Macquarie Forestry Investment Quarterly Update

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Monica Barnett
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Macquarie Forestry Quarterly update September 2018 Macquarie Eucalypt Project 2005 Macquarie Forestry Investment Quarterly Update Harvest of the Macquarie Eucalypt Project 2005 (2005 Tree Project) is

1 Macquarie Forestry Quarterly update September 2018 Macquarie Eucalypt Project 2005 Macquarie Forestry Investment Quarterly Update Harvest of the Macquarie Eucalypt Project 2005 (2005 Tree Project) is currently approximately 98% complete with over 499,000 Green Metric Tonnes (GMT) of timber having been harvested to 31 August Midway currently has one contractor harvesting the remaining volume for the 2005 Tree Project and harvest is now expected to be completed in December The final distribution of harvest proceeds for the 2005 Tree Project will not be paid to investors until after the harvest is complete and is expected to be approximately $80 per Interest. Table 1 Macquarie Eucalypt Project 2005 Distributions (excl GST) after Fees Timing Source Amount (per Interest) Aug-16 Harvest proceeds paid $ Feb-17 Harvest proceeds paid $ Total harvest proceeds received to date $ *These amounts also include interest income from the 2005 Tree Project bank account. Macquarie Timber Land Trust 2005 The Macquarie Timber Land Trust 2005 (2005 Land Trust) has sold and settled 26 properties in the East Gippsland, Ballarat and Green Triangle regions of Victoria of the total 33 properties owned by the 2005 Land Trust. The remaining 7 properties are located in the Strzelecki region and comprise 541 net plantable hectares of the total of 4,904 net plantable hectares owned by the 2005 Land Trust. Harvest has completed on 4 of these 7 properties and they were placed on the market in April Contracts of sale have been executed for all 4 of these properties and settlement is expected before 30 September The net sales proceeds for these 4 properties equates to a distribution of approximately $400 per Unit after sales costs. These net sale proceeds, along with any other properties that settle before 31 December 2018, will be paid to investors in the February 2019 semi-annual distribution.

2 Table 2 Macquarie Timber Land Trust Distributions Timing Source* Amount (per Unit) Aug-15 Pine sale proceeds paid $16.06 Aug-16 Deferred Rent paid $38.12 Feb-17 Deferred Rent paid $50.65 Feb-17 Land sales paid $ Aug-17 Land sales paid $ Feb-18 Land sales paid $1, Total distributions received to date $2, *These amounts also include interest income from the 2005 Land Trust bank account. Macquarie Eucalypt Project 2006 The Macquarie Eucalypt Project 2006 (2006 Tree Project) has two off-take agreements to sell timber to Midway and Australian Paper, respectively. The 2006 Tree Project is expected to supply merchantable volumes of approximately 406,000 GMT to Midway, 11% more than the initial estimate of 365,000 GMT, and 158,000 GMT to Australian Paper. Harvest of the Midway volume commenced in April 2017 and as of 31 August 2018 approximately 391,000 GMT, or approximately 96% of the Midway volume has been harvested for the 2006 Tree Project. Harvest of the Australian Paper volume commenced in July 2017 and as of 31 July 2018 approximately 60,000 GMT, or approximately 38% of the Australian Paper volume has been harvested for the 2006 Tree Project. Once harvest of all merchantable timber from the 2006 Tree Project is complete, it is anticipated that investors will receive a total distribution of approximately $2,950 per Interest after all fees and expenses. This is an increase of $170 per Interest from the initial estimate of $2,780 per Interest and is due to the increase in expected yield for the 2006 Tree Project. A distribution of $ per Interest was paid to investors in the August 2018 semi-annual distribution. Further distributions will be progressively paid to investors over the 2018 to 2021 financial years as harvest proceeds are received from Midway and Australian Paper. Table 3 Macquarie Eucalypt Project Distributions Timing Source* Amount (per Interest) Aug-17 Harvest proceeds paid $ Feb-18 Harvest proceeds paid $1, Aug-18 Harvest proceeds paid $ Total distributions received to date $2, *These amounts also include interest income from the 2006 Tree Project bank account. Macquarie Timber Land Trust 2006 The Macquarie Timber Land Trust 2006 (2006 Land Trust) comprised 29 different properties located across the Ballarat, Otway, Strzelecki, East Gippsland and Green Triangle regions of Victoria. From 1 January 2018

