Mantra Group. Coasting through 1H15. Earnings and target price revision. Price catalyst. Catalyst: 1H15 result on 27 February.

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1 AUSTRALIA MTR AU Price (at 07:30, 12 Feb 2015 GMT) Outperform A$2.90 Valuation A$ DCF (WACC 8.7%, beta 1.3, ERP 5.0%, RFR 3.8%, TGR 3.0%) 12-month target A$ month TSR % Volatility Index Medium GICS sector Consumer Services Market cap A$m day avg turnover A$m 0.5 Number shares on issue m Investment fundamentals Year end 30 Jun 2014A 2015E 2016E 2017E Revenue m EBIT m Reported profit m Adjusted profit m Gross cashflow m CFPS CFPS growth % nmf PGCFPS x PGCFPS rel x EPS adj EPS adj growth % nmf PER adj x PER rel x Total DPS Total div yield % Franking % nmf ROA % ROE % EV/EBITDA x Net debt/equity % P/BV x MTR AU vs Small Ordinaries, & rec history Note: Recommendation timeline - if not a continuous line, then there was no Macquarie coverage at the time or there was an embargo period. Source: FactSet, Macquarie Research, February 2015 (all figures in AUD unless noted) 12 February 2015 Macquarie Securities (Australia) Limited Coasting through 1H15 Event We reiterate our Outperform call heading into MTR s 1H15 result. Impact Expecting a solid 1H15: We are forecasting 1H15 revenue of $250.1m (+8.7% on pcp), EBITDA of $40m (+7.7%) and NPATA of $24.1m (+10.1%), with growth driven by a mix of occupancy, room rates, non-room revenue and new properties. All four specific new properties identified in the prospectus to complete in FY15 are now trading under Mantra brands. Two new properties not included in the prospectus will also contribute to 1H15: Mantra Midtown Apartments and BreakFree on Clarence. We expect MTR to announce a maiden dividend of 6.4cps for the half (75% payout). Latest industry data supports our forecasts: Data from trade publications suggest that RevPAR in Brisbane and Qld tourist destinations was positively impacted by the G20. Over the week of the G20, Brisbane RevPAR reportedly increased 150%. In addition, Sydney hotels had had the best November for 20 years reporting a 5.7% increase in RevPAR (driven by rates) and occupancy >90% for the second month this year. Sources: STR Global, Hotel News Resource, Travel Trends. New properties keep coming: MTR have won three new properties since our last update in October, Mantra / BreakFree Bell City in Melbourne (open in Jan), BreakFree on Cashel in Christchurch (opening in Apr), and Richmont Hotel by Mantra in Brisbane (opening in Dec). There are now four properties that were not included in MTR s prospectus and will now contribute to FY15 Mantra Midtown, BreakFree on Clarence, Bell City and Cashel St and we would expect incremental EBITDA to more than cover the $0.4m attributed to the probability weighted pipeline. We see the potential for a prospectus upgrade: Given the strong 1H15 result, a seasonal weighting to 1H, and MTR s visibility over the remainder of its key trading period, we think MTR is a candidate for a prospectus upgrade. Consensus has started to move, with the top end 3.5% ahead of prospectus. Earnings and target price revision Very minor EPS changes. PT increased from $2.56 to $3.26 as we move to DCF methodology (p.5). Price catalyst 12-month price target: A$3.26 based on a DCF methodology. Catalyst: 1H15 result on 27 February. Action and recommendation MTR is in the enviable position of having multiple medium-term industry tailwinds coupled with an attractive business model (low ongoing capex, solid OCF, long-dated operating agreements, entrenched in properties) and experienced management team. The business is well placed to benefit from a lower AUD given its strong positioning in domestic travel but the impact is not immediate and will take time to flow through. Retain Outperform. Please refer to page 8 for important disclosures and analyst certification, or on our website

