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MACQUARIE KOREA INFRASTRUCTURE FUND
Macquarie Korea Infrastructure Fund
General Presentation
February 2016
PAGE 1 MACQUARIE KOREA INFRASTRUCTURE FUND
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.
Important notice
PAGE 2 MACQUARIE KOREA INFRASTRUCTURE FUND
2 Highlights
Financial results
The toll road performance
The newer toll road assets
13
14
15
16
1 A leading infrastructure fund in Korea
Corporate structure
Portfolio summary
Stable and long-term businesses
4
5
6
7
Key Results – FY2015
Minimum Revenue Guarantee
Healthy financial position
Track record of stable distributions
Key investment highlights
8
9
10
11
3 Capital restructuring of Woomyunsan
Tunnel (WIC)
Recap on recent capital restructuring transactions
Financial position statements
Profit and loss statements
Cashflow statements
Landmark assets in Korea
Portfolio
22
23
24
25
26
27
28
The New Port
Asset performance
Minimum revenue guarantee summary
Asset management fees
Macquarie Asset Management
Macquarie worldwide investments
MIRA infrastructure overview
29
30
31
32
33
34
35
Busan New Port Phase 2-3 (BNP)
Capital restructuring transactions
Litigation status
Conclusion
17
18
19
20
Contents Business Overview
Appendix
MACQUARIE KOREA INFRASTRUCTURE FUND
Business Overview
01
PAGE 4 MACQUARIE KOREA INFRASTRUCTURE FUND
1. Act on Public Private Partnerships in Infrastructure (“PPI Act”) defines infrastructure sectors including roads, railways, ports, energy, airport, communication, water resources, etc. 2. Historical performance does not guarantee future performance 3. Rated by Nice Credit Rating on 6 April 2015 and Korea Rating on 6 July 2015 4. As of 31 December 2015 5. Source: Financial Supervisory Service (over 5% holders and MKAM’s affiliates as of 31 January 2016)
MKIF is a listed infrastructure fund with a market cap over KRW 2.7tr (USD 2.3bn)
A leading infrastructure fund in Korea
Established in 2002 / Listed in 2006 on KRX and LSE
Invests only in Korea as defined under the Korean PPI Act1
Largest portfolio of toll roads in Asia
Currently trading on approx. 5~6% yield2
Korean credit rating of AA03
Top shareholders5
1. Hanwha Life Insurance 7.3%
2. Newton Investment Management 7.2%
3. Shinyoung Asset Management 7.1%
* Macquarie Group 3.8%
(As of 31 December 2015)
Domestic institutions
49.9%
Domestic retails 25.4%
International investors
24.7%
Key Shareholders4
PAGE 5 MACQUARIE KOREA INFRASTRUCTURE FUND
Corporate structure
MKIF
Shareholders
MKAM (Manager)
Invest Distribute
Management Agreement
Corporate Debt • Credit Facility (KRW 250bn)1
• Corporate bonds (KRW 250bn)
Concessionaire
Incheon Bridge Co. Ltd
Kwangju Beltway Investment Co., Ltd
Kwangju Ring Road Company Ltd
Soojungsan Investment Co., Ltd
Baekyang Tunnel Ltd
Cheonan Nonsan Expressway Co., Ltd
Seoul Chuncheon Expressway Co., Ltd
New Airport Hiway Co., Ltd
Woomyunsan Infraway Co,. Ltd
MCB Co. Ltd
Gyeogsu Highway Co., Ltd
BNCT Co., Ltd
Invests in: Equity Subordinated debt Senior debt
Receives: Interest income Dividend
MKIF is a holding company of 12 infrastructure project companies
24.1%
60%
100%
100%
100%
75%
36%
70%
41%
43.75%
15%
30%
Externally managed by Macquarie Korea Asset Management Co., Ltd (“MKAM”)
Active manager of the underlying project companies
Corporate tax-exempted when more than 90% of distributable earnings distributed
MKIF shareholding
(As of 31 December 2015)
1. Out of KRW 250 bil credit facility, KRW 109.4 bil drawn as at 31 December 2015
PAGE 6 MACQUARIE KOREA INFRASTRUCTURE FUND
Portfolio summary1
Asset names Abbrv.
Incheon International Airport Expressway NAHC
Baekyang Tunnel BYTL
Gwangju Second Beltway, Section 1 KBICL
Gwangju Second Beltway, Section 3-1 KRRC
Woomyunsan Tunnel WIC
Cheonan-Nonsan Expressway CNEC
Soojungsan Tunnel SICL
Machang Bridge MCB
Yongin-Seoul Expressway YSE
Seoul-Chuncheon Expressway SCE
Incheon Grand Bridge IGB
Busan New Port Phase 2-3 BNP
(As of 31 December 2015)
Portfolio composition by asset Portfolio composition by phase and type
Well balanced and diversified portfolio of essential infrastructure assets Predominantly toll roads
Relatively young portfolio with average age of 9.4 years
Ratio of central and local government involvement is 69:31 in terms of investments
Growth 67.4%
Mature 13.3%
Ramp-up 19.3% Equity
31.7%
Sub Debt 55.9%
Sr Debt 12.4%
Toll-road 80.7%
Port 19.3%
BYTL 0.2%
KBICL 13.1%
NAHC 4.7%
SICL 5.5%
CNEC 16.9%
WIC 1.3% KRRC
3.9% MCB 7.0%
YSE 9.4%
SCE 8.5%
IGB 10.2%
BNP 19.3%
1. On Commitment basis
PAGE 7 MACQUARIE KOREA INFRASTRUCTURE FUND
Underlying investments operate on long-term, predictable cash flow with certain downside protection
Stable and long-term businesses
Long-term concessions with weighted average1 remaining life of 20 years
All concessions protected under the Early Termination Support provision
10 toll roads are subject to minimum revenue guarantee (MRG) by the Korean government for next 8 years on average
Early Termination Support2,3
2000 2005 2010 2015 2020 2025 2030 2035 2040 2045
KBICL(L)
BYTL(L)
BNP(C)
YSE(C)
IGB(C)
SCE(C)
MCB(L)
SICL(L)
CNEC(C)
WIC(L)
KRRC(L)
NAHC(C)
Revenue Support2
Concession Term2
Relevant Authority (C) Central government (L) Local government
Weighted Average Concession Term
20 years
Weighted Average Revenue Support
8 years Present
1. On a weighted average basis based on total commitment amount 2. Revenue support and termination payment provisions vary for each concession 3. 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
(As of 31 December 2015)
PAGE 8 MACQUARIE KOREA INFRASTRUCTURE FUND
