Apa Group · ASX:APA
Apa — Australian Pipeline Trust — Merger or Acquisition (October 2006)
27 slides from Apa's merger presentation, Oct 3, 2006
Slide 1: Australian Pipeline Trust - The Allgas Gas Distribution Business
Australian Pipeline Trust - The Aligas Gas Distribution Business Managing Director, Mick McCormack Chief Financial Officer, Rick Francis Group General Manager Operations, Stephen Ohl 3 October, 2006 ax YY
Slide 2: Important notice
Important notice This presentation sets out information in relation to the agreed acquisition of the Allgas business (through Aligas Energy Pty Limited) by APT Pipelines Limited, a subsidiary of the Australian Pipeline Trust, (‘APA’) from the Energex. Limited, a Queensland State corporation (‘Energe
Slide 3: Acquisition Overview, Financial Analysis, Allgas Business, Summary
@ Acquisition Overview m Financial Analysis @ Allgas Business @ Summary Mick McCormack Managing Director
Slide 4: Acquisition Overview
Acquisition Overview _
Slide 5: Acquisition Overview
Acquisition Overview ] Acquisition price of $521m m@ Rapid asset value growth: -8% p.a. over next'5 years ™ Attractive Internal Rate of Return (equity IRR of over 12%) m RAB multiple 1.49x — @ Exceptional fit for APA >» Further development of, and value accretion to, APA’s unique Queensland asset su
Slide 6: Forecast RAB Growth Post Acquisition
Forecast RAB Growth Post Acquisition @ Allgas’ regulator approved RAB growth profile is unique compared.to precedent distribution network acquisitions ; Relative growth in RAB (indexed at 100) 135 4 130 + 125.4 420.4 418 4 440.4 405 100 5 95 sxmuae Citpower (2002), 1.68x ‘voor Powercor (2004), 1 48x
Slide 7: Acquisition Overview — strategy
Acquisition Overview — strategy @ Medium term: Target core and complementary assets that grow distributions m@ Long term: Portfolio balancing low risk assets and high growth assets m Strategy is flexible and dynamic to take account of sensible opportunities as.they arise 55 # Aligas @ GasNet mExisti
Slide 8: Acquisition Overview
Acquisition Overview g APA's internal management model - competitive, transparent and low cost Australian Pipeline Trust Unitholders Manager — APA Personnel. Controls: + Operating Expenditure . + Capital Expenditure + Regulatory Affairs » Revenue Contracts Electricity =: Other Gas transmission Gas d
Slide 9: Financial Analysis
os Financial Analysis Rick Francis Chief Financial Officer
Slide 10: Financial Analysis — Allgas & GasNet
Financial Analysis — Allgas & GasNet @ Acquisition easily meets investment criteria » Attractive Internal Rate of Return (equity IRR of over 12%) > DPU. accretive within 18 months 2007 distributions per unit ~2009 distributions per unit aan aw ‘ooo SR —— oT Pre Gasnet Aligas. Post Pre on nn Gasnet A
Slide 11: Financial Analysis - Funding
Financial Analysis - Funding m@ Acquisition funded by bridge finance from Westpac m@ Gearing 76.3% post Gasnet and Aligas m Intention to raise equity >» Pro rata rights issue is current preference APA can fund the acquisition : il
Slide 12: Financial Analysis - Funding
Financial Analysis - Funding @ APA is funding recent acquisitions via .a-mixture of debt and equity. APAas at st capital Post equity issue Asm 30 June 2006 ng+ spp PostGasNet Post Allgas ($200-300m) Total assets : 2,061 2,061 3,248 “3,808 3,808. interest bearing liabilities 1,249 1,017. 2,004 2,654
Slide 13: Financial Analysis — Regulatory Revenue
Financial Analysis — Regulatory Revenue Allgas Regulated Asset Base Agm Jun-07 9 Jun-08) = Jun-09)- Jun-10)— Jun-11 Opening assets : . 303.2 331.5 357.6 > 385.6 417.6 Less depreciation , (8.1) (9.5) (10.4) (11.4) (11.9) Less disposals = - = aS = Plus. inflation 8.8 9.5 10.3 11.4 12,0 Plus capex : .
