US 36 Managed Lanes Project

Case Study July 2014

Project Corridor

• US 36 Corridor (the “Corridor”) is comprised of 23 miles of highway connecting Denver to Boulder, Colorado (dual direction heavy commuter route) • The Corridor diagonally bisects the northwest Denver metropolitan area, carrying an average of between 80,000 and 100,000 trips per day • The Corridor is economically diverse – ~17% of Denver metro region's business (>26,000 businesses) and employment (>200,000 jobs) located along Corridor • By 2035, population and employment within 3 miles of the Corridor are anticipated to grow by 28% and 53%, respectively • Long-term employment along the Corridor is expected to grow by 129,580 workers with annual wages totaling $520 billion by 2035 • Existing commuter corridor with established traffic patterns - allows for more precise traffic forecasting than greenfield toll projects 2

Project Scope

• Financing, design and construction of the Phase 2 Corridor General Purpose Lanes • Operations on the Phase 1 Corridor, Phase 2 Corridor and I-25 Express lanes – Project Co collects to its account toll revenue generated on above Managed Lanes • Maintenance and Lifecycle as follows:

Project

US 36 Managed Lanes US 36 General Purpose Lanes (GPL) I-25 At-Grade MLs I-25 At-Grade GPLs I-25 Structures MLs I-25 Structures GPLs

Maintenance

  (priced option) 

Lifecycle

  1

Snow and Ice Removal

    2  1  3  1   *1 - Concessionaire will lifecycle Non-Separable Tasks (tasks that that relate to lifecycle of a maintainable elements that are not easily delineated between the managed and general lanes (eg. a shared overpass)). HPTE to reimbursed Project for appropriate % for GPL lifecycle. *2 - Substructure not a Concessionaire responsibility *3 - Concessionaire responsible for Deck and Superstructure only. Substructure (piers, etc.) remains HPTE responsibility. 3

Concession Agreement

• Concession Term is 50 years from Planned Full Commencement Date • Concession Agreement based on an industry accepted precedent • Equitable Compensation, Relief and Force Majeure Provisions • Standard Default and Termination Provisions • Compensation for any expansion of the US36 and I-25 • Revenue Share between HPTE and PRD based on PRD meeting certain return thresholds 4

Tolling and Revenue

• Toll revenue will be collected from 7 toll gantries on US36 and 1(existing) gantry on the I-25 . Free vehicles include BRT, HOV3+, emergency vehicles • Each gantry will charge a separate toll • Initially tolls will be based on “time-of-day” pricing • In later years when congestion has increased tolling will be “fully dynamic” with pricing based on real-time expected time savings and guaranteeing 45 mph travel • I-25 revenue will account for a significant percentage of total Project revenue – I-25 is currently a tolled route with a history of revenue collection since 2006 and as such this revenue does not carry typical greenfield revenue risk 5

Procurement

Jan 15, 2012 Feb 21, 2012 Apr 23, 2012 May 31, 2012 HPTE DBFOM RFQ Issued Four SOQs Received •

Plenary Roads Denver

(Plenary, Ames Construction, Granite Construction, HDR, Transfield Services and Goldman Sachs) •

Denver Access Partners

(Cintra, Ferrovial Agroman, Lawrence Construction and Aztec Engineering) • •

Accelerate 36 Consortium

(Balfour Beatty Capital, Edgemoor Infrastructure, Brisa, Atkinson Construction, Parsons Brinckerhoff and Scotiabank)

US 36 Development Partners

(Isolux Corsán, Terracare Associates, Atkins, Bank of Tokyo-Mitsubishi UFJ and THB Advisory) HPTE Announces Shortlisting of Three Teams •

Plenary Roads Denver

(Plenary, Ames Construction, Granite Construction, HDR, Transfield Services and Goldman Sachs) • •

Denver Access Partners

(Cintra, Ferrovial Agroman, Lawrence Construction and Aztec Engineering)

US 36 Development Partners

(Isolux Corsán, Terracare Associates, Atkins, Bank of Tokyo-Mitsubishi UFJ and THB Advisory) 6

Procurement (cont.)

Oct 16, 2012 Mar 1, 2013 Apr 5, 2013 Jun 28, 2013 Feb 28, 2014 Final RFP Issued Two Teams Respond to RFP •

Plenary Roads Denver

(Plenary / Ames Construction / Granite Construction / HDR / Transfield Services / Goldman Sachs) •

US 36 Development Partners

(Isolux Corsan / Terracare / Atkins / BTMU / THB Advisory) Plenary Roads Denver Selected as Preferred Bidder Commercial Close Financial Close 7

Team Overview

Equity Construction JV Design and Engineering Operations and Maintenance Concessionaire Back Office Services Financial Advisory Patrol/ Enforcement

8

Financing Info

• The project, CDOT’s first P3 to close, has been financed with: – USD 20.36m of series 2014 tax-exempt private activity bonds (PABs) – A USD 60m TIFIA loan – A USD 20.6m junior subordinate loan from Northleaf Capital – Equity committed by Plenary of USD 20.8m

• The PABs, which pay a coupon of 5.75%, priced at 98.241 to yield 5.875% • The PABs have a maturity of January 2044 and were underwritten by Goldman Sachs.

• The TIFIA loan carries an interest rate of 3.68% • Fitch Ratings assigned a BBB- to the TIFIA loan and PABs 9

Design & Construction Schedule

• • • • • • Financial Close Phase 1 Construction Phase 2 Construction Phase 1 Project Open for Toll Collection Phase 2 Project Open for Toll Collection Concession Period February 2014 July 2012 – May 2015 March 2014 – December 2015 May 2015 January 2016 February 2014 – December 2065 10