Annual Meeting Presentation Attached is the Chairman and Managing - PDF document

ASX ANNOUNCEMENT 24 October 2014 APA Group (ASX: APA) (also for release to APT Pipelines Limited (ASX: AQH)) Annual Meeting Presentation Attached is the Chairman and Managing Director’s address to the Annual Meeting. Mark Knapman Company Secretary Australian Pipeline Limited For further information please contact: Investor enquiries: Media enquiries: Ian Duncan David Symons Telephone: (02) 9693 0074 Telephone: (02) 8306 4244 Mob: 0410 653 500 Mob: 0410 559 184 Email: ian.duncan@apa.com.au Email : media@apa.com.au About APA Group (APA) APA is Australia’s largest natural gas infrastructure business, owning and/or operating $12 billion of energy assets. Its gas transmission pipelines span every state and territory on mainland Australia, delivering approximately half of the nation’s gas usage. APA has direct management and operational control over its assets and the majority of its investments. APA also holds minority interests in energy infrastructure enterprises including SEA Gas Pipeline, Energy Infrastructure Investments and GDI. APT Pipelines Limited is a fully owned subsidiary of Australian Pipeline Trust and is the borrowing entity of APA Group. For more information visit APA’s website, www.apa.com.au

APA Group Annual Meeting Friday, 24 October 2014 APA Group 2014 Annual Meeting Address by Chairman, Len Bleasel AM Ladies and gentlemen, I am delighted to be presenting a solid result following another successful year for APA. Today, the focus of my address will be the strategy that has underpinned continued, sustainable growth in our business to create what is Australia’s leading gas infrastructure group. Our Managing Director, Mick McCormack, will then provide a more detailed overview of what we are doing to innovate and create value for our customers, which generates returns for our investors. National gas infrastructure portfolio A map of our operations today provides a snapshot of APA’s strategy in action. We have been patient in developing our portfolio of assets, and have now assembled what is truly an unrivalled gas infrastructure network spanning the continent. Today, we own or operate Australian energy assets worth more than $12 billion in aggregate. For those of you that have been investors for some time, you will be familiar with our strategy. It’s simple and has been consistent throughout APA’s history. We focus on opportunities that offer a fair commercial return, utilising our core skills in gas transmission, distribution and complementary energy infrastructure assets. Page 1 of 18

APA Group Annual Meeting Friday, 24 October 2014 Looking at the evolution of our asset base since listing on the Australian Stock Exchange 14 years ago, as well as our financial performance over that period, it is clear this strategy has served us well. Today we have an interconnected pipeline grid on the east coast and a growing network of gas and energy infrastructure across the country. But we are not resting on our laurels. Your Board and management is proactive in finding new opportunities to grow, whether organically or by acquisition. During the 2014 financial year, we announced and advanced a number of expansion projects involving our existing infrastructure. A key focus for management is finding ways to leverage our gas infrastructure portfolio to provide solutions to customers as they adapt to rapidly evolving dynamics in the gas and broader energy markets. When it comes to acquisitions, we pursue the right opportunities. However, we couple this with a disciplined approach to the terms we are prepared to offer to ensure we can achieve appropriate returns for our Securityholders over the longer term. Ultimately, it has been that balance of discipline and an unwavering focus on sustainable growth that has enabled us to deliver the returns we have for Securityholders over the years. Financial performance Turning to the financial result, I am pleased to say that APA delivered another solid result in 2014. Net profit after tax was 16% higher than last year at $344 million, after including a one-off positive adjustment to tax expense of $144 million. Excluding significant items from the statutory results in both years, net profit after tax was up 14% to $200 million and earnings before interest, tax, depreciation and amortisation were 13% higher at $747 million. Page 2 of 18

