Macquarie Infrastructure Corp - FORM 10-K - EX-99.(1)

Attached files

file	filename
10-K - 10-K - Macquarie Infrastructure Corp	d27893.htm
EX-21.1 - EX-21.1 - Macquarie Infrastructure Corp	d27893_ex21-1.htm
EX-23.1 - EX-23.1 - Macquarie Infrastructure Corp	d27893_ex23-1.htm
EX-32.1 - EX-32.1 - Macquarie Infrastructure Corp	d27893_ex32-1.htm
EX-32.2 - EX-32.2 - Macquarie Infrastructure Corp	d27893_ex32-2.htm
EX-31.2 - EX-31.2 - Macquarie Infrastructure Corp	d27893_ex31-2.htm
EX-23.2 - EX-23.2 - Macquarie Infrastructure Corp	d27893_ex23-2.htm
EX-31.1 - EX-31.1 - Macquarie Infrastructure Corp	d27893_ex31-1.htm
EX-10.28 - EX-10.28 - Macquarie Infrastructure Corp	d27893_ex10-28.htm
EX-10.27 - EX-10.27 - Macquarie Infrastructure Corp	d27893_ex10-27.htm

CONSOLIDATED FINANCIAL STATEMENTS

AND SUPPLEMENTARY CONSOLIDATING INFORMATION

IMTT Holdings Inc. and Subsidiaries

Years Ended December 31, 2010 and December 31, 2009

Independent Auditors’ Report

The Board of Directors

IMTT Holdings Inc. and Subsidiaries:

We have audited the accompanying consolidated balance sheets of IMTT Holdings Inc. and subsidiaries as of December 31, 2010 and 2009, and the related consolidated statements of income, shareholders’ equity, comprehensive income and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of IMTT Holdings Inc. and subsidiaries as of December 31, 2010 and 2009, and the results of its operations and its cash flows for the years then ended in conformity with U.S. generally accepted accounting principles.

/s/ KPMG LLP

New Orleans, Louisiana February 21, 2011

IMTT HOLDINGS INC. AND SUBSIDIARIES

Consolidated Balance Sheets

As of December 31, 2010 and 2009


				2010		2009
ASSETS
Current assets:
	Cash			$	11,186,000	$	3,257,000
	Accounts and accrued interest receivable, net of allowance of $6,809,000 ($4,916,000 in 2009)				47,076,000		28,569,000
	Inventories (Note 2)				8,140,000		6,086,000
	Prepaid expenses and deposits (Note 12)				24,995,000		19,473,000
			Total current assets		91,397,000		57,385,000
Property, Plant and Equipment (Notes 2 and 6):
Land					34,565,000		30,366,000
Terminal and other facilities					1,532,516,000		1,427,348,000
					1,567,081,000		1,457,714,000
		Less: accumulated depreciation			(525,742,000)		(470,639,000)
					1,041,339,000		987,075,000

Debt issue costs, net (Notes 2 and 4)					11,489,000		3,322,000
Tax-exempt bond escrow investment (Note 2)					59,741,000		—
Receivable from affiliates (Note 3)					22,000		28,000
Investment in NTL venture (Note 2)					11,144,000		10,587,000
Other (Notes 2, 5 and 12)					6,730,000		6,452,000
					89,126,000		20,389,000

			Total assets	$	1,221,862,000	$	1,064,849,000

LIABILITIES and SHAREHOLDERS' EQUITY
Current liabilities:
	Accounts payable			$	33,688,000	$	15,998,000
	Accrued liabilities (Note 12)				51,693,000		36,450,000
	Current portion of swap fair market value (Notes 2 and 4)				18,139,000		17,246,000
	Current portion of long-term debt (Note 4)				4,866,000		15,829,000
			Total current liabilities		108,386,000		85,523,000
Other long-term liabilities (Notes 2, 4, 5, 6 and 12)					104,439,000		81,099,000
Long-term debt, excluding current maturities (Notes 3, 4 and 8)					651,121,000		616,399,000
Deferred income taxes (Notes 2 and 7)					179,742,000		141,475,000
			Total liabilities		1,043,688,000		924,496,000

Commitments and Contingencies (Note 6)					—		—

Shareholders' equity (Notes 9 and 10):
	IMTT Holdings Inc.				175,923,000		138,586,000
	Non-controlling interest				2,251,000		1,767,000
			Total shareholders' equity		178,174,000		140,353,000

			Total liabilities and shareholders' equity	$	1,221,862,000	$	1,064,849,000

The accompanying notes are an integral part of these statements.

IMTT HOLDINGS INC. AND SUBSIDIARIES

Consolidated Statements of Income

For the years ended December 31, 2010 and 2009


				2010		2009
REVENUES:
	Tank storage and terminal charges (Note 11)			$	367,587,000	$	326,289,000
	Other rental income				2,421,000		2,436,000
	Railroad operations				2,197,000		1,655,000
	Other income (Note 2)				1,953,000		522,000
	Environmental response services				184,979,000		15,795,000
			Total revenues		559,137,000		346,697,000

EXPENSES:
	Terminals:
		Labor costs (Note 5)			79,813,000		75,933,000
		Repairs and maintenance (Note 6)			31,876,000		28,227,000
		Real and personal property taxes			10,513,000		10,497,000
		Other operating			46,511,000		41,895,000
			Total terminal operating expenses		168,713,000		156,552,000
	Environmental response affiliate expenses				115,937,000		14,792,000
	General and administrative (Notes 3 and 5)				37,126,000		27,437,000
	Interest expense (Notes 2, 3 and 4)				34,682,000		29,510,000
	Depreciation and amortization (Note 2)				61,277,000		55,998,000
	Mark-to-market loss (gain) of non-hedging derivatives (Notes 2 and 4)				15,652,000		(30,686,000)
					433,387,000		253,603,000

Income before income taxes					125,750,000		93,094,000

(Provision) credit for income taxes (Notes 2 and 7):
	Current				(12,514,000)		(1,593,000)
	Deferred				(41,007,000)		(37,249,000)
					(53,521,000)		(38,842,000)

Net income				$	72,229,000	$	54,252,000

Less: net (income) loss attributable to non-controlling interest (Note 1)					(165,000)		332,000
Net income attributable to IMTT Holdings Inc.				$	72,064,000	$	54,584,000

The accompanying notes are an integral part of these statements.

IMTT HOLDINGS INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the years ended December 31, 2010 and 2009


			2010		2009

Net Income			$	72,229,000	$	54,252,000

	Less: net (income) loss attributable to non-controlling interest (Note 1)			(165,000)		332,000
Net income attributable to IMTT Holdings Inc.				72,064,000		54,584,000

Other comprehensive income (loss):

	Derivatives (Notes 2 and 4):
		Change in fair market value of hedging interest rate swap agreements		—		3,594,000

		Amortization of accumulated other comprehensive loss for swap agreements no longer accounted for as hedges		1,891,000		1,605,000
				1,891,000		5,199,000

	Pension and post-retirement benefit plans (Note 5)			(10,953,000)		(2,166,000)

	Foreign currency translation adjustment			1,439,000		3,671,000

Income tax effects of items included in other comprehensive income				3,215,000		(1,644,000)
Other comprehensive (loss) income (Note 10)				(4,408,000)		5,060,000

Less: other comprehensive (income) attributable to non-controlling interest (Note 1)				(319,000)		(850,000)
Other comprehensive (loss) income attributable to IMTT Holdings Inc.				(4,727,000)		4,210,000

Comprehensive income				67,821,000		59,312,000

Less: Comprehensive (income) attributable to non-controlling interest (Note 1)				(484,000)		(518,000)
Comprehensive income attributable to IMTT Holdings Inc.			$	67,337,000	$	58,794,000

The accompanying notes are an integral part of these statements.

IMTT HOLDINGS INC. AND SUBSIDIARIES

Consolidated Statements of Shareholders' Equity

For the years ended December 31, 2010 and 2009


				IMTT Holdings Inc.			NON-CONTROLLING INTEREST
			Total	Other Shareholders' Equity	Accumulated Other Comprehensive Income (Loss)	Total	Other Shareholders' Equity	Accumulated Other Comprehensive Income (Loss)	Total
Balance, 1/1/2009			$81,041,000	96,774,000	(16,982,000)	79,792,000	1,587,000	(338,000)	$1,249,000

	Comprehensive income:
		Net income (loss)	54,252,000	54,584,000	—	54,584,000	(332,000)	—	(332,000)
		Other comprehensive income (loss), net of tax	5,060,000	—	4,210,000	4,210,000	—	850,000	850,000
			59,312,000	54,584,000	4,210,000	58,794,000	(332,000)	850,000	518,000

	Distributions, net		—	—	—	—	—	—	—
Balance, 12/31/2009			140,353,000	151,358,000	(12,772,000)	138,586,000	1,255,000	512,000	1,767,000

	Comprehensive income:
		Net income	72,229,000	72,064,000	—	72,064,000	165,000	—	165,000
		Other comprehensive income (loss), net of tax	(4,408,000)	—	(4,727,000)	(4,727,000)	—	319,000	319,000
			67,821,000	72,064,000	(4,727,000)	67,337,000	165,000	319,000	484,000

	Distributions, net		(30,000,000)	(30,000,000)	—	(30,000,000)	—	—	—
Balance, 12/31/2010			$178,174,000	193,422,000	(17,499,000)	175,923,000	1,420,000	831,000	$2,251,000

The accompanying notes are an integral part of these statements.

