Good morning to everyone, and thank you for joining this webcast of APA's 2019 Full-Year Results. I’m Jennifer Blake from APA's Investor Relations team. Today, we welcome APA's new CEO and Managing Director, Rob Wheals to present the 2019 financial year results and outlook for FY2020 alongside APA's CFO, Peter Fredricson, who will provide more depths on the financials. A Q&A session for analysts will follow the presentation. For any media on today’s call, time has been separately set aside for your questions and interviews following the webcast. I’ll now hand over to Rob.

Good morning, and welcome to APA's 2019 full-year results presentation. I'm Rob Wheals, and I’m very pleased to be presenting my inaugural results presentation as APA's new Managing Director and CEO. I’ve been present for the last 20-year plus full-year and half-year results announcement calls, but certainly it is a bit different now that I’m the one upfront with the microphone. With me in the Sydney office is Peter Fredricson, APA's Chief Financial Officer, who will be presenting our financial results in detail. Also present is my executive team, Ross Gersbach, Chief Executive Strategy and Development; Sam Pearce, Group Executive Networks and Power; Nevenka Codevelle, Group Executive Governance Risk and Legal; Elise Manns, Group Executive People, Safety and Culture; Kevin Lester, Group Executive Infrastructure Development; and lastly, I would like to introduce Darren Rogers, who is currently acting in the role of Group Executive Transmission following my recent appointment. The team are available during the Q&A session if you have any specific questions for them. I’ll begin with an overview of the full-year results and then hand over to Peter to go through the financials in detail. I’ll then conclude with the commentary on APA's strategy and growth opportunities, including guidance for full-year 2020 before moving to Q&A. The 2019 financial year was a very active year with a number of key events and milestones, and I’ll briefly highlight a few of them. Operationally, we commissioned a number of new infrastructure assets and invested over $460 million in new growth projects. We also stepped up our focus on safety management, process safety in particular as well as in the area of sustainability. Financially, we replaced $700 million of high cost maturing debt with lower cost longer-term debt reducing APA's annual interest expense going forward. And we also dealt with the CKI acquisition proposal process for almost six months and we continued to run the business in this context. And culturally, we refreshed our Code of Conduct, developed and launched APA's customer promise. We have been highly proactive in developing and leading the Energy Charter, and we farewelled, Mick McCormack, our longstanding CEO and Managing Director. So all up, it's been a very, very busy year indeed. So how does that activity reflect to the numbers on Slide 4? I'm pleased to report a good solid set of results. Indeed, I've been very fortunate to have taken over the reins of a business with very strong and stable financial foundations, a quality asset portfolio and good growth opportunities in front of us. Earnings before interest, tax, depreciation and amortization or EBITDA was up 3.6% on FY2018 results to $1,573.8 million. We gave guidance at the half-year results of expecting EBITDA for FY2019 to fall within the upper end of the guidance range of $1,550 million to $1,575 million, and that's exactly where our result has landed. Given the stable nature of our cash flows and the nature of our contracts being long-term and majority take-or-pay, we have very good oversight of our financials. The new growth projects that have come on line over the last two to three years contributed $65 million of incremental revenues. I'll speak a bit more on those projects a little later in the presentation. Other contributors to the increased revenues and EBITDA included the general uplift on the Goldfields Gas Pipeline in Western Australia, as a result of all the new expansion projects on APA's Eastern Goldfields Pipeline that is connected to the Goldfields Pipeline. We are also pleased to be able to assist Incitec Pivot, keep it's Gibson Island manufacturing plant operating during 2019 by facilitating gas transportation over 3,000 kilometers, while our longer-term gas supply option was investigated. And pleasingly, we've been able to extend a delivery service until early 2023 on the back of New Queensland Gas tenements being released that have been designated for domestic manufacturing use only. A number of GTA variations and extensions on APA's East Coast Gas Grid also contributed to financially in 2019 earnings, which will continue into FY2020. We continue to work very closely with each of our customers to meet the individual needs for both contract and service flexibility as well as for new energy infrastructure requirements. For Securityholders, APA's distributions for the full-year increased 4.4% to $0.47. Additional franking credits of $0.686 per security will also be attached to the total distribution. APA's total securityholder return for the financial year was 15%. So all-in-all, a solid result with growth and earnings, growth in our asset footprint and importantly, growth in our returns to securityholders. Turning to Slide 5 and looking at our safety results first. We were all very pleased to see the improved Total Reportable Injury Frequency Rate or TRIFR, the TRIFR metric reduced by third on FY2019 results to 5.98 injuries per million hours worked. As I mentioned earlier, we had renewed our efforts in FY2019 on APA's approach to safety in an effort to improve on FY2019 financial results. And I'm therefore very pleased to be able to report that those efforts have made a difference. Zero Harm is our goal and during financial year 2020, we will continue our focus on safety to improve our standards and practices. It's been an active year for APA in the enterprise-wide sustainability or ESG improvement journey that APA commenced in FY2018 and certainly there is still more to do within our practices in our disclosure. We believe that climate change is a significant issue facing the energy industry and all Australians, and we also believe that APA has an important role to play in how Australia gets the balance right between lower carbon energy, reliability and importantly affordability. We aligned our climate risk management with the recommendations of the Taskforce on Climate-related Financial Disclosures or the TCFD and undertook a 10-year scenario analysis to assess the risks and opportunities for APA and our assets. As a result of this analysis, we are confident that APA is physically and financially resilient to climate-related transitional and physical risks at least for the next 10 years to 2030. But this is something that needs to be monitored and assist on an ongoing basis as energy dynamics and energy policy evolve and more reliable and insightful data becomes available. This financial year you will see a much more comprehensive sustainability report as a result of the step-up in focus on providing improved and consistent disclosure to stakeholders, particularly