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The MDI Mechanism

The MDI Mechanism. MDI allows for a variable term of the concession, based on enplaned passenger revenues only (12.2% of total revenues) . There is a maximum extension of 78 months . Passenger Traffic risk of the concession is substancially mitigated. The MDI Mechanism Offered by MOP.

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The MDI Mechanism

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  1. The MDI Mechanism • MDI allows for a variable term of the concession, based on enplaned passenger revenues only (12.2% of total revenues). • There is a maximum extension of 78 months. • Passenger Traffic risk of the concession is substancially mitigated.

  2. The MDI MechanismOffered by MOP • Chosen Option: Low traffic growth rate • 5.0% growth rate for domestic passenger traffic. • 5.5% growth rate for international passenger traffic. • Total guaranteed enplaned passenger revenues: UF 1,190,024 (calculated using a higher base year 2003 due to the September 11th terrorist attacks). • Premium: UF 833,017 (USD 22.3 million)

  3. The MDI Mechanism • This Agreement establishes a Revenue Distribution Mechanism (the MDI Mechanism): • The MDI Mechanism guarantees to the Concessionaire a present value of emplanement fee revenues (YTG) of UF 1.190.024 discounted @ 9.5%. • The YTG is calculated by applying: • 5% annual growth rate to the domestic enplaned passenger revenues in year 2003 plus 6.39% until the end of the original Concession. • 5.5% annual growth rate to the international enplaned passenger revenues in year 2003 plus 9.13% until the end of the original Concession • The Concession ends when the Guaranteed Emplanement Fee Revenues (YTG) are reached. • The cost of this Mechanism is UF 833.017.

  4. Option #1 Option #2 SCL has chosen the low traffic growth rate Total Guaranteed Revenues The MDI Mechanism Enplaned Pax. tariff. [UF] Io t 2003 Original term of the concession(2013)

  5. Demand trend Case 1: The concession ends before the original term (equivalent to an annual traffic growth rate higher than 9.4%) Io Total Guaranteed Revenues Equivalent to 9.4% annual traffic growth rate t 2003 Original term of the concession(2013) The MDI Mechanism Enplaned Pax. tariff. [UF]

  6. Io Difference needed to complete the guaranteed revenues. Operational and Maintenance cost (agreed upon today) t 2003 The MDI Mechanism Enplaned Pax. tariff. [UF] Demand trend Case 2: The concession ends after the original term (lower than 9.4% annual traffic growth rate) Total Guaranteed Revenues Original term of the concession(2013)

  7. The MDI Mechanism: Advantages & Benefits • Strong mitigation of traffic risk. • Provides financiability to the project. • Shareholder’s possibility of loosing equity is greatly diminished. • Extremely low probability of an ultimate loss.

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