Trade Secret and Strictly Confidential Carlyle Global Infrastructure Opportunity Fund Peter Taylor Fund Co-Head 06/24/2019
Trade Secret and Strictly Confidential Carlyle’s Global Investment Platform Corporate Private Equity Real Assets $84 $46 billion billion $222 Billion Total AUM $46 $45 billion billion Global Credit Investment Solutions 1 Note: As of March 31, 2019. Presented for illustrative purposes only.
Trade Secret and Strictly Confidential Evolution of the U.S. Public Infrastructure Market Expanding Institutionalized Early (2015-2025) (2025+) (2000’s) Consistent deal flow • Policy / Transaction • standardization begins to occur Greater stakeholder acceptance • Institutional primary and • Higher execution certainty • secondary markets for deals Broad political acceptance • Standardized incentives for • stakeholders Ad Hoc Deals • Risk increases due to capital • Inconsistent Policy / Decision • saturation Making Long Lead Time • High stakeholder skepticism • Capitalization Low Execution Certainty • Political Will Presented for illustrative purposes only. Based on Carlyle Analysis as of May 2017. The information above reflects Carlyle's views and may be subject to change based upon 2 prevailing global market and economic conditions. There can be no guarantee that any forecasts will ultimately materialize.
Trade Secret and Strictly Confidential The U.S. Infrastructure Opportunity Bi-partisan support exists for infrastructure in the United States, but with 80%+ of public infrastructure owned by states and municipalities, the role of the federal government is limited. We are seeing an increase in federal and local support for public-private partnerships and believe the U.S. remains the world’s most attractive emerging infrastructure market. We believe three key trends are driving the emergence of the U.S. opportunity, including: 1. Largest opportunity set globally is in the US; significant need for infrastructure updates, and specifically in lower risk, core infrastructure assets 2. Accommodative regulatory environment 3. Distinct transaction environment that favors trusted local partners While the U.S. market has evolved as the most attractive place to invest, it is not an ‘open’ market. To succeed, investors must be U.S.-based, have a credible local presence and track record of delivering on stakeholder outcomes. 3 Source: Carlyle analysis. For illustrative purposes only.
Trade Secret and Strictly Confidential Key Themes Transport Energy • Over $100 billon required in airport • US energy export revolution changing infrastructure over next 5 years 1 global energy market dynamics • Crude exports have grown from 0 to 2.2 mmbbls/d in three years 3 Electric Infrastructure Water • 3500 power outages in 2017 • 2,000+ medium / large water impacting 36 million people 2 systems in the US are out of EPA compliance 4 Over $2 trillion required to be invested in US infrastructure through the next decade 1 Airport Council International. 2 ECMAG Article. "36.7 Million Affected by Power Outages in 2017, Per Eaton Study" (March 2018). 3 EIA (October 2018). 4 4 Natural Resources Research Institute (2017).
Trade Secret and Strictly Confidential Transport: Private Investment in Airports through P3 Pillars Community Commercial Customer 1 2 3 Outcomes Outcomes Outcomes Local, State and Federal Passengers Airlines Government Major Opportunity to Improve Outcomes for All Stakeholders of US Airports 5 Note: For illustrative purposes only.
Trade Secret and Strictly Confidential Transport Case Study: Terminal One at JFK Airport 6
Trade Secret and Strictly Confidential 1 Community Engagement 30% MWBE Commitment • Partnering with Labor • Sustainability, including 50 – 100% Renewable Energy Target • JFK Redevelopment Community Advisory Council • Education & Career Development Opportunities through the JFK Airport Academy • Unprecedented Commitment to Diversity, Inclusion & the Local Community 7 Note: For illustrative purposes only.
Trade Secret and Strictly Confidential 2 Customer Outcomes The Port Authority of New TOGA Airlines; Terminal One Passengers York & New Jersey Reach Airports World-class facilities • World-class operations & Ownership & control of JFK • • efficiency Quality of space & product Governance & oversight • • offerings Munich Airport expertise • Transfer of project delivery • Seamless passenger journey risk • Competitive cost base • Safety & security • Increased sustainability • Performance measurement & • Terminal integration • Expedited timeline reporting schemes • Easy access • Successful Navigation through Complex Stakeholder Environment 8 Note: For illustrative purposes only.