IMTT HOLDINGS INC. AND SUBSIDIARIES

Combined Statements of Cash Flows

For the years ended December 31, 2010 and 2009


				2010		2009
CASH FLOWS FROM OPERATING ACTIVITIES
	Net income			$	72,229,000	$	54,252,000
	Adjustments to reconcile net cash provided by operating activities:
		Depreciation and amortization			61,277,000		55,998,000
		Debt issue cost amortization			2,011,000		543,000
		Loss on sale/retirement of assets			33,000		24,000
		Reclassification of swap loss from AOCI			1,891,000		1,605,000
		(Increase) decrease in accounts and accrued interest receivable			(18,254,000)		14,811,000
		(Increase) decrease in inventories			(2,053,000)		682,000
		(Increase) decrease in prepaid expenses and deposits			(4,175,000)		1,078,000
		(Increase) decrease in other assets			(1,285,000)		1,338,000
		Increase (decrease) in accounts payable			14,622,000		(3,707,000)
		Increase in accrued liabilities			16,807,000		3,557,000
		Increase in deferred income taxes			41,007,000		37,249,000
		Increase (decrease) in other long-term liabilities			12,077,000		(34,048,000)
			Net operating cash flows		196,187,000		133,382,000

CASH FLOWS FROM INVESTING ACTIVITIES
	Purchase of plant assets				(107,832,000)		(137,008,000)
	(Increase) in other assets				(637,000)		(4,281,000)
	Proceeds from sale of fixed assets				126,000		73,000
	(Increase) in tax-exempt bond escrow investments				(59,741,000)		—
			Net investing cash flows		(168,084,000)		(141,216,000)

CASH FLOWS FROM FINANCING ACTIVITIES
	Net (payments) borrowings under bank revolving credit facility				(153,856,000)		6,475,000
	(Repayments of) proceeds from unsecured term loan				(30,000,000)		30,000,000
	Net borrowings under tax-exempt bond agreements				275,000,000		—
	Net other debt payments				(65,223,000)		(13,201,000)
	Distributions to shareholders				(30,000,000)		(14,000,000)
	Net receipts (payments) of receivables/payables with affiliates				6,000		(8,000)
	Repayments of shareholder debt				(3,257,000)		(1,955,000)
	Debt issue cost incurred				(12,919,000)		(1,049,000)
			Net financing cash flows		(20,249,000)		6,262,000

			Net increase (decrease) in cash		7,854,000		(1,572,000)

			Net increase in cash due to currency translation		75,000		227,000

	Cash at beginning of year				3,257,000		4,602,000

	Cash at end of year			$	11,186,000	$	3,257,000

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

	Cash paid during the period for:
	Interest (net of amount capitalized)			$	34,116,000	$	28,954,000
	Income taxes				13,974,000		346,000

The accompanying notes are an integral part of these statements.

IMTT HOLDINGS INC. and SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2010 and 2009

(1)

Nature of operations and organization

IMTT Holdings Inc. (“IHI”) formerly Loving Enterprises Inc., owns 100% of various corporations and limited liability companies (International Tank Terminals, L.L.C. and Affiliates, “ITT and Affiliates”) who in turn own 100% of various operating entities, primarily partnerships (“IMTT Combined”). The following chart summarizes the relationship of the various ITT and Affiliates and IMTT Combined entities.


Parent Entities (ITT and Affiliates)		Subsidiary/Operating Entities (IMTT Combined)
99% Ownership	1% Ownership *
International Tank Terminals, L.L.C.	ITT-Storage, Inc.	International-Matex Tank Terminals
International Tank Bayonne, Inc. (100%)	-	Bayonne Industries, Inc.
International Tank Bayonne, Inc.	ITT-Bayonne Storage, Inc.	IMTT-Bayonne
ITT-BX, Inc.	ITT-BX Storage, Inc.	IMTT-BX
ITT-Pipeline, Inc.	ITT-Pipeline Partner, Inc.	IMTT-Pipeline
ITT-BC, Inc. (50%)	ITT-Interterminal Pipeline, Inc. (50%)	IMTT-BC
ITT-Gretna, L.L.C.	ITT-Gretna Storage, Inc.	IMTT-Gretna
ITT-Virginia, Inc.	ITT-Virginia Storage, Inc.	IMTT-Virginia
ITT-Richmond-CA, Inc.	ITT-Richmond-CA Storage, Inc.	IMTT-Richmond-CA
ITT-Illinois, Inc.	ITT-Illinois Storage, Inc.	IMTT-Illinois
ITT-Petroleum Management, Inc.	ITT-SPR Partner, Inc.	IMTT-Petroleum Management
ITT-Geismar, L.L.C.	ITT-Geismar Storage, Inc	IMTT-Geismar
International Environmental Services, Inc.	ITT-IEP Partner, Inc.	International Environmental Partners
ITT-NTL, Inc. (100%)	-	IMTT-NTL, Ltd.

* - Unless noted otherwise below

IMTT HOLDINGS INC. and SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2010 and 2009

The IMTT Combined entities primarily provide bulk liquid storage and handling services in North America through terminals located on the East, West and Gulf Coasts as well as the Great Lakes region of the United States and in Quebec and Newfoundland, Canada, with the predominant terminals located in New York harbor and on the Mississippi River near the Gulf of Mexico. Petroleum products, vegetable and tropical oils, renewable fuels, and various chemicals are stored and handled.

International-Matex Tank Terminals (“IMTT”) is a partnership formed in 1975 to own and operate bulk liquid storage terminal facilities in St. Rose and Avondale, Louisiana. Bayonne Industries, Inc. (“BII”) is a New Jersey corporation which owns terminal facilities in Bayonne, New Jersey and was purchased in 1983. IMTT-Bayonne is a partnership formed in 1983 to operate New Jersey terminal assets. The IMTT-BX partnership was formed in 1993 to acquire the terminal facility adjacent to BII's tank terminal on April 1, 1993. IMTT-BC is a partnership organized in 1996 to purchase certain terminal assets in 1997, 2003, and 2004 that are contiguous to the existing Bayonne terminal. IMTT-Pipeline is a partnership formed in 1996 to own a pipeline utilized in the transfer of products by IMTT-Bayonne and other third parties. IMTT-Bayonne leases and operates tank terminal and warehouse facilities owned by BII, IMTT-BX and IMTT-BC in Bayonne, New Jersey/ New York Harbor. IMTT-Gretna is a partnership formed in 1990 to purchase and operate a bulk liquid storage terminal in Gretna, Louisiana. IMTT-Virginia, formerly IMTT-Chesapeake and IMTT-Richmond, is a partnership formed in 1991 to purchase and operate bulk liquid storage terminals in Chesapeake and Richmond, Virginia. IMTT-Petroleum Management is a partnership formed in 1992 to own an interest in a joint venture operating the United States Strategic Petroleum Reserve. IMTT-Richmond-CA is a partnership formed in 1995 to purchase and operate a bulk liquid storage terminal in Richmond, California. IMTT-Illinois (formerly IMTT-Lemont) is a partnership formed in 1997 to purchase and operate terminal facilities in Lemont and Joliet, Illinois. IMTT-NTL, Ltd. (“IMTT-NTL”) is a Canadian corporation formed in 1997 to own an interest in and manage a terminal in Newfoundland, Canada. IMTT-Quebec Inc. (“IMTT-Quebec”), a 66^2/3% owned subsidiary of IMTT, operates a bulk liquid storage terminal located in Quebec, Canada. IMTT-Geismar is a partnership formed in 2006 to construct and operate a chemical logistics facility in Geismar, Louisiana. International Environmental Partners is a partnership formed in 1999 to own an entity that provides environmental response and other services to the IMTT terminals and third parties. IMTT-FINCO, LLC (“IMTT-FINCO”) is a wholly-owned subsidiary of IMTT, which is a financing conduit to IMTT and other terminal entities.

IMTT HOLDINGS INC. and SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2010 and 2009

(2)

Summary of significant accounting policies

Combination/consolidation

The accompanying consolidated financial statements consist of the accounts of IHI, which have been consolidated with those of ITT and Affiliates as well as those of IMTT Combined after eliminating all intercompany account balances and transactions (“IHI Consolidated”). IMTT Combined consists of the consolidated financial statements of IMTT, IMTT-Quebec and IMTT-FINCO combined with the other entities, primarily partnerships, described previously.

