COST: 367.5 $MM
VOLUMES: 782 MW
NEW YORK, Nov. 9, 2020 /PRNewswire/ -- Macquarie Infrastructure Corporation (NYSE: MIC) today announced its operational and financial results for the third quarter 2020 and its entry into an agreement to sell its International-Matex Tank Terminals (IMTT) business to an affiliate of Riverstone Holdings LLC.
On November 8, 2020, MIC entered into an agreement to sell its bulk liquid storage and handling business, IMTT, to an entity affiliated with Riverstone Holdings LLC for approximately $2.685 billion in cash and assumed debt. The transaction is expected to close in late 2020 or early 2021, subject to receipt of approvals and satisfaction of the conditions precedent set forth in the sales agreement.
MIC intends to use all net proceeds, after payment of capital gains taxes and additional transaction related expenses and fees, to pay a special dividend of approximately $10.75 per share and to repay or offset holding company level debt of approximately $400 million. Both the record date for the dividend and final amount remain subject to approval by the MIC board of directors, which is expected following the closing of the sale based on business and economic conditions at the time. Pro-forma for the completion of the sale and the payment of the special dividend, the Company expects its leverage ratio to be approximately 4.3x net debt to EBITDA.
On closing of the sale, MIC anticipates paying capital gains taxes of approximately $158 million, additional transaction expenses of approximately $25 million and a payment to the Company's external Manager of approximately $28 million pursuant to the Disposition Agreement entered into between the Company and the Manager on October 30, 2019.
"We are pleased with the result of our efforts to sell IMTT against the challenging backdrop created by the COVID-19 pandemic," said Christopher Frost, MIC's chief executive officer. "We have achieved a favorable outcome for MIC shareholders consistent with our strategy of unlocking value via sales of our operating businesses."
"We remain committed to our pursuit of strategic alternatives for our ongoing businesses and to maintaining our balance sheet strength and financial flexibility throughout the process," Frost added.
Lazard and Evercore acted as financial advisors to MIC, and White & Case provided legal support.
IMTT has been classified as a discontinued operation for financial reporting purposes as of September 30, 2020. All prior periods referenced in this press release and in the Company's filing with the SEC on Form 10-Q have been restated to reflect this classification. MIC's continuing operations comprise Atlantic Aviation, MIC Hawaii, and the Company's Corporate and Other segment.
MIC's results for the third quarter reflect strong sequential growth in cash generation by Atlantic Aviation based on stable domestic general aviation flight activity at levels consistent with the end of the second quarter together with effective expense management. The Company also reported performance by its MIC Hawaii businesses consistent with the second quarter of 2020 reflective of COVID-related restrictions on tourism in the state.
Commenting on the Company's results for the quarter, Frost said: "The continued stable performance of Atlantic Aviation and MIC Hawaii underpinned our decision to repay most of the funds previously drawn on our revolving credit facility. We are confident in the outlook for our ongoing operations and their ability to remain profitable as the economy recovers from the effects of the pandemic."
Third Quarter 2020 Financial Results of Continuing Operations
MIC generated a net loss from continuing operations of $(158) million for the quarter, compared with net income of $2 million in the third quarter of 2019. The net loss reflects reduced revenue from each of Atlantic Aviation and MIC Hawaii driven by the COVID-related decline in business activity versus the prior comparable period. In addition, given the probability that IMTT will be sold in a taxable transaction, the Company recorded a deferred tax liability on the difference between the book and tax basis in its investment in IMTT. The net loss was partially offset by reduced operating expenses and lower interest expense.
The Company reported Adjusted EBITDA excluding non-cash items of $60 million in the third quarter, down from $69 million in the prior comparable period. The decrease reflects primarily the reduced contributions from each of Atlantic Aviation and MIC Hawaii.
MIC generated cash from operating activities of $44 million in the third quarter, down from $101 million in the prior comparable period. The decrease primarily reflects the absence of a federal income tax liability in the prior comparable quarter related to the gain on sale of the Company's renewable power generation businesses that was paid in December of 2019. The decrease also reflects the reduced EBITDA excluding non-cash items generated by each of Atlantic Aviation and MIC Hawaii, partially offset by favorable movements in accounts receivable.
The Company reported Adjusted Free Cash Flow of $38 million for the third quarter, down from $50 million in the prior comparable period. The decrease reflects the reduced Adjusted EBITDA excluding non-cash items and a current income tax liability versus an income tax benefit in the prior comparable period. These were partially offset by lower interest expense and lower maintenance capital expenditures.
Third Quarter 2020 Financial Results of Discontinued Operations
MIC's discontinued operations comprise IMTT and its subsidiaries in the current period. In the prior periods reported, discontinued operations include IMTT, MIC's portfolio of wind and solar power generation businesses, and a solar power development company.
MIC generated a net loss from discontinued operations of $(735) million for the quarter versus net income of $59 million in the prior comparable period. The net loss reflects primarily an impairment of the IMTT disposal group of $750 million including a $725 million write-down of the value of the goodwill of IMTT and the absence of the gain on the sale of solar power generation businesses and the solar power development company, which were concluded in the third quarter of 2019.
Third Quarter 2020 Segment Results
Continuing Operations
"Domestic general aviation flight activity in the third quarter was stable and modestly improved relative to the end of the second quarter, although down approximately 14% industry wide and down 19% at the airports on which Atlantic Aviation operates, versus the prior comparable period. The stability in flight activity throughout the quarter and continued effective cost control resulted in substantially better cash generation by Atlantic Aviation versus the second quarter," said Frost.
"The performance of MIC Hawaii during the third quarter was consistent with the second quarter with the amount of gas sold declining by approximately 37% versus the third quarter in 2019," said Frost. "The number of visitors to Hawaii dropped by 94% in the third quarter versus the same period in 2019, although the easing of quarantine requirements on October 15, 2020 is expected to result in an increase in the number of visitors and to contribute to modest growth in gas sales by our Hawaii Gas business in the fourth quarter."
MIC's Corporate and Other segment includes primarily costs of managing the public company including fees payable to the Company's external manager, interest expense on holding company level debt facilities, and expenses related to the Company's pursuit of strategic alternatives.
Discontinued Operations
"IMTT performed well in the third quarter as petroleum product prices remained constructive for storage," noted Frost. "The outlook for storage demand across petroleum, chemical and agricultural products remains favorable and overall utilization continues to be above historically normal levels causing some customers to seek renewal of contracts ahead of their scheduled maturity to ensure ongoing access to capacity."
Balance Sheet Strength and Financial Flexibility
MIC's aggregate leverage ratio was 4.8x net debt/Adjusted EBITDA excluding non-cash items (trailing twelve-month basis) on September 30, 2020. Leverage across MIC's ongoing operations was 5.7x on September 30, 2020 and is expected to increase ahead of the expected closing of the sale of IMTT as the Company uses a portion of its current cash balance to fund growth projects to which it has previously committed. MIC had cash on hand of $429 million on September 30, 2020 including $150 million drawn on its revolving credit facility.
Guidance
MIC re-initiated financial guidance for 2020. For the full year, the Company expects to generate Adjusted EBITDA excluding non-cash items from continuing operations of between $200 million and $215 million. The buildup of the EBITDA guidance for 2020 on segment basis is as follows:
Segment | EBITDA Range ($mm) | |
Atlantic Aviation | 185 - 195 | |
MIC Hawaii | 35 - 40 | |
Corporate and Other | (20) | |
Total | 200 - 215 |
Through September 30, 2020, the Company had deployed $154 million of an anticipated $200 million to $225 million of investments in growth projects for the full year. Approximately $118 million of the capital deployed was invested in projects related to the discontinued operations of IMTT. Of the investment being made in 2020, between $50 million and $55 million is expected to be deployed into projects involving Atlantic Aviation and MIC Hawaii.
Strategic Alternatives
On October 31, 2019, MIC announced its intention to pursue strategic alternatives and unlock value for shareholders potentially through the sale of the Company or one or more of its operating businesses. Following the announcement of the agreement to sell IMTT, MIC expects to continue to pursue sales of the Company or its remaining operating businesses. Although MIC has not established a timeline for completion of any sale, the Company indicated that it would proceed at a point at which value could be expected to be maximized relative to any economic recovery.
