APA Group. A new regime A$8.82 AUSTRALIA. Event. Impact. Earnings and target price revision. Price catalyst. Action and recommendation

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1 AUSTRALIA APA AU Price (at CLOSE#, 24 Mar 2017) Neutral A$8.82 Valuation A$ - DCF (WACC 5.1%, beta 0.8, ERP 5.0%, RFR 3.3%) month target A$ month TSR % Volatility Index Low GICS sector Utilities Market cap A$m 9, day avg turnover A$m 18.0 Number shares on issue m 1,114 Investment fundamentals Year end 30 Jun 2016A 2017E 2018E 2019E Revenue m 2, , , ,415.5 EBITDA m 1, , , ,500.8 EBITDA growth % EBIT m Reported profit m Adjusted profit m Gross cashflow m CFPS CFPS growth % PGCFPS x PGCFPS rel x EPS adj EPS adj growth % PER adj x PER rel x Total DPS Total div yield % Franking % ROA % ROE % EV/EBITDA x Net debt/equity % P/BV x APA AU vs ASX 100, & rec history Note: Recommendation timeline - if not a continuous line, then there was no Macquarie coverage at the time or there was an embargo period. Source: FactSet, Macquarie Research, March 2017 (all figures in AUD unless noted) 24 March 2017 Macquarie Securities (Australia) Limited A new regime Event GMRG (Vertigan Review) has issued a consultation document suggestion to the information disclosure and arbitration regime. Impact The consultation period is short, with implementation in May, arbitration regimes starting August 1 st, and disclosure regime in October The consultation has suggested a base level of pipeline information plus individual financial disclosure of each pipeline P&L, cashflow and balance sheet. This type of disclosure runs contrary to APA s approach around grid pricing, and will refocus basic services back on individual pipelines. This potentially limits the ability to obtain premium pricing for more complex services. The preferred arbitration approach is conventional, with procedural protection. The aspect that might agitate APA is the involvement of the AER as administrative and technical provider. The basis of arbitration is on actual cost of providing the service + a commercial return, not a regulated return. The approach results in the regime becoming cost-plus at the pipeline level. The critical aspect is determination of the starting cost base of the asset, particularly older assets like MSP. The safeguard for APA is that the operator is not forced by an access determination to augment a pipeline that is not appropriately funded, ie the access seeker pays. APA as a cost of capital tends to be lower than the pipeline users. The risk for APA is where there is recontracting of capacity around the pipeline. At this stage ~$172m of EBITDA is involved in MSP, non reg RBP and CGP which may come under pressure in the coming years as they go through recontracting. Longer-term recontracting risk extends to all the pipelines. Earnings and target price revision No change. Price catalyst 12-month price target: A$9.42 based on a DCF methodology. Catalyst: Finalisation of the GMRG position. Action and recommendation Neutral. APA continues to invest and reiterates its $1.5bn capex guidance, however the risk remains around the earnings power of the existing assets in the current regulatory environment and the changing gas flows. The devil in the detail suggests earnings risk, especially around recontracting in the coming years, albeit there is not enough certainty to provide any quantification. APA s share price has recovered from the last bout of risk concern, albeit as we enter this final phase there is some downside. Neutral. Please refer to page 7 for important disclosures and analyst certification, or on our website

2 Analysis There are multiple streams associated with the Gas market Reform Group. There is a legislative task which will occur this week which will provide change to the legislation. This established the frame work for the Vertigan review to be implemented, review which broadly required disclosure and transparency along with an arbitration scheme for disputes. Last week the GMRG released a discussion paper with numerous options around the proposed reforms and implementation. The chart below is a snapshot of their preferred options across the information disclosure, arbitration and arbitration framework. They are asking for industry responses in the next 3 weeks, with implementation of the scheme in July. The information disclosure regime does not commence until October 2018 when 2H18 results are required. Fig 1 Preliminary views of the GMRG Source: GMRG, Macquarie Research, March 2017 Information disclosure Since the review process started, APA has become progressively better about data disclosure. The table below sets out APA individual pipelines. Capacity forward and backhaul and capacity registers have become increasingly available along with the reference pricing for standard services. 24 March

