On The Right Track:

Continuous Improvement In P3 Delivery

BMO Capital Markets Infrastructure & Utilities Conference

February 18, 2010

DISCLAIMER/DISCLOSURE

This presentation has been prepared by 407 ETR.

The financial information presented is taken from quarterly and year-end

statistics that have been disclosed publicly over 2006, 2007, 2008 and 2009.

All financial amounts are shown in Canadian dollars unless otherwise

indicated.

Additional information relating to 407 ETR and or 407 International, including

the 2009 Annual Information Form dated February 4, 2010, can be accessed

on SEDAR.

The statements about expected future events and financial and operating

results are forward-looking. Forward-looking statements may include words

such as anticipate, believe, could, expect, goal, intend, may, outlook, plan,

strive, target and will. These statements reflect internal projections,

expectations, future growth, performance and business prospects and

opportunities, and, as they are subject to a number of risks and uncertainties,

you are cautioned not to put undue reliance upon such statements as they

may differ from actual results and developments.

2

AGENDA

Global Economic Update

407 ETR in 2009

2010 Toll Rate Changes

Recent and Planned Infrastructure Improvements

Key Financial Measures

Key Operational Measures

Continued Customer Service Improvements

Continued Efficiency Improvements

3

GLOBAL ECONOMIC CHALLENGES

4

GLOBAL ECONOMIC UPDATE

5

GAS PRICES

6

Regular Gas

Price (CAD c/L)

TRAFFIC TREND

7

2,500

2,600

2,700

2,800

2,900

3,000

3,100

Jan-0

0

May-0

0

Sep-0

0

Jan-0

1

May-0

1

Sep-0

1

Jan-0

2

May-0

2

Sep-0

2

Jan-0

3

May-0

3

Sep-0

3

Jan-0

4

May-0

4

Sep-0

4

Jan-0

5

May-0

5

Sep-0

5

Jan-0

6

May-0

6

Sep-0

6

Jan-0

7

May-0

7

Sep-0

7

Jan-0

8

May-0

8

Sep-0

8

Jan-0

9

May-0

9

Sep-0

9

Miles T

ravelled

Date

Monthly US Traffic 2000 to 2009

INTERNATIONAL TOLL ROADS

8

Economy and gas prices are still having an effect on toll roads

around the world:

Foothill/Eastern Tollroads (Cal.) down 7% in Q4 (also down 7% in Q4 2008)

Chicago Skyway up 6.0% in Q4 (down 9.2% in Q4 2008)

M6 Toll (UK) down 1.7% in Q4 (down 11.5% in Q4 2008)

Indiana Toll Road up 1.7% in Q4 (down 16.4% in Q4 2008)

Public Border Operators Association (11 border crossings in the Great

Lakes/St. Lawrence area) down 14.3% in Q3 (down 5.9% in Q3 2008)

Including Ambassador Bridge down 9.9% in August and 2% in

September 2009 (down 20% and 19.4% respectively in 2008)

While 407 ETR has been affected by the economy and gas

prices, the economic impact has continued to be significantly

less dramatic than other concessions

407 ETR Q4 traffic down 0.6% (down 1.5% in Q4 2008)

9

0

20

40

60

80

100

120

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Millions Total Trips by Year

0

50

100

150

200

250

300

350

400

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Thousands Average Workday Trips by Year

0

500

1,000

1,500

2,000

2,500

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Millions Total VKT by Year

15.50

16.50

17.50

18.50

19.50

20.50

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Average Trip Length by Year(km)

407 ETR TRAFFIC

-2.6% -2.8%

+1% -1.7%

2009 IN REVIEW

10

Demand for 407 ETR is still relatively strong, especially:In peak hours

Among customers with transponders

In specific sections (“zones”) of the highway

2009 saw a global economic slowdown that affected toll traffic (especially commercial vehicles) world wide.

In 2009, 407 ETR saw a slight decrease in overall traffic

Contract provides flexibility to manage traffic volumes

2010 toll rates use different tools to address these issuesZone Tolling

Trip Toll Charge

Regular Zone Light Zone

Segments W1 – C4 C5 – E2

Per KM Toll Charge Pk: $0.1985,

OffPk: $0.1800

Pk: $0.1925,

OffPk: $0.1800

Trip Toll Charge Light: 25¢ HSU:50¢ HMU:75¢

Weighted Average Toll: $ 0.1889 (1.4% Growth)

8.1% Growth in Typical Trip Toll (with TTC)

Regular Zone Light Zone

Segments W1 – C2 , C4, E1 – E2 C3, C5 – C7

Per KM Toll Charge Pk: $0.2135,

OffPk: $0.1835Pk: $0.2010,

OffPk: $0.1835

Trip Toll Charge Light: 40¢ HSU:50¢ HMU:75¢

Weighted Average Toll Rate: $ 0.1968 (4.2% Growth)

7.7 % Growth in Typical Trip Toll (with TTC)

2009 Toll Structure

2010 Toll Structure

11

TOLL RATES

SUMMARY OF TOLL RATE CHANGES

12

Expansion of Zone Tolling

Increased difference between Peak & Off-Peak pricing

Use the levers available under the contract, including the

Trip Toll Charge

Attract commercial traffic by keeping the Heavy Single

Vehicle and Heavy Multiple Vehicle Trip Toll Charge static

Continue to use the flexibility available

in the contract to maximize value.

