MACQUARIE KOREA INFRASTRUCTURE FUND General Presentation May 2013
IMPORTANT NOTICE DISCLAIMER This presentation is not an offer or invitation for subscription or purchase of or a recommendation of securities. It does not take into account the investment objectives, financial situation and particular needs of the investor. Before making an investment in Macquarie Korea Infrastructure Fund ( MKIF ), the investor or prospective investor should consider whether such an investment is appropriate to their particular investment needs, objectives and financial circumstances and consult an investment adviser after reading investment prospectus, if necessary. MKIF and Macquarie Korea Asset Management Co., Ltd.( MKAM ) are not authorised deposit-taking institutions for the purposes of the Banking Act 1959 (Commonwealth of Australia) and their obligations do not represent deposits or other liabilities of Macquarie Bank Limited ABN 46 008 583 542 (MBL). MBL does not guarantee or otherwise provide assurance in respect of the obligations of MKIF/ MKAM. Information, including forecast financial information, in this presentation should not be considered as a recommendation in relation to holding, purchasing or selling shares, securities or other instruments in MKIF. Due care and attention has been used in the preparation of forecast information. However, actual results may vary from forecasts and any variation may be materially positive or negative. Forecasts by their very nature, are subject to uncertainty and contingencies many of which are outside the control of MKIF. Past performance and results are not a reliable indication of future performance. Based on the performance of the fund, loss of principal may incur and such losses will be vested to investors. This presentation is not an offer for sale of the securities of MKIF in the United States or in any jurisdiction where any offer, sale or solicitation in respect of such securities is not permitted. Securities may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended, or in any jurisdiction where such offer or sale is not permitted. MKIF does not intend to register any portion of any contemplated offering in the United States or to conduct a public offering of securities in the United States Not for distribution in the United States or in any jurisdiction where any offer, sale or solicitation in respect of the contemplated securities is not permitted. This document is only being distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the Order ) or (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as relevant persons ). Any securities will only be available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire any securities will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents. FORWARD LOOKING STATEMENT This presentation contains forward-looking statements, in particular, under the heading Business Overview. All forward-looking statements are our management s present expectations of future events and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. 2
CONTENTS 1 Key Results Highlights 5 Underlying asset performance 7 Financial results 6 Newly opened assets 8 2 Business Overview MKIF history 10 Long-term concession period 15 Share information 11 Government revenue support 16 Corporate structure 12 Debt profile 17 Portfolio 13 Distribution 18 Landmark assets 14 Conclusion 19 3 Appendices Financial position statements 21 Minimum revenue guarantee summary 27 Profit and loss statements 22 Management fees 28 Cashflow statements 23 Macquarie Funds Group 29 Busan New Port Phase 2-3 24 Macquarie worldwide investments 30 Portfolio Operating performance by asset 25 26 Macquarie Infrastructure and real assets (MIRA) s competitive advantage MIRA infrastructure overview 31 32 3
Key Results 1