Revenue Cap1
MRG1
Forecast Revenues2
Government bodies compensate the shortfall
Relevant government authorities extract the excess portion
Actual Revenue Revenue MRG for 10 of MKIF’s 12 assets3
Inflation-linked revenue support
MRG line tracking the forecast revenue line (typically 80~90% below forecast revenue)
Korea’s sovereign rating as of September 2015:
– S&P: A+ (Stable)
– Moody’s: Aa3 (Stable)
(Conceptual Diagram)
Minimum Revenue Guarantee (MRG) mechanism
Minimum Revenue Guarantee
1. MRG and revenue caps vary across assets 2. Forecast revenues set out in the Concession Agreement 3. Excluding Woomyunsan Tunnel and Busan New Port Phase 2-3. In two of 10 MRG assets, no revenue guarantee applies if actual revenue falls below 50% of the toll revenue forecast
Time in years
PAGE 9 MACQUARIE KOREA INFRASTRUCTURE FUND
Stable revenues with external debt amortisation result in increasing cash income for MKIF
Healthy financial position
1. Proportionately consolidated cash balance (including MKIF cash balance of KRW 15.7bil) 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. Outstanding debt balance based on amortisation schedule of asset level external debt on a proportionate equity shareholding basis. Excludes MKIF level corporate loan balance
GEARING3 30.5%
AMORTISING MATURITY2 7.1 years
CASH1 KRW 214.3bil
Asset-level outstanding debt balance4
(KRW bil)
300
600
900
1,200
2016 2021 2026 2031 2036 2041
MKIF-level debt capped at 30% of its paid in capital (current limit of KRW 500 bil) with average maturity of 2.5 years
Current total MKIF-level debt of KRW 359.4bil
– KRW 109.4bil drawn down from KRW 250bil of credit facility limit
– KRW 60bil of 5-yr fixed rate bond (maturing in May 2016) / KRW 190bil of 7-yr fixed rate bond (maturing in May 2018)
The asset level debt amortising heavily with remaining average maturity of 7.1 years
MKIF cash income expected increase as underlying debt declines
(As of 31 December 2015)
PAGE 10 MACQUARIE KOREA INFRASTRUCTURE FUND
Targets long-term, sustainable and growing distributions
1. Historical performance does not guarantee future performance 2. Performance fee for the second quarter of 2015 (KRW 7.8 bil) and net of accounting loss from the Transactions (KRW 3.1 bil) 3. Accounting income is higher than taxable income in 2015 and the declared distribution amount for the Period is in line with accounting income 4. Total of KRW464 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
Track record of stable distributions1
Distribution is paid semi-annually (record dates in June and December)
Distribution floor is higher of taxable income or 100% of distributable accounting income (to maintain tax exempt status)
Total distribution for FY 2015 of KRW 464 reflected one-off accounting loss and expense (KRW 33) on a per share basis2
2015 DISTRIBUTION
KRW 464 per share3,4
(KRW / share)
291 317 363 360 370
464 53 13
117 153 48
(33)
344 330
480 513
418
464
-
100
200
300
400
500
600
2010 2011 2012 2013 2014 2015
Normal distribution One-off
PAGE 11 MACQUARIE KOREA INFRASTRUCTURE FUND
MKIF is structured to deliver underlying growth
1. Conceptual diagram. Assuming no portfolio change such as divestment of assets or new investment and different from the cash flow chart based on the projection
Project Company’s Cash Flow1 Cash Flow to MKIF1
Key investment highlights
Stable and predictable underlying revenues which are inflation-linked and substantially MRG-backed
Embedded growth on increasing income
Additional growth potential through asset re-ratings and new investments
Macquarie-managed fund
Management fees aligned with shareholders’ interest
Sub-debt service (Shareholder loan) Senior debt service
(external debt)
Dividend to shareholders
Revenue
OPEX & CAPEX
2042
(Conceptual Diagram) (Conceptual Diagram)
2042
Present
Net cash receipts (Profit & investment principal)
MACQUARIE KOREA INFRASTRUCTURE FUND
Key Results – FY2015
02
PAGE 13 MACQUARIE KOREA INFRASTRUCTURE FUND
Highlights • Delivered strong financial and operational performance
– Excluding one-offs1, MKIF revenue and net income grew by 25.2% and 34.6% respectively, compared with the previous corresponding period (“pcp”) – The underlying traffic volume and revenue2 grew by 8.8% and 8.5%, respectively, on pcp – The traffic of the three newer toll road assets3 reached 82.6%4 of the Concession Agreement (“CA”) forecasts, an increase of 11.0% over pcp – Busan New Port Phase 2-3 (“BNP”) handled 1.37 mil TEU volume for the Period. Revenue and EBITDA increased by 4.9% and 14.7% pcp
• Completed capital restructuring transactions (the “Transactions”) - Incheon Airport Expressway(NAHC) and Yongin-Seoul Expressway(YSE) – The transactions involving new debt packages and return of share capital. Impacts to MKIF include:
• Immediate cash inflow KRW 58 bil • Higher dividend income over the next 3 years (NAHC) • Deferred interest minimised, accelerating cash inflow (YSE) • Target investment return remains largely unchanged
• Healthy financial position maintained (as at 31 December 2015) – Proportional cash balance of KRW 214.3bil including MKIF cash of KRW 15.7bil – Continued de-gearing of asset level debt with a weighted average maturity of 7.1 years – Proportionately consolidated gearing reduced to 30.5% from 36.0% in the previous year5
– Refinancing of the corporate bond of KRW 60 bil expected in May 2016
• Progress of the legal disputes with respective government authorities – Machang Bridge: The ICC arbitration process is closed on 2 April 2015 – all overdue MRG was paid (February 2015) – Gwangju 2nd Beltway Section 1 (KBICL): With The Supreme Court ruling on the local government’s administrative order6 to KBICL is on-going. With regard