Summary Financial Information
Quarter Ended | Change | Nine Months Ended | Change | ||||||||||||||||||||||||
2020 | 2019 | $ | % | 2020 | 2019 | $ | % | ||||||||||||||||||||
($ In Millions, Except Share and Per Share Data) (Unaudited) | |||||||||||||||||||||||||||
GAAP Metrics | |||||||||||||||||||||||||||
Continuing Operations | |||||||||||||||||||||||||||
Net (loss) income | $ | (158) | $ | 2 | (160) | NM | $ | (190) | $ | 20 | (210) | NM | |||||||||||||||
Net (loss) income per share attributable to MIC | (1.82) | 0.03 | (1.85) | NM | (2.19) | 0.24 | (2.43) | NM | |||||||||||||||||||
Cash provided by operating activities | 44 | 101 | (57) | (56) | 114 | 220 | (106) | (48) | |||||||||||||||||||
Discontinued Operations | |||||||||||||||||||||||||||
Net (loss) income | $ | (735) | $ | 59 | (794) | NM | $ | (700) | $ | 119 | (819) | NM | |||||||||||||||
Net (loss) income per share attributable to MIC | (8.44) | 0.68 | (9.12) | NM | (8.05) | 1.42 | (9.47) | NM | |||||||||||||||||||
Cash provided by operating activities | 66 | 9 | 57 | NM | 168 | 139 | 29 | 21 | |||||||||||||||||||
Weighted average number of shares outstanding: | 87,030,751 | 86,276,237 | 754,514 | 1 | 86,864,951 | 86,075,394 | 789,557 | 1 | |||||||||||||||||||
MIC Non-GAAP Metrics | |||||||||||||||||||||||||||
EBITDA excluding non-cash items - continuing | $ | 57 | $ | 71 | (14) | (20) | $ | 138 | $ | 237 | (99) | (42) | |||||||||||||||
Investment and acquisition/disposition costs | 3 | (2) | 5 | NM | 16 | 1 | 15 | NM | |||||||||||||||||||
Adjusted EBITDA excluding non - cash items–continuing | $ | 60 | $ | 69 | (9) | (13) | $ | 154 | $ | 238 | (84) | (35) | |||||||||||||||
Cash interest | $ | (16) | $ | (18) | 2 | 11 | $ | (55) | $ | (57) | 2 | 4 | |||||||||||||||
Cash taxes | (3) | 3 | (6) | NM | (2) | 6 | (8) | (133) | |||||||||||||||||||
Maintenance capital expenditures | (3) | (4) | 1 | 25 | (12) | (13) | 1 | 8 | |||||||||||||||||||
Adjusted Free Cash Flow - continuing operations | $ | 38 | $ | 50 | (12) | (24) | $ | 85 | $ | 174 | (89) | (51) | |||||||||||||||
EBITDA excluding non-cash items - discontinued operations | $ | 67 | $ | 61 | 6 | 10 | $ | 212 | $ | 251 | (39) | (16) | |||||||||||||||
Cash interest | (10) | (10) | — | — | (30) | (38) | 8 | 21 | |||||||||||||||||||
Cash taxes | 1 | (59) | 60 | 102 | (2) | (71) | 69 | 97 | |||||||||||||||||||
Maintenance capital expenditures | (12) | (14) | 2 | 14 | (31) | (28) | (3) | (11) | |||||||||||||||||||
Adjusted Free Cash Flow - Discontinued operations | $ | 46 | $ | (22) | 68 | NM | $ | 149 | $ | 114 | 35 | 31 | |||||||||||||||
Adjusted Free Cash Flow - consolidated | $ | 84 | $ | 28 | 56 | NM | $ | 234 | $ | 288 | (54) | (19) |
NM — Not meaningful |
Conference Call and Webcast
When: MIC has scheduled a conference call for 8:00 a.m. Eastern Time on Monday, November 9, 2020 during which management will review and comment on the Company's third quarter and year to date 2020 results.
How: To listen to the conference call dial +1(650) 521-5252 or +1(877) 852-2928 at least ten 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. Allow extra time prior to the call to visit the site and download the software needed to listen to the webcast.
Slides: MIC will prepare materials in support of its conference call. The materials will be available for downloading from the Company's website prior to the call.
Replay: For interested individuals unable to participate in the live conference call, a replay will be available after 2:00 p.m. on November 9, 2020 through midnight on November 16, 2020, at +1(404) 537-3406 or +1(855) 859-2056, Passcode: 9356736. An online archive of the webcast will be available on the Company's website for one year following the call.
About MIC
MIC owns and operates a diversified group of businesses providing basic services to customers in the United States. Its businesses consist of a bulk liquid terminals business, International-Matex Tank Terminals; an airport services business, Atlantic Aviation; and entities comprising an energy services, production and distribution segment, MIC Hawaii. For additional information, please visit the MIC website at www.macquarie.com/mic.
Use of Non-GAAP Measures
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items and Free Cash Flow
In addition to MIC's results under U.S. GAAP, the Company uses certain non-GAAP measures to assess the performance and prospects of its businesses.
MIC measures EBITDA excluding non-cash items as a reflection of its businesses' ability to effectively manage the volume of products sold or services provided, the operating margin earned on those transactions and the management of operating expenses independent of the capitalization and tax attributes of those businesses. The Company believes investors use EBITDA excluding non-cash items primarily as a measure to assess the operating performance of its businesses and to make comparisons with the operating performance of other businesses whose depreciation and amortization expense may vary widely from MIC's, particularly where acquisitions and other non-operating factors are involved. MIC defines EBITDA excluding non-cash items as net income (loss) or earnings — the most comparable GAAP measure — before interest, taxes, depreciation and amortization and non-cash items including impairments, unrealized derivative gains and losses, adjustments for other non-cash items and pension expense reflected in the statements of operations. Other non-cash expenses, net, excludes the adjustment to bad debt expense related to the specific reserve component, net of recoveries. EBITDA excluding non-cash items also excludes base management fees and performance fees, if any, whether paid in cash or stock.
The Company's businesses can be characterized as owners of high-value, long-lived assets capable of generating substantial Free Cash Flow. MIC defines Free Cash Flow as cash from operating activities — the most comparable GAAP measure — which includes cash paid for interest, taxes and pension contributions, less maintenance capital expenditures, which includes principal repayments on capital lease obligations used to fund maintenance capital expenditures and excludes changes in working capital.
Management uses Free Cash Flow as a measure of its ability to fund acquisitions, invest in growth projects, reduce or repay indebtedness and/or return capital to shareholders. GAAP metrics such as net income (loss) do not provide MIC management with the same level of visibility to into the performance and prospects of the business as a result of: (i) the capital intensive nature of MIC's businesses and the generation of non-cash depreciation and amortization; (ii) shares issued to the Company's external manager under the Management Services Agreement, (iii) the Company's ability to defer all or a portion of current federal income taxes; (iv) non-cash mark-to-market adjustment of the value of derivative instruments; (v) gains (losses) related to the write-off or disposal of assets or liabilities, (vi) non-cash compensation expense incurred in relation to the incentive plans for senior management of our operating businesses, and (vii) pension expense. Pension expenses primarily consist of interest expense, expected return on plan assets and amortization of actuarial and performance gains and losses. Any cash contributions to pension plans are reflected as a reduction in Free Cash Flow and are not included in pension expense. Management believes that external consumers of its financial statements, including investors and research analysts, use Free Cash Flow both to assess the Company's performance and as an indicator of its success in generating an attractive risk-adjusted return.
In its Quarterly Report on Form 10-Q, the Company has disclosed Free Cash Flow on a consolidated basis and for each of its operating segments and MIC Corporate and Other. Management believes that both EBITDA excluding non-cash items and Free Cash Flow support a more complete and accurate understanding of the financial and operating performance of its businesses than would otherwise be achieved using GAAP results alone.
Free Cash Flow does not take into consideration required payments on indebtedness and other fixed obligations or other cash items that are excluded from MIC's definition of Free Cash Flow. Management notes that Free Cash Flow may be calculated differently by other companies thereby limiting its usefulness as a comparative measure. Free Cash Flow should be used as a supplemental measure to help understand MIC's financial performance and not in lieu of its financial results reported under GAAP.
See the tables below for a reconciliation of Net Income (loss) to EBITDA excluding non-cash items from continuing operations and a reconciliation of cash provided by operating activities from continuing operations to Free Cash Flow from continuing operations.
With respect to the Company's guidance for EBITDA and Free Cash Flow in 2020, a reconciliation of EBITDA to net income (loss), the most comparable GAAP measure and a reconciliation of Free Cash Flow to cash from operating activities, the most comparable GAAP measure, are not available without unreasonable effort due to the Company's limited visibility into and an inability to make accurate projections and estimates of items including management fees, hedging agreements, depreciation and any (benefit) provision for income taxes. These items may vary greatly from year to year and could significantly impact MIC's results as reported in accordance with GAAP.
Classification of Maintenance Capital Expenditures and Growth Capital Expenditures
MIC categorizes capital expenditures as either maintenance capital expenditures or growth capital expenditures. As neither maintenance capital expenditure nor growth capital expenditure is a GAAP term, the Company has adopted a framework to categorize specific capital expenditures. In broad terms, maintenance capital expenditures primarily maintain MIC's businesses at current levels of operations, capability, profitability, or cash flow, while growth capital expenditures primarily provide new or enhanced levels of operations, capability, profitability or cash flow. Management considers various factors in determining whether a specific capital expenditure will be classified as maintenance or growth.
MIC does not bifurcate specific capital expenditures into growth and maintenance components. Each discrete capital expenditure is considered within the above framework and the entire capital expenditure is classified as either maintenance or growth.
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. Such statements include, among others, those concerning our expected financial performance and strategic and operational plans, statements regarding the anticipated specific and overall impacts of the COVID-19 pandemic, as well as all assumptions, expectations, predictions, intentions or beliefs about future events. Forward-looking statements in this release 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; the short and long term impact of the COVID-19 pandemic; its ability to service, comply with the terms of and refinance debt, successfully integrate and manage acquired businesses, retain or replace qualified employees, complete growth projects, deploy growth capital and manage growth, make and finance future acquisitions, and implement its strategy; the regulatory environment; demographic trends, the political environment, the economy, tourism, construction and transportation costs, air travel, environmental costs and risks; fuel and gas and other commodity costs; its ability to recover increases in costs from customers, cybersecurity risks, work interruptions or other labor stoppages; risks associated with acquisitions or dispositions, litigation risks; risks related to its shared services initiative and its ability to achieve cost savings; 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.