HIGHLIGHTS Solid financial and traffic results - On a non-consolidated basis, MKIF s revenue and net income decreased by 0.9% and 0.7%, respectively, compared to the previous corresponding period ( pcp ), mainly due to the decrease in loan interest resulting from the divestment of Daegu 4th Beltway East completed on 27 June 2012 - Underlying traffic volume and revenue grew by 2.6% and 7.2%, respectively, on pcp 1 - Weighted average daily traffic for the four newly opened assets 2 reached 73%³ of the Concession Agreement Forecasts Outlook on Busan New Port, 2-3, remains cautiously optimistic - Total volume for the Quarter was approximately 0.3 million TEUs, largely in line with the management expectation adjusted for the seasonality, and the estimated volume for the year remains at 1.6 million TEUs - Volume migration from the Busan Old Port continues with the New Port s market share of container volume in Busan area reaching 60% as of March 2013 - Overall, Busan s volume grew by slightly over 2.8% in the Quarter compared to pcp - Cash management remains priority during the ramp-up phase Remains financially healthy with a conservative debt position - Proportional cash balance of KRW 221.1 billion including MKIF cash of KRW 25.8 billion - Continued de-gearing of asset level debt with average maturity of 8.4 years - No external debt refinancing required until May 2016 - Proportionately consolidated gearing 4 of 41% with 65% of interest obligations fixed 5 - MKIF domestic credit rating remains AA (Stable) 6 1. On a weighted average basis based on revenue size of each asset and the MKIF s equity interest in each concession company 2. Yongin-Seoul Expressway, Seoul-Chuncheon Expressway, Seoul Subway Line 9 and Incheon Grand Bridge 3. On a weighted average basis based on total commitment amount and average daily traffic 4. Gearing = Proportionately consolidated MKIF Net Debt / (Proportionately consolidated MKIF Net Debt + MKIF market capital (3-month average)) 5. Hedging (Fixed) = Proportionately consolidated MKIF net debt adjusted for fixed debt / Proportionately consolidated MKIF net debt 6. Rated by NICE Investors Service on 29 March 2013 5
FINANCIAL RESULTS Non-consolidated financial information (Unit: KRW mn) FY2012 1Q 2013 1Q 2012 % change Revenue 205,749 42,585 42,968 0.9% Interest income 171,912 42,585 42,968 Gain on sale of investment 33,151 1 - - Other income 686 - - Expense 51,626 12,880 13,053 Management fee 27,786 7,577 6,434 Interest expense 19,828 4,698 6,007 Other expense 4,012 605 612 Net income 154,123 29,705 29,915 0.7% Normalised Net income 120,972 29,705 29,915 1. One-off gain from the sale of equity in Daegu 4th Expressway East 6
UNDERLYING ASSET PERFORMANCE TRAFFIC VOLUME GROWTH 1 2.6% TRAFFIC REVENUE GROWTH 1 7.2% PORTFOLIO AGE 2 6.6 years TRAFFIC PERFORMANCE 1Q 2013 OVER 1Q 2012 Average daily traffic volume Average daily traffic revenue % of MKIF Portfolio Vehicles/day % change on pcp KRW thousand/day % change on pcp Incheon International Airport Expressway 6.6% 49,686 2.1% 328,318 4.4% Baekyang Tunnel 0.2% 70,350 2.2% 50,382 1.9% Gwangju Second Beltway, Section 3-1 4.9% 31,571 (11.0%) 33,336 6.5% Gwangju Second Beltway, Section 1 11.4% 37,053 4.9% 39,011 6.5% Woomyunsan Tunnel 1.2% 23,769 (3.4% ) 51,360 (3.6%) Cheonan-Nonsan Expressway 16.1% 41,446 2.5% 345,004 6.4% Soojungsan Tunnel 6.5% 42,198 2.2% 30,763 1.6% Machang Bridge 6.8% 14,634 (1.7%) 32,100 19.3% Yongin-Seoul Expressway 8.1% 65,103 5.2% 116,624 16.8% Seoul-Chuncheon Expressway 8.2% 33,566 (1.2%) 212,040 2.2% Seoul Subway Line 9 Section1 4.5% 235,632 11.4% 189,998 19.8% Incheon Grand Bridge 9.9% 27,784 6.1% 145,315 9.5% Weighted average growth rate 2.6% 7.2% 1. On a weighted average basis based on revenue size of each asset and the MKIF s equity interest in each concession company 2. Operation period of each concession company on a weighted average basis based on respective commitment amount 7
NEWLY OPENED ASSETS 1 % OF PORTFOLIO 31% % OF CA FORECAST TRAFFIC VOLUME 2 73% TRAFFIC VOLUME GROWTH 3 5% 1Q 2013 TRAFFIC PERFORMANCE QUARTERLY TREND OF TRAFFIC VOLUME Asset Yongin-Seoul Expressway (YSE) Traffic volume Operation growth on commencement pcp Traffic revenue growth on pcp % of CA forecast traffic volume 01-Jul-09 5.2% 16.8% 71.5% Vehicles/day 80,000 70,000 60,000 50,000 Initial boarding/day 250,000 200,000 150,000 Seoul-Chuncheon Expressway (SCE) Seoul Subway Line 9, Section 1 (SM9) Incheon Grand Bridge (IGB) 15-Jul-09 (1.2%) 2.2% 67.5% 24-Jul-09 11.4% 19.8% 105.6% 19-Oct-09 6.1% 9.5% 62.5% 40,000 30,000 20,000 10,000 0 2009 Q4 2010 Q1 Q2 Q3 Q4 2011 Q1 Q2 Q3 Q4 2012 Q1 Q2 Q3 Q4 2013 Q1 100,000 50,000 - YSE (LHS) SCE (LHS) IGB (LHS) SM9 (RHS) 1. Transportation assets opened since 2009 2. During 1 st quarter 2013, on a weighted average basis based on total commitment amount and average daily traffic 3. Weighted average daily traffic during 1 st quarter 2013 over 1 st quarter 2012 8