to MRG suspension, Seoul Administrative Court confirmed the order was not legitimate and dismissed the case (August 2015) – Baekyang Tunnel (BYTL) /Soojungsan Tunnel (SICL): The 2nd courting rulings on Busan City’s administrative order5 to BYTL and SICL are on going. (BYTL
and SICL received favorable 1st rulings). Petition submitted to Busan District Court to claim overdue financial support payment (January 2016)
• Declared distribution of KRW 464 per share for the full year7
1. Excluding one-off gains and expenses (2014: Liquidation dividend income from CNE ABS SPC (tranche 3)/ 2015: 2Q performance fee, one-off net loss from the Transactions) 2. On a weighted average basis based on revenue size of each asset and the MKIF’s equity interest in each concession company. 3. Yongin-Seoul Expressway, Seoul-Chuncheon Expressway and Incheon Grand Bridge 4. On a weighted average basis based on total commitment amount and average daily traffic 5. Gearing = MKIF Net Debt/(MKIF Net Debt + MKIF market capital (3-month average)), where MKIF Net Debt = proportionate net debt from assets + corporate net debt. Excludes shareholder loans 6. Administrative order to reinstate the original capital structure at the time of the concession agreement signing 7. On 29 January 2016, MKIF Board of Directors approved the distribution of KRW 254 per share for the second half of 2015
PAGE 14 MACQUARIE KOREA INFRASTRUCTURE FUND
Year Ended 31 Dec 2015
Year Ended 31 Dec 2014
% Change in recurring items
Revenue 219,488 181,243 21.1%
Interest income 178,114 177,838 0.2%
Dividend income (normal) 40,9231 -
Dividend income (one-off) - 3,3862
Other income 451 19
Expenses 65,677 55,418 18.5%
Management fee 35,353 30,803
Performance fee 7,8353 -
Interest expense 19,370 19,629
Other fees and expenses 3,119 4,986
Net income 153,811 125,825 22.2%
Normalised net income 4 164,772 122,439 34.6%
EPS (KRW per share) 5 464 380
Normalised EPS (KRW per share) 4,5 497 370
DPS (KRW per share) 5,6 464 418
(Unit: KRW mil)
Financial results • Normalised revenue increased by 25.2% mainly due to the dividend income paid by Incheon International Airport Expressway and
Soojungsan Tunnel
(Audited, non-consolidated financial information )
1. Paid by Soojungsan Tunnel (KRW 12 bil) and Incheon International Airport Expressway (KRW 28.9 bil) 2. One-off liquidation dividend income from CNE ABS SPC (tranche 3) 3. Performance fee for the second quarter of 2015 4. Excludes one-offs (2014: Liquidation dividend income from CNE ABS SPC (tranche 3) / 2015: Performance fee for the second quarter of 2015 and one-off loss from YSE refinancing
(KRW 3.5 bil) & one-off gain from NAHC refinancing (KRW0.4 bil) 5. Based on the number of shares outstanding of 331.5 mil shares 6. Distribution amounts for FY15 and FY14 were determined by considering both taxable and accounting income of the respective period
PAGE 15 MACQUARIE KOREA INFRASTRUCTURE FUND
The toll road performance
1. Yanggok-Wanam route of the national highway and Changwon-Busan Expressway (stage 2) 2. Higher traffic volume increase than revenue increase is due to the toll discount implemented as a result of the capital management transaction. Toll fare reduced from KRW 7,600 to KRW 6,600
on 1 September 2015 3. On a weighted average basis based on revenue size of each asset and the MKIF’s equity interest in each concession company
2015 Year-to-date 4Q 2015
Average daily traffic volume Average daily traffic revenue Average daily traffic volume Average daily traffic revenue
Vehicles/day % change on YTD
KRW thousand/day
% change on YTD Vehicles/day % change
on pcp KRW
thousand/day % change
on pcp
Incheon International Airport Expressway 2 66,713 10.3% 377,327 2.4% 69,863 13.1% 360,652 -3.4%
Baekyang Tunnel 76,764 4.3% 57,804 9.4% 78,567 4.0% 64,583 18.9%
Gwangju Second Beltway, Section 1 46,140 9.9% 48,812 10.2% 47,486 10.4% 50,423 10.9%
Gwangju Second Beltway, Section 3-1 37,211 9.2% 39,341 9.3% 38,626 9.0% 40,887 9.0%
Woomyunsan Tunnel 28,576 5.4% 61,809 5.6% 30,282 6.0% 65,541 6.1%
Cheonan-Nonsan Expressway 49,979 6.5% 417,908 6.5% 51,216 7.5% 431,051 7.9%
Soojungsan Tunnel 48,183 5.3% 38,135 14.1% 49,322 3.3% 44,974 28.7%
Machang Bridge 32,086 23.2% 71,964 23.8% 34,662 20.0% 78,126 20.4%
Yongin-Seoul Expressway 86,357 13.8% 152,076 11.8% 92,818 15.2% 155,144 7.4%
Seoul-Chuncheon Expressway 43,900 7.0% 278,320 7.0% 43,614 8.3% 277,392 8.4%
Incheon Grand Bridge 38,900 11.4% 200,375 11.2% 40,231 13.6% 208,200 13.6%
Weighted average growth rate3 8.8% 8.5% 9.6% 9.5%
• Traffic volume and traffic revenue increased across all 11 toll road assets, in particular: ̶ Incheon International Airport Expressway/ Incheon Grand Bridge: Population growth in Cheongra, Yeongjong and Song-do districts
and higher number of airport users during the year ̶ Gwangju 2nd Beltway Section 1 and Section 3-1: Extension of the adjacent roads and more road users attracted to Naju Innovation City ̶ Machang Bridge: New connecting roads1 and a newly-built industrial complex in Changwon operating since June 2014 ̶ Yongin-Seoul Expressway: Increase in Yongin area’s residential occupancy
PAGE 16 MACQUARIE KOREA INFRASTRUCTURE FUND
The newer toll road assets1
1. The newer assets opened to traffic in 2H 2009 2. Toll compensation includes toll-freeze compensation and various toll discounts and exempts applied as per the request from the respective government authorities.
