Strictly Confidential Macquarie Securities (USA) Inc. Mark Rosner Senior Vice President Macquarie Securities (USA) Inc. Surface Transportation Board Fall

Strictly ConfidentialMacquarie Securities (USA) Inc.

Mark Rosner Senior Vice President

Macquarie Securities (USA) Inc.

Surface Transportation Board Fall Forum

October 15, 2007

Washington D.C.

2STRICTLY CONFIDENTIAL

Important Notice

The name "Macquarie" refers to the Macquarie group, which comprises Macquarie Bank Limited and its worldwide subsidiaries, affiliates, and funds or other investment vehicles that they manage. This document does not constitute an offer to sell or a solicitation of an offer to buy any securities. It is an outline of matters for discussion only.

This document and its contents are confidential to the person (s) to whom it is delivered and should not be copied or distributed, in whole or in part, or its contents disclosed by such person (s) to any other person.

You may not rely upon this document in evaluating the merits of investing in any securities referred to herein. This document does not constitute and should not be interpreted as either an investment recommendation or advice, including legal, tax or accounting advice.

Future results are impossible to predict. Opinions and estimates offered in this presentation constitute our judgement and are subject to change without notice, as are statements about market trends, which are based on current market conditions.

This presentation may include forward-looking statements that represent opinions, estimates and forecasts, which may not be realized. We believe the information provided herein is reliable, as of the date hereof, but do not warrant its accuracy or completeness. In preparing these materials, we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources.

Nothing in this document contains a commitment from Macquarie to subscribe for securities, to provide debt, to arrange any facility, to invest in any way in any transaction described herein or is otherwise imposing any obligation on Macquarie. Macquarie does not guarantee the performance or return of capital from investments. Any participation by Macquarie in any transaction would be subject to its internal approval process. Macquarie Bank Limited is not licensed to conduct banking business in the United States. It maintains Representative Offices in New York, Texas, California and Washington. With respect to matters pertaining to US securities laws, and to the extent required by such laws, Macquarie Bank Limited and its worldwide subsidiaries consult with, and act through, Macquarie Securities (USA) Inc., a registered broker-dealer and member of NASD, or another US broker-dealer.

Macquarie Securities (USA) Inc. is not an authorized deposit-taking institution for the purposes of Banking Act (Commonwealth of Australia) 1959, and Macquarie Securities (USA) Inc.’s obligations do not represent deposits or other liabilities of Macquarie Bank Limited ABN 46 008 583 542. Macquarie Bank Limited does not guarantee or otherwise provide assurance in respect of the obligations of Macquarie Securities (USA) Inc.


Macquarie GroupIntroduction to Macquarie

Diversified, international financial services organization

Macquarie Group – A Global InstitutionMarket capitalization of ~ US$18 billionTotal Macquarie assets under management ~ US$160 billion

55% of total operating income derived from international markets

11,000+ employees in 24 countries

- Over 1,200 employees in the Americas

Successive years of consistent growth since 1992

MACQUARIE IS ONE OF THE WORLD’S LARGEST PRIVATE MANAGERS OF INFRASTRUCTURE


Macquarie’s IBG Business Model

A UNIQUE COMPLETE SERVICE PROVIDER

BrokerFinancialAdviser

UnderwriterFund & Asset

ManagerPrincipal

GOVERNANCE SEPARATION

Macquarie Advisory Advisory (Macquarie managed and

other non-affiliates)

Asset sourcing 1000+ executives (500+ infrastructure

specialists) worldwide with deal origination and execution skills and experience

IB Funds Funds focus Active asset management Investment evaluation 590+ staff worldwide Equity under management ~$49bn*

Strong alignment of interests Fund shareholdings Performance fee incentive Remuneration based on fund

performance*Market capitalization for listed funds and net asset

value for unlisted funds for IBF funds since inception to June 30, 2007 (listed

funds as of June 30, 2007, unlisted funds as at

December 31, 2006). Calculated in AUD. Cash

flows converted at historic rates.


Macquarie is one of the world’s leading providers of infrastructure advisory, financing and fund management services

— Macquarie has over 11,000 employees working in 24 countries

The Infrastructure Advisory division is integrally involved in the acquisition and divestment of a broad range of infrastructure assets in markets including the United States, Canada, Australia, New Zealand, Korea and the United Kingdom

Through its involvement as a principal investor in infrastructure investments across the globe, Macquarie has expanded its franchise by creating specialized funds targeting infrastructure assets

— Macquarie is a leading international infrastructure fund manager with over $49 billion of infrastructure asset equity under management

— Macquarie has more than 500 staff worldwide in its IB Funds division, managing Macquarie’s listed and unlisted infrastructure funds and companies

Infrastructure assets are located in a number of international markets including the United States, Canada, the United Kingdom, Germany, Spain, Portugal, Italy, Chile, Korea, South Africa and Australia