BUSINESS OVERVIEW 2
MKIF HISTORY Promulgated PPI Act A key component in Korean government s initiative to expand Infrastructure in Korea, introduced strong government supports to private participation in investment Asian economic crisis Identified the attractive opportunities available Active fund raising and deal participation Market Leader Late 90s 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Establishment Capital raising of KRW 1.26tn until the listing Captured attractive asset portfolio underpinned by significant government revenue protections Listing Capital raising of KRW 582.5 bn through IPO Dual listed on KRX and LSE MANDATE To invest in infrastructure assets in Korea as defined under PPI Act 1 OBJECTIVE To create value through active capital/portfolio management and to provide stable distributions INVESTMENTS 13 assets, KRW1.66tn (11 toll roads, 1 subway &1 port) ASSET MANAGER Macquarie Korea Asset Management Co., Ltd. 2 1. Private Participation in Infrastructure Act (PPI Act) defines infrastructure sectors including roads, railways, ports, energy, airport, communication, water resources, etc. 2. A wholly owned subsidiary of Macquarie Infrastructure and Real Assets (Europe) Limited, a member of Macquarie Group (voting share basis) 10
SHARE INFORMATION SHAREHOLDER BASE 4 International investors 20.8% EXCHANGE KRX -088980.KS / LSE MKIF.LI Domestic institutions 22.2% 57.0% MARKET CAP 1 KRW 2.2 trillion (US$ 2.0 billion) 2 Domestic Retail DAILY VOLUME 3 618,356 shares (US$ 3.7 million) 2 TOP SHAREHOLDERS 5 1. Hanwha Life Insurance 13.1% 2. Shinhan Financial Group 7.2% 3. Newton Investment Management 7.1% 4. Kyobo Life Insurance 6.1% * Macquarie Group 3.8% 1. Based on the share price as of 31 March 2013 2. Calculated based on the exchange rate as at 31 March 2013 3. 3-month average daily turnover as of 31 March 2013 4. As at 31 December 2012 5. Source: Financial Supervisory Service (Over 5% holders and MKAM s affiliates as of 31 March 2013) 11
CORPORATE STRUCTURE As of 31 March 2013 Active manager of the invested companies through management participation Corporate tax exempted when MKIF distributes more than 90% of its profits available for dividends MKIF Tax through vehicle Management Agreement MKAM External fund manager Managed under Macquarie s global policies and procedures Receives: Interest income Dividend Invests in the form of: Equity Subordinated debt Senior debt OPERATING 13 assets Toll roads (11) Subway (1) Port (1) 12
PORTFOLIO 1 Portfolio Composition by Asset Portfolio Composition by Phase and Type As of 31 March 2013 9.9% 15.6% Seoul Subway Port Line 9, Section 1 15.6% 4.5% Subway 4.5% Incheon Grand Bridge Seoul- Chuncheon Expressway Busan New Port Phase 2-3 Baekyang Tunnel 0.2% Gwangju 2 nd Beltway, Section 1 11.4% 6.6% Incheon International Airport Expressway 6.5% Soojungsan Tunnel Toll-road 79.9% 16.1% 8.2% Cheonan-Nonsan Expressway Yongin-Seoul Expressway Machang 8.1% Bridge Woomyunsan 6.8% 4.9% 1.2% Tunnel Gwangju 2 nd Beltway, Section 3-1 Senior debt 14.3% Growth 35.4% Mature 11.6% Sub debt 51.5% Ramp up 53.0% Equity 34.2% Well balanced and diversified into essential infrastructure assets Predominantly toll-roads Relatively young portfolio with average age of 6.6 years Ratio of central and local government involvement is 65:35 1. Based on commitment amount 13
LANDMARK ASSETS 14
