AURIZON HOLDINGS LIMITED — M&A Activity 2021

Oct 21, 2021

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Aurizon Holdings Limited ABN 14 146 335 622

ASX Market Announcements ASX Limited 20 Bridge Street Sydney NSW 2000

BY ELECTRONIC LODGEMENT

22 October 2021

Aurizon announces agreement for acquisition of One Rail Australia

Attached is an ASX announcement, including a copy of the related Investor Presentation slides for release to the market.

Aurizon will be holding an investor briefing today at 1000am (Brisbane time); 1030am (Adelaide) and 1100am (Sydney/ Melbourne). To access the briefing, please click here https://services.choruscall.com/mediaframe/webcast.html?webcastid=zEl8VMDo

Kind regards

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David Wenck Company Secretary

Authorised for lodgement by the Aurizon Holdings Limited Board of Directors

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T +61 7 3019 9000 | F +61 7 3019 0720 | CompanySecretary@aurizon.com.au Level 8, 900 Ann St, Fortitude Valley QLD 4006 Australia | GPO Box 456 Brisbane QLD 4001 Australia

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ASX Announcement

Date: 22 October 2021

Aurizon announces agreement for acquisition of One Rail Australia

Aurizon today announced it had signed an agreement with Macquarie Asset Management, on behalf of its managed funds and client, to acquire One Rail Australia (ORA) for $2.35 billion.

ORA comprises bulk rail haulage and general freight assets in South Australia (SA) and the Northern Territory (NT); the 2,200km Tarcoola-to-Darwin railway line; and a haulage business in New South Wales (NSW) and Queensland (Qld).

Aurizon will divest ORA’s NSW and Qld business (“East Coast Rail or ECR”) through a demerger or a trade sale, whichever creates greater value for Aurizon shareholders.

Aurizon will retain and integrate the ORA bulk and general freight assets into the Aurizon business. These include the Tarcoola-to-Darwin rail infrastructure, South Australian regional infrastructure, five rail yards, 68 active locomotives, over 1000 active wagons and approximately 400 employees. Further details are available in the full presentation lodged by Aurizon with the Australian Securities Exchange. An overview slide is included at the end of this announcement showing the ORA business and the proposed integration and divestment of assets by Aurizon.

The purchase is subject to several customary conditions precedent and regulatory and consent conditions, including clearance from the Australian Competition and Consumer Commission (ACCC).

The acquisition is fully funded from a combination of Aurizon’s existing debt facilities and underwritten by new committed debt facilities.

One Rail Australia is a strong, profitable business with an aggregate estimated Earnings Before Interest Tax, Depreciation and Amortisation (EBITDA) of $220 million for CY2021 (ORA’s Bulk ~$80 million; ECR ~$140 million).

Managing Director & CEO Andrew Harding said the transaction offered a unique opportunity to grow Aurizon’s business and create value for shareholders.

“The One Rail acquisition is highly strategic and transformative for Aurizon. It is fully aligned with Aurizon’s strategy to grow our Bulk freight business into new markets and new geographies in Australia,” Mr Harding said.

“At our Investor Strategy Day in June, we detailed our aspiration to double our earnings in the Bulk business over the coming decade. The One Rail acquisition delivers a step change for Aurizon Bulk as a new entrant in the SA and NT region, and supports the ongoing growth of non-coal revenue in the Aurizon portfolio.

“Upon completion of the transaction, with the integration of One Rail bulk and divestment of ECR, the Bulk share of Aurizon’s haulage revenue will represent around 40%.[1]

“The ORA bulk infrastructure and operations in SA and NT provide customers with a safe, efficient and effective pathway to market for numerous existing commodities and growth opportunities in base metals, agriculture, iron ore and for neweconomy metals such as manganese and copper.”

Aurizon will be committing to an enforceable undertaking with the ACCC to divest ECR following the completion of the ORA transaction. Until that time, ECR will be operated independently of the Aurizon Group with a separate CEO and management team. The ECR divestment commitment is to address potential competition concerns from the ACCC arising from the transaction, and a final decision on the form of divestment will be based on delivering the best value outcome for Aurizon shareholders.

1 Haulage revenue includes Above Rail Coal (excluding track access), Above Rail Bulk (excluding track access) and One Rail Bulk (which includes South Australia/Northern Territory Infrastructure). Network (Central Queensland Coal Network) is excluded.

The ECR business includes a long-term coal haulage contract with Glencore for its mines in the Hunter Valley, NSW offering strong and stable cashflows.

Aurizon aims to complete the ORA acquisition by January – April 2022 but this is subject to regulatory approvals and other conditions precedent referred to above. Divestment of ECR, again subject to timing of the regulatory approvals of the acquisition, is targeted for completion in CY2022.