MIC is not an authorized deposit-taking institution for the purposes of the Banking Act 1959 (Commonwealth of Australia). The obligations of MIC 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 MIC.
MACQUARIE INFRASTRUCTURE CORPORATION | |||||||
CONSOLIDATED CONDENSED BALANCE SHEETS | |||||||
($ in Millions, Except Share Data) | |||||||
September 30, | December 31, | ||||||
(Unaudited) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 429 | $ | 260 | |||
Restricted cash | 14 | 1 | |||||
Accounts receivable, net of allowance for doubtful accounts | 40 | 66 | |||||
Inventories | 17 | 22 | |||||
Prepaid expenses | 9 | 9 | |||||
Income tax receivable | 12 | 11 | |||||
Other current assets | 9 | 10 | |||||
Current assets held for sale(1) | 3,400 | 4,172 | |||||
Total current assets | 3,930 | 4,551 | |||||
Property, equipment, land and leasehold improvements, net | 859 | 879 | |||||
Operating lease assets, net | 319 | 317 | |||||
Goodwill | 616 | 615 | |||||
Intangible assets, net | 462 | 488 | |||||
Other noncurrent assets | 7 | 11 | |||||
Total assets | $ | 6,193 | $ | 6,861 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Due to Manager-related party | $ | 2 | $ | 3 | |||
Accounts payable | 22 | 38 | |||||
Accrued expenses | 45 | 43 | |||||
Current portion of long-term debt | 11 | 12 | |||||
Operating lease liabilities - current | 18 | 18 | |||||
Other current liabilities | 24 | 23 | |||||
Current liabilities held for sale(1) | 1,856 | 1,872 | |||||
Total current liabilities | 1,978 | 2,009 | |||||
Long-term debt, net of current portion | 1,705 | 1,554 | |||||
Deferred income taxes | 279 | 120 | |||||
Operating lease liabilities - noncurrent | 307 | 303 | |||||
Other noncurrent liabilities | 68 | 64 | |||||
Total liabilities | 4,337 | 4,050 | |||||
Commitments and contingencies | — | — | |||||
Stockholders' equity(2): | |||||||
Additional paid in capital | 1,133 | 1,198 | |||||
Accumulated other comprehensive loss | (37) | (37) | |||||
Retained earnings | 751 | 1,641 | |||||
Total stockholders' equity | 1,847 | 2,802 | |||||
Noncontrolling interests | 9 | 9 | |||||
Total equity | 1,856 | 2,811 | |||||
Total liabilities and equity | $ | 6,193 | $ | 6,861 |
(1) | See Note 4, "Discontinued Operations and Dispositions", in our Notes to Consolidated Condensed Financial Statements in Part I of Form 10-Q for the quarter ended September 30, 2020, for discussions on businesses classified as held for sale. |
(2) | The Company is authorized to issue the following classes of stock: (i) 500,000,000 shares of common stock, par value $0.001 per share. On September 30, 2020 and December 31, 2019, the Company had 87,134,627 shares and 86,600,302 shares of common stock issued and outstanding, respectively; (ii) 100,000,000 shares of preferred stock, par value $0.001 per share authorized. On September 30, 2020 and December 31, 2019, no preferred stocks were issued or outstanding; and (iii) 100 shares of special stock, par value $0.001 per share, issued and outstanding to its Manager as on September 30, 2020 and December 31, 2019. |
MACQUARIE INFRASTRUCTURE CORPORATION | |||||||||||||||
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS | |||||||||||||||
(Unaudited) | |||||||||||||||
($ in Millions, Except Share and Per Share Data) | |||||||||||||||
Quarter Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Revenue | |||||||||||||||
Service revenue | $ | 163 | $ | 229 | $ | 491 | $ | 722 | |||||||
Product revenue | 39 | 58 | 136 | 183 | |||||||||||
Total revenue | 202 | 287 | 627 | 905 | |||||||||||
Costs and expenses | |||||||||||||||
Cost of services | 54 | 104 | 178 | 335 | |||||||||||
Cost of product sales | 25 | 43 | 85 | 128 | |||||||||||
Selling, general and administrative | 69 | 72 | 229 | 219 | |||||||||||
Fees to Manager-related party | 5 | 8 | 16 | 23 | |||||||||||
Depreciation | 20 | 20 | 59 | 58 | |||||||||||
Amortization of intangibles | 8 | 11 | 29 | 33 | |||||||||||
Total operating expenses | 181 | 258 | 596 | 796 | |||||||||||
Operating income | 21 | 29 | 31 | 109 | |||||||||||
Other income (expense) | |||||||||||||||
Interest income | — | 1 | — | 5 | |||||||||||
Interest expense(1) | (19) | (25) | (69) | (85) | |||||||||||
Other (expense) income, net | (1) | — | (1) | 2 | |||||||||||
Net income (loss) from continuing operations before income taxes | 1 | 5 | (39) | 31 | |||||||||||
Provision for income taxes | (159) | (3) | (151) | (11) | |||||||||||
Net (loss) income from continuing operations | (158) | 2 | (190) | 20 | |||||||||||
Discontinued Operations(2) | |||||||||||||||
Net (loss) income from discontinued operations before income taxes | (731) | 95 | (684) | 173 | |||||||||||
Provision for income taxes | (4) | (36) | (16) | (54) | |||||||||||
Net (loss) income from discontinued operations | (735) | 59 | (700) | 119 | |||||||||||
Net (loss) income | (893) | 61 | (890) | 139 | |||||||||||
Net (loss) income from continuing operations | (158) | 2 | (190) | 20 | |||||||||||
Net (loss) income from continuing operations attributable to MIC | (158) | 2 | (190) | 20 | |||||||||||
Net (loss) income from discontinued operations | (735) | 59 | (700) | 119 | |||||||||||
Less: net loss attributable to noncontrolling interests | — | — | — | (3) | |||||||||||
Net (loss) income from discontinued operations attributable to MIC | (735) | 59 | (700) | 122 | |||||||||||
Net (loss) income attributable to MIC | $ | (893) | $ | 61 | $ | (890) | $ | 142 | |||||||
Basic (loss) income per share from continuing operations attributable to | $ | (1.82) | $ | 0.03 | $ | (2.19) | $ | 0.24 | |||||||
Basic (loss) income per share from discontinued operations attributable to | (8.44) | 0.68 | (8.05) | 1.42 | |||||||||||
Basic (loss) income per share attributable to | $ | (10.26) | $ | 0.71 | $ | (10.24) | $ | 1.66 | |||||||
Weighted average number of shares outstanding: basic | 87,030,751 | 86,276,237 | 86,864,951 | 86,075,394 | |||||||||||
Diluted (loss) income per share from continuing operations attributable to | $ | (1.82) | $ | 0.03 | $ | (2.19) | $ | 0.24 | |||||||
Diluted (loss) income per share from discontinued operations attributable to | (8.44) | 0.68 | (8.05) | 1.42 | |||||||||||
Diluted (loss) income per share attributable to | $ | (10.26) | $ | 0.71 | $ | (10.24) | $ | 1.66 | |||||||
Weighted average number of shares outstanding: diluted | 87,030,751 | 86,303,694 | 86,864,951 | 86,101,022 | |||||||||||
Cash dividends declared per share | $ | — | $ | 1.00 | $ | — | $ | 3.00 |
(1) | Interest expense includes non-cash losses on derivative instruments of an insignificant amount for the quarter ended September 30, 2020 and $4 million for the nine months ended September 30, 2020, compared with non-cash losses of $1 million and $8 million for the quarter and nine months ended September 30, 2019, respectively. |
(2) | See Note 4, "Discontinued Operations and Dispositions", in our Notes to Consolidated Condensed Financial Statements in Part I of Form 10-Q for the quarter ended September 30, 2020, for discussions on businesses classified as held for sale. |
MACQUARIE INFRASTRUCTURE CORPORATION | |||||||
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS | |||||||
(Unaudited) | |||||||
($ in Millions) | |||||||
Nine Months Ended September 30, | |||||||
2020 | 2019 | ||||||
Operating activities | |||||||
Net (loss) income from continuing operations | $ | (190) | $ | 20 | |||
Adjustments to reconcile net (loss) income to net cash provided by operating activities from | |||||||
Depreciation and amortization of property and equipment | 59 | 58 | |||||
Amortization of intangible assets | 29 | 33 | |||||
Amortization of debt discount and financing costs | 9 | 9 | |||||
Adjustments to derivative instruments | — | 21 | |||||
Fees to Manager - related party | 16 | 23 | |||||
Deferred taxes | 149 | 17 | |||||
Other non-cash expense, net | 10 | 5 | |||||
Changes in other assets and liabilities, net of acquisitions: | |||||||
Accounts receivable | 25 | 4 | |||||
Inventories | 5 | — | |||||
Prepaid expenses and other current assets | (1) | (6) | |||||
Accounts payable and accrued expenses | (9) | (7) | |||||
Income taxes payable | — | 45 | |||||
Other, net | 12 | (2) | |||||
Net cash provided by operating activities from continuing operations | 114 | 220 | |||||
Investing activities | |||||||