LONG-TERM CONCESSION PERIOD CONCESSION TERM VS. GOVERNMENT REVENUE SUPPORT PERIOD As of 31 March 2013 Relevant Authority (C) Central government (L) Local government Revenue Support 1,2 Concession Term 3 Weighted Average Revenue Weighted Average Present Early Termination Support Concession Term Support 11 years 23 years 1,4 (L)Baekyang Tunnel (L)Kwangju 2nd Beltway, Section 1 (C)Incheon International Airport Expressway (L)Soojungsan Tunnel (C)Cheonan Nonsan Expressway (L)Woomyunsan Tunnel (L)Kwangju 2nd Beltway, Section 3 (L)Machang Bridge (C)Yongin-Seoul Expressway (C)Seoul Chuncheon Expressway (L)Seoul Subway Line 9, Section 1 (C)Incheon Grand Bridge (C)Busan New Port Phase 2-3 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 1. Revenue support and termination payment provisions vary for each concession 2. Revenue support until at least 2019 with weighted average support remaining of about 11 years (excluding Busan New Port Phase 2-3) 3. Concessions last at least until 2025 with weighted average life remaining of about 23 years 4. Concession companies have the right to receive payments if the relevant concession agreement is terminated prior to expiration of the concession term, including termination due to events attributable to the concession company or the government body or for events of force majeure 15
GOVERNMENT REVENUE SUPPORT MINIMUM REVENUE SUPPORT MECHANISM Revenue Relevant government authorities extract the excess portion Government bodies compensate the shortfall Conceptual Diagram Actual Revenue Revenue Cap 1 Forecast Revenues 2 MRG 1 MRG and Revenue support for 12 of MKIF s 13 assets 3 Inflation-linked revenue support MRG line tracking the forecast revenue line (typically 80~90% below forecast revenue) Korea sovereign rating as of March 2013: S&P : A+ (Stable) Moody s : AA3 (Stable) Details for the government revenue support by each asset attached Slide 27 1. MRG and revenue caps vary across assets 2. Forecast revenues set out in the Concession Agreement 3. In three of 12 MRG assets, no revenue guarantee applies if actual revenue are below 50% of the toll revenue forecast 16
DEBT PROFILE As of 31 March 2013 CASH 1 KRW 221.1bn (KRW bn) OUTSTANDING DEBT BALANCE 5 1,500 AMORTISING MATURITY 2 8.4 years 1,200 900 600 GEARING 3 41% 300 2014 2019 2024 2029 2034 2039 2044 INTEREST RATE HEDGE 4 65% until end of Mar 2014 1. Proportionately consolidated cash balance (including MKIF cash balance of KRW 25.8bn) 2. Weighted average amortising maturity of the underlying asset level external debt 3. Gearing = Proportionately consolidated MKIF Net Debt / (Proportionately consolidated MKIF Net Debt + MKIF market capital (3-month average)) 4. Hedging (Fixed) = Proportionately consolidated MKIF net debt adjusted for fixed debt / Proportionately consolidated MKIF net debt 5. Outstanding debt balance based on amortisation schedule of asset level external debt on a proportionate equity shareholding basis. Excludes MKIF level corporate loan balance 17
DISTRIBUTION DECLARATION/ PAYMENT Semi-annual: As end of June and December DISTRIBUTION FLOOR Higher of taxable income or 100% of distributable accounting income to maintain tax exempt status 2012 DISTRIBUTION KRW 480 per share 1 CASH YIELD Circa 7.0% 2 DISTRIBUTION HISTORY ( PER SHARE, POST-LISTING ) 600 582 Second Half First Half 500 400 300 200 420 440 220 220 122 230 Stock distribution 390 160 344 184 480 330 260 165 100 0 200 220 230 230 160 165 220 2006 2007 2008 2009 2010 2011 2012 1. Composed of (i) a dividend of KRW465 per share and (ii) a distribution in excess of profits of KRW15 per share (Deduction from the retained earnings). Total of KRW480 per share will be accounted as distribution income in calculating dividend income tax and tax payable under Korean law. Investors are advised to consult their own tax advisor for the appropriate tax treatment of the distribution 2. Based on the share price as of 31 December 2012 and 2012 distribution 18
CONCLUSION REDUCED CAPITAL RISKS Minimum Revenue Guarantee (MRG) provided to12 out 13 underlying assets Underlying revenues are fully inflation-adjusted EMBEDDED GROWTH POTENTIAL Real and inflation-linked natural underlying revenue growth Capital restructuring opportunities Re-rating of assets Growth through new investments HEALTHY FINANCIALS Sound balance sheet position Conservative gearing with solid debt profile Stability of operating cashflows supported by predictable cost basis MACQUARIE MANAGED FUND Global leader managing A$91 billion 1 of infrastructure assets under management across 23 countries Management fees aligned with shareholders interests STRONG MARKET PRESENCE #1 infrastructure management and advisory platform Unrivalled brand recognition and track record in the infrastructure space in Korea 1. Based on proportionate enterprise value, calculated as proportionate net debt and equity value at 30 June 2012 for the majority of assets 19