The amount and components vary by assets 3. During 2015, on a weighted average basis based on total commitment amount and average daily traffic 4. Weighted average daily traffic during 2015 over 2014
Quarterly trend of traffic volume 2015 Traffic Performance
% OF PORTFOLIO
29.1%
% OF CA FORECAST TRAFFIC VOLUME3
82.6%
TRAFFIC VOLUME GROWTH4
11.0%
Asset Operation commencement
Traffic volume
growth on pcp
Traffic revenue
growth on pcp
% of CA forecast
traffic volume
Yongin-Seoul Expressway (YSE) 01-Jul-2009 13.8% 11.8% 87.6%
Seoul-Chuncheon Expressway (SCE) 15-Jul-2009 7.0% 7.0% 79.4%
Incheon Grand Bridge (IGB) 19-Oct-2009 11.4% 11.2% 79.7%
(Vehicles/day)
• The three newer toll roads delivered a daily average traffic of 82.6% of the Concession Agreement forecasts, compared to 78.6% in the previous year
• Actual traffic performance of Yongin-Seoul Expressway and Seoul-Chuncheon Expressway are above the minimum revenue guarantee level thus those assets do not require support payment except for toll compensations2
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
2013 Q1
Q2 Q3 Q4 2014 Q1
Q2 Q3 Q4 2015 Q1
Q2 Q3 Q4
YSE SCE IGB
PAGE 17 MACQUARIE KOREA INFRASTRUCTURE FUND
Busan New Port Phase 2-3 (BNP)
Historical results and 2016 targets
1. Maximum handling capacity for 2015 is 2.2mil TEU as the construction was completed in May 2015 2. Actual performance may vary from the forecast provided by BNP 3. Considering the currently scheduled regular calls 4. Source: Busan Port Authority. Five container terminals including BNP and excluding multi-purpose terminals
2015 Performance highlights BNP
2015 2014
Throughput Volume (TEU) 1.37 mil 1.41 mil
Volume Growth over pcp (2.5%) 17.0%
Revenue (KRW mil) 72,136 68,735
Revenue Growth over pcp 4.9% 25.5%
Container Terminals of New Port 1
Throughput Volume (TEU) 12.8mil
Volume Growth over pcp 7.5%
23,429
54,767 68,735 72,136
101,880
- 6,903
22,404 25,683
45,126 0.51
1.20 1.41 1.37
1.80
- 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80 2.00
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
2012 2013 2014 2015 2016(E)
Revenue (LHS) EBITDA (LHS) Volume (RHS)
(KRW mil) (mil TEU)
• BNP handled 1.37 million TEU for the Period, representing a 2.5% decrease over pcp, primarily due to a slower than expected ramp-up of Ocean 3 alliance volume (Ocean 3 is the BNP’s main shipping line partner and is one of the four major global shipping alliances formed in early 2015)
• Revenue increased by 5% and EBITDA by 15% during the Period compared with pcp, recording KRW 72.1 bil and KRW 25.7 bil, respectively − driven by an increase in tariff rates and reduction in operating expenses
• Capacity expansion from 1.8 million to 2.5 million TEU per annum was completed on time and on budget in May 20151 • For FY2016, BNP targets approximately 1.8 million TEU of handling volume and over KRW 101.9 bil and KRW 45.1 bil of revenue and EBITDA,
respectively2
− Ocean 3 vessel scheduling is complete, and BNP starts the year with a 12-month estimated forward service schedule of over 1.6 million TEU3
− Throughput demand increase for the New Port is expected to continue – New Port volume grew by 7.5% during the Period, handling approximately 12.8 million TEU4, leaving only BNP with existing and expansion capacity among the five terminals in the New Port over the next 4-5 years
− BNP anticipates additional volume growth from recent market activities including the acquisition of APL shipping line by CMA CGM and the proposed merger of COSCO and China Shipping expected to close in 2016 – CMA CGM and China Shipping are Ocean 3 alliance members and APL and COSCO are major customers of the New Port
2
PAGE 18 MACQUARIE KOREA INFRASTRUCTURE FUND
Capital restructuring transactions • Successfully completed capital restructuring of two assets - both resulted in improved cash flow and enhanced investment stability
Incheon International Expressway (August 2015) Yongin-Seoul Expressway (October 2015)
Transaction overview
① New debt package – New senior debt (KRW 143.8bil) – New subordinated debt (KRW 214.4bil), replacing
the existing sub-debt (KRW 160.8 bil) ② Capital reduction – KRW 143.8bil of capital returned to shareholders
① New debt package – New senior debt (KRW 384.7bil) on attractive
market terms, replacing the existing senior debt (KRW 321.4bil)
– New sub-debt (KRW 170.8bil), replacing the existing sub-debt (KRW 132.0bil)
② Shareholder change – MKIF and two other financial investors to purchase
all equity held by construction sponsors (40%) ③ Capital reduction – KRW 48.0bil of capital returned to shareholders
(priced at 2% premium over par value)
Impacts to MKIF Net cash proceeds of KRW 21.7 bil Higher dividend income expected from NAHC over
the next 3 years Target investment return remains largely unchanged
Net cash proceeds of KRW 36.3 bil Settlement of the unpaid interest on MKIF’s sub-debt
investment of KRW 51.7 bil Deferred interest reduced, accelerating cash inflow
Benefit sharing with relevant authority
Ministry of Land, Infrastructure and Transport Toll reduction (KRW 7,600 to KRW 6,600)
Ministry of Land, Infrastructure and Transport Toll reduction (KRW 2,000 to KRW 1,800)
MKIF investment (Post-transaction)
MKIF investment to NAHC reduced by KRW 21.7bil
MKIF investment to YSE increased by KRW16.3bil
Equity Subordinated debt
Total % of MKIF portfolio
KRW 23.6bil KRW 51.7bil KRW 75.3bil 4.7%
Equity Subordinated debt
Total % of MKIF portfolio
KRW 51.5bil KRW 99.6bil KRW 151.1bil 9.4%
PAGE 19 MACQUARIE KOREA INFRASTRUCTURE FUND
Litigation status
1. On commitment basis 2. BYTL: KRW 10.5 bil (toll compensation) / SICL: KRW 3.8 bil (minimum revenue support and toll compensation)
Assets % of MKIF portfolio1 Case Status Government
Authority
Baekyang Tunnel (BYTL)/ Soojungsan Tunnel (SICL)
0.2%/ 5.5%
Administrative order to reinstate the original capital structure from the time of the concession agreement signing
