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8-K - MACQUARIE INFRASTRUCTURE COMPANY LLC 8-K - Macquarie Infrastructure Corpa50738191.htm

Exhibit 99.1

Macquarie Infrastructure Company LLC Reports Third Quarter 2013 Financial Results, Declares Cash Dividend of $0.875 Per Share

• Reported proportionately combined Free Cash Flow increases 78%

• Free Cash Flow per share guidance of $4.10 to $4.20 in 2013 reaffirmed

• Strong performance by Atlantic Aviation, new FBO acquisition announced

• 41% increase in growth investments

NEW YORK--(BUSINESS WIRE)--October 28, 2013--Macquarie Infrastructure Company LLC (NYSE:MIC) reported its financial results for the third quarter of 2013 including the declaration of a quarterly cash dividend of $0.875 per share. The dividend will be paid on November 14, 2013 to shareholders of record on November 11, 2013.

MIC’s businesses generated proportionately combined Free Cash Flow of $57.0 million or $1.08 per share during the quarter, compared with $32.1 million or $0.69 per share in the comparable period in 2012. Excluding interest rate swap breakage costs incurred by MIC’s Hawaii Gas business in the third quarter of 2012, underlying proportionately combined Free Cash Flow increased 40.0% in the third quarter of 2013. Underlying proportionately combined Free Cash Flow per share increased 18.9% to $3.28 for the nine months ended September 30, 2013 compared with $2.76 for the nine months ended September 30, 2012.

MIC’s proportionately combined Free Cash Flow per share in 2013 reflects an approximate 6.4 million share (13.6%) increase in the weighted average number of shares outstanding. The increase is associated primarily with a public equity offering conducted by the Company in May 2013 as well as management and performance fees settled in shares during the past year.

“The performance of our businesses in the third quarter was largely in line with our expectations and positions us to deliver proportionately combined free cash flow for the full year that is consistent with our guidance and consistent with the generation of approximately $337.0 million in proportionately combined EBITDA,” said James Hooke, Chief Executive Officer of Macquarie Infrastructure Company LLC.


“We are reaffirming our guidance of $4.10 to $4.20 in proportionately combined Free Cash Flow for calendar year 2013. On a trailing twelve month basis, MIC has generated $4.09 per share in proportionately combined Free Cash Flow so we’re already within sight of our guidance range as we end the third quarter,” Hooke added.

Hooke noted that the improving outlook reflected better than anticipated pricing on a refinancing of the long-term debt of MIC’s Atlantic Aviation business in May as well as improvement in the operating performance of Atlantic Aviation generally. “With 13.0% EBITDA growth at Atlantic Aviation for the quarter, a substantial pipeline of new growth projects, and the addition of the Hangar 10 aviation services facility at Kansas City Downtown Airport to the Atlantic Aviation portfolio, the trends in the business have been positive over the past several quarters,” he said.

On October 25, 2013, MIC’s Atlantic Aviation business entered into an agreement to acquire Hangar 10 Aviation Services located on the Kansas City Downtown Airport. The award-winning facility is expected to become the 63rd facility in the Atlantic Aviation network. The acquisition is projected to close in November 2013, subject to receipt of required airport approvals and other consents customary for a transaction of this size and type.

MIC established a new line of business – MIC Solar - in the fourth quarter of 2012 with an investment in two contracted solar power generation facilities. In the third quarter of 2013 MIC invested $14.7 million in two additional facilities currently under construction. In October of 2013 the Company invested $6.1 million in a fifth facility that is also under construction. MIC has invested a total of $30.1 million in the five facilities. The Company anticipates that the facilities will generate a total of between $1.6 million and $1.8 million in Free Cash Flow in each of the next five years.

Located in the southwestern U.S., the Company’s photovoltaic facilities are capable of generating a combined approximately 57 megawatts of electricity. The electricity is sold to nearby utilities and a U.S. Air Force base pursuant to long-term (20 and 25 year) power purchase agreements.

Hooke noted, “Year to date through September, 2013, MIC has deployed $14.7 million in solar contracted power, and $58.6 million in other growth projects representing a 40.7% increase over the rate at which capital was put to work in the first nine months of 2012. Collectively our businesses have committed to another approximately $70.0 million of projects. In addition to this, we are also exploring a pipeline of opportunities in excess of $100.0 million.”

MIC regards Free Cash Flow as an important tool in assessing the performance of its capital intensive, cash generative businesses. Proportionately combined Free Cash Flow refers to the sum of the Free Cash Flow generated by MIC’s businesses and investments in proportion to its equity interest in each entity after holding company costs. See “Cash Generation” below for MIC’s definition of Free Cash Flow and further information.


Consolidated Results for Third Quarter and Nine Months

The Company reported net income, before tax, of $14.1 million for the third quarter of 2013 compared with a net loss of $1.9 million for the third quarter of 2012. For the nine months ended September 30, 2013, MIC reported net income, before tax, of $23.2 million compared with net income of $40.8 million for the comparable period in 2012. The decrease in the year to date result versus the prior comparable period is primarily attributable to performance fees incurred in 2013.

MIC’s consolidated revenue for the third quarter of 2013 increased 1.7% to $263.7 million compared with $259.3 million in the third quarter of 2012. Consolidated revenue was essentially flat for the nine-month period ended September 30, 2013 versus the comparable period in 2012.

Reported gross profit – defined as revenue less cost of goods sold – removes the volatility in revenue associated with fluctuations in energy costs such as feedstock costs at Hawaii Gas. MIC’s consolidated gross profit rose 6.4% to $108.0 million in the third quarter of 2013 from $101.5 million in the same period in 2012. For the nine months ended September 30, 2013 the Company’s gross profit increased 4.8% versus the comparable period in 2012.

Cash Generation

MIC reports EBITDA excluding non-cash items on a consolidated and operating segment basis and reconciles each to consolidated net income (loss). EBITDA excluding non-cash items is a measure relied upon by management in evaluating the performance of its businesses and investments. EBITDA excluding non-cash items is defined as earnings before interest, taxes, depreciation and amortization and non-cash items, which may include impairments, gains and losses on derivatives and adjustments for certain other items reflected in the statement of operations.

MIC believes that EBITDA excluding non-cash items provides additional insight into the performance of its operating businesses, relative to each other and to similar businesses, without regard to capital structure, and their ability to service or reduce debt, fund capital expenditures and/or support distributions to the holding company.

MIC also reports Free Cash Flow, as defined below, on both a consolidated and operating segment basis as a means of assessing the amount of cash generated by its businesses and as a supplement to other information provided in accordance with GAAP, and reconciles each to cash from operating activities.


MIC believes that reporting Free Cash Flow provides additional insight into its ability to deploy cash where GAAP measures, such as net income (loss) and cash from operating activities, do not reflect all of the items that management considers in estimating the amount of cash generated by its operating businesses. MIC defines Free Cash Flow as cash from operating activities, less maintenance capital expenditures and changes in working capital.

Free Cash Flow does not fully reflect MIC’s ability to freely deploy generated cash, as it does not reflect required payments made on its indebtedness and other fixed obligations or the other cash items excluded when calculating Free Cash Flow. Free Cash Flow may be calculated in a different manner by other companies, which limits its usefulness as a comparative measure. Therefore, Free Cash Flow should be used as a supplemental measure and not in lieu of MIC’s financial results as reported under GAAP.

MIC may report certain financial metrics on a proportionately combined basis including, proportionately combined gross profit, proportionately combined EBITDA excluding non-cash items, proportionately combined cash interest, proportionately combined cash taxes, proportionately combined maintenance capital expenditures, proportionately combined Free Cash Flow, proportionately combined Free Cash Flow per share, proportionately combined growth capital expenditures and proportionately combined net debt. The Company believes that such measures provide investors and management with additional insight into the financial results and cash generated on the basis of its varied ownership interests in its businesses and investments for the reporting period.

Proportionately combined metrics used by MIC may be calculated in a different manner by other companies and may limit their usefulness as a comparative measure. Therefore, proportionately combined metrics should be used as a supplement to and not in lieu of financial results reported in accordance with GAAP.

The following table summarizes MIC’s financial performance on a proportionately combined basis during the quarter and nine month periods ended September 30, 2013 and the prior comparable periods.

           

For the Quarter Ended September 30, 2013

     
($ in Thousands) (Unaudited) IMTT 50%   Hawaii Gas  

District
Energy
50.01%

 

Atlantic
Aviation

  MIC Solar(2)  

MIC
Corporate

 

Proportionately
Combined(1)

IMTT 100%  

District
Energy
100%

 

MIC Solar
100%

             
Gross profit 35,438 17,239 2,942 82,645 1,488 N/A 139,752 70,875 5,883 2,253
EBITDA excluding non-cash items 31,810 12,879 3,636 38,306 (470 ) (1,094 ) 85,067 63,620 7,271 205
Free cash flow 16,581   9,154     2,475   30,774   (1,083 )   (854 )   57,047 33,162   4,950   (689 )
 

For the Quarter Ended September 30, 2012

       
($ in Thousands) (Unaudited) IMTT 50%   Hawaii Gas  

District
Energy
50.01%

 

Atlantic
Aviation

  MIC Solar  

MIC
Corporate

 

Proportionately
Combined(1)

  IMTT 100%  

District
Energy
100%

 

MIC Solar
100%

 
Gross profit 31,590 16,676 3,394 78,069

N/A

N/A 129,728 63,179 6,786 N/A
EBITDA excluding non-cash items 27,955 12,632 4,019 33,893 N/A (1,875 ) 76,624 55,909 8,037 N/A
Free cash flow 12,689   (440 )   2,675   17,679   N/A     (552 )   32,050   25,377   5,348   N/A  
             

For the Nine Months Ended September 30, 2013

         
($ in Thousands) (Unaudited) IMTT 50%   Hawaii Gas  

District
Energy
50.01%

 