APPENDICES 3
FINANCIAL POSITION STATEMENTS Non-consolidated as at 31 March 2013 and 31 December 2012 (Unit: KRW mn) 31 March 2013 31 December 2012 Assets Invested Assets 1,694,304 1,691,108 Cash & deposits 25,822 20,815 Loans 1,094,231 1,096,042 Equity securities 574,251 574,251 Others 386,191 364,175 Interest receivable 375,387 351,646 Other receivables 2,947 4,458 Deferred costs, net 7,857 8,071 CAPITAL INJECTION INTO MKIF INVESTMENTS Asset Item 1Q 2013 Soojungsan Tunnel Senior Debt (1,799) Total (1,799) * Excludes Baekyang Tunnel loan amortisation of KRW 12mil Total Assets 2,080,495 2,055,283 Liabilities Accounts Payable 1 1 Management fee payable 7,577 7,455 Long-term debt 166,419 84,944 Bonds 249,200 249,156 Other liabilities 1,579 1,534 Total Liabilities 424,776 343,090 Shareholders Equity Share Capital 1,670,986 1,670,986 Retained Earnings (15,267) 41,207 Total Shareholders Equity 1,655,719 1,712,193 Total Liabilities and Shareholders Equity 2,080,495 2,055,283 21
PROFIT AND LOSS STATEMENTS Non-consolidated 3 months to 31 March 2013 (Unit: KRW mn) 1Q 2013 1Q 2012 Revenue 42,585 42,968 Interest Income 42,585 42,968 Gain (Loss) on sale of investment - - Expenses 12,880 13,053 Management fees 7,577 6,434 Custodian fees 82 83 Administrator fees 51 52 Interest expenses 4,698 6,007 Other expenses 472 477 Net Profits 29,705 29,915 22
CASHFLOW STATEMENTS Non-consolidated - 12 Months to 31 December 2012 (Unit: KRW mn) 2012 2011 Cashflows from operating activities: Cash inflows from operating activities 200,405 133,130 Sale of investment 91,159 20,550 Collection of other loans receivable 45,827 14,530 Interest and other income 63,419 98,050 Cash outflows from operating activities: (33,869) (100,096) Investments (4,720) (74,355) Fees and expenses (29,148) (25,741) Net cash provided by (used in) operating activities 166,537 33,034 Cashflows from financing activities: Repayment of long-term debt (180,000) (250,000) Drawdown from long-term debt 74,500 55,443 Proceeds from Bond - 250,000 Distributions paid (127,612) (115,679) Interest expense (13,403) (6,552) Borrowing related costs (100) (3,592) Bond issue cost - (1,126) Net cash provided by (used in) financing activities (246,615) (71,506) Net increase (decrease) in cash and deposits (80,078) (38,472) Cash and deposits at beginning of the period 100,893 139,365 Cash and deposits at end of the period 20,815 100,893 23
BUSAN NEW PORT PHASE 2-3 Construction completed on time and on budget, commencing operation in January 2012 The key operational highlights for 1Q 2013 include: - Total volume for the Quarter was approximately 0.3 million TEUs, largely in line with the management expectation adjusted for the seasonality, and the estimated volume for the year remains at 1.6 million TEUs - Volume migration from the Busan Old Port continues with the New Port s market share of container volume in Busan area reaching 60% as of March 2013 - Overall, Busan s volume grew by slightly over 2.8% in the Quarter compared to pcp - Cash management remains priority during the ramp-up phase Project Company Relevant Authority Concession Term BNCT Co., Ltd. Ministry of Oceans and Fisheries 29 years 3 months from completion of construction (24 Dec 2011 23 Mar 2041) Construction Period 48 months (Dec 2007 ~ Dec 2011) Operation commencement 2 January 2012 MKIF Investment % of MKIF Portfolio 15.6% Total of KRW 259.4bn - 30% Equity ( KRW 66.4bn) - 100% Sub debt ( KRW 193bn) Gaduk-do, Busan City 24