Acquisitions of businesses and investments, net of cash, cash equivalents and restricted cash acquired | (13) | — | |||||
Purchases of property and equipment | (40) | (61) | |||||
Loan to project developer | — | (1) | |||||
Loan repayment from project developer | — | 16 | |||||
Net cash used in investing activities from continuing operations | (53) | (46) | |||||
Financing activities | |||||||
Proceeds from long-term debt | 874 | — | |||||
Payment of long-term debt | (733) | (358) | |||||
Dividends paid to common stockholders | (87) | (258) | |||||
Debt financing costs paid | — | (1) | |||||
Net cash provided by (used in) financing activities from continuing operations | 54 | (617) | |||||
Net change in cash, cash equivalents and restricted cash from continuing operations | 115 | (443) |
MACQUARIE INFRASTRUCTURE CORPORATION | |||||||
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS – (continued) | |||||||
(Unaudited) | |||||||
($ in Millions) | |||||||
Nine Months Ended September 30, | |||||||
2020 | 2019 | ||||||
Cash flows provided by (used in) discontinued operations: | |||||||
Net cash provided by operating activities | $ | 168 | $ | 139 | |||
Net cash (used in) provided by investing activities | (150) | 125 | |||||
Net cash provided by financing activities | — | 24 | |||||
Net cash provided by discontinued operations | 18 | 288 | |||||
Net change in cash, cash equivalents and restricted cash | 133 | (155) | |||||
Cash, cash equivalents and restricted cash, beginning of period | 358 | 629 | |||||
Cash, cash equivalents and restricted cash, end of period | $ | 491 | $ | 474 | |||
Supplemental disclosures of cash flow information: | |||||||
Non-cash investing and financing activities: | |||||||
Accrued purchases of property and equipment from continuing operations | $ | 3 | $ | 9 | |||
Accrued purchases of property and equipment from discontinued operations | 12 | 11 | |||||
Leased assets obtained in exchange for new operating lease liabilities from continuing operations | 9 | 13 | |||||
Leased assets obtained in exchange for new operating lease liabilities from discontinued operations | 1 | — | |||||
Taxes paid, net, from continuing operations | 1 | 3 | |||||
Taxes paid, net, from discontinued operations | 4 | 6 | |||||
Interest paid, net, from continuing operations | 55 | 71 | |||||
Interest paid, net, from discontinued operations | 24 | 32 |
The following table provides a reconciliation of cash, cash equivalents and restricted cash from both continuing and discontinued operations reported within the consolidated condensed balance sheets that is presented in the consolidated condensed statements of cash flows:
As of September 30, | |||||||
2020 | 2019 | ||||||
Cash and cash equivalents | $ | 429 | $ | 356 | |||
Restricted cash | 14 | 1 | |||||
Cash, cash equivalents and restricted cash included in assets held for sale(1) | 48 | 117 | |||||
Total of cash, cash equivalents and restricted cash shown in the consolidated statement of cash flows | $ | 491 | $ | 474 |
(1) | Represents cash, cash equivalents and restricted cash related to businesses classified as held for sale. See Note 4, "Discontinued Operations and Dispositions", in our Notes to Consolidated Condensed Financial Statements in Part I of Form 10-Q for the quarter ended September 30, 2020, for further discussion. |
MACQUARIE INFRASTRUCTURE CORPORATION | |||||||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS – MD&A | |||||||||||||||||||||||||||
Quarter Ended | Change | Nine Months Ended | Change | ||||||||||||||||||||||||
2020 | 2019 | $ | % | 2020 | 2019 | $ | % | ||||||||||||||||||||
($ In Millions, Except Share and Per Share Data) (Unaudited) | |||||||||||||||||||||||||||
Revenue | |||||||||||||||||||||||||||
Service revenue | $ | 163 | $ | 229 | (66) | (29) | $ | 491 | $ | 722 | (231) | (32) | |||||||||||||||
Product revenue | 39 | 58 | (19) | (33) | 136 | 183 | (47) | (26) | |||||||||||||||||||
Total revenue | 202 | 287 | (85) | (30) | 627 | 905 | (278) | (31) | |||||||||||||||||||
Costs and expenses | |||||||||||||||||||||||||||
Cost of services | 54 | 104 | 50 | 48 | 178 | 335 | 157 | 47 | |||||||||||||||||||
Cost of product sales | 25 | 43 | 18 | 42 | 85 | 128 | 43 | 34 | |||||||||||||||||||
Selling, general and administrative | 69 | 72 | 3 | 4 | 229 | 219 | (10) | (5) | |||||||||||||||||||
Fees to Manager - related party | 5 | 8 | 3 | 38 | 16 | 23 | 7 | 30 | |||||||||||||||||||
Depreciation and amortization | 28 | 31 | 3 | 10 | 88 | 91 | 3 | 3 | |||||||||||||||||||
Total operating expenses | 181 | 258 | 77 | 30 | 596 | 796 | 200 | 25 | |||||||||||||||||||
Operating income | 21 | 29 | (8) | (28) | 31 | 109 | (78) | (72) | |||||||||||||||||||
Other income (expense) | |||||||||||||||||||||||||||
Interest income | — | 1 | (1) | (100) | — | 5 | (5) | (100) | |||||||||||||||||||
Interest expense(1) | (19) | (25) | 6 | 24 | (69) | (85) | 16 | 19 | |||||||||||||||||||
Other (expense) income, net | (1) | — | (1) | NM | (1) | 2 | (3) | (150) | |||||||||||||||||||
Net income (loss) from continuing operations before income taxes | 1 | 5 | (4) | (80) | (39) | 31 | (70) | NM | |||||||||||||||||||
Provision for income taxes | (159) | (3) | (156) | NM | (151) | (11) | (140) | NM | |||||||||||||||||||
Net (loss) income from continuing operations | (158) | 2 | (160) | NM | (190) | 20 | (210) | NM | |||||||||||||||||||
Discontinued Operations | |||||||||||||||||||||||||||
Net (loss) income from discontinued operations before income taxes | (731) | 95 | (826) | NM | (684) | 173 | (857) | NM | |||||||||||||||||||
Provision for income taxes | (4) | (36) | 32 | 89 | (16) | (54) | 38 | 70 | |||||||||||||||||||
Net (loss) income from discontinued operations | (735) | 59 | (794) | NM | (700) | 119 | (819) | NM | |||||||||||||||||||
Net (loss) income | (893) | 61 | (954) | NM | (890) | 139 | (1,029) | NM | |||||||||||||||||||
Net (loss) income from continuing operations | (158) | 2 | (160) | NM | (190) | 20 | (210) | NM | |||||||||||||||||||
Net (loss) income from continuing operations attributable to MIC | (158) | 2 | (160) | NM | (190) | 20 | (210) | NM | |||||||||||||||||||
Net (loss) income from discontinued operations | (735) | 59 | (794) | NM | (700) | 119 | (819) | NM | |||||||||||||||||||
Less: net loss attributable to noncontrolling interests | — | — | — | — | — | (3) | (3) | (100) | |||||||||||||||||||
Net (loss) income from discontinued operations attributable to MIC | (735) | 59 | (794) | NM | (700) | 122 | (822) | NM | |||||||||||||||||||
Net (loss) income attributable to MIC | $ | (893) | $ | 61 | (954) | NM | $ | (890) | $ | 142 | (1,032) | NM | |||||||||||||||
Basic (loss) income per share from continuing operations attributable to MIC | $ | (1.82) | $ | 0.03 | (1.85) | NM | $ | (2.19) | $ | 0.24 | (2.43) | NM | |||||||||||||||
Basic (loss) income per share from discontinued operations attributable to MIC | (8.44) | 0.68 | (9.12) | NM | (8.05) | 1.42 | (9.47) | NM | |||||||||||||||||||
Basic (loss) income per share attributable to MIC | $ | (10.26) | $ | 0.71 | (10.97) | NM | $ | (10.24) | $ | 1.66 | (11.90) | NM | |||||||||||||||
Weighted average number of shares outstanding: basic | 87,030,751 | 86,276,237 | 754,514 | 1 | 86,864,951 | 86,075,394 | 789,557 | 1 |
NM — Not meaningful | |
(1) | Interest expense includes non-cash losses on derivative instruments of an insignificant amount for the quarter ended September 30, 2020 and $4 million for the nine months ended September 30, 2020, compared with non-cash losses of $1 million and $8 million for the quarter and nine months ended September 30, 2019, respectively. |
MACQUARIE INFRASTRUCTURE CORPORATION | |||||||||||||||||||||||||||
RECONCILIATION OF CONSOLIDATED NET (LOSS) INCOME TO EBITDA EXCLUDING | |||||||||||||||||||||||||||
NON-CASH ITEMS AND A RECONCILIATION FROM CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW | |||||||||||||||||||||||||||
Quarter Ended | Change | Nine Months Ended | Change | ||||||||||||||||||||||||
2020 | 2019 | $ | % | 2020 | 2019 | $ | % | ||||||||||||||||||||
($ In Millions) (Unaudited) | |||||||||||||||||||||||||||
Net (loss) income from continuing operations | $ | (158) | $ | 2 | $ | (190) | $ | 20 | |||||||||||||||||||
Interest expense, net(1) | 19 | 24 | 69 | 80 | |||||||||||||||||||||||
Provision for income taxes | 159 | 3 | 151 | 11 | |||||||||||||||||||||||