Aurizon will be holding an investor briefing today at 1000am (Brisbane time); 1030am (Adelaide) and 1100am - (Sydney/ Melbourne). To access the briefing, please click here Webcast | Aurizon Investor Briefing

For more information:

Investors: Media: Chris Vagg Mark Hairsine +61 409 406 128 +61 418 877 574

Extract from Aurizon presentation Acquisition of One Rail Australia and Divestment of East Coast Rail, available on the Aurizon and ASX websites:

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Acquisition of One Rail and Divestment of East Coast Rail

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22 October 2021

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Disclaimer

NO RELIANCE ON THIS DOCUMENT

This document was prepared by Aurizon Holdings Limited (ACN 146 335 622) (referred to as “Aurizon” which includes its related bodies corporate (including Aurizon Operations Limited)). It includes, or references or uses as a basis for information included in this document, certain information provided or made available to Aurizon by third parties through a process as part of which Aurizon was provided or given access to limited information about the target business.

Whilst Aurizon has endeavoured to confirm the accuracy of the information contained in this document at the date of publication, none of Aurizon, its related bodied corporate, or any of their respective officers, employees or representatives has independently verified, nor will verify, the information contained in this document for accuracy or completeness. None of Aurizon, its related bodied corporate, or any of their respective officers, employees or representatives:

• makes any representation or warranty as to the accuracy, completeness or reliability of any of the information contained in this document; or

• owes you any duty, whether in contract or tort or under statute or otherwise, with respect to or in connection with this document, or any part thereof, including any implied representations or otherwise that may arise from this document.

Any reliance is entirely at your own risk.

DOCUMENT IS A SUMMARY ONLY

This document contains information in a summary form only and does not purport to be complete and is qualified in its entirety by, and should be read in conjunction with, all of the information which Aurizon files with the Australian Securities Exchange. Any information or opinions expressed in this document are subject to change without notice. Aurizon is not under any obligation to update or keep current the information contained within this document. Information contained in this document may have changed since its date of publication.

NO INVESTMENT ADVICE

This document is not intended to be, and should not be considered to be, investment advice by Aurizon nor a recommendation to invest in Aurizon. The information provided in this document has been prepared for general informational purposes only without taking into account the recipient’s investment objectives, financial circumstances, taxation position or particular needs. Each recipient to whom this document is made available must make its own independent assessment of Aurizon after making such investigations and taking such advice as it deems necessary. If the recipient is in any doubt about any of the information contained in this document, the recipient should obtain independent professional advice.

INFORMATION ON ONE RAIL AND EAST COAST RAIL

The information on One Rail and East Coast Rail (and their related entities) and their respective assets contained in this document has been prepared by Aurizon using certain information provided or made available to Aurizon by third parties through a process as part of which Aurizon was provided or given access to limited information about the target business, and other publicly available information. While Aurizon has taken certain steps to confirm the accuracy and completeness of this information, neither Aurizon, or any of its officers, employees or representatives has independently verified, nor will verify, or makes any representation or warranty (express or implied) as to the accuracy or completeness of, such information.

STATEMENTS ABOUT THE FUTURE

This document contains “forward-looking statements”. The words “expect”, “anticipate”, “likely”, “intend”, “should”, “could”, “may”, “predict”, “plan”, “propose”, “will”, “believe”, “forecast”, “estimate”, “goals’, “aims”, “target” and other similar expressions are intended to identify forward-looking statements. Indications of, and guidance or outlook on, future earnings or financial position or performance are also forward-looking statements. The forward-looking statements are not based on historical facts, but rather on current beliefs, assumptions, expectations, estimates and projections of Aurizon. These statements are not guarantees or predictions of future performance, and involve both known and unknown risks, uncertainties and other factors, many of which are beyond Aurizon’s control. As a result, actual results or developments may differ materially from those expressed in the forward-looking statements contained in this document. Aurizon cautions against reliance on any forward-looking statements or guidance.

Except as required by applicable regulations or by law, Aurizon is not under any obligation to update these forward-looking statements (or scenario analysis) to reflect events or circumstances that arise after publication.

Past performance is not an indication of future performance.

NO LIABILITY

To the maximum extent permitted by law in each relevant jurisdiction, Aurizon and its directors, officers, employees, agents, contractors, advisers and any other person associated with the preparation of this document, each expressly disclaims any liability, including without limitation any liability arising from fault or negligence, for any errors or misstatements in, or omissions from, this document or any direct, indirect or consequential loss howsoever arising from the use or reliance upon the whole or any part of this document or otherwise arising in connection with it.

NO OFFER OF SECURITIES

Nothing in this presentation should be construed as a recommendation of or an offer to sell or a solicitation of or subscription or invitation of an offer to buy or sell securities in Aurizon in any jurisdiction (including in the United States), nor shall it or any part of it form the basis of or be relied on in connection with any contract or commitment whatsoever. This document is not a prospectus and it has not been reviewed or authorized by any regulatory authority in any jurisdiction. This document does not constitute an advertisement, invitation or document which contains an invitation to the public in any jurisdiction to enter into or offer to enter into an agreement to acquire, dispose of, subscribe for or underwrite securities in Aurizon.

