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1Financing Activities 2Capital management 3At 30 June 2023, APA had 1,179,893,848 securities on issue. This is unchanged from 30 June 2022.4Debt facilities5At 30 June 2023, APA had $11,241 million of drawn debt facilities (compared with $11,146 million at 30 June 2022). APA’s debt 6portfolio has a broad spread of maturities across the global debt capital markets extending out to FY36, with an average 7maturity of drawn debt of 5.7 years. APA’s Treasury Policy requires interest rate hedging to minimise the potential impacts from 8adverse movements in interest rates. At year end, 100% of interest obligations on gross drawn borrowings was either hedged 9into or issued at fixed interest rates for varying periods extending out to 2036.10In FY23, APA raised AUD $1.6 billion of bilateral facility agreements from leading Australian and overseas banks, replacing 11$1.3 billion of the previous existing facilities. The new bilateral facility agreements comprise of 3-year, 4-year and 5-year tenors 12which remain undrawn at 30 June 2023. The purpose of the bilateral agreements is to provide access to facilities for general 13corporate purposes.14Interest costs15During the year, net finance costs decreased by $24 million or 5.0%, to $459 million (FY22: $483 million). The average interest 16rate1, including credit margins, applying to drawn debt was 4.43% for FY23 (FY22: 4.42%). The decrease is due to higher average 17cash balances and higher market interest rates facilitating higher interest income offsetting interest expense. Most of APA’s debt 18obligations were either issued at fixed rates or hedged at lower interest rates because they were issued in the lower interest rate 19environment prior to 2022.20Credit ratings21During the year, APA Infrastructure Limited (APAIL), the borrowing entity of APA, maintained two investment grade credit ratings:22• BBB long-term corporate credit rating (outlook Stable) assigned by Standard & Poor’s (S&P) in June 2009, and last confirmed 23on 31 January 2023.24• Baa2 long-term corporate credit rating (outlook Stable) assigned by Moody’s Investors Service (Moody’s) in April 2010, and 25last confirmed on 20 March 2023.26APA calculates the Funds From Operations (FFO) to Interest to be 3.3 times (FY22: 3.6 times) and FFO to Net Debt to be 10.6% 27for FY23 (FY22: 11.1%). 28FFO to Net Debt is the key quantitative measure used by S&P and Moody’s to assess APA’s creditworthiness and credit rating 2.29Capital management strategy30APA’s four-pillar capital management strategy positions APA for its next phase of growth. It comprises:31• Securityholder returns – focus on maximising available free cash flow and distributions32• Access to capital – maintain investment grade credit metrics and a diverse source of funding33• Capital allocation – make disciplined investments aligned to strategy and investment hurdles that drive long-term value34• Risk management – use a funding strategy focused on diversification, tenor and maturities, with Treasury policies that 35support strong liquidity and reduce volatility36Income tax37Income tax expense for FY23 of $190 million resulted in an effective income tax rate of 39.8%, compared with 40.9% in the 38previous year. The high effective rate is due to significant amortisation charges relating to contract intangibles acquired with 39the Wallumbilla Gladstone Pipeline. These are not tax deductible.40In FY23 APA has deducted $902 million of capital expenditure as part of the Government’s Temporary Full Expensing measures 41and as a result, the FY23 cash tax payable is $0. The effective cash tax paid rate is 0% for the FY23 income tax year, compared 42with 20.3% in FY22. 43APA has published a Tax Transparency Report, including a reconciliation of profit to income tax payable.44To assist APA securityholders who wish to submit their annual tax return before receiving their annual APA Tax Statement  45in mid- September, APA has an indicative online tax estimator tool which is available on the Investor page on APA’s website.461 The average interest rate is now calculated using period end FX and hedged rates to better reflect actual debt outstanding at period end (comparative 47year has also been restated). Based on the previous methodology, average interest was 4.59% in FY22.482 The credit metric ratios are now calculated to be more closely aligned with credit rating agency methodology (comparatives have also been restated). 49Based on the previous methodology, FFO/Net debt was 11.5% for the 12 months to 30 June 2022. FFO/Interest is unchanged at 3.6 times for the 5012 months to 30 June 2022.51OPERATING & FINANCIAL REVIEWSUSTAINABILITYGOVERNANCEAPA INFRASTRUCTURE TRUST FINANCIAL REPORTAPA INVESTMENT TRUST FINANCIAL REPORTADDITIONAL INFORMATION525753