SICL & BYTL received favorable rulings from the Busan District Court (10 Oct 2014)
Busan City appealed to the Busan Appellate Court (24 Oct 2014)
Busan City
Claim of overdue payments 2 Petition submitted to Busan District Court (6 Jan 2016)
Gwangju 2nd Beltway, Section 1 (KBICL) 13.1%
Administrative order to reinstate the original capital structure from the time of the concession agreement signing
Undergoing the Supreme Court process
Gwangju City Administrative order to suspend MRG payment (Closed)
Seoul Administrative Court confirmed the order was not legitimate and dismissed the case (August 2015)
The International Chamber of Commerce (ICC) arbitration process in relation to Machang Bridge is closed on 2 Apr 2015 – all overdue MRG was paid in Feb 2015
Three local concession assets of MKIF are undergoing legal disputes with their respective government authorities
PAGE 20 MACQUARIE KOREA INFRASTRUCTURE FUND
Increase in dividend payment capacity as a result of steady asset-level debt amortisation
Continuous review of capital restructuring opportunities
Continue active management of MKIF capital and portfolio
− KRW 60 bil of fixed rate bond maturity in May 2016
− Prudent and proactive management of toll road assets to enhance traffic performance and to maintain superior
level of business sustainability and risk management
− Active litigation management
− Focus on ensuring financial and operational stability of BNP as a key management priority during its ramp-up
phase
Conclusion
APPENDIX
MACQUARIE KOREA INFRASTRUCTURE FUND
A
PAGE 22 MACQUARIE KOREA INFRASTRUCTURE FUND
Capital restructuring of Woomyunsan Tunnel (WIC) Post-transaction, cash flows to MKIF no longer relying on MRG payments – toll revenue is expected to be more than sufficient to support target return/cashflows
Key aspects of the Transaction − Introduction of a revenue partitioning structure (the “Revenue
Partitioning”) to replace the Minimum Revenue Guarantee (MRG) provision1
− Cash flows from toll revenue reprioritized in favour of equity and shareholder loan (SHL) Tr. B investors
− Toll rate fixed at KRW 2,500 until the concession end
− Unpaid MRG settled through the Transaction
Toll Revenue
Disposable Income Account (DIA)
OPEX/ CAPEX
SHL Tr. B Interest
SHL Tr. B Principal
Reserved for Dividend
Surplus Income Account
Corp. Tax
SHL Tr. A Interest
SHL Tr. A Principal
Supported by SMG credit
1st payment
2nd payment
SMC Collection
Cashflow to MKIF paid from DIA
Revenue water fall under the Revenue Partitioning
1. Preset amount will be first reserved from WIC’s cash revenue and deposited to the Disposable Income Account (the “DIA”). The balance cashflows will be separately managed under the surplus income account (the “Surplus Income Account”) for servicing remaining obligations including other debt and corporate taxes
2. Approximately ~70% of the current traffic level is expected to be sufficient to cover MKIF’s target return and yield 3. The pre-payment fee of existing subordinated debt (KRW 8.6 billion) and capital reduction related gains (KRW 10.1 billion)
Impacts on MKIF
One-off accounting income3 KRW 18.7 bil (KRW 56 per share) - 1Q 2016
Net cash inflow KRW 18.6 billion
Settlement of the unpaid interest KRW 2.6 billion
MKIF Investment Equity (KRW 5.3bil) Shareholder loan Tranche B (KRW 15.0bil)
% of MKIF portfolio 1.3% (total investment remain unchanged)
− MKIF’s return on the investment to be fully paid from the DIA2
− Risks associated with the toll fare changes removed
WIC capital structure change
Equity 11.6bn
Equity 26.6bn
SHL 26.6bn
SHL Tr. B 21.2bn
Sr Loan, 71.4bn
SHL Tr. A 121.0bn
Post transaction (KRW 153.8bil)
Pre transaction (KOR 124.6bil) (KRW
MKIF Equity: KRW 10.7bil (36%) SHL: KRW 9.6 bil
MKIF Equity: KRW 5.3bil (36%) SHL Tr. B: KRW 15.0 bil
PAGE 23 MACQUARIE KOREA INFRASTRUCTURE FUND
Recap on recent capital restructuring transactions
Woomyunsan Tunnel (WIC) Incheon International Airport Expressway (NAHC) Yongin-Seoul Expressway (YSE)
Documentation close January 2016 August 2015 October 2015
Transaction overview
① New debt packaging ② Shareholder change ③ Capital reduction ④ Introduction of the Revenue Partitioning
structure to replace the MRG
① New debt packaging ② Capital reduction
① New debt packaging ② Shareholder change ③ Capital reduction
Impacts to MKIF
Settlement of the unpaid interest on MKIF’s subordinated debt of KRW 2.6 bil
MKIF no longer relying on MRG payments The risk associated with the toll fare changes in
the future are removed
Higher dividend income expected from NAHC over the next 3 years
Target investment return remains largely unchanged
Settlement of the unpaid interest on MKIF’s sub-debt investment of KRW 51.7 bil
Deferred interest reduced, accelerating cash inflow
Net cash proceeds KRW 18.6 bil KRW 21.7 bil KRW 36.3 bil
Accounting gains KRW 18.7 bil (KRW 56 per share) – 1Q 20161 N/A Loss of KRW 4.1 bil (KRW 12 per share) – 4Q 20152
Benefit sharing with relevant authority
Seoul Metropolitan city Fixed at KRW 2,500 until the end of the
concession
Ministry of Land, Infrastructure and Transport
Toll reduction (KRW 7,600 to KRW 6,600)
Ministry of Land, Infrastructure and Transport Toll reduction (KRW 2,000 to KRW 1,800)
MKIF investment (% of portfolio) KRW 20.3 bil (1.3%) KRW 75.3bil (4.7%) KRW 151.1bil (9.4%)
All three transactions resulted in improved cash flow and enhanced investment stability
1. The pre-payment fee of existing subordinated debt (KRW 8.6 billion) and capital reduction related gains (KRW 10.1 billion) 2. In a step-up interest structure of existing subordinated debt (13% during the construction and three years after operation and 15% until maturity), the effective interest rate method was applied
over whole period. With regard to the existing subordinated debt repayment, outstanding balance of effective interest of KRW 3.5 billion was adjusted to be off from the book.
