PERFORMANCE OF INFRATIL

Morrison & Co has a management contract with Infratil and reports to the Company's board. Under the contract Morrison & Co must meet a number of obligations and objectives as set by the board.

It is Morrison & Co's objective to exceed these objectives and maintain the full satisfaction of the board for the ultimate benefit of Infratil's shareholders.

Generating Superior Returns

Infratil's goal is a 20% per annum after tax return to shareholders over the long term.

While the financial markets can, and do, impact returns in any one year, on average over the last 14 years Infratil has bettered its target.

This achievement is due to Infratil's businesses being positioned in sectors which have been good for investors due to social and economic trends. Renewable energy, air travel, and urban mobility are changing and require new facilities and services to meet demand, and investors are receiving good returns from providing those facilities and services.

Making Good Investments

Infratil was formed in March 1994 to invest in New Zealand infrastructure at a time when government and community ownership of infrastructure was being rolled back. Since then Infratil has made investments in airports, electricity, ports and gas.

As one of the first advisors to the newly evolving infrastructure sector Morrison & Co was able to establish good relationships with industry players and develop a sound understanding of the sector. In this position it was able to find desirable investment opportunities, invest at good prices, and to develop and implement operational and strategic changes to optimise value.

Active Management

As the manager, Morrison & Co's approach is to be an active investor with sufficient expertise in the fields where Infratil invests and takes a hands-on management role rather than being a passive portfolio investor.

Capital Structure

Morrison & Co has significant experience in the identification of appropriate capital structures and securing efficient sources of capital with a focus on prioritising shareholder value. This experience is brought to bear on Infratil's investments where practicable.