2 We expect a solid 1H15 result from Mantra MTR will report its 1H15 result on 27 February. Management did not provide half-year prospectus forecasts, only FY15 numbers. Our full-year FY15 forecasts are in line with prospectus; however, we believe there is potential for a positive surprise and we discuss this on p. 5. For 1H15 we are forecasting sales of $250.1m (+8.7% on pcp), EBITDA of $40m (+7.7%) and NPATA of $21.4m (+10.1%). We have been guided by historical seasonality in setting our forecasts, as illustrated in Figures 1 and 2. MTR has a strong earnings skew to the first half, driven largely by occupancy. 1H13 EBITDA was 58% of the full year and 1H14 was 59.5%. Our FY15 forecasts assume a 58/42 EBITDA split and 61/39 NPATA split. Fig 1 EBITDA skewed to 1H... Fig 2... driven largely by occupancy 70% 60% 50% 40% 30% 90% 85% 80% 75% 70% 65% 60% 85.1% 85.1% 81.0% 82.3% 83.1% 83.1% 70.2% 68.0% 68.1% 62.9% 63.2% 59.9% 20% 55% 10% 50% 45% 0% Group EBITDA CBD EBITDA Resorts EBITDA 40% 1H13 2H13 1H14 2H14 1H15e 2H15e 1H13 2H13 1H14 2H14 1H15e 2H15e CBD Resorts Source: Macquarie Research, Company information, February 2015 Source: Macquarie Research, Company information, February 2015 What are we looking for in 1H15? Solid occupancy: We expect CBD occupancy rates to hold in 1H15 at ~85%, partly assisted by strong Brisbane trading during the G20 Summit. We are forecasting Resorts occupancy of 70.2%, which is 210bps higher than pcp and consistent with STR Global data indicating strong RevPAR growth in Qld (see p. 3-4). Rates growth: We assume modest room rate growth of +1.5% for CBD and +1.3% for Resorts. While the CBD markets of Melbourne, Sydney and Brisbane likely saw good rate growth in 1H15, with Brisbane driven by the G20, this was potentially tempered by a subdued (but not steeply declining) Perth market. Based on the industry data we have collated (see p. 3-4), we believe there is potential for room rates to be a source of positive surprise at the result. New properties: All of the four specific properties identified in the prospectus to complete and commence operations in FY15 are now open and trading under Mantra brands. The last of these, Mantra on Edward in Brisbane, opened on 6 October. Two new properties not included in the prospectus forecasts, Mantra Midtown Apartments in Brisbane (MLR) and BreakFree on Clarence in Sydney (MA), have also been operating since October and will contribute to 1H15. Margins: Overall we assume a flat EBITDA margin vs. pcp of ~16%. We see the potential for margins to surprise on the upside if we see better than expected room rate growth, particularly given the operating leverage in CBD properties. Cash flow / balance sheet: We expect a ~$15m reduction in net debt vs. FY14 in part due to seasonally stronger earnings. Maiden dividend: We expect MTR to announce a maiden dividend of 6.4cps for the half, implying a 75% payout ratio. See Figure 3 on the following page for our detailed segment outlook and p. 6 for our full 1H15 P&L forecasts. 12 February

3 Segment profit outlook & 1H15 expectations Fig 3 Segment earnings and KPIs June y/e; A$m FY11(a) FY12(a) FY13(a) 1H14(a) 2H14(a) FY14(a) 1H15(e) 2H15(e) FY15(e) FY16(e) CBD Sales Growth - 6.0% 2.6% 4.0% 4.5% 4.2% 12.7% 16.2% 14.4% 7.6% EBITDA Growth % -2.4% -0.8% -4.9% -2.7% 5.2% 20.2% 11.9% 9.3% Margin 18.2% 20.5% 19.5% 19.6% 16.6% 18.2% 18.3% 17.2% 17.8% 18.0% KPIs Total rooms available 1,410 1,428 1, , ,609 1,690 Paid rooms sold 1,084 1,123 1, , ,353 1,421 Occupancy 76.9% 78.7% 81.7% 85.1% 83.1% 84.1% 85.1% 83.1% 84.1% 84.1% Average room rate $ $ $ $ $ $ $ $ $ $ RevPAR $ $ $ $ $ $ $ $ $ $ Gross room revenue Resorts Sales Growth - 5.8% 2.3% 4.3% 6.2% 5.2% 2.9% 2.9% 2.9% 4.5% EBITDA Growth % 9.5% 4.3% 20.3% 9.7% 6.1% 4.6% 5.5% 6.2% Margin 10.9% 11.6% 12.4% 15.7% 9.9% 13.0% 16.2% 10.1% 13.3% 13.5% KPIs Total rooms available 1,900 1,902 1, , ,926 1,960 Paid rooms sold 1,118 1,189 1, , ,285 1,323 Occupancy 58.8% 62.5% 64.0% 68.1% 62.9% 65.6% 70.2% 63.2% 66.7% 67.5% Average room rate $ $ $ $ $ $ $ $ $ $ RevPAR $85.08 $89.57 $94.46 $ $94.21 $99.44 $ $95.48 $ $ Gross room revenue Central Rev & Distrib. Sales Growth % 4.0% 8.8% 54.9% 30.3% 13.1% -9.3% 0.7% 6.5% EBITDA Growth % 8.6% 9.2% 35.1% 20.6% 4.8% -3.7% 0.6% 5.8% Margin 66.1% 71.4% 74.6% 78.7% 61.2% 69.0% 72.9% 64.9% 68.9% 68.5% Corporate Sales Growth % -3.8% -4.3% 123.6% 52.0% -1.1% -46.1% -30.3% 2.0% EBITDA Growth % -4.8% -12.5% 20.2% 1.9% -1.0% -2.7% -1.9% 3.0% Source: Company data, Macquarie Research, February 2015 Latest data supports 1H15 growth We do not have official industry statistics for the six months to 31 December but have sourced the following to provide some colour around trading conditions over 1H15 for MTR: JLL data show that Cairns RevPAR increased 27.9% in September vs. pcp, likely driven by Cairns hosting the G20 finance ministers and Central Bank governors over September as well as a broader recovery in tourism (source: Over the week of the G20 Summit (10-16 November), STR Global data show that Brisbane hotel occupancy rates reached 93.5%, room rates increased ~127% and RevPAR increased 150%. Due to high demand leading up to the event, hotels were able to drive rate growth up to two weeks ahead. The Gold Coast and Sunshine Coast also benefited from the G20 event in both occupancy and ADR, although at lower growth rates than Brisbane (source: Hotel News Resource). 12 February