our investors as they can make informed decisions regarding the investment choices. I'm now on Slide 6. I've spent the last 10 years or so working very closely with our transmission pipeline customers and so putting customers at the center of our thinking is definitely high on my priority list and something I'm extremely passionate about. So passionate in fact that I wanted APA and all our employees collectively to make a promise to each other and to every customer that we will deliver service that our customers' value. That promise has become known as APA's Customer Promise and attached to it is a whole of organization program called project Red Dot. That is helping our people transition to a more customer centric focus. How will we know if our efforts have made a difference? Well, our customers will tell us, and we will listen, and learn, and respond accordingly. We now have a regular customer feedback process in place providing both quantitative and qualitative information to us. Also on the customer focus front, as I mentioned earlier, APA and particularly being led by Nevenka Codevelle has been instrumental in developing the Energy Charter alongside other energy businesses. Our joint goal is together deliver energy for a better Australia, which means affordable, reliable, and sustainable energy for all Australians. Each of the 18 signatories will be accountable to each other and to an independent accountability panel, who will assist individually and as an industry, how we are performing against the charter principles that we all agreed to, and the panel will publish the first report by the end of November this year. Turning to Slide 7. Well as you can see, we've had an active year helping our customers to better manage the energy portfolio needs by building new energy infrastructure across East, West and Southern Australia. You can see from the list of projects on the slide that diversity of the new infrastructure across transmission pipelines, gas fired power generation, wind and solar renewables as well as gas processing. In the West, we connected both the Agnew Gold Mine and the Gruyere Gold Mine to gas with the construction of the Agnew Lateral and Yamarna Gas Pipeline, providing a reliable and cost-effective energy supply to both mining operations. We also built the Gruyere Power Station to supply gas fired power to the Gruyere Gold Mine. Importantly, these types of organic growth connections also provide an uplift on the other connected pipelines such as the Goldfields Gas Pipeline and the Eastern Goldfields Pipeline. Also in WA, we added more wind and solar capacity adjacent to our existing Emu Downs renewable precinct with the addition of the Badgingarra Wind and Solar Farms. Alinta Energy is our customer for the Badgingarra assets, originally underwriting the Wind Farm, but then extending their requests for solar energy and extending both the power purchase agreements for another five years out to 2035. The Solar Farm was recently completed and commenced commercial operations earlier this month. In Queensland, the Darling Downs Solar Farm commenced commercial operations on behalf of our customer Origin Energy. In fact, we acquired the site from Origin Energy in 2017. It also has the Beelbee Solar Farm development site nearby, which has potential for an additional 150 megawatts of solar energy. All the renewable projects that APA has undertaken have been driven by customer demand with customers wanting renewable energy generation as part of their energy mix. The projects have met APA standard investment hurdles and the customers for renewable energy are also our gas transmission customers. In terms of earnings and FY2019 renewables contributed around 3% of total revenue and EBITDA. So all up a very small contributing sector to the business financially, but importantly very beneficial because renewables help our customers meet the energy mix requirements, combined with our gas infrastructure, APA's diverse infrastructure is contributing to a more reliable lower carbon energy mix for Australia. One of the more complex growth projects undertaken was the refurbishment of the [indiscernible] Orbost Gas Processing plant in Victoria. Commissioning is scheduled to commence in early September with first sales gas to be delivered during quarter four, calendar year 2019. This complex plant ultimately facilitates the connection of a new offshore gas supply source into Eastern Australia. This is exactly what we need to help put a downward pressure on gas prices. I'm on Slide 8, which is entitled responding to customers needs, and that's exactly what has driven APA’s growth. At the end of financial year 2016 results, we flagged to investors a $1.5 billion pool of organic growth opportunities that we could see as a result of working closely with our customers. Today, three years on, it is extremely pleasing to be able to report that those projects have all come to provision and that there's still more to do and more that our customers continue to talk to us about, which I'll talk more on in the strategy and outlook section. Additionally, we've continued to announce significant contracts with customers, new contracts, variations and extensions. During the reporting year, we also signed a Memorandum of Understanding with Comet Ridge Limited and Vintage Energy Limited to build, own and operate the proposed 240 kilometer Galilee Moranbah Pipeline that would connect new gas sources in the Galilee Basin to the gas processing and distribution hub of Moranbah in central Queensland. The pipeline is subject to final investment decision by Comet and Vintage. However, we are now moving to infield investigations and working with relevant stakeholders following granting of the survey license earlier this month. In Victoria, APA's proposed Dandenong Power project was announced by the federal government as one of the shortlisted projects under review for the government's Underwriting New Generation Investments scheme, which aims to provide financial support to facilitate the development of new firm generation capacity in the NEM. This scheme is still in its very early investigative stages and we are working with the government on the project assessment as well as continuing to work to identify customer to underwrite the project. And whilst we've been working with our customers, we've also actively worked with regulators to improve information transparency, and consistency, and implement the gas market to perform group changes introduced across the last couple of years. In financial year 2019, these changes included the publishing of pipeline financial statements under Part 23 of the National Gas Rules. Under Part 24 and Part 25 of the rules, a new capacity trading platform and daily auction facility was established in March of this year, requiring extensive system developments. And to-date, the daily auction platform has supported additional liquidity into the East Coast gas market. The energy market continues to evolve and we will continue to work with the authorities to ensure Australia's energy market is operating for the benefit of all of its users. And on that note, I'll hand over to Peter to run through the numbers.