Trade Secret and Strictly Confidential Commercial Outcomes 3 Material equity contribution to create alignment with minimal impact on PANYNJ • cost of capital Positive impact on credit rating • Strategic balance of public & private • financing alternatives Alignment of stakeholder interests • Ability to leverage private sector networks, resources & expertise • Commercial Optimization through Partnership & Alignment 9 Note: For illustrative purposes only.
Trade Secret and Strictly Confidential Bringing to Bear a Full Complement of Resources 2 1 Bid Phase and Design Development Construction Phase 580+ Total Professionals • 5,000+ Construction & Related Services professionals • 20+ Investment Professionals • 25+ Financial Advisors • 40+ Lawyers • 50+ Airline Professionals and Advisors • 15+ Airport Operations Professionals • 20+ Commercial Consultants 3 Operational Phase • 10+ Community Development and Government Relations Experts 30+ Environmental and Technical Advisors • Up to ~15,000 badged • 300+ Design and Engineering Professionals employees 50+ Project Management and Delivery Experts • 20+ Pre-Construction Professionals 10 Source: Carlyle analysis. For illustrative purposes only.
Trade Secret and Strictly Confidential Forecasted Job Creation at Terminal One The New Terminal One is forecasted to create over 8,000 new permanent jobs Total Number of Badged Employees* Job Categories Terminal Management • Current Terminal One New Terminal One Security (incl. TSA) • Customs • Administrative • Maintenance • 2.3x Wheelchair Assistance • ~6,300 ~15,000 Janitorial • Airline Staff • ~5,000 total Lounge Staff • Logistics construction jobs • Ramp Operations • Baggage Handling • Retail Staff • Training and career development opportunities in collaboration Restaurant Staff with local organizations such as the Council for Airport Opportunity • Airline Marketing to attract and develop future local workforce • Source: Carlyle analysis. For illustrative purposes only. 11 *Badged employees represents all employees at Terminal One including TSA, CBP, Airlines, service providers etc.
Trade Secret and Strictly Confidential Energy Case Study: Lone Star Ports Preliminary Harbor Island Dock Rendering Dredging Project Map Presented for illustrative purposes only. Sources include EIA and Carlyle Analysis as of October 2018. The information above reflects Carlyle's views and may be subject to change based upon prevailing global market and economic conditions. There can be no guarantee that any 12 forecasts will ultimately materialize. References to strategic partnerships are not and should not be construed as a recommendation of any particular company or security. There can be no guarantee that the fund will be able to consummate this transaction on the terms herein or at all.
Trade Secret and Strictly Confidential Crimson Midstream AlphaStruxure Acquisition of Midstream Crude Oil Pipeline Deepening Partnership with Schneider Electric Owner & Operator • Carlyle: Ability to finance and own energy infrastructure removes funding roadblocks and accelerates deployment of distributed energy assets Crimson Headquarters Denver, CO • Schneider: Best-in-class low-and medium-voltage products Gulf Operating Center and integrated digital solutions deliver the efficiency and Crimson Control Center Houma, LA Long Beach, CA Houston reliability gains customers are seeking Office Crimson’s pipeline footprint • With current favorable market dynamics, the partnership has the potential to provide unrivaled energy solutions and value to customers • AlphaStruxure is well positioned to capitalize on the large and growing market for microgrid and distributed energy solutions 13 Note: Crimson Midstream transaction closed on 1/11/19. For illustrative purposes only. References to strategic partnerships are not and should not be construed as a recommendation of any particular company or security. The information above reflects Carlyle's judgment & may be subject to change based upon prevailing global market & economic conditions. There is no guarantee that these trends will continue. There can be no guarantee that the fund will be able to consummate this transaction on the terms herein or at all.
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