Atlantic
Aviation

 

MIC Solar(2)

   

MIC
Corporate

 

Proportionately
Combined(1)

IMTT 100%  

District
Energy
100%

 

MIC Solar
100%

           
Gross profit 109,756 54,803 6,609 240,118 3,864 N/A 415,150 219,511 13,216 6,109
EBITDA excluding non-cash items 98,552 40,005 8,107 109,169 1,065 (4,463 ) 252,435 197,104 16,210 3,157
Free cash flow 45,926   25,583   5,315   85,761   (263 )   3,350     165,671 91,851   10,627   1,044
 
 

For the Nine Months Ended September 30, 2012

         
($ in Thousands) (Unaudited) IMTT 50%   Hawaii Gas  

District
Energy
50.01%

 

Atlantic
Aviation

  MIC Solar    

MIC
Corporate

 

Proportionately
Combined(1)

IMTT 100%  

District
Energy
100%

 

MIC Solar
100%

 
Gross profit 96,484 53,451 7,775 230,863

N/A

N/A 388,572 192,967 15,546 N/A
EBITDA excluding non-cash items 86,127 41,262 9,141 99,379 N/A (8,848 ) 227,060 172,253 18,278 N/A
Free cash flow 50,268   16,165   5,942   51,422   N/A     (4,224 )   119,573 100,535   11,882   N/A

 

_____________________

N/A-Not applicable.
(1)   Proportionately combined free cash flow is equal to the sum of free cash flow attributable to MIC's ownership interest in each of its operating businesses and MIC Corporate.
(2) Proportionately combined free cash flow for MIC Solar is equal to the sum of free cash flow attributable to MIC Solar's ownership interest in each of its operating projects.

IMTT

MIC has a 50% equity interest in International-Matex Tank Terminals (IMTT), the operator of one of the largest independent bulk liquid storage terminal businesses in the U.S. IMTT owns and operates 10 marine storage terminals in the U.S. and is the part owner and operator of two terminals in Canada. The terminals store and handle a wide variety of petroleum grades, chemicals and vegetable and animal oils. To aid in meaningful analysis of the performance of IMTT across periods, the table and discussion below refer to results for 100% of the business, not MIC’s 50% interest.

Historically, storage rates have generally included the provision of ancillary services. More recently, IMTT’s customer contracts have unbundled a number of these services, adding or increasing separate fees for ancillary services. As such, MIC believes that terminal revenue is becoming a more relevant metric for analyzing IMTT’s performance than storage rates.

Terminal revenue increased 8.1% and 8.8% for the quarter and nine months ended September 30, 2013 as compared with 8.5% and 7.1% for the quarter and nine months ended September 30, 2012, respectively.

While average storage rental rates increased by 2.1% and 5.1% for the quarter and nine months ended September 30, 2013, respectively, as compared with 9.2% and 6.9% for the quarter and nine months ended September 30, 2012, revenue from ancillary services increased 19.4% and 15.1% for the quarter and nine months ended September 30, 2013 as compared with 4.7% and 3.2% for the quarter and nine months ended September 30, 2012. Ancillary services include throughput, pumping, as well as some blending and infrastructure usage.

Capacity utilization was 92.9% in the third quarter of 2013 compared with 93.3% in the third quarter of 2012 driven primarily by a single large tank being taken out of service for cleaning and inspection. That tank was returned to service in October 2013 and a second tank of the same size was taken out of service, also for cleaning and inspection.


After spiking in the second quarter of the year, maintenance capital expenditures decreased to $14.5 million and increased to $60.5 million for the quarter and year to date periods, respectively, in 2013 compared with $15.3 million and $30.7 million in the prior comparable periods. The majority of the year to date increase in 2013 pertains to previously disclosed costs to repair the damage from Hurricane Sandy at IMTT’s Bayonne, New Jersey facility and higher costs related to tank cleaning and repair. Maintenance capital expenditures in 2014 are expected to return to the range of levels observed in 2010 through 2012.

IMTT’s tax provision contemplates payment of approximately $13.0 million of federal income taxes and $5.6 million of state income taxes for 2013. The $13.8 million tax provision for the nine months ended September 30, 2013 includes $9.7 million for federal income taxes and $4.1 million for state income taxes.

Free Cash Flow generated by IMTT increased 30.7% to $33.2 million and decreased 8.6% to $91.9 million for the quarter and nine months ended September 30, 2013, respectively, versus the prior comparable periods in 2012. The growth in the quarter was driven primarily by the improved operating results of the business. The decline in Free Cash Flow for the year to date period stems from the higher maintenance capital expenditures incurred during the second quarter of the year and an increased interest expense that more than offset the increase in EBITDA excluding non-cash items.

IMTT declared a distribution of $20.5 million for the third quarter to each of its two shareholders on October 24, 2013.

Hawaii Gas

Hawaii Gas is the owner and operator of the only regulated (“utility”) gas processing and pipeline distribution network on the islands of Hawaii. The business is also the owner and operator of the largest unregulated (“non-utility”) gas distribution operation on the islands.

For the third quarter of 2013 compared with the third quarter of 2012:

  • Non-utility contribution margin increased 1.0% to $15.7 million from $15.5 million
  • Utility contribution margin increased 1.2% to $9.4 million from $9.3 million
  • The combined volume of utility and non-utility gas sold increased 0.9%

In July, Hawaii Gas entered into a new naphtha feedstock supply agreement for its utility operations. The agreement provides the business with a supply of naphtha for the period October 1, 2013 through March 31, 2014.

Hawaii Gas is progressing with initiatives related to the use of LNG (“Liquefied Natural Gas”) as a back-up fuel for its customers. On August 12, 2013, Hawaii Gas filed an application with the Hawaiian Public Utilities Commission seeking approval to use LNG as a back-up to its regulated SNG (“Synthetic Natural Gas”) system. A decision by the HPUC on the matter is expected before the end of the year. The cost of developing this project continues to negatively impact EBITDA.


The Free Cash Flow generated by Hawaii Gas increased to $9.2 million in the third quarter of 2013 from ($440,000) in the third quarter of 2012. Through the nine months ended September 30, 2013, Free Cash Flow increased 58.3% to $25.6 million from $16.2 million in the comparable period in 2012. The increase reflects primarily interest rate swap breakage costs of $8.7 million that were incurred in 2012 and not in 2013 and a decrease in the business’ tax provision. Excluding the impact of the swap break costs, underlying Free Cash Flow grew by 10.8% and 2.9% in the quarter and nine months ended September 30, 2013, respectively, versus the prior comparable periods.

District Energy

MIC’s District Energy business produces chilled water that it distributes via underground pipelines in downtown Chicago to high-rise buildings for use in air conditioning and process cooling systems. The business also operates a facility in Las Vegas, Nevada that supplies both cooling and heating services to three customers there. MIC has a 50.01% (controlling) interest in District Energy. The table and discussion below refer to results for 100% of the business, not MIC’s 50.01% interest.

For the third quarter of 2013 compared with the third quarter of 2012:

  • Cooling consumption revenue decreased 13.1% to $9.1 million from $10.5 million in 2012; and,
  • Capacity revenue increased 3.0% to $5.8 million from $5.6 million - increases in the number of customers being served and inflation adjustments to existing contracts contributed to the improved performance.

District Energy’s results for the third quarter reflect lower average temperatures in 2013 compared with 2012 and the loss of a customer (previously disclosed) that reduced demand for cooling. The business is in dispute with the customer that terminated its contract as the customer has refused to make unamortized lease principal payments to which District Energy believes it is entitled. The parties have agreed to mediate the matter in a process that is expected to commence prior to year end.

MIC expects to commence a refinancing of the long-term debt at District Energy in the fourth quarter of 2013. The refinancing is expected to be completed in the first half of 2014 subject to market conditions remaining favorable.

Free Cash Flow generated by District Energy decreased 7.4% to $5.0 million for the third quarter of 2013 and decreased 10.6% to $10.6 million for the nine months ended September 30, 2013 versus the prior comparable periods. The decreases reflect primarily the reduction in revenue noted above partially offset by a decrease in maintenance capital expenditures.


Atlantic Aviation

Atlantic Aviation owns and operates a network of fixed-base operations (FBO) that primarily provide fuel, terminal and aircraft hangar services to owners and operators of general aviation (GA) aircraft at 62 airports in the U.S. The network is the one of the largest in the U.S. air transportation industry.

For the third quarter of 2013 compared with the third quarter of 2012:

  • The volume of GA fuel sold increased by 3.5% and the average margin on GA fuel sales increased 1.2%; and,
  • Non-fuel gross profit increased 8.9% primarily due to an increase in hangar and office rental revenue of 6.1%.

The performance of Atlantic Aviation is, in general, more closely tied to economic health of the U.S. as a whole than that of MIC’s other businesses. MIC believes that the improvement in gross profit generated by Atlantic Aviation is reflective of the ongoing improvement in the U.S. economy broadly, market share gains and the popularity of the destinations in the portfolio specifically.

Free Cash Flow generated by Atlantic Aviation increased 74.1% to $30.8 million and 66.8% to $85.8 million for the quarter and nine months ended September 30, 2013, respectively, versus the comparable periods in 2012. The increase in cash generation reflects primarily the reduction in the amount and cost of the business’ long-term debt outstanding versus 2012, the improved operating results and lower maintenance capital expenditures.

Free Cash Flow gains at Atlantic Aviation year to date were partially offset by an increase in the business’ provision for current income taxes of $5.6 million compared with $2.0 million through nine months in 2012. The federal portion of Atlantic Aviation’s current income taxes for 2013 is expected to be wholly offset in consolidation by the application of Net Operating Loss carryforwards at the MIC holding company level.