Thanks, Rob, and good morning, everybody. I'm going to start on Slide 10. As Rob has noted, we are certainly pleased that this year's result is showing the benefits of the growth that we've invested in over the last number of years to deliver energy infrastructure that our customers have been asking for. Across the Board, we've seen our performance with increases in revenue, increases in EBITDA, and reductions in interest costs both as a result of reducing rates and higher capitalization associated with that well discussed CapEx program. As we paid more tax in 2019 this flows through to securityholders as franking credits and whilst it's had a minor impact on operating cash flow for the year. We've been able to increase distributions off the back of our growth and earnings and as we'll discuss later, we'll see more of that increase in FY2020 as the revenues from that new infrastructure fully annualized going forward. The revenue increase for the year includes $65 million from those new projects, slightly below the $70 million that we had previously indicated, but that's purely as a result of timing of completion and connection of those assets. With the expected fourth quarter calendar 2019 commissioning of Orbost and the startup in this month of the Badgingarra Solar Farm, we expect some $190 million of revenues in FY2020 from those projects stepping up to the full $215 million that we've spoken of before in revenue in FY2021. And just to be clear, that's $135 million more revenue this year than last year given that we achieved $65 million last year. On Slide 11, the results of the various assets across the states continued to reflect the changing nature of the dynamic gas market particularly on East Coast. Again as in previous years of light, reduced performance year-on-year in one state is offset by outperformance in another. This year with less gas transported for customers north out of Victoria through Kogan and more gas transported south out of Wallumbilla, Queensland and New South Wales increases offset Victorian reductions. In particular, the performance in WA continues to support our ongoing investment there, as our resources customers look to take advantage of more reliable and lower emissions gas, [indiscernible] energy to support their own businesses. And as Rob points out, the WA result includes contributions from the Emu Downs Solar Farm, the Yamarna Gas Pipeline, the Gruyere gas-fired electricity generation plant and the Badgingarra Wind Farm. Asset Management saw a return to norms in FY2019 with around $12 million, that is the long-term average of customer contributions against FY2018s $18.0 million. Energy Investments delivered a solid year as [C Gas] in particular delivered a set of renewed contracts in the second half of the year and interest income from shareholder funding of that business generated an increased revenue year-on-year. Corporate costs, as noted at the half year include around $11.1 million of ones off costs associated with the CKI bid and Mick’s retirement. Absent those costs, we maintained tight control over our costs, notwithstanding an increasing impact on costs due to compliance regimes in respect of various regulatory bodies. Turning to Slide 12. The EBITDA bridge here or waterfall is provided to give investors a better understanding of where our income is coming from. The vast majority of our long-term contracts have some form of CPI escalation clause in them and around 1.5% of revenue increase year-on-year came from that in FY2019. Reductions in variable revenue in FY2019 have substantially offset by new contracts as in a number of cases customers convert previous as available services into contracted services going forward. The new assets contribution aligns with our previous guidance and discussion based on about $65 million of revenues received in FY2019. The FX impact of $15.6 million rises because of the revenues that we had hedged from the Wallumbilla Gas Pipeline in FY2019, we're at rates that were lower than the rates that we had for FY2018. There will be reduced EBITDA year-on-year in this area in FY2020 as the locked in rates that we have for FY2020 as cited out in the Director's report remain above those that we had achieved for FY2019. One further point that we should – we would note is that the costs of regulation for our business continued to rise. About $3 million alone in extra external costs in FY2019, just to put together and published Part 23 pipeline financials, valuation and tariff information and to deal with the capacity trading and auction system that is now in place. These costs don't include the significant internal resources used to deliver this ongoing reporting. We see these costs as a part of what we do and unavoidable going forward, but they will become part of a somewhat higher cost base in the business from here on forward. Moving to Slide 13. Year-on-year nothing much has changed in the risk profile that is APA's business. As in previous years in excess of 90% of our revenues are contracted, regulated or take-or-pay capacity charges. We have a good spread of customers across the energy, utilities, resources, and industrial sectors, but most importantly around 93% of our revenues are coming from customers with investment grade credit ratings. Where a customer does not have an investment grade credit rating, we look for other appropriate credit support arrangements to ensure that our risk profile does not change and to ensure that the low risk, low return model that we run does not unduly expose securityholder capital to further risk. As in previous years, our top dozen customers delivered us close to 90% of our revenues on an annual basis. Moving to Slide 14. And as Rob noted, FY2019 substantially complete the three-year $1.4 billion plus growth capital expenditure program that we first talked about in August, 2016, three years ago. All of the projects that we have talked about over that time period are now contributing revenues except the Orbost Gas Processing Plant, which is due to come on line in the fourth quarter of calendar 2019. Stay-in business CapEx came in around our expected $100 million for this year. Additionally, IT CapEx was close to $25 million with much of that spent on continuing the ongoing enhancement of APA's grid system, which helps our customers easily and efficiently interact with APA toward the gas transportation and services they need. In FY2019, we spent around $7 million just on building the IT platforms for capacity trading and auction, which has now been running since March 1 of this year. Rob will talk later on growth CapEx guidance, but we remain comfortable that our SIB CapEx will continue at around these levels into the foreseeable future. On Page 15, Rob will talk in detail again about strategy and outlook next, but an underlying precept to the strategy that we have at APA is that everything we do will be done whilst managing or maintaining APA's financial strength. The Baa2 BBB ratings from Moody's and Standard & Poor’s are central to that, and in FY2019, we continued to strengthen the financial metrics that underpin those ratings. The operating results continue to improve FFO to debt, free funds from operations to debt and FFO to interest metrics, allowing us to increase distributions both for the year and in the guidance for FY2020. Importantly, during FY2019, we set up for the replacement of some $700 million of higher price maturing debt with lower cost longer-term funding out of the debt capital markets. We repaid $315 million of USPPs in financial year 2019 and then in July FY2020 of this year we repaid a further $390 million of USPPs and Maple Bonds using funds that we had raised in the Sterling market in March. As a result, the average term to maturity of the portfolio remains around seven years and the average interest rate across the portfolio for FY2019 is around 5.5%. Moving to Slide 16. The debt portfolio is an integral part of APA's financial strength, necessary to maintain our strategy going forward. With debt issued out to 2035 across a broad cross section of markets, we have four issues in the U.S. 144A market, two issues in the Euro market, three issues in the Sterling market, and two issues in the Aussie dollar MTN market. We are steadily repaying funding in the USPP market as those issues mature and we recently undertook an opportunistic placement with a Japanese Yen, [indiscernible] for 15-year, 130 million Aussie dollar note. With the repayment of $390 million of USPPs and Maple Bond debt in July of 2019, our next maturity is not until July, 2020 when our inaugural Aussie dollar MTN matures. At this stage, we have in the order $1.4 billion of syndicated debt and bilateral facilities available to support our business going forward. All-in-all, we remain confident that as rates again look like they will remain lower for longer, we can fund any level of expansion of our business with good support from a broad range of highly liquid global debt capital markets. Whilst we believe operating cash flow for FY2020 will fully fund both increased distributions and our expected organic growth in SIB CapEx, our capital management policy remains that we will fund significant levels of growth in particular acquisitions with an appropriate amount of funds retained in the business, debt and equity with the objective of maintaining a Baa2 BBB ratings going forward. Finally, on Slide 17. The solid result for the year, the continuing growth in the business and the strength of our financial position all affords APA the ability to continue to reward securityholders with increasing distributions. Whilst we continue to grow the profitability of the business off the back of ongoing growth driven by the needs of our customers, we will generally also now pay corporate tax which has in FY2019 impacted the operating cash flow outcome. Nevertheless, we remain confident that increasing operating cash flows in FY2020 will deliver the ability to fund next year's growth and distributions, growth CapEx and tax payments of around $90 million without needing increased debt or equity. This year's 4.4% increase in distribution is supplemented by $0.686 per security franking credits for the full-year. With that, I'll hand back to Rob for him to take us through some strategic insights and FY2020 outlook.

