ASX RELEASE 22 August 2012 For personal use only borrowing costs – Reduction in net borrowings...

ASX RELEASE 22 August 2012

The Manager ASX Market Announcements Australian Securities Exchange 4th Floor, 20 Bridge Street Sydney NSW 2000 Electronic Lodgement Dear Sir or Madam Company Announcement I attach the following announcement for release to the market: • 2012 Full Year Results Presentation Yours sincerely

Mark Knapman Company Secretary

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Financial Results Year ended 30 June 2012

22 August 2012 F

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2012 Results Presentation 2

Result overview and strategic highlights

Mick McCormack Managing Director and CEO F

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Developing opportunities, creating value Well positioned in a growing market

– Expanding our energy infrastructure portfolio across Australia in line with increasing demand for gas and energy

Track record of consistent financial performance

– Remain a low risk but growing business, with revenue underpinned by long term contracts or regulatory arrangements

– Balance sheet strength to fund growth sustainably

A range of opportunities with an eye on value for the long term

– Corporate structure – management, operating, engineering and construction capability across the portfolio

– Preserving or increasing value of APA’s infrastructure portfolio with core and adjacent developments and acquisitions

– Energy infrastructure solutions and service innovations for customers For

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Another solid result

2012

$ million 2011 $ million Change

Operating cash flow 336 290 up 16 % Revenue excluding pass-through (1) 758 720 up 5 % EBITDA (2) 526 492 up 7 % Profit (2) 131 109 up 20 % Operating cash flow per security (cents) 52.5 52.6 down (0)% Distribution per security (cents) 35.0 34.4 up 2 % Distribution payout ratio 67.0% 65.7%

(1) Pass-through revenue is revenue on which no margin is earned (2) EBITDA and profit includes significant items: FY 2012 - Profit on the sale of APA Gas Network business (Allgas) less transaction costs;

FY 2011 - APA’s equity accounted share of the Investment Allowance Concession benefit recognised on the commencement of generation of the North Brown Hill Wind Farm. APA has referenced the significant items to more accurately reflect the actual trading results of the Group. The significant items have been audited.

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Strong performance across the business

Increase due to:

↑ Full year contribution from asset expansions – Young Wagga lateral (November 2010) and Moomba Sydney Pipeline (ongoing)

↑ General tariff increase across most assets

↑ Increased contribution from Energy Investments – Envestra, Hastings Diversified Utilities Fund and GDI (EII) (6 months contribution)

↑ Acquisition earnings contribution – Emu Downs wind farm and Amadeus Gas Pipeline

↑ Lower borrowing costs – Reduction in net borrowings following sale of Allgas and reduction in average interest rate

Offset by:

↓ Reduced annual revenue (Allgas)

↓ Reduced customer contribution (Asset Management)

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Moomba Sydney Pipeline Mainline capacity expansion Young compressor upgrade;Various GTAs up to 10 years

Mondarra Gas Storage Facility

Capacity expansion; 20-year GSA

Roma Brisbane Pipeline Capacity expansion completed; 2 GTAs up to 15 years

Victorian Transmission SystemSunbury looping project andEuroa compressor station;Regulated revenue

APA energy infrastructure

APA investments

Other natural gas pipelines

Diamantina Power StationJoint development (APA/AGL)242 MW gas-fired generation;17- year ESACarpentaria Gas Pipeline10-year GTA

Goldfields Gas Pipeline2 x capacity expansion – compressor stations and

compressor upgrades;20-year and 15-year GTAs

Strategic and operational highlights

All growth capital expenditure underpinned by secure revenue

Optimal use of assets: contracted and regulated assets near full capacity – Expansions supply additional capacity to meet customer requirements – ~ $300 million per annum over the next two years for committed and visible capital projects

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Strategic and operational highlights

