MACQUARIE KOREA INFRASTRUCTURE FUND General Presentation May 2010
CONTENTS
1
2
3
Key Results Highlights
5
Underlying asset performance
7
Financial results
6
Newly opened assets
8
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
Capital restructuring opportunities
18
Landmark assets
14
Distribution
19
Conclusion
20
Appendices Balance sheet
22
Minimum revenue guarantee summary
28
Profit and loss statement
23
Management fee
29
Cashflow statement
24
Macquarie worldwide investments
30
Capital management transaction
25
Macquarie capital funds advantage
31
Portfolio
26
32
Operation performance by asset
27
Macquarie capital funds infrastructure overview
P
Key Results
efdeifdeqp=Ó Nn=OMNM Solid overall performance
9
9
CONTINUES TO DELIVER SOLID TRAFFIC AND FINANCIAL RESULTS
Traffic volume and revenue1 growth of 3.3% and 5.1% respectively compared with the prior corresponding period (pcp)
Weighted average traffic volume vs. Concession Agreement forecasted volume of 65%2 for the newly opened assets
MKIF Revenue and EBITDA increased by 8% and 4%, respectively on pcp
Recognised capital gains of KRW 7.1bn during 1Q from two capital management transactions3
SUCCESSFUL OUTCOME ON CAPITAL MANAGEMENT INITIATIVES
9
1. 2. 3. QK 5. 6. 7.
Generated a net cash proceeds to MKIF of W105bn
2nd Tranche securitisation of the interest receivable on the subordinated loans provided to Cheonan-Nonsan Expressway
Divestment of the subordinated loan provided to Seosuwon-Osan-Pyungtaek Expressway
REMAINS FINANCIALLY HEALTHY (as of 31 March 2010)
Proportionately consolidated cash balance4 of KRW 412.2bn
Undrawn commitments5 of KRW 118bn remaining over next 2 years
Current MKIF net debt of KRW 187.2bn with corporate debt funding not maturing until 2014
Proportionately consolidated gearing6 of 50% with 61% of interest obligations either fixed or hedged7 for next one year
MRG (minimum revenue guarantee) backing on substantially all of MKIF’s operating cash receipts
On a weighted average basis based on revenue size of each asset and the MKIF’s equity interest in each concession company. Excludes all new assets which have commenced operation since July 2009 On a weighted average basis based on total commitment amount into four new assets opened in 2009. Transactions include (i) Seosuwon-Osan-Pyungtaek Expressway (sale of subordinated loan) and (ii) Cheonan-Nonsan Expressway (securitisation of interest receivable on subordinated loan). Details of the transactions is contained in Slide 25 fåÅäìÇÉë Åçêéçê~íÉ=Å~ëÜ=Ä~ä~åÅÉ=çÑ=hot=OMQKÄå Excluding MKIF’s conditional commitment to acquire an additional 32% equity interest in Yongin-Seoul Expressway 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 Hedging (Fixed or swapped to fixed) = Proportionately consolidated MKIF net debt adjusted for fixed or swapped debt / Proportionately consolidated MKIF net debt
R
cfk^k`f^i=obpriqp= Delivery of steady growth
Non-consolidated financial information (Unit: KRW mn)
Revenue Interest & dividend income
FY2009
1Q 2009
1Q 2010
153,978
40,867
44,025
157,818
40,534
36,875
(3,575)
-
7,1482
(265)
333
2
53,755
11,746
15,716
Management fee
23,382
5,859
5,650
Interest expense
22,961
4,512
6,526
7,412
1,375
3,5403
EBITDA
123,184
33,633
34,835
Net income
100,223
29,121
28,309
Capital gain (loss) Other income (loss) Expense
Other expense
1. 2. 3.
% change
7.7%
-9.0 1
3.6%
Due to the decrease in interest income resulting primarily from the sale of two assets (senior debt in Incheon Grand Bridge and sub-debt in Seosuwon-Osan-Pyungtaek) and the application of effective interest accounting method in relation to Machang Bridge subordinated loan (From 20% interest rate to 9.35%) Includes gains from (i) securitisation of interest receivable in Cheonan-Nonsan Expressway of KRW249mn and (ii) divestment of the sub-debt in Seosuwon-Osan-Pyungtaek Expressway of KRW6,899mn Includes one-off transaction related costs
S
rkaboivfkd=^ppbq=mbocloj^k`b== Improved operating performance
TRAFFIC VOLUME GROWTH1
TRAFFIC REVENUE GROWTH1
3.3%
5.1%
EBITDA MARGIN
2
PORTFOLIO AGE3
86%
4 years
TRAFFIC PERFORMANCE –1Q 2010 OVER 1Q 2009 Average daily traffic volume % of MKIF Portfolio
3. 4.