CONSTRUCTION AND INFRASTRUCTURE

13

407 ETR has invested over $1.2 billion since 1999!

IMPACT OF NEW LANES

14

PLANNED CONSTRUCTION

15

$70 million of planned highway construction spending in 2010

1. W1Westbound connection onto QEW, lengthening of 403 W/QEW S ramp merge lane, modifications to QEW/Fairview St ramps

2. C1Inside widening of Hwy 407 bridge structures at 16 Mile Creek and CPR, between 403 and 401

3. C2Structural repairs to Hwy 407 over the Credit River bridge structure

4. C7Inside widening of Hwy407 lanes from 404 to Markham Rd.

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KEY INDICATORS - Financial

0

100,000

200,000

300,000

400,000

500,000

600,000

2005 2006 2007 2008 2009

Revenues

-

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,000

2005 2006 2007 2008 2009

EBITDA

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

2005 2006 2007 2008 2009

OpEx

0.00

1.00

2.00

3.00

4.00

5.00

6.00

2005 2006 2007 2008 2009

Revenue/Trip and Expenses/Trip

OpEx/Trip Revenue/Trip

+2.5%

-12.2%

+7.1%+5.4%

-9.8%

DEBT MATURITY PROFILE

17

-

100

200

300

400

500

600

700

800

900

2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040

Junior Bonds

Senior Bonds

Subordinated Bonds

Senior Amortizing PaymentsReal Return Bonds

*

*$165 million Junior Bonds extendible to July 2040, at the option of the bondholders

- All bonds are now current-pay

KEY OPERATIONAL MEASURES

18

0

100

200

300

400

500

600

700

800

900

1000

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Transponders in Circulation (000's)

50

55

60

65

70

75

80

85

90

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Transponder Penetration Percentage

+7.1%

+0.3%

19

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Unbilled Traffic* %

* Includes Unbillable, Unreadable, Non Revenue

KEY INDICATORS - Traffic

-13.7%

20

KEY INDICATORS – Customer Operations

350

400

450

500

2005 2006 2007 2008 2009

Average Handle Time (Seconds)

12,000,000

13,200,000

14,400,000

15,600,000

16,800,000

2005 2006 2007 2008 2009

Bills Sent

50

85

120

155

190

2005 2006 2007 2008 2009

Head Count

0

500

1000

1500

2000

2500

3000

3500

4000

2004 2005 2006 2007 2008 2009

Number of Escalated Complaints

-34.2%

-7.2%

-6.5%

-24%

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KEY INITIATIVES

Vehicle Fingerprinting Technology

IBTTA: President’s Award for Excellence, and

Toll Excellence Award in Technology

VEP second read

OCR improvement – new cameras (CMOS)

RIN consolidations

WEB – Self serve

E-Billing

Plate Denial back-log: proactive clean-up

OPP Mobile Reader

22

IBTTA AWARD

Vehicle Fingerprinting TechnologyVideo traffic transactions can be impacted by weather, customer behaviour, condition of vehicle

and licence plate.

With 20% of trips being captured by video, a significant amount of revenue relies on accurately

identifying these non-transponder vehicles.

Research found technology used in Japanese parking lots that fingerprints the plate and rear of

vehicles so that if plate returns you can match it to the fingerprint.

Two objectives in mind:

Improve the readability of the vehicle plates

Reduce the reliance on the manual reading of these plates

Not only did 407 ETR see a quick recoup on the costs, the system resulted in:

20% decrease in transactions routed for manual verification

37% reduction in headcount

17% improvement in the readability of plates in the dirty/rusty category

13% reduction in the recycle rate (number of times a plate is read by software or a human)

Added benefit: the increase in Customer Satisfaction among those that would have received a

wrong or late bill due to a misread plate.

“407 ETR’S MOST WANTED”

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“Duplicate Plate or Altered Plate?”

Customer with GMC Acadia gets bills for

trips not taken.

Identical plate used on GMC Safari

numerous times. Appears to be a

duplicate plate.

OPP set up a “sting” at the commuter’s

usual entrance and usual drive time.

Vehicle is spotted by OPP with duplicate

plate but plate changes by the time the

OPP pulls over the driver of the GMC

Safari on the highway.

Drill attached to an old right plate

portion, which moves in front of the real

plate on the GMC Safari by flicking a

switch when entering and exiting the

highway.

Driver cut cheque for outstanding tolls

and rebuilt device for us to videotape. In

this case, crime did pay!

QUESTIONS?

24