3 to 30 June 2018, the 2006 Land Trust sold and settled 4 properties in the Ballarat region of Victoria bringing the total number of properties sold to 5. The properties comprised 324 net plantable hectares of the total of 3,933 net plantable hectares owned by the 2006 Land Trust. The net sales proceeds after sales costs for these 4 properties, along with the Deferred Rent received from the 2006 Tree Project for the period equated to a distribution of $ per Unit and was paid to investors in the August 2018 semi-annual distribution. A further 5 properties in the Ballarat region of Victoria have settled since 1 July These 5 properties comprised 594 net plantable hectares and the net sales proceeds will equate to an additional distribution of approximately $550 per Unit after sales costs. Offers have also been accepted for 9 other properties in the Ballarat, Otway and Green Triangle regions of Victoria. These 9 properties comprised 1,766 net plantable hectares and if any of these properties are sold and settle before 31 December 2018 then the sales proceeds will be paid to investors in the February 2019 semi-annual distribution. Table 4 Macquarie Timber Land Trust Distributions Timing Source* Amount (per Unit) Aug-17 Deferred Rent paid $31.57 Feb-18 Deferred Rent paid $ Feb-18 Land sales paid $51.20 Aug-18 Deferred Rent paid $92.38 Aug-18 Land sales paid $ Total distributions received to date $ *These amounts also include interest income from the 2006 Land Trust bank account. Macquarie Eucalypt Project 2007 The Macquarie Eucalypt Project 2007 (2007 Tree Project) has two off-take agreements to sell timber to Midway and Australian Paper. The 2007 Tree Project is expected to supply merchantable volumes of approximately 310,000 GMT to Midway and 43,000 GMT to Australian Paper. Midway commenced harvest of the 2007 Tree Project in April 2018 based on a stumpage price of $24.76 per GMT but as communicated in previous updates a provisional stumpage price for the 2007 Tree Project is yet to be determined by an arbitrator. As of 31 August 2018 approximately 76,000 GMT, or approximately 24% of the Midway volume has been harvested for the 2007 Tree Project. Australian Paper are expected to commence harvest of plantations in the East Gippsland and Strzelecki regions in September 2018 and their current harvest schedule anticipates that the harvest will be completed by 30 June A distribution of $ per Interest was paid to investors in the August 2018 semi-annual distribution. Further distributions will be progressively paid to investors as harvest proceeds are received from Midway and Australian Paper. Macquarie Timber Land Trust 2007 The Macquarie Timber Land Trust 2007 (2007 Land Trust) comprised 18 different properties located across the Ballarat, Strzelecki, East Gippsland and Green Triangle regions of Victoria. To date, 2 properties in the

4 Ballarat region of Victoria are under contract and are due to settle 21 days after harvesting activities are completed on the properties. The properties comprised 132 net plantable hectares of the total of 2,848 net plantable hectares owned by the 2007 Land Trust. Offers have also been accepted for a further 2 properties in the Green Triangle region which comprised 483 net plantable hectares with settlement scheduled once harvesting activities are completed on the properties. A distribution of $61.61 per Unit was paid to investors in the August 2018 semi-annual distribution for Deferred Rent on both harvest proceeds and insurance proceeds received by the 2007 Tree Project for the 6 months to 30 June Further distributions will be progressively paid to investors on a semi-annual basis as Deferred Rent is received from the 2007 Tree Project and land sale proceeds are received. The clean-up of the fire impacted area on the Whitehead property resulting from the fire which broke out in Mooralla, Victoria on 13 December has commenced. The cost of the clean-up works is covered by the insurance policy taken out by 2007 Tree Project investors. The property will be sold once these clean-up works are completed which is currently anticipated to be around mid Macquarie Timber Land Trust 2008 A distribution of $3.96 per Unit ($15.84 per net plantable hectare) was paid to investors in the August 2018 semi-annual distribution for Deferred Rent on insurance proceeds received by the 2008 Tree Project for the 6 months to 30 June The clean-up of the fire impacted area on the Greenaway property resulting from the fire which broke out in Mooralla, Victoria on 13 December has commenced. The cost of the clean-up works is covered by the insurance policy taken out by 2008 Tree Project investors. The property will be sold once these clean-up works are completed which is currently anticipated to be around mid Macquarie Timber Land Trust 2009 A distribution of $ per Unit ($72.87 per net plantable hectare) was paid to investors in the August 2018 semi-annual distribution for Deferred Rent on insurance proceeds received by the 2009 Tree Project for the 6 months to 30 June The clean-up of the fire impacted area on the Carter property resulting from the fire which broke out in Mooralla, Victoria on 13 December will commence shortly. The cost of the clean-up works is covered by the insurance policy taken out by 2009 Tree Project investors. The Carter property will not be sold until after harvest is completed on the property which is expected to commence in 2020.

5 For more information call Macquarie Specialised Investment Solutions on , or visit macquarie.com.au/forestry This information has been prepared by Macquarie Alternative Assets Management Limited ABN , AFSL , (MAAML) and Macquarie Financial Products Management Limited ABN , AFSL , (MFPML) and is current as at 18 September It has been prepared in good faith with all reasonable care. However, some of the information is obtained or is based upon information obtained from third parties which may not have been checked or verified. Except to the extent permitted by law, and only to the extent so required, no member of the Macquarie Group makes any warranty in relation to, or accepts any responsibility or liability for any loss or damage suffered by any person arising out of or in relation to the material. This document is not for circulation or publication without the prior written consent of MAAML and MFPML. This information has been prepared for general information purposes and does not take account of your objectives, financial situation or needs. Before acting on this general advice, you should therefore 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.

PRODUCT SUMMARY of MACQUARIE FORESTRY INVESTMENT 2011 IMPORTANT NOTICE

Macquarie Forestry Investment 2011 Product Summary (pg 1) PRODUCT SUMMARY of MACQUARIE FORESTRY INVESTMENT 2011 IMPORTANT NOTICE This product summary has been prepared by Macquarie Alternative Assets Management