3 Fig 2 APA pipelines First Gas Name State Interest Flow km Access Forward Capacity Register Reference haul Backhaul (TJ/day) % free Price Throughput Non reference TJ/day TJ/day per GJ per GJ per GJ Wallumbilla Gladstone QLD 100% Not Covered 1, % Roma Brisbane QLD 100% Covered % Carpentaria Gas QLD 100% Light % South West Queensland QLD 100% Not Covered Moomba to Sydney NSW 100% Light % NSW-Victoria Interconnect VIC/NSW 100% Not Covered % Amadeus NT 100% 1987 Covered South East Australia Gas SA 50% Not Covered 314 Longford to Melbourne Gas VIC 100% Covered 1,030 South West Pipeline VIC 100% Covered Goldfields WA 88% Covered Midwest WA 50% Not Covered Parmelia WA 100% Not Covered Pilbarra Pipeline System WA 100% Not Covered Source: Company data, Macquarie Research, March 2017 At a minimum the suggestion by GMRG is for information on the services provided, availability of the services, the standing offers both price and non-price. In many cases these appear to be met on the major pipelines. One variance however is APA will have to nominate its methodology for determining the pricing path. Choosing an approach different to the one the arbitrator takes, opens APA to potential dispute risk. Broadly we believe APA is delivering many of the requirements around the base information. GMRG has expressed this information does not necessarily solve the imbalance between pipeline owners and shippers in that so far as it may not avoid disputes. The second step in the preferred options is APA and other pipeline owners would be required to publish individual financial accounts around each pipeline, ie MSP, CGP, RBP, SWQP, etc. The accounts would include a P&L, balance sheet, cashflow with the broader requirements being developed by AER. For APA this is not necessarily a positive as: The concept of the grid is lost under this reporting requirement. Cross grid services like park and loan etc are effectively allocated to individual pipelines. APA is possibly incentivised to have ancillary and derivative services accounted for on fully contracted pipelines like SWQP. Shippers instead of thinking about the grid, disaggregate the services to specific pipelines and then seek to get a better pricing as a grid service. At a broader level, shippers are likely to look across the sector and question why pricing on one pipe is materially different to the other. Secondly they will look at the individual RoFE on pipelines to frame the view around whether returns are too high. They will also compare their specific access charges relative to the average. It is uncertain whether goodwill paid for pipelines like EPIC gets included in the allowed return or is this is excluded from the outcome. The argument is likely to become particularly heated around recontracting of the pipelines with shippers wanting to capture the benefit of the grid without paying a return on the goodwill for establishing it. Finally an EBIT, asset and capex is arguably obtainable at individual pipelines; it becomes increasingly academic in the allocation of debt to individual pipelines as APA finances as a group. The incentive will be to allocate leverage to non-pipeline assets, and regulated assets which increases the asset base and lowers the RoE. As the previous table also highlights, pipeline usage is also changing with CGP now at 75% utilisation. RBP potentially drops to 42% and we expect MSP will also slip from 100% as contracts are re-negotiated. Additionally, the high gas price is likely to cause demand destruction, reducing pipeline demand. A risk that is emerging for APA in this environment is stranding or at least structural underutilisation. Measuring individual pipelines is difficult, but at a collective level ex WGP and generation, we estimate RoFE ex goodwill is 11-12%. With leverage of 70% D:D+E, this implies a pre-tax equity return of 15-17% pa. However, if leverage is 50%, the implied return is 11-12%. Collectively, it does not appear as if the portfolio is getting an excessive commercial return, albeit individual pipelines may be a different matter 24 March