Thanks Peter. I'm now on Slide 21. It's the most common question that I’ve been asked since commencing in my new role in July; will I be changing APA's strategy? And that's an easy answer, no. APA is a longstanding and successful strategy of growing the business through leveraging our existing asset portfolio and skill sets. Therefore to be very clear, I fully support APA's strategy, which was ratified by both the Board and APA's leadership team earlier this year during our annual strategy review process or which I was a part. What is new this year was the incorporating of APA's customer promise because we believe it is a key pillar to our strategy. APA has been consistent with its growth approach. Over the last five years on average, we've spent $421 million per annum on growth CapEx and that average over the last 10 years is $338 million per annum. We continue to expect in the order of $300 million to $400 million per annum growth capital expenditure over the next two to three years. As in financial year 2016, when we provided comment on the oversight of a pool of potential projects, we will not specify those exact projects until we have signed agreements with our customers. APA does not build infrastructure or increase capacity unless it has been underwritten by customers. We do not build on spec and hope that someone will come in use what we build. This is one of the reasons why APA's guidance has been very reliable for many years. When you take into consideration the supply demand dynamics, you can see from a AEMO's latest information on the top right hand graph that the gas supply demand balance remains tight with adequate supply from committed gas development only up until 2023. With the driven variances in consumption or electricity market activity could increase gas demand creating potential peak day shortages. With gas prices continuing to be high, we strongly advocate for both the federal and state governments to support increasing exploration and production to provide more competition and liquidity into the market, especially for the benefit of domestic manufacturers and everyday consumers. APA has been doing its part in building new infrastructure to get new guests to market. Work on the Orbost Gas Processing Plant will complete before the end of the year. We continue to work with Santos on the Narrabri Gas Project to connect this new gas source to the domestic gas market and we are working with AGL on the Crib Point LNG import terminal, another potential new source of gas supply for Eastern Australia. The other graph on the bottom right of the slide shows that energy generation from coal has decreased approximately 15% since 2006 whilst gas generated energy has more than doubled in their time as has renewables generation. We continue to believe that gas and gas peaking plants will serve a critical role in Australia's future energy mix and will be essential in supporting the integration of more renewables into Australia's National Energy Market to shore up reliability and on-demand energy. APA's strategy therefore continues to be appropriate and realistic as Australia looks to displace more carbon intensive fuels such as black and brown coal as well as oil and diesel. I'm now on the next slide, Slide 13. And this is all about a current re-contracting environment given the recent gas market reform initiatives. And just in terms of gas market reforms and reviews, we do know that the ACCCs review has been extended through to 2025, but it is very pleasing to see that generally the focus is shifting to what is the real issue, which is all about gas supply. In that context, we are continuing to do with our customers what we have always done. Contracts continue to be renewed with customers where customers have an ongoing need for energy solutions, and we've said in the past, we're getting on with business delivering to our customers. Typically, contracts that are renewed are not for the same terms as foundation or initial contracts. Our customers today have list foresight as to where they will buy gas over the longer-term. And so we have expected and spoken about the multi-asset, multi-service renewable contract that we are entering into with our customers are generally for shorter-terms than those initial contracts. Nevertheless, our revenue weighted-average contract tender remains above 12 years as we add new assets with the longer-term contracts and expiring contracts are replaced with renewals. Our customers continue to benefit from APA's interconnected grid of energy assets with now around 60 received points and a 100 delivery points for gas around Australia. Looking at Slide 21. I want to specifically call out the possible U.S. investment part of APA's strategy as it's probably the second most common question I've been asked about. Do I support the U.S. asset search? Absolutely, I do. As it makes sense given the U.S. is one of the largest gas infrastructure sectors in the world, combined with the attractive returns that regulated assets earned in the U.S., the stable regulatory framework and that the U.S. is a wash with excisable gas. It certainly makes sense for APA to be doing due diligence in that part of the world. We are looking for a platform to grow from with a management and operations team who can help us do that. We will apply the same disciplined and prudent investment approach to any overseas asset as you would to acquiring or investing in assets in Australia. Above all, any acquisition must pay its way and be accretive in its full – in its first full-year of operations under APA ownership. This is not about increasing assets under ownership. We see genuine opportunity to apply our operating and management skills to similar gas transmission and distribution assets in the U.S. To that end, Ross Gersbach, he is currently our Chief Executive Strategy and Development will be relocating in the next couple of months to our Houston office to progress our U.S. strategy, alongside the small team that we already have – that we've already had there over the last couple of years. I'm on Slide 22 now and looking at guidance for the year ahead. Financial year 2019 has set APA up for another solid outcome in financial year 2020. As previously noted, around $65 million of revenue has flowed through into FY2019 from new projects that have commissioned at different stages throughout the year. We expect around $190 million of revenue from those projects and Orbost in financial year 2020. We now the general movements in EBITDA that come from CPI changes, foreign exchange relativity, contract renewals in the like and we fractal that in into our plans. We expect EBITDA to fall within a range of $1,660 million to $1,690 million for the financial year 2020. Interest costs are expected to be in the range $505 million to $515 million and distributions are expected to be in the order of $0.50 per security, an increase of around 6% year-on-year before any allocation of franking credits. Given the completion of the $1.4 billion plus of growth projects over the last three years, we returned to our previous guidance of $300 million to $400 million of growth CapEx over the next two to three years based on the visibility we have of various projects that we expect to be able to bring to the market for our customers. Finally, I thought it might be useful to summarize what I see of my priorities for the year ahead. I initiated a review in July of APA's purpose, vision, strategic imperatives and operating model to ensure that we have the right structure and resources in place to execute our strategy and deliver on the guidance that I've just talked about. That review is underway and we will update the market with any major outcomes resulting from that review. We are continuing to work on a number of growth projects domestically that are being announced as well as talking with our customers about the future energy infrastructure requirements. APA's U.S. due diligence will activity continue under the leadership of Ross Gersbach in Houston, and operationally he will step up the work we are doing on safety and sustainability, whilst ensuring we deliver on APA's customer promise of providing services and service that our customers value. And with that, I'll now go to questions and my management team is here as I said earlier on standby to assist with those questions.