Vehicles/day
% change on pcp
KRW thousand/day
% change on pcp
Incheon International Airport Expressway
6.2%
50,323
(12.4%)
301,036
(10.5%)
Baekyang Tunnel
0.2%
65,836
2.4%
47,930
2.6%
Gwangju Second Beltway, Section 3-1
5.6%
30,154
13.4%
26,657
25.3%
Gwangju Second Beltway, Section 1
10.7%
32,508
(4.7%)
33,475
12.8%
Woomyunsan Tunnel
1.1%
23,827
9.7%
41,300
9.7%
Cheonan-Nonsan Expressway
15.2%
34,364
8.8%
261,685
10.5%
Soojungsan Tunnel
7.3%
39,415
4.0%
29,668
4.6%
Deagu 4th Beltway East
5.0%
18,301
3.1%
18,351
3.1%
Machang Bridge4
5.6%
12,928
26.8%
23,198
6.3%
Weighted average growth rate1 1. 2.
Average daily traffic revenue
3.3%
5.1%
On a weighted average basis based on revenue size of each asset and the MKIF’s equity interest in each concession company. Excludes all new assets which have commenced operation since July 2009 Estimated, unaudited figure. On a proportionate average basis based on MKIF’s equity interest in each concession company. EBITDA margin=EBITDA/Operating Revenue where, revenue compensation and other compensations are reflected on cash basis. Excludes all new assets which have commenced operation in 2008 and 2009 Operation period of each concession company on a weighted average basis based on respective commitment amount FY2008 figures annualised
T
kbtiv=lmbkba=^ppbqp== A successful transition into operation for the four new assets
Represent 29% of the portfolio, all completed on time and on budget All subject to MRG arrangement Weighted average traffic volume vs. Concession Agreement forecasted volume of 65%1 Traffic results to date in line with expectations but remain cautious to ensure timely payments of sub-debt interests Only 1 out of 14 assets in the portfolio now remains under construction Yongin-Seoul Expressway
Operation commencement Average daily traffic revenue (‘000 krw) Average daily traffic2 (Vehicles/day) % of CA forecast traffic volume Traffic volume growth (1Q 2010 over FY09 4) Revenue Guarantee Threshold % of MKIF portfolio
Seoul Subway Line 9, Section 1
Incheon Grand Bridge
1 July 09
15 July 09
24 July 09
19 October 09
70,878
179,592
117,373
105,164
44,261
28,518
162,0693
21.620
58%
63%
91%
61%
14%
(6%)
17%
(15%)
70%
80% / 70% / 60%5
90% / 80% / 70%5
80%
7.6%
7.6%
4.2%
9.2%
Traffic pattern: international Key growth drivers: Extension of the airport user demand and subway line (Section 2 and 3) to the Youngong Island tourists Key growth drivers: Business and Key growth drivers: a major southeast end of Seoul within next 3 Key growth drivers: recreational/resort facility residential developments Developments of commercial years developments underway underway area of New Songdo International District in Incheon City and On a weighted average basis based on total commitment amount. Average daily traffic during 1Q 2010 housing developments in Average daily initial boarding during 1Q 2010. Initial boarding only (Excludes inter-change passengers) Yongjong Island From opening date to 31 December 2009 Traffic pattern: Commuters and intercity travel
1. 2. 3. 4. 5.
Seoul-Chuncheon Expressway
Traffic pattern: Intercity travel (national expressway)
Traffic pattern: Commuters
Step down every five years
U
BUSINESS OVERVIEW
MKIF HISTORY
Established in December 2002
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 Late 90s
2000
Identified the attractive opportunities available 2001
2002
Active fund raising and deal participation 2003
2004
Market Leader 2005
2006
Capital raising of KRW 1.26tn 1.26 tnuntil untilthe thelisting listing Establishment • • Captured attractive asset portfolio underpinned by significant government revenue and capital protections
MANDATE
INVESTMENTS
To invest in infrastructure assets in Korea as defined under PPI Act1
14 assets, KRW 1.79tn (12 toll roads, 1 subway &1 port)
OBJECTIVE
ASSET MANAGER
2007
Listing
2008
2009
2010
Capital raising of KRW 582.5 bn through IPO Dual listed on KRX and LSE
To create value through active capital/portfolio management and to provide stable distributions
Macquarie Shinhan Infrastructure 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 joint venture company between Macquarie Group and Shinhan Financial Group.
