EBITDA of A$1,518.5 million for the FY2018 multiple.

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APA’s uniquely integrated energy infrastructure

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Assets and Investments Glossary
AGPGLOS Amadeus Gas Pipeline
BGP Bonaparte Gas Pipeline
BWSF Badgingarra Wind and Solar Farm
BWP Berwyndale Wallumbilla Pipeline
CGP Carpentaria Gas Pipeline
CRP Central Ranges Pipeline &
distribution network
CWP Central West Pipeline
DDSF Darling Downs Solar Farm
DPS & LPS Diamantina & Leichhardt
Power Stations
EGP Eastern Goldfields Pipeline
EDWSF Emu Downs Wind and Solar Farms
EP Ethane Pipeline
GGP Goldfields Gas Pipeline
IOC Integrated Operations Centre
KKP Kalgoorlie Kambalda Pipeline
MP Mid west Pipeline
MGP Mortlake Gas Pipeline
MGPSF Mondarra Gas Processing &
Storage Facility
MMGP Mt Morgans Gas Pipeline
MSP Moomba Sydney Pipeline
NGP Nifty Gas Pipeline
OGPP Orbost Gas Processing Plant
PGP Parmelia Gas Pipeline
PPS Pilbara Pipeline System
RBP Roma Brisbane Pipeline
RCWP Reedy Creek Wallumbilla Pipeline
SESA South East South Australia Pipeline
SGP SEA Gas Pipeline
SWQP South West Queensland Pipeline
TGP Tipton Gas Pipeline
VTS Victorian Transmission System
WGP Wallumbilla Gladstone Pipeline
WPP Wickham Point Pipeline
X41 X41 Power Station
YGP Yamarna Gas Pipeline
YPS Yamarna Power Station
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supplementary information

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snapshot of APA

Australian gas transmission pipeline ownership by kilometres ~ APA is Australia’s largest gas pipeline owner ~

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Jemena 2,344 km
AGIG 3,622 km
15,400 km
APA Group GasSEA EII
0 1,500 3,000 4,500 6,000 7,500 9,000 10,500 12,000 13,500 15,000
----- End of picture text -----*

Note: *** includes SEA Gas Pipeline and Mortlake Pipeline Source:** AER State of the Energy Market Dec 2017; Company reports; APA data as at 30 Jun 2018 and includes the Ethane Pipeline.

Total securityholder returns since listing vs index ~ Strong track record of delivering securityholder returns ~

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2,400
TSR CAGR: 17.8% over 18 Years
2,000
1,600
1,200
800
400
0
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APA Overview (Ticker: APA AU)

Market cap A$ 11.8 billion (as at 20 Aug 2018) ASX rank S&P/ASX 50

ASX rank

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

Credit rating

Assets approximately $20 billion owned/ Gas transmission[(1)] operated 15,400km transmission pipelines Underground & LNG gas storage Gas distribution[(2)] ~28,600 km gas mains & pipelines ~1.4 million gas consumers

Other energy infrastructure 605 MW power generation 244 km HV electricity transmission Gas processing plants Employees ~1,700

Notes:

• (1) Includes 100% of pipelines operated by APA Group, which form part of Energy Investments segment, including SEA Gas and EII.

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APA total securityholder return Utilities accumulation index
S&P/ASX 200 accumulation index
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• (2) Includes 100% of assets operated by APA Group in Queensland, New South Wales, Victoria and South Australia.

Source: IRESS, TSR performance to 20 August 2018

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group structure

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

• Australian Pipeline Trust (ARSN 091 678 778)

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

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

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

• The units of APT and APTIT 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, and the owner of the majority of APA’s operating assets and investments

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• Reporting business 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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solid historical performance
Normalised EBITDA Normalised operating cash flow
$1,600m $1,200m
$1,518
$1,400m $1,470
$1,000m $1,032
$1,331
$974
$1,200m
$862
$800m
$1,000m
$800m $600m
$822
$747 $545
$600m $662
$400m $433 $440
$535
$490
$400m $336
$290
$200m
$200m
$0m $0m
FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18
$16,000m Total assets 50c Distributions
$15,046 $15,227 45c
$14,000m $14,653 $14,843 45.0
43.5
40c 41.5
$12,000m
38.0
35c 36.3
34.4 35.0 35.5
$10,000m
30c
$8,000m 25c
$7,973
$7,699
20c
$6,000m
$5,428 $5,496 15c
$4,000m
10c
$2,000m
5c
$0m 0c
FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 29
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FY2018 operational summary – Energy Infrastructure

