1、apa groupannual report.2018energy.connected.APA GROUP ANNUAL REPORT 2018Energy affords us the quality of life we have come to expect in Australia.Affordable,reliable and sustainable energy is a basic expectation of Australians,both consumers and businesses.We live in a country with bountiful energy
2、resources,and yet in recent times,weve incurred rising energy bills and concerns about having sufficient energy supply to meet demand.As a leading energy infrastructure business,APA is committed to playing its part within the broader energy sector to work towards solving Australias energy trilemma.A
3、 collaborative and innovative approach combining the commitments and skills of the whole energy supply chain andgovernments is what is required.Aswework towards our vision ofconnecting Australia to its energy future,we will play our part in ensuring that energyis affordable,reliable and sustainable
4、for us all.Construction of the Reedy Creek Wallumbilla Pipeline in Queensland,commissioned in May 2018Our VisionAPA GROUP ANNUAL REPORT 2018 01 FY2018 IN REVIEW02 Chairmans Report04 Managing Directors Report06 APA Leadership08 Highlights AUSTRALIAN PIPELINE TRUST 10 Directors Report40 Remuneration R
5、eport50 Consolidated Financial Statements APT INVESTMENT TRUST 101 Directors Report106 Consolidated Financial Statements125 Additional information126 Five year summary 127 Investor information S01 Sustainability Report ContentsOur StrategyMAINTAIN APAS FINANCIAL STRENGTHCONTINUE TO STRENGTHEN ASSET
6、MANAGEMENT,DEVELOPMENT AND OPERATIONAL CAPABILITIESGROWTH FOCUS TO ENHANCE OUR PORTFOLIO OF:gas transmission pipelinespower generation:gas-fired and renewablesmid-stream energy infrastructure assets,including gas storage and gas processing02 APA GROUP ANNUAL REPORT 2018APAs vision is to connect Aust
7、ralia to its energy future.That future has rapidly evolved particularly in recent years,with influences from both domestic circumstances such as our dynamic energy markets and government policy,and globally with demand for Australias energy resources and calls for action on climate change.APA plays
8、a key role in enabling Australian consumers and businesses to have access to affordable,reliable and sustainable energy.During the 2018 financial year,we stepped up our commitment to this role,working with industry and our customers and investing over$700 million in new organic growth projects that
9、will contribute to providing a solution to Australias energy trilemma.In my first year as your Chairman,I am delighted to share some highlights about the progress APA has made in delivering on its strategy this past financial year.Since its inception in 2000,APA has gone from strength to strength an
10、d our disciplined investment approach has delivered a portfolio of assets that we own and/or operate of over$20 billion.APAs vision to connect Australia to its energy future is being realised as we progress our strategic growth trajectory and continue to deliver value for our Securityholders.Financi
11、al resultsIn FY2018,APA has presented the market with a solid set of financial results.Revenue has increased by 2.8 per cent to$1,941.4 million(1).Off the back of the growth that we continue to deliver,earnings before interest,tax,depreciation and amortisation(EBITDA)have increased by 3.3 per cent t
12、o$1,518.5 million and net profit after tax has increased by 11.8 per cent to$264.8 million.The very nature of APAs business enables predictable results for our Securityholders that are largely unaffected by market conditions.This is achieved through the longevity of our contracts to supply energy an
13、d services to our customers.These contracts,in turn,support the ongoing investment in our infrastructure.Over the last few years,the Australian market has been challenged by fluctuating commodity prices.We are conscious that the relative price of these commodities may have an impact on our customers
14、 demand for infrastructure in the future.By applying a customer centric approach,APA sees itself as an energy industry team player with the ability to offer flexible services that meet our customers long-term needs.Our total distributions for FY2018 of 45 cents per security represent a 3.4 per cent
15、increase over distributions for FY2017.Securityholders have also benefited from a total of 6.33 cents per security of franking credits which accompany the distributions.In accordance with our distribution policy,distributions have been fully covered by operating cash flows.A portion of these cash fl
16、ows have also been retained within the business to support our ongoing growth.With growth continuing to drive our strategy,we are working on in excess of$1.4 billion of growth projects that have been agreed with our customers to meet their future energy needs.In FY2018,APA commissioned the Emu Downs
17、 Solar Farm,Reedy Creek Wallumbilla Pipeline,the Mt Morgans Gas Pipeline and the Yamarna Gas Pipeline.chairmans report.1)Total revenue,excluding pass-through(revenue on which no margin is earned).APA GROUP ANNUAL REPORT 2018 03These assets will all contribute to earnings in FY2019 and beyond.Operati
18、ng cash flow for FY2018 increased by 5.9 per cent to$1,031.6 million.Operating cash flow per security held strong and increased by 4.1 per cent to 90.7 cents per security,despite over 65 million new securities being issued during FY2018 as part of the$500 million equity capital raise that was undert
19、aken in February.Delivering for stakeholdersOur success is not only judged by the value created for Securityholders,but from our ability to service our customers long-term energy infrastructure needs.In FY2018,APA was one of 15 energy supply chain businesses that pledged to develop a consumer charte
20、r,putting customers first.We believe that for APA to continue to succeed,we need to be delivering for our customers and Australias energy users.Instilling customer confidence in the energy industry requires an industry-wide commitment across the supply chain for both gas and electricity.At the heart
21、 of The Energy Charter is an assurance to improve the culture throughout the energy industry by putting the customer at the centre of each of our business decisions.At APA we are committed to The Energy Charter and developing a culture of customer focus and good conduct across the business.Energy po
22、licyThroughout FY2018,national energy policy remained highly topical within Australia.As policy makers seek to tackle the energy trilemma and solve a decade-long failure to effectively integrate energy and climate policy,ongoing uncertainty prevails in the market.This affects investment decisions,pr
23、ices and energy reliability for Australian consumers and businesses.Policy certainty and clarity are the crucial components to maintaining investment confidence in Australia.This requires a collaborative approach with the energy industry and governments working together.APA continues to support inte
24、grated energy and climate policies that will meet Australias carbon reduction commitments,whilst ensuring affordability and reliability.In this context,APA continues to encourage the development of a bipartisan national energy policy which will give that certainty for future investment in the sector
25、.Gas remains a viable,low-emissions fuel supply that Australia has in abundance.GovernanceThroughout FY2018,I have had the opportunity to meet directly with investors,listening to their feedback about APAs strategic direction,board composition and remuneration report.In FY2018,we farewelled Mr Leona
26、rd Bleasel AM as Chairman of the APA Board after ten successful years at the Boards helm.I was delighted to follow in Lens footsteps and accept the position as Chairman,after contributing in my role as an APA Non-Executive Director since 2015.APAs Board also saw Non-Executive Director Mr John Fletch
27、er retire and welcomed two new Non-Executive Directors,Ms Shirley Int Veld and Mr Peter Wasow who each have a wealth of experience to help navigate the opportunities and challenges facing the energy market.During the year,Non-Executive Director Ms Patricia McKenzie announced her intention to retire
28、at the 2018 Annual Meeting.Given the CKI proposal,I am delighted to advise that Patricia has agreed to continue as a Director beyond the Annual Meeting.CKI Consortium ProposalAs at the time of writing this Report,there have been no further developments to the proposed transaction between APA and the
29、 CKI Consortium since the announcement by APA on 13 August 2018 that both parties had entered into a binding Implementation Agreement for the CKI Consortium to acquire 100 per cent of APAs securities.Your Board believes the Offer of$11.00 cash per security is compelling for APA Securityholders and w
30、e unanimously recommend it to you.It represents a premium of over 30 per cent(2)on the price APA securities were trading at prior to the announcement on 13 June 2018 and an FY2017 Enterprise Value/EBITDA multiple of 15.3 times and FY2018 Enterprise Value/EBITDA of 14.8 times(3).We will keep Security
31、holders informed as the transaction progresses,with the expectation of a Securityholder meeting and vote on the Schemes to be held in late November 2018.Outlook The past year has provided Securityholders with continued growth,as APA has delivered solid financial performance and further creation of v
32、alue.Going forward,we will certainly continue to act in your best interests to ensure the best possible returns.APAs guidance for FY2019 is for EBITDA of between$1,550 million and$1,575 million and net interest costs of between$500 million and$510 million.In the event that the CKI proposal does not
33、proceed and APA remains as a stand-alone listed company for the full financial year,total distributions per security are expected to be in the order of 46.5 cents per security,prior to the benefits of any franking credits that may arise as a result of the ongoing payment of company tax by APA.On beh
34、alf of the Board,I would like to thank our Managing Director Mick McCormack,the APA leadership team and APAs employees for their contribution this year.Importantly,I would also like to thank all our Securityholders for your continued support.Michael FraserChairman 2)The value of$11.00 per security r
35、epresents a 30%-35%premium to the 12 June 2018 trading price based on the 5 day,1 month and 3 month volume weighted average prices of$8.434,$8.374 and$8.144 respectively.3)Based on 1,179,893,848 APA stapled securities on issue,APA net debt as at 30 June 2018 as per Note 18 of the FY2018 financial st
36、atements,APA FY2017 EBITDA of A$1,470.1 million for theFY2017 multiple and APA FY2018 EBITDA of A$1,518.5 million for the FY2018 multiple.04 APA GROUP ANNUAL REPORT 2018managing directors report.At APA,we have always looked to continually improve our business,leverage our strengths and deliver for o
37、ur stakeholders.The solid 2018 financial year results reflect the success of our approach and as we work towards completing the$1.4 billion plus of committed growth projects in FY2019,we are on track to continue this success.Without our customers,there would be no APA.In FY2018,we commenced a progra
38、m to foster a greater customer centric mindset across the business.The energy industry has had a tough couple of years in terms of regulatory intervention and political focus.Much of this has stemmed from the view that the industry is not meeting societys expectations,particularly when it comes to e
39、nergy affordability and consumer trust is at an all-time low.For Australian businesses to do well in the longer term,the entire energy industry needs to be delivering for consumers.I am very proud that APA is a foundation member of The Energy Charter initiative.This commitment to put customers at th
40、e centre of Australias energy system by each of these businesses is a major step in solving Australias energy trilemma and meeting community expectations.In the past year,energy continued to be a highly charged and emotive political issue in Australia with any bipartisan energy policy still to be ag
41、reed.Various mechanisms have been touted to address the issues including the Finkel Review and resultant draft National Energy Guarantee.At APA,we are acutely aware that gas is critical to energy security,affordability and sustainability,now and into the future.Gas-fired power generation is critical
42、 to keeping electricity prices down and Australian businesses viable.Gas currently accounts for around 40 per cent of mid merit and peaking generation capacity in the National Electricity Market.Governments and the energy industry need to work collaboratively to make more gas available and therefore