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Agenda

1	Transaction Overview	Andrew Harding, Managing Director & Chief Executive Officer
2	Introduction to One Rail Bulk	Clay McDonald, Group Executive Bulk
3	Introduction to East Coast Rail	George Lippiatt, Chief Financial Officer & Group Executive Strategy
4	Transaction Funding and Process	George Lippiatt
5	Conclusion	Andrew Harding
6	Q&A

3

Transaction Overview Andrew Harding Managing Director & CEO

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TRANSACTION OVERVIEW

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Highlights

Acquisition of One Rail with integration of One Rail Bulk and divestment of East Coast Rail throu h a demer er or trade sale g g

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Integrated above
and below rail Increases Bulk’s
Transformative business with share of haulage
IRR exceeds
acquisition increased revenue [1] to ~40% Utilising strong
implied returns
consistent with exposure to and expansion into balance sheet to
from share
strategy of growing commodities South Australia support growth
buyback [2]
Bulk associated with and Northern
new economy Territory
markets
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Divestment of East Coast Rail through a demerger or a trade sale, whichever creates greater shareholder value

Aurizon dividend policy remains at 70-100% of underlying Net Profit After Tax

Dividends likely toward the lower end of the range for 1-2 years with the final outcome dependant on the divestment option undertaken for East Coast Rail Committed to maintaining current BBB+ / Baa1 credit rating

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1. Haulage revenue includes Above Rail Coal (excluding track access), Above Rail Bulk (excluding track access) and One Rail Bulk (which includes South Australia/Northern Territory Infrastructure). Network (Central Queensland Coal Network) excluded 2. Unlevered pre-tax return calculated using 20 years of forecast data from first year of acquisition and assuming demerger option (trade sale option IRR would depend on sale/use proceeds). Share buyback refers to the completed FY2021 buy-back

TRANSACTION OVERVIEW

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One Rail operations

One Rail Bulk is an integrated rail business in central Australia. East Coast Rail provides coal haula e in Hunter Valle and Central Queensland g y

ONE RAIL – OVERVIEW

ONE RAIL BULK

EAST COAST RAIL

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› Below Rail operator of Tarcoola to › Coal haulage in Hunter Valley and
⚫⚫⚫⚫⚫ Darwin $245m Darwin line $230m Central Queensland
Revenue [1] Revenue [1]
⚫ Katherine › Leading Intermodal and bulk freight › Long term rail haulage contract with
haulage in South Australia and Glencore to 2036
Northern Territory › Underpinned by lower cost, high
⚫ Tennant Creek
Mackay ⚫⚫⚫ $80m › To be integrated with Aurizon $140m energy (thermal) coal mines
EBITDA [1] Operations EBITDA [1] › To be divested
⚫⚫⚫ Alice Springs
Revenue [1] Above Rail Bulk Volume [2] Coal Haulage (million tonnes)
50
50
30%
Tarcoola 14mt
40
70%
⚫⚫⚫ Thevenard Port Augusta ⚫⚫
Port Pirie ⚫⚫ Newcastle
⚫⚫⚫ Whyalla ⚫⚫⚫ Above Rail: Bulk & Intermodal Iron Ore Manganese 30
⚫⚫⚫⚫⚫ Adelaide
Below Rail: Infrastructure Gypsum Copper
⚫ Port Access 20
Grain
⚫ Depot
Track Infrastructure [3]
⚫ Maintenance Facility/Facilities 10
⚫ Terminal Tracks Lease Expiry
⚫ Owned Yard
▬ Leased (Operating) Track Infrastructure 2,460km 32 years 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 [4]
Central Queensland Hunter Valley
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• › Long term rail haulage contract with Glencore to 2036

1. Estimated CY2021 based on nine months of actual data and three months of forecast data, post intercompany allocations. Excludes any corporate and operational synergies

2. Estimated CY2021 based on nine months of actual data and three months of forecast data

3. Track infrastructure is Tarcoola to Darwin and (operating) South Australia (SA) intrastate infrastructure (Kevin to Thevenard line, and yards/sidings on the interstate mainline). Non-operating (SA) track: Eyre Peninsula lines (excluding Thevenard), Mid-North and Barossa lines and Murray-Mallee region lines. Lease expiry is weighted average (by km) of Tarcoola-Darwin and (operating) SA Intrastate Network

4. Year-to-date (to 30 September 2021), annualised

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TRANSACTION OVERVIEW

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Transaction summary

• › Cash consideration of A$2.35 billion (plus ~$80m acquisition and divestment related fees) › Highly strategic and transformative acquisition for Aurizon and consistent with capital allocation framework › While several options were assessed, it was determined the combined package of One Rail assets would deliver greater value to our shareholders and also met the vendors’ requirements in selling the business as a whole

