Australian Pipeline Ltd ACN 091 344 704 | Australian Pipeline Trust ARSN 091 678 778 | APT Investment Trust ARSN 115 585 441 Level 19, 580 George Street Sydney NSW 2000 | PO Box R41 Royal Exchange NSW 1225 Phone +61 2 9693 0000 | Fax +61 2 9693 0093 APA Group | apa.com.au 24 August 2016 ASX ANNOUNCEMENT APA Group (ASX: APA) (also for release to APT Pipelines Limited (ASX: AQH)) Annual Financial Results The following announcements are attached: • Australian Pipeline Trust Appendix 4E • Australian Pipeline Trust Annual Report (including Sustainability Report) • APT Investment Trust Annual Financial Report Nevenka Codevelle Company Secretary Australian Pipeline Limited For further information please contact: Investor enquiries: Media enquiries: Yoko Kosugi Louise Watson Telephone: +61 2 9693 0049 Telephone: +61 2 8079 2970 Mob: +61 438 010 332 Mob: +61 419 185 674 Email: [email protected] Email: [email protected] About APA Group (APA) APA is Australia’s largest natural gas infrastructure business, owning and/or operating around $20 billion of energy infrastructure 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 a number of energy infrastructure enterprises including SEA Gas Pipeline, SEA Gas (Mortlake) Partnership, Energy Infrastructure Investments, GDI Allgas Gas Networks and Diamantina and Leichhardt Power Stations. APT Pipelines Limited is a wholly owned subsidiary of Australian Pipeline Trust and is the borrowing entity of APA Group. For personal use only For more information visit APA’s website, apa.com.au Page 1 Australian Pipeline Trust Results for announcement to the market For the year ended 30 June 2016 Appendix 4E Percentage Change Amount Statutory Results % $’000 Revenue including significant items up 34.8 to 2,094,304 EBITDA including significant items up 4.8 to 1,330,543 EBIT including significant items down 23.7 to 809,653 Profit after tax including significant items down 67.9 to 179,471 Operating cash flow including significant items up 53.4 to 862,435 Operating cash flow per security including significant items up 20.9¢ to 77.4¢ Earnings per security including significant items down 40.2¢ to 16.1¢ Normalised Results Revenue excluding significant items up 34.8 to 2,094,304 EBITDA excluding significant items up 61.8 to 1,330,543 EBIT excluding significant items up 31.9 to 809,653 Profit after tax excluding significant items down 12.0 to 179,471 Operating cash flow excluding significant items up 58.2 to 862,435 Operating cash flow per security excluding significant items up 22.6¢ to 77.4¢ Earnings per security excluding significant items down 4.4¢ to 16.1¢ EBIT = Earnings before interest and tax EBITDA = EBIT before depreciation and amortisation Reporting Period The above results are for the financial year ended 30 June 2016, reference is made to movements from the previous corresponding period being the financial year ended 30 June 2015. For personal use only Australian Pipeline Trust Results for announcement to the market For the year ended 30 June 2016 Appendix 4E APA Group Franked Amount per amount per Distributions paid and proposed security security Final distribution proposed profit distribution 20.09¢ - capital distribution 2.41¢ - 22.50¢ Interim distribution paid profit distribution 19.00¢ - capital distribution - - 19.00¢ - 41.50¢ - Record date for determining entitlements to the unrecognised final distribution in respect of the current financial year is 30 June 2016. Distribution information is presented on an accounting classification basis. The APA Group Annual Tax Statement and Annual Tax Return Guide (released in September 2016) provides the classification of distribution components for the purposes of preparation of security holder income tax returns. The Directors have reviewed APA Group’s financial position and funding requirements and have decided to retain the suspension of the Distribution Reinvestment Plan, which initially came into effect on 19 June 2013, until further notice. 2016 2015 Net asset backing per security $ $ Net tangible asset backing per security -0.46 -0.28 Net asset backing per security 3.62 3.93 Additional information and commentary on results for the year For additional disclosures refer to the APA Group annual report for the year ended 30 June 2016 accompanying this Appendix 4E. For personal use only APA Group Annual Report. For the financial year ended 30 June 2016 For personal use only APA Group Annual Report for the year ended 30 June 2016 CHAIRMAN’S REPORT 1 MANAGING DIRECTOR’S REPORT 5 APA GROUP BOARD 8 APA GROUP SENIOR MANAGEMENT 10 2016 HIGHLIGHTS 12 AUSTRALIAN PIPELINE TRUST DIRECTORS’ REPORT 13 1 Directors 13 2 Principal Activities 13 3 State of Affairs 13 4 Subsequent Events 13 5 About APA 14 6 Financial Overview 16 7 Business Segment Performances and Operational Review 19 8 Capital and Investment Expenditure 27 9 Financing Activities 29 10 Regulatory Matters 33 11 Health, Safety and Environment 