Revenue recognition

Contracts for the use of storage capacity at the various terminals predominantly have non-cancelable terms of one to five years. These contracts generally provide for payments for providing storage capacity throughout their term based on a fixed rate per barrel of capacity leased, as adjusted annually for inflation indices. Contracts are classified and accounted for as operating leases in accordance with generally accepted accounting principles and revenue is recognized over their term based on the rate specified in the contract. Revenue from the rendering of ancillary services (e.g. product movement (thruput), heating, mixing, etc.) is recognized as the related services are performed based on contract rates. Thruput revenues are not recognized until the thruput quantity specified in the contract for the applicable period is exceeded. Payments received prior to the related services being performed or as a reimbursement for specific fixed asset additions or improvements related to a customer’s contract are recorded as deferred revenue and ratably recognized as storage revenues over the contract term; the non-current portion is included in other long-term liabilities in the accompanying balance sheet. Environmental response services revenues are recognized as services are rendered.

Accounts receivable and allowance for doubtful accounts

Accounts receivable are stated at the historical carrying amount net of an allowance for doubtful accounts. An allowance for doubtful accounts receivable is established based on specific customer collection issues that have been identified. Accounts receivable are charged against the allowance for doubtful accounts when it has been determined the balance will not be collected.

IMTT HOLDINGS INC. and SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2010 and 2009

Inventories

Inventories which consist primarily of back-up fuel supplies, chemicals and supplies used in packaging anti-freeze for customers, spare parts used in maintenance activities, and spill response materials are carried at cost which is equal to or less than their fair market value.

Property, plant and equipment

Property, plant and equipment is carried at cost including applicable construction period interest. Construction period interest (including related letter of credit fees) of $782,000 and $1,842,000 was capitalized in 2010 and 2009, respectively. Depreciation is provided using the straight-line method over lives which range from 15 to 30 years for the terminal facility and 3 to 8 years for furniture, fixtures and equipment. Costs which are associated with capital additions and improvements or that extend the useful lives or increase service capacity of assets are capitalized; costs of maintenance and repairs are expensed. Terminal fixed assets with a net book value of $1,035,000,000 at December 31, 2010 are utilized to provide storage capacity and related services to customers/lessees. The balance of assets not placed in service and recorded in construction in progress was $56,856,000 and $39,934,000 at December 31, 2010 and 2009, respectively.

Debt issue costs

Costs incurred related to issuing and reissuing and extending the term of tax-exempt bonds and entering into extended and expanded bank lines of credit and the unsecured term loan (See Note 4) are capitalized as debt issue costs in the accompanying balance sheet and amortized over the term of the related debt as additional interest expense.

Tax-exempt bond escrow investment

Proceeds from the tax-exempt bond issues are held by the trustee and invested in a highly liquid bank deposit pending reimbursement of IMTT Combined for expenditure of qualified project costs.

IMTT HOLDINGS INC. and SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2010 and 2009

Other assets

Costs incurred to deepen vessel draft at the docks as well as those incurred periodically to maintain draft depths for more than one year are capitalized and amortized over their estimated useful lives (3 to 20 years) as a planned major maintenance activity. $637,000 and $4,281,000 of such costs were capitalized in 2010 and 2009, respectively. Amortization of such costs was $1,703,000 and $1,817,000 in 2010 and 2009, respectively.

Investment in NTL venture

On July 21, 1997 IMTT-NTL acquired a 20% interest in Newfoundland Transshipment Limited (“NTL”), a Canadian corporation which owns and operates a storage and transshipment terminal located in Newfoundland. The investment is shown in the accompanying balance sheet at cost of $11,144,000 at December 31, 2010. NTL guarantees its shareholders a minimum 12% return on investment. This return on investment was $1,621,000 and $1,471,000 for 2010 and 2009, respectively, and is recorded as other income in the accompanying statements of income as its ultimate realization is reasonably assured based on the nature of its operations and the involvement of major oil companies as customers and shareholders.

Income taxes

Income taxes are accounted for in accordance with the asset and liability method. Income tax expense includes federal and state taxes currently payable as well as deferred taxes arising from temporary differences between income for financial reporting and income tax reporting purposes. Operating loss and tax credit carryforwards are recognized as reductions to net deferred income tax liabilities if it is likely that their benefit will be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. IHI Consolidated recognizes the effect income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.

IMTT HOLDINGS INC. and SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2010 and 2009

Fair value measurements

IHI Consolidated has adopted the provisions of ASC 820, Fair Value Measurements and Disclosures, for fair value measurements of financial assets and financial liabilities and for fair value measurements of nonfinancial items that are recognized or disclosed at fair value in the financial statements on a recurring basis. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and also establishes a framework for measuring fair value and expands disclosures about fair value measurements.

Derivatives

IHI Consolidated has entered into interest rate-related derivative instruments to manage its interest rate exposure on certain debt instruments. See Note 4. IHI Consolidated does not enter into derivative instruments for any purpose other than economic interest rate hedging. That is, IHI Consolidated does not speculate using derivative instruments.

By using derivative financial instruments to hedge exposures to changing interest rates, IHI Consolidated exposes itself to credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes IHI Consolidated, which creates credit risk for IHI Consolidated. When the fair value of a derivative contract is negative, IHI Consolidated owes the counterparty and, therefore, it does not possess credit risk, as was the case at December 31, 2010 and 2009. IHI Consolidated minimizes the credit risk in the derivative instruments by entering into transactions with high quality counterparties. Market risk is the adverse effect on the value of a financial instrument that results from a change in interest rates.

IHI Consolidated has in place variable-rate debt. These debt obligations expose IHI Consolidated to variability in interest payments due to changes in interest rates. IHI Consolidated believes that it is prudent to limit the variability of a large portion of its interest payments. To meet this objective, IHI Consolidated enters into interest rate swap agreements to manage fluctuations in cash flows resulting from interest rate risk on a majority of its variable-rate debt. These swaps change the variable-rate cash flow exposure on the debt obligations to fixed cash flows. Under the terms of the interest rate swaps, IHI Consolidated receives variable interest rate payments and makes fixed interest rate payments, thereby creating the equivalent of fixed-rate debt for the portion of the debt that is swapped.

IMTT HOLDINGS INC. and SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2010 and 2009

In accordance with ASC 815-10-05-4, IHI Consolidated had concluded that all of its interest rate swaps qualified as cash flow hedges and IHI Consolidated applied hedge accounting for these instruments until March 31, 2009. Changes in the fair value of interest rate derivatives designated as hedging instruments that effectively offset the variability of cash flows associated with variable-rate debt obligations up to that time were reported in other comprehensive income or loss. Any ineffective portion of the change in valuation of derivatives was recorded through earnings, and reported in the mark-to-market loss (gain) of non-hedging derivatives line in the consolidated statements of income. Effective April 1, 2009, IHI Consolidated elected to discontinue the application of hedge accounting to its interest rate swap agreements. The amount recorded in accumulated other comprehensive income at that time ($6,984,000 loss) will be amortized to mark-to-market loss (gain) in the statement of income over the remaining term of the swap agreements. $1,891,000 and $1,605,000 was amortized to mark-to-market loss (gain) in the statements of income for the years ended December 31, 2010 and 2009, respectively. Subsequent to March 31, 2009, all changes in the fair value of interest rate swap agreements are recorded through earnings. The long-term portion of these fair market values is recorded in other long-term liabilities in the accompanying balance sheet. The term over which IHI Consolidated is currently partially hedging exposures relating to debt is through June 2017. (See Note 4)

At December 31, 2010, IHI Consolidated had $655,987,000 of outstanding debt, $438,300,000 of which was hedged with interest rate swaps. At December 31, 2009, IHI Consolidated had $632,228,000 of outstanding debt, $431,300,000 of which was hedged with interest rate swaps.

IMTT HOLDINGS INC. and SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2010 and 2009

For the years ended December 31, 2010 and 2009, IHI Consolidated recorded the following changes in the current and non-current portions of the value of its derivative instruments:


	2010	2009
Opening balance (liability)	$(47,651,000)	$(83,536,000)

Unrealized gain on derivative instruments in other comprehensive income for the year	–	3,594,000

Ineffective portion of the changes in the valuation of the derivatives instruments, representing unrealized gains included in gains (loss) on derivative instruments for the year	–	3,306,000

Change in fair value of derivative instruments after March 31, 2009 included in gain (loss) on derivative instruments in the accompanying statement of income	(32,407,000)	11,518,000

Reclassification of realized losses on derivative instruments into interest expense for the year	18,646,000	17,467,000

Closing balance (liability)	$(61,412,000)	$(47,651,000)

IHI Consolidated will amortize losses of approximately $1,602,000 (pretax) from accumulated other comprehensive (loss) into mark-to-market loss (gain) in the statement of income over the next twelve months.

In accordance with ASC 815-10-10-1, IHI Consolidated derivative instruments are recorded on the balance sheet at fair value. IHI Consolidated measures derivative instruments at fair value using the income approach which converts future amounts (being the future net cash settlements expected under the derivative contracts) to a discounted present value. These valuations primarily utilize observable (“level 2”) inputs including contractual terms, interest rates and yield curves observable at commonly quoted intervals.