43、 affordable.Whether supporting gas import terminals or unlocking additional gas resources that Australia is rich with,it is important that all stakeholders work together to facilitate and develop new projects,communicating the facts and evidence to be considered in a well informedpublic debate.Safet
44、y and our people remain a priorityThe importance of fostering a workplace culture that operates safely is a key driver at APA.Compliance with our health,safety and environmental(HSE)obligations shows continuous improvement and we are working to build a sustainable future across our workforce.In FY20
45、18,we completed an overhaul of our Alcohol&Other Drugs Policy and protocols and launched an online Health and Wellbeing platform for employees.Despite our teams best efforts,the Total Recordable Injury Frequency Rate result of 8.9 exceeded its target,predominantly due to contractor injuries.This ind
46、icates that we still have some work to do to ensure procedures are in place to keep all of our workers safe.We will use data analytics as part of initiatives to improve injury performance including contractor performance and management,manual handling and hand injury prevention.In FY2018,APA introdu
47、ced stakeholder engagement initiatives as a way to drive best practice in our strategic thinking and across our operations.These initiatives,such asarticulating the APA Way and revising our Code of Conduct,contributed to enhancing a more progressive andcustomer centric corporate culture.The APA Way
48、is a blueprint that guides how our employees are expected to behave and ultimately,defines how we strive to manage our business.At its core,our five STARS values drive our behaviours and these are supported by the five principles of our Decision Compass,which guide the way we make decisions.The APA
49、Way and our Code of Conduct will help us achieve our vision by ensuring the way we work and do business aligns with the expectations of all of our stakeholders.StrategyAs part of our overall strategy,we continued to deliver customer focused energy solutions whilst engaging positively with the commun
50、ities and respecting the environment in which we operate.Our$1.4 billion plus pipeline of growth projects continues to be realised with the commissioning of a variety of new energy infrastructure assets across Australia as detailed in the Chairmans Report.We also announced a number of significant co
51、ntracts and renewals,as well as a new solar farm development at Badgingarra in Western Australia and the potential Crib Point Pakenham Pipeline in Victoria linking AGLs proposed floating LNG regasification terminal to APAs East Coast Grid(subject to AGL FID).During a year when much uncertainty was g
52、enerated with the introduction of the new gas pipelines arbitration and disclosure regimes,APAs reliable,low risk business model and pro-active approach of innovative continual improvement came to the fore.In particular,we continued to manage counterparty risks by diversifying our customer and indus
53、try exposure,assessing counterparties creditworthiness and entering into long-term contracts to support major capital spend.As testament to this,the average contract tenor at APA is in excess of 12 years and all contracts and renewals have continued to be negotiated with our customers.Growth and sec
54、urityholder value In FY2017,we embarked upon a three year growth program which will see APA invest in excess of$1.4 billion in a variety of energy infrastructure growth projects.As at the end of FY2018,we had committed$1 billion in capital expenditure with the balance to be realised in FY2019.We est
55、imate the additional revenue contribution from these new assets to be in excess of$75 million in FY2019,increasing to over$215 million per annum in FY2020.And still we see more growth in front of us with in excess of$4 billion of growth opportunities currently identified over the next four to five y
56、ears.These opportunities range across gas pipeline developments,gas and renewables power generation and other opportunities that are currently at various stages of development.Despite the challenges of continual regulatory reform initiatives and an offer to acquire our business,the APA team has rema
57、ined focused on delivering for its customers and growth.Long term viewAs we have detailed in the 2018 Sustainability Report which is contained in this report,APA recognises that climate change is a risk that warrants our consideration both as a business and as a good global citizen.APA is supportive
58、 of Australias commitment under the Paris Agreement to reduce emissions by between 26 and 28 per cent on 2005 levels by 2030.To meet these emissions reductions,major changes are required for the Australian energy industry.APA GROUP ANNUAL REPORT 2018 05We are also aware that the physical impacts of
59、climate change may impact operational aspects of APAs operations and financial performance,such as:the ability to operate in extreme conditions;maintenance requirements and our ability to respond to extreme weather events;as well as consequential changes in insurance costs;our supply chain.To reinfo
60、rce our commitment to improving APAs Environmental,Social and Governance(ESG)performance,we have initiated a new program and engaged an external advisory firm to review APAs strategic direction for our ESG management and reporting.It is important for the sustainability of any business to understand
61、the opportunities and risks associated with climate change and how we incorporate those into our strategy.A plan is being developed which will see a number of ESG initiatives rolled out from FY2019 and beyond.This financial year,APA has strengthened its advocacy in environmental stewardship.We belie
62、ve that gas is a viable,lower-emissions fuel supply that can help respond to the intermittent nature of renewable energy generation while technology continues to evolve in energy generation.APA continues to expand its renewable generation portfolio with the commissioning of the Emu Downs Solar Farm
63、and the development of our Darling Downs Solar Farm and Badgingarra Wind and Badgingarra Solar Farms.APAs extensive gas pipeline footprint was built with Australias future in mind.Our assets are built for the long term to meet our customers needs for long term energy supply.Sustainable business prac
64、tice is incorporated into the way we work with all our stakeholders including customers,the environment,community,employees and investors.Looking aheadIt is prudent to add that while APA has spent the past 18 years building a pipeline of energy infrastructure assets and a growth trajectory to create
65、 securityholder value,your Board,has advised its unanimous support for the Implementation Agreement with the CKI Consortium to acquire 100 per cent of APA.The compelling offer is testament to APAs success,evolving from a simple point-to-point pipeline business with an enterprise value of around$1 bi
66、llion in 2000,to a business now being valued by a potential acquirer at$22 billion.Regardless of the outcome of the proposed transaction which remains subject to a number of conditions,our vision to connect Australia to its energy future,remains.I believe that our burgeoning portfolio of infrastruct
67、ure assets will continue to deliver energy solutions to the people,businesses and communities of Australia affordably,efficiently and reliably for generations to come.I am very proud to have been a part of APAs growth and success and to work alongside all 1,700 members of APAs team over the past yea
68、r.Mick McCormackChief Executive Officer and Managing Director 06 APA GROUP ANNUAL REPORT 2018 1Michael FraserBCom FCPA FTI MAICDIndependent ChairmanAppointed 1 September 2015Appointed Chairman 27 October 2017Michael has more than 30 years experience in the Australian energy industry.He has held vari
69、ous executive positions at AGL Energy culminating in his role as Managing Director and Chief Executive Officer for the period of seven years until February 2015.Michael is a Non-Executive Director of Aurizon Holdings Limited.He is also a former Chairman of the Clean Energy Council,Elgas Limited,Acte
70、wAGL and the NEMMCo Participants Advisory Committee,as well as a former Director of Queensland Gas Company Limited,the Australian Gas Association and the Energy Retailers Association of Australia.Michael is a member of the Audit and Risk Management Committee and the Chairman of the Nomination Commit
71、tee.5Russell Higgins AO BEc FAICDIndependent DirectorAppointed 7 December 2004Russell has extensive experience both locally and internationally,in the energy sector and in economic and fiscal policy.He was Secretary and Chief Executive Officer of the Department of Industry,Science and Resources from
72、 1997 to 2002 and Chairman of the Australian Governments Energy Task Force from 2003 to 2004.Russell is a Director of Telstra Corporation Limited and Chairman of Argo Investments Limited and of Argo Global Listed Infrastructure Limited.He is a former Chairman of the Global Carbon Capture and Storage
73、 Institute,the CSIRO Energy Transformed Flagship Advisory Committee and Snowy Hydro,as well as a former Director of Leighton Holdings Limited,Ricegrowers Limited(trading as SunRice),St James Ethics Foundation,Australian Biodiesel Group Limited,EFIC and the CSIRO.He was also previously a member of th
74、e Prime Ministerial Task Group on Emissions Trading.Russell is Chairman of the Health Safety and Environment Committee,a member of the Audit and Risk Management Committee and a member of the Nomination Committee.2Michael(Mick)McCormackBSurv GradDipEng MBA FAICDChief Executive Officer and Managing Di
75、rectorCEO Appointed 1 July 2005MD Appointed 1 July 2006Mick has over 35 years experience in the energy infrastructure sector in Australia,and his career has encompassed all aspects of the sector,including commercial development,design,construction,operation and management of most of Australias natur
76、al gas pipelines and gas distribution systems.His experience extends to gas-fired and renewable power generation,gas processing,LNG and underground storage.Mick is a former Director of Envestra(now Australian Gas Networks),the Australian Pipeline Industry Association(now Australian Pipelines and Gas
77、 Association)and the Australian Brandenburg Orchestra.6Shirley Int VeldBCom LLB(Hons)Independent DirectorAppointed 19 March 2018Shirley has considerable expertise and experience in the energy,mining and renewables sectors.Shirley is currently a Non-Executive Director with Northern Star Resources Lim
78、ited and NBN Co Limited and Deputy Chair of CSIRO.She is formerly a Non-Executive Director of Perth Airport,DUET Group,Asciano Limited,Alcoa of Australia Limited and a Council Member of the Chamber of Commerce and Industry of Western Australia.She was also the Managing Director of Verve Energy(2007
79、2012)and,before that,she worked for 10 years in senior roles at Alcoa of Australia,WMC Resources Ltd,Bond Corporation and BankWest.In 2014,she was Chairman of the Queensland Government Expert Electricity Panel and a member of the Renewable Energy Target Review Panel for the Department of Prime Minis
80、ter and Cabinet and,was until recently,a Council member of the Australian Institute of Company Directors(WA)and an Advisory Board member of the SMART Infrastructure Facility(University of Wollongong).Shirley is a member of the Health,Safety and Environment Committee and a member of the People and Re
81、munerationCommittee.apa group board.3Steven(Steve)Crane BComm FAICD SF FinIndependent DirectorAppointed 1 January 2011Steve has over 30 years experience in the financial services industry.His background is in investment banking,having previously been Chief Executive Officer of ABN AMRO Australia and
82、 BZW Australia.Steve has considerable experience as a Non-Executive Director of listed entities.He is currently Chairman of nib holdings limited and the Taronga Conservation Society Australia.He was formerly Chairman of Adelaide Managed Funds Limited and Investa Property Group Limited,a Director of
83、Bank of Queensland Limited,Transfield Services Limited,Adelaide Bank Limited,Foodland Associated Limited and APA Ethane Limited,the responsible entity of Ethane Pipeline Income Fund,and a member of the Advisory Council for CIMB Securities International(Australia)Pty Ltd.Steve is a member of the Audi
84、t and Risk Management Committee and a member of the People and Remuneration Committee.7Patricia McKenzieLLB FAICDIndependent DirectorAppointed 1 January 2011 Patricia has considerable expertise and experience in energy market regulation and extensive corporate legal experience.She is currently Chair