Depreciation and amortization | 28 | 31 | 88 | 91 | |||||||||||||||||||||||
Fees to Manager - related party | 5 | 8 | 16 | 23 | |||||||||||||||||||||||
Other non-cash expense, net(2) | 4 | 3 | 4 | 12 | |||||||||||||||||||||||
EBITDA excluding non-cash items - | $ | 57 | $ | 71 | (14) | (20) | $ | 138 | $ | 237 | (99) | (42) | |||||||||||||||
EBITDA excluding non-cash items - continuing operations | $ | 57 | $ | 71 | $ | 138 | $ | 237 | |||||||||||||||||||
Interest expense, net(1) | (19) | (24) | (69) | (80) | |||||||||||||||||||||||
Non-cash interest expense, net(1) | 3 | 6 | 14 | 23 | |||||||||||||||||||||||
(Provision) benefit for current income taxes | (3) | 3 | (2) | 6 | |||||||||||||||||||||||
Changes in working capital(3) | 6 | 45 | 33 | 34 | |||||||||||||||||||||||
Cash provided by operating activities - continuing operations | 44 | 101 | 114 | 220 | |||||||||||||||||||||||
Changes in working capital(3) | (6) | (45) | (33) | (34) | |||||||||||||||||||||||
Maintenance capital expenditures | (3) | (4) | (12) | (13) | |||||||||||||||||||||||
Free cash flow - continuing operations | $ | 35 | $ | 52 | (17) | (33) | $ | 69 | $ | 173 | (104) | (60) |
(1) | Interest expense, net, includes adjustments to derivative instruments, non-cash amortization of deferred financing fees and non-cash amortization of debt discount related to the 2.00% Convertible Senior Notes due October 2023. |
(2) | Other non-cash expense, net, includes pension expense, non-cash mark to market adjustment of the value of the commodity hedge contracts, non-cash compensation expense incurred in relation to the incentive plans for senior management of our operating businesses, and non-cash gains (losses) related to the write-off or disposal of assets or liabilities. Pension expense consists primarily of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses. Other non-cash expense, net, excludes the adjustment to bad debt expense related to the specific reserve component, net of recoveries, for which this adjustment is reported in working capital in the above table. See "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items and Free Cash Flow" above for further discussion. |
(3) | For the quarter and nine months ended September 30, 2019, the change in working capital includes the current federal income tax liability of $42 million related to the gain on sale of the renewable businesses reported in the results from discontinued operations. |
MACQUARIE INFRASTRUCTURE CORPORATION | |||||||||||||||||||||||
RECONCILIATION OF SEGMENT NET INCOME (LOSS) TO EBITDA | |||||||||||||||||||||||
EXCLUDING NON-CASH ITEMS AND A RECONCILIATION FROM CASH PROVIDED | |||||||||||||||||||||||
BY (USED IN) OPERATING ACTIVITIES TO FREE CASH FLOW | |||||||||||||||||||||||
Atlantic Aviation | |||||||||||||||||||||||
Quarter Ended | Change | Nine Months Ended | Change | ||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
$ | $ | $ | % | $ | $ | $ | % | ||||||||||||||||
($ In Millions) (Unaudited) | |||||||||||||||||||||||
Revenue | 163 | 230 | (67) | (29) | 491 | 724 | (233) | (32) | |||||||||||||||
Cost of services (exclusive of depreciation and | 54 | 104 | 50 | 48 | 178 | 335 | 157 | 47 | |||||||||||||||
Gross margin | 109 | 126 | (17) | (13) | 313 | 389 | (76) | (20) | |||||||||||||||
Selling, general and administrative expenses | 55 | 62 | 7 | 11 | 178 | 185 | 7 | 4 | |||||||||||||||
Depreciation and amortization | 24 | 27 | 3 | 11 | 76 | 79 | 3 | 4 | |||||||||||||||
Operating income | 30 | 37 | (7) | (19) | 59 | 125 | (66) | (53) | |||||||||||||||
Interest expense, net(1) | (11) | (18) | 7 | 39 | (44) | (59) | 15 | 25 | |||||||||||||||
Provision for income taxes | (6) | (5) | (1) | (20) | (5) | (18) | 13 | 72 | |||||||||||||||
Net income | 13 | 14 | (1) | (7) | 10 | 48 | (38) | (79) | |||||||||||||||
Reconciliation of net income to EBITDA | |||||||||||||||||||||||
Net income | 13 | 14 | 10 | 48 | |||||||||||||||||||
Interest expense, net(1) | 11 | 18 | 44 | 59 | |||||||||||||||||||
Provision for income taxes | 6 | 5 | 5 | 18 | |||||||||||||||||||
Depreciation and amortization | 24 | 27 | 76 | 79 | |||||||||||||||||||
Other non-cash expense, net(2) | — | — | 2 | 1 | |||||||||||||||||||
EBITDA excluding non-cash items | 54 | 64 | (10) | (16) | 137 | 205 | (68) | (33) | |||||||||||||||
EBITDA excluding non-cash items | 54 | 64 | 137 | 205 | |||||||||||||||||||
Interest expense, net(1) | (11) | (18) | (44) | (59) | |||||||||||||||||||
Non-cash interest expense, net(1) | 1 | 3 | 8 | 15 | |||||||||||||||||||
Provision for current income taxes | (3) | (4) | (3) | (14) | |||||||||||||||||||
Changes in working capital | 6 | 4 | 31 | 6 | |||||||||||||||||||
Cash provided by operating activities | 47 | 49 | 129 | 153 | |||||||||||||||||||
Changes in working capital | (6) | (4) | (31) | (6) | |||||||||||||||||||
Maintenance capital expenditures | (2) | (3) | (7) | (8) | |||||||||||||||||||
Free cash flow | 39 | 42 | (3) | (7) | 91 | 139 | (48) | (35) |
(1) | Interest expense, net, includes non-cash adjustments to derivative instruments and non-cash amortization of deferred financing fees. |
(2) | Other non-cash expense, net, includes primarily non-cash compensation expense incurred in relation to incentive plans and non-cash gains (losses) related to the write-off or disposal of assets or liabilities. Other non-cash expense, net, excludes the adjustment to bad debt expense related to the specific reserve component, net of recoveries, for which this adjustment is reported in working capital in the above table. See "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items and Free Cash Flow" above for further discussion. |
MIC Hawaii | |||||||||||||||||||||||
Quarter Ended | Change | Nine Months Ended | Change | ||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
$ | $ | $ | % | $ | $ | $ | % | ||||||||||||||||
($ In Millions) (Unaudited) | |||||||||||||||||||||||
Revenue | 39 | 58 | (19) | (33) | 136 | 183 | (47) | (26) | |||||||||||||||
Cost of product sales (exclusive of depreciation and amortization shown separately below) | 25 | 43 | 18 | 42 | 85 | 128 | 43 | 34 | |||||||||||||||
Gross margin | 14 | 15 | (1) | (7) | 51 | 55 | (4) | (7) | |||||||||||||||
Selling, general and administrative expenses | 6 | 6 | — | — | 18 | 17 | (1) | (6) | |||||||||||||||
Depreciation and amortization | 4 | 4 | — | — | 12 | 12 | — | — | |||||||||||||||
Operating income | 4 | 5 | (1) | (20) | 21 | 26 | (5) | (19) | |||||||||||||||
Interest expense, net(1) | (2) | (3) | 1 | 33 | (7) | (8) | 1 | 13 | |||||||||||||||
Other expense, net | (1) | — | (1) | NM | (1) | (2) | 1 | 50 | |||||||||||||||
Provision for income taxes | — | (1) | 1 | 100 | (4) | (5) | 1 | 20 | |||||||||||||||
Net income | 1 | 1 | — | — | 9 | 11 | (2) | (18) | |||||||||||||||
Reconciliation of net income to EBITDA excluding non-cash items and a | |||||||||||||||||||||||
Net income | 1 | 1 | 9 | 11 | |||||||||||||||||||
Interest expense, net(1) | 2 | 3 | 7 | 8 | |||||||||||||||||||
Provision for income taxes | — | 1 | 4 | 5 | |||||||||||||||||||
Depreciation and amortization | 4 | 4 | 12 | 12 | |||||||||||||||||||
Other non-cash expense (income), net(2) | — | 3 | (3) | 10 | |||||||||||||||||||
EBITDA excluding non-cash items | 7 | 12 | (5) | (42) | 29 | 46 | (17) | (37) | |||||||||||||||
EBITDA excluding non-cash items | 7 | 12 | 29 | 46 | |||||||||||||||||||
Interest expense, net(1) | (2) | (3) | (7) | (8) | |||||||||||||||||||
Non-cash interest expense, net(1) | — | 1 | 1 | 2 | |||||||||||||||||||
Provision for current income taxes | — | (1) | (3) | (4) | |||||||||||||||||||
Changes in working capital | — | 2 | 4 | 3 | |||||||||||||||||||
Cash provided by operating activities | 5 | 11 | 24 | 39 | |||||||||||||||||||
Changes in working capital | — | (2) | (4) | (3) | |||||||||||||||||||
Maintenance capital expenditures | (1) | (1) | (5) | (5) | |||||||||||||||||||
Free cash flow | 4 | 8 | (4) | (50) | 15 | 31 | (16) | (52) |
NM — Not meaningful | |
(1) | Interest expense, net, includes non-cash adjustments to derivative instruments related to interest rate swaps and non-cash amortization of deferred financing fees. |