Delivering on growth strategy

Major projects progress

– Mondarra Gas Storage Facility expansion – Diamantina Power Station development

Takeover offer for Hastings Diversified Utilities Fund

National customer system and operations focus

– Implementation of APA Gas grid – Operational excellence

Capital management

– Successful refinancing program – Launched APA Subordinated Notes

Mondarra Gas Storage Facility, WA

Diamantina Power Station site, Qld

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Sustainability reporting Health and safety

– Long-term safety goal of Zero Harm - program of continuous improvement

– Decrease of LTIFR (1) to 2.2, down from 6.2

– National APA health and safety system launched – “Safeguard”

Natural gas and carbon reduction – Carbon tax – direct cost impact expected to be immaterial due to cost recovery mechanisms

– Promoting the use of natural gas in reducing carbon emissions

New organisational structure – Better reflects APA’s discrete core businesses and significant infrastructure development

activities

– New senior leadership appointments – leading plans for growth

Community investment program – Continued support of community partnerships through “Building brighter futures” program

(1) Lost time injury frequency rate (LTIFR) is measured as the number of lost time injuries per million hours worked

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Financial performance

Peter Fredricson Chief Financial Officer F

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Diversified EBITDA

2012

$ million 2011

$ million Change Energy Infrastructure

Queensland 79.6 71.7 11.0 % New South Wales 113.1 101.3 11.7 % Victoria & South Australia 123.1 115.9 6.2 % Western Australia & Northern Territory 125.9 99.8 26.2 %

Energy Infrastructure total 441.7 388.7 13.6 % Asset Management 31.9 38.7 (17.6)% Energy Investments 41.8 27.1 54.2 % Total EBITDA continuing business 515.4 454.5 13.4 % Divested business - Allgas 20.1 35.1 Total EBITDA before significant items 535.5 489.6 9.4 %

Significant items (9.7) 2.5 Total EBITDA after significant items 525.8 492.1 6.9 %

APA’s portfolio diversity provides stability

Qld 15.4%

NSW 21.9%

Vic & SA 23.9%

WA & NT 24.4%

Asset Management

6.2%

Energy Investments

8.1%

Energy Infrastructure

85.7%

FY 2012 EBITDA (continuing business)

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Solid, consistent result

2012 $ million 2011

$ million Change

EBITDA before significant items 535.5 489.6 9.4 %

Depreciation and amortisation (110.4) (100.4) 10.0 %

EBIT 425.1 389.2 9.2 %

Net interest expense (234.3) (247.1) (5.2)%

Tax (50.4) (35.9) 40.6 %

Net profit 140.3 108.9 28.8 %

Significant items after tax (9.7) (0.4) Net profit after significant items 130.6 108.5 20.4 %

Significant items: FY 2012 - Profit on the sale of APA Gas Network business (Allgas) less transaction costs; FY 2011 - APA’s equity accounted share of the Investment Allowance Concession benefit recognised on the commencement of generation of the North Brown Hill Wind Farm. APA has referenced the significant items to more accurately reflect the actual trading results of the Group. The significant items have been audited.

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Queensland Roma Brisbane Pipeline expansion

– Completion of expansion project, including new revenue contracts, commenced August 2012

– Access Arrangement – AER’s final decision (10 August 2012) includes 8.75% tariff increase

APA Gas Network

– Sell down to (GDI) EII in December 2011

– APA retains 20% interest and long term asset management agreement

Dalby compressor station

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New South Wales Moomba Sydney Pipeline expansion

– 4th year in 5-year expansion program

– Young compressor upgrade

– Fully contracted – gas transportation and storage services

Young to Wagga lateral

– Full year of operation – commissioned November 2010

Young compressor station and control centre

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Victoria & South Australia Decreased gas flow due to milder weather

and reduced gas use in generation

– 6.5% decrease in gas flows to 230 PJ

Euroa compressor station construction

– Northern augmentation stage 2

Sunbury looping project

– Completed first stage of expansion

Victorian Transmission System

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Western Australia & Northern Territory Goldfields Gas Pipeline