4 Sydney hotels had the best November for 20 years according to STR Global data, which reported a 5.7% increase in RevPAR, largely driven by growing room rates. Occupancy was >90% for the second month this year (source: Travel Trends). STR Global data show that in December, Australia-wide occupancy rates were up 0.6% to 72%, with overall revpar up a more modest 0.2% due to room rate declines of -0.4% (source: Hotel News Resource). Action Hotels, a UK-listed hotel owner with one property in Melbourne and five in the Middle East, provided a trading update on 22 January. No specific operating statistics were provided for Australia; however, management commented that all six operational hotels delivered strong performance with group RevPAR up 3.7% and occupancy levels across the portfolio remaining in line with management expectations. New properties keep coming Winning new property operating agreements is an ordinary course of business for MTR and below we provide an update on the latest wins announced on its website since our last update in October 2014: Mantra / BreakFree Bell City: MTR opened its largest hotel to date on 14 January, with the rebranding of the 844-room Bell City in Preston, Melbourne. The property has dual hotel towers which were opened as Mantra Bell City (383 rooms) and BreakFree Bell City (461 rooms). Mantra will operate the property under a Management Agreement with Elanor Investors Group, who recently purchased the property. This is the fourth MA with Elanor. Other properties include Peppers Cradle Mountain Lodge, Mantra Wollongong, and BreakFree on Clarence, Sydney. This property will contribute to earnings in FY15. While it is a Management Agreement, given the size of the property it should have a greater earnings contribution than a typical MA. BreakFree on Cashel: The 250-room hotel (modern compact rooms) is due to open in April This is following an extensive refurbishment after the 2011 Christchurch earthquakes by Auckland-based Russell Group. The hotel is positioned within two blocks of many of Christchurch s new infrastructure projects. The operating structure was not disclosed. Richmont Hotel by Mantra: Richmont, a Malaysian development group, will build a 110-room 4-star hotel on Kennigo Street in Spring Hill, Brisbane. The hotel is scheduled for completion in December 2015 and will be operated by MTR under a long-term Management Agreement. On our count the new properties announced that will contribute to FY15 but are not explicitly named in the prospectus include: Mantra Midtown Apartments opened October 2014 (MLR, Brisbane). BreakFree on Clarence opened October 2014 (MA, Sydney). Mantra / BreakFree Bell City opened January 2015 (Large MA, Melbourne). BreakFree on Cashel opening in April 2015 (Unknown, Christchurch). While we do not have specific property earnings for each of these, we believe that they will be more than enough to cover the $0.4m EBITDA contribution from the probability-weighted pipeline included in prospectus forecasts. Outlook commentary expectations Outlook commentary: Overall we expect positive outlook commentary from management given the momentum in the business. More specifically: CBD: We expect positive commentary on the outlook for Melbourne and Sydney, with a focus on the potential for room rate growth in light of high occupancy rates. We believe declines in Perth have largely stabilised following supernormal profits earned during the resources boom, but we are not expecting Perth to be a significant driver of growth over the coming 12 months. Resorts: With an improving outlook for domestic tourism due to household wealth (house prices & lower rates / petrol prices) and a lower AUD, we expect positive commentary around the occupancy and room rate outlook for Resorts. We are also looking for signs of a sustained improvement in the corporate conference market, which had shown some early positive signs at the FY14 result. 12 February