• › Divestment through a demerger or a trade sale, whichever creates greater shareholder value › Addresses ACCC requirements and aligns with Aurizon strategy to grow Bulk › A$1.93 billion debt for Aurizon Operations

• Acquisition of 100% of One Rail › Highly strategic and transformative acquisition for Aurizon and consistent with capital allocation framework

• 1 Australia › While several options were assessed, it was determined the combined package of One Rail assets would deliver greater value to shareholders and also met the vendors’ requirements in selling the business as a whole

• › Divestment through a demerger or a trade sale, whichever creates greater shareholder value

• 2 Divestment of East Coast Rail › Addresses ACCC requirements and aligns with Aurizon strategy to grow Bulk › A$1.93 billion debt for Aurizon Operations

• Funded from existing resources and › A$500 million secured debt for East Coast Rail

• 3 underwritten new committed debt facilities › Engagement with ratings agencies well advanced, commitment remains to Aurizon Operations BBB+/Baa1 credit ratings › Investment grade credit rating targeted for East Coast Rail › Positive engagement to date with various regulatory authorities

• 4 Completion targeted for early CY2022 › Divestment of East Coast Rail (through a demerger or trade sale) to take place after completion

Transaction does not impact legal proceedings against G&W – they remain on foot

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TRANSACTION OVERVIEW

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Opportunity for Aurizon Bulk

Expansion into South Australia and Northern Territory and increased exposure to commodities associated with new econom markets y

INTEGRATED ABOVE AND BELOW RAIL EXPOSURE TO CENTRAL AUSTRALIA

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GREATER EXPOSURE TO NEW ECONOMY MARKETS SUPPORTED BY GLOBAL DEMAND TRENDS

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Population growth, urbanisation and industrialisation in Asia

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Global energy transition through the development of wind turbines, battery development, electric cars and solar panels

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Reduction in steel production emissions requires supply of high-grade iron ore such as magnetite

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A growing world population and changing diets driving increased crop production and fertiliser use

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TRANSACTION OVERVIEW

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Value created for Aurizon

Consistent with our Bulk growth strategy aspiration to more than double EBIT by 2030[1]

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Growing bulk
business with new
markets
Our aspiration to
double the size of the
Bulk business by
2030
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Aurizon Investor Day June 2021

AURIZON BULK: UNDERLYING EBITDA[2] (A$m)

AURIZON HAULAGE REVENUE (FY21)[3]

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$80
-4ppts
to 30%
$220
$140
-4ppts
to 30% +8ppts
to 40%
FY2021 Change Pro forma
Earnings post-completion projected to Bulk
increase driven by volume growth and Metallurgical Coal
~$7-$10m of synergies
Thermal Coal
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3. Haulage revenue includes Above Rail Coal (excluding track access), Above Rail Bulk (excluding track access) and One Rail Bulk (which includes South Australia/Northern Territory Infrastructure). Network (Central Queensland Coal Network) excluded

1. Refer Investor Day presentation 8 June 2021

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2. Change represents One Rail Bulk estimated CY2021 based on nine months of actual data and three months of forecast data, post intercompany allocations. Excludes any corporate and operational synergies

TRANSACTION OVERVIEW

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East Coast Rail

Stable operating cash flows underpinned by long-term Hunter Valley take or pay contract

• Underpinned by long-term rail haulage contract with Glencore (to 2036)

• ✓ representing approximately 85% of projected coal volumes in CY2021

Average mine life of Hunter Valley contracted mines of 20 years[1] with the ✓ majority of coal volume ranked in the top quartile of energy content[2]

• ✓ Ability to redeploy fleet to pursue new Bulk opportunities in the region

Experienced management team, with John McArthur (current One Rail Chief ✓ Commercial Officer with 30 years of rail industry experience) to be appointed Chief Executive Officer

• ✓ Stable operating cash flows supporting free cash flow yield, targeting investment grade credit rating

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1. Weighted average mine life of Glencore contracted mines

2. Wood Mackenzie Cost Curve 2021 (Dataset: August 2021), Gross As Received (GAR) basis

Introduction to One Rail Bulk Clay McDonald Group Executive Bulk

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ONE RAIL BULK

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Highlights of One Rail Bulk

Acquisition is aligned with Aurizon’s Bulk growth strategy and provides a step change in Bulk earnings

INTEGRATED ABOVE AND BELOW RAIL BUSINESS

• ✓ Leading provider of intermodal and bulk freight in South Australia and Northern Territory

• ✓ Operates 2,460km[1] below rail infrastructure including Tarcoola to Darwin line

• ✓ Scope and scale opportunity that opens up new customers, channels, and geographies