Throughput Regulated Contracted SocialInfrastructure- Related

Roads Tunnels Bridges Ports Airports Rail

Electricity Distribution

Gas Distribution Water Distribution

District Energy Renewable Energy Power Generation Communications

Towers

Hospitals Long-Term Care Schools Courthouses Prisons

Ferries / Shipping Car Parks / Parking

Garages Telecoms Systems Directories

The Infrastructure Investment Spectrum

Macquarie GroupInfrastructure Expertise


US$160 billion under management

Macquarie GroupSuccessful private ownership


Sustained Deal Flow109 ASSETS, 25 COUNTRIES –

UNIQUE GLOBAL POSITIONING, LOCAL ASSET MANAGERS

USAAIR-servAmerican Consolidated MediaAquarionAtlantic AviationDistrict EnergyDulles GreenwayDuquesne LightHanjin Container TerminalsIcon ParkingIndiana Toll RoadInternational-Matex Tank TerminalsLongviewFastTrack ParkingSkywaySmarte CarteSouth Bay ExpresswayThe Gas Company

JapanHakone Turnpike

Ibukiyama Driveway

AustraliaAlintaGas NetworksBroadcast AustraliaDampier-BunburyEastern Distributor (M1)EastLinkElectranet SAMacquarie Regional RadioworksMultinetProspect WaterRVG SydneyRetirement Care AustraliaRetirement Services AustraliaSouthern Cross BroadcastingSydney AirportTranstollUnited Energy DistributionWestlink M7Zig Inge

Canada407 ETR

A-25*AltaLink

Cardinal PowerClean Power Operating Trust***

Edmonton Ring RoadFraser Surrey Docks

Halterm LimitedLeisureworld

New World Gaming*Sea To Sky

New ZealandMetlifecarePrivate LifecareRCNZ

South KoreaBaekyang TunnelCheonan Nonsan ExpresswayDaegu East Circular RoadIncheon ExpresswayIncheon Grand BridgeKwangju 2nd Beltway, Section 1Kwangju 2nd Beltway, Section 3Machang BridgeNew Daegu Busan ExpresswaySK E&SSeosuwon-Osan-Pyungtaek ExpresswaySeoul Chuncheon ExpresswaySeoul Subway #9Soojungsan TunnelWest Sea Power / West Sea WaterWoomyunsan TunnelYongin Seoul Expressway

AFRICASouth AfricaBakwena Platinum CorridorN3 TollN4 Maputo TollNeotel

TanzaniaKilimanjaro Airport

China/TaiwanChangshu Xinghua Port

Taiwan Broadband Communications

As at June 30, 2007 – the assets listed are managed on behalf of investors with various direct % stakes held in each* Subject to financing and customary closing arrangements** European Directories also located in Sweden, Finland, Austria, Czech Republic, Slovakia, Denmark and France*** Includes wind, hydro and biomass power assets

EUROPEUKAirwaveArqiva/NGW Bristol AirportCLP EnvirogasEast London Bus GroupEnergy Power Resources (UK)M6 TollMotoNational Car ParksRed Bee MediaSteam PacketTalariusThames WaterWales & West UtilitiesWightlink

BelgiumBrussels Airport

SpainItevelesa

FranceAutoroutes Paris-Rhin-RhôneEnergy Power Resources (Europe)Trois Sources & Lomont windfarms

GermanyTanQuid (tank storage business)Warnow Tunnel

DenmarkCopenhagen Airport

PortugalTagus Crossings

The NetherlandsEuropean Directories**NRE*Netbeheer Haarlemmermeer*Obragas Net*

PolandDeep Sea Container Terminal

SwedenArlanda Express

United Arab EmiratesAl Ain Industrial City

Industrial City of Abu Dhabi (Phase 2)Industrial City of Abu Dhabi Extension

Phase 2ICAD Effluent Treatment Plant


Provider of essential community services around the globe

Employees +65,000 across the assets

Airports +115 million passengers per annum

Toll Roads 1.7 million cars per day

Gas Distribution 6.9 million households

Water Services +5.2 million households

Electricity Distribution 1.2 million households

Communications 83 million people are reached by Macquarie’s television, telephone and radio infrastructure, and cable and newspaper services

Real Estate +700 properties including retail, office, residential, leisure & industrial

Rail 2.7 million passengers per annum

Ferries +6.0 million passengers per annum

Aged Care / Retirement Villages +7,500 beds / +7,700 units

Buses 300 million passengers per annum* As of March 31, 2007


Macquarie GroupValue Add

Vast access to capital.