4 Fig 3 APA Gas ($ m) E 2018E 2019E 2020E Revenue Distribution & Transmission Pass Through Total Revenue Growth 4.2% 6.3% 2.6% 21.5% 6.7% 13.9% 0.0% 11.3% 1.8% 1.2% 1.0% Qld NSW Victoria South Australia Western Australia Northern Territory Adj EBITDA Margin (ex pass through) 72.2% 70.4% 71.7% 73.7% 83.1% 84.0% 89.4% 84.3% 83.1% 82.9% 83.0% Depreciation & amorit EBIT Core Assets 3,645 3,949 3,683 5,373 5,659 5,916 6,195 6,243 6,256 6,249 6,252 Goodwill ,073 1,073 1,073 1,073 1,073 1,073 1,073 1,073 Assets 4,127 4,431 4,017 6,446 6,731 6,988 7,267 7,315 7,329 7,322 7,324 Liabilities Net Funds Employed 3,979 4,258 3,861 6,161 6,434 6,680 6,946 6,992 7,005 6,999 7,001 Return on Funds employed 8.1% 7.7% 9.0% 7.1% 8.2% 9.4% 9.2% 9.5% 9.5% 9.6% 9.9% Ex goodwill 9.2% 8.7% 9.8% 8.6% 9.8% 11.2% 10.9% 11.3% 11.2% 11.4% 11.7% Total Capex Source: Company data, Macquarie Research, March 2017 Whilst the collective outcome is supportive of a reasonable return, specific pipeline outcomes could be different. The table below sets out Carpentaria estimated returns. This is based on 200% acquisition of the minorities which did not appear to create any goodwill. Assuming an asset life of ~40 years and the $29m upgrade in 2009 (additional compression) the average pre tax RoFE is 15%, which is healthy. However, the construction of the NEGI at 90TJ/day ie from NT, potentially drops flow on the pipeline until the NEGI is expanded, ROFE dropping to <10%. It is an inherent risk of operating the asset and justifies the commercial returns it has obtained. Fig 4 Carpentaria Pipeline history E Asset value $m EBITDA Depreciation EBIT RoFE 9.3% 11.3% 13.4% 12.3% 15.5% 16.7% 17.9% 19.0% 20.2% 21.5% 17.8% 13.9% Source: Company data, Macquarie Research, March 2017 Arbitration Framework The arbitration mechanism of convention arbitration with enhanced procedural protections and partial transparency is unlikely to be a major issue. The one element we anticipate the industry will have some concern over is the AER potentially being sought to provide administrative and technical support to the process. AER is focused on regulated assets, and regulatory returns, not necessarily commercial returns. Of greater concern is the pricing principles being suggested by the discussion paper, requiring actual cost of the provision plus commercial return. The major issue in any dispute is establishing the starting point of established assets. The discussion paper did not provide a definitive preferred approach but highlighted the alternatives namely a range from actual costs based on records to depreciated optimised replacement costs. 24 March

5 Fig 5 Investment Fundamentals ($m) Year end June Valuation Gas Trasmission $m 4,459 4,564 7,910 9,510 10,998 11,804 11,807 11,799 11,734 11,629 11,584 QCLNG $m 6,536 6,444 6,525 6,410 5,865 5,655 5,425 Electricity (WF/Dia) $m ,027 1,165 1,224 1,176 1,124 1,111 1, Asset management $m Listed Associates $m Other Associates $m Net debt $m -2,795-2,576-4,233-4,586-8,776-9,525-9,363-9,373-9,277-9,050-8,853 Valuation $m 3,513 4,147 5,834 7,340 10,529 10,401 10,658 10,451 9,899 9,719 9,549 per share $ WACC % 7.0% 7.1% 7.0% 6.6% 5.6% 5.2% 5.2% 5.2% 5.2% 5.2% 5.2% Cost of equity % 8.6% 8.5% 8.6% 8.5% 7.4% 7.1% 7.0% 7.0% 7.0% 7.1% 7.1% Profit & Loss Gas Trasmission $m ,040 1,058 1,070 1,081 1,095 QCLNG $m Electricity (WF/Dia) $m Asset management $m Energy investments Other $m Total Revenue $m 1,079 1,054 1,261 1,404 1,525 2,049 2,302 2,351 2,416 2,437 2,480 Growth % 10.6% -2.3% 19.6% 11.4% 8.7% 34.3% 12.4% 2.1% 2.8% 0.9% 1.8% Gas Trasmission $m WGP $m Electricity (WF/Dia) $m Asset management $m Energy investments $m Corporate $m One offs $m EBITDA $m ,269 1,331 1,455 1,475 1,498 1,486 1,510 Margin % 45.6% 49.9% 61.0% 53.2% 83.2% 64.9% 63.2% 62.8% 62.0% 61.0% 60.9% Depreciation $m Net Interest $m Profit Before Tax $m Tax Expense $m Tax Ratio % -23% -27% -14% 28% -24% -39% -38% -38% -37% -37% -36% Attributed Profit $m EPS (one offs) PE x DPS Franking % 0% 0% 0% 0% 0% 0% 25% 31% 38% 59% 80% Yield % Payout ratio (Op cf - maint) x 70% 72% 85% 78% 83% 57% 54% 58% 58% 57% 57% EV/EBITDA x EV/EBIT x Price to book value x Price to op c/flow x Net Debt 2,795 2,576 4,233 4,701 8,894 9,640 9,472 9,474 9,371 9,136 8,929 D:EV % 36.2% 31.1% 36.3% 38.8% 47.4% 49.4% 48.9% 48.9% 48.7% 48.0% 47.5% D:D+E % 62.6% 61.5% 62.8% 65.3% 67.0% 70.5% 71.3% 72.6% 73.8% 74.6% 75.1% Net Debt : EBITDA x DSCR (post reg & main capex) x RoFE % 8.8% 9.9% 9.5% 8.2% 8.0% 5.9% 6.7% 6.9% 7.3% 7.5% 8.0% RoE % 6.5% 8.1% 11.8% 13.8% 12.9% 4.5% 6.4% 7.4% 8.8% 9.7% 11.4% Dividend to Equity % 12.2% 11.5% 10.9% 11.9% 9.7% 8.9% 11.6% 12.9% 14.6% 16.0% 16.6% Share on issue m ,114 1,114 1,114 1,114 1,114 1,114 1,114 EFPOWA m ,114 1,114 1,114 1,114 1,114 1,114 Cashflow Schedule Operating Cash Flow EBITDA (inc