Thank you. We will now proceed to the question-and-answer session. [Operator Instructions] Your first questioner is James Byrne from Citigroup. Please go ahead.

Good morning, Rob and team. Look, I had question for you, Rob, something that I'm sure you hope you wouldn't have to address with your tenures. So yes, but it's around further review into the pipeline sector by the government given the hand, it's kind of enforced by the Central Alliance. Now Central Alliance, obviously have a pretty strong opinion on pricing in the pipeline sector. I'm not going to ask you to defend your position. I think everyone on the call knows where you stand on that. Rather I wanted to just get a picture of what that could look like in terms of reviews, when they could start as well just to help shareholders get an understanding perhaps of the risk on this front over the next couple of years?

James, thanks you. And look, earlier this month, I think you're referring to the announcement by the government. Not only looking at pipeline review, but I'm particularly looking to introduce a prospect of gas reservation policy, a focus on a review on the gas market export mechanism, and extending the ACCCs review of the gas markets through to 2025, but also made reference to further reviews into the pipeline sector. I think we don't have certainly done a detail exactly what all of that will entail across all of those aspects that they announced. What we can say is that there is an existing regulatory impact statement review underway that's already been planned and we would expect that any additional reviews into the pipeline sector should there be any further reviews would be incorporated into that existing regulatory review.

Okay. That's helpful. And yes, so I appreciate that you don't want to speculate on what they may look like. But are you able to perhaps remind us are there any recommendation made to the government in prior years that haven't been implemented? What are the reasons which may again surface through this process?

James, if we go back to the review done back in 2015, 2016, which culminated in some recommendations and ultimately the setting up of the Gas Market Reform Group headed by Dr. Vertigan. Importantly, what came out of that review was to introduce a number of measures; one was increasing the amount of information. So what's flowed from that is, is an increase in reporting and transparency to I guess, balance the information asymmetry. And so the customers have got more information when they're dealing with pipeline operators. So that's one initiative that is underway, and we've actively – as I said in my presentation, actively engaged in that. The other aspect of what came out is part of the Gas Market Review was the introduction of secondary markets. And again, we've actively engaged with that. And since March, we've had the platform available for capacity trading and also the auction platform. And we've seen quite a bit of activity on that auction platform. And thirdly, the other initiative recommended by Dr. Michael Vertigan was the introduction of a more formalized process of customers being able to formally ask for access and should they not get access to pipelines in terms if they feel comfortable with to go down a process of arbitration. And so that process again has been in place since August 17. And as I pointed out in my presentation, we've actively engaged with our customers and continued doing what we've always done, which is a negotiated outcomes of work for both ourselves and our customers. While I've gone back in a bit of history, it’s fair to say that we need to let all those initiatives work and do their bit, and I think it's really way too early to start to think about what else might be required. Those are the recommendations that came out of that detailed review and those recommendations are in the process – are they've been implemented or have been implemented or on their way to being implemented.

Okay, fine. Thanks. And just a second quick question on Dandenong, would you proceed with that if the government being underactive?

Look, I think certainly that's a prospective site where it's located close to gas source, close to electricity transmission lines. What it needs is a customer and we’re working with number of parties in that regard. And as we said it's been short listed in the government process. Like any project for APA, it's got to meet our investment hurdles and this one will be no different.

Fine, okay. Thanks, Rob.

Thank you. Your next question comes from Ian Myles from Macquarie. Please go ahead.

Good morning, guys. Congratulations on the results. Just looking at your guidance, based on the comments you've got about another $120 million of sort of growth revenue from your historical CapEx program and just applying the margin that the program got this year. That sort of leads to about a $100 million uplift with the fact that you don't have the CKI expenses and mixed retirement and there's another $11 million, and you put sort of a CPI sort of increase in there of $100 million – you get up to another $20 million or $30 million, that would be above your guidance. Just wondering, what are the headwinds in the business that are sort of working against some of that growth coming through?

Thanks, Ian and thank you very much for your comments around the result, which is another solid result for APA. But in terms of the guidance, I might just hand the question to Peter Fredricson, and he can comment in some more detail.

Yes. Thanks, Ian. And I expect nothing more from you than the detail that you've gone into. What I mentioned through the presentation is that FY2020, the Wallumbilla Gladstone Pipeline revenues that come through will be at a higher FX rate than what we had relative – what we had in FY2018. And if you have a look in the Director's report, you'll see those rates there. So there's between $10 million and $15 million of difference there alone, I think the other thing that we probably expect is that as we look at inflation you've seen from this, we see it 1.5% has come through in FY2019. 1.5% is below what we have seen as the general CPI in both Aussie dollars and in both Australia and the U.S. in FY2019. So it means that we're not getting a 100% of CPI across the Board. We would also see CPI coming down in FY2020 relative to FY2019. So there's a little bit there. So we've certainly got a number that says that $125 million odd of revenue coming through in FY2020 contributing and we've certainly got a number that says the $1,660 million as a bottom end and the $1,690 million as a top end.

Okay. Two other questions. Firstly will be Solar Farm. What do you need – because I think you've got the development approval, what do you need to actually be able to progress that project further? Are the transmission capacity constraints existing up there as well for the farm?

Ian, I'll direct the question to Sam Pearce, who will probably be able to give you a little bit of color.

Hi, Ian. Thank you for the question. The short answer is we need a customer who is willing to sign up for a long-term off-take on that asset. The position of that asset is very good in terms of grid. So that's not a particularly relevant issue for us. It would connect into the – into the transmission grid essentially at the same point as the Darling Downs Solar Farm. So the primary issue for us to get that project away is making sure that we have a customer who's willing to provide us with the long-term contract that we would need to press the button on it.

Is that a partial expectation given the APA links are being shortening and you'd get down as short of five years now?

That's certainly the case that the market is changing. We continue to work with our customers and see what we can do to meet them. The market in Queensland in particular is for solar is particularly – there's lots of solar projects coming online, but a lot of them are struggling and a lot of them don't have the same benefits that Beelbee does in terms of its location on the transmission grid. So we continue to talk to customers. There are some that remain interested in it, and we will continue to work with them.