APA Group Annual Meeting Friday, 24 October 2014 It was particularly pleasing to record a strong contribution from recently acquired assets and development projects. We expect to see continued growth from these assets, such as the South West Queensland Pipeline over the coming years. The success of our acquisition and investment activity is a credit to the ability of APA’s people to identify and deliver on the right opportunities. The business also continues to generate strong, stable cash flows, with operating cash flow increasing by 2% to $440 million on a normalised basis. Sustainable distribution growth The Board declared a final distribution of 18.75 cents in August, bringing total distributions for the 2014 financial year to 36.25 cents. This was a 2.1% increase on the 35.5 cents paid in the previous financial year, representing an increase on our earlier guidance that total distributions for the year would be at least in-line with the prior year. As in past years, this year’s distributions were well covered by operating cash flow, with operating cash flow of 52.6 cents per security. The distribution paid this year represents some 69% of operating cash flow. This is consistent with our focus on ensuring that distributions are sustainable. Your Board is always mindful of the need to balance distribution increases with the retention of sufficient cash to invest in APA’s continued growth. Page 3 of 18

APA Group Annual Meeting Friday, 24 October 2014 Maximising securityholder returns APA’s total securityholder return, which accounts for the capital appreciation of APA’s security price and assumes the reinvestment of distributions when they are declared, was 21.6% for the 2014 financial year. I believe this result reflects that we are striking an appropriate balance between retaining funds in the business to deliver ongoing growth, and delivering Securityholders an appropriate level of cash and investment returns. In addition, I note that since listing on the ASX in 2000, we have recorded an average annual total securityholder return of 18.4%, outperforming the market as well as our listed peers in the utilities sector. Page 4 of 18

APA Group Annual Meeting Friday, 24 October 2014 Sale of interest in Envestra Those of you who attended APA’s Annual Meeting last year would recall that I talked in some detail about the strategic rationale of the proposed merger of APA and Envestra, a gas distribution business with networks operating in Victoria, South Australia and Queensland. We first acquired an interest in Envestra in 2007 and since that time we had built our shareholding to 33%. In July 2013, APA proposed a merger with Envestra through a scheme of arrangement to acquire the remaining shares. We revised our offer in December 2013 and put in a bid with an implied value of $1.17 per Envestra share, based on an APA security price of around $6.10. APA operated and maintained Envestra’s gas distribution assets and we saw benefits for investors in both APA and Envestra in bringing together ownership and management of the businesses. However, in May this year, Envestra received a rival takeover proposal from Hong Kong based Cheung Kong Infrastructure Group, known as CKI, who at the time owned 17.5% of Envestra. This was an all-cash proposal of $1.35 including the 2014 final dividend. Given the offer price by CKI, your Board gave full consideration to all of the options available to APA before concluding that it was in APA’s best interests not to increase our offer, and to sell our Envestra shareholding into the rival offer as the terms on offer well exceeded our assessment of the value of Envestra. The sale of our Envestra shareholding has generated gross proceeds of $784 million and a pre-tax profit of about $430 million. This is a very pleasing result which will ultimately be reflected in APA’s financial results for the 2015 financial year. Page 5 of 18

APA Group Annual Meeting Friday, 24 October 2014 I am satisfied that our decision to sell APA’s shareholding in Envestra exemplified the disciplined, prudent approach that is central to APA’s strategy and our ability to continually deliver sustainable growth. Over the next 12 to 18 months, we will reinvest the capital released from that sale in alternative growth and investment opportunities that offer attractive commercial returns to APA. We will also continue to earn revenues from operating Envestra’s assets under a long term operating and management agreement that runs until at least 2027. Capital management We operate in an industry where growth is reliant on capital investment, and hence we have always focused on maintaining a strong balance sheet with an appropriate mix of debt and equity funding. At the end of June this year, APA had $800 million in cash and committed undrawn debt facilities and a gearing ratio of 64.2%. We remain committed to maintaining strong investment grade credit ratings from both Standard & Poor’s and Moody’s. The BBB and Baa2 ratings remain an integral part of our declared capital management policies. APA will look to retain ratings at these levels as a minimum to ensure that we retain access to the most liquid and broadest range of debt capital markets world-wide. Page 6 of 18