MACQUARIE INFRASTRUCTURE AND REAL ASSETS ALLENTOWN, PA WATER AND SEWER CONCESSION REQUEST FOR QUALIFICATIONS RESPONSE AUGUST 17, 2012 WS:ISF_NewYork:2914780:v51 General Disclaimer This document is being distributed to you by Macquarie Infrastructure and Real Assets Inc. (“MIRA Inc.”). “Macquarie” refers to Macquarie Group Limited and its worldwide subsidiaries, affiliates and the funds and similar investment entities that they manage or advise. MIRA Inc. is an entity within the Macquarie Infrastructure and Real Assets division of Macquarie Funds Group (“MIRA”). References to “we”, “us”, “our” and similar expressions are to MIRA Inc. This document does not constitute an offer to sell or a solicitation of an offer to buy any securities. This document is an outline of matters for discussion only and no representations or warranties are given or implied. This document does not contain all the information necessary to fully evaluate any transaction or investment or MIRA’s participation therein, and you should not rely on the contents of this document for such purpose. Any investment decision should be made based solely upon appropriate due diligence and, if applicable, upon receipt and careful review of any formal disclosure document. This document includes forward-looking statements that represent our opinions and expectations regarding the future, which may not be realized. Actual and future results and trends could differ materially from those described by such statements due to various factors, including those beyond our ability to control or predict. Given these uncertainties, you should not place undue reliance on the forward-looking statements and we do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Unless otherwise noted herein, the information in this document is presented as of its date. It does not reflect any facts, events or circumstances that may have arisen after the applicable date. All performance and other data included herein concerning Macquarie, MIRA and companies managed and/or invested in by MIRA and its managed funds have been prepared by us and are believed to be accurate and reliable. Past performance is not a reliable prediction or guarantee of future results or returns. Certain of the foregoing pages hereinpages present information about individual MIRA portfolio companies. Performance and other information relating thereto should be understood only as good faith estimates, subject to change, and based on our current assessments and information. Certain information identified by footnotes in this document has been obtained from sources that we consider to be reliable, based on present circumstances, market conditions and belief. We have not independently verified this information and cannot assure you that it is accurate or complete. Any financial projections have been prepared and set out for illustrative purposes only and do not in any manner constitute a forecast. They may be affected by future changes in economic and other circumstances and you should not place undue reliance on any such projections. You should neither treat nor rely on the contents of this document as advice relating to legal, taxation or investment matters and are advised to consult your own professional advisers. This document should not be copied or distributed in whole or in part or disclosed by you to any other person without our prior written consent. [Is this allowed under the RFQ rules? Isn’t this public?] Any financial measures contained in this presentation which are not presented in accordance with U.S. generally accepted accounting principles ("GAAP") are not meant as a substitute for GAAP, but are included solely for informational and comparative purposes. We believe that this information assists in evaluating operational trends, but should not be regarded as a replacement for corresponding GAAP measures. Except where otherwise indicated herein, all figures are presented in U.S. Dollars. Pursuant to U.S. Treasury department Circular 230, unless we expressly state otherwise, any tax advice contained in this document (including any attachments) was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding tax-related penalties or (ii) promoting, marketing or recommending to another party any matter(s) addressed herein. None of the entities noted in this document is an authorized deposit-taking institution for the purposes of Banking Act 1959 (Commonwealth of Australia). The obligations of these entities do not represent deposits or other liabilities of Macquarie Bank Limited ABN 46008583542 (MBL). MBL does not guarantee or otherwise provide assurance in respect of the obligations of these entities. This document may contain material non-public information concerning the Company or its securities. By accepting this document, the Recipient agrees to use such information in accordance with its compliance policies, contractual obligations, and applicable law, including federal and state securities law. Macquarie Infrastructure and Real Assets Inc. A Member of the Macquarie Group of Companies 125 West 55th Street Telephone +1 (212) 231-1000 New York, NY 10019 Facsimile +1 (212) 231-1010 UNITED STATES OF AMERICA Internet www.mirafunds.com August 17, 2012 Scott Shearer Jason Brockman Managing Director Senior Managing Consultant Public Financial Management, Inc. Public Financial Management, Inc. Telephone: +1 (717) 232-2723 Telephone: +1 (717) 232-2723 E-Mail: [email protected] E-Mail: [email protected] RE: Response of Request for Qualifications (“RFQ”) Dear Mr. Shearer and Mr. Brockman, Macquarie Infrastructure and Real Assets Inc. (“MIRA”) is pleased to submit this qualification submission and requested responses to Public Financial Management, Inc. (“PFM”), advisors to the City of Allentown, PA (the “City”), for the potential long-term concession lease of the City’s water and sewer systems (the “City Systems”). MIRA would be delighted to have the opportunity to partner with the City under a long-term concession arrangement (the “Concession”), and to provide financing, management, and stewardship services in accordance with the Concession (the “Project”). Our RFQ response provides an overview of MIRA and its capabilities. MIRA has experience across multiple types of assets and serving in various roles as a sponsor and developer, asset manager and operator of utility assets. MIRA is the ideal partner and Concessionaire for the City for the Project and is eminently capable of funding all payments due to the City under the proposed concession structure. Due to its financial integrity and breadth of experience, MIRA is highly confident in its ability to meet the City’s objective of receiving a highly competitive, fully committed, binding proposal for the Concession with a substantial upfront payment under the City’s stipulated time-frame. If you have questions in relation to this submission, please do not hesitate to contact one of us directly. Best Regards, _________________________________________ _________________________________________ Andrew Chapman Alicia Moy Senior Managing Director Senior Vice President Macquarie Infrastructure and Real Assets, Inc. Macquarie Infrastructure and Real Assets, Inc. Telephone: +1 (212) 231-1851 Telephone: +1 (212) 231-1824 Mobile: +1 (646) 651-0474 Mobile: +1 (646) 267-1984 Facsimile: +1 (212) 231-1700 Facsimile: +1 (212) 231-1717 E-Mail: [email protected] E-Mail: [email protected] STRICTLY CONFIDENTIAL [This page has been left blank intentionally] STRICTLY CONFIDENTIAL TABLE OF CONTENTS 1. EXECUTIVE SUMMARY ........................................................................................................................ 1 1.1 OVERVIEW .............................................................................................................................. 1 1.2 PROPOSER INFORMATION ............................................................................................................... 1 1.3 FINANCIAL CAPABILITY ........................................................................................................ 4 1.4 CONFIDENTIALITY AND DATA USE AGREEMENT ............................................................. 5 2. PROPOSER INFORMATION ................................................................................................................. 6 2.1 DESCRIPTION OF PROSPECTIVE PROPOSER .................................................................. 6 2.2 ROLES OF TEAM MEMBERS AND KEY PERSONNEL ...................................................... 11 2.3 OPERATOR ........................................................................................................................... 19 2.4 CONTACT PERSON ............................................................................................................. 19 2.5 CONTROLLING INTERESTS ................................................................................................ 19 2.6 EXPECTED ADVISORS TO MIRA ........................................................................................ 20 2.7 COMPARABLE PROJECTS .................................................................................................. 22 2.8 REFERENCES....................................................................................................................... 31 3. TECHNICAL CAPABILITY ..................................................................................................................