85、 of Essential Energy.Patricia was formerly the Chair and a Director of Healthdirect Australia;a Director of Macquarie Generation,TransGrid and the Australian Energy Market Operator Limited(AEMO),the national energy market operator for electricity and gas;and formerly the Chief Executive Officer of G
86、as Market Company Limited,the market administrator for retail competition in the gas industry in New South Wales and the Australian Capital Territory.Patricia is a member of the Health Safety and EnvironmentCommittee,andamember of the People andRemuneration Committee.4Debra(Debbie)GoodinBEc FCA MAIC
87、DIndependent DirectorAppointed 1 September 2015Debbie has considerable experience as a Non-Executive Director,including as a member and Chair of Board Audit and Risk Committees.She is currently a Director of ASX-listed companies Senex Energy Limited,oOh!media Limited and Atlas Arteria Limited,and Ch
88、airs the Audit and Risk Committees of Senex Energy Limited and oOh!media Limited and Chairs the Remuneration Committee for Atlas Arteria Limited.She was formerly a Director of Ten Network Holdings Limited.Debbie also has extensive executive experience in operations,finance and corporate development,
89、including with engineering and professional services firms,and is a Fellow of Chartered Accountants Australia and New Zealand.Debbie is the Chairman of the Audit and Risk Management Committee,a member of the Health Safety and Environment Committee and a member of the Nomination Committee.8Peter Waso
90、wBCom,GradDip(Management)Fellow(CPA Australia)Independent DirectorAppointed 19 March 2018 Peter has extensive experience in the resources sector as both a senior executive and director.He retired as Managing Director and Chief Executive Officer of Alumina Limited in mid-2017.Previously,he had held t
91、he position of Executive Vice President and Chief Financial Officer at Santos Limited and,in a 20-year plus career at BHP,he held senior positions including Vice President,Finance,and other senior roles in Petroleum,Services,Corporate,Steel and Minerals.Peter is a Non-Executive Director with Oz Mine
92、rals Limited and the privately held GHD Group.He is formerly a Non-Executive Director of Alcoa of Australia Limited,AWA Brazil Limitada,AWAC LLC and Alumina Limited.Peter is the Chair of the People and Remuneration Committee and a member of the Audit and Risk Management Committee.8 1 2 3 4 5 6 7APA
93、GROUP ANNUAL REPORT 2018 07 1Nevenka CodevelleBCom LLM GAICDGroup Executive Governance,Risk and LegalNevenka is responsible for APA Groups Secretariat and Legal division.The division comprises the company secretarial,legal,and group risk and compliance functions.Nevenka joined APA Group in February
94、2008 and has held the role of General Counsel since June 2012.In October 2015,she also assumed the role of Company Secretary and joined the Executive team.Nevenka is a lawyer with over 20 years experience in energy and other infrastructure industries,with particular focus on project development,merg
95、ers and acquisitions,competition andindustry regulation.5Elise MannsBBus CAHRIGroup Executive People,Safety and CultureElise is responsible for managing APA Groups Human Resources division,which covers APAs people strategy,safety and environment performance and governance and all activities relating
96、 to APAs people,their development,health and wellbeing,and employment arrangements.Elise joined APA Group in May 2012 as General Manager Human Resources and in October 2015 joined the Executive team becoming Group Executive Human Resources.Elise has a strong background in employment relations and wo
97、rkplace change,organisational restructuring and business improvement.Elise has over 25 years human resources experience in Australias heavy manufacturing,engineering,steel and utilities sectors.2Peter FredricsonBCom CA GAICDChief Financial OfficerPeter is responsible for all financial aspects of APA
98、 Group,including accounting and financial reporting,financial compliance and governance,taxation,treasury,balance sheet management,capital strategy,insurance,Investor Relations and Information Technology.Peter joined APA Group in June 2009.He has considerable expertise in the listed energy infrastru
99、cture sector and over 30 years experience in senior financial roles in energy infrastructure,financial services and investment banking organisations across Australia,New Zealand and Asia.6Sam PearceBSc LLB MBAGroup Executive Networks&PowerSam is responsible for the operation and management of APA Gr
100、oups fully and minority owned gas distribution and power generation and electricity transmission assets,as well as for Australian Gas Networks assets.Sam joined APA Group in July 2008 and was formerly General Manager Corporate Development and Investments.Sam has over 20 years experience in the energ
101、y sector,covering mergers and acquisitions,investment management,commercial and business development,greenfields project development,strategy and operations.apa group senior management.3Ross GersbachBBus MAICDChief Executive Strategy and DevelopmentRoss is responsible for APA Groups strategy,energy
102、investments,regulatory and government affairs,environmental development,and mergers and acquisitions.He has responsibility for further enhancing APA Groups portfolio ofassets that complement the value of its infrastructure,including APA Groups investments in midstream gas infrastructure,andthe opera
103、tion and development of these assets.Ross was previously a Director of APA Group from 2004 to 2008 joining the management team in April 2008 where he was responsible for all commercial aspects of APA Group.He has over 20 years experience in senior positions across a range of energy related sectors,c
104、overing areas such as infrastructure investments,mergers and acquisitions and strategic developments.Additionally,Ross has extensive commercial experience and has managed a portfolio of infrastructure assets in the natural gas and electricity distribution network sector.7Rob WhealsBCom CA GAICDGroup
105、 Executive TransmissionRob is responsible for the management of APA Groups transmission and gas storage assets including all aspects of commercial and operational performance.Rob joined APA Group in September 2008 and is responsible for managing APAs customers and revenue contracts,as well as growin
106、g APAs gas transmission revenues.Rob is also responsible for managing all operational aspects of APAs 15,000 kilometres of owned and operated gas transmission pipelines and gas storage facilities.Rob has over 20 years of experience in Australia and internationally,in energy infrastructure and teleco
107、mmunications,across roles in finance,commercial,strategy,infrastructure investments and M&A,as well as regulatory.4Kevin LesterBEng(Civil)MIEAust GAICD Group Executive Infrastructure DevelopmentKevin is responsible for the project development,engineering,procurement and delivery of APA Groups infras
108、tructure expansion projects.This division also has responsibility for providing asset engineering services,the technical regulation of all pipeline related assets,procurement,engineering services and the provision of land,approvals and asset protection services across APA.Kevin joined APA Group in A
109、ugust 2012 continuing a career in the management of major infrastructure projects,including energy infrastructure.Kevin is a Director and a Past President of the Australian Pipelines and Gas Association.6 5 4 3 2 1 708 APA GROUP ANNUAL REPORT 2018$1,518.5mearnings before interest,tax,depreciation an
110、d amortisation(EBITDA)on FY2017+3.3%total capital and investment expenditure in FY2018$875.5mExpected in FY2019$425moperating cash flow$1,031.6mon FY20175.9%highlights FY2018.of new pipelines constructed and commissioned in FY2018 connecting to APAs east and west coast pipeline grids252kmunder const
111、ruction to be completed in FY2019257.5mwrenewable power generation owned and/or operated as at FY2018232mw$11.6 bMarket capitalisation as at 30 June 2018FY2018 total distribution per securityplus total franking credits of 6.33 cents per security45.0on FY2017+3.4%APA GROUP ANNUAL REPORT 2018 091)Norm
112、alised financial results exclude significant items.2)Operating cash flow=net cash from operations after interest and tax payments.3)Pass-through revenue is revenue on which no margin is earned.Pass-through revenue arises in the asset management operations in respect of costs incurred and passed on t
113、o Australian Gas Networks Limited(AGN)and GDI in respect of the operation of the AGN and GDI assets respectively.4)On the 23 March 2018,APA Group issued 65,586,479 new ordinary securities on completion of the fully underwritten pro-rata accelerated institutional tradeable renounceable entitlement of
114、fer(Entitlement Offer),resulting in total securities on issue as at 30 June 2018 of 1,179,893,848.The Entitlement Offer was offered at$7.70 per security,a discount to APA Groups closing market price of$8.26 per security on the 23 February 2018,the last trading day before the record date of 26 Februa
115、ry 2018.The numbers of securities used for calculation of earnings per security and operating cash flow per security from FY2018 to FY2014 have been adjusted.An adjustment factor of 1.0038 has been calculated,being the closing market price per security on 23 February 2018,divided by the theoretical
116、ex-rights price(TERP)of$8.23 per security.Between 23 December 2014 and 28 January 2015,APA issued a total of 278,556,562 new ordinary securities,resulting in total securities on issue of 1,114,307,369.The weighted average number of securities for FY2015 has been adjusted to account for that rights i
117、ssue.5)APAs liability to repay debt at relevant due dates of the drawn facilities.This amount represents current and non-current borrowings as per balance sheet and is adjusted for deferred borrowing costs,the effect of unwinding of discount,unrealised foreign exchange differences reported in equity
118、 and deducting other financial liabilities that are reported as part of borrowings in the balance sheet.6)Gearing=net debt divided by net debt plus equity.$million30 June 201830 June 2017Changes(%)Revenue2,386.72,326.42.6Revenue excluding pass-through(3)1,941.41,888.32.8EBITDA1,518.51,470.13.3Profit
119、 after tax 264.8236.811.8Operating cash flow(2)1,031.6973.95.9Financial positionTotal assets15,227.215,046.01.2Total drawn debt(5)8,810.49,249.74.7Total equity4,126.83,978.23.9Financial ratiosOperating cash flow per security(4)(cents)90.787.13.8Earnings per security(cents)23.321.29.4Distribution per
120、 security(cents)45.043.53.4Distribution payout ratio(%)51.549.83.4Gearing(6)(%)65.467.43.0Interest cover ratio(times)2.72.8(3.6)Financial results.normalised(1)business performance.FY14FY15FY16FY17FY18FY14FY15FY16FY17FY18FY14FY15FY16FY17FY18FY14FY15FY16FY17FY18FY14FY15FY16FY17FY18FY14FY15FY16FY17FY18
121、EBITDA($m)Operating cash flow(2)($m)Revenue excluding passthrough(3)($m)Operating cash flow per security(4)(cents)Distributions per security(cents)Totalassets($b)7478221,3311,4701,5184405458629741,0329931,1191,6561,8881,94150.654.677.187.190.736.338.041.543.545.08.014.714.815.015.210 APA GROUP ANNUA
122、L REPORT 2018directors report.AUSTRALIAN PIPELINE TRUST AND ITS CONTROLLED ENTITIESAustralian Pipeline Trust and its Controlled Entities(ARSN 091 678 778)Directors Report for the year ended 30 June 2018The Directors of Australian Pipeline Limited(Responsible Entity)submit their financial report of A
123、ustralian Pipeline Trust(APT)and its controlled entities(together APA or Consolidated Entity)for the year ended 30 June 2018.This report refers to the consolidated results of APT and APT Investment Trust(APTIT).1.DirectorsThe names of the Directors of the Responsible Entity during the year and since
124、 the year end are:Michael Fraser Chairman from 27 October 2017Michael(Mick)McCormack Chief Executive Officer and Managing DirectorSteven(Steve)CraneDebra(Debbie)GoodinRussell Higgins AOPatricia McKenzieShirley Int Veld Appointed 19 March 2018Peter Wasow Appointed 19 March 2018Leonard Bleasel AM Reti
125、red as Chairman and Director 27 October 2017John Fletcher Retired as a Director 21 February 2018The Company Secretary of the Responsible Entity during and since the year to 30 June 2018 is Nevenka Codevelle.2.Principal ActivitiesThe principal activities of APA during the course of the year were the
