Macquarie Power & Infrastructure Income Fund Announces First Quarter 2006 Results

10 May 2006

TORONTO   – Macquarie Power & Infrastructure Income Fund (TSX: MPT.UN – “MPT”, the “Fund”) today announced results for the first quarter ended March 31, 2006.

The Fund generated revenue for the quarter of $27.7 million, a 9.7% increase on revenue in the previous corresponding quarter of $25.2 million.  Income from operations [1] was $4.4 million for the quarter, compared to $5.5 million for the previous corresponding quarter. 

The Fund’s distributable cash [2] for the quarter was $10.8 million ($0.359 per fully diluted unit), compared to the previous corresponding quarter of $7.7 million ($0.364 per fully diluted unit).  Declared distributions to unitholders for the quarter were $7.5 million ($0.250 per unit), representing a payout ratio of 70% (Q1 2005 – 65%). 

The increase in the Fund’s distributable cash for the quarter reflected distributions of
$2.6 million from Leisureworld as well as the continuing impact of electricity rate increases under Cardinal’s Power Purchase Agreement with Ontario Electricity Financial Corporation and decreased fuel transportation costs for the quarter. In addition, Cardinal received a payment of $1.1 million during the quarter for an adjustment in the 2005 Direct Customer Rate.

The improvement in the Fund’s distributable cash for the quarter was partially offset by the Fund’s decision to accrue Fund administration expenses on a quarterly basis to better align revenues and costs going forward.  Previously these costs were primarily recorded in the fourth quarter.

As at March 31, 2006, the Fund had cash and cash equivalents totalling $21.0 million, of which $7.5 million was allocated to its general, major maintenance and capital expenditure reserve accounts.  The balance of this amount is maintained as free cash on hand and is available to finance the seasonality of operations.

Mr. Gregory Smith, Chief Executive Officer of the Fund, said, “The Fund has performed well in the first quarter of 2006, with growing cash flows and strong operating performances generated from the underlying Cardinal and Leisureworld businesses.

“With Cardinal’s major maintenance program tracking to timetable and costs fully funded by the major maintenance reserve, we remain positive about the Fund’s outlook and our ability to maintain a payout ratio of less than 95% for 2006,” Mr. Smith said.

MPT anticipates that in excess of 75% of distributions for 2006 will reflect a return of capital, based on current operations and barring any significant external shocks.

Cardinal Operational Performance
During the quarter the Cardinal plant performed well with availability of 100% (Q1 2005 – 99.2%), capacity of 97.5% (Q1 2005 – 97.9%) and electricity sales of 343 MWh (Q1 2005 – 345 MWh).  The plant did not curtail any electricity production in the quarter (Q1 2005 – 88 hours).

Leisureworld Operational Performance
Through its 45% indirect interest in Leisureworld Senior Care LP (“LSCLP”), the Fund owns a 45% interest in Leisureworld which it accounts for as an equity investment.

During the quarter, Leisureworld continued to operate in line with expectations.  Resident uptake of preferred accommodation increased, with Leisureworld receiving the preferred payment rate for 77% of its designated preferred beds at March 31, 2006.  Long-term care (LTC) facilities opened in 2003 and 2004 (Brampton Meadows, Brampton Woods, Norfinch and Vaughn) improved occupancy levels during the quarter, driving increases in revenue and income from operations. The Brampton Meadows LTC home also surpassed the 97% threshold rate during the quarter – only one LTC home now remains in the “ramp up” phase and is expected to achieve 97% occupancy by the fourth quarter 2006.  Overall, average LTC occupancy for the quarter was 95% (Q1 2005 – 86%).

Conference Call and Webcast
The Fund will hold a conference call to discuss the first quarter results on Thursday, May 11, 2006 at 8:30AM.  The conference call will be available via webcast through the Fund’s website at www.macquarie.com/mpt and by telephone at 416-695-6623 (local) or 1-888-333-4519 (toll free).  A replay of the conference call will be available until May 18, 2006 and can be accessed by dialling 416-695-5275 (local) or 1-888-509-0081 (toll free), pass code 619580.

About the Fund
Macquarie Power & Infrastructure Income Fund invests in infrastructure assets with an emphasis on power infrastructure. MPT's strategy is to acquire and actively manage a high-quality portfolio of long-life infrastructure assets to improve their financial performance and provide growing and sustainable distributions to unitholders for the long term. MPT's infrastructure portfolio includes Cardinal, a 156MW gas-fired cogeneration power station in Ontario, and a 45% interest in Leisureworld, a leading long-term care provider in Ontario with over 30 years operating experience. MPT is managed by a wholly-owned subsidiary of Macquarie Bank Limited and a member of the Macquarie group.

Forward-looking Statements
Certain statements in this news release may constitute forward-looking statements which involve known and unknown risks, uncertainties and other factors which may cause the actual results to be materially different from any future results expressed or implied by such forward-looking statements.  Forward-looking statements use such words as “may”, “will”, “anticipate”, “believe”, “expect”, “plan” and other similar terminology. These statements reflect current expectations regarding future events and operating performance and speak only as of the date of this news release. Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved.  A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to, risks associated with the Cardinal facility and the power industry, risks associated with MPT’s interest in Leisureworld and the long-term care sector, and risks associated with the structure of MPT.  The risks and uncertainties described above are not exhaustive and other events and risk factors including risk factors disclosed in MPT’s filings with Canadian securities regulatory authorities could cause actual results to differ materially from the results discussed in the forward-looking statements.

The forward-looking statements contained in this news release are based upon information currently available and what the Manager currently believes are reasonable assumptions, however neither the Fund nor the Manager can assure investors that actual results will be consistent with these forward-looking statements.  These forward-looking statements are made as of the date of this news release, and the Fund and the Manager assume no obligation to update or revise them to reflect new events or circumstances.  The Fund and the Manager caution readers not to place undue reliance on any forward-looking statements, which speak only as of the date made.

Non-GAAP Financial Measures
"Income from operations" and "distributable cash" do not have any standardized meaning under Canadian Generally Accepted Accounting Principles (GAAP).  Management believes they are useful measures of performance as they provide investors with indications of income from operations and the amount of cash available for distribution to unitholders.  The Fund's method of calculating "income from operations" and "distributable cash" may not be comparable to other similarly named calculations.
 

Investor enquiries
Harry Atterton
Chief Financial Officer
Macquarie Power Management Ltd.
Tel: (416) 607 5198
Email: harry.atterton@macquarie.com

Suzanne Mercer
Public Relations
Macquarie Group (North America)
Tel: (1 416) 607 5042
Email: suzanne.mercer@macquarie.com