5 New properties: We expect positive commentary on the new property pipeline. Will MTR upgrade prospectus forecasts? We believe there is a strong chance management will upgrade its prospectus forecasts due to the combination of (1) a strong 1H15 result, (2) a seasonal weighting to the first half, and (3) MTR s visibility over the remainder of its key trading period, with the company previously commenting it has good visibility ~90 days forward. Consensus has already begun to move: Factset consensus data are showing a mean FY15 EBITDA of $70.6m compared to prospectus $69.5m. The top end of consensus is 3.5% ahead of prospectus. We have left our forecasts in line with prospectus. Valuation and price target We move from a multiple based valuation to a DCF to better capture the opportunity for growth over the medium-term from new properties and medium-term industry tailwinds. Our DCF assumptions are as follows: RFR 3.75%, Beta 1.25, ERP 5%, gearing 20%, cost of debt 5%, TGR 3%, WACC 8.7%. We are comfortable having a TGR >2.5% for MTR given the structural thematic surrounding Chinese inbound tourism, with MTR to benefit as the Chinese move from group tours to independent travel. For more detail on this very long-term thematic see our initiation report Travelling (capital) light. Our DCF valuation is $3.06 per share. To arrive at our $3.26 price target we roll forward our DCF 12-months. Figure 4 below contains a comparative valuation table including global hotel peers. We include global peers as a broad point of reference but note the differing business models and end market exposure vs. Mantra. Fig 4 Comparative valuation table Security Company Name Y/E Australian Leisure Operators Share price (local) Market Cap PER (FY1) PER EV/EBITDA EV/EBITDA (FY2) (FY1) (FY2) EV/EBIT (FY1) EV/EBIT (FY2) Div. Yield EPS 3-year (FY1) CAGR AAD-AU Ardent Leisure Jun , % 14.8% VRL-AU Village Roadshow Jun % 5.1% Weighted average by market cap AAD & VRL % 10.4% AHD-AU Amalgamated Holdings Jun , % 14.9% Weighted average by market cap % 11.6% Australia - Other Travel / Leisure CTD-AU Corporate Travel Mgmt Jun , % 25.0% FLT-AU Flight Centre* Jun , % 12.2% HLO-AU Helloworld Jun % % WEB-AU Webjet* Jun % 7.2% Weighted average by market cap % 10.4% Global Hotel Operators Local USD CY14 CY15 CY14 CY15 CY14 CY15 CY14 AC-FR Accor SA Dec , % 15.2% CHH-US Choice Hotels Dec , % 9.7% HLT-US Hilton Worldwide Holdings Dec , % H-US Hyatt Hotels Dec , % IHG-GB InterContinental Hotels Dec , % 12.6% MAR-US Mariott International Dec , % 21.9% Weighted average by market cap % 21.2% CY15 CY16 CY15 CY16 CY15 CY16 CY15 HOT-US Starwood Hotels & Resorts Dec , % 4.7% WYN-US Wyndham Worldwide Dec , % 16.4% Weighted average by market cap % 10.0% Emerging Leaders Universe Small Industrials % 11.2% MTR-AU Jun % 9.5% Source: Macquarie Research, FactSet, February Note Starwood and Wyndham have already reported CY14 full-year results, with the rest of the global peers to report next week. 12 February

6 (MTR:$2.90) 12-Feb-15 Interim results 2H/13A 1H/14A 2H/14A 1H/15E Profit & Loss 2014A 2015E 2016E 2017E Revenue Revenue $m EBITDA $m EBITDA $m Depreciation $m Depreciation $m Amortisation of goodwill $m Amortisation of goodwill $m EBIT $m EBIT $m Net Interest expense $m Net interest expense $m Pre-Tax Profit $m Pre-Tax Profit $m Tax Expense $m Tax Expense $m Net Profit $m Net Profit $m Outside equity interests $m Outside equity interests $m Net Abn/Extra $m Net Abnormals/Extra. $m Reported Earnings $m Reported Earnings $m Adjusted Earnings $m Adjusted Earnings $m Gross Cashflow $m Gross Cashflow $m EPS (Adj/dil) c EPS (adj/diluted) c EPS growth % EPS growth % CFPS c PE (adj) x CFPS Growth % CFPS c EBITDA/Sales % CFPS Growth % EBIT/Sales % PGCFPS x Earnings Split % DPS c Revenue Growth % Yield % EBIT Growth % Franking % nmf Profit and Loss ratios 2014A 2015E 2016E 2017E Cashflow Analysis 2014A 2015E 2016E 2017E Revenue Growth % EBIT Growth % Pre-tax Profit $m EBITDA/Sales % Depreciation & Amortisation $m EBIT/Sales % Tax Paid $m Effective tax rate % Gross cashflow $m Payout ratio % Changes in working capital $m EV/EBITA x Other $m EV/EBITDA x Operating Cashflow $m EV/Sales x Acquisitions $m Balance sheet ratios Capex - Plant & Equip. $m ROE % Asset Sales $m ROA % Other $m ROFE % Investing cashflow $m Net Debt $m Dividend (ordinary) $m Net Debt/Equity % Equity raised $m Interest Cover x