NM
SHARE INFORMATION Korea’s only listed infrastructure fund As of 31 March 2010
SHAREHOLDER BASE
EXCHANGE
KRX -088980.KS / LSE – MKIF.LI
International investors
24.8% 62.3%
1. 2. 3.
MARKET CAP1
KRW 1.6 trillion (US$ 1.4 billion )
DAILY VOLUME2
256,082 shares (US$ 1 million)
Domestic institutions
12.9% Domestic Retails
TOP SHAREHOLDERS3 1. Military Mutual Aid Association
11.8%
2. Shinhan Financial Group
11.2%
3. Kumho Life Insurance
7.5%
4. Capital Research & Mgmt Company
6.0%
5. Korea Life Insurance
5.9%
6. Korea Government Employees Pension Services
5.4%
7. Lazard Asset Management
5.0%
8. Macquarie Group
4.4%
Based on the share price as of 31 March 2010 3-month average daily turnover Source: Financial Supervisory Service
NN
CORPORATE STRUCTURE
Tax flow through vehicle
As of 31 March 2010
Active manager of the invested companies through management participation
Corporate tax exempted when MKIF distributes more than 90% of its annual net income
Korean retail residents benefit from a lower distribution withholding tax1
Management Agreement
MKIF
– External fund manager – JV between Macquarie & Shinhan Financial Group – Managed under Macquarie’s global policies and procedures
Invests in 14 Concession companies Receives: Interest income
Dividend
Invests in the form of: Equity
Macquarie Shinhan Infrastructure Asset Management Co., Ltd.
Subordinated debt Senior debt
OPERATING – 13 assets
CONSTRUCTION – 1 asset
Toll roads (12) Subway(1)
Port(1)
1. Investments having a total par value of KRW 100mil or less are subject to withholding tax of 5.5%. Investments having a total par value over KRW100mil are subject to 15.4% (applicable until December 2010)
NO
mloqcliflN Young and well balanced, diversified portfolio As of 31 March 2010
Portfolio Composition by Asset1
Portfolio Composition by Phase and Type
Beakyang Tunnel 0.2% Busan New Port Phase 2-3 14.6%
Seoul Subway Line 9, Section 1
Gwangju 2nd Beltway, Section 1
Construction 14.6%
Soojungsan Tunnel 7.3%
Subway 4.2%
Incheon Grand Bridge 9.2%
15.6%
Incheon International Airport Expressway 6.2%
Port 14.6%
4.2%
Senior debt
10.7%
Daegu 4th Beltway, East 5.0%
Seoul-Chuncheon Expressway
Toll-road 81.3%
7.6%
Cheonan-Nonsan Expressway 15.1%
Yongin-Seoul Expressway
Mature 15.9% Equity 36.0%
Ramp up 39.8%
Growth 29.7%
Sub debt 48.4%
7.6% Machang Bridge 5.6%
Woomyunsan Tunnel 1.1% Gwangju 2 Beltway, Section 3-1 nd
5.6% 1. Based on commitment amount
NP
LANDMARK ASSETS Presence in major metropolitan areas
Source: Korea National Statistical Office (As at 31 December 2009)
NQ
ilkdJqboj=`lk`bppflk=mbofla Government support packages1 underpin investment security As of 31 March 2010
CONCESSION TERM VS. GOVERNMENT REVENUE SUPPORT PERIOD Relevant Authority (C) Central government
(L) Local government
Revenue Support Duration 2
Concession Term 3
Weighted Average Revenue Support 14 years
Present
Weighted Average Concession Term 25 years
Early Termination Support4
9 9 9 9 9 9 9 9 9 9 9 9 9 9
(L)Baekyang Tunnel (L)Gwangju 2nd Beltway, Section 1 (C)Incheon International Airport Expressway (L)Soojungsan Tunnel (L)Daegu 4th Beltway, East (C)Cheonan Nonsan Expressway (L)Woomyunsan Tunnel (L)Gwangju 2nd Beltway, Section 3-1 (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 1. 2. 3. 4.