Generally, acquisition base case IRRs can range anywhere from 9-10% for mature toll facilities to 16-18% for assets with a higher growth component

Thorough understanding of capital intensive businesses

Invests for the long-term

The difference between bid case IRRs and the historical performance IRR can be attributed to several factors, including:

– Refinancing: ability to replace existing debt on better terms and higher amounts due to maturity of an asset; accessing different debt markets; higher than expected usage and therefore revenues

– Operational improvement: such as improved facilities, marketing & signage, cost reductions / efficiencies, etc

– Decreasing risk profile: as the asset matures and yields increase, the market may “re-rate” the asset (i.e. reduce the discount rate applied to the asset’s forecast cash flows, which results in an increase in valuation)

– First-mover advantage: assets re-rate as the market develops, even if the risk profile and projected cash flows are unchanged

– Exit strategy: infrastructure assets are well suited to exits via dividend-paying listed vehicles which have a low cost of capital and can therefore generate significant uplift

These potential upsides are often not built into our investment case valuations and can potentially lead to improved cash flows, which enable higher than forecast valuations and distributions to equity

Macquarie can add value to its managed infrastructure assets above and beyond the investment case – value that government can’t unlock


Listed Fund/Vehicle Description

Macquarie Infrastructure Group (MIG)

ASX listed infrastructure fund investing in toll roads in OECD countries

Macquarie Airports (MAp) ASX listed fund investing in airports globally

Macquarie Communications Infrastructure Group (MCG)

ASX listed fund investing in communications infrastructure in OECD countries

Macquarie Korea Infrastructure Fund (MKIF)

KRX and LSE listed fund predominantly investing in Korean toll roads and tunnels

ConnectEast Group (CEU) ASX listed fund through which the Eastlink toll road project was financed

Macquarie Infrastructure Company (MIC)

NYSE listed company investing in infrastructure in the United States and other developed countries

Macquarie Media Group (MMG) ASX listed fund investing in media assets globally

Macquarie International Infrastructure Fund (MIIF)

SGX listed infrastructure fund investing in a diversified group of infrastructure businesses around the world

Macquarie Capital Alliance Group (MCAG)

ASX Listed fund that has a global investment mandate investing in any industry sector other than property

Southern Cross FLIERS Trust (SCF) ASX listed special purpose fund holding subordinated debt investment in Sydney Airport

Diversified Utility and Energy Trusts (DUET)

ASX listed trust investing in energy utility assets primarily in Australia and New Zealand

MAREST - TICkETS ASX listed special purpose fund through which hybrid securities were issued to partially fund the acquisition of Brussels Airport

Macquarie Power & Infrastructure Income Fund (MPT)

TSX listed fund investing in infrastructure in Canada and US, with an emphasis on power

* For listed funds/vehicles - market capitalization as at June 30, 2006 plus fully underwritten or committed future capital raisings. Jointly managed funds (DUET, MKIF) included at 50%. Exchange rates as at June 30, 2006.

Macquarie Funds/Vehicles US$49 billion of equity under management


Fund Description

Macquarie European Infrastructure Fund (MEIF)

Unlisted fund investing in infrastructure in European OECD countries

Macquarie European Infrastructure Fund II (MEIF II)

Unlisted fund investing in infrastructure in EU member states, Norway, Switzerland and other countries acceding to the EU on set dates during the Commitment Period.

Macquarie Airports Group (MAG)

Unlisted airport fund – focus on UK and Europe

Macquarie Infrastructure Partners (MIP)

Unlisted fund investing in infrastructure predominantly in Canada and the United States

Macquarie Essential Assets Partnership (MEAP)

Unlisted fund focused on essential infrastructure assets in Canada and the United Stated

Macquarie Korea Opportunities Fund (MKOF)

Unlisted Korean infrastructure fund

Global Infrastructure Fund II (GIFII)

Unlisted infrastructure fund. Targets equity investments in OECD countries

ZonesCorp Infrastructure Fund (ZIF)

Unlisted fund investing in infrastructure and related assets in industrial and commercial zones located predominantly in UAE

African Infrastructure Investment Fund (AIIF)

Unlisted fund with a focus on private sector investment in infrastructure projects in southern Africa

Other Includes funds managed under Macquarie Direct Investment, GSKF, MFIT, GIF, SAIF, HCF, Mandated assets, Balance Sheet assets and MBL Consortia Equity

Unlisted

* Unlisted funds at committed capital less any called capital subsequently returned to investors. Invested capital for mandated assets, MBL direct holdings and MBL consortia equity. Jointly managed funds (SAIF, AIIF, GSKF and HCF) included at 50% of committed capital, ZIF included at 49% of committed capital. Adjustments have been made where Macquarie-managed funds have invested in other Macquarie-managed funds. Exchange rates as at June 30, 2006.