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Wallumbilla Gladstone Pipeline South West Queensland Pipeline Roma Brisbane Pipeline Reedy Creek Wallumbilla Pipeline
Carpentaria Gas Pipeline Diamantina Power Station Other Qld assets Moomba Sydney Pipeline
Victorian Transmission System SESA Pipeline Amadeus Gas Pipeline Goldfields Gas Pipeline
Eastern Goldfields Pipeline Emu Downs Wind and Solar Farm Pilbara Pipeline System Mondarra Gas Storage
Other WA
0 150 300 450 600 750 900 1,050 1,200 1,350 1,500 1,650A$ m
FY14
FY15
FY16
FY17
FY18
East Coast + Northern Territory Western Australia
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• EBITDA increased by 3.0% for East Coast, 22.1% for NT

• EBITDA from WA assets increased by 1.2%

• Early contributions from recently completed and commissioned Reedy Creek Wallumbilla Pipeline

• Continued demand for bi-directional services

• Early contributions from the Mt Morgans Gas Pipeline and the Emu Downs Solar Farm completed during the year

• Benefit from the US CPI increase on the Wallumbilla Gladstone Pipeline contract, along with a favourable USD/AUD exchange rate as the majority of contract revenues are in USD

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FY2018 operational summary – Asset Management, Energy Investments and Corporate costs

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A$ m70 Asset Management EBITDA
60
One-off
Customer
50
Contributions
40
30
Underlying
Asset
20
Management
EBITDA
10
0
FY15 FY16 FY17 FY18
Note: From FY17 onwards, DPS and the Ethane Pipeline became fully owned
assets and are managed within APA’s Energy Infrastructure segment and
therefore no asset management fees earnt.
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Asset Management

• Connections continued to grow, as natural gas remains a fuel of choice for cooking in APA’s network areas

• Customer contribution average increased to ~$12m p.a.

Energy Investments

• EBITDA from Energy Investments was marginally reduced

Corporate costs

• Slightly increased due to additional costs associated with the new Part 23 compliance requirements

• Contained despite the significant organic growth cycle

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Corporate costs 25 Energy Investments EBITDA
A$ m100 A$ m
80
Divested &
transferred
60 investments
20
40
Continuing
investments
20
0
15
FY15 FY16 FY17 FY18
FY15 FY16 FY17 FY18
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Note: Historical earnings from EP and DPS in this graph are classified as 31 Divested & transferred investments.

debt facilities

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Total committed debt facilities at 2 July 2018

	$ million	Facility	Drawn	Tenor
		amount	amount
	2015, 2016, 2017 & 2018 Bilateral bank facilities	550	200	2 to 4.6 year facilities maturing between May 2019 to July 2022
	2018 Syndicated bank facilities	1,000	-	5 and 5.5 year tranches maturing June and December 2023
	2003 US Privateplacement	96	96	15year tranche maturingSeptember 2018
	2007 US Private placement	516	516	12 and 15 year tranches maturing May 2019 and May 2022
	2009 US Private placement	99	99	10 year tranche maturing July 2019
	2010 AUD Medium Term Notes	300	300	10 year tranche maturing July 2020
	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
	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
	2016 AUD Medium Term Notes	200	200	7 year tranche maturing October 2023
	2017 US144a/Reg S Notes	1,109	1,109	10.3 year tranche maturing July 2027
	Total	10,173	8,823

Note: (1) USD denominated obligations translated to AUD at the prevailing rate at inception (USD144A - AUD/USD=0.7879, EMTN & Sterling - AUD/USD=0.7772)

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regulatory update

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• Approximately 9.0% of APA’s Energy Infrastructure revenue in FY18 was regulated revenue

• APA’s major regulatory resets over the next few years are as follows:

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**Note: *** Asset will cease to be covered as of 1 July 2019 in accordance with the National Gas Law and Rules

• Roma Brisbane Pipeline access arrangement review

• New Access Agreement from 1 January 2018

• Recognised changes in the pipeline configuration and demand profile through the approval of a bi-directional postage stamp tariff structure

• • The new tariff is in line with that applying in the previous period

• Victorian Transmission System access arrangement review

• New Access Agreement from 1 January 2018

• The Australian Energy Regulator approved APA’s recent significant expansions that enabled more gas flows between Victoria and NSW

• Average tariffs are largely unchanged from the previous period

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economic regulation of gas pipelines and networks

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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 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
tariff		negotiated for other services
	•	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 and
		― Return on value of regulated assets (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
asset base		RABs
(RAB)	•	RABs updated every access arrangement period
		― Increased by capital invested into the asset and reduced by regulatory depreciation costs
Regulatory	•	The larger distribution networks and some transmission pipelines are price 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, 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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For further information contact: Jennifer Blake Group Head of Investor Relations Tel: +61 2 9693 0097 E-mail: jennifer.blake@apa.com.au

Or visit the APA website at: www.apa.com.au

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