Okay. And one final question. Ross heading off to the U.S., who runs the Australian strategy?

Ian, you would see on my last slide where I talk about priorities in financial year 2020 alongside reviewing our purpose and vision and strategic imperatives, we're also doing a review of our operating model, which will – as you can see one of the first decisions I've made is that Ross Gersbach to locate to sunny Houston. And one of the fallouts of that is, is working out how we organize ourselves here for the rest of the business. And like I said in my comments earlier that once we've completed that review, and if there's something to announce we'll be sharing that with the market.

Okay. That's great. Thank you very much.

Thanks, Ian.

Thank you. Your next question comes from Peter Wilson from Credit Suisse. Please go ahead.

There is a question on the daily auction. There was five PJ's auctioned in July. Just wondering if you notice any impact on your interruptible revenues, I mean, I'm assuming most of these trades were services which would otherwise not have happened, but just wondering if you’re seeing any impact at all?

Peter, thanks. I think I only caught the sort about three quarters of the question, but I think you're asking about auction activity on the platform since that kicked off in March. Is that correct?

Yes. Obviously there was five PJ's traded it July and that’s a reasonable volumes. I'm wondering whether you've noticed any revenue impact on your interruptible revenues.

Peter, I think when you're looking at those numbers, and I don't have those numbers to hand. But we have to understand also that these capacity traded on the multiple pipeline legs that actually help deliver gas to where it's going. So whether the five PJ's as you refer to is the sum of the capacity on all the separate pipelines or whether it's a number that's actually been traded from a sort of a nat gas perspective, I can't comment on. But what I can say is that, we fully expected this auction market to deliver some more liquidity into the market. We haven't had any noticeable impact just year two on our variable revenues as such. But as you rightly pointed out, this auction is relates to capacity that already contracted, but not be nominated for the next day on a daily basis. So it's not revenue – so much as we're losing out on it's additional services that customers are taking advantage of as part of the new market services.

I think Peter the other thing to think about is, clearly in the waterfall chart, we've seen about $12 million reduction in what we call variable revenue. If you have a look at, Slide 13, we are still getting around 1% of revenues in the business from the flexible and short-term sort of another services. Now if you go back a couple of years, if you go back three, four years, that number's been, I think as high as 1.7%. So it fluctuates and it moves around and we've always said that's not a number that's going to – we're going to live or die on because it's nice to have. But our business is about long-term contracts with our customers and that's really where we come from. So yes, there's been some movement, but there's been movement every year for the last five in that number. And there'll be more movement next year and it could go up or it could go down. It depends on tough things that our customers want that may not be accommodated by that capacity traded in auction system.

Okay. And if you can here me, the Galilee Pipeline, so there's now two proposals you also connect to Moranbah and to connect all the way until the East Coast Grid rather than PJ. Can you talk about the relative merits of grid that you're choosing and whether it's a case of only one pipeline gets up or both might go ahead?

Peter, it's Rob here. I can't get your comment on what Jim and his strategy is that for them to comment on. What I can say is that our focus is making sure that we connect supply source to a market. That's the focus of that proposed Galilee to Moranbah Pipeline. And the next stage of that potentially is to connect that into the East Coast Grid, first stage is about bringing gas supply, available supply to market demand. So that's we focused on, which is why we've entered into those – that Memorandum of Understanding with Comet Ridge and Vintage, and while we're focused on putting people in the field to start working on that pipeline grid.

Okay. I'll leave it there. Thank you.

Thank you.

Thank you. Your next question comes from Joseph Wong from UBS Equity Research. Please go ahead.

Hi, guys. Just two questions from me. Maybe I'll start I guess on the contracting, the tenor looks like it's aren’t going down this year. I just wanted to understand what’s striving that? Is it a case of more new customers finding shorter-term contracts or just contracts falling off with a shorter tenor?

It's Rob here, and thanks for your question. Look, I think you probably answered your own question in the sense that we do have from time-to-time and every year we'll be a little bit different contracts coming off as this coming on, contracting new infrastructure on longer-term contracts will generally drag that weighted average up. I don't think it’s one particular reason. And as I made in some of my comments earlier, what we tend to find is that renewal contracts will be on – given the state of the gas market as it is, renewal contracts typically for a shorter period and so you will sort of see the duration from year-to-year in the weighted average contract tenor for that particular reason to tonight.

Well, maybe if…

Maybe I could add to that. I think the other thing to keep in mind is this that when you look at last year's number, we are now – effectively, if you look at last year's numbers being $12.7 million, absent any changes, this year's number should be $11.7 million because we're a year further into those contracts that were – that made up the $12.7 million last year. We're at $12.3 million this year. And so what's happened is that we've added more. And the pure mess of this will say that every contract we have tomorrow will be a day shorter than it was today. And so the important thing from our perspective is that we continue to add stuff and we continue to stay in this sort of 10 plus area. And we will continue to do that and we've continued to do that for a number of years.

Okay. And I guess, when moved to the U.S., I guess there was a comment on terms of the U.S., the returns looking quite attractive. I guess where do you see the returns in the U.S. compared to Australia? And do you see risks of that returns coming down given the current FERC review on the ROE in the U.S.?

Look, I think, we've commented in the past on what we see as a more attractive returns in the U.S. as you rightly pointed out. I've got Ross Gersbach here, we've said that, he will be relocating to Houston in a short while and I might just ask him to comment more specifically on that question.

Yes. Thank you. I mean, I think all I could say is there's a still a significant gap between the returns that are likely in the U.S. versus the returns in Australia and part of where those returns are going will fundamentally be part of our due diligence.

Is there any guidance on what that spread is between the U.S. and Australia?

I think we've spoken in the past that 9% to 10% equity returns currently, and which is almost double what you've got here.

I just didn't catch that last. It was 9% to 10% in the U.S. and what was it in Australia?

Which is based on recent returns almost doubled the type of returns that you are receiving here.

Okay. Those are the two questions for me. Thanks.

Thank you.

Thank you. Your next question comes from Daniel Butcher from CLSA. Please go ahead.

Thanks. Most of my questions were asked. But I just wanted to follow-up quickly on the U.S. if I could. You spoke about the returns. Maybe you could speak about the opportunity set aside in terms of have your criteria changed at all since we last spoke to me, and maybe you can sort of outline to us how many things that come across your desk within the opportunity set and meet your criteria over the last two years that you haven't jumped that?