IMTT HOLDINGS INC. and SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2010 and 2009

IHI Consolidated’s fair value measurements of its derivative instruments at December 31, 2010 and 2009 were as follows:


		Fair Value Measurements at Reporting Date Using
Description	2010 Total	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Derivative Instruments:
Current liabilities	$(18,139,000)	$ –	$(18,139,000)	$ –
Non-current liabilities	(43,273,000)	–	(43,273,000)	–
Total	$(61,412,000)	$ –	$(61,412,000)	$ –


		Fair Value Measurements at Reporting Date Using
Description	2009 Total	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Derivative Instruments:
Current liabilities	$(17,246,000)	$ –	$(17,246,000)	$ –
Non-current liabilities	(30,405,000)	–	(30,405,000)	–
Total	$(47,651,000)	$ –	$(47,651,000)	$ –

There have been no transfers of assets or liabilities between levels for the years ended December 31, 2010 and 2009.

IMTT HOLDINGS INC. and SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2010 and 2009

Pension and other postretirement plans

IHI Consolidated records annual amounts relating to its pension and postretirement plans based on calculations that incorporate various actuarial and other assumptions, including discount rates, mortality, assumed rates of return, compensation increases, turnover rates and healthcare cost trend rates. IHI Consolidated reviews its assumptions on an annual basis and makes modifications to the assumptions based on current rates and trends when it is appropriate to do so. The effect of modifications to those assumptions is recorded in other comprehensive income and amortized to net periodic cost over future periods using the corridor method. IHI Consolidated believes that the assumptions utilized in recording its obligations under its plans are reasonable based on its experience and market conditions. Net periodic costs are recognized as employees render the services necessary to earn the postretirement benefits.

Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts and disclosures. Some of the more important estimates and assumptions concern depreciation methods and lives, future environmental remediation costs and pension plan discount rates and rates of return on plan assets. Actual results may differ from those estimates and assumptions.

Impairment of long-lived assets

Long-lived assets, such as property, plant, and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets is assessed by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the asset. Certain nursery assets involved in plant growing operations (greenhouses and related equipment) as well as a small amount of equipment used in packaging liquids are no longer in use due to unfavorable prospects for future profitable operations. The estimated remaining useful life of these assets was adjusted in 2009 to reduce their net book value to zero (estimated fair value). Additional depreciation expense of $1,458,000 was recorded in the accompanying 2009 statement of income as a result of this change in the remaining useful life.

IMTT HOLDINGS INC. and SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2010 and 2009

Foreign currency translation

The assets and liabilities of IMTT-NTL and IMTT-Quebec are translated from their foreign currency (Canadian dollars) to U.S. dollars at exchange rates in effect at the end of the year and statement of income accounts are translated at average exchange rates for the year. Translation gains or losses as a result of changes in the exchange rate are recorded as a component of other comprehensive income.

Commitments and contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties and other sources, are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred.

(3)

Related party transactions

During 2010 and 2009, IHI Consolidated paid or accrued $2,247,000 and $2,300,000, respectively, to entities related to a group of shareholders for legal services and office rent which are recorded as general and administrative expense in the accompanying statements of income. Receivables from affiliates of $22,000 and $28,000 at December 31, 2010 and 2009, respectively, consist of receivables from entities affiliated with a group of shareholders. In accordance with the terms of the shareholders’ agreement, IHI has loans outstanding to a group of shareholders at December 31, 2010 and 2009 of $31,282,000 and $34,540,000, respectively. Principal payments of $2,607,000 are due annually through December 2022. Interest accrued on these loans for 2010 and 2009 was $1,834,000 and $1,980,000, respectively .

IMTT HOLDINGS INC. and SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2010 and 2009

(4)

Long-term debt and related derivatives

Long-term debt consists of the following:


	2010	2009
Tax-exempt N.J.E.D.A. bonds, .75% at December 31, 2010 (.29% at December 31, 2009)	$30,000,000	$30,000,000
Tax-exempt N.J.E.D.A. bonds of terminated El Dorado joint venture, .75% at December 31, 2010 (.29% at December 31, 2009)	6,300,000	6,300,000
Tax-exempt Ascension Parish bonds, .32% at December 31, 2010 (.26% at December 31, 2009)	165,000,000	165,000,000
Tax-exempt L.P.F.A. bonds, .32% at December 31, 2010 (.26% at December 31, 2009)	50,000,000	50,000,000
Tax-exempt L.P.F.A. bonds, .32% at December 31, 2010	85,000,000	–
Bank-owned tax-exempt L.P.F.A. bonds, 1.64% at December 31, 2010	100,000,000	–
Bank-owned tax-exempt L.P.F.A. bonds, 1.64% at December 31, 2010	90,000,000	–
Unsecured notes payable under U.S. revolving bank credit facility averaging 1.40% at December 31, 2010 (1.30% at December 31, 2009)	75,000,000	230,100,000
Notes payable under revolving credit facility with a Canadian bank, averaging 3.24% at December 31, 2010 (1.40% at December 31, 2009)	23,167,000	20,827,000
Unsecured term loan payable to a bank (4.24% at December 31, 2009)	–	30,000,000
Capitalized land sublease due in monthly installments through October, 2011 with interest at 7%	202,000	425,000
Loans from shareholders, 5.50%, due in quarterly installments over a 15 year period beginning March 31, 2008	31,282,000	34,540,000
Notes payable to a bank, 1.231% at December 31, 2009	–	65,000,000
Other	36,000	36,000
	$655,987,000	$632,228,000
Less – Current maturities	(4,866,000)	(15,829,000)
	$651,121,000	$616,399,000

IMTT HOLDINGS INC. and SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2010 and 2009

In 1993, BII and IMTT-Bayonne received the proceeds of and became obligated for $30,000,000 of tax-exempt New Jersey Economic Development Authority (“N.J.E.D.A.”) Dock Facility Revenue Refunding Bonds (the “Bonds”) to refinance and retire previously issued tax-exempt industrial development revenue bonds.

In accordance with the terms of the Bond indenture, BII and IMTT-Bayonne select from four interest rate-setting frequency modes; daily, weekly, commercial paper (“CP”) (from 30 to 269 days) and adjustable rate mode (at least six months). The interest rates for these various alternatives are determined by the remarketing agent as the lowest rate that will allow the Bonds to be sold at par based on the current market conditions. For all of 2010 and 2009, the Bond interest rate was set under the daily rate mode.

The Bonds are secured by $30,473,000 of irrevocable letters of credit, which expire June, 2014 (if not extended), issued by the banks under the credit facility discussed below.

The Bonds mature on December 1, 2027, but are subject to optional and mandatory tender, as well as various redemption provisions, at 100% of principal and accrued interest (plus applicable premium if the Bonds are in the adjustable rate mode). When in the daily or weekly rate mode, bond owners may, at their option, tender the Bonds to the remarketing agent for payment of principal and accrued interest.

The Bonds are also subject to mandatory tender provisions in the following cases: 1) each time the interest rate mode is converted, 2) if the related letters of credit are released or allowed to terminate or expire without replacement or extension, 3) substitution of an alternate credit facility for an existing letter of credit, if certain conditions are not met and 4) on each CP rate reset date. After tender, if sufficient funds are not available from remarketing the Bonds, the bond owners could be paid from the proceeds of a draw on the related letters of credit, or, should sufficient funds not be available from letters of credit, the Bonds could be purchased by BII and IMTT-Bayonne. The Bonds may be redeemed at various times at the direction of BII and IMTT-Bayonne while in any rate mode and are also subject to mandatory redemption if the Bonds are determined to be taxable.

IMTT-BC is responsible for the payment of principal (due December 1, 2021) and related interest of a $6,300,000 N.J.E.D.A. tax-exempt bond issue of a terminated joint venture. Interest terms on these bonds are similar to those issued by BII and IMTT-Bayonne discussed previously. These bonds are secured by a $6,404,000 irrevocable letter of credit issued by the banks under the credit facility discussed below.

IMTT HOLDINGS INC. and SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2010 and 2009

In July, 2007, IMTT-Geismar received the proceeds of and became obligated for $165,000,000 of tax-exempt Industrial Development Board of the Parish of Ascension, Louisiana, Inc. revenue bonds to finance construction of a chemical liquid logistics facility in Geismar, Louisiana. At the same time, IMTT received the proceeds of and became obligated for $50,000,000 of tax-exempt Louisiana Public Facilities Authority (“L.P.F.A.”) revenue bonds to finance the expansion of liquid terminal facilities at its St. Rose, Louisiana terminal. Both of these tax-exempt financings mature on June 1, 2043 and are secured by irrevocable letters of credit expiring May, 2014 ($167,170,000 and $50,658,000, respectively) issued by the banks under the credit facility discussed below as well as confirming irrevocable letters of credit ($167,333,000 and $50,707,000, respectively) issued by the Federal Home Loan Bank (“FHLB”) of Atlanta which expire August, 2013. These two tax-exempt financings have interest rate setting modes, optional and mandatory tender and redemption provisions similar to the NJEDA tax-exempt bonds. For all of 2010 and 2009 the rate on these bonds was set under the weekly rate mode.