– Commenced two pipeline expansions

– Merits review process completed


– First year construction of expanded facility

Emu Downs wind farm and Amadeus Gas Pipeline

– Operating substantially to investment case in first year of ownership


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Asset Management and Energy Investments

Asset Management Reduction in customer contributions

Additional asset management – GDI (EII)

Energy Investments Increased investment returns – Envestra

Increased investment holding – HDF

Additional investment returns – GDI (EII)

Meter calibration

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•2012 Results Presentation 17

Major capital expenditure (1)

2012 $ million Description of 2012 major projects 2011

$ million Growth capital expenditure

Regulated Victoria Transmission System 35.1 Northern augmentation project, Sunbury looping 33.4 APA Gas Networks (Qld) 8.4 Includes southern network expansion 16.1

Major Projects 43.5 49.5

Queensland expansion 35.7 Roma Brisbane Pipeline expansion 19.6 New South Wales expansion 18.9 MSP mainline expansion 34.3 Western Australia expansion 116.4 Mondarra Gas Storage Facility, Goldfields Gas Pipeline expansions 39.8 Other 10.2 National customer management system, Victorian metering 12.2

Acquisitions 181.2 105.9

Energy Infrastructure 6.0 Amadeus Gas Pipeline, Emu Downs purchase adjustments 228.8 Energy investments 40.4 Envestra, Hastings Diversified Utilities Fund 113.9

46.4 342.7 Total growth capex 271.1 498.0 Stay in business capex 24.4 18.0 Total 295.5 516.0

(1) Capital expenditure represents cash payments as disclosed in the cash flow statement for FY2011 and FY2012.

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42.7

48.251.9 52.6 52.5

29.5 31.0 32.8 34.4 35.0

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60

2008 2009 2010 2011 2012

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Operating cash flow per security Distribution per security

2012 distribution in line with guidance (at least 34.4 cps)

Fully covered distributions

2012 distribution payout ratio(1) of 67.0% (2011: 65.7%)

(1) Distribution payout ratio: total distribution payments as a percentage of operating cash flow

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Capital management Cash and committed undrawn facilities of $1,106 million at 30 June 2012

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

Metrics 30 Jun 2012 30 Jun 2011

Gearing (1) 65.0 % 66.2 % Interest cover ratio 2.48 times 2.03 times Average interest rate applying to drawn debt 7.39 % 7.47 % Interest rate exposure fixed or hedged 80.9 % 73.5 %

Equity: $45 million equity raised through the Distribution Reinvestment Plan

Debt: $1.9 billion of new debt facilities raised as part of 2012 refinancing program

— Refinanced $1.065 billion of debt maturing in FY 2012 — Replaced $515 million of higher cost debt due to mature in FY 2014

$415 million Medium Term Notes (MTN)

— A$126 million raised in January 2012 – JPY10 billion 6.5 year MTN — A$289 million raised in June 2012 – CAD 300 million 7.1 year MTN

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Capital management Refinancing program focused on extending debt maturity, diversifying funding sources

and reducing borrowing costs

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Capital management Funding APA beyond 1 July 2012

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Sources $m

Existing cash and undrawn facilities 1,106

Subordinated notes net proceeds 460

New 1-year bank commitments 300

New 4-year bank commitments 300

Total 2,166

Uses $m

Cash component of revised HDF bid 336

Repay existing drawn Epic facilities 1,375

Transaction completion costs 69

Headroom retained by APA 386

Total 2,166

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Capital management strategy Managing balance sheet to maintain minimum investment grade credit rating metrics

– Standard & Poor’s BBB; Moody’s Baa2

Refinancing program focused on extending debt maturity, diversifying funding sources and reducing borrowing costs

– Next refinancing obligation in September 2013 ($113 million)

– AMTN, EMTN and US 144A programs in place

– Optionality available – short term debt can be replaced with long term debt without penalty