GROWTH PLATFORM TO FURTHER DIVERSIFY CURRENT BULK BUSINESS

• ✓ Increased commodity exposure to new economy markets

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AURIZON BULK: REVENUE [2] ($Am)
$245
$880
$635
FY2021 Change Pro forma
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• ✓ Direct access to port facilities with capacity available – Darwin, Adelaide, Port Pirie

• ✓ Enhanced customer value proposition for Aurizon with operations across four states and Northern Territory

INTEGRATION

• ✓ Extract value through the enhanced capacity of the combined rail entity, and complemented with Aurizon's supply chain development capabilities

• ✓ Synergies estimated at an annual benefit of $7m - $10m

• ✓ Flexibility to redeploy excess rolling stock across Group

AURIZON BULK: UNDERLYING EBITDA[2] (A$m)

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$80
Earnings post- $220
completion projected
$140 to increase driven by
volume growth and
~$7-$10m of synergies
FY2021 Change Pro forma
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1. Track infrastructure is Tarcoola to Darwin and (operating) South Australia (SA) intrastate infrastructure (Kevin to Thevenard line, and yards/sidings on the interstate mainline). Non-operating (SA) track includes: Eyre Peninsula lines (excluding Thevenard), Mid-North and Barossa lines and Murray-Mallee region lines.

2. Estimated CY2021 based on nine months of actual data and three months of forecast data, post intercompany allocations. Excludes any corporate and operational synergies

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ONE RAIL BULK

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Below Rail: Infrastructure

A critical piece of rail infrastructure to support long-term growth ambitions

OVERVIEW

TRACK INFRASTRUCTURE

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› Economic owner of two long term rail concessions covering 2,460km [1] of track across
South Australia and Northern Territory ⚫⚫⚫⚫⚫ Darwin
› Revenue underpinned by a regulatory regime and negotiate / arbitrate framework ⚫ Katherine
regulated by Essential Services Commission of South Australia
› Readily available capacity to support growth opportunities
⚫ Tennant Creek
⚫⚫⚫ Alice Springs
One Rail Bulk: CY21 Revenue [2]
SA Interstate
Tarcoola-Darwin [1]
Network [1]
$70m
(30%) AustralAsia Railway
Concession Grantor SA Government
Corporation
Tarcoola
⚫ Port Access Port Augusta ⚫⚫
Expiration 2054 2047 ⚫ Depot ⚫⚫⚫ Thevenard Port Pirie ⚫⚫
⚫ Maintenance Facility/Facilities
Above Rail: Bulk ⚫ Terminal ⚫⚫⚫ Whyalla
⚫ Owned Yard
Below Rail: Infrastructure Track (km) 2,245 215 ▬ Leased (Operating) Track Infra. ⚫⚫⚫⚫⚫ Adelaide
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1. Track infrastructure is Tarcoola to Darwin and operating South Australia (SA) intrastate infrastructure (Kevin to Thevenard line, and yards/sidings on the interstate mainline). Non-operating SA track includes: Eyre Peninsula lines (excluding Thevenard), Mid-North and Barossa lines and Murray-Mallee region lines

2. Estimated CY2021 based on nine months of actual data and three months of forecast data, post intercompany allocations

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ONE RAIL BULK

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Below Rail: Infrastructure

Acquisition almost doubles Aurizon's existing rail infrastructure

Australian Rail Infrastructure Management (kilometres)

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8,500km
6,600km
5,500km
5,130km
3,520km
2,670km
2,386km 2,460km
1,700km
1,608km
998km 1,000km
760km
611km
344km
Roy Hill TasRail Fortescue Metro Trains BHP (Pilbara) Sydney Trains Rio Tinto John One Rail Aurizon V/Line Aurizon Arc Queensland ARTC
(Pilbara) (Pilbara) Melbourne (Pilbara) Holland Rail (CQCN) (CQCN / Infrastructure Rail
One Rail)
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Notes: Rail infrastructure management <200km excluded. TasRail: route kilometres of operational rail track only. BHP (Pilbara): includes rail infrastructure. Sydney Trains: includes track managed and maintained. Rio Tinto: includes rail network and related infrastructure. John Holland Rail (Country Regional Network (NSW) – contracted infrastructure manager): includes operational rail track only. One Rail: Tarcoola to Darwin and operating South Australia (SA) intrastate infrastructure (Kevin to Thevenard line, and yards/sidings on the interstate mainline). Non-operating SA track: Eyre Peninsula lines (excluding Thevenard), Mid-North and Barossa lines and Murray-Mallee region lines. V/line: includes leased and maintained rail track. Arc Infrastructure: includes rail track not in use. Australian Rail Track Corporation (ARTC): distance in route kilometres, includes rail network managed and maintained. Source: Company websites, Sydney Trains Annual Report 2019-20.

