FAQs

Infrastructure is an essential part of any modern community, providing the underlying foundation of basic services, facilities and institutions. Infrastructure assets include roads and highways, bridges, power generation facilities, electricity transmission and distribution systems, long-term care, water distribution, hospitals, schools, sea ports and airports.

MPT focuses on regulated or contractually-defined infrastructure assets, which are lower risk and deliver a return that is similar to that of a utility.

MPT’s objective is to acquire and actively manage a high-quality portfolio of long-life infrastructure assets with an emphasis on power infrastructure. We are focused on improving the financial performance of our existing assets while seeking opportunities to further diversify our portfolio. Our objective is to deliver an attractive return to unitholders with the potential for capital growth.

Our portfolio currently includes power and social infrastructure assets that generate stable, predictable revenue as a result of long-term contracts or licences. MPT’s power portfolio includes gas cogeneration, wind, hydro and biomass power generation facilities in Canada representing approximately 350 MW of installed capacity. We also have a 45% interest in Leisureworld, a provider of long-term care, or social infrastructure, through 26 long-term care homes located in Ontario.

MPT is an unincorporated, open-ended limited purpose trust established by a declaration of trust dated March 15, 2004, as amended and restated as of April 16, 2004 under the laws of the Province of Ontario, and as further amended on February 21, 2006. MPT plans to convert into a dividend-paying corporation prior to January 1, 2011.

MPT is managed by Macquarie Power Management Ltd. (MPML). MPML is a member of Macquarie Group Limited, one of the world’s largest and most experienced managers of infrastructure with approximately $42 billion in infrastructure equity under management in 22 countries.

MPT is governed by a four-person Board of Trustees comprising:

• Derek Brown, Independent Trustee, Chairman
• Patrick J. Lavelle, Independent Trustee
• Stephen Mentzines, Manager-appointed Trustee
• François R. Roy, Independent Trustee
• V. James Sardo, Independent Trustee

More information about MPT’s governance structure is available in the Governance section of our website.

MPT is listed on the Toronto Stock Exchange under the symbol MPT.UN. Units in MPT can be purchased through any Canadian brokerage firm authorized to deal in Canadian securities. MPT’s convertible debentures are listed on the Toronto Stock Exchange under the symbol MPT.DB.

MPT currently has approximately 50 million units outstanding, including approximately 3.2 million Class B exchangeable units.

Our fiscal year end is December 31.

Our unit registrar is Computershare Investor Services Inc. Computershare’s toll-free number if calling within Canada or the United States is 1-800-564-6253. The international phone number is 514-982-7555.

All correspondence can be sent to:

Computershare Investor Services Inc.
1500 University Street, Suite 700
Montreal, Quebec H3A 3S9
Canada

Macquarie Power Management Ltd. can be reached by:

Mail
Macquarie Power Management Ltd.
Brookfield Place
181 Bay Street, Suite 3100
Toronto, Ontario M5J 2T3

Telephone
416-607-5009

Fax
416-607-5073

Email
mpt@macquarie.com

MPT distributes its available cash to unitholders through monthly cash distributions. Distributions are declared each month, approximately eight business days prior to the last business day of the month. Unitholders of record on the last business day of that month are entitled to the distribution. The declared distributions are paid out on the 15th or next closest business day of the following month.

Example

Distribution Month	Record Date	Payable Date
January 2008	January 31, 2008	February 15, 2008

For 2009, the Fund will maintain distributions at $0.0875 per unit per month, or $1.05 per unit annually. The Fund's new distribution policy, effective January 2010, will be to distribute $0.055 per unit monthly, or $0.66 per unit annually. Based on our current profile and outlook, we expect this new distribution profile to be sustainable for the foreseeable future.

MPT launched a DRIP in February 2007. More information is available in the DRIP section of this website.

Many income trusts, including MPT, use a tax deferral mechanism to enhance tax efficiency for unitholders whereby a portion of the distribution is considered to be a return of capital. Investors do not pay tax on the amount deemed to be return of capital, and the amounts received as return of capital serve to reduce the cost base of the original investment. This means that when investors sell their units, they pay capital gains tax on the difference between the sale proceeds and the adjusted cost base at the time of sale (in Canada, the capital gains tax rate is currently preferable to regular income tax treatment).