associates) $m ,331 1,455 1,475 1,498 1,486 1,510 Net Interest Paid $m Tax Paid $m Other (dec Working Capital) $m Net Operating Cashflow $m Investing Cashflow Capex & Acquisitions $m , Divestments $m Other $m Net Investing Cashflow $m , Financing Cashflow Dividends $m Debt Changes $m , New Equity $m , Other (inc adj.) $m Net Financing Cashflow $m , Net Cashflow $m % c/flow in US$ $m 31% 29% 30% 31% 30% 33% Balance Sheet Cash $m ,018 Debtors $m Tangible Assets $m 3,768 3,472 5,280 5,574 8,355 9,189 9,045 9,104 9,016 8,829 8,648 Intangible Assets $m ,328 1,321 4,697 4,540 4,357 4,171 3,991 3,813 3,636 Investments $m Other $m Total Assets $m 5,428 5,496 7,699 7,973 14,653 14,843 15,016 14,931 14,595 14,521 14,424 Total Liabilities $m 3,760 3,882 5,187 5,476 10,270 10,814 11,206 11,349 11,270 11,408 11,466 Total Shareholder Funds $m 1,668 1,614 2,512 2,496 4,383 4,029 3,810 3,582 3,325 3,113 2,959 Source: Company data, Macquarie Research, March March

6 Macquarie Quant View The quant model currently holds a neutral view on. The strongest style exposure is Growth, indicating this stock has good historic and/or forecast growth. Growth metrics focus on both top and bottom line items. The weakest style exposure is Earnings Momentum, indicating this stock has received earnings downgrades and is not well liked by sell side analysts. 233/431 Global rank in Utilities % of BUY recommendations 31% (4/13) Number of Price Target downgrades 2 Number of Price Target upgrades 6 Fundamentals Attractive Quant Local market rank Global sector rank Displays where the company s ranked based on the fundamental consensus Price Target and Macquarie s Quantitative Alpha model. Two rankings: Local market (Australia & NZ) and Global sector (Utilities) Macquarie Alpha Model ranking A list of comparable companies and their Macquarie Alpha model score (higher is better). Factors driving the Alpha Model For the comparable firms this chart shows the key underlying styles and their contribution to the current overall Alpha score. AGL Energy 1.5 AGL Energy ERM Power 0.8 ERM Power AusNet Services AusNet Services Spark Infrastructure Grp -0.2 Spark Infrastructure Grp % -80% -60% -40% -20% 0% 20% 40% 60% 80% 100% Valuations Growth Profitability Earnings Momentum Price Momentum Quality Macquarie Earnings Sentiment Indicator The Macquarie Sentiment Indicator is an enhanced earnings revisions signal that favours analysts who have more timely and higher conviction revisions. Current score shown below. Drivers of Stock Return Breakdown of 1 year total return (local currency) into returns from dividends, changes in forward earnings estimates and the resulting change in earnings multiple. AGL Energy 0.7 AGL Energy ERM Power -0.4 ERM Power -0.5 AusNet Services 0.8 AusNet Services Spark Infrastructure Grp -0.1 Spark Infrastructure Grp % -50% 0% 50% 100% Dividend Return Multiple Return Earnings Outlook 1Yr Total Return What drove this Company in the last 5 years Which factor score has had the greatest correlation with the company s returns over the last 5 years. Sales to EV FY0 Price to Book NTM Net Buybacks to Mkt Cap RNOA Profit Margin NTM Capex to Sales FY0 Profit Margin FY1 Change in Cash FY0 Negatives Positives -17% -17% -18% -20% 29% 29% 26% 33% -40% -20% 0% 20% 40% How it looks on the Alpha model A more granular view of the underlying style scores that drive the alpha (higher is better) and the percentile rank relative to the sector and market. Alpha Model Score Valuation Growth Profitability Earnings Momentum Price Momentum Quality Capital & Funding Liquidity Risk Technicals & Trading Normalized Score Percentile relative to sector(/431) Percentile relative to market(/421) Source (all charts): FactSet, Thomson Reuters, and Macquarie Research. For more details on the Macquarie Alpha model or for more customised analysis and screens, please contact the Macquarie Global Quantitative/Custom Products Group (cpg@macquarie.com) 24 March