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ONE RAIL BULK

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Above Rail: Bulk and Intermodal

Leading provider of intermodal and bulk freight in South Australia and Northern Territory

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One Rail Bulk: CY21 Revenue [1] BULK
› Diversified mix of bulk minerals and agriculture, hauling iron ore,
manganese, gypsum, copper and grain
› Insourced rollingstock and track infrastructure maintenance
functions
$175m
70%
INTERMODAL
Below Rail: Infrastructure
› Sole rail freight operator on the Tarcoola-Darwin corridor
› Transports consumer goods, general cargo, construction materials,
One Rail Bulk: CY21 Volume [2] bulk liquids and special cargo between Adelaide and Darwin
› Terminals at Alice Springs, Tennant Creek, Katherine and Darwin
› Services centred around Australia’s four major freight forwarders
and Woolworths
14mt
Iron Ore Manganese
Gypsum Copper
Grain
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• › Transports consumer goods, general cargo, construction materials, bulk liquids and special cargo between Adelaide and Darwin

• › Terminals at Alice Springs, Tennant Creek, Katherine and Darwin

• › Services centred around Australia’s four major freight forwarders and Woolworths

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1. Estimated CY2021 based on nine months of actual data and three months of forecast data, post intercompany allocations 2. Estimated CY2021 based on nine months of actual data and three months of forecast data

ONE RAIL BULK

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Greater exposure to new economy commodities There are over 250 projects[1] across South Australia and Northern Territory

Commodity	Demand Driver	South Australia and Northern Territory Exposure	Copper Zinc Iron Ore Nickel Lanthanides Lead Phosphate Graphite Tin Potash Lithium Other SA & NT MINE PROJECTS1 ‒ Rail line	Copper Zinc Iron Ore Nickel Lanthanides Lead Phosphate Graphite Tin Potash Lithium Other SA & NT MINE PROJECTS1 ‒ Rail line
				Copper Zinc Iron Ore Nickel Lanthanides Lead Phosphate Graphite Tin Potash Lithium Other ‒ Rail line
Copper	Batteries, telecommunications	› Australia holds the second largest copper resources globally, with two-thirds contained in South Australia2
Grain	Food consumption	› South Australia produces around 20% of Australia’s grain production, averaging six million tonnes per annum (over the past five years)3
Magnetite	Green Steel	› South Australia holds around 44% of Australia’s total identified magnetite resource4
Phosphate	Fertiliser, agriculture	› The Georgina Basin, encompassing parts of both Queensland and Northern Territory account for almost all of Australia's phosphate rock resources5
Rare Earths	Batteries, wind turbines	› Australia is ranked sixth in the world for rare earth resources6. South Australia holds around 80% of Australia’s total rare earth oxides resource7

1. S&P Market Intelligence (Mine projects: all commodities excluding precious metals, diamonds, coal and uranium. Project status: exploration to pre-production)

2. Geoscience Australia, Australia’s Identified Mineral Resources 2020

3. Australian Crop Report, Australian Bureau of Agricultural and Resource Economics and Sciences, September 2021

4. South Australian Government, SA Magnetite Strategy (December 2017)

5. Geoscience Australia, Australia’s Identified Mineral Resources 2020

6. Geoscience Australia, Australia’s Identified Mineral Resources 2020

7. Geoscience Australia (website)

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Introduction to East Coast Rail George Lippiatt CFO & Group Executive Strategy

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EAST COAST RAIL

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Highlights of East Coast Rail A highly cash generative business

EXCLUSIVE HUNTER VALLEY HAULAGE RIGHTS

• ✓ Long-term rail haulage contract with Glencore to 2036

• ✓ Minimum guaranteed volumes to 2034 with no commodity price risk

• ✓ Underpinned by lower cost, high energy (thermal) coal mines

STABLE CASH FLOWS

• ✓ Highly cash generative – strong EBITDA margin and core capex <5% of revenue

• ✓ Utility-like stable cash flows support strong free cash flow yield

• ✓ Targeting an investment grade credit rating

PLATFORM FOR FUTURE DIVERSIFICATION

• ✓ Young fleet with average locomotive age of 9 years (Hunter Valley)

• ✓ Versatile fleet optimally positioned for deployment to pursue new opportunities as they arise

• ✓ Scope to pursue agriculture, construction materials and new economy commodities

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REVENUE (A$m) [1]
230
190 184
2019 2020 2021
UNDERLYING EBITDA (A$m) [1]
140
104 105
2019 2020 2021
COAL HAULAGE (Million Tonnes)
50
50
40
30
20
10
0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 [2]
Central Queensland Hunter Valley
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1. Estimated CY2021 based on nine months of actual data and three months of forecast data, post intercompany allocations

2. Year-to-date (to 30 September 2021), annualised

EAST COAST RAIL

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Overview of East Coast Rail

Haulage of approximately 30% of Hunter Valley export volumes

ONE RAIL CONTRACTED HUNTER VALLEY MINES Global Seaborne Thermal Coal Cash Margins[4]