MIC Solar

At the quarter end September 30, 2013, MIC had invested in four contracted solar power generation facilities located in the southwestern U.S., two of which were in operation and two of which were under construction. The Company invested in a fifth facility, also under construction, following the quarter end. When completed, the combined generating capacity of the five facilities is expected to be approximately 57 megawatts of electricity. The power will be sold to nearby utilities and one U.S. Air Force base pursuant to long-term power purchase agreements.

Effective with the third quarter of 2013 the four facilities that comprised MIC Solar constituted a reportable segment under GAAP. MIC has certain rights with respect to decisions involving the management and operations of the projects in MIC Solar and has determined that it is appropriate to consolidate the projects for financial reporting purposes with its co-investor’s interest reflected as “noncontrolling interest” in the consolidated condensed financial statements.


MIC Solar’s facilities, including the two operating facilities and the two acquired in the period, performed as anticipated during the third quarter of 2013. The facilities generated a proportionately combined Free Cash Flow of approximately ($689,000) and $1.0 million for the quarter and nine months ended September 30, 2013, respectively.

MIC Solar incurred approximately $2.0 million of acquisition expenses in the third quarter related to the three facilities currently under development. These expenses contributed to the negative Free Cash Flow for the segment in the period. The two facilities in operation were cash flow positive. Free Cash Flow will be adversely affected in any quarter in which a new facility is acquired given the expenses associated with such acquisitions that cannot be capitalized.

MIC anticipates allocating approximately $35.0 million of additional capital to MIC Solar over the upcoming 12 – 18 months.

Conference Call and WEBCAST

When: Management has scheduled a conference call for 8:00 a.m. Eastern Time on Tuesday, October 29, 2013 during which it will review the Company’s results and answer questions from analysts and investors.

How: To listen to the conference call, please dial +1(650) 521-5252 at least 10 minutes prior to the scheduled start time. A webcast of the call will be accessible via the Company’s website at www.macquarie.com/mic. Please allow extra time prior to the call to visit the site and download the necessary software to listen to the webcast.

Slides: The Company will prepare materials in support of its conference call presentation. The materials will be available for downloading from the Company’s website the morning of October 29, 2013 prior to the conference call. A link to the materials will be located on the homepage of the MIC website.

Replay: For interested individuals unable to participate in the live conference call, a replay will be available after 2:00 p.m. on October 29, 2013 through November 5, 2013, at +1(404) 537-3406, Passcode: 77570782. An online archive of the webcast will be available on the Company’s website for one year following the call. MIC-G


About Macquarie Infrastructure Company

Macquarie Infrastructure Company owns, operates and invests in a diversified group of infrastructure businesses providing basic services to customers in the United States. Its businesses consist of a gas processing and distribution business, Hawaii Gas, a controlling interest in a District Energy business in Chicago, and a 50% interest in a bulk liquid storage terminal business, International-Matex Tank Terminals. MIC also owns and operates an airport services business, Atlantic Aviation, and interests in five solar power generation facilities, collectively MIC Solar. The Company is managed by a wholly-owned subsidiary of the Macquarie Group. For additional information, please visit the Macquarie Infrastructure Company website at www.macquarie.com/mic.

Forward-Looking Statements

This press release contains forward-looking statements. MIC may, in some cases, use words such as "project”, "believe”, "anticipate”, "plan”, "expect”, "estimate”, "intend”, "should”, "would”, "could”, "potentially”, or "may” or other words that convey uncertainty of future events or outcomes to identify these forward-looking statements. Forward-looking statements in this report are subject to a number of risks and uncertainties, some of which are beyond MIC’s control including, among other things: changes in general economic or business conditions; its ability to service, comply with the terms of and refinance debt, successfully integrate and manage acquired businesses, retain or replace qualified employees, manage growth, make and finance future acquisitions, and implement its strategy; its shared decision-making with co-investors over investments including the distribution of dividends; its regulatory environment establishing rate structures and monitoring quality of service, demographic trends, the political environment, the economy, tourism, construction and transportation costs, air travel, environmental costs and risks, fuel and gas costs; its ability to recover increases in costs from customers, reliance on sole or limited source suppliers, risks or conflicts of interests involving its relationship with the Macquarie Group and changes in U.S. federal tax law.

MIC’s actual results, performance, prospects or opportunities could differ materially from those expressed in or implied by the forward-looking statements. Additional risks of which MIC is not currently aware could also cause its actual results to differ. In light of these risks, uncertainties and assumptions, you should not place undue reliance on any forward-looking statements. The forward-looking events discussed in this release may not occur. These forward-looking statements are made as of the date of this release. MIC undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

“Macquarie Group” refers to the Macquarie Group of companies, which comprises Macquarie Group Limited and its worldwide subsidiaries and affiliates. Macquarie Infrastructure Company LLC is not an authorized deposit-taking institution for the purposes of the Banking Act 1959 (Commonwealth of Australia) and its obligations do not represent deposits or other liabilities of Macquarie Bank Limited ABN 46 008 583 542 (MBL). MBL does not guarantee or otherwise provide assurance in respect of the obligations of Macquarie Infrastructure Company LLC.


       
MACQUARIE INFRASTRUCTURE COMPANY LLC
 
CONSOLIDATED CONDENSED BALANCE SHEETS
($ In Thousands, Except Share Data)
 
September 30,

2013

December 31,

2012

ASSETS (Unaudited)
Current assets:
Cash and cash equivalents $ 83,043 $ 141,376
Restricted cash 13,920 3,133
Accounts receivable, less allowance for doubtful accounts
of $806 and $875, respectively 65,115 56,553
Inventories 25,330 20,617
Prepaid expenses 9,473 8,908
Deferred income taxes 6,456 6,803
Equipment lease receivables current 13,149 4,448
Other   9,766     12,072  
Total current assets 226,252 253,910
Property, equipment, land and leasehold improvements, net 777,067 708,031
Equipment lease receivables non-current 17,285 28,177
Investment in unconsolidated business 86,554 75,205
Goodwill 513,939 514,640
Intangible assets, net 600,345 626,902
Deferred financing costs, net of accumulated amortization 22,030 7,845
Other   5,702     8,984  
Total assets $ 2,249,174   $ 2,223,694  
 
LIABILITIES AND MEMBERS' EQUITY
Current liabilities:
Due to manager - related party $ 15,379 $ 50,253
Accounts payable 28,957 26,499
Accrued expenses 40,978 35,499
Current portion of long-term debt 168,005 106,580
Fair value of derivative instruments 13,336 7,450
Other   18,187     19,049  
Total current liabilities 284,842 245,330
Long-term debt, net of current portion 754,685 1,052,584
Deferred income taxes 176,092 169,392
Fair value of derivative instruments - 5,360
Other   53,733     53,463  
Total liabilities   1,269,352     1,526,129  
Commitments and contingencies - -
Members’ equity:
LLC interests, no par value; 500,000,000 authorized; 53,469,879 LLC

interests issued and outstanding at September 30, 2013 and 47,453,943 LLC interests

issued and outstanding at December 31, 2012

1,129,950 883,143
Additional paid in capital 21,447 21,447
Accumulated other comprehensive loss (20,419 ) (20,801 )
Accumulated deficit   (213,331 )   (228,761 )
Total members’ equity 917,647 655,028
Noncontrolling interests   62,175     42,537  
Total equity   979,822     697,565  
Total liabilities and equity $ 2,249,174   $ 2,223,694  
 

           
MACQUARIE INFRASTRUCTURE COMPANY LLC
 

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)
($ In Thousands, Except Share and Per Share Data)
 
Quarter Ended Nine Months Ended

September 30,

September 30,

September 30,

September 30,

 

2013

 

2012

2013

2012

 
Revenue
Revenue from product sales $ 172,169 $ 166,385 $ 513,465 $ 508,468
Revenue from product sales - utility 32,981 35,535 104,095 110,656
Service revenue 57,752 56,214 160,153 160,053
Financing and equipment lease income   817     1,119     2,779     3,448  
Total revenue   263,719     259,253     780,492     782,625  
Costs and expenses
Cost of product sales 113,974 111,677 340,122 346,778
Cost of product sales - utility 28,142 31,001 89,095 94,497
Cost of services 13,584 15,044 37,030 41,489
Selling, general and administrative 53,669 51,571 154,998 157,301
Fees to manager - related party 15,242 29,353 76,912 39,108
Depreciation 10,039 7,596 28,730 22,704
Amortization of intangibles 8,618 8,800 25,866 25,892
Loss from customer contract termination - - 1,626 -
Loss (gain) on disposal of assets   50     (1,706 )   226     (1,379 )
Total operating expenses   243,318     253,336     754,605     726,390  
Operating income 20,401 5,917 25,887 56,235
Other income (expense)
Interest income 39 110 182 116
Interest expense(1) (15,767 ) (15,144 ) (31,190 ) (39,076 )
Loss on extinguishment of debt - - (2,472 ) -
Equity in earnings and amortization charges of investee 8,576 6,989 30,327 23,295
Other income, net   829     249     514     245  
Net income (loss) before income taxes 14,078 (1,879 ) 23,248 40,815
(Provision) benefit for income taxes(2)   (5,829 )   1,758     (9,241 )   (14,698 )
Net income (loss) $ 8,249 $ (121 ) $ 14,007 $ 26,117
Less: net (loss) income attributable to noncontrolling interests   (2,158 )   1,758     (1,423 )   2,766  
Net income (loss) attributable to MIC LLC $ 10,407   $ (1,879 ) $ 15,430   $ 23,351  
 
Basic income (loss) per share attributable to MIC LLC interest holders $ 0.20   $ (0.04 ) $ 0.31   $ 0.50  
Weighted average number of shares outstanding: basic   53,043,185     46,684,627     50,525,617     46,524,980  
Diluted income (loss) per share attributable to MIC LLC interest holders $ 0.20   $ (0.04 ) $ 0.31   $ 0.50  
Weighted average number of shares outstanding: diluted   53,056,095     46,684,627     50,541,513     46,545,903  
Cash dividends declared per share $ 0.8750   $ 0.6875   $ 2.4375   $ 1.5125  
 

_____________________

(1)

 

Interest expense includes losses on derivative instruments of $8.0 million and $9.6 million for the quarter and nine months ended September 30, 2013, respectively, of which net losses of $344,000 and $1.2 million, respectively, was reclassified from accumulated other comprehensive income. For the quarter and nine months ended September 30, 2012, interest expense includes losses on derivative instruments of $9.4 million and $20.3 million, respectively, of which net losses of $6.1 million and $14.6 million, respectively, was reclassified from accumulated other comprehensive income.