Other $m Net Debt/EBITDA x Financing cashflow $m Fixed Charges Cover x NTA per share $ Net Change in cash/debt $m EFPOWA m Historical performance* 2011A 2012A 2013A 2014A Balance Sheet 2014A 2015E 2016E 2017E Cash $m Revenue $m Receivables $m EBITDA $m Inventories $m Depreciation/Amortisation $m Investments $m EBIT $m Property, plant & equipment $m Net interest expense $m Intangibles $m Pre-Tax Profit $m Other Assets $m Tax Expense $m Total Assets $m Net Profit $m Payables $m Net Abn/Extra $m Short Term Debt $m Long Term Debt $m EPS (adj/dil) c Other Liabilities $m EPS growth % Total Liabilities $m Ordinary DPS c Shareholders Funds $m EBITDA/Sales % Minority Interests $m EBIT/Sales % Total Shareholders Equity $m ROE % 61.3 nmf ROFE % 74.4 nmf Total Funds employed $m EFPOWA m Segments Sales CBD $m Resorts $m C-Rev & Distribution Corporate EBITDA CBD $m Resorts $m Source: Macquarie Research C-Rev & Distribution *FY11, FY12, FY13 and 1H14 are pro forma numbers Corporate Source: Company data, Macquarie Research, February February

7 Fundamentals Macquarie Wealth Management Macquarie Quant View The quant model currently holds a reasonably positive view on. The strongest style exposure is Growth, indicating this stock has good historic and/or forecast growth. Growth metrics focus on both top and bottom line items. The weakest style exposure is Quality, indicating this stock is likely to have a weaker and less stable underlying earnings stream. 67/290 Global Alpha Model Sector Rank % of BUY recommendations 40% (2/5) Number of Price Target downgrades 0 Number of Price Target upgrades 2 Attractive Quant Rank within Country Rank within Sector Displays where the company s ranked based on the fundamental consensus Price Target and Macquarie s Quantitative Alpha model. The rankings are displayed relative to the sector and country. Macquarie Alpha Model ranking A list of comparable companies and their Macquarie Alpha model score (higher is better). Factors driving the Alpha Model For the comparable firms this chart shows the key underlying styles and their contribution to the current overall Alpha score. Corporate Travel Manageme 2.4 Corporate Travel Manageme Marriott International Hilton Worldwide Holdings Starwood Hotels & Resorts Wynn Resorts Flight Centre Travel Grou Marriott International Hilton Worldwide Holdings Starwood Hotels & Resorts Wynn Resorts Flight Centre Travel Grou % -80% -60% -40% -20% 0% 20% 40% 60% 80% 100% Valuations Growth Profitability Earnings Momentum Price Momentum Quality Macquarie Earnings Sentiment Indicator The Macquarie Sentiment Indicator is an enhanced earnings revisions signal that favours analysts who have more timely and higher conviction revisions. Current score shown below. Drivers of Stock Return Breakdown of 1 year total return (local currency) into returns from dividends, changes in forward earnings estimates and the resulting change in earnings multiple. Corporate Travel Manageme Marriott International Hilton Worldwide Holdings Starwood Hotels & Resorts Wynn Resorts Flight Centre Travel Grou Corporate Travel Manageme Marriott International Hilton Worldwide Holdings Starwood Hotels & Resorts Wynn Resorts Flight Centre Travel Grou % -40% 10% 60% Dividend Return Multiple Return Earnings Outlook 1Yr Total Return What drove this Company in the last 5 years Which factor score has had the greatest correlation with the company s returns over the last 5 years. How it looks on the Alpha model A more granular view of the underlying style scores that drive the alpha (higher is better) and the percentile rank relative to the sector and country Alpha Model Score Valuation Growth Profitability Earnings Momentum Price Momentum Quality Capital & Funding Liquidity Risk Technicals & Trading Normalized Score Percentile relative to sector(/290) Percentile relative to country(/241) For more details on the Macquarie Alpha model or for more customised analysis and screens, please contact the Macquarie Global Quantitative/Custom Products Group (cpg@macquarie.com) 12 February