In August, 2010, IMTT-FINCO received the proceeds of and became obligated for $85,000,000 of tax-exempt L.P.F.A. revenue bonds to finance expansion and improvements at the St. Rose facility in Louisiana. This tax-exempt financing matures on August 1, 2046 and is secured by an irrevocable letter of credit ($86,118,000) expiring May, 2014 issued by the banks under the credit facility discussed below as well as a confirming irrevocable letter of credit ($86,202,000) issued by the FHLB of Atlanta, which expires August, 2013. This tax-exempt financing has interest rate setting modes, optional and mandatory tender and redemption provisions similar to the NJEDA tax-exempt bonds. For 2010, the rate on these bonds was set under the weekly rate mode. Costs of $871,000 associated with the issuance of these bonds are being deferred and amortized to interest expense ratably over the term of the bonds.

In November and December 2010, IMTT-FINCO received the proceeds of and became obligated for an additional $100,000,000 and $90,000,000, respectively, of tax-exempt L.P.F.A. revenue bonds to finance expansion and improvements at the St. Rose, Geismar and Gretna facilities in Louisiana. Concurrent with the issuance of these bonds, IMTT-FINCO entered into agreements with a syndicate of banks to purchase the bonds, some of which also participate in the revolving credit facility discussed below. These bonds do not require a letter of credit as security and provide for monthly principal payments beginning in July, 2011, as follows, with final maturity in December, 2040, subject to mandatory tender for purchase in December, 2015 at 100% of the outstanding principal balance plus accrued interest. The bonds can be resold at that time and are subject to annual tender thereafter.

IMTT HOLDINGS INC. and SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2010 and 2009


Year		Total Principal Payments
2011		$2,057,000
2012		4,322,000
2013		4,455,000
2014		4,577,000
2015		4,701,000

IMTT-FINCO’s obligations under these agreements are guaranteed by the remainder of the entities comprising IMTT Combined, excluding the Canadian entities. These agreements also contain covenants and restrictions similar to the revolving credit facility as described below. The interest rate on these bonds is determined monthly based on 68% of one-month LIBOR plus 65% of the LIBOR margin under the revolving credit facility as described below.

Costs of $2,761,000 associated with the issuance of these bonds is being deferred and amortized to interest expense ratably over the period to mandatory tender.

On June 18, 2010 IMTT Combined amended and restated its revolving credit facility. The unsecured revolving credit facility is with a twenty-two bank syndicate with commitments totaling $1,100,000,000. This amended and restated credit facility consists of seventeen banks with commitments totaling $995,000,000 through June 7, 2014, one Canadian bank with a commitment of $30,000,000 through June 7, 2014 and four banks with commitments totaling $75,000,000 through June 7, 2012. The proceeds from the amended and restated revolving credit facility were used to pay off the existing revolving credit facilities, an existing $30,000,000 term loan and, through distributions, the remaining $65,000,000 on an ITT and Affiliates term loan.

IMTT and IMTT-Bayonne are the borrowers under this agreement, which is guaranteed by all the remaining entities comprising IMTT Combined, except IMTT-NTL and IMTT-Quebec; however, a majority of the equity interest in IMTT-NTL and IMTT-Quebec is pledged in repayment of the debt. IMTT-NTL and IMTT-Quebec are the borrowers under the Canadian portion of the facility.

Except for a $65,000,000 portion of the facility through December 31, 2012, as described below, IMTT and IMTT-Bayonne can borrow, at their option, for various periods under the agreement at LIBOR plus 1.50% to 2.75% or at the banks’ base rate, as defined, plus .50% to 1.75%, dependent upon the leverage ratio, as defined. The Canadian borrowers can borrow from the Canadian lender at the bankers’ acceptance rates plus 1.50% to 2.75%, or the Canadian prime rate plus .50% to 1.75%, dependent upon the leverage ratio, as defined. Borrowings provided by the four banks not extending their commitments through June 2014 are at LIBOR plus .55% to 1.50% or the banks’ base rate, as defined, dependent upon the leverage ratio, as defined.

IMTT HOLDINGS INC. and SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2010 and 2009

The bank that previously held the ITT and Affiliates $65,000,000 term loan is part of the bank syndication and now holds the $65,000,000 under the amended and restated revolving credit facility. The rate on this portion of the outstanding debt is LIBOR plus 1.00% and matures on December 31, 2012, at which time this portion of the facility is paid from and converts to extended commitments through June, 2014 with pricing the same as other commitments.

Costs of $9,275,000 associated with the amendment, extension and increase of the revolving credit facility are being deferred and amortized to interest expense ratably over the remaining extended loan term.

The U.S. portion of the revolving credit facility includes the availability for the issuance of letters of credit. Letters of credit outstanding under this facility at December 31, 2010 of $350,835,000 primarily secure obligations under certain tax-exempt bonds referred to previously. Loans of $75,000,000 were outstanding under the U.S. portion of this facility and $23,167,000 of loans were outstanding with the Canadian bank at December 31, 2010, thus leaving $650,998,000 total available under of this credit facility at December 31, 2010.

IMTT Combined is subject to various covenants under this credit facility. The primary covenants require the maintenance of certain ratios, as defined, of combined 1) debt to earnings before interest, income taxes and depreciation and amortization, and 2) earnings before interest, income taxes and depreciation and amortization to interest expense. The loan agreement also restricts liens on assets, additional investments and loans, sales or dispositions of assets and change of control, as defined, among other requirements.

The interest rate on the borrowings under the tax-exempt bonds and the revolving bank credit facility discussed previously adjusts periodically depending on their individual terms as previously described. In an effort to achieve a more stable interest cost and reduce the risk of rising interest rates and expense, four interest rate swap agreements with three large banks were entered into whereby floating rates were swapped for fixed rates. The primary terms and the accounting treatment of these financial instruments are described below.

IMTT HOLDINGS INC. and SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2010 and 2009


		Swap 1		Swap 2		Swap 3		Swap 4		Total
Related debt		N.J.E.D.A. Bonds		Tax-Exempt Bonds		Bank Line		Bank Line/Note Payable
Notional amount		$36,300,000		$215,000,000		$135,000,000 *		$52,000,000 ***
Term		10/07-10/12		7/07-6/17		10/07-3/17		5/06-12/12
Fixed rate paid		3.410%		3.662%		5.507%		6.290%
Floating rate received		67% of monthly Libor		67% of monthly Libor		Quarterly Libor		Monthly Libor
		2010	2009	2010	2009	2010	2009	2010	2009	2010	2009
Floating rate at year end		0.175%	0.156%	0.175%	0.156%	0.303%	0.251%	0.261%	0.231%

Net interest expense for year		$1,171,000	$1,156,000	$7,485,000	$7,390,000	$6,026,000	$4,224,000	$3,964,000	$4,697,000	$18,646,000	$17,467,000
Fair market value at year end (liability)**		$(1,970,000)	$(2,153,000)	$(24,712,000)	$(18,563,000)	$(28,858,000)	$(19,474,000)	$(5,872,000)	$(7,461,000)	$(61,412,000)	$(47,651,000)
Change in fair market value for year gain (loss)		$183,000	$797,000	$(6,149,000)	$15,433,000	$(9,384,000)	$16,005,000	$1,589,000	$3,650,000	$(13,761,000)	$35,885,000
Change in fmv value recorded in –											$–
Other comprehensive income (loss)		$–	$(130,000)	$–	$–	$–	$3,157,000	$–	$567,000	$–	$3,594,000
Net income (loss)		$183,000	$927,000	$(6,149,000)	$15,433,000	$(9,384,000)	$12,848,000	$1,589,000	$3,083,000	$(13,761,000)	$32,291,000
Total gain (loss)		$183,000	$797,000	$(6,149,000)	$15,433,000	$(9,384,000)	$16,005,000	$1,589,000	$3,650,000	$(13,761,000)	$35,885,000

*	– Increases annually to $200 million at 12/31/12. At 1/1/10 was $115 million.
**	– Included in current and other long-term liabilities in the accompanying balance sheets.
***	– Was $65,000,000, changed to $52,000,000 on 12/31/10

(5)

Employee benefits

Except for a plan covering certain employees covered by a collective bargaining agreement at the Lemont and Joliet, Illinois terminals, substantially all employees of IMTT Combined are eligible to participate in a defined benefit pension plan (the “Plan”). Benefits under the Plan are based on years of service and the employees' highest average compensation for a consecutive five year period. Coincident with the acquisition of terminal facilities in 1997 and 2007 by IMTT-Illinois, it became the sponsor of a defined benefit plan covering union employees at these terminals (“Union Plan”). Monthly benefits under this plan are computed based on a benefit rate in effect at the date of the participant's termination ($50.50 at November 1, 2010) multiplied by the number of years of service. IMTT Combined’s contributions to both plans are based on the recommendations of its consulting actuary.

The following table sets forth the obligations and assets (as well as changes therein) of both plans, the resulting funded status and amounts recognized in the accompanying financial statements.