2005
2010
2015
2020
2025
2030
2035
2040
2045
Revenue support and termination payment provisions vary for each concession Revenue support until at least 2023 with weighted average support remaining of about 14 years (excluding Busan New Port Phase 2-3) Concessions last at least until 2035 with weighted average life remaining of over 25 years 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
NR
GOVERNMENT REVENUE SUPPORT1 Mechanism
MINIMUM REVENUE SUPPORT MECHANISM
Conceptual Diagram Actual Revenue
Revenue
Revenue Cap1
Relevant government authorities extract the excess portion
Forecast Revenues2 MRG1
MRG and Revenue support for 13 of MKIF’s 14 assets3
Real and inflation-linked revenue support
MRG line tracking the forecast revenue line (typically 80~90% below forecast revenue)
No history of Korea sovereign default
Korea sovereign rating as of April 2010: − S&P
: A (Stable)
− Moody’s : A1 (Stable) Government bodies compensate the shortfall
Details for the government revenue support by each asset attached – Slide 28
1. MRG and revenue caps vary across assets 2. Forecast revenues set out in the Concession Agreement 3. In three of 13 MRG assets, no revenue guarantee applies if actual revenue are below 50 % of the toll revenue forecast
NS
DEBT PROFILE
Conservatively positioned to withstand volatility in the credit market As of 31 March 2010
OUTSTANDING DEBT BALANCE 5 AMORTISING MATURITY1
8.7 years (KRW bn)
GEARING2
50%
1,800 1,500 1,200
NET DEBT TO EBITDA3
2.7x
900 600 300
INTEREST RATE HEDGE4
61% until end of 2011
2010
2015
2020
2025
2030
2035
2040
1. Weighted average amortising maturity of the underlying asset level external debt 2. Gearing = Proportionately consolidated MKIF Net Debt / (Proportionately consolidated MKIF Net Debt + MKIF market capital (3-month average)), where Proportionately consolidated MKIF Net Debt = Proportionate net debt from assets + Corporate net debt. Excludes shareholder loans 3. As of 31 December 2009. Proportionate average of operating assets Excludes all new assets which have commenced operation in 2008 and 2009 4. Hedging (Fixed or swapped to fixed) = Proportionately consolidated MKIF net debt adjusted for fixed or swapped 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 corporate loan facility
NT
CAPITAL RESTRUCTURING OPPORTUNITIES Value creation from capital management activities
Opportunities exist to optimise capital structure
Asset level senior debt typically have amortising debt with restrictive cash reserve covenants
Certain assets are subject to Benefit Sharing Plan where financial benefits from refinancing need to be shared with the relevant government authority
Gearing
Conceptual Diagram
② INCREASE GEARING
50%1
③ DELAY DEBT AMORTISATION ① REFINANCING Year ① REFINANCING
Lower interest rate
Improve debt covenants
Release trapped cash
③ DELAY DEBT AMORTISATION
② INCREASE GEARING
Capacity to gear up further
Bring forward available cash
1. Proportionately consolidated net gearing as at March 2010
NU
afpqof_rqflk=
DECLARATION/ PAYMENT
Semi-annual: As end of June and December
2009 DISTRIBUTION
KRW 390 per share
DISTRIBUTION FLOOR
CASH YIELD
Higher of taxable income or 100% of distributable accounting income – to maintain tax exempt status
Circa 7.9%1
DISTRIBUTION HISTORY ( PER SHARE, POST-LISTING ) 582
600 500
420
440
122
Stock distribution 390
400
220
300
220
230
160
200
Second Half
100
200
220
230
230
2008
2009
First Half
0
2006
2007
1. Based on the average closing price in 2009 and 2009 total distribution
NV
CONCLUSION
Key value propositions
Minimum Revenue Guarantee (MRG) provided to13 out 14 underlying assets REDUCED CAPITAL RISKS
Currently, substantially all of operating cash receipts are MRG-backed Underlying revenues are fully inflation-adjusted Real and inflation-linked natural underlying revenue growth
EMBEDDED GROWTH POTENTIAL
Capital restructuring opportunities Re-rating of assets Growth through new investments
Sound balance sheet position HEALTHY FINANCIALS
Conservative gearing with solid debt profile Stability of operating cashflows supported by predictable cost basis Global leader managing 110 infrastructure businesses in 25 countries
MACQUARIE MANAGED FUND
Superior track record delivering over 7%(listed)/7%(unlisted) annual return since 19941 Management fees aligned with shareholders’ interests
STRONG MARKET PRESENCE
#1 infrastructure management and advisory platform with over 100 professionals Unrivalled brand recognition and track record in the infrastructure space in Korea
1. Annualised return based on all capital raised, distributions paid and valuations (market capitalisation for listed funds and net asset value for unlisted, including managed assets) for Macquarie Capital Funds since inception to 30 September 2009 (unlisted funds and managed assets as at 30 June 2009).