Thanks, Daniel. Rob, here. Look, the criteria what we're looking for as I pointed out earlier in the presentation, I'm a big supporter of us doing the due diligence in the U.S. and the U.S. being a potential part of our growth strategy. In terms of size and scale, our thinking hasn't changed. And the way I would characterize it is, it’s going to be big enough to make a difference, but not so big that we bet the farm. And we've got a very robust business here in Australia that we want to continue to look after. Would you mind just repeating the second part of your question?

I was just wondering how many deals you've seen come across your desk in Houston so far in the last sort of three years that you've been…

Well, I think what I'd say is that one of the reasons we're sending Ross over to the U.S. is to increase our focus there and there is a fair bit of activity. But Ross, do you want to comment further?

Yes. Just to remind that we were somewhat hamstrung during the CKI process, but rest assured that we're rich in opportunities in terms of the number that investment banks come through the door. But we are quite particular in what we're looking for and – but needless to say, we wouldn't be going there unless we thought there was a range of opportunities that fit the bill.

All right. Thanks. That's all for me.

Thank you, Dan.

Thank you. Your next question comes from Rob Koh from Morgan Stanley. Please go ahead.

Hi. Good morning, guys. Can I just ask a, I guess a qualitative question about your EBITDA guidance which you've increased the range from historically $25 million to a $30 million range, still an extraordinarily narrow range for a Company of your size. Can you just remind us of the key moving parts in there? I guess U.S. CPI for Wallumbilla Gladstone timing of growth projects and a bit of interruptible revenues. Is there anything else that drives the – whether you're at the higher or the lower ends?

You got it right. You've got the lot of them, and at the end of the day, CPI is what CPI is and you and I both know that it's at the low end of the range. In terms of expectations, you can pretty much work out what the FX impact of the Wallumbilla Gladstone revenues are, and then it does comes down to timing of revenues et cetera, including if Orbost comes on in the October 1, it will be different than if it comes on the December 1. So we've got – that's where we're at. So probably all I can help you to be fear up.

Yes. No worries. Thanks Peter. It sounds good. And one other small component of guidance I guess is the – if the stay-in-business CapEx, which historically you've said is around the $100 million mark and you beat that this year a little bit, but should we still be thinking that order of magnitude in the next year or so?

We got [indiscernible] sitting in the front row here and he's just smiling that he's going to get an uptick. But the answer is yes. Probably that number is the long-term number. And our expectation is that it does fluctuate around there, it's pretty much dependent on when we're spending money on rotating kit above ground more than anything else. That's what drives it higher in any given year. And we've got more of that stuff than we had five years ago as you'll know. So look $100 million as good a number as we can think about today and it will fluctuate around that.

Yes. Okay. It sounds like no change to previous sentiment. If I can turn to the kind of other reporting that you guys have to do under Part 23 and I guess it looks like you'll be needing to do some kind of RCM and RFM asset-based on the light regulated assets too. Can you perhaps in general terms give us a sense of what, why those numbers can differ from a statutory disclosures? And I guess I'm really only asking because I'd hope for some investor to ask me to reconcile them to be honest?

Well, Rob, they're not reconcilable. So you need to tell your investor that the – why those numbers are put together as we're required to come up with a methodology, which we've done. And effectively what we're looking to do is put together a set of pipeline financial statements as if each pipeline was operating as a standalone business in its own right. And so there are inputs into a set of financial results for those pipelines over many, many years from the beginning of time and respect of each pipeline that are determined by expert advice to us and applied in the context of the process that we have determined they should be. So if we aligned all of those sets of accounts and added them up, you're not going to get to APA's financial outcomes. So it's just – they are totally different things.

Yes. Thanks Peter. Yes and I asked for different purposes. It's very helpful that what you've just explained there. So just the last flyer question for me about long run futures, so Australia is, I guess working up on a National Hydrogen Plan. Can you comment on the suitability of your asset base to a little bit of hydrogen going into the gas mix in any other future growth options that come out of that?

Rob thanks. It's Rob responding to your question. Look, there is quite a bit of interest in hydrogen not only in Australia, but globally as well where we've got a number of our people following that quite closely. And when you start talking in the hydrogen space, it depends whether you’re talking hydrogen in its pure form or whether it’s – we're talking another option which is renewable methane. So the short answer is we're looking at it closely. We've got a couple of projects that we're kicking off to test what – how they can work in some of our assets and including also producing for renewable methane. And I think it's really early to say how that could work in the longer-term, and despite all the excitement that there is across the industry.

Okay. Got it. Sounds good. Thank you very much gents and good luck. Cheers.

Thanks Rob.

Thank you. Your next question comes from James Nevin from RBC Capital Markets. Please go ahead.

Hi everyone. I just had a question on the distribution payout ratio and at the moment you're funding [indiscernible] growth CapEx from operating cash flows. And then you're talking about when you potentially making an acquisition then that would be like if funded appropriately between equity and debt. Just wondering how that’s going to evolve going forward? Is there like a drop that is potentially on – when you might look at an U.S. acquisition and if you do look at some sort of external acquisitions and then would you revert to like some other kind of payout ratio and with your funding on a growth CapEx from a mix of equity and debt and you could potentially increase the payout ratio?

I'll let Rob talk about it. It's Peter Fred. I'll let Rob talk about what if a drop date – there are. But philosophically, we've always seeing that we will fund the – I think we've moved away from what's called a payout ratio. We don't talk about payout ratios anymore in the narrative. And the reason for that is that we're looking to increase distributions to shareholders or securityholders on a sustainable level in line with our policy. But we're also looking to ensure that a standard CapEx year is funded on the balance sheet if it can be, because that adds a bit of value to what our shareholders are receiving longer-term. So that's the way we've done things. I think we've said in the future, if we don't have things to spend the money on, we'll do nothing different. We'll continue to increase distributions in line with – generally in line with operating cash flow, and were we payout a whole lot more if we've got no growth CapEx. We've got to keep in mind that we've got a debt book of $10 billion. It's called $9 billion, which is over 20 years, $500 million a year. So my view is that if we didn't have stuff to spend on growth, which is continues to support a debt portfolio like that then we'd be allocating some of that extra cash flow to reducing our debt as well. So you've got to keep a balance here, and that's not same. We've got a policy of anything in the future. What we say is that we'll look at this on an annual basis based on what our capital needs are and what the economic conditions are and that's the way we've evolved everything we've got now.