BUSINESS OVERVIEW

• › Exclusive hauler of export coal from Glencore managed mines in the Hunter Valley with an average mine life of 20 years[[1]]

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Hunter Valley with an average mine life of 20 years [[1]] $60
Margin based on thermal coal
Recent expansion into Queensland’s Central Coal Network price (NEWC) of
US$100/t
Highly cash generative business with low capital intensity
$40
Hunter Valley Coal Export: Market Share East Coast Rail: Revenue By State [3]
(By Volume) [2]
2% 5% $20
26%
43%
$0
100 200 300 400 500 600 700 800 900
29%
95%
Pacific National Aurizon New South Wales
One Rail (East Coast Rail) SSR Queensland One Rail Contracted Hunter Valley Mines
-$20
Operating Cash Margin (US$/t, FOB)
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• › Recent expansion into Queensland’s Central Coal Network

• › Highly cash generative business with low capital intensity

1. Weighted average mine life of Glencore contracted mines

2. Estimated market share based on Hunter Valley Coal Chain Coordinator (HVCCC) train services data (nine months to 30 September 2021) multiplied by average payload assumptions

3. Revenue split is based on actual data for the nine months to September 2021

4. Wood Mackenzie Thermal Coal Cash cost / Margin Curve 2021 (Dataset: August 2021), Thermal benchmark price (NEWC) assumption: US$100/t (Free on Board)

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EAST COAST RAIL

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Intention to divest East Coast Rail Divestment by demerger or trade sale

PROCESS

• › Pursuant to s87b commitment provided to ACCC

• › Overarching objective is to maximise shareholder value

• › Divestment proposed to be undertaken within 18 months from completion

SEPARATION CONSIDERATIONS

• › The separation process will be structured to minimise costs and operational disruption

• › East Coast Rail to operate as a separate and independent stand-alone business on day one with ring-fencing of sensitive information, minimising overall impact of separation

• › Experienced management team, with John McArthur (current One Rail Chief Commercial Officer with 30 years of rail industry experience) to be appointed Chief Executive Officer

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20

Transaction Funding and Process George Lippiatt CFO & Group Executive Strategy

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TRANSACTION FUNDING AND PROCESS

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Shareholder returns

Projected to be EPS accretive with IRR exceeding share buyback[1]

ACQUISITION IS CONSISTENT WITH CURRENT CAPITAL ALLOCATION HIERARCHY

• › In-line with Aurizon’s disciplined approach to capital allocation – commitment remains to existing BBB+/Baa1 investment grade rating post transaction

• › Growth opportunity consistent with Bulk strategy that seeks to maximise shareholder value – expected rate of return exceeds implied return from buy-back[1]

• › EPS accretion (demerger option[2] ) – projected to be ~10% accretive compared to status quo, ~5% accretive compared to buyback

• › Dividend payout ratio – remains 70-100% with future payouts towards lower end of the range for 1-2 years in demerger scenario

CAPITAL ALLOCATION HIERARCHY

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1
Determine Available
Capital
› Ongoing operating cash flows
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• › Additional funding capacity available:

• › Network BBB+ / Baa1 › Operations BBB+ / Baa1

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2
Non Growth Capital
› Sustaining and
transformation projects
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3 4
Dividends Surplus Capital
› Within 70-100% payout ratio › Capital management
opportunities
› Growth projects – only where
it maximises shareholder
value
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1. Unlevered pre-tax return calculated using 20 years of forecast data from first year of acquisition and assuming demerger option (trade sale option IRR would depend on sale/use proceeds). Share buyback refers to the completed FY2021 buy-back

2. EPS accretion under a trade sale option would depend on the amount and use of sale proceeds. EPS accretion (demerger option) is the average over the first four years and refers to the current Aurizon shareholders and therefore includes potential East Coast Rail distributions

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TRANSACTION FUNDING AND PROCESS

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Valuation considerations

Implied EBITDA multiple is inline with recent transactions

RELEVANT TRANSACTION MULTIPLES[1]

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VALUATION COMPONENTS
13.4x
11.4x One Rail Bulk East Coast Rail
11.1x 11.2x
10.5x
9.7x
9.3x
Long-term growth expected Stable cash flows
Integrated below and above
Above rail only
rail
Diversified bulk commodities
leveraged to strong Predominantly thermal coal
forecasted demand
>10x EBITDA <10x EBITDA
G&W / Freightliner Consortium / Pacific AZJ / One Rail [2] Macquarie / G&W Macquarie PGGM / G&W Australia / Brookfield /
(2015) National (2016) Australia (2016) [3] G&W Australia (2019) Glencore Rail (2016) [4] G&W (2019)
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1. Multiples calculated using Last Twelve Months or last reported EBITDA sourced from company filings & announcements

2. AZJ / One Rail 2021 multiple based on acquisition consideration of A$2,350m and estimated EBITDA for the 12 months to June 2021