126、ownership and operation of energy infrastructure assets and businesses,including:energy infrastructure,comprising gas transmission,gas storage and processing;and gas-fired and renewable energy power generation businesses located across Australia;asset management services for the majority of APAs ene
127、rgy investments and for third parties;and energy investments in unlisted entities.3.State of AffairsOn 13 June 2018,APA announced that an unsolicited,indicative non-binding proposal had been received from a consortium comprising CK Infrastructure Holdings Limited(CKI),CK Asset Holdings Limited(CKA)a
128、nd Power Assets Holdings Limited(PAH)(together,the Consortium),to acquire all of the stapled securities in APA.The indicative price proposed by the Consortium was$11.00 cash per stapled security,plus the final six months distribution for FY2018 of 24.0 cents per stapled security to be paid in Septem
129、ber as scheduled.The Board considered it was in the best interests of Securityholders to further engage with the Consortium and allow due diligence which was undertaken during June August 2018.Subsequently,on 13 August 2018,APA announced that it had entered into a conditional Implementation Agreemen
130、t with CKI,CKA,PAH and CKM Australia Bidco Pty Ltd(Bidder)under which Bidder(a wholly owned subsidiary of CKA)will acquire all of the stapled securities in APA under trust schemes(Schemes).If the Schemes are implemented,APA Securityholders will receive A$11.00 cash per APA stapled security.The trans
131、action does not affect APAs final distribution for the 2018 financial year,which the Board announced on 22 August 2018,will be 24.0 cents per stapled security,and will be paid on 12 September 2018.If the Schemes are implemented at any time after 31 December 2018,APA Securityholders will receive an a
132、dditional distribution of 4.0 cents per APA stapled security for each full month in calendar 2019 which elapses prior to implementation of the Schemes(up to,and including,March 2019).Implementation of the Schemes is subject to certain conditions outlined in the Implementation Agreement(a copy of whi
133、ch was attached to APAs ASX announcement on 13 August 2018).The conditions include:Approval of the Australian Competition and Consumer Commission and the Foreign Investment Review Board;An Independent Expert opining that the Schemes are fair and reasonable and in the best interests of APA Securityho
134、lders;No“material change”or“prescribed events”occurring in relation to APA;CKA shareholder approval;APA Securityholder approval;and Court approval.The APA Directors unanimously recommend the transaction in the absence of a superior proposal and subject to an Independent Expert concluding(and continu
135、ing to conclude)that the Schemes are fair and reasonable and in the best interests of APA Securityholders.Depending on the progress of regulatory approvals,a meeting of APA Securityholders is targeted to be held in late November 2018 to consider the Schemes,with implementation and payment to APA Sec
136、urityholders targeted to occur in midDecember2018.APA GROUP ANNUAL REPORT 2018 11directors report.continued.AUSTRALIAN PIPELINE TRUST AND ITS CONTROLLED ENTITIES4.Subsequent EventsThe following events have occurred subsequent to the period end:On 2 July 2018 a new$1,000 million syndicated bank facil
137、ity came into effect.This new facility has two tranches maturing on 30 June 2023 and 31 December 2023 respectively.On 13 August 2018,APA announced that it had entered into a conditional Implementation Agreement with CKI,CKA,PAH and CKM Bidder under which Bidder(a wholly owned subsidiary of CKA)will
138、acquire all of the stapled securities in APA under trust schemes(Schemes).If the Schemes are implemented,APA Securityholders will receive A$11.00 cash per stapled security.The transaction does not affect APAs final distribution for the 2018 financial year.If the Schemes are implemented at any time a
139、fter 31 December 2018,APA Securityholders will receive an additional distribution of 4.0 cents per APA stapled security for each full month in calendar 2019 which elapses prior to implementation of the Schemes(up to,and including,March 2019).Implementation of the Schemes is subject to certain condit
140、ions,including regulatory and shareholder approvals.On 22 August 2018,the Directors declared a final distribution of 24.0 cents per security($283.2 million)for APA Group,an increase of 4.3%,or 1.0 cent per security over the previous corresponding period(2H FY2017:23.0 cents).This is comprised of a d
141、istribution of 17.96 cents per security from APT and a distribution of 6.04 cents per security from APTIT.The APT distribution represents a 8.93 cents per security fully franked profit distribution and 9.03 cents per security capital distribution.The APTIT distribution represents a 2.90 cents per se
142、curity profit distribution and a 3.14 cents per security capital distribution.Franking credits of 3.83 cents per security will be allocated to the APT franked profit distribution.The distribution is expected to be paid on 12 September 2018.Other than what is noted above and as disclosed elsewhere in
143、 this report,there has not arisen in the interval between the end of the full year to 30 June 2018 and the date of this report any matter or circumstance that has significantly affected,or may significantly affect,the Groups operations,the results of those operations,or the Groups state of affairs,i
144、n future financialyears.5.About APA5.1 APA overviewAPA is a leading Australian energy infrastructure business.It owns and/or operates in excess of$20 billion of energy infrastructure assets across Australia,and operates these with a skilled workforce of in excess of 1,700 people.APA has a diverse po
145、rtfolio of over 15,000 kilometres(1)of gas transmission pipelines that spans every state and territory on mainland Australia and delivers about half the nations natural gas.It also owns or has interests in other related energy infrastructure assets such as gas storage facilities,gas processing facil
146、ities,gas compression facilities and renewable and gas fired power generation assets.APA has ownership interests in,and/or operates,GDI(EII)Pty Ltd(GDI)and Australian Gas Networks Limited gas distribution networks,which together own approximately 28,600 kilometres of gas mains and pipelines,and almo
147、st 1.4million gas consumer connections.APA also has interests in other energy infrastructure assets and businesses,including SEA Gas Pipeline,Mortlake Gas Pipeline,Energy Infrastructure Investments(EII)and EII2.APA is listed on the Australian Securities Exchange(ASX)and is included in the S&P ASX 50
148、 Index.Since listing in June 2000,APAs market capitalisation has increased more than 24-fold to$11.8 billion(2),and it has achieved securityholder returns of 17.8%(3)per annum on an annual compounding basis since listing on 13 June 2000 through to 20 August 2018.5.2 APA objectives and strategiesAPA
149、will continue to be a leading energy infrastructure business,developing,owning and operating energy infrastructure.We are committed to delivering connected and sustainable energy solutions that are safe,reliable,innovative and cost-effective so that all of our stakeholders are better off as we work
150、together to create a connected and sustainable energy future.Ourstrategy is as follows:Our growth focus is to enhance our portfolio:of gas transmission pipelines;of power generation:gas-fired and renewable;and of midstream energy infrastructure assets,including gas storage and gas processing.Continu
151、e to strengthen asset management,development and operational capabilities.Maintain APAs financial strength.These strategies are underpinned by the APA Way how we do business.This new blueprint was integrated into APAs culture and mindset during the reporting period.The APA Way is a combination of ho
152、w we behave,guided by our values(our STARS),and how we make decisions,guided by APAs Decision Compass.1)Owned and/or operated by APA.2)Market capitalisation as at 20 August 2018.3)Total securityholder return is the capital appreciation of APAs security price,adjusted for capital management actions(s
153、uch as security splits and consolidations)and assuming reinvestment of distributions at the declared distribution rate per security.Figures quoted are sourced from IRESS.12 APA GROUP ANNUAL REPORT 2018directors report.continued.AUSTRALIAN PIPELINE TRUST AND ITS CONTROLLED ENTITIES5.2 APA objectives
154、and strategies(continued)Our STARS values set the benchmark for how we operate to ensure business integrity:Safe We will maintain a safe environment and a professional workplace where staff work collaboratively,are valued and treated with respect.Trustworthy We act with honesty and integrity and acc
155、ept individual and collective responsibility for the delivery of all business outcomes.We do what we say we are going to do.Adaptable We continually respond and adapt to our changing environment by innovating,modifying our behaviour and continually improving our processes and systems to take advanta
156、ge of opportunities to enhance,improve and grow our business.Results We consistently meet our commitments and deliver excellent results to the benefit of our employees,customers,investors and the community through tenacity and perseverance.Service We are committed to high quality service delivery ac
157、hieved through listening,understanding,anticipating and responding to our customer needs.Good decision-making is at the core of successful strategy execution and APAs Decision Compass sets out clear principles for all our employees,empowering them to make good decisions with confidence.Employees and
158、 all decision makers right through to the Board,are encouraged to take a moment and ask“is this decision consistent with each of the key decision compass points”as below:Do things safely Take a long term focus Manage APA money as if its our own Do what we say we will do Know our reputation mattersTh
159、e APA Way puts all employees on the same page,ensuring that the way we work and the many decisions we make are based on consistent values and principles,and are aligned to what we need to execute on our strategy.5.3 APA assets and operationsAPA is a major participant in developing,owning and operati
160、ng natural gas transportation and energy infrastructure assets across Australia.APAs assets and operations are reported in three principal business segments:Energy Infrastructure,which includes all of APAs wholly or majority owned pipelines,gas storage assets,gas compression and processing assets an
161、d gas-fired and renewable energy power generation assets;Asset Management,which provides commercial,operating services and/or asset maintenance services to its energy investments and third parties for appropriate fees;and Energy Investments,which includes APAs strategic stakes in a number of investm
162、ent vehicles that house energy infrastructure assets,generally characterised by long-term secure cash flows,with low ongoing capital expenditurerequirements.APA Group assetsWind farmGas storage facilitySolar farmGas processing plantGas power stationIntegrated Operations CentreAPA Group investmentsAP
163、A managed(not owned by APA)IOC182632321734328241096175334323432322912113414151331323334301620212224231925272826WASANTQLDVICTASNSWAPA GROUP ANNUAL REPORT 2018 13directors report.continued.AUSTRALIAN PIPELINE TRUST AND ITS CONTROLLED ENTITIES5.3 APA assets and operations(continued)Energy Infrastructur
164、e assets(numbers correspond with those on the map on page 12)Length(1)East Coast and Central Region assets1 Roma Brisbane Pipeline(including Peat Lateral)583 km2 Carpentaria Gas Pipeline 944 km3 Berwyndale Wallumbilla Pipeline 112 km4 South West Queensland Pipeline 936 km5 Wallumbilla Gladstone Pipe
165、line(including Laterals)556 km6 Reedy Creek Wallumbilla Pipeline 49 km7 Darling Downs Solar Farm(2)110 MW8 Diamantina and Leichhardt Power Stations 242 MW/60 MW9 Moomba Sydney Pipeline 2,029 km10 Ethane Pipeline 1,375 km11 Central West Pipeline 255 km12 Central Ranges Pipeline and 295 km Tamworth Ga
166、s Network(gas distribution)250 km of gas mains,3,600 gas consumer connections13 Victorian Transmission System 1,847 km14 Dandenong LNG Storage Facility 12,000 tonnes15 Orbost Gas Processing Plant(2)(with connection pipeline)12 km/70 TJ/d16 SESA Pipeline 45 km17 Amadeus Gas Pipeline(including Lateral
167、s)1,661 kmWest Australian assets18 Pilbara Pipeline System 249 km19 Goldfields Gas Pipeline(88.2%)1,546 km20 Eastern Goldfields Pipeline 293 km21 Yamarna Gas Pipeline 198 km 22 Yamarna Power Station(2)45 MW23 Mt Morgans Gas Pipeline 5 km24 Kalgoorlie Kambalda Pipeline 44 km25 Mid West Pipeline(50%)3