7 Important disclosures: Recommendation definitions Macquarie - Australia/New Zealand Outperform return >3% in excess of benchmark return Neutral return within 3% of benchmark return Underperform return >3% below benchmark return Benchmark return is determined by long term nominal GDP growth plus 12 month forward market dividend yield Macquarie Asia/Europe Outperform expected return >+10% Neutral expected return from -10% to +10% Underperform expected return <-10% Macquarie South Africa Outperform expected return >+10% Neutral expected return from -10% to +10% Underperform expected return <-10% Macquarie - Canada Outperform return >5% in excess of benchmark return Neutral return within 5% of benchmark return Underperform return >5% below benchmark return Macquarie - USA Outperform (Buy) return >5% in excess of Russell 3000 index return Neutral (Hold) return within 5% of Russell 3000 index return Underperform (Sell) return >5% below Russell 3000 index return Volatility index definition* This is calculated from the volatility of historical price movements. Very high highest risk Stock should be expected to move up or down % in a year investors should be aware this stock is highly speculative. High stock should be expected to move up or down at least 40 60% in a year investors should be aware this stock could be speculative. Medium stock should be expected to move up or down at least 30 40% in a year. Low medium stock should be expected to move up or down at least 25 30% in a year. Low stock should be expected to move up or down at least 15 25% in a year. * Applicable to Asia/Australian/NZ/Canada stocks only Recommendations 12 months Note: Quant recommendations may differ from Fundamental Analyst recommendations Financial definitions All "Adjusted" data items have had the following adjustments made: Added back: goodwill amortisation, provision for catastrophe reserves, IFRS derivatives & hedging, IFRS impairments & IFRS interest expense Excluded: non recurring items, asset revals, property revals, appraisal value uplift, preference dividends & minority interests EPS = adjusted net profit / efpowa* ROA = adjusted ebit / average total assets ROA Banks/Insurance = adjusted net profit /average total assets ROE = adjusted net profit / average shareholders funds Gross cashflow = adjusted net profit + depreciation *equivalent fully paid ordinary weighted average number of shares All Reported numbers for Australian/NZ listed stocks are modelled under IFRS (International Financial Reporting Standards). Recommendation proportions For quarter ending 31 December 2016 AU/NZ Asia RSA USA CA EUR Outperform 57.53% 50.72% 45.57% 42.28% 60.58% 52.79% (for global coverage by Macquarie, 8.71% of stocks followed are investment banking clients) Neutral 33.90% 33.97% 43.04% 50.11% 37.23% 35.62% (for global coverage by Macquarie, 8.05% of stocks followed are investment banking clients) Underperform 8.56% 15.30% 11.39% 7.61% 2.19% 11.59% (for global coverage by Macquarie, 4.63% of stocks followed are investment banking clients) APA AU vs ASX 100, & rec history (all figures in AUD currency unless noted) Note: Recommendation timeline if not a continuous line, then there was no Macquarie coverage at the time or there was an embargo period. Source: FactSet, Macquarie Research, March month target price methodology APA AU: A$9.42 based on a DCF methodology Company-specific disclosures: APA AU: Macquarie Capital (USA) Inc. or one of its affiliates, expects to receive or intends to seek compensation for investment banking services from Australian Pipeline Ltd in the next three months. Macquarie and its affiliates collectively and beneficially own or control 1% or more of any class of APA Group's equity securities. MACQUARIE CAPITAL (AUSTRALIA) LIMITED or one of its affiliates has provided Australian Pipeline Ltd with investment advisory services in the past 24 months, for which it received compensation. Important disclosure information regarding the subject companies covered in this report is available at Date Stock Code (BBG code) Recommendation Target Price 23-Feb-2017 APA AU Neutral A$ Aug-2016 APA AU Neutral A$ Jul-2016 APA AU Neutral A$ May-2016 APA AU Outperform A$ Feb-2016 APA AU Outperform A$ Feb-2016 APA AU Outperform A$ Nov-2015 APA AU Outperform A$ Aug-2015 APA AU Outperform A$ Jun-2015 APA AU Outperform A$ Sep-2014 APA AU Neutral A$ Aug-2014 APA AU Neutral A$ Aug-2014 APA AU Neutral A$6.67 Target price risk disclosures: APA AU: Additional diltuion from changing bid terms around the APA/ENV merger Any inability to compete successfully in their markets may harm the business. This could be a result of many factors which may include geographic mix and introduction of improved products or service offerings by competitors. The results of operations may be materially affected by global economic conditions generally, including conditions in financial markets. The company is exposed to market risks, such as changes in interest rates, foreign exchange rates and input prices. From time to time, the company will enter into transactions, including transactions in derivative instruments, to manage certain of these exposures. Analyst certification: We hereby certify that all of the views expressed in this report accurately reflect our personal views about the subject company or companies and its or their securities. We also certify that no part of our compensation was, is or will be, directly or indirectly, related to the specific recommendations or views 24 March