PORTFOLIO 1 As of 31 March 2013 MKIF COMMITMENT AND DEBT INTEREST RATE (KRW bn, %) Name Abbrv Equity Ownership(%) Subordinated debt Interest rate(%) Senior debt Interest rate (%) Total Baekyang Tunnel BYTL 1.2 100.0-1.5 15.0 2.7 Gwangju Second Beltway, Section 1 KBICL 13.1 100.0 35.2 2 20.0 142.0 10.0 190.3 Incheon International Airport Expressway NAHC 58.2 24.1 51.7 13.9-109.9 Soojungsan Tunnel SICL 47.1 100.0 19.3 20.0 41.4 8.5 107.8 Cheonan-Nonsan Expressway CNEC 87.8 60.0 182.2 20.0-270.0 Woomyunsan Tunnel WIC 10.7 36.0 9.6 20.0-20.3 Gwangju Second Beltway, Section 3-1 KRRC 28.9 75.0-52.1 7.85 81.0 Machang Bridge MCB 33.8 70.0 79.0 11.4-112.8 Yongin-Seoul Expressway YSE 57.8 35.0 77.0 15.0-134.8 Seoul-Chuncheon Expressway SCE 48.6 15.0 87.4 11.6-136.0 Seoul Subway Line 9 Section 1 SM9 40.9 24.5 33.5 15.0-74.4 Incheon Grand Bridge IGB 74.5 41.0 89.4 9.3-163.9 Busan New Port Phase 2-3 BNP 66.4 30.0 193.0 12.0-259.4 Total 569.0 857.3 237.0 1,663.3 Percentage(%) 34.2% 51.5% 14.3% 100% 1. Based on commitment amount 2. Includes KRW 3.2bn working capital facility 25
OPERATING PERFORMANCE BY ASSET 1 12 Months to 31 December 2012 2012 2011 (Unit: KRW million) Assets Operating Revenue 2 OPEX EBITDA Net Debt 3 EBITDA margin Net Debt to EBITDA Operating Revenue 2 OPEX EBITDA Net Debt 3 EBITDA margin Net Debt to EBITDA Gwangju Second Beltway, Section 1 4 14,552 (4,862) 9,690 (1,606) 67% (0.2x) 30,553 (4,431) 26,122 (1,584) 85% (0.1x) Gwangju Second Beltway, Section 3-1 18,331 (3,965) 14,367 (1,775) 78% (0.1x) 17,131 (5,798) 11,333 (2,279) 66% (0.2x) Soojungsan Tunnel 4 11,417 (3,909) 7,509 (13,362) 66% (1.8x) 23,966 (3,740) 20,226 (16,219) 84% (0.8x) Baekyang Tunnel 4 21,396 (4,229) 17,166 136,005 80% 7.9x 23,259 (3,722) 19,537 142,812 84% 7.3x Incheon International Airport Expressway 199,138 (21,008) 178,130 152,424 89% 0.9x 187,868 (19,060) 168,808 237,679 90% 1.4x Cheonan-Nonsan Expressway 186,395 (25,721) 160,675 96,612 86% 0.6x 180,093 (23,936) 156,157 185,402 87% 1.2x Woomyunsan Tunnel 4 19,869 (3,966) 15,903 76,640 80% 4.8x 21,015 (3,787) 17,228 86,162 82% 5.0x Machang Bridge 23,144 (5,047) 18,098 226,747 78% 12.5x 23,178 (4,495) 18,684 221,412 81% 11.9x Yongin-Seoul Expressway 41,502 (10,393) 31,109 357,281 75% 11.5x 37,161 (9,673) 27,487 351,953 74% 12.8x Seoul-Chuncheon Expressway 106,717 (20,607) 86,110 810,605 81% 11.8x 106,608 (30,402) 76,206 831,035 71% 10.9x Seoul Subway Line 9 Section 1 121,339 (81,337) 40,002 472,127 33% 9.4x 93,308 (76,538) 16,771 442,397 18% 26.4x Incheon Grand Bridge 68,711 (15,802) 52,909 576,818 77% 10.9x 59,743 (16,265) 43,478 584,276 73% 13.4x Busan New Port Phase 2-3 5 23,429 (41,024) (17,596) (475,628) (75%) (27.0x) N/A N/A N/A N/A N/A N/A Proportionate average 6 332,729 (74,563) 258,166 999,646 78% 3.9x 344,102 (73,073) 271,030 1,073,609 79% 4.0x 1. Management estimated, unaudited figures. Actual results may vary 2. Revenue compensation and other compensations from the relevant government authority are reflected on cash basis 3. Excludes Shareholders loans 4. All or part of MRG portion of operating revenue receivable for 2011 were not paid, resulting in significantly decreased operating revenue compared to prior year 5. Busan New Port Phase 2-3 commenced operation 2 January 2012. Negative Net Debt to EBITDA margin reflects cash deficiency due to ramp-up period 6. On a proportionate average basis based on MKIF s equity interest in each concession company. Daegu 4th Beltway East (divested in June 2012) and Busan New Port Phase 2-3 (operation commenced in January 2012) excluded from the proportionate average for FY 2011 and FY 2012 26
MINIMUM REVENUE GUARANTEE SUMMARY Asset Relevant Authority Concession Term Concession Term Remaining Revenue Guarantee Duration Revenue Guarantee Duration Remaining Revenue Guarantee Threshold 1 Revenue Cap Threshold 1,2 As of 31 March 2013 Remarks Baekyang Tunnel Gwangju 2nd Beltway, Section 1 Busan Metropolitan City Gwangju Metropolitan City 25 12 25 12 90% 110% 28 16 28 16 85% 115% Incheon International Airport Expressway MOLIT 7 30 18 20 8 80% 110% Soojungsan Tunnel 4 Busan Metropolitan City 25 14 25 14 90% 110% Cheonan-Nonsan Expressway MOLIT 30 20 20 10 82% 110% Woomyunsan Tunnel Gwangju 2nd Beltway, Section 3-1 Seoul Metropolitan City Gwangju Metropolitan City 30 21 30 21 79% 3 110% 30 22 30 22 90% 110% Partial revenue sharing in excess of 80% to 110% level