3. EBITDA based on disclosed pro-forma G&W Australia EBITDA inclusive of forecast Glencore Rail EBITDA as disclosed

4. EBITDA based on forecast GlencoreRail EBITDA as disclosed

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TRANSACTION FUNDING AND PROCESS

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Funding certainty

Fully underwritten committed debt facilities with ongoing commitment to BBB+/Baa1 ratings

DEBT FUNDING

• › $1.93 billion increase in total bank debt for Aurizon Operations sourced from existing and new facilities

• › Bank debt to be termed out in capital markets over time consistent with current strategy

• › Potential for future hybrid issuance to diversify funding sources, expected to achieve 50% equity credit, further supporting credit ratings

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Aurizon: Net Debt [2]
AUD, billions
$5.4
$1.9
$2.3
$3.5
$0.4
$3.1 $3.1
30 June 2021 Change Proforma
Operations Network One Rail Bulk
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• › $500m in underwritten bank debt for East Coast Rail

CREDIT RATINGS

• › Engagement with ratings agencies well advanced to determine impact from transaction including increase in Bulk earnings

• › Aurizon Operations[1] is committed to maintaining its current BBB+ / Baa1 credit ratings

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Aurizon: Net Debt to EBITDA
multiple
3.7x 3.7x
3.4x
3.1x
2.4x
0.6x
30 June Proforma 30 June Proforma 30 June Proforma
2021 2021 2021
Operations Network Group
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1. One Rail Bulk to be owned by Aurizon Operations

2. Pro forma based on divestment via demerger (trade sale option would depend on sale/use proceeds)

TRANSACTION FUNDING AND PROCESS

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Illustrative sources & uses

Acquisition fully funded from existing resources and new committed debt facilities

Sources	A$m	Uses	A$m
East Coast Rail debt	500	One Rail acquisition price	2,350
Aurizon Operations debt	1,930	Acquisition & divestment related fees	80
Total sources	2,430	Total uses	2,430

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TRANSACTION FUNDING AND PROCESS

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Divestment process for East Coast Rail

Divestment of East Coast Rail through a demerger or a trade sale, whichever creates greater shareholder value

Demerger

• › Requires shareholder and regulatory approval (~6-9 months)

• › Aurizon dividends likely toward the lower end of 70-100% payout ratio[1]

• › Shareholders expected to benefit from additional East Coast Rail distributions

Trade sale

• › Aurizon Operations debt to be reduced by the implied value of East Coast Rail equity

• › Aurizon dividends likely toward the higher end of 70-100% payout ratio[1]

• › Subject to regulatory approval of purchaser

Regardless of option undertaken:

Aurizon Operations

• › Committed to maintaining current BBB+ / Baa1 credit rating

East Coast Rail funding considerations

• › Fully underwritten $500 million senior secured facilities with tenors up to 5 years

• › Potential to term out debt in capital markets

• › Investment grade credit rating targeted

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1. Across a one to two year period. Payout ratio is based on underlying Net Profit After Tax (NPAT) and no material disruptions across the Aurizon group

TRANSACTION FUNDING AND PROCESS

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Transaction timetable and next steps

Completion targeted for early CY2022 followed by East Coast Rail divestment process

INDICATIVE TIMELINE

October 2021 January 2022 April 2022 July 2022 October 2022  Partnership Interest Sale Agreement executed and transaction announced ACCC and other regulatory consents and approvals One Rail Bulk integration East Coast Rail: Divestment Process Hold Separate

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Conclusion Andrew Harding Managing Director and Chief Executive Officer

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CONCLUSION

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Highlights

Acquisition of One Rail with integration of One Rail Bulk and divestment of East Coast Rail throu h a demer er or trade sale g g

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Integrated above
and below rail Increases Bulk’s
Transformative business with share of haulage
IRR exceeds
acquisition increased revenue [1] to ~40% Utilising strong
implied returns
consistent with exposure to and expansion into balance sheet to
from share
strategy of growing commodities South Australia support growth
buyback [2]
Bulk associated with and Northern
new economy Territory
markets
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Divestment of East Coast Rail through a demerger or a trade sale, whichever creates greater shareholder value

Aurizon dividend policy remains at 70-100% of underlying Net Profit After Tax

Dividends likely toward the lower end of the range for 1-2 years with the final outcome dependant on the divestment option undertaken for East Coast Rail Committed to maintaining current BBB+ / Baa1 credit rating

29

1. Haulage revenue includes Above Rail Coal (excluding track access), Above Rail Bulk (excluding track access) and One Rail Bulk (which includes South Australia/Northern Territory Infrastructure). Network (Central Queensland Coal Network) excluded 2. Unlevered pre-tax return calculated using 20 years of forecast data from first year of acquisition and assuming demerger option (trade sale option IRR would depend on sale/use proceeds). Share buyback refers to the completed FY2021 buy-back

Q&A

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