168、62 km26 Parmelia Gas Pipeline 448 km27 Mondarra Gas Storage and Processing Facility 18 PJ28 Emu Downs Wind Farm 80 MW28 Emu Downs Solar Farm 20 MW28 Badgingarra Wind Farm(2)130 MW28 Badgingarra Solar Farm(2)17.5 MW OwnershipEnergy Investment interest Detail29 GDI(EII)20%Gas distribution:Allgas Gas N
169、etwork 3,630 km of gas mains,108,500 gas consumer connections in Qld and NSW30 South East Australia Gas Pty Ltd 50%Gas pipeline:687 km SEA Gas Pipeline 31 SEA Gas(Mortlake)Partnership 50%Gas pipeline:83 km Mortlake Gas Pipeline 32 Energy Infrastructure Investments 19.9%Gas pipelines:Telfer/Nifty Gas
170、 Pipelines and lateral(488 km);Bonaparte Gas Pipeline(286 km);Wickham Point Pipeline(12 km)Electricity transmission cables:Murraylink(180 km)and Directlink(64 km)Gas-fired power stations:Daandine Power Station(30MW)and X41 Power Station(41 MW)Gas processing facilities:Kogan North(12 TJ/d);Tipton Wes
171、t(33 TJ/d)33 EII2 20.2%Wind generation:North Brown Hill Wind Farm(132MW),SA34 Australian Gas Networks Nil Gas distribution:24,710 km of gas mains and pipelines,1.28 million gas consumer connections,1,124 km of transmission gas pipelines in SA,Vic,NSW,Qld&NT 6.Financial OverviewEarnings before intere
172、st and tax(EBIT)and EBIT before depreciation and amortisation(EBITDA)excluding significant items are financial measures not prescribed by Australian Accounting Standards(AIFRS)and represent the profit under AIFRS adjusted for specific significant items.The Directors consider these measures to reflec
173、t the core earnings of the Consolidated Entity,and therefore these are described in this report as normalised measures.1)Pipeline capacities are available online(.au).2)Assets under construction.14 APA GROUP ANNUAL REPORT 2018directors report.continued.AUSTRALIAN PIPELINE TRUST AND ITS CONTROLLED EN
174、TITIES6.Financial Overview(continued)For the financial year to 30 June 2018,APA reported EBITDA of$1,518.5 million,an increase of 3.3%or$48.4 million on the previous corresponding period EBITDA of$1,470.1 million.This is slightly above the upper level of APAs guidance range of$1,475million to$1,510
175、million,as advised at the announcement of our FY2017 results and reconfirmed at our 1HFY18 results.Total revenue(excluding pass-through revenue)increased by$53.1 million to$1,941.4 million,an increase of 2.8%on the previous corresponding period(FY2017:$1,888.3 million).Increased revenues and EBITDA
176、were primarily attributable to:part year contributions from newly commissioned organic growth assets including the Reedy Creek Wallumbilla Pipeline(QLD),Mt Morgans Gas Pipeline(WA)and the Emu Downs Solar Farm(WA).Less than$5 million in revenue in FY2018 was from the new growth projects,with the full
177、 accretive impact from these projects to flow from FY2019;new gas transportation contracts across APAs East and West Coast Grids,and a new mining customer for the Diamantina Power Station;and US CPI escalation and favourable USD/AUD exchange rates in relation to the Wallumbilla Gas Pipeline.The soli
178、d FY2018 results endorse APAs prudent and consistent strategy of pursuing secure and sustainable growth opportunities that earn fair commercial returns.The astute investments,acquisitions and organic growth developments over the last 18 years,continue to sustain the business as it undertakes the lar
179、gest growth expansion capital spend in the Groups history.Across the three-year period of FY2017 to FY2019,APA will spend in excess of$1.4 billion on committed growth projects,all of which will contribute to future operating cash flow.In FY2018,operating cash flow was$1,031.6 million.This represents
180、 an increase of 5.9%or$57.7 million over the previous year(FY2017:$973.9 million),with operating cash flow per security increasing by 4.1%,or 3.6 cents,to 90.7 cents per security(FY2017:87.1(4)cents per security).On 22 August 2018,the Directors announced a final distribution of 24.0 cents per securi
181、ty,which will take APAs distributions in respect of the financial year to a total of 45.0 cents per security.This represents an increase of 3.4%,or 1.5 cents,over FY2017 distributions of 43.5 cents.Franking credits of 3.83 cents per security will be allocated to the final distribution,resulting in t
182、he FY2018 franking credits totalling 6.33 cents per security.APA maintains a sustainable distribution policy to ensure its ability to fully fund its distributions out of operating cash flows on a going forward sustainable basis,whilst also retaining appropriate levels of cash in the business to supp
183、ort ongoing growth.APAs distributions have consistently increased every year for the 18 years the company has been listed.The following table provides a summary of key financial data for FY2018.30 June 2018 30 June 2017 Changes$000$000$000%Total revenue 2,386,722 2,326,420 60,302 2.6%Pass-through re
184、venue(a)445,307 438,140 7,167 1.6%Total revenue excluding pass-through 1,941,415 1,888,280 53,135 2.8%EBITDA 1,518,474 1,470,122 48,352 3.3%Depreciation and amortisation expenses(578,916)(570,021)(8,895)(1.6%)EBIT 939,558 900,101 39,457 4.4%Finance costs and interest income(509,664)(513,767)4,103 0.
185、8%Profit before income tax 429,894 386,334 43,560 11.3%Income tax expense(165,055)(149,488)(15,567)(10.4%)Profit after income tax 264,839 236,846 27,993 11.8%Operating cash flow(b)1,031,627 973,936 57,691 5.9%Operating cash flow per security(cents)90.7 87.1 3.6 4.1%Earnings per security(cents)23.3 2
186、1.2 2.1 9.9%Distribution per security(cents)45.0 43.5 1.5 3.4%Distribution payout ratio(c)51.5%49.8%1.7%3.4%Weighted average number of securities(000)(d)1,136,875 1,118,523 18,352 1.6%Notes:Numbers in the table may not add up due to rounding.a)Pass-through revenue is revenue on which no margin is ea
187、rned.Pass-through revenue arises in the asset management operations in respect of costs incurred in,and passed on to Australian Gas Networks Limited(AGN)and GDI in respect of the operation of the AGN and GDI assets respectively.b)Operating cash flow=net cash from operations after interest and tax pa
188、yments.c)Distribution payout ratio=total distribution applicable to the financial year as a percentage of operating cash flow.d)On the 23 March 2018,APA Group issued 65,586,479 new ordinary securities on completion of the fully underwritten pro-rata accelerated institutional tradeable renounceable e
189、ntitlement offer(Entitlement Offer),resulting in total securities on issue as at 30 June 2018 of 1,179,893,848.The Entitlement Offer was offered at$7.70 per security,a discount to APA Groups closing market price of$8.26 per security on the 23 February 2018,the last trading day before the record date
190、 of 26 February 2018.The number of securities used for FY2018 and FY2017 calculation of earnings per security and operating cash flow per security have beenadjusted.4)Operating cash flow per security has been adjusted for the Entitlement Offer completed on the 23 March 2018.An adjustment factor of 1
191、.0038 has been calculated,being the closing market price per security on 23 February 2018,divided by the theoretical ex-rights price(TERP)of$8.23 per security.APA GROUP ANNUAL REPORT 2018 15directors report.continued.AUSTRALIAN PIPELINE TRUST AND ITS CONTROLLED ENTITIES7.Business Segment Performance
192、s and Operational ReviewStatutory reported revenue and EBITDA performance of APAs business segments is set out in the table below.30 June 2018 30 June 2017 Changes$000$000$000%RevenueEnergy Infrastructure East Coast:Queensland 1,153,214 1,114,428 38,786 3.5%East Coast:New South Wales 166,506 176,000
193、(9,494)(5.4%)East Coast:Victoria 153,699 156,946(3,247)(2.1%)East Coast:South Australia 2,998 2,958 40 1.4%Northern Territory 32,861 30,932 1,929 6.2%Western Australia 294,681 291,728 2,953 1.0%Energy Infrastructure total 1,803,959 1,772,992 30,967 1.7%Asset Management 108,537 86,424 22,113 25.6%Ene
194、rgy Investments 23,068 24,382(1,314)(5.4%)Total segment revenue 1,935,564 1,883,798 51,766 2.7%Pass-through revenue 445,307 438,140 7,167 1.6%Unallocated revenue(a)5,851 4,482 1,369 30.5%Total revenue 2,386,722 2,326,420 60,302 2.6%EBITDAEnergy Infrastructure East Coast:Queensland 962,231 925,366 36
195、,865 4.0%East Coast:New South Wales 147,095 149,484(2,389)(1.6%)East Coast:Victoria 124,631 123,008 1,623 1.3%East Coast:South Australia 2,577 2,319 258 11.1%Northern Territory 22,923 18,771 4,152 22.1%Western Australia 237,639 234,724 2,915 1.2%Energy Infrastructure total 1,497,096 1,453,672 43,424
196、 3.0%Asset Management 66,204 58,719 7,485 12.7%Energy Investments 23,068 24,382(1,314)(5.4%)Corporate costs(67,894)(66,651)(1,243)(1.9%)Total EBITDA 1,518,474 1,470,122 48,352 3.3%Notes:Numbers in the table may not add up due to rounding.a)Interest income is not included in calculation of EBITDA,but
197、 nets off against interest expense in calculating net interest cost.APA has delivered a solid result in FY2018 reflecting sustainable operations and the intrinsic value of the business,which is more than the sum of its individual assets.APAs diversity of expertise,asset type and geographic spread al
198、l contribute to APAs business sustainability.Total EBITDA increased by$48.4 million,or 3.3%,to$1,518.5 million,over the FY2017 result of$1,470.1 million.APA derives its revenue through a mix of regulated revenue,long-term negotiated revenue contracts,asset management fees and investment earnings.Ear
199、nings are underpinned by solid cash flows generated from high quality,geographically diversified assets and a portfolio of highly creditworthy customers.7.1 Energy InfrastructureThe Energy Infrastructure segment consists of all APAs interconnected energy infrastructure footprint across mainland Aust
200、ralia including gas transmission,gas compression,processing and storage assets,renewable energy power generation,and gas-fired power generation.This segment is the largest contributor to group revenue,contributing 93.2%(excluding pass-through)and 94.4%of group EBITDA(before corporate costs)during th
201、e financial year.Revenue(excluding pass-through revenue)was$1,804.0 million,an increase of 1.7%on the previous year(FY2017:$1,773.0 million).EBITDA(before corporate costs)increased by 3.0%on the previous year to$1,497.1 million(FY2017:$1,453.7 million).This segment is characterised by the East Coast
202、 Gas Grid and the West Coast Gas Grid,the nature of which will result in both positive and negative swings over the longer term in revenue and EBITDA on the individual assets that make up each of those grids.In FY2018,for example,increased revenue and EBITDA in Queensland offset reductions in New So
203、uth Wales and Victoria as customers with more flexible multi-asset,multi service contracts determined their respective needs,period on period,for gas sourcing and delivery.16 APA GROUP ANNUAL REPORT 2018directors report.continued.AUSTRALIAN PIPELINE TRUST AND ITS CONTROLLED ENTITIES7.1 Energy Infras
204、tructure(continued)During the reporting period,new earnings were realised from recently completed and commissioned assets including the Reedy Creek Wallumbilla Pipeline,the Mt Morgans Gas Pipeline and the Emu Downs Solar Farm.FY2018 earnings for Energy Infrastructure also benefitted from the US CPI
205、increase on the Wallumbilla Gladstone Pipeline contract,along with afavourable USD/AUD exchange rate as the majority of contract revenues are in USD.Note:The charts above exclude discontinued operations previously accounted for within Energy Infrastructure,including earnings from Allgas Networks and
206、Moomba to Adelaide Pipeline.The majority of revenues in the Energy Infrastructure segment derive from either regulatory arrangements or long term capacity-based contracts.Contracts generally have the majority of the revenue fixed over the term of the relevant contract.WORKING WITH APAS CUSTOMERS a s
207、hort term solution for Incitec PivotOn 25 June 2018,APA announced a one year gas transportation contract with Incitec Pivot(IPL)to deliver gas from the Northern Territory to IPLs Gibson Island fertiliser plant near Brisbane.IPL is a long term customer of APA and the importance of this contract was t
208、o assist IPL in keeping its Gibson Island plant operations running for another year whilst other options are explored for future economically viable gas supply,given the East Coasts tight gas supply market.Quote from Jeanne Johns,Managing Director and CEO,Incitec Pivot Limited“An affordable and reli
209、able gas supply is critical to securing the sustainable future of Incitec Pivots Gibson Island fertiliser manufacturing plant.The Gibson Island site employs around 450 people and produces 550,000 tonnes of fertiliser per year,which is then used within Australia and globally to support farming commun