Capital management policy Continue to target strong BBB/Baa2 investment grade ratings through maintaining

sufficient flexibility to fund organic growth and investment from internally generated and retained cash flows and, where appropriate, additional debt and equity funding

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Outlook and guidance

Mick McCormack Managing Director and CEO F

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APA Group energy infrastructure assets

APA Group energy investments

Other natural gas pipelines

PJ Natural gas reserves (proved and probable)

41 PJ

4,124 PJ884 PJ258 PJ

139 PJ

2,827 PJ

1,735 PJ

1,123 PJ

Source: APA data; Energy Quest May 2012

39,750 PJ72,559 PJ

17,384 PJ

HDF natural gas pipelines (excluding MAPS)

Moomba to Adelaide Pipeline System

South West Queensland PIpeline

Pipeline Energy Pipeline System

Sustainable long term growth and value Growth catalysts

– Carbon reducing policies

– Gas supply developments

– New market participants

– Resources projects

Enhancing our portfolio – Optimal gas delivery between

gas sources and markets

– Infrastructure for gas fired power generation

Disciplined investment – Strategic fit with APA’s portfolio and

internal capability

– Appropriate economic returns

– Low risk, long term earnings

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APA’s off-market takeover offer for HDF

Rationale

– Retained Epic Energy pipelines form a natural fit with APA’s assets

– Enhanced gas transmission pipeline network – benefits APA securityholders and customers

Process update

– Takeover offer announced (14 December) – cash and scrip offer for HDF securities

– ACCC clearance (19 July) subject to MAPS divestment

– Revised offer (17 August) – increased price and reduced conditions

– Recommended by HDF board committee

Next steps

– Release of supplementary Bidder’s Statement shortly

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Delivering value for securityholders Five years of growth

– Operating cash flow CAGR of 17.4%(1)

– EBITDA CAGR of 12.1% (1)

– Total securityholder return of 92%

Indexed to 100 from 30 June 2007 to 30 June 2012 Source: APA based on IRESS data

(1) Compound annual growth rate (CAGR) calculated from 2007 base year to 2011

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Outlook and guidance

Outlook Continued construction and development of expansion projects

Progress takeover offer for HDF

Guidance EBITDA – expected within a range of $540 million to $550 million

– Compared with $515 million (1) for FY12 – Based on APA’s continuing business, excluding HDF assets

Net interest cost – expected within a range of $240 million to $245 million

Distribution – at least equal to FY2012 total distributions per security – Unchanged if HDF transaction proceeds

(1) Based on APA’s continuing business EBITDA for FY 2012 of $515 million

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Supplementary information

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Financials Key financial ratios

2012 2011 Operating cash flow per security (cents) 52.5 52.6

Weighted average securities on issue (million) 639.7 551.2

Payout ratio 67.0 % 65.7 %

Earning per security (cents) 20.4 19.7

Interest cover ratio (times) 2.48 2.03

Gearing ratio 65.0 % 66.2 %

Total assets ($ million) 5,496 5,428

Net assets ($ million ) 1,614 1,668

Net tangible asset backing per security $1.58 $1.51

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Cash flow

Financials

2012

$ million 2011

$ million Change Operating cash flow 335.6 290.0 8.3 % Distributions (net of DRP) 163.6 130.9 Available operating cash flow 172.0 159.2 (3.3%) Operating cash flow per security (cents) 52.5 52.6 1.4 % Distributions per security (cents) 35.0 34.4 5.0 % Distribution payout ratio 67.0 % 65.7 % Capital expenditure 249.1 173.3

Investments 40.4 113.9

Acquisitions 6.0 228.8

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Financials Revenue analysis by business segment