OM
APPENDICES
BALANCE SHEET
Unaudited, Non-consolidated – as at 31 March 2010 and 31 December 2009
(Unit: KRW mn)
Mar 2010
Dec 2009
Total Assets
2,065,434
2,154,296
Invested Assets
1,881,956
1,964,784
204,123
239,694
1,059,216
1,112,570
618,617
612,520
183,478
189,512
Cash and deposits Loans Equity securities Others (receivables, prepayments, etc.) Total Liabilities
399,756
463,894
3
7
5,650
5,814
391,370
380,087
2,733
77,986
Total Shareholders’ Equity
1,665,678
1,690,402
Total Liabilities and Shareholders’ Equity
2,065,434
2,154,296
Accounts payables Management fee payable Long-term debts Other liabilities
CAPITAL INJECTION INTO MKIF INVESTMENTS1
Asset
Item
Soojungsan Tunnel
Sub Debt
(1,799)
Gwangju 2nd Beltway, 3-1
Sub Debt
(1,834)
Seosuwon-Osan-Pyungtaek
Sub Debt
(68,455)
Incheon Grand Bridge
Busan New Port Total
FY2010
Equity
1,600
Sub Debt
1,948
Equity
4,497
Sub Debt
16,797 (47,246)
1. Excluding transaction costs
OO
PROFIT AND LOSS STATEMENT Unaudited, Non-consolidated
(Unit: KRW mn)
1Q 2010
1Q 2009
FY2009
44,025
40,867
153,978
36,875
40,534
157,818
-
144
144
7,1481
-
(3,575)
2
189
(409)
15,716
11,746
53,755
Management fee
5,650
5,859
23,382
Interest expense
6,526
4,512
22,961
Other expenses
3,5402
1,375
7,412
28,309
29,121
100,223
Revenue Interest income Arrangement fees Gain (Loss) on sale of investment Other Income Expense
Net Profit 1. 2.
Includes gain on (i) securitisation of interest receivable in Cheonan-Nonsan Expressway of KRW249mn and (ii) divestment of the sub-debt in Seosuwon-Osan-Pyungtaek Expressway of KRW6,899mn Includes one-off transaction related costs
OP
`^pecilt=pq^qbjbkq Audited, non-consolidated
(Unit: KRW mn)
FY2008
FY2009
% Change
386,127
377,423
(2%)
280,319
183,051
-
5,396
105,808
116,211
-
72,765
(355,673)
(186,495)
(314,485)
(146,571)
(41,188)
(39,924)
30,454
190,928
(100,000)
(120,000)
314,000
137,000
(145,571)
(150,646)
Net cash provided by (used in) financing activities
68,429
(133,646)
Net increase in cash and deposits
98,883
57,282
Cash and deposits at beginning of the period
83,529
182,412
182,412
239,694
Cashflows from operating activities: Cash inflows from operating activities Sale of investment Collection of other loans receivable Interest income and other Advanced receipt Cash outflows from operating activities: Investments Fees and expenses Net cash provided by (used in) operating activities
(48%)
527%
Cashflows from financing activities: Repayment of long-term debts Drawdown from long-term debts Distributions paid
Cash and deposits at end of the period
(295%)
31%
OQ
CAPITAL MANAGEMENT TRANSACTIONS – 1Q 2010 Validation of intrinsic value and recycle story SECURITISATION OF SUBORDINATED DEBT INTEREST RECEIVABLE
SALE OF SUBORDINATED LOAN
FINANCIAL CLOSE (January 2010)
ISSUANCE OF THE 2ND TRANCHE ABS (March 2010)
Seosuwon-Osan-Pyungtaek Expressway
Cheonan-Nonsan Expressway
DESCRIPTION
Divestment of MKIF’s subordinated loan commitment of KRW 80bn (Final drawndown amount of KRW 77.3bn)
Sale of a non-core asset
Released trapped sub-debt interest to MKIF Attractive pricing
Sold at premium of KRW 6.9bn1
Evidence of market’s strong appetite for MKIF’s assets − AA credit rating for subordinated cashflow without credit support − Competitive pricing in spite of unusual structure of callable (with lock-up period) zerocoupon ABS
Net cash inflow of KRW 85.7bn
Immediate net cash inflow of KRW 19.5bn
TRANSACTION RATIONALE
PRICING
CASHFLOW 1. 2.