210、ities that grow food to feed millionsofpeople.It was very satisfying to see the whole of the gas industry supply-chain working together withus to develop an interim gas solution that will allow our Gibson Island plant in Queensland to operate for another year.Despite a gas supply being almost on our
211、 doorstep,the current local gas price required us to source a more affordable gas supply from over 3,300 kms away.The one-year interim solution has demonstrated that the industry working together can make a huge difference.APA,along with our other project partners has worked with Incitec Pivot to ma
212、ke that longjourneyviable.“Energy Infrastructure Revenue by State50%60%70%80%90%04008001,2001,600A$mFY15FY16FY17FY18WANTSAVICNSWQLDEBITDA marginWallumbilla Gladstone PipelineEnergy Infrastructure EBITDA by AssetFY18FY17FY16FY1501503004506007509001,0501,2001,3501,500A$mSouth West Queensland PipelineR
213、oma Brisbane PipelineReedy Creek Wallumbilla PipelineCarpentaria Gas PipelineDiamantina Power StationOther Qld assetsMoomba Sydney PipelineVictorian Transmission SystemSESA PipelineAmadeus Gas PipelineGoldfields Gas PipelineEastern Goldfields PipelineEmu Downs Wind and Solar FarmPilbara Pipeline Sys
214、temMondarra Gas StorageOther WAEnergy Infrastructure EBITDA by State04008001,200A$mFY15FY16FY17FY18WANTSAVICNSWQLDAPA GROUP ANNUAL REPORT 2018 17directors report.continued.AUSTRALIAN PIPELINE TRUST AND ITS CONTROLLED ENTITIES7.1 Energy Infrastructure(continued)During FY2018,APA refreshed its suite o
215、f gas pipeline services,to provide customers with more options and additional flexibility making it simpler for customers to better manage their gas portfolios.The refreshed services and approach provide additional clarity and ease of access for customers to APAs infrastructure,which will help promo
216、te gas market liquidity.During the reporting period,APA announced several significant new or renewal contracts including:a new$40 million revenue contract over three years for gas transportation and storage from Queensland into southern markets;a$38 million contract extension over two years for an E
217、ast Coast Grid customer;and a new gas transportation agreement with Incitec Pivot to transport gas over 3,300 km from the Northern Territory to their Gibson Island fertilizer plant near Brisbane.Changes to Part 23 of the National Gas Rules during the reporting period provide a commercial arbitration
218、 framework in the event parties cannot agree a negotiated contract.APA has continued to successfully negotiate all new contracts and contract renewals with its customers.During the financial year,78.7%of Energy Infrastructure revenue(excluding pass-through)was from capacity reservation charges from
219、term contracts,4.3%from other contracted fixed revenues and 6.8%from throughput charges and other variable components.Given the dynamic east coast gas market,there were additional revenues from the provision of flexible short term services,accounting for around 1.0%.The regulated portion of APAs rev
220、enue makes up 9.0%of total FY2018 Energy Infrastructure revenue.Given the take-or-pay nature of the majority of APAs Energy Infrastructure contracts,APA had direct oversight of 92.0%of its revenue earning for this business segment during the reporting period.As part of APAs product refresh of gas tr
221、ansportation services during the period,many of APAs standard service offerings and tariffs are now effectively 100%capacity reservation.APA manages its counterparty risk in a variety of ways.One aspect is to consider customers credit ratings.During FY2018,95.6%of Energy Infrastructure revenue was r
222、eceived from investment grade counterparties.Diversification of customer base is another strength of APAs business,with our customers split across the energy,utility,resources and industrial sectors,as shown in the chart below.a)An investment grade credit rating from either S&P(BBB-or better)or Mood
223、ys(Baa3 or better),or joint venture with an investment grade average rating across owners.Ratings shown as equivalent to S&P rating scale.APA strives to continually enhance the service offerings available to customers to better address their increasingly complex and dynamic gas portfolio needs.Signi
224、ficant investment by APA has been made in energy infrastructure in the last decade to support customers needs.The state-of-the-art Integrated Operations Centre(IOC)is one of those customer focused initiatives that APA has invested in to deliver seamless and reliable services for the benefit of the A
225、ustralian energy market.APAs IOC in Brisbane has dramatically improved Australias gas transmission operations,providing customers access to greater operating flexibility and smarter gas portfolio management.It improves market resilience significantly by utilising the breadth of the Grid to respond t
226、o contingencies.The facility continues to evolve its services and functions to meet the growing and changing needs of both our customers and APAs operations.The IOC plays a major role in APA being able to provide the benefits of system flexibility,efficiencies,cost effective solutions and safety fro
227、m having real-time visibility across transmission assets throughout Australia,24 hours a day,seven days a week.FY2018 Energy Infrastructure by Revenue TypeContracted fixed revenue:4.3%Capacity charge revenue:78.7%Regulated revenue:9.0%Throughput charge&other variable revenue:6.8%Flexible short term
228、services:1.0%Other:0.2%APA Pipelines by Regulation Type(a)Full regulation pipelinesLight regulation pipelinesNon-scheme pipelinesa)Owned and/or operated by APAFY2018 Energy Infrastructure Revenuesby Counterparty Credit RatingA-rated or better:44.9%BBB and BBB+:27.8%Investment Grade(a):22.9%Not rated
229、:4.2%Sub-investment grade:0.2%FY2018 Energy Infrastructure Revenuesby Customer Industry SegmentEnergy:49.1%Utilities:24.3%Resources:21.6%Industrials&Others:5.0%18 APA GROUP ANNUAL REPORT 2018directors report.continued.AUSTRALIAN PIPELINE TRUST AND ITS CONTROLLED ENTITIES7.1 Energy Infrastructure(con
230、tinued)Engineering,commercial and systems operation skills integrate into daily decision making to give the business both big picture and detailed oversight of operations.Gas market opportunities for customers can be quickly realised as can immediate response and management to periods of unplanned p
231、lant,market or customer disruption.The IOC also plays a key role in keeping our remote employees safe by monitoring and managing the In-Vehicle Monitoring System(IVMS)thereby better managing APAs operational risk.More importantly,it provides employees and their families with a high level of comfort
232、that someone knows where they are at all times whilst they travel between remote locations.THE IOC THE EYES AND EARS OF APA TRANSMISSION ensuring security of supply in southern markets during Longford operational constraintsDuring mid-June 2018,the Longford gas facility in Victoria suffered an opera
233、tional issue resulting in a risk to the security of gas supply in southern markets.The Longford gas plant currently supplies the majority of Victorias gas requirements,as well as gas supplies for NSW and Tasmania.Peak winter and summer periods are often times when“if something can go wrong,it willan
234、d usually at the worst time.”Gas constraints were already in place that week at Longford to undertake repairs of a gas train.APA also had planned maintenance and other works underway on the Roma Brisbane Pipeline and at Moomba.Therefore,when the Longford gas plant undertook to resolve the operationa
235、l issue during a further two day period,there was a realpossibility of a gas supply shortage insouthern markets.A highly coordinated combination of solutions from across APAs East Coast Grid and other external stakeholders were put into play to ultimately manage gas supply security.This included inc
236、reased instantaneous southern flow capacity from APAs Grid into the Declared Wholesale Gas Market;optimisation and management of Moomba Sydney Pipeline(MSP)line pack;Roma Brisbane Pipeline assistance to allow rebuild of MSP line pack;and Young,Culcairn and Bulla Park compressors placed onstandby.The
237、 successful outcome as a result of APAs interconnected grid system with IOC oversight,meant that all demand for gas across eastern Australia was met,and businesses and consumers that rely on gas as their energy source were notimpacted.East Coast and Central RegionAPAs 7,500 plus kilometre integrated
238、 pipeline grid on the east coast of Australia has the ability to transport gas seamlessly from multiple gas production facilities to gas users across four states and the ACT,as well as to the export LNG market which has developed out of Gladstone in Queensland.EBITDA from APAs assets on the east coa
239、st increased by 3.0%during the financial year.In NSW and Victoria,continued demand for bi-directional services due to dynamic southern and northern gas markets contributed to the earnings increase.The Moomba Sydney Pipeline continues to play a critical role to the operation of the East Coast Grid as
240、 both a bi-directional gas transmission highway and gas storage facility.In Queensland,the South West Queensland Pipeline and its bi-directional capability played a key role in gas moving both east and west.APAs newest Queensland pipeline and extension to the East Coast Grid-the 49km Reedy Creek Wal
241、lumbilla Pipeline-was completed and commissioned in May 2018.An official opening by the Queensland Premier,the Hon.Annastacia Palaszczuk,the Minister for Natural Resources,Mines and Energy,the Hon.Dr Anthony Lynham,and the Mayor for Maranoa Regional Council,Tyson Golder was held in June 2018,at APAs
242、 Wallumbilla operations site.Nicholas Edmiston overseeing operations in APAs Integrated Operations Centre in BrisbaneAPA GROUP ANNUAL REPORT 2018 197.1 Energy Infrastructure(continued)APA RESPONDING TO CUSTOMER NEEDS connecting APLNG directly to the dynamic east coast domestic gas marketIn September
243、 2016,APA announced construction of the new 49 km Reedy Creek Wallumbilla Pipeline to connect the Australia Pacific LNG Pipeline(APLNG)at Reedy Creek to APAs 7,500 km East Coast Grid system at Wallumbilla.Lessthan two years on,the recently commissioned pipeline(May 2018)is operating and providing AP
244、LNG access to the dynamic eastern Australian domestic gas market.The new bi-directional pipeline was officially opened by the Queensland Premier,The Hon.Annastacia Palaszczuk,at APAs Wallumbilla operations site.Also attending was the Minister for Natural Resources,Mines and Energy,The Hon.Dr Anthony
245、 Lynham,APLNGs Chief Executive Warwick King,APAs Chairman Michael Fraser,APAs Managing Director Mick McCormack and Tyson Golder,the Mayor for Maranoa Regional Council(image below).“This new pipeline gives APLNG efficient,flexible access to Australias dynamic east coast gas market via Wallumbilla,”Mr
246、 King said.“We are pleased to have reached a long-term agreement with APA that enables us to support the efficient movement of gas.”APA entered into a 20-year contract with APLNG to provide a bi-directional service of up to 300 TJ/d on the new pipeline.APA is able to utilise its unique gas grid to p
247、rovide bespoke services that supports our customers commercial requirements,and shoring up gas security for domestic markets.From delivery of pipes in November 2016,to the official opening in June 2018,the Reedy Creek Wallumbilla Pipeline is already providing commercial options for APLNG to move its
248、 gasAPAs Diamantina gas-fired power station in Mount Isa,Queensland benefitted from a new mining customer during the period.Capricorn Copper operates the Capricorn Copper mine,north of Mount Isa and was in ramp-up mode for the first seven months of FY2018,and is now at full contract capacity.The min
249、e is a restart of prior mining operations,which recommenced in 2017.During the financial year,APAs assets in the Northern Territory recorded an uplift in earnings from additional contracting achieved on the Amadeus Gas Pipeline.South Australian earnings were in line with expectations.Western Austral
250、iaAPA services a range of customers in Western Australia within the resources,industrial and utility sectors.In recent years,interconnections off the main Goldfields pipeline to mining sites has not only extended the Western Australian Grid,but also reinforced the importance of the Goldfields Gas Pi