8 This publication was disseminated on 24 March 2017 at 07:45 UTC. Macquarie Wealth Management expressed in this report. The Analysts responsible for preparing this report receive compensation from Macquarie that is based upon various factors including Macquarie Group Limited (MGL) total revenues, a portion of which are generated by Macquarie Group s Investment Banking activities. General disclosure: This research has been issued by Macquarie Securities (Australia) Limited ABN , AFSL , a Participant of the ASX and Chi-X Australia Pty Limited. This research is distributed in Australia by Macquarie Wealth Management, a division of Macquarie Equities Limited ABN AFSL ("MEL"), a Participant of the ASX, and in New Zealand by Macquarie Equities New Zealand Limited ( MENZ ) an NZX Firm. Macquarie Private Wealth s services in New Zealand are provided by MENZ. Macquarie Bank Limited (ABN , AFSL No ) ( MBL ) is a company incorporated in Australia and authorised under the Banking Act 1959 (Australia) to conduct banking business in Australia. None of MBL, MGL or MENZ is registered as a bank in New Zealand by the Reserve Bank of New Zealand under the Reserve Bank of New Zealand Act Apart from Macquarie Bank Limited ABN (MBL), any MGL subsidiary noted in this research,, is not an authorised deposit-taking institution for the purposes of the Banking Act 1959 (Australia) and that subsidiary s obligations do not represent deposits or other liabilities of MBL. MBL does not guarantee or otherwise provide assurance in respect of the obligations of that subsidiary, unless noted otherwise. This research contains general advice and does not take account of your objectives, financial situation or needs. Before acting on this general advice, you should consider the appropriateness of the advice having regard to your situation. We recommend you obtain financial, legal and taxation advice before making any financial investment decision. This research has been prepared for the use of the clients of the Macquarie Group and must not be copied, either in whole or in part, or distributed to any other person. If you are not the intended recipient, you must not use or disclose this research in any way. If you received it in error, please tell us immediately by return and delete the document. We do not guarantee the integrity of any s or attached files and are not responsible for any changes made to them by any other person. Nothing in this research shall be construed as a solicitation to buy or sell any security or product, or to engage in or refrain from engaging in any transaction. This research is based on information obtained from sources believed to be reliable, but the Macquarie Group does not make any representation or warranty that it is accurate, complete or up to date. We accept no obligation to correct or update the information or opinions in it. Opinions expressed are subject to change without notice. The Macquarie Group accepts no liability whatsoever for any direct, indirect, consequential or other loss arising from any use of this research and/or further communication in relation to this research. The Macquarie Group produces a variety of research products, recommendations contained in one type of research product may differ from recommendations contained in other types of research. The Macquarie Group has established and implemented a conflicts policy at group level, which may be revised and updated from time to time, pursuant to regulatory requirements; which sets out how we must seek to identify and manage all material conflicts of interest. The Macquarie Group, its officers and employees may have conflicting roles in the financial products referred to in this research and, as such, may effect transactions which are not consistent with the recommendations (if any) in this research. The Macquarie Group may receive fees, brokerage or commissions for acting in those capacities and the reader should assume that this is the case. The Macquarie Group s employees or officers may provide oral or written opinions to its clients which are contrary to the opinions expressed in this research. Important disclosure information regarding the subject companies covered in this report is available at Macquarie Group 24 March