PAGE 24 MACQUARIE KOREA INFRASTRUCTURE FUND
(Unit: KRW mil)
Financial position statements Audited, Non-consolidated – as at 31 December 2015 and 31 December 2014
31 December 2015 31 December 2014 Assets
Invested Assets 1,617,610 1,681,571
Cash & deposits 15,680 48,864
Loans 1,089,746 1,079,604
Equity securities 512,184 553,103
Others 439,746 462,936
Interest receivable 433,604 455,070
Other receivables 2,430 2,368
Deferred costs, net 3,712 5,498
Total Assets 2,057,356 2,144,507
Liabilities Accounts Payable 1 1
Management fee payable 8,867 8,277
Long-term debt 109,444 208,565
Bonds 249,688 249,510
Other liabilities 3,210 1,636
Total Liabilities 371,210 467,989
Shareholders’ Equity
Share Capital 1,670,986 1,670,986
Retained Earnings 15,160 5,532
Total Shareholders’ Equity 1,686,146 1,676,518
Total Liabilities and Shareholders’ Equity 2,057,356 2,144,507
CHANGE OF INVESTMENT
* Excludes Baekyang Tunnel loan amortisation of KRW 46mil
Asset Item 2015
Gwangju 2nd Beltway, 3-1 Senior Debt (5,250)
Soojungsan Tunnel Senior Debt (7,195)
Yongin-Seoul Expressway Sub Debt 22,633 Incheon International Airport Expressway Equity (34,645)
Yongin-Seoul Expressway Equity (6,274)
Total (30,731)
PAGE 25 MACQUARIE KOREA INFRASTRUCTURE FUND
(Unit: KRW mn)
Profit and loss statements Audited, Non-consolidated – 12 Months to 31 December 2015 and 31 December 2014
2015 2014
Revenue 219,488 181,243
Interest income 178,114 177,838
Dividend income 40,9231 3,3862
Other income 451 19
Expenses 65,677 55,418
Management fee 35,353 30,803
Performance fee 7,8353 -
Custodian fee 330 332
Administrator fee 208 207
Interest expense 19,370 19,629
Other expense 2,581 4,447
Net Profits 153,811 125,825
EPS (KRW)4 464 380
1. Paid by Soojungsan Tunnel (KRW 12 bil) and Incheon International Airport Expressway (KRW 28.9 bil) 2. One-off liquidation dividend income from CNE ABS SPC (tranche 3) 3. Performance fee for the second quarter of 2015 4. Based on the number of shares outstanding of 331.5 mil shares
PAGE 26 MACQUARIE KOREA INFRASTRUCTURE FUND
Cashflow statements Audited, Non-consolidated – 12 Months to 31 December 2015 and 31 December 2014
(Unit: KRW mil)
2015 2014
Cashflows from operating activities:
Cash inflows from operating activities 439,443 120,726
Collection of equity securities 55,645 -
Collection of loans receivable 141,115 19,013
Interest and other income 242,683 101,713
Cash outflows from operating activities: (209,848) (40,546)
Investments (166,030) (8,600)
Fees and expenses (43,818) (31,946)
Net cash provided by (used in) operating activities 229,595 80,180
Cashflows from financing activities:
Repayment of long-term debt (155,000) (200,305)
Drawdown from long-term debt 52,500 334,800
Distributions paid (144,185) (164,404)
Interest expense (15,994) (13,808)
Borrowing related costs (100) (2,350)
Net cash provided by (used in) financing activities (262,779) (46,067)
Net increase (decrease) in cash and deposits (33,184) 34,113
Cash and deposits at beginning of the period 48,864 14,751
Cash and deposits at end of the period 15,680 48,864
PAGE 27 MACQUARIE KOREA INFRASTRUCTURE FUND
MKIF’s investments are well recognised landmark assets located in/around major cities
Landmark assets in Korea
Seoul-Chuncheon Expressway (SCE) Seoul Chuncheon Expressway Co., Ltd
Incheon International Airport Expressway (NAHC) New Airport Hiway Co., Ltd
Incheon Grand Bridge (IGB) Incheon Bridge Co. Ltd
Woomyunsan Tunnel (WIC) Woomyunsan Infraway Co,. Ltd
Yongin-Seoul Expressway (YSE) Gyeogsu Highway Co,. Ltd
Cheonan-Nonsan Expressway (CNEC) Cheonan Nonsan Expressway Co,. Ltd
Gwangju 2nd Beltway Section 1 (KBICL) Kwangju Beltway Investment Co., Ltd
Gwangju 2nd Beltway Section 3-1 (KRRC) Kwangju Ring Road Co., Ltd
Baekyang Tunnel (BYTL) Baekyang Tunnel Ltd
Machang Bridge (MCB) MCB Co., Ltd
Busan New Port Phase 2-3 (BNP) BNCT Co., Ltd
Soojungsan Tunnel (SICL) Soojungsan Investment Co., Ltd
Incheon Metropolitan City Third largest city in Korea
Population ~2.9 million
Seoul Metropolitan City Largest city in Korea
Population ~10.1 million
Gwangju Metropolitan City Sixth largest city in Korea
Population ~1.5 million
Busan Metropolitan City Second largest city in Korea
Population ~3.5 million
(As of 31 December 2015)
PAGE 28 MACQUARIE KOREA INFRASTRUCTURE FUND
MKIF COMMITMENT AND DEBT INTEREST RATE (Units: KRW bil, %)
Name Abbrev. Equity Ownership (%) Subordinated Debt
Interest Rate (%)
Senior Debt
Interest Rate (%) Total
Baekyang Tunnel BYTL 1.2 100.0 - 1.4 15.0 2.6
Gwangju Second Beltway, Section 1 KBICL 33.1 100.0 35.22 20.0 142.0 10.0 210.3
Incheon International Airport Expressway NAHC 23.6 24.1 51.7 13.5 - 75.3
Soojungsan Tunnel SICL 47.1 100.0 19.3 20.0 21.6 8.5 88.0
Cheonan-Nonsan Expressway CNEC 87.8 60.0 182.2 20.0 - 270.0
Woomyunsan Tunnel WIC 10.73 36.0 15.0 12.0 - 25.7
Gwangju Second Beltway, Section 3-1 KRRC 28.9 75.0 - 33.7 7.85 62.6
Machang Bridge MCB 33.8 70.0 79.0 11.4 - 112.8
Yongin-Seoul Expressway YSE 51.5 43.75 99.6 15.5 - 151.1
Seoul-Chuncheon Expressway SCE 48.6 15.0 87.4 11.6 - 136.0
Incheon Grand Bridge IGB 74.5 41.0 89.4 9.3 - 163.9
Busan New Port Phase 2-3 BNP 66.4 30.0 243.04 12 ~14 - 309.4
Total 507.2 901.8 198.7 1,607.7
Percentage(%) 31.7% 55.9% 12.4% 100%
1. Based on commitment amount 2. Includes KRW 3.2bil working capital facility (Interest rate of 15% p.a.) 3. Capital reduction of Woomyunsan Tunnel completed in February 2016 4. Includes KRW 50bil working capital facility (Interest rate of 14% p.a.)