(2) | Other non-cash expense (income), net, includes primarily non-cash mark-to-market adjustment of the value of the commodity hedge contracts, pension expense, non-cash compensation expense incurred in relation to incentive plans, and non-cash gains (losses) related to the write-off or disposal of assets or liabilities. Pension expense consists primarily of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses. Other non-cash expense (income), net, excludes the adjustment to bad debt expense related to the specific reserve component, net of recoveries, for which this adjustment is reported in working capital in the above table. See "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items and Free Cash Flow" above for further discussion. |
Corporate and Other | |||||||||||||||||||||||
Quarter Ended | Change | Nine Months Ended | Change | ||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
$ | $ | $ | % | $ | $ | $ | % | ||||||||||||||||
($ In Millions) (Unaudited) | |||||||||||||||||||||||
Selling, general and administrative expenses | 8 | 5 | (3) | (60) | 33 | 19 | (14) | (74) | |||||||||||||||
Fees to Manager-related party | 5 | 8 | 3 | 38 | 16 | 23 | 7 | 30 | |||||||||||||||
Operating loss | (13) | (13) | — | — | (49) | (42) | (7) | (17) | |||||||||||||||
Interest expense, net(1) | (6) | (3) | (3) | (100) | (18) | (13) | (5) | (38) | |||||||||||||||
Other income, net | — | — | — | — | — | 4 | (4) | (100) | |||||||||||||||
(Provision) benefit for income taxes | (153) | 3 | (156) | NM | (142) | 12 | (154) | NM | |||||||||||||||
Net loss | (172) | (13) | (159) | NM | (209) | (39) | (170) | NM | |||||||||||||||
Reconciliation of net loss to EBITDA | |||||||||||||||||||||||
Net loss | (172) | (13) | (209) | (39) | |||||||||||||||||||
Interest expense, net(1) | 6 | 3 | 18 | 13 | |||||||||||||||||||
Provision (benefit) for income taxes | 153 | (3) | 142 | (12) | |||||||||||||||||||
Fees to Manager-related party | 5 | 8 | 16 | 23 | |||||||||||||||||||
Other non-cash expense, net(2) | 4 | — | 5 | 1 | |||||||||||||||||||
EBITDA excluding non-cash items | (4) | (5) | 1 | 20 | (28) | (14) | (14) | (100) | |||||||||||||||
EBITDA excluding non-cash items | (4) | (5) | (28) | (14) | |||||||||||||||||||
Interest expense, net(1) | (6) | (3) | (18) | (13) | |||||||||||||||||||
Non-cash interest expense, net(1) | 2 | 2 | 5 | 6 | |||||||||||||||||||
Benefit for current income taxes | — | 8 | 4 | 24 | |||||||||||||||||||
Changes in working capital(3) | — | 39 | (2) | 25 | |||||||||||||||||||
Cash (used in) provided by operating | (8) | 41 | (39) | 28 | |||||||||||||||||||
Changes in working capital(3) | — | (39) | 2 | (25) | |||||||||||||||||||
Free cash flow | (8) | 2 | (10) | NM | (37) | 3 | (40) | NM |
NM — Not meaningful | |
(1) | Interest expense, net, included non-cash amortization of deferred financing fees and non-cash amortization of debt discount related to the 2.00% Convertible Senior Notes due October 2023. |
(2) | Other non-cash expense, net, includes primarily non-cash adjustments related to non-cash compensation expense incurred in relation to incentive plans and non-cash gains (losses) related to the write-off or disposal of assets or liabilities. See "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items and Free Cash Flow" above for further discussion. |
(3) | For the quarter and nine months ended September 30, 2019, the change in working capital includes the current federal income tax liability of $42 million related to the gain on sale of the renewable businesses reported in the results from discontinued operations. |
MACQUARIE INFRASTRUCTURE CORPORATION | ||||||||||||
RECONCILIATION OF NET INCOME (LOSS) TO EBITDA EXCLUDING ACTIVITIES TO FREE CASH FLOW | ||||||||||||
For the Quarter Ended September 30, 2020 | ||||||||||||
Atlantic Aviation | MIC Hawaii | Corporate | Total Continuing | Discontinued Operations | Total | |||||||
($ in Millions) (Unaudited) | ||||||||||||
Net income (loss) | 13 | 1 | (172) | (158) | (735) | (893) | ||||||
Interest expense, net(1) | 11 | 2 | 6 | 19 | 9 | 28 | ||||||
Provision for income taxes | 6 | - | 153 | 159 | 4 | 163 | ||||||
Impairment(2) | - | - | - | - | 750 | 750 | ||||||
Depreciation and amortization | 24 | 4 | - | 28 | 34 | 62 | ||||||
Fees to Manager-related party | - | - | 5 | 5 | - | 5 | ||||||
Other non-cash expense, net(3) | - | - | 4 | 4 | 5 | 9 | ||||||
EBITDA excluding non-cash items | 54 | 7 | (4) | 57 | 67 | 124 | ||||||
EBITDA excluding non-cash items | 54 | 7 | (4) | 57 | 67 | 124 | ||||||
Interest expense, net(1) | (11) | (2) | (6) | (19) | (9) | (28) | ||||||
Non-cash interest expense (income), net(1) | 1 | - | 2 | 3 | (1) | 2 | ||||||
(Provision) benefit for current income taxes | (3) | - | - | (3) | 1 | (2) | ||||||
Changes in working capital | 6 | - | - | 6 | 8 | 14 | ||||||
Cash provided by (used in) operating activities | 47 | 5 | (8) | 44 | 66 | 110 | ||||||
Changes in working capital | (6) | - | - | (6) | (8) | (14) | ||||||
Maintenance capital expenditures | (2) | (1) | - | (3) | (12) | (15) | ||||||
Free Cash Flow | 39 | 4 | (8) | 35 | 46 | 81 | ||||||
For the Quarter Ended September 30, 2019 | ||||||||||||
Atlantic Aviation | MIC Hawaii | Corporate | Total Continuing Operations | Discontinued Operations | Total | |||||||
($ in Millions) (Unaudited) | ||||||||||||
Net income (loss) | 14 | 1 | (13) | 2 | 59 | 61 | ||||||
Interest expense, net(1) | 18 | 3 | 3 | 24 | 11 | 35 | ||||||
Provision (benefit) for income taxes | 5 | 1 | (3) | 3 | 36 | 39 | ||||||
Depreciation and amortization | 27 | 4 | - | 31 | 32 | 63 | ||||||
Fees to Manager-related party | - | - | 8 | 8 | - | 8 | ||||||
Other non-cash expense, net(3) | - | 3 | - | 3 | (77) | (74) | ||||||
EBITDA excluding non-cash items | 64 | 12 | (5) | 71 | 61 | 132 | ||||||
EBITDA excluding non-cash items | 64 | 12 | (5) | 71 | 61 | 132 | ||||||
Interest expense, net(1) | (18) | (3) | (3) | (24) | (11) | (35) | ||||||
Non-cash interest expense, net(1) | 3 | 1 | 2 | 6 | 1 | 7 | ||||||
(Provision) benefit for current income taxes | (4) | (1) | 8 | 3 | (59) | (56) | ||||||
Changes in working capital(4) | 4 | 2 | 39 | 45 | 17 | 62 | ||||||
Cash provided by operating activities | 49 | 11 | 41 | 101 | 9 | 110 | ||||||
Changes in working capital(4) | (4) | (2) | (39) | (45) | (17) | (62) | ||||||
Maintenance capital expenditures | (3) | (1) | - | (4) | (14) | (18) | ||||||
Free Cash Flow | 42 | 8 | 2 | 52 | (22) | 30 |
For the Nine Months Ended September 30, 2020 | |||||||||||||
Atlantic Aviation | MIC Hawaii | Corporate | Total Continuing Operations | Discontinued Operations | Total | ||||||||
($ in Millions) (Unaudited) | |||||||||||||
Net income (loss) | 10 | 9 | (209) | (190) | (700) | (890) | |||||||
Interest expense, net(1) | 44 | 7 | 18 | 69 | 34 | 103 | |||||||
Provision for income taxes | 5 | 4 | 142 | 151 | 16 | 167 | |||||||
Impairment(2) | - | - | - | - | 750 | 750 | |||||||
Depreciation and amortization | 76 | 12 | - | 88 | 102 | 190 | |||||||
Fees to Manager-related party | - | - | 16 | 16 | - | 16 | |||||||
Other non-cash expense (income), net(3) | 2 | (3) | 5 | 4 | 10 | 14 | |||||||
EBITDA excluding non-cash items | 137 | 29 | (28) | 138 | 212 | 350 | |||||||
EBITDA excluding non-cash items | 137 | 29 | (28) | 138 | 212 | 350 | |||||||
Interest expense, net(1) | (44) | (7) | (18) | (69) | (34) | (103) | |||||||
Non-cash interest expense, net(1) | 8 | 1 | 5 | 14 | 4 | 18 | |||||||
(Provision) benefit for current income taxes | (3) | (3) | 4 | (2) | (2) | (4) | |||||||
Changes in working capital | 31 | 4 | (2) | 33 | (12) | 21 | |||||||
Cash provided by (used in) operating activities | 129 | 24 | (39) | 114 | 168 | 282 | |||||||
Changes in working capital | (31) | (4) | 2 | (33) | 12 | (21) | |||||||
Maintenance capital expenditures | (7) | (5) | - | (12) | (31) | (43) | |||||||
Free Cash Flow | 91 | 15 | (37) | 69 | 149 | 218 | |||||||
For the Nine Months Ended September 30, 2019 | |||||||||||||
Atlantic Aviation | MIC Hawaii | Corporate | Total Continuing | Discontinued Operations | Total | ||||||||
($ in Millions) (Unaudited) | |||||||||||||
Net income (loss) | 48 | 11 | (39) | 20 | 119 | 139 | |||||||
Interest expense, net(1) | 59 | 8 | 13 | 80 | 51 | 131 | |||||||
Provision (benefit) for income taxes | 18 | 5 | (12) | 11 | 54 | 65 | |||||||
Depreciation and amortization | 79 | 12 | - | 91 | 98 | 189 | |||||||
Fees to Manager-related party | - | - | 23 | 23 | - | 23 | |||||||