8 Important disclosures: Recommendation definitions Macquarie - Australia/New Zealand Outperform return >3% in excess of benchmark return Neutral return within 3% of benchmark return Underperform return >3% below benchmark return Benchmark return is determined by long term nominal GDP growth plus 12 month forward market dividend yield Macquarie Asia/Europe Outperform expected return >+10% Neutral expected return from -10% to +10% Underperform expected return <-10% Macquarie First South - South Africa Outperform expected return >+10% Neutral expected return from -10% to +10% Underperform expected return <-10% Macquarie - Canada Outperform return >5% in excess of benchmark return Neutral return within 5% of benchmark return Underperform return >5% below benchmark return Macquarie - USA Outperform (Buy) return >5% in excess of Russell 3000 index return Neutral (Hold) return within 5% of Russell 3000 index return Underperform (Sell) return >5% below Russell 3000 index return Volatility index definition* This is calculated from the volatility of historical price movements. Very high highest risk Stock should be expected to move up or down % in a year investors should be aware this stock is highly speculative. High stock should be expected to move up or down at least 40 60% in a year investors should be aware this stock could be speculative. Medium stock should be expected to move up or down at least 30 40% in a year. Low medium stock should be expected to move up or down at least 25 30% in a year. Low stock should be expected to move up or down at least 15 25% in a year. * Applicable to Asia/Australian/NZ/Canada stocks only Recommendations 12 months Note: Quant recommendations may differ from Fundamental Analyst recommendations Financial definitions All "Adjusted" data items have had the following adjustments made: Added back: goodwill amortisation, provision for catastrophe reserves, IFRS derivatives & hedging, IFRS impairments & IFRS interest expense Excluded: non recurring items, asset revals, property revals, appraisal value uplift, preference dividends & minority interests EPS = adjusted net profit / efpowa* ROA = adjusted ebit / average total assets ROA Banks/Insurance = adjusted net profit /average total assets ROE = adjusted net profit / average shareholders funds Gross cashflow = adjusted net profit + depreciation *equivalent fully paid ordinary weighted average number of shares All Reported numbers for Australian/NZ listed stocks are modelled under IFRS (International Financial Reporting Standards). Recommendation proportions For quarter ending 31 December 2014 AU/NZ Asia RSA USA CA EUR Outperform 51.80% 58.06% 45.07% 44.42% 60.54% 46.81% (for US coverage by MCUSA, 5.29% of stocks followed are investment banking clients) Neutral 31.80% 27.37% 30.99% 50.10% 35.37% 33.51% (for US coverage by MCUSA, 3.08% of stocks followed are investment banking clients) Underperform 16.39% 14.57% 23.94% 5.48% 4.08% 19.68% (for US coverage by MCUSA, 0.44% of stocks followed are investment banking clients) MTR AU vs Small Ordinaries, & rec history (all figures in AUD currency unless noted) Note: Recommendation timeline if not a continuous line, then there was no Macquarie coverage at the time or there was an embargo period. Source: FactSet, Macquarie Research, January month target price methodology MTR AU: A$3.26 based on a EV/EBITA methodology Company-specific disclosures: MTR AU: MACQUARIE EQUITIES LIMITED or one of its affiliates managed or co-managed a public offering of securities of Ltd in the past 12 months, for which it received compensation. MACQUARIE CAPITAL (AUSTRALIA) LIMITED or one of its affiliates managed or co-managed a public offering of securities of Ltd in the past 12 months, for which it received compensation. Important disclosure information regarding the subject companies covered in this report is available at Date Stock Code (BBG code) Recommendation Target Price 18-Oct-2014 MTR AU Outperform A$ Aug-2014 MTR AU Outperform A$ Aug-2014 MTR AU Outperform A$2.46 Target price risk disclosures: MTR AU: Any inability to compete successfully in their markets may harm the business. This could be a result of many factors which may include geographic mix and introduction of improved products or service offerings by competitors. The results of operations may be materially affected by global economic conditions generally, including conditions in financial markets. The company is exposed to market risks, such as changes in interest rates, foreign exchange rates and input prices. From time to time, the company will enter into transactions, including transactions in derivative instruments, to manage certain of these exposures. Analyst certification: The views expressed in this research reflect the personal views