Securitisation of MKIF’s interest receivable on the subordinated loans – 8 tranches of ABS to be issued with a combined face value of KRW 157.2bn2 2nd tranche total issuance amount of KRW 20.1bn issued at the discount rate of 6.68%
Resulting in KRW 6.9 billion of accounting income in 1Q 2010 (deducting related expenses) Assuming the market rates of the ‘AA-’ rated Korean corporate bonds as at 14 May 2009
OR
mloqclifl= Balanced, diversified portfolio As of 31 March 2010
MKIF COMMITMENT AND DEBT INTEREST RATE (KRW bn, %)
Interest Rate
Senior Debt
Interest Rate
Total
-
1.7
15.0
2.9
20.0
142.0
10.0
190.3
Name
Abbrv.
Baekyang Tunnel
BYTL
1.2
100.0
-
Gwangju 2nd Beltway Section 1
KBICL
13.1
100.0
35.2
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
63.0
8.5
129.4
Daegu 4th Beltway, East
D4
57.5
85.0
32.0
17.0
-
-
89.5
Cheonan-Nonsan Expressway
CNE
87.7
60.0
182.3
16.0
-
-
270.0
Woomyunsan Tunnel
WIC
10.7
36.0
9.6
20.0
-
-
20.3
Gwangju 2nd Beltway Section 3-1
KRRC
28.9
75.0
-
-
71.5
7.85
100.4
Machang Bridge
MCB
48.3
100.0
51.2
20.0
-
-
99.5
Yongin–Seoul Expressway2
YSE
57.8
35.0
77.0
13.0
-
-
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
11.5
-
-
163.9
Busan New Port Phase 2-3
BNP
66.4
30.0
193.0
10.0
-
-
259.4
Total Percentage (%)
Equity
Subordinated Debt
Ownership (%)
1
640.9
861.6
278.2
1,780.7
36.0
48.4
15.6
100.0
1. Includes KRW 3.2bn working capital facility 2. Excludes MKIF’s conditional commitment to acquire an additional 32% equity interest
OS
lmbo^qfkd=mbocloj^k`b=_v=^ppbqN 12 Months to 31 December 2009
(Unit: KRW million)
20092
2008
Operating Revenue3
OPEX
EBITDA
Net Debt4
EBITDA margin
Net Debt to EBITDA
Operating Revenue3
OPEX
EBITDA
Net Debt4
EBITDA margin
Net Debt to EBITDA
Gwangju Second Beltway, Section 1
26,531
(4,781)
21,751
(603)
82%
(0.0x)
23,105
(3,183)
19,292
(346)
83%
(0.0x)
Gwangju Second Beltway, Section 3-1
15,778
(3,439)
12,338
(8,568)
78%
(0.7x)
14,006
(3,157)
10,849
(2,465)
77%
(0.2x)
Soojungsan Tunnel
22,530
(2,622)
19,908
(9,667)
88%
(0.5x)
15,808
(2,566)
13,242
(4,361)
84%
(0.3x)
Baekyang Tunnel
21,425
(3,568)
17,856
159,104
83%
8.9x
20,298
(4,469)
15,829
164,823
78%
10.4x
Incheon International Airport Expressway
225,370
(17,548)
207,822
419,151
92%
2.0x
219,213
(21,417)
197,796
532,974
90%
2.7x
Cheonan-Nonsan Expressway
147,709
(22,941)
124,767
397,170
84%
3.2x
131,345
(19,914)
111,431
470,234
85%
4.2x
Woomyunsan Tunnel
21,307
(3,841)
17,466
96,772
82%
5.5x
21,553
(3,648)5
17,905
74,948
83%
4.2x
Daegu 4th Beltway East
23,654
(3,082)
20,572
78,586
87%
3.8x
21,317
2,649
18,668
88,711
88%
4.8x
Proportionate average6
31,629
(4,443)
27,186
72,920
86%
2.7x
28,404
(4,236)
24,167
83,905
85%
3.5x
Assets
1. 2. 3. 4. 5. 6.
Excludes all new assets which have commenced operation in 2008 and 2009 Management estimated, unaudited figures. Actual results may vary Revenue compensation and other compensations from the relevant government authority are reflected on cash basis. Payments are typically received within 6 to 18 months after the end of the year to which they relate. Excludes Shareholders loans Adjusted to exclude costs related to capital restructuring in 4Q 2008 On a proportionate average basis based on MKIF’s equity interest in each concession company.
