MACQUARIE INFRASTRUCTURE GROUP. Results Presentation 14 August 2000

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1 MACQUARIE INFRASTRUCTURE GROUP Results Presentation 14 August 2000

2 Presentation Outline MIG s financial results for 2000 Electronic tolling in Sydney Conclusion

3 Second Half Overview Failure to complete M4 acquisition Listing of Horizon Energy Financial close on Rostock Good growth in operational cash flows Financial close on Ministry of Defence Within 8 months of the 90 million Kvaerner acquisition, cash return of 15 million (pre-tax) has been achieved Non-completion of Infratil takeover Net profit for six months to 30 June 2000 = $97.3 million

4 Post Balance Date Events In principle agreement on global settlement on Tagus Crossing extended concession to 2030 Sale of 10.45% holding in Airport Motorway by Leighton at 29% premium to MIG s December 1999 valuation. MIG to acquire 2.95% Appointment of two additional directors to MIIML Board - David Mortimer & Nicholas Moore

5 Sale of Eastern Distributor Stake Leighton has decided to sell its remaining stake of 10.45% A 7.5% stake will be purchased by Develop Australia Fund (which also has stakes in the M5 & M4) MIG will purchase the remainder % - taking its total holding to 71.35% The sale price was the equivalent of $2.57 per $1 of initial equity The sale price represents a 29% premium to MIG s 31 December 1999 valuation MIG s voting shares will increase from 50% to 58.9% and will then increase to 71.35% on 30 April 2003

6 Summary Results Result Change on 1999 Net Profit Before Tax $106.2m (53%) Net Profit After Tax $44.2m (75%) Revenue from Asset Reval s $53.3m (75%) Non-Revaluation Revenue $73.1m 181% Net Assets at 30/6/00 $1,215m 54% NTA per unit at 30/6/00 $1.38 (2%) Cash & other Current Assets at 30/6/00 $338.9m 92%

7 P & L Result INCOME $m $m - Revaluations Investment Income Interest Income Management Fees Other Income TOTAL INCOME Management Fees (9.7) (13.3) - Other Expenses (10.5) (3.9) TOTAL EXPENSES (20.2) (17.2) Income Tax (62.0) (45.4) NET OPERATING RESULT

8 Assets at 30 June 2000 Asset Owner -ship % Value A$m Prop % Eastern Distributor M5 Motorway Kvaerner Toll Roads na City Link Hills Motorway Other Assets na Loy Yang Rostock Toll Road Cash & Receivables TOTAL ASSETS Liabilities NET ASSETS NTA per unit $1.38

9 Kvaerner Assets Asset MIG Share Description Midland Expressway, England 50% Pre Financial Close Toll Road Tagus Crossing, Portugal 24.8% Operating Toll Bridges Yorkshire Link, England 50% Operational Shadow Toll Road Dartford River Crossings, London Na# Operational Toll Bridges/Tunnel Ministry Of Defence HQ, London Queen Elizabeth Hospital, London Dundee Energy Plant, Scotland 26.7% Under Construction PFI Building 50% Under Construction PFI Building 50%* Operational Waste Burning Incinerator * Economic interest # service agreement

10 Change in Asset Values From 31/12/99 Asset Book Value At 30-Jun-00 $m Book Value At 31 Dec 99 $m Change $m Airport Motorway Interlink Roads Kvaerner Toll Roads Transurban Hills Motorway Other Assets Loy Yang (43.8) Rostock 9.2 na na SUB TOTAL 1, Cash, Receivables na TOTAL ASSETS 1, ,

11 Discount Rates* Used for 30 June 2000 Asset Risk Premium Airport Motorway (implied) 3.6% Interlink Roads (3%-existing; 5%-new) 3.3% Ex-Kvaerner toll roads (weighted ave.) 6.7% Transurban (implied) 2.8% Hills Motorway (implied) 4.4% Horizon (implied) 17.9% Other ex-kvaerner assets (weighted ave.) 6.8% Rostock * Australian risk free rate = 6.16% (down 84bp since 31/12/99) UK risk free rate = 5.17% (down 32 bp since 31/12/99) na

12 Traffic Growth in 1999/2000* TOLL ROAD AGE ANNUAL (years) GROWTH M5 Motorway % M2 Motorway 3 9.6% Vasco da Gama Bridge % 25 th April Bridge % Yorkshire Link 2 7.3% *June 2000 compared to June 1999 Data for Eastern Distributor & Transurban not applicable end of section

13 Electronic Tolling

14 Lane Cove Tunnel Western Sydney Orbital Cross City Tunnel M5 East SYDNEY S EMERGING RING ROAD SYDNEY S EMERGING RING ROAD

15 ETC - Key Considerations The Eastern Distributor is currently trialling its ETC system The RTA will shortly commence trials of its system The M2 s existing ETC system needs replacing The M5 will move to ETC early next year The Cross City Tunnel will go to tender next year as an ETC only toll road The Lane Cove Tunnel likely to also be ETC only

16 Electronic Toll Collection (ETC) in Sydney There is now an Australian standard which specifies CEN as the system to be used for all toll roads in Australia The Eastern Distributor has installed a Phillips ETC system which is based on Kapsch technology and is CEN compliant. The RTA has installed CEN compliant Q-Free technology (as used in Portugal & Norway) CEN compliant Saab-Combitech technology is used by Transurban

17 Electronic Toll Collection (ETC) in Sydney (cont ) The M2 & the Queensland toll roads use AT Com technology, a US standard that is not CEN compliant Kapsch & Saab-Combitech have worked with a number of other European suppliers to achieve an interoperable system called GSS. This is effectively a sub-set of CEN However, Q- Free are not part of that group and a dual protocol is being implemented to ensure interoperablility between Q-Free & GSS members

18 Electronic Toll Collection in Sydney (cont ) The M5 currently has over 100,000 account customers using proximity cards. This system can be easily adapted to an ETC reader. It will form the basis of a joint venture between the M5 and Eastern Distributor which the M2 & M4 owners are being invited to join. Once the dual protocol is finalised, the RTA & Harbour Tunnel will offer their users a separate but fully interoperable tag and run their own customer base It is hoped that once the dual protocal is finalised, the two back offices could be merged sometime in the future end of section

19 Conclusion

20 MIG s Triple Stapling MIT(2) A M Ltd Interlink Horizon Transcore Stapling MEIL MIT(1) A M Trust Hills Transurban MIPL MI(UK)L MII(UK)L MoD Midland Yorkshire Tagus Rostock Heartland Dartford Meridian Dundee

21 Midland Expressway - status Clearance to Proceed certificate issued Notices to Treat issued Financing package being finalised Construction tenders received and under negotiation Financial close will not be rushed. We and the government want all isues resolved first.

22 Outlook for 2000/01 Directors expect to pay a gross distribution of 10 cents Midland Expressway financial close expected by 31 December 2000 Sale process instigated for non-toll road assets held by MEIL Introduction of electronic tolling in the Sydney network Full opening of City Link Tender for the Cross City Tunnel

23 MIDLANDS M2 EAST. DIST M5 YORKSHIRE ROSTOCK CITYLINK TAGUS DARTFORD D FORD ASSET VALUE CASH GREENFIELDS GREENFIELD CONSTRUCT RAMP UP GROWTH MATURITY MATURITY

24 MIG s Strategic Strength MIG assets provide both strong cash flows in the long term; and significant rerating potential MIG is a growth stock with strong defensive characteristics

25 Questions?

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