In 2004 and 2005, 100% of MPT’s distributions to unitholders were considered return of capital. In 2006, 79% of distributions were return of capital. In 2007, 70% of distributions were return of capital. In 2008, 60% of distributions were considered return of capital. For 2009, management currently expects that approximately 50% of distributions will be considered return of capital. For 2010, it is expected that approximately 40% of distributions will be considered return of capital.

For 2009, we expect to pay distributions to unitholders of $1.05 per unit, which is expected to result in a payout ratio of approximately 105%. Effective January 2010, MPT will pay a monthly distribution of $0.055 per unit, or $0.66 per unit annually. The new distribution level is expected to be sustainable for the foreseeable future, based on our current portfolio and outlook.

Based on our current operational outlook, for fiscal 2009 we expect to achieve a payout ratio of approximately 105%. If required, the Fund's general reserve account ensures our ability to support distribution to unitholders in 2009.

Overall, we expect stable performance from our portfolio for the balance of 2009.

For 2009, Cardinal is expected to generate lower annual revenue than in 2008, which primarily reflects the hot gas path inspection that required 13 days of outage in April. While Cardinal will continue to experience higher gas transportation costs, the confirmed 2009 rate is below the average 2008 level. As a result of these factors, cash flow from Cardinal will be slightly lower in 2009 compared with 2008.

Erie Shores is expected to generate slightly less electricity than the estimated average annual production of 249,800 MWh, reflecting generally lower wind speed and density in 2009 to date. Erie Shores’ production is subject to wind speed and density, which are typically strongest during the fall and winter months.

The hydro power facilities are expected to generate less electricity than the average long-term annual production of 166,360 MWh, which reflects the unusually poor hydrological conditions in the first six months of the year. Production at the hydro power facilities is subject to water flows, which are typically strongest during the spring and fall months.

Whitecourt completed its outage to repair the turbine vibration on July 18, 2009, requiring 433 hours of outage in the quarter. No further maintenance work is scheduled for the facility in 2009. Management currently expects that the turbine will operate reliably until the next scheduled major maintenance inspection, which occurs every seven years. Whitecourt is expected to achieve an availability of approximately 80% to 83% in 2009 (2008 - 88.4%) and to return to its five-year average availability of approximately 95% in 2010.

Leisureworld is continuing to focus on enhancing the quality of care and accommodation for residents, which contributes to the continuing high occupancy of its homes. In addition, Leisureworld is continuing to attract a growing number of residents to private accommodation, for which Leisureworld receives a regulated premium. Leisureworld’s distribution policy will be maintained for fiscal 2009. Effective in January 2010, Leisureworld’s annual distribution to the Fund is expected to be $9.5 million compared with $10.4 million currently. This new distribution policy more closely reflects management’s outlook for Leisureworld’s financial performance in 2010.

On September 29, 2009 MPT announced its intention to convert into a dividend-paying corporation prior to January 1, 2011. Upon conversion, MPT will become taxable.

In 2011, a tax of approximately 29% will be applied to the Fund. Our new distribution level considers the impact of this tax. Based on our current portfolio and outlook, we expect the new distribution level to be sustainable for the foreseeable future.

Our goal is to match the cash flow profile of our assets and the life of our power purchase agreements (PPAs) with investment-grade debt, which helps to minimize financial risk.

As at September 30, 2009, MPT’s long-term debt included:

• $90.5 million on our credit facility, which matures in June 2012;
• Approximately $38.9 million of 6.75% convertible unsecured subordinated debentures outstanding, which are due on December 31, 2010; and
• Approximately $111 million in project debt for Erie Shores in three tranches that mature in 2011 and 2026, respectively.

In addition, Leisureworld has $310 million of 4.814% senior secured debentures due November 24, 2015 as well as a $75-million term loan. Of this amount, $15-million was repaid at the end of January 2009 through equity injections from MPT and Macquarie International Infrastructure Fund, which is the beneficial owner of the other 55% of Leisureworld. The balance of $60 million matures on January 31, 2011.