251、peline in moving gas from the north into the south-eastern region of Western Australia.EBITDA from APAs Western Australian assets for the financial year increased by 1.2%compared with FY2017.The Eastern Goldfields Pipeline continues to contribute to increased earnings for APAs Western Australian ass
252、ets.During the period,the new Mt Morgans Gas Pipeline was completed to supply gas to Dacian Gold mining operations.APA has a 10.5 year gas transportation agreement with Dacian Gold and the pipeline commenced generating earnings in the second half of the reporting period.In June 2017,APA announced th
253、e Yamarna Gas Pipeline and Power Station greenfield projects on behalf of the Gruyere Joint Venture mine project.Construction and commissioning of the 198 km pipeline was completed during the reporting period,with the power station construction completed recently in August.Commissioning of the Yamar
254、na Power Station will take place between August and October.First gold pour is scheduled for the FY2019 June quarter.With the addition of the Gruyere mine in June 2019,the Eastern Goldfields Pipeline will have five mines using approximately 1,700 kms of interconnected pipelines to the eastern goldfi
255、elds region in Western Australia.APA expects further opportunities for growth in this area as miners are seeking reliable and economical energy solutions to ensure their operations are viable for the life of the mines.APA is developing a significant renewable energy precinct in the West and during F
256、Y2018 completed and commissioned the 20 MW Emu Downs Solar Farm which was underpinned by a 13 year power purchase agreement with Synergy.The project received$5.5 million funding from the Australian Renewable Energy Agency(ARENA).directors report.continued.AUSTRALIAN PIPELINE TRUST AND ITS CONTROLLED
257、 ENTITIES20 APA GROUP ANNUAL REPORT 2018directors report.continued.AUSTRALIAN PIPELINE TRUST AND ITS CONTROLLED ENTITIES7.1 Energy Infrastructure(continued)CO-LOCATED EMU DOWNS WIND AND SOLAR FARMS maximising resources and infrastructureNote:From FY2017 onwards,DPS and the Ethane Pipeline became ful
258、ly owned assets and are managed within APAs Energy Infrastructure segment and therefore no asset management fees earnt.5)APA sold its 33.05%stake in AGN in August 2014,however,the operating and maintenance agreements remain on foot until 2027.Asset Management Revenue020406080100A$mFY15FY16FY17FY18On
259、e-off Customer ContributionsUnderlying Asset Management RevenueAsset Management EBITDA0102030405080A$mFY15FY16FY17FY18One-off Customer ContributionsUnderlying Asset Management RevenueThe site is co-located with APAs 80 MW Emu Downs Wind Farm,taking advantage of shared transmission connection infrast
260、ructure.The wind and solar generation profiles at this location are largely predictable and complementary,enabling APA to leverage the combined wind and solar resources and transmit renewable energy through a single infrastructure network.During the period,there was a minor impact on earnings for th
261、e Emu Downs Wind Farm due to the cut-in of the Solar Farm,this was more than offset by the contribution of the Solar Farm,in the latter part of the financial year.In FY2017,APA announced construction of the 130 MW Badgingarra Wind Farm after entering into a long term offtake agreement with Alinta to
262、 satisfy its renewable energy requirements.Construction was advanced during the reporting period and is due for completion in early 2019.During FY2018,APA agreed with Alinta to extend the original 12 year power purchase agreement for the Badgingarra Wind Farm by five years,and undertake a new 17.5 M
263、W co-located Solar Farm on the Badgingarra site,which is adjacent to the Emu Downs renewables farm.Both Badgingarra Wind and Solar farms will also share transmission connection infrastructure.When complete,APA will have an energy precinct in Western Australia delivering over 245 MW of renewable ener
264、gy capitalising on the complementary wind and solar relationship in this region.7.2 Asset ManagementAPA provides asset management and operational services to the majority of its energy investments and to a number of third parties.Its main customers are Australian Gas Networks Limited(AGN)(5),Energy
265、Infrastructure Investments and GDI(EII).Asset management services are provided to these customers under long-term contracts.APA has the expertise and diversified skillset to provide whole-of-life asset management and operational services for high voltage power,power generation,gas rotating plant and
266、 equipment,stationary engines,gas transmission pipelines and gas distribution pipelines.These services also include asset inspection,vegetation management,aerial patrols,metering services and specialist utility asset services.Revenue(excluding pass-through revenue)from asset management services incr
267、eased by$22.1 million or 25.6%to$108.5 million(FY2017:$86.4 million)and EBITDA(excluding corporate costs)increased by$7.5 million or 12.7%to$66.2 million(FY2017:$58.7 million).APA GROUP ANNUAL REPORT 2018 21directors report.continued.AUSTRALIAN PIPELINE TRUST AND ITS CONTROLLED ENTITIES7.2 Asset Man
268、agement(continued)GAS IS A FUEL OF CHOICE 2018 Commonwealth Games villageAPA as the operator and a minority investor in the GDI Allgas Distribution Network in Brisbane was engaged by the Gold Coast Commonwealth Games organisers in 2015 to supply natural gas to the proposed new Athletes Village in ti
269、me for Games held on the Gold Coast in April 2018.The work involved extending the GDI gas network to the greenfield site and reticulating the gas infrastructure throughout the development as construction proceeded.Redevelopment of the precinct was one of the largest urban renewal projects ever under
270、taken on the Gold Coast.Natural gas was used to supply bulk hot water and cooking to apartments,pool heating and catering.Transformation of the athletes accommodation is underway to develop permanent apartments for both student and general accommodation.The remainder of the site is also being develo
271、ped into a new Gold Coast Health andKnowledgeprecinct.APA worked closely with the developer to ensure that the construction of the gas infrastructure was well coordinated towork in with the immediate and future needs of the site,and ensured gas was provided to the facilities well in advance ofthe Co
272、mmonwealth Games.Customer contributions are payments received from a third party for APA to undertake work on the assets it manages to accommodate that third partys project.Customer contributions have increased in FY2018 moving the long term average per annum to approximately$12 million from$10 mill
273、ion per annum average over the last five years.APA continues to expect annual swings in customer contributions,as these are driven by customer requirements.Excluding customer contributions,both revenue and EBITDA increased for the Asset Management business due to tariff adjustments in line with regu
274、latory approvals.Solid connection growth for the gas distribution businesses of AGN and GDI continues through ongoing investment in new housing estates and high-rise apartment developments,with natural gas continuing to be a fuel of choice for cooking,hot water and heating in these markets.REWARDING
275、 EXCELLENCE APA Employee Excellence Award winner focusing on Network customersEach year,APA holds annual awards to celebrate the efforts and success of our employees.During FY2018,the awards were refreshed and rebranded to the APA Excellence Awards and were aligned to APAs five STARS values-Safety,T
276、rustworthy,Adaptable,Results and Service.Nicole Butler from APAs Commercial Networks division was the dual winner of the APA Excellence“Service”Award,along with Silvana Alessandro from the Financial Accounting division.Nicole won the award for her role in removing barriers and roadblocks that were m
277、aking new Network connection processes unnecessarily complicated for internal and external customers.Nicoles belief that every customer is important resonates with APAs Values.Nicole is a team player,reinforcing a customer centric ethos and believes that while it may only take one person to care abo
278、ut the customers needs,it takes a team of people to ensure those needs are met.Nicoles commitment is testament to all of APAs Values(S.T.A.R.S)Safety,Trustworthy,Adaptable,Results and importantly for our Network customers,Service.Customer Contributions0102030FY15FY14FY16FY17FY18Average$12m p.a.APA O
279、perated Gas Networks Statistics1.251.301.351.4027,00028,00029,000(million)(km)FY15FY16FY17FY18Gas consumer connections(LHS)Networks managed(RHS)22 APA GROUP ANNUAL REPORT 2018directors report.continued.AUSTRALIAN PIPELINE TRUST AND ITS CONTROLLED ENTITIES7.3 Energy InvestmentsAPA has interests in a
280、number of complementary energy investments across Australia.Asset and ownership interestsAsset details an APA servicesPartnersMortlake Gas Pipeline50%SEA Gas(Mortlake)Partnership83 km gas pipeline connecting the Otway GasPlant to the Mortlake Power StationMAINTENANCERestSEA Gas Pipeline50%South East
281、 Australia Gas Pty Ltd687 km gas pipeline from Iona and Port Campbell in Victoria to AdelaideMAINTENANCERestNorth Brown Hill Wind Farm20.2%EII2132 MW wind farm in South AustraliaCORPORATE SERVICESInfrastructure Capital Group OsakaGasAllgas Gas Distribution Network20%GDI(EII)3,630 km Allgas gas distr
282、ibution network inQueensland with 108,500 connectionsCORPORATE SERVICESMarubeni Corporation StateSuperOPERATIONAL MANAGEMENTDaandine and X41 Power StationsKogan North and Tipton West Processing PlantsDirectlink and Murraylink Electricity InterconnectorsNifty and Telfer Gas PipelinesWickham Point and
283、 Bonaparte Gas Pipelines19.9%Energy Infrastructure InvestmentsGas-fired power generation 71MWGas processing facilities45TJ/dayElectricity transmission cables 244kmGas pipelines totaling786kmCORPORATE SERVICESMarubeni Corporation OsakaGasOPERATIONAL MANAGEMENTAPAs ability to manage these investments
284、and provide operational and/or corporate support services gives it flexibility in the way it grows the business and harnesses expertise in-house,thereby delivering services from a lower cost base due to portfolio synergies.EBITDA from Energy Investments was marginally reduced for the reporting perio
285、d to$23.0 million(FY2017:$24.4million).7.4 Corporate CostsCorporate costs of$67.9 million for the financial year were slightly above the previous corresponding period(FY2017:$66.7 million)due to additional costs associated with the new Part 23 compliance requirements.Excluding those additional compl
286、iance costs,APA has kept corporate costs contained during the largest organic growth cycle that the business has undertaken.Energy Investments Revenue&EBITDA152025(A$m)FY15FY16FY17FY18Divested&transferred investmentsContinuing investmentsNote:DPS and EPX earnings are classified as divested and trans
287、ferredinvestments within Energy Investments up until financial close for thepurpose of the segment reporting.Corporate Costs020406080(A$m)FY15FY16FY17FY18APA GROUP ANNUAL REPORT 2018 23directors report.continued.AUSTRALIAN PIPELINE TRUST AND ITS CONTROLLED ENTITIES8.Capital and Investment Expenditur
288、eCapital and investment expenditure for FY2018 totalled$875.5 million.Total capital expenditure(including stay-in-business capital expenditure but excluding acquisitions and other investing cash flows)for FY2018 was$855.5 million compared with$340.7 million last year.Growth project expenditure of$74
289、2.9 million(FY2017:$271.9 million)was largely related to thefollowing projects during the year:Construction of the Darling Downs Solar Farm and completion and commissioning of the Reedy Creek Wallumbilla Pipeline in Queensland;Construction and completion of Western Australia projects including the Y
290、amarna Gas Pipeline,Mt Morgans Gas Pipelineand Emu Downs Solar Farm;Construction of the Murrin Compressor Station.Yamarna Power Station and Badgingarra Wind Farm are also well underway,and will be completed in FY2019;Commencement of the upgrade of the Orbost Gas Processing Plant in Victoria;and Pre-
291、investigative and preliminary license approval undertakings for the proposed Western Slopes Pipeline and Crib PointPakenham Pipeline.APAs growth capital expenditure continues to be fully underwritten through long-term contractual arrangements or to haveregulatory approval through a relevant access a
292、rrangement.Capital and investment expenditure for FY2018 isdetailedin thetable below.Capital and investment 30 June 2018 30 June 2017expenditure(a)Description of major projects($million)($million)Growth expenditureRegulated Victorian-Northern Interconnect expansion,South West Pipeline Westernhaul Ex