And James, Rob here, just to add what Peter said. I think you had a question around a drop debt date on the U.S. transaction? Absolutely say we've got no drop debt date. We got – as Ross said earlier, we’ve got particular around what we're looking for and we're going make sure that what we do is straight down the fairway and it's creative to adding incremental ready to APA. And so those are criteria and we're not going sit a timeline. We're going to make sure that we do what's right for our securityholders in the long-term.

Okay. Thanks. And there's been further question on that the CapEx growth pipeline and just trying to get sale on – a few comments just on your renewable projects, and where the market is kind of moving towards maybe shorter-term PPAs, and how does that affect your potentially growth CapEx? Would you be maybe looking more than us, more likely to be kind of gas infrastructure projects and if the demand isn't there from customers for kind of longer-term PPA and APA would normally kind of required underway projects? Maybe it is less likely you're going to be able to fund renewable projects. And then maybe if you could also – and I don't know if you can comment on, it looks like there's potentially like a lot of capital kind of changing some of these renewable projects if there is a long-term PPA. So is it harder to me it's kind of APA's requirements and investment hurdles there?

James, I'll have a crack and try to answer that. I think the way to think about this is, number one, if you go back a number of years before we announced that we had a pipeline of growth projects totaling in the order of $1.5 billion and that was in the financial year 2016 period, I think from what I recall. And that the reason we did that is we had what we could see as a bigger pipeline of projects, and prior to the time, we talked about a $300 million to $400 million per annum growth CapEx range. And what we're doing now is we are reverting to that same guidance. We've gotten past that larger pipeline of $1.5 billion worth of projects. And if you look at our long-term average, it's in that similar range as I think I mentioned earlier. Now as to what exactly that mix of projects is ultimately going to be will be determined by what our customers want. And we've got strict investment criteria as to how we think about things. We'll also particular driven by the mix of where our customers want energy solutions, whether it be wind, solar, gas, pipelines, gas processing, anything else for that matter.

Okay. Thank you.

Thank you.

Thank you. [Operator Instructions] Your next question comes from Nathan Lead from Morgans. Please go ahead.

Hey, guys. Just a couple of clarification questions here. So Cooper costs run rate in the moment, so it's $80.1 million, take it to $11.1 million? Are we running at $69 million or is there some lumps and bumps in there?

Nathan, a little ways been lumps or bumps and not $11 million a year lumps and bumps. I think we've talked about $70 million-ish. What you'll see in the there in that waterfall you'll see another three that's – this year is an extra three that we didn't have last year that we talked about being in the context of putting together Part 23 and financial statements, et cetera. So we've also see those become part of the cost-based going forward, might not be as high as they're going forward, but there's an incremental increase in costs. So I think you look at what's the vast majority or that a reasonable part of that $69 million today. And that's personnel costs, governments globally want to see personal wages go up, so if you apply and CPI to those sorts of things and maybe a little bit more. So it's always going to be off at base, but I don't think you're going to see it at $80 million next year absent and unexpected cost as we sit here today.

Okay. And then on Slide 14, the stay-in-business CapEx you've broken that a partner with the stay-in-business and IT CapEx. So previously was sort of those conditions to thinking about the number from last year being sort of averaging around that $100 million and we've now got to stay-in-business at $93 million and IT at $25 million. So we thinking the $93 million number this year should jump around the $100 million and then there's IT CapEx component separate to that?

Yes, that's, I mean it's generally the thought process.

Yes. So what's that run rate, you talked in the presentation? I think about having $7 million of abnormal this year. As $25 million less than $7 million or is there a way, some sort of project coming through that'll keep that around that $25 million number?

I mean that $25 million number is probably been consistent over the last seven or eight years now to be fear. We're spending a reasonable chunk – there's a reasonable chunk of that $25 million has been spent on the APA grid in itself. So again $20 million to $25 million is not a bad number. Remember, listening to one of the major banks tell us, four or five years ago, when they first sit out on spending – thinking that they had to catch up with the market. They thought there's been $1.5 billion a year. $1.8 billion in the first year and that would be it. But it's been $1.5 billion every year since. So from our perspective, I think that number is a reasonable rule of thumb to be fear.

Yes, okay. The last one for me, obviously the big thing that's happened out there probably since even the last result presentation is just rapid drop in the bond rates. How are you thinking about project returns going forward within that low and straight environment? Are you recalibrating your thinking?

Nathan, Rob here. Look, I think we've obviously look at what's available in the market relative to what our costs to capital is and make sure that we're always for every dollar we spend we're adding value for our securityholders. And the fact is if we are seeing a low for longer future, then we will and in order to be able to respond to and compete in the marketplace. We will no doubt have to adjust our expectations going forward. But that's us responding to what's available in the market.

So have you got like a corporate cost of capital that you see recalibrate every once in a while? Have you done that recently?

Yes, we do Nathan, but the point is this and it's sort of born out by the fact that the average cost of debt for the year is 5.5%. People say to us, why haven't you refinanced the whole book and why aren't you paying 3.5% now? The thing about our businesses, because it's a long-term business and because we've been issuing date in markets on a regular basis to ensure that we don't have a once off, sort of ditch shock or repayment shock or refinancing shock in the future. What we've got is a portfolio of debt that's been raised, as we sit here today between 2003 and 2019. So we've got a portfolio of debt has been raised over 16 years and so that that means there are 16 years of debt costs involved in what we've gotten our book today, which means that we can't sit here and say, we'll base our cost to capital on what $10 billion of debt today is at today's rates. So the answer is we play around with stuff. We look at it all the time and one of the messages that we seen to anybody is that when we invest in a dollar, we expect that investment to be operating cash flow per security accretive. And that's our guideline here.

Okay. That's it for me guys. Thanks for your presentation.

Thank you, Nathan.

Thank you. There are no further questions at this time. I'll now hand back to Mr. Wheals for closing remarks.

Well, thank you very much everybody for listening today. Appreciate your time and I'm sure we'll be catching up over the next couple of weeks to talk more about our results. Thank you very much.