Other non-cash expense (income), net(3) | 1 | 10 | 1 | 12 | (71) | (59) | |||||||
EBITDA excluding non-cash items | 205 | 46 | (14) | 237 | 251 | 488 | |||||||
EBITDA excluding non-cash items | 205 | 46 | (14) | 237 | 251 | 488 | |||||||
Interest expense, net(1) | (59) | (8) | (13) | (80) | (51) | (131) | |||||||
Non-cash interest expense, net(1) | 15 | 2 | 6 | 23 | 13 | 36 | |||||||
(Provision) benefit for current income taxes | (14) | (4) | 24 | 6 | (71) | (65) | |||||||
Changes in working capital(4) | 6 | 3 | 25 | 34 | (3) | 31 | |||||||
Cash provided by operating activities | 153 | 39 | 28 | 220 | 139 | 359 | |||||||
Changes in working capital(4) | (6) | (3) | (25) | (34) | 3 | (31) | |||||||
Maintenance capital expenditures | (8) | (5) | - | (13) | (28) | (41) | |||||||
Free Cash Flow | 139 | 31 | 3 | 173 | 114 | 287 | |||||||
(1) | Interest expense, net, includes non-cash adjustments to derivative instruments, non-cash amortization of deferred financing fees and non-cash amortization of debt discount related to the 2.00% Convertible Senior Notes due October 2023. |
(2) | As part of classifying IMTT as held for sale, the Company recognized an impairment of the IMTT disposal group of $750 million, which includes a goodwill impairment of $725 million reported in discontinued operations for the quarter ended September 30, 2020. |
(3) | Other non-cash expense (income), net, includes pension expense, non-cash mark-to-market adjustment of the value of the commodity hedge contracts, non-cash compensation expense incurred in relation to the incentive plans for senior management of our operating businesses, and non-cash gains (losses) related to the write-off or disposal of assets or liabilities. Pension expense consists primarily of interest cost, expected return on plan assets, and amortization of actuarial and performance gains and losses. Other non-cash expense, net, excludes the adjustment to bad debt expense related to the specific reserve component, net of recoveries, for which this adjustment is reported in working capital in the above table. See "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items and Free Cash Flow" above for further discussion. |
(4) | For the quarter and nine months ended September 30, 2019, the change in working capital includes the current federal income tax liability of $42 million related to the gain on sale of the renewable businesses reported in the results from discontinued operations. |
View original content:http://www.prnewswire.com/news-releases/mic-reports-third-quarter-2020-financial-and-operational-results-announces-agreement-to-sell-imtt-301168432.html
SOURCE Macquarie Infrastructure Corporation
NEW YORK, Aug. 4, 2020 /PRNewswire/ -- Macquarie Infrastructure Corporation (NYSE: MIC) today announced its second quarter 2020 operational and financial results. The results reflect the ongoing impact of COVID-19 related travel restrictions, quarantines and event cancellations on the Company's Atlantic Aviation and MIC Hawaii segments, partially offset by improved performance in its IMTT segment.
Christopher Frost, MIC's Chief Executive Officer, said: "Our bulk liquid storage and handling business, IMTT, saw sustained high levels of storage utilization and generated year-on-year improvement in financial performance while a partial recovery in general aviation flight activity in the U.S. contributed to a better than anticipated result at Atlantic Aviation.
"We remain confident in the outlook for MIC and its operating businesses over the medium term despite the impact of COVID-19 on our results for the second quarter. Cost reduction initiatives implemented early in the quarter enabled us to achieve targeted levels of expense savings while continuing to provide a high level of service and support to our customers."
Second Quarter 2020 Financial Results
MIC reported a net loss from continuing operations of $8 million for the quarter, compared with net income of $6 million in the second quarter of 2019. The decrease reflects reduced revenue from each of Atlantic Aviation and MIC Hawaii. The reduced revenue was partially offset by lower expenses including fees payable to the Company's external manager, lower unrealized losses on interest rate hedges and an income tax benefit.
Adjusted EBITDA excluding non-cash items from continuing operations totaled $87 million in the second quarter, down from $134 million in the prior comparable period. The decrease reflects the reduced contributions from each of Atlantic Aviation and MIC Hawaii, including a $7 million provision for estimated costs of remediating certain environmental matters recorded in selling, general and administrative expenses at Atlantic Aviation, partially offset by an increased contribution from IMTT.
MIC generated cash from operating activities of $73 million in the second quarter, down from $108 million in the prior comparable period. The decrease primarily reflects the reduced EBITDA excluding non-cash items generated by each of Atlantic Aviation and MIC Hawaii and declines in the amounts of products purchased and lower wholesale product prices, partially offset by declines in the amount of product sold and lower retail product prices.
The Company's Adjusted Free Cash Flow from continuing operations totaled $46 million in the second quarter, down 48% from $88 million in the prior comparable period. The decrease reflects the reduction in Adjusted EBITDA excluding non-cash items and higher maintenance capital expenditures, partially offset by a current tax benefit.
Second Quarter 2020 Segment Results
"The improved results at IMTT reflect an increase in demand for storage, particularly for petroleum products, together with a consistent level of uncontracted, ancillary services in the quarter," said Frost.
"The partial recovery in general aviation flight activity in the quarter resulted in an increased contribution from Atlantic Aviation relative to the end of the first quarter. A lifting of lockdown measures in additional markets and a recovery in business oriented travel could increase flight activity, although the absence of most event-related and international travel together with increases in COVID-19 infections in certain states, could limit further recovery in 2020," said Frost.
"Travel restrictions and rules requiring mandatory quarantining effectively eliminated tourism in Hawaii during the quarter and materially reduced demand for gas produced and/or distributed by Hawaii Gas," said Frost.
MIC's Corporate and Other segment includes costs of managing the public company, interest expense associated with holding company level debt facilities and expenses related to its pursuit of strategic alternatives.
Balance Sheet Strength and Financial Flexibility
MIC's aggregate leverage ratio increased to approximately 4.8 times net debt/Adjusted EBITDA excluding non-cash items (trailing twelve-month basis) on June 30, 2020. The Company expects its leverage ratio to increase through the remainder of the year based on the impact of COVID-19 on its financial performance and its use of a portion of its current cash balance to fund growth projects. MIC expects to deploy cash of between $200 and $225 million on projects to which it is contractually obligated. Through June 30, the Company had deployed $119 million in growth projects. The use of cash is expected to be partially offset by incremental EBITDA generated by the projects completed during the year.
"Our current cash balances, excluding drawings on our revolving credit facility, together with the cash we believe our businesses will generate over the remainder of the year, are expected to fund our ongoing operations and allow us to meet all of our financial obligations," noted Frost.
Strategic Alternatives
On October 31, 2019, MIC announced that it was pursuing strategic alternatives including the sale of the Company or one or more of its operating businesses as a means of unlocking value. During the second quarter, the Company continued to actively pursue these alternatives although travel and other restrictions on interactions imposed by COVID-19 slowed the process, as expected.
"While the timeline for the process has been extended due to COVID-19, we remain committed to unlocking value for shareholders through a sale or sales," said Frost.