OT
MINIMUM REVENUE GUARANTEE SUMMARY As of 31 March 2010
Asset
Concession Term
Concession Term Revenue Guarantee Revenue Guarantee Remaining Duration Duration Remaining
Revenue Guarantee Threshold 1
Revenue Cap Threshold 1,2
Remarks
Operating asset
Baekyang Tunnel
25
15
25
15
90%
110%
Gwangju 2nd Beltway, Section 1
28
19
28
19
85%
115%
Incheon International Airport Expressway
30
21
20
11
80%
110%
Soojungsan Tunnel4
25
17
25
17
90%
110%
Daegu 4th Expressway, East
24
16
20
12
79.8%
120.2%
Cheonan-Nonsan Expressway
30
23
20
13
82%
110%
Woomyunsan Tunnel
30
24
30
24
79%3
110%
Gwangju 2nd Beltway, Section 3-1
30
25
30
25
90%
110%
Machang Bridge
30
28
30
28
80%
120%
Yongin-Seoul Expressway 5
30
30
10
10
70%
130%
Seoul-Chuncheon Expressway 5
30
30
15
15
80%/70%/60%
120%/130%/140%
Change by every five year
Seoul Subway Line 9, Section 1 5
30
30
15
15
90%/80%/70%
110%/120%/130%
Change by every five year
Incheon Grand Bridge
30
30
15
15
80%
120%
Busan New Port Phase 2-3
29
29
N/A
N/A
Weighted average6
29
25
17
14
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% to110%
Construction asset
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
OU
MANAGEMENT FEES Aligned with shareholder interests
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 Commitment2 of MKIF
Performance Fee
20% sharing in cumulative total returns3 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 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.
OV
MACQUARIE WORLDWIDE INVESTMENTS 110+ businesses and 330+ properties1
UK M6 Toll Bristol Airport Wales & West Utilities Thames Water CLP Envirogas Energy Power Resources Arqiva Airwave Red Bee Media Condor Group (ferry services) Moto (motorway services) National Car Parks East London Bus Group Steam Packet (ferry services) Wightlink (ferry services)
Finland Fonecta (directories) Spain Itevelesa (vehicle inspection) Asset Energia Solar Solpex Energia Solar Netherlands De Telefoonggids (directories) Gouden Gids (directories) Italy Macquarie Office Trust
Czech Republic Mediatel (directories) Slovakia Mediatel (directories) Sweden EPR Sweden (wind farm) Arlanda Express Lokaldelen (directories) Poland DCT Gdansk (container terminal) Macquarie CountryWide Trust pkt.pl (directories)
Canada Edmonton Ring Road Highway 407 ETR A-25 Sea to Sky AltaLink Cardinal (power station) Whitecourt (biomass facility) Chapais (biomass facility) Erie Shores Wind Farm Hydro Power Business Halterm Limited (port) Fraser Surrey Docks Leisureworld New World Gaming
USA Dulles Greenway Indiana Toll Road Chicago Skyway South Bay Expressway AIR-serv (tyre inflation) Icon Parking Total Terminals International Harley Marine Services Petermann (school buses) Smarte Carte Penn Terminals Sentient (private aviation) Airport Parking Business Airport Services (fixed base operations)
Waste Industries American Consolidated Media Bulk Liquid Storage Terminal Business Global Tower Partners Macquarie DDR Trust Macquarie CountryWide Trust Macquarie Office Trust Aquarion Company Puget Energy District Energy Duquesne Light The Gas Company
Belgium
Brussels Airport Denmark Copenhagen Airports De Gule Sider (directories)
France Autoroutes Paris-RhinRhône Trois Sources & Lomont Windfarms Compteurs Farnier (water metering) EPR France (wind farm) RES (wind farm) Pisto SAS (oil storage and distribution) Germany Warnow Tunnel Macquarie CountryWide Trust Macquarie Office Trust GWE (heat & power) Techem (submetering) TanQuid (tank storage business) Austria Herold (directories)
Real Estate
South Africa N3 Toll Concessions Bakwena Platinum Corridor Trans African Concessions Neotel Kelvin Power Station
United Arab Emirates Al Ain Industrial City Industrial City of Abu Dhabi ICAD Effluent Treatment Plant
Airports
Changshu Xinghua Port MWREF Hua Nan Expressway Taiwan Taiwan Broadband Communications Miaoli Windpower Hanjin Pacific Corporation (Kaohsiung)
Nigeria Lekki Concession Company
Communications
Utilities
Roads
South Korea Baekyang Tunnel Cheonan-Nonsan Expressway Incheon International Airport Expressway Gwangju 2nd Beltway Section 1 Gwangju 2nd Beltway Section 3-1 Machang Bridge Soojungsan Tunnel Daegu 4th Beltway East Incheon Grand Bridge Seoul Chuncheon Expressway Woomyunsan Tunnel Yongin-Seoul Expressway West Sea Power/West Sea Water C&M (cable tv) Hanjin Pacific Corporation (ports) Busan New Port Phase 2-3 Seoul Subway Line 9, Section 1
Australia Dampier to Bunbury Natural Gas Pipeline Multinet Gas Holdings United Energy Distribution AlintaGas Networks Hobart International Airport Westlink M7 Retirement Villages Group Macquarie Southern Cross Media Regis Group (aged care) Macquarie CountryWide Trust MREEF Macquarie Direct Property Fund Macquarie Office Trust
China
Puerto Rico Global Tower Partners
Japan Macquarie Direct Property Fund Macquarie Office Trust Hanjin Pacific Corporation (Tokyo, Osaka)
New Zealand Metlifecare Private Lifecare Retirement Care New Zealand Macquarie CountryWide Trust
Transport & Related Services
Other
1. As at 31 December 2009. Represents businesses and assets which Macquarie Capital Funds manages on behalf of investors with various direct percentage stakes held in each.