(2)

Includes $137,000 and $463,000 of benefit for income taxes from accumulated other comprehensive income reclassifications for the quarter and nine months ended September 30, 2013, respectively. The quarter and nine months ended September 30, 2012 includes benefit for income taxes of $3.1 million and $6.5 million from accumulated other comprehensive income reclassifications, respectively.


MACQUARIE INFRASTRUCTURE COMPANY LLC
 

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)
($ In Thousands)
 
Nine Months Ended

September 30, 2013

September 30, 2012

 
Operating activities
Net income $ 14,007 $ 26,117
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization of property and equipment 33,751 27,740
Amortization of intangible assets 25,866 25,892
Loss (gain) on disposal of assets 106 (1,803 )
Loss from customer contract termination 1,626 -
Equity in earnings and amortization charges of investee (30,327 ) (23,295 )
Equity distributions from investee 19,025 77,920
Amortization of debt financing costs 2,892 3,290
Loss on extinguishment of debt 2,434 -
Adjustments to derivative instruments 1,160 (23,680 )
Base management fees to be settled/settled in LLC interests 23,524 15,599
Performance fees to be settled/settled in LLC interests 53,388 23,509
Equipment lease receivable, net 2,814 2,595
Deferred rent 197 314
Deferred taxes 6,567 10,459
Other non-cash (income) expenses, net (743 ) 2,340
Changes in other assets and liabilities:
Restricted cash (465 ) -
Accounts receivable (8,524 ) (8,882 )
Inventories (3,535 ) 2,232
Prepaid expenses and other current assets 1,026 395
Due to manager - related party 2 68
Accounts payable and accrued expenses (13,794 ) 4,622
Income taxes payable (819 ) 727
Other, net   (2,418 )   (1,576 )
Net cash provided by operating activities   127,760     164,583  
 
Investing activities
Acquisitions of businesses and investments, net of cash acquired (14,666 ) -
Purchases of property and equipment (51,435 ) (25,443 )
Proceeds from sale of assets - 5,625
Return of investment in unconsolidated business - 50,899
Other, net   64     72  
Net cash (used in) provided by investing activities   (66,037 )   31,153  
 
Financing activities
Proceeds from issuance of LLC interests 227,558 -
Proceeds from long-term debt 499,960 191,142
Offering and equity raise costs paid (11,041 ) -
Dividends paid to holders of LLC interests (82,139 ) (47,716 )
Contributions received from noncontrolling interests 22,362 -
Distributions paid to noncontrolling interests (1,652 ) (4,286 )
Payment of long-term debt (758,795 ) (203,428 )
Debt financing costs paid (18,973 ) (2,815 )
Change in restricted cash 4,036 -
Payment of notes and capital lease obligations   (1,372 )   (622 )
Net cash used in financing activities   (120,056 )   (67,725 )
Net change in cash and cash equivalents   (58,333 )   128,011  
 
Cash and cash equivalents, beginning of period   141,376     22,786  
Cash and cash equivalents, end of period $ 83,043   $ 150,797  
 
Supplemental disclosures of cash flow information
Non-cash investing and financing activities:
Accrued purchases of property and equipment $ 12,331   $ 1,742  
Acquisition of equipment through capital leases $ 1,320   $ 2,624  
Issuance of LLC interests to manager for base management fees $ 21,487   $ 13,977  
Issuance of LLC interests to manager for performance fees $ 90,302   $ -  
Issuance of LLC interests to independent directors $ 640   $ 571  
Taxes paid $ 3,493   $ 3,734  
Interest paid $ 28,090   $ 50,863  

             

CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS-MD&A

 
Quarter Ended

September 30,

Change

Favorable/(Unfavorable)

Nine Months Ended
September 30,

  Change

Favorable/(Unfavorable)

  2013       2012     $     %     2013       2012     $     %  
($ In Thousands) (Unaudited)
Revenue  
Revenue from product sales $ 172,169 $ 166,385 5,784 3.5 $ 513,465 $ 508,468 4,997 1.0
Revenue from product sales - utility 32,981 35,535 (2,554 ) (7.2 ) 104,095 110,656 (6,561 ) (5.9 )
Service revenue 57,752 56,214 1,538 2.7 160,153 160,053 100 0.1
Financing and equipment lease income   817     1,119     (302 ) (27.0 )   2,779     3,448     (669 ) (19.4 )
Total revenue   263,719     259,253     4,466   1.7   780,492     782,625     (2,133 ) (0.3 )
Costs and expenses
Cost of product sales 113,974 111,677 (2,297 ) (2.1 ) 340,122 346,778 6,656 1.9
Cost of product sales - utility 28,142 31,001 2,859 9.2 89,095 94,497 5,402 5.7
Cost of services   13,584     15,044     1,460   9.7   37,030     41,489     4,459   10.7
Gross profit 108,019 101,531 6,488 6.4 314,245 299,861 14,384 4.8
Selling, general and administrative 53,669 51,571 (2,098 ) (4.1 ) 154,998 157,301 2,303 1.5
Fees to manager - related party 15,242 29,353 14,111 48.1 76,912 39,108 (37,804 ) (96.7 )
Depreciation 10,039 7,596 (2,443 ) (32.2 ) 28,730 22,704 (6,026 ) (26.5 )
Amortization of intangibles 8,618 8,800 182 2.1 25,866 25,892 26 0.1
Loss from customer contract termination - - - - 1,626 - (1,626 ) NM
Loss (gain) on disposal of assets   50     (1,706 )   (1,756 ) (102.9 )   226     (1,379 )   (1,605 ) (116.4 )
Total operating expenses   87,618     95,614     7,996   8.4   288,358     243,626     (44,732 ) (18.4 )
Operating income 20,401 5,917 14,484 NM 25,887 56,235 (30,348 ) (54.0 )
Other income (expense)
Interest income 39 110 (71 ) (64.5 ) 182 116 66 56.9
Interest expense(1) (15,767 ) (15,144 ) (623 ) (4.1 ) (31,190 ) (39,076 ) 7,886 20.2
Loss on extinguishment of debt - - - - (2,472 ) - (2,472 ) NM
Equity in earnings and amortization charges of investee 8,576 6,989 1,587 22.7 30,327 23,295 7,032 30.2
Other income, net   829     249     580   NM   514     245     269   109.8
Net income (loss) before income taxes 14,078 (1,879 ) 15,957 NM 23,248 40,815 (17,567 ) (43.0 )
(Provision) benefit for income taxes   (5,829 )   1,758     (7,587 ) NM   (9,241 )   (14,698 )   5,457   37.1
Net income (loss) $ 8,249 $ (121 ) 8,370 NM $ 14,007 $ 26,117 (12,110 ) (46.4 )
Less: net (loss) income attributable to noncontrolling interests   (2,158 )   1,758     3,916   NM   (1,423 )   2,766     4,189   151.4
Net income (loss) attributable to MIC LLC $ 10,407   $ (1,879 )   12,286   NM $ 15,430   $ 23,351     (7,921 ) (33.9 )
 

_____________________

NM - Not meaningful

(1)

 

Interest expense includes losses on derivative instruments of $8.0 million and $9.6 million for the quarter and nine months ended September 30, 2013, respectively. For the quarter and nine months ended September 30, 2012, interest expense includes losses on derivative instruments of $9.4 million and $20.3 million, respectively.


           

MACQUARIE INFRASTRUCTURE COMPANY LLC

RECONCILIATION OF CONSOLIDATED NET INCOME (LOSS) ATTRIBUTABLE TO MIC LLC TO EBITDA

EXCLUDING NON-CASH ITEMS AND CASH FROM OPERATING ACTIVITIES TO FREE CASH FLOW

 

 
  Quarter Ended

September 30,

Change

Favorable/(Unfavorable)

  Nine Months Ended

September 30,

    Change

Favorable/(Unfavorable)

  2013       2012       $   %   2013       2012     $     %  
($ In Thousands) (Unaudited)
 
Net income (loss) attributable to MIC LLC(1) $ 10,407 $ (1,879 ) $ 15,430 $ 23,351
Interest expense, net(2) 15,728 15,034 31,008 38,960
Provision (benefit) for income taxes 5,829 (1,758 ) 9,241 14,698
Depreciation(3) 10,039 7,596 28,730 22,704
Depreciation - cost of services(3) 1,620 1,685 5,021 5,036
Amortization of intangibles(4) 8,618 8,800 25,866 25,892
Loss from customer contract termination - - 1,626 -
Loss on extinguishment of debt - - 2,434 -
(Gain) loss on disposal of assets - (1,850 ) 106 (1,803 )
Equity in earnings and amortization charges of investee(5) 2,570 - (11,302 ) -
Base management fees to be settled/settled in LLC interests 8,336 5,844 23,524 15,599
Performance fees to be settled/settled in LLC interests 6,906 23,509 53,388 23,509
Other non-cash (income) expense, net   (1,340 )   2,695         (1,969 )   5,420    
EBITDA excluding non-cash items $ 68,713   $ 59,676     9,037 15.1 $ 183,103   $ 173,366   9,737   5.6
 