2012 $ million

2011 $ million Change

Energy Infrastructure Queensland (1) 112.2 107.7 4.2% New South Wales 138.4 126.7 9.3% Victoria & South Australia 163.4 153.3 6.6% Western Australia & Northern Territory 195.9 157.5 24.4% Energy Infrastructure total 610.0 545.1 11.9% Asset Management 69.3 68.6 0.9% Energy Investments 41.7 27.1 53.9% Total segment revenue 721.0 640.9 12.5%

Pass-through revenue 302.6 381.7 (20.7%) Unallocated revenue 6.3 12.9 (51.2%) Divested business - Allgas 30.7 56.6 Significant item - 9.8

Total revenue 1060.7 1,102.0 (3.8%) (1) Queensland excludes revenue from Allgas

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Financials

Total committed debt facilities at 30 June 2012

Facility Facility amount

$ million(1)

Drawn amount

$ million(1) Tenor

2011 Bilateral borrowings (2) 300 157 3 years maturing July and August 2014

2011 Bilateral borrowing 150 0 5 years maturing October 2016

2011 Syndicated facility (3) 1,450 967 2, 3 and 4 year tranches maturing November 2013, 2014 and 2015

2003 US Private placement 394 394 10, 12 and 15 year tranches maturing Sept 2013, 2015 and 2018

2007 US Private placement 811 811 10, 12 and 15 year tranches maturing May 2017, 2019 and 2022

2009 US Private placement 185 185 7 and 10 year tranches maturing July 2016 and 2019

2010 AUD Medium Term Notes 300 300 10 year tranche maturing July 2020

2012 JPY Medium Term Notes 126 126 6.5 year tranche maturing in June 2018

2012 CAD Medium Term Notes 289 289 7.1 year tranche maturing in July 2019

Total 4,005 3,229

(1) Australian dollars. Any foreign notes issued have been hedged into fixed-rate Australian dollar obligations (2) Comprises four facilities of $75 million each (3) Comprises three facilities of $484 million each

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Regulatory update

APA’s major price regulated assets Regulatory resets over the next five years

Roma Brisbane Pipeline access arrangement – AER’s final decision (10 August 2012) includes 8.75% tariff increase – Minimal impact to APA’s revenue – the majority of the pipeline’s revenue is derived from haulage

contracts with set terms, including pricing

Victorian Transmission System access arrangement – AER draft decision expected mid September 2012; final decision expected March 2013

Goldfields Gas Pipeline merits review – Completed in April 2012 and favourable outcomes achieved on coverage tests for expansion and cost

allocation methodology

2013 2015 2016

Victorian Transmission System

Roma Brisbane Pipeline

2012

Goldfields Gas Pipeline

Next regulatory periodCurrent regulatory period

2014Calendar year

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APA Group profile APA is Australia’s largest natural gas infrastructure business

– Energy Infrastructure: natural gas pipelines and interconnected gas storage facilities across Australia, and the Emu Downs wind farm in Western Australia

– Asset Management: provision of asset management, operating and maintenance services to the majority of APA’s investments and other third parties

– Energy Investments: minority interests in energy infrastructure investments, including Envestra, GDI (EII) (Allgas), SEA Gas Pipeline, Energy Infrastructure Investments, Hastings Diversified Utilities Fund, EII2 (North Brown Hill wind farm) and Ethane Pipeline Income Fund

APA generates secure cash flows from contractual and regulatory arrangements on its assets

– with more than 90% of revenue from regulated (natural monopoly) assets and long term contracts

APA has direct management and operational control over its assets and investments

– no fee leakage or conflicts that arise with external management model

– employing over 1,400 skilled and experienced people who perform all commercial, engineering and operational functions for APA’s assets and investments

APA delivers half of Australia’s domestic gas usage

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Queensland(1) Roma Brisbane Pipeline(2) Carpentaria Gas Pipeline (3) Berwyndale Wallumbilla Pipeline

Northern Territory(17) Amadeus Gas Pipeline

Western Australia(11) Goldfields Gas Pipeline (88.2%)(12) Mid West Pipeline (50%)(13) Parmelia Gas Pipeline(14) Mondarra Gas Storage (15) Kalgoorlie Kambalda Pipeline(16) Emu Downs wind farm