Partial revenue sharing in excess of 82% to 110% level All revenue sharing excess of 79% to 85% and excess 110%/ Partial revenue sharing excess of 90% to 110% Machang Bridge GSND 8 30 25 30 25 75.78% 120% Yongin-Seoul Expressway 5 MOLIT 30 26 10 6 70% 130% Seoul-Chuncheon Expressway 5 MOLIT 30 26 15 11 80%/70%/60% 120%/130%/140% Change by every five year Seoul Subway Line 9, Section 1 5 Seoul Metropolitan City 30 26 15 11 90%/80%/70% 110%/120%/130% Change by every five year Incheon Grand Bridge MOLIT 30 27 15 12 80% 120% Busan New Port Phase 2-3 MOF 9 29 28 N/A N/A Weighted average 6 29 23 17 11 1. % of annual concession agreement projected revenue 2. Relevant government authorities are entitled to receive the portion exceeding the threshold 3. 79% up to 2023 and 78% from 2024 to 2034 4. In toll revenue below 90%, Busan City Government is obliged to compensate 91.5% of the shortfall amount 5. No revenue guarantee applies if actual revenue are below 50 % of the toll revenue forecast 6. Weighted by investment commitment 7. MOLIT (Ministry of Land, Infrastructure and Transport) 8. GSND (Gyeongsang Namdo (Provincial) government) 9. MOF (Ministry of Oceans and Fisheries) 27
MANAGEMENT FEES Manager s interests aligned with shareholders No performance no performance fees Underperformance carried forward Management fee calculated quarterly basis as: Base Fee 1.25% pa falling to 1.10% 1 of Net Investment Value (NIV) of MKIF; plus (+) 1.15% pa falling to 1.05% 1 per annum of Commitment 2 of MKIF Performance Fee 20% sharing in cumulative total returns 3 over 8% pa Net Investment Value for any quarter equals: The average market capitalisation of MKIF over all trading days in each calculation; plus (+) The amount of any external borrowings by MKIF; less (-) Cash or cash equivalent held by MKIF 1. For NIV +Commitment in excess of KRW 1.5 trillion 2. Commitments means all amounts that MKIF has firmly committed for future investment contributions 3. Total return to shareholders reflects both distributions from MKIF to its shareholders and share price performance over each calculation 28
MACQUARIE FUNDS GROUP Macquarie Infrastructure and Real Assets ( MIRA ) Macquarie Investment Management ( MIM ) Macquarie Specialised Investment Solutions ( MSIS ) Alternative asset management including: Infrastructure Real Estate Agriculture Energy Securities investment management across: Fixed interest and currencies Equities, including infrastructure securities Private markets Hedge funds Multi-asset allocation solutions Best of breed external managers Operations Legal and Compliance Distribution Fund and equity-based solutions including: Fund linked products Capital protected investments Retirement and annuity solutions Agriculture Infrastructure debt A$334bn 20 ~1,400 AUM 1 Countries worldwide 1 Staff 1 1. All numbers as at 31 December 2012 29
MACQUARIE WORLDWIDE INVESTMENTS ~110 portfolio businesses, ~300 properties and ~3.5 million hectares of farmland 1 UK Bristol Airport Airwave Arqiva Red Bee Media CLP Envirogas (MEIF Renewables) Energy Power Resources (MEIF Renewables) Thames Water M6 Toll Condor Group (ferry services) Moto (motorway services) National Car Parks Wightlink (ferry services) Baglan Bay Power Station Belgium Brussels Airport Denmark Copenhagen Airports France Pisto SAS (oil storage and distribution) EPR France (MEIF Renewables, wind farm) RES (MEIF Renewables, wind farm) Trois Sources & Lomont Windfarms Compteurs Farnier (Techem, water metering) Autoroutes Paris-Rhin- Rhône Germany TanQuid (tank storage business) GWE (Techem) Techem (submetering) Thyssengas Open Grid Europe Warnow Tunnel Nigeria Lekki Concession Company Airports Spain Asset Energia Solar (MEIF Renewables) Solpex Energia Solar (MEIF Renewables) Itevelesa (vehicle inspections) Communications South Africa Kelvin Power Station Umoya Energy Cookhouse Kathu Bakwena Platinum Corridor N3 Toll Concessions Trans African Concessions Energy Czech Republic Ceske Radiokomunikace Poland DCT Gdansk (container terminal) TanQuid (tank storage business) Sweden EPR Sweden (MEIF Renewables, wind farm) Varmevarden Arlanda Express Russia Brunswick Rail