EBITDA excluding non-cash items $ 68,713 $ 59,676 $ 183,103 $ 173,366
Interest expense, net(2) (15,728 ) (15,034 ) (31,008 ) (38,960 )
Interest rate swap breakage fees - Hawaii Gas(2) - (8,701 ) - (8,701 )
Interest rate swap breakage fees - Atlantic Aviation(2) - (95 ) - (595 )
Adjustments to derivative instruments recorded in interest expense(2) 4,449 (1,770 ) 1,160 (14,384 )
Amortization of debt financing costs(2) 995 1,347 2,892 3,290
Cash distributions received in excess of equity in earnings and amortization
charges of investee(6) - - - 54,625
Equipment lease receivables, net 740 885 2,814 2,595
Provision/benefit for income taxes, net of changes in deferred taxes (799 ) (1,913 ) (2,674 ) (4,239 )
Changes in working capital   (7,707 )   5,357     (28,527 )   (2,414 )
Cash provided by operating activities 50,663 39,752 127,760 164,583
Changes in working capital 7,707 (5,357 ) 28,527 2,414
Maintenance capital expenditures   (3,889 )   (5,371 )       (10,897 )   (13,832 )  
Free cash flow $ 54,481   $ 29,024     25,457 87.7 $ 145,390   $ 153,165   (7,775 ) (5.1 )
 

_____________________

(1)

 

Net income (loss) attributable to MIC LLC excludes net loss attributable to noncontrolling interests of $2.2 million and $1.4 million for the quarter and nine months ended September 30, 2013, respectively, and net income attributable to noncontrolling interests of $1.8 million and $2.8 million for the quarter and nine months ended September 30, 2012, respectively.

(2)

Interest expense, net, includes adjustment to derivative instruments, non-cash amortization of deferred financing fees and interest rate swap breakage fees at Hawaii Gas and Atlantic Aviation.

(3)

Depreciation - cost of services includes depreciation expense for District Energy, which is reported in cost of services in our consolidated condensed statements of operations. Depreciation and Depreciation - cost of services does not include acquisition- related step-up depreciation expense of $2.0 million and $5.9 million for the quarters and nine months ended September 30, 2013 and 2012, respectively, in connection with our investment in IMTT, which is reported in equity in earnings and amortization charges of investee in our consolidated condensed statements of operations.

(4)

Amortization of intangibles does not include acquisition-related step-up amortization expense of $85,000 and $256,000 for the quarters and nine months ended September 30, 2013 and 2012, respectively, in connection with our investment in IMTT, which is reported in equity in earnings and amortization charges of investee in our consolidated condensed statements of operations.

(5)

Equity in earnings and amortization charges of investee in the above table includes our 50% share of IMTT's earnings, offset by the distributions we received only up to our share of the earnings recorded in the calculation for EBITDA excluding non-cash items. For the quarter and nine months ended September 30, 2013, we recognized equity in earnings and amortization charges of investee income of $8.6 million and $30.3 million, respectively, in the consolidated condensed statements of operations, which was offset by the cash distributions received of $19.0 million during the nine months ended September 30, 2013. For the quarter and nine months ended September 30, 2012, we recognized equity in earnings and amortization charges of investee income of $7.0 million and $23.3 million, respectively, in the consolidated condensed statements of operations, which was fully offset by the cash distributions received during nine months ended September 30, 2012.

(6)

Cash distributions received in excess of equity in earnings and amortization charges of investee in the above table is the excess cumulative distributions received to the cumulative earnings recorded in equity in earnings and amortization charges of investee, since our investment in IMTT, adjusted for the current periods equity in earnings and amortization charges of investee in the calculation from net income (loss) attributable to MIC LLC to EBITDA excluding non-cash items above. The cumulative allocation of the $128.8 million distributions received during nine months September 30, 2012 was $77.9 million recorded in net cash provided by operating activities and $50.9 million recorded in net cash provided by investing activities, as a return on investment, on the consolidated condensed statements of cash flows.


                 
 

IMTT

 
Quarter Ended

September 30,

  Nine Months Ended

September 30,

 
 

Change

 

Change

2013   2012  

Favorable/(Unfavorable)

2013   2012  

Favorable/(Unfavorable)

$   $   $   %   $   $   $   %  
($ In Thousands) (Unaudited)
Revenue
Terminal revenue 120,560 111,532 9,028 8.1 361,412 332,316 29,096 8.8
Environmental response revenue 5,887   7,069   (1,182 ) (16.7 ) 22,341   18,052   4,289   23.8
Total revenue 126,447 118,601 7,846 6.6 383,753 350,368 33,385 9.5
Costs and expenses
Terminal operating costs 50,371 49,509 (862 ) (1.7 ) 145,581 141,886 (3,695 ) (2.6 )
Environmental response operating costs 5,201   5,913   712   12.0 18,661   15,515   (3,146 ) (20.3 )
Total operating costs 55,572 55,422 (150 ) (0.3 ) 164,242 157,401 (6,841 ) (4.3 )
Terminal gross profit 70,189 62,023 8,166 13.2 215,831 190,430 25,401 13.3
Environmental response gross profit 686   1,156   (470 ) (40.7 ) 3,680   2,537   1,143   45.1
Gross profit 70,875 63,179 7,696 12.2 219,511 192,967 26,544 13.8
General and administrative expenses 8,084 7,605 (479 ) (6.3 ) 24,420 22,405 (2,015 ) (9.0 )
Depreciation and amortization 19,051 16,992 (2,059 ) (12.1 ) 56,109 51,016 (5,093 ) (10.0 )
Casualty losses, net(1) 200   -   (200 ) NM 6,700   -   (6,700 ) NM
Operating income 43,540 38,582 4,958 12.9 132,282 119,546 12,736 10.7
Interest expense, net(2) (9,376 ) (10,533 ) 1,157 11.0 (17,099 ) (28,914 ) 11,815 40.9
Other income 620 417 203 48.7 1,804 1,680 124 7.4
Provision for income taxes (15,181 ) (11,631 ) (3,550 ) (30.5 ) (48,894 ) (37,867 ) (11,027 ) (29.1 )
Noncontrolling interest (44 ) (451 ) 407   90.2 (220 ) (636 ) 416   65.4
Net income 19,559   16,384   3,175   19.4 67,873   53,809   14,064   26.1
 
Reconciliation of net income to EBITDA excluding non-cash items:
Net income 19,559 16,384 67,873 53,809
Interest expense, net(2) 9,376 10,533 17,099 28,914
Provision for income taxes 15,181 11,631 48,894 37,867
Depreciation and amortization 19,051 16,992 56,109 51,016
Casualty losses, net(1) 200 - 6,700 -
Other non-cash expenses 253   369     429   647    
EBITDA excluding non-cash items 63,620   55,909   7,711   13.8 197,104   172,253   24,851   14.4
 
EBITDA excluding non-cash items 63,620 55,909 197,104 172,253
Interest expense, net(2) (9,376 ) (10,533 ) (17,099 ) (28,914 )
Adjustments to derivative instruments recorded in interest expense(2) (1,768 ) 461 (15,784 ) 98
Amortization of debt financing costs(2) 824 805 1,990 2,419
Provision for income taxes, net of changes in deferred taxes (5,624 ) (5,962 ) (13,847 ) (14,565 )
Changes in working capital 9,119   5,382   4,035   17,680  
Cash provided by operating activities 56,795 46,062 156,399 148,971
Changes in working capital (9,119 ) (5,382 ) (4,035 ) (17,680 )
Maintenance capital expenditures(3) (14,514 ) (15,303 )   (60,513 ) (30,756 )  
Free cash flow 33,162   25,377   7,785   30.7 91,851   100,535   (8,684 ) (8.6 )
 

_____________________

NM - Not meaningful

(1)

 

Casualty losses, net, includes $2.5 million and $1.5 million related to the quarters ended December 31, 2012 and March 31, 2013, respectively, which were recorded in terminal operating costs in those periods. These amounts have been included in the nine months ended September 30, 2013.

 

(2)

Interest expense, net, includes adjustments to derivative instruments and non-cash amortization of deferred financing fees.

(3)

Maintenance capital expenditures includes a reclassification from growth capital expenditures in the quarters ended December 31, 2012 and March 31, 2013 of $1.2 million and $509,000, respectively. These amounts have been included in the nine months ended September 30, 2013. The classification of capital expenditures as either growth or maintenance is the subject of ongoing review and discussions between MIC and its co-investor in IMTT.