IMTT HOLDINGS INC. and SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2010 and 2009


	2010		2009
	*The Plan*	*Union Plan*	*The Plan*	*Union Plan*
Changes in benefit obligation:
Benefit obligation at beginning of year	$63,043,000	$4,052,000	$53,261,000	$3,333,000
Service cost	4,066,000	200,000	3,314,000	174,000
Interest cost	3,728,000	235,000	3,414,000	221,000
Actuarial loss	7,326,000	273,000	5,337,000	396,000
Benefits paid	(1,276,000)	(99,000)	(2,283,000)	(72,000)
Benefit obligation at end of year	$76,887,000	$4,661,000	$63,043,000	$4,052,000
Changes in plan assets:
Fair value of plan assets at beginning of year	$39,274,000	$3,492,000	$32,049,000	$2,848,000
Actual return on plan assets	3,936,000	338,000	5,676,000	498,000
Employer contribution	4,447,000	131,000	3,832,000	218,000
Benefits paid	(1,276,000)	(99,000)	(2,283,000)	(72,000)
Fair value of plan assets at end of year	$46,381,000	$3,862,000	$39,274,000	$3,492,000
Funded status – Pension (liability) recognized in balance sheet in other long-term liabilities	$(30,506,000)	$(799,000)	$(23,769,000)	$(560,000)
Amounts recognized in accumulated other comprehensive income consist of:
Net actuarial loss	$18,382,000	$1,264,000	$12,214,000	$1,081,000
Prior service cost	745,000	284,000	915,000	316,000
Total	$19,127,000	$1,548,000	$13,129,000	$1,397,000
Accumulated benefit obligation at December 31:	$54,499,000	$4,661,000	$46,346,000	$4,052,000

IMTT HOLDINGS INC. and SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2010 and 2009


	2010		2009
	*The Plan*	*Union Plan*	*The Plan*	*Union Plan*
Components of net periodic benefit cost:
Service cost	$4,066,000	$200,000	$3,314,000	$174,000
Interest cost	3,728,000	235,000	3,414,000	221,000
Expected return on plan assets	(3,431,000)	(298,000)	(2,696,000)	(244,000)
Amortization of prior service cost	170,000	33,000	170,000	33,000
Recognized net actuarial loss	653,000	50,000	583,000	58,000
Net periodic benefit cost recognized in statement of income	$5,186,000	$220,000	$4,785,000	$242,000

Other changes in plan assets and benefit obligation recognized in other comprehensive income:
Net actuarial loss	$6,821,000	$233,000	$2,357,000	$142,000
Amortization of prior service (cost)	(170,000)	(33,000)	(170,000)	(33,000)
Amortization of actuarial (loss)	(653,000)	(50,000)	(583,000)	(58,000)
Total recognized in other comprehensive income	$5,998,000	$150,000	$1,604,000	$51,000
Total recognized in net periodic benefit cost and other comprehensive income	$11,184,000	$370,000	$6,389,000	$293,000

Weighted average assumptions used to determine benefit obligations as of December 31:
Discount rate	5.60%	5.55%	6.00%	6.00%
Expected return on plan assets	8.50%	8.50%	8.50%	8.50%
Rate of compensation increase	5.47%	–	5.47%	–

Weighted average assumptions used to determine net benefit cost:
Discount rate	6.00%	6.00%	6.50%	6.50%
Expected return on plan assets	8.50%	8.50%	8.50%	8.50%
Rate of compensation increase	5.47%	–	5.47%	–

IMTT HOLDINGS INC. and SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2010 and 2009

As of December 31, 2010, the discount rate assumption used in the computation of benefit obligations for the Plan and the Union Plan was changed to 5.60% and 5.55%, respectively, to better approximate returns available on high quality fixed income investments. The long-term rate of return of pension assets is based on historical results adjusted as necessary for future expectations.

The allocation of pension plan assets as of December 31, 2010 and 2009 is shown below based on quoted prices in active markets for identical assets (Level 1 fair value measurements).


	2010		2009
	*The Plan*	*Union Plan*	*The Plan*	*Union Plan*
Weighted average asset allocation:
Domestic equity funds	25.6%	25.3%	12.3%	12.2%
International equity fund	15.4%	15.1%	7.4%	7.4%
Domestic fixed income fund	56.1%	55.0%	78.1%	76.3%
Other	2.9%	4.6%	2.2%	4.1%
Total	100.0%	100.0%	100.0%	100.0%

Pension asset investment decisions are made with assistance of an outside paid advisor to achieve the multiple goals of high rate of return, diversification and safety.

Beginning in late 2008, the concentration of plan assets was shifted to a preponderance in one domestic fixed income fund, as opposed to a more traditional 60% equity and 40% fixed income allocation, in light of adverse economic conditions and declining equity valuations. This strategy was revised in 2010 back toward greater equity asset concentration and continued subsequent to December 31, 2010 to a 60% equity and 40% fixed income allocation based on economic recovery and a more favorable stock market outlook.

IMTT HOLDINGS INC. and SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2010 and 2009

Expected benefit payments as of December 31, 2010 are as follows:


	*The Plan*	*Union Plan*

Year 2011	$3,124,000	$135,000
Year 2012	2,992,000	150,000
Year 2013	3,218,000	164,000
Year 2014	3,602,000	180,000
Year 2015	4,155,000	199,000
Years 2016-2020	26,361,000	1,553,000
Anticipated contributions for 2011	$4,000,000	$347,000

IMTT Combined provides post-retirement life insurance (coverage equal to 25% of final year compensation not to exceed $25,000) and health benefits (coverage for early retirees at least 62 years old on early retirement to age 65, reimbursement of Medicare premiums for the Bayonne terminal employees and some smaller health benefits no longer offered) to retired employees. IMTT Combined adopted the accounting treatment for post-retirement benefits other than pensions as prescribed by ASC 715-60-05 in 2006. As allowed by that accounting standard, IMTT Combined elected to defer and amortize the January 1, 2006 transition obligation over ten years.

The following table sets forth the obligation and assets (as well as changes therein) of these plans, the resulting funded status and amounts recognized in the accompanying financial statements.

IMTT HOLDINGS INC. and SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2010 and 2009


	2010	2009
Changes in benefit obligation:
Benefit obligation at beginning of year	$4,346,000	$3,501,000
Service cost	297,000	104,000
Interest cost	346,000	216,000
Actuarial loss	5,318,000	863,000
Benefits paid	(428,000)	(338,000)
Benefit obligation at end of year	$9,879,000	$4,346,000

Changes in plan assets:
Fair value of plan assets at beginning of year	$ –	$ –
Employer contribution	428,000	338,000
Benefits paid	(428,000)	(338,000)
Fair value of plan assets at end of year	$ –	$ –

Funded status – plan (liability)	$(9,879,000)	$(4,346,000)

Amounts recognized in combined balance sheets consist of:
Current (liabilities)	$(669,000)	$(320,000)
Other long-term (liabilities)	(9,210,000)	(4,026,000)
Total (liabilities)	$(9,879,000)	$(4,346,000)

Amounts recognized in accumulated other comprehensive income consist of:
Transition obligation	$1,756,000	$2,108,000
Net actuarial loss	6,200,000	1,044,000
Total	$7,956,000	$3,152,000

Components of net periodic benefit cost:
Service cost	$297,000	$104,000
Interest cost	346,000	216,000
Amortization of transition obligation	351,000	351,000
Amortization of actuarial loss	162,000	–
Net periodic benefit cost of the plan	$1,156,000	$671,000

IMTT HOLDINGS INC. and SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2010 and 2009


	2010		2009
Other changes in plan assets and benefit obligation recognized in other comprehensive income:
Net actuarial loss	$5,318,000		$862,000
Amortization of transition obligation	(351,000)		(351,000)
Amortization of actuarial (loss)	(162,000)		–
Total recognized in other comprehensive income	$4,805,000		$511,000

Total recognized in net periodic benefit cost and other comprehensive income	$5,961,000		$1,182,000

Weighted average assumptions used to determine benefit obligations as of December 31:
Discount rate	5.50%		6.00%
Rate of compensation increase	5.47%		3.00%

Weighted average assumptions used to determine net benefit cost:
Discount rate	6.00%		6.50%
Rate of compensation increase	3.00%		3.00%

Health Care Trend Rates - Pre-65 (Post-65)
Healthcare trend rate		7.69% (7.60%)	8.00%
Ultimate trend		5.50%	5.00%
Year ultimate trend reached		2017	2014

Health Care Trend Rates – Medicare Part B
Healthcare trend rate		-1.39%	8.00%
Ultimate trend		5.50%	5.00%
Year ultimate trend reached		2019	2014

IMTT HOLDINGS INC. and SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2010 and 2009

Expected benefit payments and contributions as of December 31, 2010 are as follows:


Year 2011		$669,000
Year 2012		541,000
Year 2013		507,000
Year 2014		548,000
Year 2015		582,000
Years 2016 – 2020		4,418,000
Anticipated contributions for 2011		$669,000

Assumptions concerning health care cost trend rates can have a significant impact on plan costs and liabilities, as shown below as of year-end and for the year 2010:


	Using Stated	One percentage point
	assumptions	Decrease	Increase
End of year benefit obligation	$9,879,000	$8,836,000	$11,153,000
Service and interest cost	643,000	578,000	723,000

Accumulated other comprehensive income at December 31, 2010 contains $1,330,000 of net actuarial losses, $203,000 of prior service cost and $351,000 of net transition obligation for the foregoing defined benefit pension and post-retirement health/life plans expected to be recognized as components of net periodic benefit cost in 2011.