Portfolio1 (As of 31 January 2016)
PAGE 29 MACQUARIE KOREA INFRASTRUCTURE FUND
The New Port
Busan Port performance highlights
FY2015 BNP New Port North Port Container Terminals (“CTs”) in Operation
(New Port Terminal) 5 Terminals 4 Terminals
Handling Capacity of CTs1 (TEU p.a.) 2.2mil 14.4mil 7.7mil
Actual volume in FY20152 1.37mil 12.83mil 6.0mil
Volume Growth over pcp -2.5% 7.5% -2.1%
Capacity Utilisation Rate of CTs (%) 62.2% 89.1% 77.6%
Busan Port Market Share3 9.7% 66.2% 33.8%
New Port’s historical performance (2011-2015)3
1. Source: BNP 2. Source: BNP’s volume includes shifting; New Port’s and North Port’s volumes are compiled by Busan Port Authority and do not include shifting 3. Source: Busan Port Authority – shifting volume excluded; volume of misc. terminals included for market share calculation
• 5 container terminals of the New Port achieved a 7.5% annual growth for the year, or 12.8mil TEU of container throughput volume • Throughput volume demand for the New Port is expected to continue • Only BNP with existing and expansion capacity among the five terminals in the New Port over the next 4-5 years
7.74 9.39
10.91 11.93 12.83
3.38
3.53 2.01 0.99
1.58 69.6% 72.7%
84.4% 92.3%
89.1%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0
2
4
6
8
10
12
14
16
18
2011 2012 2013 2014 2015
Volume (LHS) Surplus capacity (LHS) Capacity utilisation (RHS)
(TEU mil)
PAGE 30 MACQUARIE KOREA INFRASTRUCTURE FUND
Asset Perfomance1
Assets Adjusted
operating revenue2
OPEX Adjusted EBITDA2 Net debt3 EBITDA
margin Net debt
to EBITDA
Adjusted operating revenue2
OPEX Adjusted EBITDA2 Net debt3 EBITDA
margin Net debt
to EBITDA
Gwangju Second Beltway, Section 1 39,636 (6,209) 33,427 (2,470) 84.3% (0.1x) 38,071 (5,416) 32,655 (1,657) 85.8% (0.1x)
Gwangju Second Beltway, Section 3-1 20,356 (4,649) 15,707 (3,912) 77.2% (0.2x) 19,858 (4,349) 15,509 (1,548) 78.1% (0.1x)
Soojungsan Tunnel 23,622 (4,130) 19,492 (8,433) 82.5% (0.4x) 23,392 (4,105) 19,287 (17,841) 82.5% (0.9x)
Baekyang Tunnel 26,222 (4,059) 22,163 110,580 84.5% 5.0x 25,210 (4,354) 20,856 121,890 82.7% 5.8x
Incheon International Airport Expressway 226,101 (30,372) 195,729 (178,381) 86.6% (0.9x) 237,636 (27,450) 210,187 (160,829) 88.4% (0.8x)
Cheonan-Nonsan Expressway 211,583 (29,005) 182,578 (74,548) 86.3% (0.4x) 205,072 (29,763) 175,309 (60,988) 85.5% (0.3x)
Woomyunsan Tunnel 22,581 (4,113) 18,467 (15,281) 81.8% (0.8x) 21,386 (4,107) 17,279 69,120 80.8% 4.0x
Machang Bridge 30,726 (5,354) 25,372 133,617 82.6% 5.3x 28,241 (5,529) 22,712 135,052 80.4% 5.9x
Yongin-Seoul Expressway 55,329 (12,689) 42,640 369,157 77.1% 8.7x 49,647 (11,313) 38,334 276,999 77.2% 7.2x
Seoul-Chuncheon Expressway 115,071 (17,345) 97,726 604,883 84.9% 6.2x 104,863 (19,393) 85,470 655,173 81.5% 7.7x
Incheon Grand Bridge 85,512 (18,761) 66,752 409,320 78.1% 6.1x 79,806 (17,800) 62,006 440,659 77.7% 7.1x
Busan New Port Phase 2-3 72,136 (46,452) 25,683 523,045 35.6% 20.4x 68,735 (46,337) 22,397 509,957 32.6% 22.8x
Proportionate average4 412,975 (77,385) 335,590 641,922 81.3% 2.0x 399,146 (75,799) 323,347 674,258 81.0% 2.2x
2015 2014
1. Management estimated, unaudited figures. 2. Revenue compensation and other compensations from the relevant government authority are reflected on accrued basis, not on cash basis 3. Excludes shareholders loans 4. On a proportionate average basis based on MKIF’s equity interest in each concession company
(Unit: KRW mil)
PAGE 31 MACQUARIE KOREA INFRASTRUCTURE FUND
Minimum revenue guarantee summary
Asset Relevant Authority
Concession Term
Concession Term
Remaining
Revenue Guarantee Duration
Revenue Guarantee Duration
Remaining
Revenue Guarantee Threshold1
Revenue Cap Threshold1,2 Remarks
Baekyang Tunnel Busan Metropolitan City 25 9 25 9 90% 110%
Gwangju 2nd Beltway, Section 1 Gwangju Metropolitan City 28 13 28 13 85% 115%
Incheon International Airport Expressway MOLIT3 30 15 20 5 80% 110% Partial revenue sharing in excess of 80%
to 110% level
Soojungsan Tunnel4 Busan Metropolitan City 25 11 25 11 90% 110%
Cheonan-Nonsan Expressway MOLIT 30 17 20 7 82% 110% Partial revenue sharing in excess of 82% to 110% level
Woomyunsan Tunnel Seoul Metropolitan City 30 18 N/A N/A
As part of the capital restructuring transaction completed in Jan 2016, MRG provision removed
Gwangju 2nd Beltway, Section 3-1 Gwangju Metropolitan City 30 19 30 19 90% 110%
Machang Bridge GSND6 30 22 30 22 75.78% 120%
Yongin-Seoul Expressway7 MOLIT3 30 24 10 9 70% 130%
Seoul-Chuncheon Expressway7 MOLIT3 30 24 15 9 80%/70%/60% 120%/130%/140% Each threshold for five years
Incheon Grand Bridge MOLIT3 30 23 15 3 80% 120%
Busan New Port Phase 2-3 MOF8 29 25 N/A N/A
Weighted average9 29 20 17 8
1. % of annual concession agreement projected revenue 2. Relevant government authorities are entitled to receive the portion exceeding the threshold 3. MOLIT (Ministry of Land, Infrastructure and Transport) 4. In toll revenue below 90%, Busan City Government is obliged to compensate 91.5% of the shortfall amount 5. 79% up to 2023 and 78% from 2024 to 2034 6. GSND (Gyeongsang Namdo (Provincial) government) 7. No revenue guarantee applies if actual revenue are below 50 % of the toll revenue forecast 8. MOF (Ministry of Oceans and Fisheries) 9. Weighted by investment commitment
(As of 31 December 2015)
PAGE 32 MACQUARIE KOREA INFRASTRUCTURE FUND
Management Fee − 1.25% per annum falling to 1.10%2 of Net Investment Value (NIV) of MKIF; plus (+) − 1.15% per annum falling to 1.05%2 per annum of Commitment3 of MKIF
Performance Fee − 20% of outperformance; the amount by which the sum of quarterly return4 and cumulative deficit5 exceeds the quarter’s bench
mark return (8% p.a.)
*NIV for any quarter equals:
The average market capitalisation6 of MKIF over all trading days in each calculation period; plus (+) The amount of any external borrowings by MKIF; less (-) Cash or cash equivalent held by MKIF
Asset management fees1
1. Details of the calculation method is stated in the Articles of Incorporation available on MKIF website (www.mkif.com) 2. For NIV +Commitment in excess of KRW 1.5 trillion 3. Commitment means all amounts that MKIF has firmly committed for future investment 4. Quarterly return to be measured by multiplying the performance of MKIF accumulation index to the market capitalisation6 of the previous quarter-end over last 15 trading-days.