Slide 14: Allgas Business
Allgas — Business iil, Hu Stephen Ohl Group General Manager Operations 14
Slide 15: Allgas Business
Allgas Business m@ Allgas business comprises ¥ / : oy Noasa HEADS SUNSHINE COAST * Snoovootsak sanpspongpds Sfeaounors " » Regulated gas distribution networks > Rights relating to Gatton to Gympie pipeline Tae va Moura pipeline - NEW SOUTH WALES ae A business. that is well understood by APA a5
Slide 16: Allgas Business — Growth Potential
Allgas Business — Growth Potential m Residential growth >South east Queensland — Australia’s fastest growing region » Government strategies encourage gas utilisation > Utilisation per household increasing m Industrial & commercial growth _ > Expansion into new geographic areas near-Ipswich and on th
Slide 17: Allgas Business
Allgas Business @ Distribution network >» One of two gas distribution businesses in south east Queensland » Services high population growth centres m 2,304 km of distribution mains* >» Brisbane >. Gold Coast / Northern. NSW. > Toowoomba / Oakey @ Total gas usage of 10 PJ.p.a.* .* Actuals for the yea
Slide 18: Allgas Business
Allgas Business @ Volume customers (<10-TJ.p.a.) > 64,413 customers » 27% of sales volume (2.7'PJ pa.) > 60% of revenue ($23.4m)* m Demand customers (>10 TJ p.a) » 111 customers | » 713% of sales volume (7.3.PJ.p.a.) > 40% of revenue ($15.6m)* .* Actuals for the year ended 30 June 2006 Allgas has a
Slide 19: Allgas Business - Future Growth
Allgas Business - Future Growth m@: Grow existing system through developing distribution system >». Increasing utilisation to. new and existing homes and apartment blocks » Developing industrial and. commercial customer base m@ Expansion of the system through » Gatton to Gympie pipeline » Swanbank E
Slide 20: Allgas Business - Operations Summary
Allgas Business - Operations Summary @ APA has established detailed integration plan >» Existing operation and management personnel will transfer to APA m@ Transition Agreement in place for up to.18 months = Compatible with APA internal management model @ Further-enhances APA internal operations cap
Slide 21: Summary
Summary Mick McCormack Managing Director 21
Slide 22: Solid reliable returns
@ Solid reliable returns > Attractive equity IRR of over 12% >» Strong growth profile and DPU. accretive within 18 months — @. Exceptional fit >» Complements APA’s unique ‘suite of assets and management model »-Bolsters APA internal operations capability i. Positions. APA for further growth : >». Fu
Slide 23: We Deliver Energy
_ We Deliver Energy
Slide 24: Appendix
Appendix | | = 24
Slide 25: Allgas Growth in Customer Numbers
Allgas Growth in Customer Numbers @ Rapid growth is forecast in customer connections for the volume customer group ® This growth has been ratified through the Approved Access Arrangement 84,000 4 80,000 + Forecast customers 64,000 + 60,000 76,000. + 72,000 + 68,000 + 6/07. . 07/08. v, O8/09. 09/10 1
Slide 26: Allgas Network Capex Profile
Allgas Network Capex Profile m Allgas has_a significant-expansion program approved by the: regulator, primarily to service the growing gas demand in the region “2006-07 2007-08 2008-09 2 2008-10 2010-11 Source: QCA tariff determination Junie 2006 160.4 140.4 120 + 100 Forecast cumulative capex (A$m)
Slide 27: Regulatory Management
Regulatory Management @ Current regulatory determination commenced in July.2006 providing maximum period of revenue certainty m The next determination will be undertaken by the AER in 2011 @ APA has a strong track record asa manager of regulated assets. across a number of jurisdictions m APA managem
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