34 12 Risk Overview 37 13 Directors 40 14 Options Granted 41 15 Indemnification of Officers and External Auditor 41 16 Remuneration Report 42 17 Auditor 42 18 Information Required for Registered Schemes 42 19 Rounding of Amounts 43 20 Corporate Governance Statement 43 21 Authorisation 43 AUSTRALIAN PIPELINE TRUST REMUNERATION REPORT 44 1 What This Report Covers 45 2 Remuneration Outcomes and APA Performance 46 3 Executive Remuneration Arrangements 52 4 Executive Contracts 55 5 Remuneration Governance 56 6 Non-executive Director Arrangements 57 For personal use only 7 Additional Key Management Personnel Disclosures 58 AUSTRALIAN PIPELINE TRUST CONSOLIDATED FINANCIAL STATEMENTS 65 i APA Group Annual Report for the year ended 30 June 2016 APT INVESTMENT TRUST DIRECTORS’ REPORT 130 1 Directors 130 2 Principal Activities 130 3 State of Affairs 130 4 Subsequent Events 130 5 Review of Results and Operations 131 6 Distributions 131 7 Directors 131 8 Options Granted 133 9 Indemnification of Officers and External Auditor 133 10 Information Required for Registered Schemes 134 11 Auditor’s Independence Declaration 134 12 Rounding of Amounts 134 13 Authorisation 134 APT INVESTMENT TRUST CONSOLIDATED FINANCIAL STATEMENTS 135 APA GROUP ADDITIONAL INFORMATION 158 APA GROUP FIVE YEAR SUMMARY 159 APA GROUP INVESTOR INFORMATION 160 APA GROUP SUSTAINABILITY REPORT 1 Our Sustainability Approach S1 2 Message from Mick McCormack, Managing Director S2 3 Customers S3 4 Environment S5 5 Community S8 6 Employees S11 7 Investors S14 For personal use only ii APA Group Annual Report for the year ended 30 June 2016 CHAIRMAN’S REPORT I am pleased to report another solid year for APA. The FY2016 results represent the outcome of a consistent and prudent strategy of growth and value creation. APA has been able to reap the benefits of this strategy, seeing earnings come through from capital we have invested in growing our asset base through acquisitions and organic expansion. The FY2016 results include a full year of earnings from the Wallumbilla Gladstone Pipeline acquired in FY2015 and increasing revenue streams from the ongoing expansion of both the East Coast Grid and expansions and greenfields investment in Western Australia. APA’s long term vision, strategic planning and focused execution have seen the business continue to deliver prudent distribution growth and long term market-leading increases in Securityholders’ value. The total distributions for FY2016 of 41.5 cents per security represent a 9.2 per cent increase over FY2015. As per our distribution policy, distributions have been fully covered by operating cash flows with an appropriate amount of those cash flows retained within the business to support growth. Your Board believes that the increase in distributions represents a prudent increase in returns for Securityholders given the current economic environment. The Board is of the view that the 41.5 cents per security represents a solid base from which to increase distributions on a sustainable basis going forward. Long term sustainability is what APA is all about. We continue to see good opportunities for organic growth in front of us and we are mindful of ensuring that the business is in a position to fund that growth going forward. We will continue to maintain a disciplined approach to investing in growth that delivers long term value for Securityholders and positions APA securely for the future. Despite the challenges within the global and Australian energy sector in FY2016 with volatile energy market conditions and the rebalancing of global demand and supply, we have continued the execution of APA’s long standing growth-based strategy. We have invested in enhancing our existing assets and during the year we acquired two complementary assets in the Diamantina and Leichhardt Power Stations and the Ethane Pipeline, to connect more energy resources to more markets. We continue to innovate through provision of new services that are helping our customers manage their energy needs, particularly during what have been relatively uncertain times from an economic, political and regulatory perspective. Our sustainable business model and strong balance sheet have enabled us to navigate the current economic environment and make the most of opportunities that arise and, most importantly, position us for further growth in the years ahead. For personal use only Solid Results The strength of our low risk, resilient business model is reflected in APA’s FY2016 financial results. Earnings before interest, tax, depreciation and amortisation (“EBITDA”) from 1 APA Group Annual Report for the year ended 30 June 2016 continuing businesses were $1,330.5 million 1 , an increase of 61.8 per cent on FY2015 normalised EBITDA of $822.3 million2. Revenue (excluding pass-through revenue) increased by $536.7 million to $1,656.0 million, an increase of 48.0 per cent on the FY2015 result of $1,119.2 million.