                     

Hawaii Gas

 
Quarter Ended

September 30,

  Nine Months Ended

September 30,

 

Change

Change

2013   2012  

Favorable/(Unfavorable)

2013   2012  

Favorable/(Unfavorable)

$   $   $   %   $   $   $   %  
($ In Thousands) (Unaudited)
Contribution margin
Revenue - non-utility 28,488 26,894 1,594 5.9 88,993 88,271 722 0.8
Cost of revenue - non-utility 12,838   11,393   (1,445 ) (12.7 ) 39,525   40,520   995   2.5
Contribution margin - non-utility 15,650 15,501 149 1.0 49,468 47,751 1,717 3.6
Revenue - utility 32,981 35,535 (2,554 ) (7.2 ) 104,095 110,656 (6,561 ) (5.9 )
Cost of revenue - utility 23,534   26,202   2,668   10.2 74,914   81,568   6,654   8.2
Contribution margin - utility 9,447 9,333 114 1.2 29,181 29,088 93 0.3
Total contribution margin 25,097 24,834 263 1.1 78,649 76,839 1,810 2.4
Production 2,737 2,819 82 2.9 8,119 6,952 (1,167 ) (16.8 )
Transmission and distribution(1) 5,121   5,339   218   4.1 15,727   16,436   709   4.3
Gross profit 17,239 16,676 563 3.4 54,803 53,451 1,352 2.5
Selling, general and administrative expenses 4,818 4,760 (58 ) (1.2 ) 16,139 14,575 (1,564 ) (10.7 )
Depreciation and amortization 2,160   1,965   (195 ) (9.9 ) 6,508   5,808   (700 ) (12.1 )
Operating income 10,261 9,951 310 3.1 32,156 33,068 (912 ) (2.8 )
Interest expense, net(2) (2,097 ) (5,695 ) 3,598 63.2 (5,040 ) (9,102 ) 4,062 44.6
Other expense (146 ) (153 ) 7 4.6 (251 ) (285 ) 34 11.9
Provision for income taxes (3,191 ) (1,631 ) (1,560 ) (95.6 ) (10,669 ) (9,343 ) (1,326 ) (14.2 )
Net income(3) 4,827   2,472   2,355   95.3 16,196   14,338   1,858   13.0
 
Reconciliation of net income to EBITDA excluding non-cash items:
Net income(3) 4,827 2,472 16,196 14,338
Interest expense, net(2) 2,097 5,695 5,040 9,102
Provision for income taxes 3,191 1,631 10,669 9,343
Depreciation and amortization 2,160 1,965 6,508 5,808
Other non-cash expenses(1) 604   869     1,592   2,671    
EBITDA excluding non-cash items 12,879   12,632   247   2.0 40,005   41,262   (1,257 ) (3.0 )
 
EBITDA excluding non-cash items 12,879 12,632 40,005 41,262
Interest expense, net(2) (2,097 ) (5,695 ) (5,040 ) (9,102 )
Interest rate swap breakage fees(2) - (8,701 ) - (8,701 )
Adjustments to derivative instruments recorded in interest expense(2) 269 4,386 (426 ) 3,089
Amortization of debt financing costs(2) 113 507 342 746
Provision for income taxes, net of changes in deferred taxes (94 ) (1,513 ) (3,961 ) (5,888 )
Changes in working capital (3,023 ) 4,822   (3,810 ) 1,117  
Cash provided by operating activities 8,047 6,438 27,110 22,523
Changes in working capital 3,023 (4,822 ) 3,810 (1,117 )
Maintenance capital expenditures (1,916 ) (2,056 )   (5,337 ) (5,241 )  
Free cash flow 9,154   (440 ) 9,594   NM 25,583   16,165   9,418   58.3
 

_____________________

NM - Not meaningful

(1)

 

For the nine months ended September 30, 2013, transmission and distribution includes non-cash income of $489,000 for asset retirement obligation credit. This non-cash income is excluded when calculating EBITDA excluding non-cash items.

(2)

Interest expense, net, includes adjustments to derivative instruments, non-cash amortization of deferred financing fees and interest rate swap breakage fees.

(3)

Corporate allocation expense, intercompany fees and the tax effect have been excluded from the above table as they are eliminated on consolidation at the MIC Inc. level.


District Energy

                     
 
Quarter Ended

September 30,

  Nine Months Ended

September 30,

 

Change

Change

2013   2012  

Favorable/(Unfavorable)

2013   2012  

Favorable/(Unfavorable)

$   $   $   %   $   $   $   %  
($ In Thousands) (Unaudited)
 
Cooling capacity revenue 5,780 5,613 167 3.0 17,197 16,675 522 3.1
Cooling consumption revenue 9,114 10,490 (1,376 ) (13.1 ) 16,282 20,853 (4,571 ) (21.9 )
Other revenue 692 702 (10 ) (1.4 ) 2,139 2,023 116 5.7
Finance lease revenue 817   1,119   (302 ) (27.0 ) 2,779   3,448   (669 ) (19.4 )
Total revenue 16,403   17,924   (1,521 ) (8.5 ) 38,397   42,999   (4,602 ) (10.7 )
Direct expenses — electricity 5,733 5,901 168

2.8

10,360 12,587 2,227 17.7
Direct expenses — other(1) 4,787   5,237   450  

8.6

14,821   14,866   45   0.3
Direct expenses — total 10,520 11,138 618 5.5 25,181 27,453 2,272 8.3
Gross profit 5,883 6,786 (903 ) (13.3 ) 13,216 15,546 (2,330 ) (15.0 )
Selling, general and administrative expenses 935 823 (112 ) (13.6 ) 2,698 2,675 (23 ) (0.9 )
Amortization of intangibles 329 345 16 4.6 997 1,027 30 2.9
Loss from customer contract termination -   -   -   - 1,626   -   (1,626 ) NM
Operating income 4,619 5,618 (999 ) (17.8 ) 7,895 11,844 (3,949 ) (33.3 )
Interest expense, net(2) (1,275 ) (2,065 ) 790 38.3 (3,793 ) (6,521 ) 2,728 41.8
Other income 672 436 236 54.1 803 568 235 41.4
Provision for income taxes (1,584 ) (1,560 ) (24 ) (1.5 ) (1,797 ) (2,171 ) 374 17.2
Noncontrolling interest (174 ) (203 ) 29   14.3 (545 ) (622 ) 77   12.4
Net income 2,258   2,226   32   1.4 2,563   3,098   (535 ) (17.3 )
 
Reconciliation of net income to EBITDA excluding non-cash items:
Net income 2,258 2,226 2,563 3,098
Interest expense, net(2) 1,275 2,065 3,793 6,521
Provision for income taxes 1,584 1,560 1,797 2,171
Depreciation(1) 1,620 1,685 5,021 5,036
Amortization of intangibles 329 345 997 1,027
Loss from customer contract termination - - 1,626 -
Other non-cash expenses 205   156     413   425    
EBITDA excluding non-cash items 7,271   8,037   (766 ) (9.5 ) 16,210   18,278   (2,068 ) (11.3 )
 
EBITDA excluding non-cash items 7,271 8,037 16,210 18,278
Interest expense, net(2) (1,275 ) (2,065 ) (3,793 ) (6,521 )
Adjustments to derivative instruments recorded in interest expense(2) (1,371 ) (589 ) (4,018 ) (1,458 )
Amortization of debt financing costs(2) 177 177 531 522
Equipment lease receivable, net 740 885 2,814 2,595
Provision for income taxes, net of changes in deferred taxes (529 ) (619 ) (805 ) (892 )
Changes in working capital (192 ) 419   (2,379 ) (1,453 )
Cash provided by operating activities 4,821 6,245 8,560 11,071
Changes in working capital 192 (419 ) 2,379 1,453
Maintenance capital expenditures (63 ) (478 )   (312 ) (642 )  
Free cash flow 4,950   5,348   (398 ) (7.4 ) 10,627   11,882   (1,255 ) (10.6 )
 

_____________________

NM - Not meaningful

(1)

 

Includes depreciation expense of $1.6 million and $5.0 million for the quarter and nine months ended September 30, 2013, respectively, and $1.7 million and $5.0 million for the quarter and nine months ended September 30, 2012, respectively.

(2)

Interest expense, net, includes adjustments to derivative instruments and non-cash amortization of deferred financing fees.


                     

Atlantic Aviation

 
 

Quarter Ended

 

Nine Months Ended

 
2013   2012  

Change

  2013   2012  

Change

$   $   $   %   $   $   $   %  
($ In Thousands) (Unaudited)
Revenue
Fuel revenue 141,032 139,491 1,541 1.1 417,305 420,197 (2,892 ) (0.7 )
Non-fuel revenue 42,166   39,409   2,757   7.0 124,535   120,502   4,033   3.3
Total revenue 183,198 178,900 4,298 2.4 541,840 540,699 1,141 0.2
Cost of revenue
Cost of revenue-fuel 97,050 96,925 (125 ) (0.1 ) 289,873 295,800 5,927 2.0
Cost of revenue-non-fuel 3,503   3,906   403   10.3 11,849   14,036   2,187   15.6
Total cost of revenue 100,553 100,831 278 0.3 301,722 309,836 8,114 2.6
Fuel gross profit 43,982 42,566 1,416 3.3 127,432 124,397 3,035 2.4
Non-fuel gross profit 38,663   35,503   3,160   8.9 112,686   106,466   6,220   5.8
Gross profit 82,645   78,069   4,576   5.9 240,118   230,863   9,255   4.0
Selling, general and administrative expenses 44,342 43,983 (359 ) (0.8 ) 130,729 130,830 101 0.1
Depreciation and amortization 14,072 14,086 14 0.1 41,917 41,761 (156 ) (0.4 )
Loss (gain) on disposal of assets 50   (1,706 ) (1,756 ) (102.9 ) 226   (1,379 ) (1,605 ) (116.4 )
Operating income 24,181 21,706 2,475 11.4 67,246 59,651 7,595 12.7
Interest expense, net(1) (11,481 ) (7,381 ) (4,100 ) (55.5 ) (20,206 ) (23,448 ) 3,242 13.8
Loss on extinguishment of debt - - - - (2,472 ) - (2,472 ) NM
Other income (expense) 54 (10 ) 64 NM 54 38 16 42.1
Provision for income taxes (5,185 ) (6,531 ) 1,346   20.6 (18,009 ) (15,815 ) (2,194 ) (13.9 )
Net income(2) 7,569   7,784   (215 ) (2.8 ) 26,613   20,426   6,187   30.3
 
Reconciliation of net income to EBITDA excluding non-cash items:
Net income(2) 7,569 7,784 26,613 20,426
Interest expense, net(1) 11,481 7,381 20,206 23,448
Provision for income taxes 5,185 6,531 18,009 15,815
Depreciation and amortization 14,072 14,086 41,917 41,761
Loss on extinguishment of debt - - 2,434 -
(Gain) loss on disposal of assets - (1,850 ) 106 (1,803 )
Other non-cash income (1 ) (39 )   (116 ) (268 )  
EBITDA excluding non-cash items 38,306   33,893   4,413   13.0 109,169   99,379   9,790   9.9
 
EBITDA excluding non-cash items 38,306 33,893 109,169 99,379
Interest expense, net(1) (11,481 ) (7,381 ) (20,206 ) (23,448 )
Interest rate swap breakage fees(1) - (95 ) - (595 )
Adjustments to derivative instruments recorded in interest expense(1) 5,551 (5,567 ) 5,604 (16,015 )
Amortization of debt financing costs(1) 702 663 2,011 2,022
Provision for income taxes, net of changes in deferred taxes (394 ) (997 ) (5,569 ) (1,972 )
Changes in working capital (3,609 ) 1,904   1,284   2,549  
Cash provided by operating activities 29,075 22,420 92,293 61,920
Changes in working capital 3,609 (1,904 ) (1,284 ) (2,549 )
Maintenance capital expenditures (1,910 ) (2,837 )   (5,248 ) (7,949 )  
Free cash flow 30,774   17,679   13,095   74.1 85,761   51,422   34,339   66.8
 

_____________________

NM - Not meaningful

(1)

 

Interest expense, net, includes adjustments to derivative instruments, non-cash amortization of deferred financing fees and interest rate swap breakage fees.