Performance of MKIF accumulation index is measured as increase in the average of the index over last 15 trading days of a considered quarter compared to its previous quarter. Index is calculated on a daily basis inclusive of share price performance and distribution. Distribution is assumed to be re-invested on the ex-dividend date at the closing price
5. Cumulative deficit up to 4Q 2015 that is to be used for 1Q 2016 performance fee calculation is KRW 18.0bn. Cumulative deficit is the sum of quarterly surplus/deficit accumulated from the payment of previous performance fee. Quarterly surplus/deficit is the difference between quarterly return and the quarter’s benchmark return (surplus when positive, deficit when negative)
6. Calculated on the basis of volume weighted average trading price for the considered period
• Management fees consist of Base Management Fee and Performance Fee
• Fees calculated and paid on a quarterly basis
• Performance Fee is linked to the performance of the fund (primarily the market capitalization of the fund)
– Paid only when there is outperformance exceeding benchmark hurdle return
– Underperformance is carried forward
PAGE 33 MACQUARIE KOREA INFRASTRUCTURE FUND
1. All numbers as at 30 June 2015.
Macquarie Asset Management
Macquarie Investment Management (“MIM”)
Securities investment management
Fixed interest and currencies Equities, including infrastructure securities
Private markets Hedge funds
Multi-asset allocation solutions ‘Best of breed’ external managers
Macquarie Infrastructure and Real Assets (“MIRA”)
Alternative asset management
Infrastructure Real Estate Agriculture
Energy
Macquarie Specialised Investment Solutions (“MSIS”)
Fund and equity-based solutions
Fund linked products Capital protected investments
Retirement and annuity solutions Agriculture
Infrastructure debt
Operations
Legal and Compliance
A$477b AUM1
22 Countries worldwide1
~1,500 Staff1
PAGE 34 MACQUARIE KOREA INFRASTRUCTURE FUND
Macquarie worldwide investments 120 Infrastructure businesses operating in 26 countries1
As at 30 June 2015. Represents infrastructure 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.
USA Chicago Skyway Dulles Greenway Elizabeth River Tunnels Goethals Bridge NYK Ports Penn Terminals Airport Services (fixed
base operations) Total Terminals International
(Hanjin Pacific Corporation) Aquarion Company Puget Energy
Canada Autoroute 25 Fraser Surrey Docks Halterm Limited (port)
South Korea C&M (Cable TV) North East Chemical Tongyang Cement’s Waste Heat Power Youngduk Wind Power Yeongyang Wind Power Kangnam City Gas Daegil Industry / Daegil Environment Baekyang Tunnel Cheonan-Nonsan Expressway CNE Motorway Service Stations Gwangju 2nd Beltway Section 1 Gwangju 2nd Beltway Section 3-1 Incheon Grand Bridge Incheon International Airport Expressway Machang Bridge Seoul Chuncheon Expressway Soojungsan Tunnel Woomyunsan Tunnel Yongin-Seoul Expressway Busan New Port Phase 2-3 Hanjin Pacific Corporation (ports) Daejon Cogeneration Hangdarm Island Deok Pyeong Land Company LLC
Japan Hanjin Pacific Corporation (Tokyo, Osaka)
Philippines NLREC Wind Farm Philippine Coastal Storage & Pipeline
China Shenyang Zhenxing Environmental
Protection Shenyang Water Treatment Co. Dallan Hengji Xinrun Water Hengyang Holdings Jinko Solar Power Engineering Hua Nan Expressway Zhejiang Wanna Environment Protection Longtan Tianyu Terminal Tianjin Port Huisheng Terminal
Taiwan Taiwan Broadband Communications Hanjin Pacific Corporation (Kaohsiung)
Duquesne Light Hawaii Gas Idaho Wind Partners Broadrock Renewables MIC Contracted Power and
Energy International-Matex Tank
Terminals Leaf River Gas Storage Waste Industries WCA Waste Bayonne Energy Center
North America Asia Mexico Decarred (highways)
Mexican Tower Partners Concesionaria Universidad
Politécnica Santiago HydroGen Mareña Renovables (wind farms)
Australia Hobart International Airport Crown Castle Prospect Water
Australia & New Zealand New Zealand Oceania Healthcare
South Africa Umoya Energy Cookhouse Kathu Bakwena Platinum
Corridor N3 Toll Concessions Trans African
Concessions
Africa & Middle East Kenya Kinangop Wind Park
India Viom Networks
Adhunik Power and Natural Resources
MB Power (Madhya Pradesh) Ashoka Concessions GMR Airports (Delhi and
Hyderabad airports) Soham Renewable Energy
Trichy Tollways GMR Jadcherla Expressways Gujarat Roads
Europe UK Airwave AGS Airports Arqiva CLP Envirogas
(MEIF Renewables) Energy Power Resources (MEIF
Renewables) Thames Water M6 Toll Condor Group (ferry services) Moto (motorway services) National Car Parks
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
Czech Republic Ceske Radiokomunikace Czech Gas Networks
Russia Brunswick Rail GSR Energy Investments Russian Towers OGK-5
Slovakia Towercom
Sweden EPR Sweden (MEIF
Renewables, wind farm) Varmevarden Arlanda Express
Poland DCT Gdansk (container terminal) TanQuid (tank storage business)
Italy Renvico Italy
Spain Asset Energia Solar (MEIF
Renewables) Solpex Energia Solar (MEIF
Renewables) Viesgo Itevelesa (vehicle inspections)
Portugal Viesgo
Denmark Copenhagen Airports
Belgium Brussels Airport
Roads & Rail Renewable Energy Other Transport Services Real Estate Communications Airports Other Real Assets Energy Utilities Waste Agriculture
Nigeria Lekki Concession
Company IHS Holdings
United Arab Emirates ICAD Effluent Treatment Plant Al Ain Industrial City Industrial City of Abu Dhabi
PAGE 35 MACQUARIE KOREA INFRASTRUCTURE FUND
MIRA infrastructure overview
1996 June 2015
Funds / Vehicles Unlisted No. - 30
Listed No. 2 5
Portfolio Businesses No. 4 120
Assets under Management A$bn 1.6 1251
Equity under Management Unlisted A$bn - 442
Listed A$bn 0.6 142
1. Based on proportionate enterprise value, calculated as proportionate net debt and equity value at 31 December 2014 for the majority of assets 2. Listed funds – market capitalisation plus fully underwritten or committed future capital raisings. Unlisted funds – committed capital less any non-recallable 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.