of the analyst(s) about the subject securities or issuers and no part of the compensation of the analyst(s) was, is, or will be directly or indirectly related to the inclusion of specific recommendations or views in this research. The analyst principally responsible for the preparation of this research receives compensation based on overall revenues of Macquarie Group Ltd (ABN , AFSL No ) ( MGL ) and its related entities (the Macquarie Group ) and has taken reasonable care to achieve and maintain independence and objectivity in making any recommendations. General disclosure: This research has been issued by Macquarie Securities (Australia) Limited (ABN , AFSL No ) a Participant of the Australian Securities Exchange (ASX) and Chi-X Australia Pty Limited. This research is distributed in Australia by Macquarie Equities Limited (ABN , AFSL No ) ("MEL"), a Participant of the ASX, and in New Zealand by Macquarie Equities New Zealand Limited ( MENZ ) an NZX Firm. Macquarie Private Wealth s services in New Zealand are provided by MENZ. Macquarie Bank Limited (ABN , AFSL No. 12 February

9 237502) ( MBL ) is a company incorporated in Australia and authorised under the Banking Act 1959 (Australia) to conduct banking business in Australia. None of MBL, MGL or MENZ is registered as a bank in New Zealand by the Reserve Bank of New Zealand under the Reserve Bank of New Zealand Act Any MGL subsidiary noted in this research, apart from MBL, is not an authorised deposit-taking institution for the purposes of the Banking Act 1959 (Australia) and that subsidiary s obligations do not represent deposits or other liabilities of MBL. MBL does not guarantee or otherwise provide assurance in respect of the obligations of that subsidiary, unless noted otherwise. This research is general advice and does not take account of your objectives, financial situation or needs. Before acting on this general advice, you should consider the appropriateness of the advice having regard to your situation. We recommend you obtain financial, legal and taxation advice before making any financial investment decision. This research has been prepared for the use of the clients of the Macquarie Group and must not be copied, either in whole or in part, or distributed to any other person. If you are not the intended recipient, you must not use or disclose this research in any way. If you received it in error, please tell us immediately by return and delete the document. We do not guarantee the integrity of any s or attached files and are not responsible for any changes made to them by any other person. Nothing in this research shall be construed as a solicitation to buy or sell any security or product, or to engage in or refrain from engaging in any transaction. This research is based on information obtained from sources believed to be reliable, but the Macquarie Group does not make any representation or warranty that it is accurate, complete or up to date. We accept no obligation to correct or update the information or opinions in it. Opinions expressed are subject to change without notice. The Macquarie Group accepts no liability whatsoever for any direct, indirect, consequential or other loss arising from any use of this research and/or further communication in relation to this research. The Macquarie Group produces a variety of research products, recommendations contained in one type of research product may differ from recommendations contained in other types of research. The Macquarie Group has established and implemented a conflicts policy at group level, which may be revised and updated from time to time, pursuant to regulatory requirements; which sets out how we must seek to identify and manage all material conflicts of interest. The Macquarie Group, its officers and employees may have conflicting roles in the financial products referred to in this research and, as such, may effect transactions which are not consistent with the recommendations (if any) in this research. The Macquarie Group may receive fees, brokerage or commissions for acting in those capacities and the reader should assume that this is the case. The Macquarie Group s employees or officers may provide oral or written opinions to its clients which are contrary to the opinions expressed in this research. Important disclosure information regarding the subject companies covered in this report is available at 12 February