Macquarie Funds/VehiclesUS$49 billion of equity under management


InfrastructureWhy we like it

EssentialEssential Strategic competitive advantageStrategic competitive advantage Stable, predictable cash flowsStable, predictable cash flows Low correlation to other asset classesLow correlation to other asset classes Price inelasticityPrice inelasticity Long-life assetsLong-life assets

Source: publicly available press articles

Core characteristics of infrastructure assets generally make them very attractive to pension fund investors


InfrastructureAcquisition

Private sector ownership - assets acquired through:

Negotiation Government privatization Business combinations Public to private Incremental acquisition


RailwaysState of affairs

Railway management teams are on the receiving end of constant scrutiny

Investors Railways not returning enough to investors Underleveraged Ability to increase returns

– Increased dividends– Share repurchases

Management not doing enough

Shippers Poor service Not enough competition Rates too high

Labor Management not willing to share the spoils of the rail renaissance Aligning with shipper interests? Relationship strained

Sluggish traffic volumes have taken the bloom off of the rail renaissance rose….

…Is this temporary or have we entered the counter reformation


While various stake holders are focusing on their own issues, they are losing site of the most critical issue

Infrastructure Investment

RailwaysState of affairs


RailwaysThe Real Issue – Investment

From 1980 to 2005:- Vehicle miles traveled: 96%- Roadway lane miles: 5.7%- Rail volumes (in GTM’s): 64%- Railway miles of track: 27%

Over the next 30 years:- Population grows to 380+ million- Freight demand (in tons) doubles- $148 billion needs to be invested

in rail infrastructure to meet projected capacity demand

(Source: Global Insight, AAR / Cambridge Systematics - National Rail Freight Infrastructure Capacity and Investment Study, Statistical Abstract of the United States, US DOT)

“You cannot escape the responsibility of tomorrow

by evading it today”

Source:

Source: American Road and Transportation Builders Association

Estimated Annual Highway Expenditure

…Abraham Lincoln



WHERE WILL THE MONEY COME FROM FOR US RAILROAD INVESTMENT?

After Tax Profits

Tax Credits

Infrastructure Funds

Private Equity

PPP Activities

Government Grants

A Miracle?

Uncertain

Doubtful

Probably

Uncertain

Doubtful

Doubtful

Doubtful


Were shippers subsidized in the past?

Using the wrong inputs to the proposed CAPM methodology can create irreversible harm to the US rail network, US transportation

network and the US economy

We must not lose sight of our past lessons…


Unlike the 60’s & 70’s:

The US highway network cannot absorb the volumes currently using rail infrastructure if the rail infrastructure no longer functions properly

The ability to rationalize property, plant, equipment and staff to improve profitability no longer exists

The bar has been raised


Infrastructure Capital

Rail Toll Roads Airports Utilities

Infrastructure capital naturally flows to the sources which yield the highest balance of risk & return



Restrictions to profitability will cause infrastructure capital to flow in different directions

Infrastructure Capital

Rail Toll Roads Airports Utilities

RE-REG



Stake holders must begin to focus on the issues of their counterparts and work together to achieve understanding and solutionInvestors

Understand the CAPEX issues Choose boards that can understand the business and direct change

Shippers Understand the CAPEX issues Understand the cost of capacity Pay full allocation of costs Work to achieve efficiency of operations Be realistic

Management Enter into a proactive dialogue with Labor Be willing to address one off small shipper rate issues Do everything in your power to please your investors Rebuild the trust

Labor Enter into a proactive dialogue with Management Align your interests in the proper place

RailwaysTime to get along


ORIGINAL QUESTIONS Investment Strategy

—Invest in infrastructure or entities that display infrastructure characteristics

Why infrastructure is a good investment

Why transportation assets are worth acquiring or leasing or investing in?

What affects our analysis?

EssentialEssential

Strategic competitive advantageStrategic competitive advantage

Stable, predictable cash flowsStable, predictable cash flows

Low correlation to other asset classesLow correlation to other asset classes

Price inelasticityPrice inelasticity

Long-life assetsLong-life assets

Original Questions


Final ThoughtInfrastructure Investment Concerns

Private funding regulated by same anti-money laundering, fraud and other rules and restrictions as domestic owners

No sensitive national security information is compromised via private ownership

— Homeland security requirements are the same regardless of ownership Restricting capital to domestic sources would not be efficient

— Not realizing full value potential— Leaving money on the table— Restricting competition

Domestic sources of capital are often not necessarily so— Foreign investors frequently commit large sums of capital into domestically-raised

private equity funds— Just because the fund manager is based in the U.S. does not mean that all sources

of capital are domestic

National security concerns do not justify restricting private funding to domestic capital sources

Source: publicly available press articles


Contact

Mark RosnerSenior Vice PresidentMacquarie Securities (USA) Inc.Tel.: (212) 231-1361Fax.: (212) [email protected]

Documents

Strictly Confidential Macquarie Securities (USA) Inc. Mark Rosner Senior Vice President Macquarie Securities (USA) Inc. Surface Transportation Board Fall