PM
MACQUARIE CAPITAL FUNDS ADVANTAGE Macquarie Capital Funds’ advantage is demonstrated by its track record and active approach to sourcing, analysing, investing in and managing businesses that provide essential services QUALITY DEAL FLOW Access to a quality stream of investment opportunities originated by Macquarie Capital Advisors’ global network of advisory executives dedicated to sourcing, analysing and executing opportunities BUSINESS AND ASSET MANAGEMENT SPECIALISTS Driving improved operational performance across the businesses and ensuring the delivery of high quality services to over 100 million people around the globe daily STRONG ALIGNMENT OF INTERESTS Macquarie and staff investment of +A$2.7 billion in Macquarie Capital managed funds Robust corporate governance framework ESTABLISHED TRACK RECORD A$46billion in equity under management across 46 funds/vehicles, ~110 businesses, +330 properties in 25 countries 5%2,3 unlisted and 5%2 listed returns to investors from vehicles managed by Macquarie Capital Funds since inception 1
1. 2.
3.
As at 31 December 2009. Listed funds – market capitalisation plus fully underwritten or committed future capital raisings. Unlisted funds – committed capital less any called capital returned to investors. Invested capital for other MacCap Funds managed businesses. For jointly managed funds the amount is representative of Macquarie’s economic ownership of the JV manager. Adjustments have been made where Macquarie managed funds have invested in other Macquarie managed funds. Annualised internal rate of return for MacCap Funds since inception based on all capital raised, distributions and valuations (market capitalisation at 31 December 2009 for listed funds and net asset value at most recent valuation date for unlisted funds, 30 September 2009 for majority of assets). Calculated in AUD, with cash flows converted at fixed FX rates (based on date of listing for listed funds, first close date for unlisted funds and financial close date for managed businesses). Should unrealised performance fees/carried interest payable by unlisted funds/vehicles at the applicable calculation date be taken into account, unlisted annualised return would have been 4%. Unlisted performance weighted towards more recent investment activity, with majority of unlisted EUM being raised & invested within last 5 years. Past performance not indicative of future returns. Unlisted performance is weighted towards more recent investment activity, with the majority of unlisted EUM being raised & invested within the last 5 years.
PN
MACQUARIE CAPITAL FUNDS INFRASTRUCTURE OVERVIEW Sustainable growth delivering superior performance for investors
1996 Funds/vehicles
December 2009
Unlisted
No.
-
21
Listed
No.
2
6
Businesses
No.
4
95
Assets under management
A$b
1.6
1011
Unlisted
A$b
-
332
Listed
A$b
0.6
62
Unlisted
%
n/a
7% pa3
Listed
%
n/a
7% pa3
Equity under management
Returns to investors
1. Based on proportionate enterprise value, calculated as proportionate net debt and equity value at most recent valuation date, 30 September 2009 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 MacCap-managed businesses. For jointly managed funds, amount is representative of Macquarie’s economic ownership of the JV manager. Adjustments have been made where MacCap-managed funds have invested in other MacCap-managed funds. 3. Annualised internal rate of return for MacCap Funds since inception based on all capital raised, distributions and valuations (market capitalisation at 31 December 2009 for listed funds and net asset value at most recent valuation date for unlisted funds, 30 September 2009 for majority of assets). Calculated in AUD, with cash flows converted at fixed FX rates (based on date of listing for listed funds, first close date for unlisted funds and financial close date for managed businesses). Unlisted performance weighted towards more recent investment activity, with majority of unlisted EUM being raised & invested within last 5 years. Past performance not indicative of future returns.
PO