(2)

Corporate allocation expense, intercompany fees and the tax effect have been excluded from the above table as they are eliminated on consolidation at the MIC Inc. level.


         
MIC Solar
 
  Quarter Ended

September 30,

Nine Months Ended

September 30,

2013   2013  
$   $  
($ In Thousands) (Unaudited)
 
Contracted revenue 2,649 7,167
Cost of revenue 396   1,058  
Gross profit 2,253 6,109
 
Selling, general and administrative expenses 2,296 2,875
Depreciation 2,096   5,174  
Operating loss (2,139 ) (1,940 )
 
Interest expense, net(1) (897 ) (2,121 )
Other income, net 248 2,353
Benefit (provision) for income taxes 27 (1,175 )
Noncontrolling interest 4,010   4,125  
Net income 1,249   1,242  
 
Reconciliation of net income to EBITDA excluding non-cash items:
Net income 1,249 1,242
Interest expense, net(1) 897 2,121
(Benefit) provision for income taxes (27 ) 1,175
Depreciation 2,096 5,174
Other non-cash income (4,010 ) (6,555 )
EBITDA excluding non-cash items 205   3,157  
 
EBITDA excluding non-cash items 205 3,157
Interest expense, net(1) (897 ) (2,121 )
Amortization of debt financing costs(1) 3 8
Changes in working capital (1,256 ) (15,954 )
Cash used in operating activities (1,945 ) (14,910 )
Changes in working capital 1,256   15,954  
Free cash flow (689 ) 1,044  
 

_____________________

(1)   Interest expense, net, includes non-cash amortization of deferred financing fees.

Corporate

                     
 
 
 

Quarter Ended

 

Nine Months Ended

 
2013   2012  

Change

2013   2012  

Change

$   $   $   %   $   $   $   %  
($ In Thousands) (Unaudited)
 
Base management fees 8,336 5,844 (2,492 ) (42.6 ) 23,524 15,599 (7,925 ) (50.8 )
Performance fees 6,906 23,509 16,603 70.6 53,388 23,509 (29,879 ) (127.1 )
Selling, general and administrative expenses 1,278   2,005   727   36.3 4,987   9,221   4,234   45.9
Operating loss (16,520 ) (31,358 ) 14,838 47.3 (81,899 ) (48,329 ) (33,570 ) (69.5 )
Interest income 22 107 (85 ) (79.4 ) 152 111 41 36.9
Other expense, net - (23 ) 23 100.0 (16 ) (75 ) 59 78.7
Benefit for income taxes 4,104 11,480 (7,376 ) (64.3 ) 22,409 12,631 9,778 77.4
Noncontrolling interest (1,678 ) (1,556 ) (122 ) (7.8 ) (2,157 ) (2,144 ) (13 ) (0.6 )
Net loss(1) (14,072 ) (21,350 ) 7,278   34.1 (61,511 ) (37,806 ) (23,705 ) (62.7 )
 
Reconciliation of net loss to EBITDA excluding non-cash items:
Net loss(1) (14,072 ) (21,350 ) (61,511 ) (37,806 )
Interest income (22 ) (107 ) (152 ) (111 )
Benefit for income taxes (4,104 ) (11,480 ) (22,409 ) (12,631 )
Base management fees to be settled/settled in LLC interests 8,336 5,844 23,524 15,599
Performance fees to be settled/settled in LLC interests 6,906 23,509 53,388 23,509
Other non-cash expense 1,862   1,709     2,697   2,592    
EBITDA excluding non-cash items (1,094 ) (1,875 ) 781   41.7 (4,463 ) (8,848 ) 4,385   49.6
 
EBITDA excluding non-cash items (1,094 ) (1,875 ) (4,463 ) (8,848 )
Interest income 22 107 152 111
Benefit for income taxes, net of changes in deferred taxes 218 1,216 7,661 4,513
Changes in working capital 373   (1,788 ) (7,668 ) (4,627 )
Cash used in operating activities (481 ) (2,340 ) (4,318 ) (8,851 )
Changes in working capital (373 ) 1,788     7,668   4,627    
Free cash flow (854 ) (552 ) (302 ) (54.7 ) 3,350   (4,224 ) 7,574   179.3
 

_____________________

(1)

 

Corporate allocation expense, intercompany fees and the tax effect have been excluded from the above table as they are eliminated on consolidation.


         

MACQUARIE INFRASTRUCTURE COMPANY LLC

RECONCILIATION OF PROPORTIONATELY COMBINED NET INCOME (LOSS) TO EBITDA EXCLUDING
NON-CASH ITEMS AND CASH FROM OPERATING ACTIVITIES TO FREE CASH FLOW
 

For the Quarter Ended September 30, 2013

 
($ in Thousands) (Unaudited) IMTT 50%   Hawaii Gas  

District
Energy
50.01%

 

Atlantic
Aviation

  MIC Solar(2)   MIC Corporate  

Proportionately
Combined(1)

IMTT
100%

 

District
Energy
100%

 

MIC Solar
100%

             
Net income (loss) attributable to MIC LLC 9,780 4,827 1,129 7,569 1,278 (14,072 ) 10,511 19,559 2,258 1,249

Interest expense (income), net(3)

4,688 2,097 638 11,481 616 (22 ) 19,498 9,376 1,275 897
Provision (benefit) for income taxes 7,591 3,191 792 5,185 (26 ) (4,104 ) 12,629 15,181 1,584 (27 )
Depreciation 9,135 1,849 810 6,094 1,399 - 19,287 18,270 1,620 2,096
Amortization of intangibles 391 311 165 7,978 - - 8,844 781 329 -
Casualty losses, net 100 - - - - - 100 200 - -
Base management fee to be settled in LLC interests - - - - - 8,336 8,336 - - -
Performance fee to be settled in LLC interests - - - - - 6,906 6,906 - - -
Other non-cash expense (income) 127     604     103     (1 )   (3,737 )   1,862     (1,043 ) 253     205     (4,010 )
EBITDA excluding non-cash items 31,810     12,879     3,636     38,306     (470 )   (1,094 )   85,067   63,620     7,271     205  
 
EBITDA excluding non-cash items 31,810 12,879 3,636 38,306 (470 ) (1,094 ) 85,067 63,620 7,271 205

Interest (expense) income, net(3)

(4,688 ) (2,097 ) (638 ) (11,481 ) (616 ) 22 (19,498 ) (9,376 ) (1,275 ) (897 )
Adjustments to derivative instruments recorded in interest expense, net(3) (884 ) 269 (686 ) 5,551 - - 4,250 (1,768 ) (1,371 ) -
Amortization of deferred finance charges(3) 412 113 89 702 3 - 1,319 824 177 3
Equipment lease receivables, net - - 370 - - - 370 - 740 -
Provision/benefit for income taxes, net of changes in deferred taxes (2,812 ) (94 ) (265 ) (394 ) - 218 (3,347 ) (5,624 ) (529 ) -
Changes in working capital 4,560     (3,023 )   (96 )   (3,609 )   (2,085 )   373     (3,881 ) 9,119     (192 )   (1,256 )
Cash provided by (used in) operating activities 28,398 8,047 2,411 29,075 (3,168 ) (481 ) 64,281 56,795 4,821 (1,945 )
Changes in working capital (4,560 ) 3,023 96 3,609 2,085 (373 ) 3,881 (9,119 ) 192 1,256
Maintenance capital expenditures (7,257 )   (1,916 )   (32 )   (1,910 )   -     -     (11,115 ) (14,514 )   (63 )   -  
Free cash flow 16,581     9,154     2,475     30,774     (1,083 )   (854 )   57,047   33,162     4,950     (689 )
 
 
 

For the Quarter Ended September 30, 2012

     
($ in Thousands) (Unaudited) IMTT 50%   Hawaii Gas  

District
Energy
50.01%

 

Atlantic
Aviation

  MIC Corporate  

Proportionately
Combined(1)

IMTT
100%

 

District
Energy
100%

 
Net income (loss) attributable to MIC LLC 8,192 2,472 1,113 7,784 (21,350 ) (1,789 ) 16,384 2,226
Interest expense (income), net(3) 5,267 5,695 1,033 7,381 (107 ) 19,268 10,533 2,065
Provision (benefit) for income taxes 5,816 1,631 780 6,531 (11,480 ) 3,278 11,631 1,560
Depreciation 8,181 1,759 843 5,837 - 16,619 16,361 1,685
Amortization of intangibles 316 206 173 8,249 - 8,943 631 345

Gain on disposal of assets

- - - (1,850 ) - (1,850 ) - -
Base management fee settled in LLC interests - - - - 5,844 5,844 - -
Performance fee settled in LLC interests - - - - 23,509 23,509 - -
Other non-cash expense (income) 185     869     78     (39 )   1,709     2,802   369     156  
EBITDA excluding non-cash items 27,955     12,632     4,019     33,893     (1,875 )   76,624   55,909     8,037  
 