GSR Energy Investments Russian Towers OGK-5 United Arab Emirates ICAD Effluent Treatment Plant Al Ain Industrial City Industrial City of Abu Dhabi Waste Renewable Energy Canada Autoroute 25 Fraser Surrey Docks Halterm Limited (port) Mexico Decarred (highways) Mareña Renovables (wind farms) Telecommunication Towers Portfolio Concesionaria Universidad Politécnica Macquarie Mexico REIT Brazil Cruzeiro do Sul Grãos (1 farm) USA AMC REIT Chicago Skyway Dulles Greenway Indiana Toll Road Midtown Tunnel AIR-serv (tyre inflation) Harley Marine Services Icon Parking Penn Terminals Smarte Carte Airport Services (fixed base operations) Leaf River Gas Storage India Viom Networks Adhunik Power and Natural Resources MB Power (Madhya Pradesh) Soham Renewable Energy GMR Airports (Delhi and Hyderabad airports) Utilities Puerto Rico (USA) Global Tower Partners Roads & Rail Global Tower Partners Aquarion Company Puget Energy District Energy Duquesne Light Hawaii Gas Broadrock Renewables International-Matex Tank Terminals Waste Industries WCA Waste Total Terminals International (Hanjin Pacific Corporation) China Hua Nan Expressway Changshu Xinghua Port Star King (China) Food Group MWREF (Retail Malls) Shenyang Water Treatment Co. Zhejiang Wanna Environment Protection Longtan Tianyu Terminal Plaza 353 Other Transport Services Real Estate Japan Hanjin Pacific Corporation (Tokyo, Osaka) South Korea C&M (Cable TV) North East Chemical Youngduk Wind Power Kangnam City Gas Baekyang Tunnel Cheonan-Nonsan Expressway Gwangju 2 nd Beltway Section 1 Gwangju 2 nd Beltway Section 3-1 Incheon Grand Bridge Incheon International Airport Expressway Machang Bridge Seoul Chuncheon Expressway Soojungsan Tunnel Woomyunsan Tunnel Yongin-Seoul Expressway Seoul Subway Line 9, Section 1 Busan New Port Phase 2-3 Hanjin Pacific Corporation (ports) Macquarie NPS REIT Macquarie NPS REIT No. 2 Australia Hobart International Airport 3P Learning Regis Group (aged care) MREEFs Paraway Pastoral (17 farms) Lawson Grains (2 farms) New Zealand Retirement Care New Zealand Taiwan Taiwan Broadband Communications Miaoli Windpower Hanjin Pacific Corporation (Kaohsiung) Agriculture 1. As at 31 December 2012. Represents portfolio businesses which Macquarie Infrastructure and Real Assets manages on behalf of investors with various direct percentage stakes held in each. Portfolio businesses shown on the map are representative and not exhaustive. In some instances they represent the operations of a single business where it has operations across different countries Other Real Assets 30
MACQUARIE INFRASTRUCTURE AND REAL ASSETS (MIRA) S COMPETITIVE ADVANTAGE A global leader in managing infrastructure and real assets for over 17 years EXTENSIVE EXPERIENCE MIRA has over 17 years global infrastructure investment experience A$97 billion¹ of assets under management across 25 countries PROPRIETARY INVESTMENT FLOW Access to the proprietary investment sourcing capability of the Macquarie Group STRONG ALIGNMENT Macquarie and staff investment of ~A$1.9 billion 2 in MIRA-managed funds EFFECTIVE ASSET MANAGEMENT Local expertise, knowledge and relationships across 28 offices globally 1. Based on proportionate enterprise value, calculated as proportionate net debt and equity value at 30 June 2012 for the majority of assets 2. Staff investment is ~A$0.2 billion. As at 30 September 2012 31
MIRA INFRASTRUCTURE OVERVIEW 1996 December 2012 Funds / Vehicles Unlisted No. - 28 Listed No. 2 4 Portfolio Businesses No. 4 98 Assets under Management A$b 1.6 91 1 Equity under Management Unlisted A$b - 30 2 Listed A$b 0.6 5 2 1. Based on proportionate enterprise value, calculated as proportionate net debt and equity value at 30 June 2012 for the majority of assets 2. Listed funds market capitalisation plus fully underwritten or committed future capital raisings. Unlisted funds committed capital less any called capital returned to investors. Invested capital for other MIRA businesses. For jointly managed funds, amount is representative of Macquarie s economic ownership of the JV manager. Adjustments have been made where MIRA managed funds have invested in other MIRA managed funds 32