IMTT Combined has established a supplementary, non-qualified benefit plan for certain management employees whose compensation exceeds the maximum eligible for inclusion in the qualified defined benefit plan. Under this plan, IMTT Combined funds additional compensation to the affected employees on a pre-tax basis that will allow them to make a contribution to a separate investment account which the employees own that will provide the actuarial equivalent of the benefits available as if all of the employees’ compensation had been included in the qualified defined benefit plan. Expense related to this plan is recorded as additional compensation and primarily included in general and administrative expense in the accompanying financial statements ($862,000 in 2010 and $687,000 in 2009).

IMTT Combined has established defined contribution Section 401(k) employee benefit plans. Under the primary plan, employees who are eighteen years old and have six months of service are eligible to participate. Employees may contribute up to the maximum allowable for Federal income tax purposes and IMTT Combined’s matching contribution is determined each year by management. In both 2010 and 2009, IMTT Combined elected to match 5% of employee contributions. Total expense for the 401 (k) plans recognized for 2010 and 2009 was $282,000 and $188,000, respectively.

IMTT HOLDINGS INC. and SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2010 and 2009

IMTT Combined purchases life insurance for certain management employees and provides for the repayment of premiums paid through deferred compensation arrangements. Under this program, various amounts of life insurance are purchased and paid for by IMTT Combined and receivables are recorded from each management employee, along with accrued interest. At retirement or termination of service, funds are provided to the plan participants under deferred compensation agreements to provide for the repayment of premiums paid and ownership of the policies is transferred at that time. Expense related to the deferred compensation arrangements is recorded annually as employee service is rendered. Expense associated with providing this benefit of $68,000 and $62,000 for 2010 and 2009, respectively, is recorded in general and administrative expense in the accompanying financial statements.

(6)

Commitments and contingencies

IHI Consolidated is involved in various lawsuits, claims and inquiries (including environmental matters) which are routine to the nature of its business. Management believes that resolution of these matters will not result in any material adverse effect on the financial statements.

Many of the entities comprising IMTT Combined are subject to compliance with federal and state environmental regulations, some of which require environmental remediation and ongoing monitoring activities. Depending upon the nature and circumstances of such activities, certain of the expenditures related thereto have been recorded as operating expenses in the accompanying statements of income and others are capitalized as such expenditures are incurred.

A summary of these environmental remediation matters follows.

The Lemont terminal entered into a consent order with the state of Illinois to remediate a contamination problem which existed at the time of the purchase of this facility from its former owners. Remediation is also required as a result of the renewal of a lease with a government agency for a portion of the terminal. This remediation effort, consisting of among other things, the implementation of extraction and monitoring wells and soil treatment, is estimated to span a period of ten to twenty years or more at a cost of $9,900,000 to $15,000,000.

IMTT HOLDINGS INC. and SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2010 and 2009

The Bayonne, New Jersey terminal which has been acquired and aggregated over a 27 year period contains pervasive remediation requirements that were assumed at the time of purchase from the various former owners. One former owner retained environmental remediation responsibilities for a purchased site as well as sharing other remediation costs. These remediation requirements are documented in two memoranda of agreement and an administrative consent order with the state of New Jersey. Remediation efforts entail removal of free product, soil treatment, repair/replacement of sewer systems, and the implementation of containment and monitoring systems. These remediation activities are estimated to span a period of ten to twenty or more years at a cost ranging from $38,450,000 to $61,100,000.

The remediation activities described previously at the two terminals are estimated based on currently available information, in undiscounted U.S. dollars and are inherently subject to relatively large fluctuation. Management believes that the cost of the foregoing remediation activities ($48,350,000 to $76,100,000 in total) is capitalizable in accordance with generally accepted accounting principles (ASC 410-30-25-18) as such costs are recoverable and improve the property as compared with its condition when acquired and either 1) extend the life, increase the capacity or improve the safety and/or efficiency of the property or 2) mitigate or prevent environmental contamination that has yet to occur that may result from future operations or activities. During 2010 and 2009 approximately $6,450,000 and $3,890,000, respectively, of such expenditures were incurred and capitalized within property, plant and equipment. For the years ended December 31, 2010 and 2009 approximately $2,171,000 and $2,040,000, respectively, of environmental related cost that did not meet the capitalization criteria were charged to operations.

The New Jersey Department of Environmental Protection (“DEP”) promulgated a pending new regulation that will require vapor control (collection and destruction) on some tanks during roof landings and tank cleanings when degassing is required. These new requirements will apply to refineries and independent terminals. Emissions during these times are currently permitted by IMTT-Bayonne with some restrictions on frequency and timing but no required collection and destruction of the emissions. The potential cost to IMTT-Bayonne of complying with this new regulation is estimated at $3,500,000 to $5,000,000 over the next several years. In accordance with the terms of their contracts, these costs could be recouped through additional charges to customers. IMTT-Bayonne will continue working to mitigate impacts on New Jersey operations with customers and the DEP, as well as designing the most cost effective means of control as the new regulation takes effect.

The IHI shareholders’ agreement contains various provisions concerning shareholder distributions. Currently, the shareholders of IHI disagree as to the interpretation of those provisions which could potentially result in significant increases in the level of distributions. If the shareholders are unable to resolve this issue, arbitration or litigation may be required.

IMTT HOLDINGS INC. and SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2010 and 2009

IMTT Combined is in the process of expanding storage capacity and other customer service capabilities at various terminals to satisfy new customer contract requirements. Approximately $21,970,000 of additional capital expenditures will be necessary in 2011 to complete these projects.

IMTT-Quebec Inc. has operating lease commitments primarily for the land on which the terminal is located and related terminal assets. Minimum lease payments required in the future are as follows at December 31, 2010.


Year		Amounts
2011		$812,000
2012		821,000
2013		833,000
2014		850,000
2015		871,000
Thereafter		2,210,000

In connection with the leases described above, IMTT-Quebec has the responsibility to remove any contaminants from the leased premises at the end of their term. The total amount of undiscounted estimated future cash flows through December 31, 2028 lease termination required to satisfy this obligation is $3,845,000. These cash flows were discounted using a credit-adjusted risk free interest rate of 7.5% and capitalized in property, plant and equipment and are being depreciated over the term of the leases. The changes to the asset retirement obligation recorded are as follows for 2010 and 2009.


	2010	2009
Balance, January 1,	$994,000	$924,000
Accretion (interest) expense	76,000	70,000
Exchange rate effect on obligation	55,000	–
Balance, December 31,	$1,125,000	$994,000

This obligation is recorded in other long-term liabilities in the accompanying balance sheets.

IMTT HOLDINGS INC. and SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2010 and 2009

(7)

Income taxes

IHI Consolidated provides for income taxes in accordance with the asset and liability method as prescribed by ASC 740-10-25-2. The components of the income tax expense shown in the accompanying statements are as follows:


	2010			2009
	Current	Deferred	Total	Current	Deferred	Total
U.S. federal	$5,504,000	$36,205,000	$41,709,000	$210,000	$30,541,000	$30,751,000
State and local	7,037,000	4,591,000	11,628,000	1,383,000	6,725,000	8,108,000
Foreign	(27,000)	211,000	184,000	–	(17,000)	(17,000)
Total income tax expense	$12,514,000	$41,007,000	$53,521,000	$1,593,000	$37,249,000	$38,842,000

Income tax expense differs from income tax computed at the U.S. federal statutory rate of 35% of income before income taxes as shown in the accompanying financial statements, as follows:


	2010	2009
Income tax expense based on U.S. federal statutory rate	$44,013,000	$32,583,000
State income tax provisions, net of federal income tax benefit	7,558,000	5,270,000
Non-deductible expenses	592,000	134,000
Foreign income tax differences	(54,000)	(2,000)
Others, net	1,412,000	857,000
Total income tax expense recorded in accompanying financial statements	$53,521,000	$38,842,000

IMTT HOLDINGS INC. and SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2010 and 2009

Deferred income taxes have been recorded in the accompanying balance sheets for the tax effects of temporary differences that impact the financial statements and income tax returns in different periods, offset partially by carryforwards for federal and state income tax purposes of unused net operating losses and tax credits. These temporary differences consist primarily of fixed asset basis differences as well as various expenses which affect the financial statements and tax returns in different periods. Differences in the basis of the fixed assets for accounting and income tax reporting purposes exist primarily as a result of different depreciation methods and lives used for financial and income tax reporting purposes, involuntary conversion treatment, for income tax purposes, of proceeds received from asset expropriations and settlement of insurance coverage for property damage. The primary components of deferred income tax liabilities (assets) are as follows:


	2010	2009
Deferred tax liabilities:
Fixed asset basis differences	$216,340,000	$192,852,000
Currency translation gain	1,431,000	848,000
Foreign terminal earnings and investment basis differences	4,544,000	–
Others, net	–	2,395,000
Total deferred tax liabilities	$222,315,000	$196,095,000

Deferred tax assets:
Interest rate swap agreement differences	$(24,875,000)	$(19,335,000)
Net operating loss and tax credit carryforwards	(8,107,000)	(29,224,000)
Expense accruals	(9,217,000)	(7,043,000)
Deferred revenue items	(5,003,000)	(5,878,000)
Pension expense in excess of contributions	(10,918,000)	(7,944,000)
Others, net	(217,000)	–
Total deferred tax assets prior to valuation allowance	(58,337,000)	(69,424,000)
Valuation allowance	2,624,000	2,104,000
Net deferred tax assets	(55,713,000)	(67,320,000)
Net deferred taxes as shown in accompanying balance sheets	$166,602,000	$128,775,000

IMTT HOLDINGS INC. and SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2010 and 2009

Management believes that it is more likely than not that the net deferred tax assets will be realized through future operations and the reversal of other temporary differences. The valuation allowance at December 31, 2010 and 2009 was primarily related to state net operating loss carryforwards that, in the judgment of management, are not more likely than not to be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences become deductible and prior to the expiration of the net operating loss carryforwards.

Deferred income taxes are classified as follows in the accompanying balance sheets.


	2010	2009
Current deferred tax (asset)	$ (13,140,000)	$(12,700,000)
Noncurrent deferred tax liability	179,742,000 ’	141,475,000’
Net deferred tax liability	$166,602,000’	$128,775,000’

Net operating loss (“N.O.L.”) and tax credit carryforwards outstanding as of December 31, 2010 expire as follows:


Year of Expiration	Federal N.O.L.	State N.O.L.’s	Foreign N.O.L.’s
2011	$ –	$4,118,000	$ –
2012	–	8,126,000	–
2013	–	5,496,000	–
2014	–	3,188,000	431,000
2015	–	1,895,000	742,000
2016	–	3,850,000	–
2017	–	908,000	–
2018	–	1,066,000	–
2019	–	843,000	–
2020	–	1,535,000	–
2021	–	2,646,000	–
2022	–	6,642,000	–
2023	–	19,705,000	–
2024	–	27,416,000	–
2025	–	14,251,000	–
2026	–	7,000	942,000
2027	191,000	108,000	570,000
2028	–	6,000	4,738,000
2029	–	4,000	2,800,000
2030	–	–	3,307,000
	$ 191,000	$101,810,000	$13,530,000

IMTT HOLDINGS INC. and SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2010 and 2009

Federal alternative minimum tax credits of $428,000 have unlimited carryforward periods.

IHI Consolidated adopted the provisions of ASC 740 relating to uncertain tax positions on January 1, 2009. IHI Consolidated has not recorded any increase in income tax liabilities attributable to unrecognized income tax benefits in its consolidated statement of income for the year 2010. Accordingly, no related expense or liability for interest or penalties has been accrued at December 31, 2010. As of December 31, 2010, tax authorities have proposed no material adjustments to IHI Consolidated’s income tax positions. There are no income tax positions for which it is reasonably possible that the amounts of unrecognized tax benefits will materially increase or decrease in the next 12 months.

IHI Consolidated and its subsidiaries file U.S. federal and state income tax returns. Two subsidiaries file Canadian federal and provincial income tax returns. There are no on-going examinations of income tax returns filed by IHI Consolidated or any of its subsidiaries that are expected to result in material adjustment. U.S. federal income tax returns for tax years ending after 2006 (after 2002 to the extent of federal net operating loss carryforward deductions) are subject to examination by the Internal Revenue Service. State income tax returns for tax years ending after 2005 (after 1997 to the extent of state net operating loss carryforward deductions) are subject to examination by state tax authorities. Canadian tax returns for tax years after 2005 are subject to examination by Revenue Canada and provincial tax authorities.

(8)

Fair value of financial instruments

The fair value of financial instruments (as defined by ASC 825-10-50) contained in the accompanying balance sheets, including cash, accounts receivable, accounts payable and long-term debt, approximates the carrying amount due to either the short-term maturity or variable or competitive interest rates assigned to these financial instruments.

(9)

Changes in ownership

In January 2000, International Tank Terminals, L.L.C. and its affiliates (“ITT”) acquired the 50% interest of their former partner in each of the entities comprising IMTT Combined. The consideration for the purchase was in the form of $130,000,000 of notes payable to the former partner. These notes were refinanced by ITT with a bank in December, 2005 and in June 2010 the remaining $65,000,000 was repaid by ITT with proceeds of a distribution from IMTT Combined from the amended and restated revolving credit facility as described more fully in note 4. At that time, the related interest rate swap agreement was transferred to IMTT Combined at its recorded balance ($7,302,000 liability) and treated as a partnership distribution ($5,061,000 charged to partners’ capital and $2,241,000 charged to accumulated other comprehensive income).

IMTT HOLDINGS INC. and SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2010 and 2009

On May 1, 2006, Loving Enterprises, Inc. (“Loving”) which was the 100% owner of ITT (owners of 100% of IMTT Combined), transferred a 50% interest to Macquarie Infrastructure Company Trust for $250,000,000 and Loving changed its name to IMTT Holdings Inc.

(10)

Accumulated other comprehensive income

Shareholders’ equity includes accumulated other comprehensive income. Changes in the components of accumulated other comprehensive income for 2010 and 2009 are as follows:


	Derivatives	Foreign Currency Translation	Pension and Post-Retirement Plans	Accumulated Other Comprehensive Income (Loss)
Balance, January 1, 2009	$(6,596,000)	$(919,000)	$(9,805,000)	$(17,320,000)
Other comprehensive income (loss) for the year, net of tax	3,396,000	2,369,000	(705,000)	5,060,000	*
Balance, December 31, 2009	(3,200,000)	1,450,000	(10,510,000)	(12,260,000)
Other comprehensive income (loss) for the year, net of tax	1,094,000	832,000	(6,334,000)	(4,408,000)	*
Balance, December 31, 2010	$(2,106,000)	$2,282,000	$(16,844,000)	($16,668,000)

* Net of deferred income tax benefit (expense) of $3,215,000 in 2010 and $(1,644,000) in 2009.

(11)

Future minimum rental revenues

Future minimum rental revenues for terminal storage capacity for the remaining unexpired term of lease agreements in existence at December 31, 2010 are as follows.


Year		Amounts
2011		$287,813,000
2012		242,918,000
2013		159,997,000
2014		114,669,000
2015		80,160,000
2016 and thereafter		90,724,000
Total		$976,281,000

IMTT HOLDINGS INC. and SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2010 and 2009

(12) Additional balance sheet detail

Additional detail of the components of certain balance sheet captions follows.


	2010	2009
Prepaid expenses and deposits:
Deferred income tax asset	$13,140,000	$12,700,000
Prepaid insurance	4,189,000	3,868,000
Prepaid income taxes	3,479,000	1,787,000
Other	4,187,000	1,118,000
Total prepaid expenses and deposits	$24,995,000	$19,473,000


	2010	2009
Other assets:
Deferred dredging costs	$3,073,000	$4,139,000
Deposits	2,524,000	1,346,000
Other	1,133,000	967,000
Total other assets	$6,730,000	$6,452,000


	2010	2009
Accrued liabilities:
Accrued payables	$23,976,000	$11,660,000
Accrued bonuses	6,196,000	–
Damage claim settlement/ fine accruals	5,314,000	6,235,000
Deferred revenue – current portion	2,873,000	2,676,000
Vacation pay	2,165,000	2,244,000
Utilities	1,667,000	1,478,000
Health claims	1,165,000	1,052,000
Interest	1,161,000	2,059,000
Workmen’s compensation claims	1,031,000	1,648,000
Other	6,145,000	7,398,000
Total accrued liabilities	$51,693,000	$36,450,000

IMTT HOLDINGS INC. and SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2010 and 2009


	2010	2009
Other long-term liabilities:
Swap mark-to-market liabilities	$43,273,000	$30,405,000
Pension benefits	31,305,000	24,329,000
Deferred revenue	18,684,000	20,805,000
Retiree health/life benefits	9,210,000	4,026,000
Deferred compensation	656,000	588,000
Other	1,311,000	946,000
Total other long-term liabilities	$104,439,000	$81,099,000

(13) Accounting pronouncements

IHI Consolidated is not aware of any issued accounting standards whose implementation date is subsequent to December 31, 2010, that would have a material impact on the reporting of its future results of operations or financial position.

(14) Subsequent events

Subsequent to December 31, 2010, IMTT Combined contributed $4,347,000 to the IMTT and Lemont union pension plans. Subsequent events were evaluated through February 21, 2011 for their impact on the accompanying financial statements, which is the date the statements were available to be issued.

Attached files

Macquarie Infrastructure Corp Reports

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