EBITDA excluding non-cash items 27,955 12,632 4,019 33,893 (1,875 ) 76,624 55,909 8,037
Interest (expense) income, net(3) (5,267 ) (5,695 ) (1,033 ) (7,381 ) 107 (19,268 ) (10,533 ) (2,065 )
Interest rate swap breakage fees - Hawaii Gas(3) - (8,701 ) - - - (8,701 ) - -
Interest rate swap breakage fees - Atlantic Aviation(3) - - - (95 ) - (95 ) - -
Adjustments to derivative instruments recorded in interest expense, net(2) 231 4,386 (295 ) (5,567 ) - (1,245 ) 461 (589 )
Amortization of deferred finance charges(3) 403 507 89 663 - 1,661 805 177
Equipment lease receivables, net - - 443 - - 443 - 885
Provision/benefit for income taxes, net of changes in deferred taxes (2,981 ) (1,513 ) (310 ) (997 ) 1,216 (4,585 ) (5,962 ) (619 )
Changes in working capital 2,691     4,822     210     1,904     (1,788 )   7,839   5,382     419  
Cash provided by (used in) operating activities 23,031 6,438 3,123 22,420 (2,340 ) 52,672 46,062 6,245
Changes in working capital (2,691 ) (4,822 ) (210 ) (1,904 ) 1,788 (7,839 ) (5,382 ) (419 )
Maintenance capital expenditures (7,652 )   (2,056 )   (239 )   (2,837 )   -     (12,784 ) (15,303 )   (478 )
Free cash flow 12,689     (440 )   2,675     17,679     (552 )   32,050   25,377     5,348  
 

_____________________

(1)

 

Proportionately combined free cash flow is equal to the sum of free cash flow attributable to MIC's ownership interest in each of its operating businesses and MIC Corporate.

(2)

Proportionately combined free cash flow for MIC Solar is equal to the sum of free cash flow attributable to MIC Solar's ownership interest in each of its operating projects.

(3)

Interest expense, net, includes adjustments to derivative instruments, non-cash amortization of deferred financing fees and interest rate swap breakage fees for 2012.


           

For the Nine Months Ended September 30, 2013

         
($ in Thousands) (Unaudited) IMTT 50%   Hawaii Gas  

District
Energy
50.01%

 

Atlantic
Aviation

  MIC Solar(2)   MIC Corporate  

Proportionately
Combined(1)

IMTT 100%  

District
Energy
100%

 

MIC Solar
100%

           
Net income (loss) attributable to MIC LLC 33,937 16,196 1,282 26,613 2,136 (61,511 ) 18,652 67,873 2,563 1,242

Interest expense (income), net(3)

8,550 5,040 1,897 20,206 1,336 (152 ) 36,876 17,099 3,793 2,121
Provision (benefit) for income taxes 24,447 10,669 899 18,009 1,175 (22,409 ) 32,790 48,894 1,797 1,175
Depreciation 27,328 5,573 2,511 17,983 3,193 - 56,588 54,656 5,021 5,174
Amortization of intangibles 727 935 499 23,934 - - 26,094 1,453 997 -
Loss from customer contract termination - - 813 - - - 813 - 1,626 -
Casualty losses, net(4) 3,350 - - - - - 3,350 6,700 - -

Loss on disposal of assets

- - - 106 - - 106 - - -
Loss on extinguishment of debt - - - 2,434 - - 2,434 - - -

Base management fee settled/to be settled in LLC interests

- - - - - 23,524 23,524 - - -

Performance fee settled/to be settled in LLC interests

- - - - - 53,388 53,388 - - -
Other non-cash expense (income) 215     1,592     207     (116 )   (6,775 )   2,697     (2,181 ) 429     413     (6,555 )
EBITDA excluding non-cash items 98,552     40,005     8,107     109,169     1,065     (4,463 )   252,435   197,104     16,210     3,157  
 
EBITDA excluding non-cash items 98,552 40,005 8,107 109,169 1,065 (4,463 ) 252,435 197,104 16,210 3,157

Interest (expense) income, net(3)

(8,550 ) (5,040 ) (1,897 ) (20,206 ) (1,336 ) 152 (36,876 ) (17,099 ) (3,793 ) (2,121 )
Adjustments to derivative instruments recorded in interest expense, net(3) (7,892 ) (426 ) (2,009 ) 5,604 - - (4,723 ) (15,784 ) (4,018 ) -
Amortization of deferred finance charges(3) 995 342 266 2,011 8 - 3,622 1,990 531 8
Equipment lease receivables, net - - 1,407 - - - 1,407 - 2,814 -
Provision/benefit for income taxes, net of changes in deferred taxes (6,924 ) (3,961 ) (403 ) (5,569 ) - 7,661 (9,195 ) (13,847 ) (805 ) -
Changes in working capital 2,018     (3,810 )   (1,190 )   1,284     (14,213 )   (7,668 )   (23,579 ) 4,035     (2,379 )   (15,954 )
Cash provided by (used in) operating activities 78,200 27,110 4,281 92,293 (14,476 ) (4,318 ) 183,089 156,399 8,560 (14,910 )
Changes in working capital (2,018 ) 3,810 1,190 (1,284 ) 14,213 7,668 23,579 (4,035 ) 2,379 15,954
Maintenance capital expenditures(5) (30,257 )   (5,337 )   (156 )   (5,248 )   -     -     (40,998 ) (60,513 )   (312 )   -  
Free cash flow 45,926     25,583     5,315     85,761     (263 )   3,350     165,671   91,851     10,627     1,044  
 
 

For the Nine Months Ended September 30, 2012

     
($ in Thousands) (Unaudited) IMTT 50%   Hawaii Gas  

District
Energy
50.01%

 

Atlantic
Aviation

  MIC Corporate  

Proportionately
Combined(1)

IMTT
100%

 

District Energy
100%

 
 
Net income (loss) attributable to MIC LLC 26,905 14,338 1,549 20,426 (37,806 ) 25,412 53,809 3,098
Interest expense (income), net(3) 14,457 9,102 3,261 23,448 (111 ) 50,157 28,914 6,521
Provision (benefit) for income taxes 18,934 9,343 1,086 15,815 (12,631 ) 32,546 37,867 2,171
Depreciation 24,437 5,191 2,519 17,513 - 49,660 48,874 5,036
Amortization of intangibles 1,071 617 514 24,248 - 26,450 2,142 1,027

Gain on disposal of assets

- - - (1,803 ) - (1,803 ) - -
Base management fee settled in LLC interests - - - - 15,599 15,599 - -
Performance fee settled in LLC interests - - - - 23,509 23,509 - -
Other non-cash expense (income) 324     2,671     213     (268 )   2,592     5,531   647     425  
EBITDA excluding non-cash items 86,127     41,262     9,141     99,379     (8,848 )   227,060   172,253     18,278  
 
EBITDA excluding non-cash items 86,127 41,262 9,141 99,379 (8,848 ) 227,060 172,253 18,278
Interest (expense) income, net(3) (14,457 ) (9,102 ) (3,261 ) (23,448 ) 111 (50,157 ) (28,914 ) (6,521 )
Interest rate swap breakage fees - Hawaii Gas(3) - (8,701 ) - - - (8,701 ) - -
Interest rate swap breakage fees - Atlantic Aviation(3) - - - (595 ) - (595 ) - -
Adjustments to derivative instruments recorded in interest expense, net (3) 49 3,089 (729 ) (16,015 ) - (13,606 ) 98 (1,458 )
Amortization of deferred finance charges(3) 1,210 746 261 2,022 - 4,239 2,419 522
Equipment lease receivables, net - - 1,298 - - 1,298 - 2,595
Provision/benefit for income taxes, net of changes in deferred taxes (7,283 ) (5,888 ) (446 ) (1,972 ) 4,513 (11,076 ) (14,565 ) (892 )
Changes in working capital 8,840     1,117     (727 )   2,549     (4,627 )   7,152   17,680     (1,453 )
Cash provided by (used in) operating activities 74,486 22,523 5,537 61,920 (8,851 ) 155,614 148,971 11,071
Changes in working capital (8,840 ) (1,117 ) 727 (2,549 ) 4,627 (7,152 ) (17,680 ) 1,453
Maintenance capital expenditures (15,378 )   (5,241 )   (321 )   (7,949 )   -     (28,889 ) (30,756 )   (642 )
Free cash flow 50,268     16,165     5,942     51,422     (4,224 )   119,573   100,535     11,882  
 

_____________________

(1)

 

Proportionately combined free cash flow is equal to the sum of free cash flow attributable to MIC's ownership interest in each of its operating businesses and MIC Corporate.

(2)

Proportionately combined free cash flow for MIC Solar is equal to the sum of free cash flow attributable to MIC Solar's ownership interest in each of its operating projects.

(3)

Interest expense, net, includes adjustments to derivative instruments, non-cash amortization of deferred financing fees and interest rate swap breakage fees for 2012.

(4)

Casualty losses, net, includes $2.5 million and $1.5 million related to the quarters ended December 31, 2012 and March 31, 2013, respectively, which were recorded in terminal operating costs in those periods. These amounts have been included in the nine months ended September 30, 2013.

(5)

Maintenance capital expenditures at IMTT includes a reclassification from growth capital expenditures in the quarters ended December 31, 2012 and March 31, 2013 of $1.2 million and $509,000, respectively. These amounts have been included in the nine months ended September 30, 2013.

CONTACT:
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Macquarie Infrastructure Company
Jay A. Davis, 212-231-1825
Investor Relations
or
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Macquarie Infrastructure Company
Paula Chirhart, 212-231-1310
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