South Australia(10) SESA Pipeline

Victoria(8) Victorian Transmission System (9) Dandenong LNG facility

New South Wales(4) Moomba Sydney Pipeline(5) Central West Pipeline(6) Central Ranges Pipeline(7) NSW interconnect with Victoria


Energy investments

(20) SEA Gas Pipeline (50%)

(18) Envestra Limited (33.4%)Gas distribution networks and pipelines (SA, Vic, Qld, NSW & NT)

(21) Energy Infrastructure Investments (19.9%)Gas pipelines, electricity transmission, gas-fired power stations and gas processing plants

(22) Ethane Pipeline Income Fund (6.1%)

Asset Management

Commercial and/or operational services to: - Envestra Limited- GDI (EII) - Allgas- Energy Infrastructure Investments- Ethane Pipeline Income Fund- SEA Gas Pipeline- EII2 - other third parties

APA Group assets and investments

(23) EII2 (20.2%) North Brown Hill wind farm

(24) Hastings Diversified Utilities Fund (20.7%)

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APA assets

APA investments

1

22

18

21

17

14

13

12

11

109

87

65

4

2

SOUTH AUSTRALIA

NORTHERN TERRITORY

WESTERN AUSTRALIA

TASMANIA

VICTORIA

NEW SOUTH WALES

QUEENSLAND

21

2121

21

2121

18

18

18

18

1818

20

3

15

23

24

24

2416 (19) GDI (EII) (20.0%) AllgasGas distribution network in Queensland

Under development(25) Diamantina Power Station (50%)

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This presentation has been prepared by Australian Pipeline Limited (ACN 091 344 704) the responsible entity of the Australian Pipeline Trust (ARSN 091 678 778) and APT Investment Trust (ARSN 115 585 441) (APA Group). Summary information This presentation contains summary information about APA Group and its activities current as at the date of this presentation. The information in this presentation is of a general background nature and does not purport to be complete. It should be read in conjunction with the APA Group’s other periodic and continuous disclosure announcements which are available at www.apa.com.au. Not financial product advice Please note that Australian Pipeline Limited is not licensed to provide financial product advice in relation to securities in the APA Group. This presentation is for information purposes only and is not financial product or investment advice or a recommendation to acquire APA Group securities and has been prepared without taking into account the objectives, financial situation or needs of individuals. Before making an investment decision, prospective investors should consider the appropriateness of the information having regard to their own objectives, financial situation and needs and consult an investment adviser if necessary. Past performance Past performance information given in this presentation is given for illustrative purposes only and should not be relied upon as (and is not) an indication of future performance. Future performance This presentation contains certain “forward-looking statements” such as indications of, and guidance on, future earnings and financial position and performance. Forward-looking statements, opinions and estimates provided in this Presentation are based on assumptions and contingencies which are subject to change without notice, as are statements about market and industry trends, which are based on interpretations of current market conditions. This presentation contains such statements that are subject to risk factors associated with the industries in which APA Group operates which may materially impact on future performance. Investors should form their own views as to these matters and any assumptions on which any forward-looking statements are based. APA Group assumes no obligation to update or revise such information to reflect any change in expectations or assumptions. Investment risk An investment in securities in APA Group is subject to investment and other known and unknown risks, some of which are beyond the control of APA Group. APA Group does not guarantee any particular rate of return or the performance of APA Group. Not an offer This presentation does not constitute an offer, invitation or recommendation to subscribe for or purchase any security.

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http://www.apa.com.au/

For further information contact Chris Kotsaris Investor Relations, APA Group Tel: +61 2 9693 0049 E-mail: [email protected]

or visit APA’s website www.apa.com.au

Delivering Australia’s energy

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ASX RELEASE 22 August 2012 For personal use only borrowing costs – Reduction in net borrowings...

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