293、pansion 33.0 106.1Non-regulatedQueensland Darling Downs Solar Farm,Reedy Creek Wallumbilla Pipeline 199.2 78.3Victoria Orbost Gas Processing Plant,early works on Crib Point to Pakenham Pipeline 116.7 New South Wales Western Slopes Pipeline early works 10.7 0.4Western Australia Yamarna Gas Pipeline a
294、nd Power Station,Emu Downs Solar Farm,and Northern Territory Badgingarra Wind Farm,Mt Morgans Gas Pipeline,Murrin Compressor Station 369.1 30.6Other VIC Metering 14.2 56.5Sub-total non-regulated capex 709.9 165.8Total growth capex 742.9 271.9Stay-in business capex 112.6 68.8Total capital expenditure
295、 855.5 340.7Investment and acquisitions 20.0(b)36.8Total capital and investment expenditure 875.5 377.5Notes:Numbers in the table may not add up due to rounding.a)The capital expenditure shown in this table represents net cash used in investing activities as disclosed in the cash flow statement,and
296、excludes accruals broughtforward from the prior period and carried forward to next period.b)Represents the share purchase price for the Orbost Gas Processing Plant.As part of the FY2016 results,APA announced that it had identified around$1.5 billion of organic growth opportunities across FY2017 to F
297、Y2019.APA continues to successfully pursue organic growth opportunities.To-date across FY2017 and FY2018,APA has spent in excess of$1.0billion on these growth projects in the areas of pipeline extensions and expansions,renewables and mid-streamassets.Capital and investment expenditure01,000750500250
298、A$mFY15FY16FY17FY18SIB capexAcquisitions&other investment cash flowsGrowth capex6,284.4 377.5875.5673.624 APA GROUP ANNUAL REPORT 2018directors report.continued.AUSTRALIAN PIPELINE TRUST AND ITS CONTROLLED ENTITIES8.Capital and Investment Expenditure(continued)In FY2018,growth capex expenditure was$
299、742.9 million,which is almost double the average annual growth capex spend of previous years.The FY2018 actual spend is lower than the approximate$850 million figure indicated to the market in May 2018.This is due to finessing of project timings for procurement contracts as projects have progressed
300、to ensure materials are better timed to arrive when required.This has resulted in some committed capital expenditure moving from FY2018 into FY2019.APA expects to spend in the order of$425 million during FY2019 on the in-flight committed organic growth projects as detailed in the table below.Some of
301、 the new projects completed in FY2018 have now commenced generating revenues.These revenues will increase in FY2019 as more projects are completed and the projects completed in FY2018 provide a full year of earnings.The full benefit of the now$1.4 billion plus of growth projects will be received fro
302、m FY2020 onwards.Beyond the approximately$425 million guidance for FY2019,APA expects growth capital expenditure in the order of$300 to$400 million per annum over the next two to three years as further growth projects come to fruition across all energy infrastructure sectors.All projects will contin
303、ue to be underwritten by long term contracts with customers and will increase APAs earnings base as they are commissioned.As detailed in Section 7 above,progress on the remaining major committed projects is as follows:The Badgingarra Wind Farm(130MW wind farm)project was extended during the reportin
304、g period to include a co-located 17.5 MW solar farm that will share transmission connection infrastructure with the wind farm.Badgingarra is located adjacent to APAs operational 100 MW Emu Downs Wind and Solar Farm in Western Australia.Alinta Energy also extended the offtake agreement for another 5
305、years for both the energy and the Large Scale Generation Certificates,commencing January 2019 through to end CY2035.The wind farm will consist of 37 turbines each with a total blade and tower height of 150 metres and the solar farm will have approximately 61,800 solar tracking panels.Both projects a
306、re on track for commissioning in December 2018 for contract commencement in January 2019.Note:Above diagram is illustrative only.ProjectsGrowth Projects Announced FY2017 FY2019FY181H FY192H FY191H FY202H FY20CustomerFY17Emu Downs Solar Farm(incl.$5.5m ARENA funding)SynergyProject(%spent)Pipeline pro
307、jectsRenewables projectsMidstream projects100%Reedy Creek Wallumbilla PipelineAPLNG100%20-year contractDarling Downs Solar Farm(incl.$20m ARENA funding)Origin88%12-year contractYamarna Pipeline&Power StationGold Road/Gold Fields JV91%15-year contractBadgingarra Wind&Solar FarmAlinta66%17-year contra
308、ctOrbost Gas Processing PlantCooper50%Multi year contractOther ProjectsFY17:$272mFY18:$743mFY19:$425mFY20:$300-400mFY18:$5mFY19:$75m+FY20:$215m+Total growth capex(in-flight to date)Total revenue contributionVarious13-year contractAPA GROUP ANNUAL REPORT 2018 25directors report.continued.AUSTRALIAN P
309、IPELINE TRUST AND ITS CONTROLLED ENTITIES8.Capital and Investment Expenditure(continued)The Orbost Gas Processing Plant acquired by APA in FY2018 will process raw natural gas from Cooper Energys offshore Sole gas field under a multi-year Gas Processing Agreement from mid-2019.When complete,up to 70T
310、J per day of gas will be available for the east coast gas market from this new source of supply.APA is undertaking an upgrade of the site,whilst also adding a hydrogen sulphide treatment plant to the facility.During the reporting period,APA undertook extensive stakeholder engagement with the surroun
311、ding community,as well as providing local sponsorship and opportunities for employment of local contractors.In March 2018,The Hon.Lily DAmbrosio,Minister for Energy,Environment and Climate Change toured the site and congratulated both APA and Cooper Energy for working together to deliver more gas in
312、to Victoria and the East Coast gas market and jointly creating more than 800 jobs during construction of onshore and offshore facilities.The Darling Downs Solar Farm near Dalby in Queensland is a 110MW solar farm,being built at a cost of around$200million(partially funded with a$20 million grant fro
313、m ARENA).Origin Energy has entered into a 12-year offtake agreement for both the energy and the Large Scale Generation Certificates.The project is on track for completion in September 2018.Over 423,000 fixed solar panels will be installed over a 250 hectare site,connecting to the existing Braemar Su
314、bstation.The Queensland Premier,The Hon.Annastacia Palaszczuk toured the site in January 2018,along with The Hon.Dr Anthony Lynham,Minister for Mines and Energy;The Hon.Mark Furner,Minister for Agricultural Industry Development and Natural Resources;Paul McVeigh,Mayor of the Western Downs Regional C
315、ouncil;and Deputy Mayor,Andrew Smith.APA announced the new build Yamarna Gas Pipeline(YGP)and the Yamarna Power Station(YPS)projects in FY2017.APA will transport gas a total of almost 1,600 kms over four APA interconnected pipelines,including the greenfield YGP that will connect to the YPS,to delive
316、r energy to the Gruyere Gold Project in Western Australia.The 198 km YGP was fully constructed during FY2018 and has now been commissioned to allow the constructed 45MW YPS to be commissioned,which is expected to be complete in between August and October 2018.A 15-year gas transportation agreement a
317、nd a 15-year electricity supply agreement have been entered into with the Gruyere Gold Project,a 50:50 joint venture between ASX listed Gold Road Resources Ltd and the global miner Gold Fields Limited.Total project cost is estimated to be$180million.APAs growth strategy will continue to be considere
318、d using the same principles and criteria that APA has always adhered to,which are to:maintain an appropriate risk and return structure;ensure an appropriate funding and capital structure;enter into contracts with highly creditworthy counterparties;and leverage in-house operational expertise.APA cont
319、inues to talk with customers to develop new opportunities and help them manage their energy portfolio requirements including the potential projects of the Western Slopes Pipeline,the Crib Point Pakenham Pipeline,future mining connection opportunities in Western Australia and connecting Northern Quee
320、nsland gas basins to APAs East Coast Grid.In FY2017,APA announced that it had contracted with a subsidiary of Santos Limited to commence development of a new 450 km Western Slopes Pipeline connecting the proposed Narrabri Gas Project(NGP)to APAs East Coast Grid through the Moomba Sydney Pipeline.The
321、 project is subject to FID of the NGP by Santos.During the reporting period,APA commenced engagement with stakeholders along a possible pipeline route.26 APA GROUP ANNUAL REPORT 2018directors report.continued.AUSTRALIAN PIPELINE TRUST AND ITS CONTROLLED ENTITIES8.Capital and Investment Expenditure(c
322、ontinued)During FY2018,APA announced that it had entered into a Development Agreement and an associated 20 Year Gas Transportation Agreement with AGL Energy to develop and construct a new 60 km pipeline with a capacity of at least 550TJ/day.The Crib Point Pakenham Pipeline would connect AGLs propose
323、d floating LNG regasification plant at Crib Point,to APAs East Coast Grid via the Victorian Transmission System at Pakenham.APAs potential capital expenditure investment would be in the range of$160 million to$200 million.Since announcing the project in June 2018,APA has been undertaking engagement
324、with local communities and environmental reviews to determine the best possible route for the pipeline.The project is subject to Final Investment Decision by AGL during FY2019.PROPOSED CRIB POINT PAKENHAM PIPELINE Community ConsultationOn 12 June 2018,APA entered into a Development Agreement and ass
325、ociated Gas Transportation Agreement with AGL Energy for the development and construction of the Crib Point Pakenham Pipeline.The project is subject to AGL Energy making a Final Investment Decision during FY2019.During FY2018,APA commenced a comprehensive program of community and stakeholder consult
326、ation for the proposed Crib Point Pakenham Pipeline project including:Multiple one-on-one and community meetings Direct mail-outs Community sessions Development of a project websiteIn May 2018,APA hosted community drop in sessions in Cardinia and Nar Nar Goon to answer community queries about the pr
327、oposed Crib Point Pipeline project.Topics discussed included cultural and heritage surveys,environment,water and pipeline alignment.AGL representatives were also present to provide information.The sessions were well attended by landowners and other community members.A further five community sessions
328、 were held in the towns of Balnarring,Hastings,Crib Point,Nar Nar Goon and Cardinia for landowners,members of the community and other interested stakeholders in July/August 2018.APA presented key findings of environmental investigations conducted to-date and answered questions from the community.AGL
329、 representatives and technical specialists were also present and participated in the Q&A session following APAs pipelinepresentation.Stay-in business capex increased to$112.6 million in FY2018 from$68.8 million in FY2017.This remains in line with both the long term asset management planning cycle ac
330、ross our assets and the increasing scale of the business and did reflect in FY2018 ongoing business and technology spend of in the order of$22.4 million reflecting the continuing growth of the business.9.Financing Activities9.1 Capital ManagementAs at 30 June 2018,APA had 1,179,893,848 securities on
331、 issue.This changed from 30 June 2017,with 65,586,479 new stapled securities issued following the$500 million capital raise(Entitlement Offer)announced on 21 February 2018 and completed on 23 March 2018.This additional equity strengthened APAs balance sheet enabling it to efficiently and prudently f
332、und the approximately$1.4 billion plus of committed growth capex projects,due for completion through the period to June 2019.Over many years,APA has consistently maintained the process of funding its growth from a mix of cash generated from within the business and appropriate levels of debt and equi
333、ty.Significant debt transactions during FY2018 were the redemption of the$515 million of Subordinated Notes at their first-call date of 31 March 2018 and the repayment of$125.8 million(JPY 10 billion)Japanese Medium Term Notes at maturity on 22 June 2018.Committed bank debt funding was increased and extended with the execution in May 2018 of a two tranche 5 and 5.5 year$1,000 million Syndicated Ba
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