MPT’s financial position is strong. As at September 30, 2009, MPT had positive working capital of $10.6 million. Cash on hand totalled $5.6 million and the general, maintenance and capital expenditure reserve accounts were funded in the amount of $10.5 million. At the end of the quarter, our debt to capital ratio was 47.2%, which is conservative relative to the low risk profile of our assets.

By definition, infrastructure assets meet critical community needs. That means consistent demand for the services that they provide.

All of our power infrastructure assets operate under long-term contracts with creditworthy customers. Similarly, Leisureworld operates within a regulated environment. In addition, about 60% of Leisureworld’s revenue is derived from the government through a clearly defined funding formula.

Overall, our portfolio is well diversified by asset type, fuel source and geography.

All of these factors help to ensure the stability of MPT’s cash flow throughout the economic cycle.

MPT has the financial strength to prudently execute a small to mid-sized transaction, or possibly two small transactions. We believe that there are attractive opportunities available that meet our investment and return criteria. However, we are being selective in what transactions we assess and choose to pursue given the challenging market climate and longer time horizon to bring deals to a successful close.

We continue to look at a range of appropriate growth opportunities, including in the power and social infrastructure spaces as well as in new categories of infrastructure, including public-private partnerships (P3s).

The Canadian Council for Public-Private Partnerships predicts that Canada will face an infrastructure deficit of $1 trillion in 60 years if current levels of underinvestment are allowed to continue. This growing deficit is spread across various sectors, including transportation, bridges, and water and wastewater.

The quality of a country’s infrastructure has a direct impact on its economic competitiveness, which is why infrastructure maintenance and renewal is increasingly a top priority for governments. The need for investment dollars is urgent and growing, which creates opportunities for an investor such as MPT.

MPT’s emphasis continues to be on power infrastructure, including existing power generation and electricity transmission and distribution facilities as well as smaller development opportunities. New infrastructure categories of interest include transportation, bridges, water and wastewater facilities, hospitals and schools.

A public-private partnership is a contractual arrangement between the public sector and a private sector participant to deliver essential infrastructure.

In a P3, the public sector retains ownership of asset while seeking private partners to provide a majority of the investment capital, to complete the construction work and to service the asset over the life of the contract. The public sector sets strict performance standards and requirements for the private partner, ranging from design specifications to community consultation to environmental enhancements.

For taxpayers, P3s have been proven to deliver significant savings and value for money while freeing up public funds for other priorities, such as health care. P3s also remove the risk of project delays and cost overruns. A key feature of any P3 is the transfer of risk away from the public sector and taxpayers to the parties who are best able to mitigate it.

As such, P3s represent contractually-defined infrastructure. Canada’s federal government has established a P3 agency as have many provincial governments, namely British Columbia, Ontario and Quebec.

The contingency value receipts formed part of the consideration for unitholders of Clean Power Income Fund (CPIF), which MPT acquired by way of a unit-exchange takeover in June 2007. For each unit of CPIF, holders received 0.5581 of an MPT trust unit and one CVR.

The CVRs relate to certain proceeds from CPIF's sale of its investment in Gas Recovery Systems LLC (GRS) in 2006. At the time of that sale, CPIF deposited US$7.593 million of the proceeds into an escrow account to address ongoing legacy issues regarding GRS’ operations. The issue outstanding at this time relates to a dispute surrounding the methodology used by one of GRS’ customers, Commonwealth Edison Co., to historically calculate the amount paid under under its Power Purchase Agreement with GRS.

Should this matter be resolved, each CVR entitles the holder, subject to certain conditions, to a payment of up to approximately 19 cents, provided that if refunds are received from Commonwealth Edison Co., the maximum amount payable under the CVRs will increase.

A complete description of the CVRs is provided in MPT’s takeover bid circular dated May 18, 2007.

No. The CVRs cannot be redeemed and are non-tradable and non-transferrable.

As described on page 81 of our takeover bid circular, on the date that the CVRs were delivered to former CPIF unitholders, each had a fair market value of approximately $0.04.

While we continue to look for a commercially reasonable solution, the process we are navigating with respect to the CVRs is complex, involving several parties and numerous legal and contractual considerations as well as regulatory and legislative constraints. At this point in time, we cannot predict when the CVRs will become payable, if at all, or how much, if any, may be payable.

Any material change in the status of the CVRs will be publicly disclosed.