Summary Financial Information
Quarter Ended | Change | Six Months Ended | Change | ||||||||||||||||||||||||
2020 | 2019 | $ | % | 2020 | 2019 | $ | % | ||||||||||||||||||||
($ In Millions, Except Share and Per Share Data) (Unaudited) | |||||||||||||||||||||||||||
GAAP Metrics | |||||||||||||||||||||||||||
Continuing Operations | |||||||||||||||||||||||||||
Net (loss) income | $ | (8) | $ | 6 | (14) | NM | $ | 3 | $ | 70 | (67) | (96) | |||||||||||||||
Net (loss) income per share attributable to MIC | (0.09) | 0.07 | (0.16) | NM | 0.04 | 0.81 | (0.77) | (95) | |||||||||||||||||||
Cash provided by operating activities | 73 | 108 | (35) | (32) | 172 | 259 | (87) | (34) | |||||||||||||||||||
Discontinued Operations | |||||||||||||||||||||||||||
Net income | $ | — | $ | 3 | (3) | (100) | $ | — | $ | 8 | (8) | (100) | |||||||||||||||
Net income per share attributable to MIC | — | 0.06 | (0.06) | (100) | — | 0.13 | (0.13) | (100) | |||||||||||||||||||
Cash provided by (used) in operating activities | — | 2 | (2) | (100) | — | (11) | 11 | 100 | |||||||||||||||||||
Weighted average number of shares outstanding: basic | 86,871,892 | 86,073,372 | 798,520 | 1 | 86,779,432 | 85,973,308 | 806,124 | 1 | |||||||||||||||||||
MIC Non-GAAP Metrics | |||||||||||||||||||||||||||
EBITDA excluding non-cash items - continuing operations | $ | 85 | $ | 132 | (47) | (36) | $ | 226 | $ | 334 | (108) | (32) | |||||||||||||||
Investment and acquisition/disposition costs | 2 | 2 | — | — | 13 | 3 | 10 | NM | |||||||||||||||||||
Adjusted EBITDA excluding non - cash items– | $ | 87 | $ | 134 | (47) | (35) | $ | 239 | $ | 337 | (98) | (29) | |||||||||||||||
Cash interest | $ | (30) | $ | (31) | 1 | 3 | $ | (59) | $ | (59) | — | — | |||||||||||||||
Cash taxes | 5 | (2) | 7 | NM | (2) | (9) | 7 | 78 | |||||||||||||||||||
Maintenance capital expenditures | (16) | (13) | (3) | (23) | (28) | (23) | (5) | (22) | |||||||||||||||||||
Adjusted Free Cash Flow - continuing operations | $ | 46 | $ | 88 | (42) | (48) | $ | 150 | $ | 246 | (96) | (39) | |||||||||||||||
EBITDA excluding non-cash items - discontinued | $ | — | $ | 12 | (12) | (100) | $ | — | $ | 22 | (22) | (100) | |||||||||||||||
Cash interest | — | (5) | 5 | 100 | — | (8) | 8 | 100 | |||||||||||||||||||
Free Cash Flow - discontinued operations | $ | — | $ | 7 | (7) | (100) | $ | — | $ | 14 | (14) | (100) | |||||||||||||||
Adjusted Free Cash Flow - consolidated | $ | 46 | $ | 95 | (49) | (52) | $ | 150 | $ | 260 | (110) | (42) |
__________ |
NM — Not meaningful |
Conference Call and Webcast
When: MIC has scheduled a conference call for 8:00 a.m. Eastern Time on Tuesday, August 4, 2020 during which management will review and comment on the second quarter and year to date 2020 results.
How: To listen to the conference call dial +1(650) 521-5252 or +1(877) 852-2928 at least ten 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. Allow extra time prior to the call to visit the site and download the software needed to listen to the webcast.
Slides: MIC will prepare materials in support of its conference call. The materials will be available for downloading from the Company's website prior to the call.
Replay: For interested individuals unable to participate in the live conference call, a replay will be available after 2:00 p.m. on August 4, 2020 through midnight on August 11, 2020, at +1(404) 537-3406 or +1(855) 859-2056, Passcode: 2387446. An online archive of the webcast will be available on the Company's website for one year following the call.
About MIC
MIC owns and operates a diversified group of businesses providing basic services to customers in the United States. Its businesses consist of a bulk liquid terminals business, International-Matex Tank Terminals; an airport services business, Atlantic Aviation; and entities comprising an energy services, production and distribution segment, MIC Hawaii. For additional information, please visit the MIC website at www.macquarie.com/mic.
Use of Non-GAAP Measures
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items and Free Cash Flow
In addition to MIC's results under U.S. GAAP, the Company uses certain non-GAAP measures to assess the performance and prospects of its businesses. In particular, MIC uses EBITDA excluding non-cash items and Free Cash Flow.
MIC measures EBITDA excluding non-cash items as a reflection of its businesses' ability to effectively manage the volume of products sold or services provided, the operating margin earned on those transactions and the management of operating expenses independent of the capitalization and tax attributes of those businesses. The Company believes investors use EBITDA excluding non-cash items primarily as a measure to assess the operating performance of its businesses and to make comparisons with the operating performance of other businesses whose depreciation and amortization expense may vary widely from MIC's, particularly where acquisitions and other non-operating factors are involved. MIC defines EBITDA excluding non-cash items as net income (loss) or earnings — the most comparable GAAP measure — before interest, taxes, depreciation and amortization and non-cash items including impairments, unrealized derivative gains and losses, adjustments for other non-cash items and pension expense reflected in the statements of operations. Other non-cash expenses, net, excludes the adjustment to bad debt expense related to the specific reserve component, net of recoveries, for which this adjustment is reported in working capital. EBITDA excluding non-cash items also excludes base management fees and performance fees, if any, whether paid in cash or stock.
The Company's businesses can be characterized as owners of high-value, long-lived assets capable of generating substantial Free Cash Flow. MIC defines Free Cash Flow as cash from operating activities — the most comparable GAAP measure — which includes cash paid for interest, taxes and pension contributions, less maintenance capital expenditures, which includes principal repayments on capital lease obligations used to fund maintenance capital expenditures and excludes changes in working capital.
Management uses Free Cash Flow as a measure of its ability to fund acquisitions, invest in growth projects, reduce or repay indebtedness and/or return capital to shareholders. GAAP metrics such as net income (loss) do not provide MIC management with the same level of visibility to into the performance and prospects of the business as a result of: (i) the capital intensive nature of MIC's businesses and the generation of non-cash depreciation and amortization; (ii) shares issued to the Company's external manager under the Management Services Agreement, (iii) the Company's ability to defer all or a portion of current federal income taxes; (iv) non-cash unrealized gains or losses on derivative instruments; (v) gains (losses) on disposal of assets; (vi) non-cash compensation expense incurred in relation to the incentive plans for senior management of our operating business; and (vii) pension expense. Pension expenses primarily consist of interest expense, expected return on plan assets and amortization of actuarial and performance gains and losses. Any cash contributions to pension plans are reflected as a reduction in Free Cash Flow and are not included in pension expense. Management believes that external consumers of its financial statements, including investors and research analysts, use Free Cash Flow both to assess the Company's performance and as an indicator of its success in generating an attractive risk-adjusted return.
In its Quarterly Report on Form 10-Q, the Company has disclosed Free Cash Flow on a consolidated basis and for each of its operating segments and Corporate and Other. Management believes that both EBITDA excluding non-cash items and Free Cash Flow support a more complete and accurate understanding of the financial and operating performance of its businesses than would otherwise be achieved using GAAP results alone.
Free Cash Flow does not take into consideration required payments on indebtedness and other fixed obligations or other cash items that are excluded from MIC's definition of Free Cash Flow. Management notes that Free Cash Flow may be calculated differently by other companies thereby limiting its usefulness as a comparative measure. Free Cash Flow should be used as a supplemental measure to help understand MIC's financial performance and not in lieu of its financial results reported under GAAP.
See the tables below for a reconciliation of Net Income (loss) to EBITDA excluding non-cash items from continuing operations and a reconciliation of cash provided by operating activities from continuing operations to Free Cash Flow from continuing operations.
Classification of Maintenance Capital Expenditures and Growth Capital Expenditures
MIC categorizes capital expenditures as either maintenance capital expenditures or growth capital expenditures. As neither maintenance capital expenditure nor growth capital expenditure is a GAAP term, the Company has adopted a framework to categorize specific capital expenditures. In broad terms, maintenance capital expenditures primarily maintain MIC's businesses at current levels of operations, capability, profitability, or cash flow, while growth capital expenditures primarily provide new or enhanced levels of operations, capability, profitability or cash flow. Management considers a number of factors in determining whether a specific capital expenditure will be classified as maintenance or growth.
MIC does not bifurcate specific capital expenditures into growth and maintenance components. Each discrete capital expenditure is considered within the above framework and the entire capital expenditure is classified as either maintenance or growth.
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. Such statements include, among others, those concerning our expected financial performance and strategic and operational plans, statements regarding the anticipated specific and overall impacts of the COVID-19 pandemic, as well as all assumptions, expectations, predictions, intentions or beliefs about future events. Forward-looking statements in this release 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; the short and long term impact of the COVID-19 pandemic; its ability to service, comply with the terms of and refinance debt, successfully integrate and manage acquired businesses, retain or replace qualified employees, complete growth projects, deploy growth capital and manage growth, make and finance future acquisitions, and implement its strategy; the regulatory environment; demographic trends, the political environment, the economy, tourism, construction and transportation costs, air travel, environmental costs and risks; fuel and gas and other commodity costs; its ability to recover increases in costs from customers, cybersecurity risks, work interruptions or other labor stoppages; risks associated with acquisitions or dispositions, litigation risks; risks related to its shared services initiative and its ability to achieve cost savings; 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.
MIC is not an authorized deposit-taking institution for the purposes of the Banking Act 1959 (Commonwealth of Australia). The obligations of MIC 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 MIC.
MACQUARIE INFRASTRUCTURE CORPORATION | |||||||
CONSOLIDATED CONDENSED BALANCE SHEETS | |||||||
($ in Millions, Except Share Data) | |||||||
June 30, | December 31, | ||||||
(Unaudited) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 874 | $ | 357 | |||
Restricted cash | 14 | 1 | |||||
Accounts receivable, net of allowance for doubtful accounts | 62 | 97 | |||||
Inventories | 26 | 31 | |||||
Prepaid expenses | 14 | 13 | |||||
Income tax receivable | 12 | 11 | |||||
Other current assets | 16 | 19 | |||||
Total current assets | 1,018 | 529 | |||||
Property, equipment, land and leasehold improvements, net | 3,231 | 3,202 | |||||
Operating lease assets, net | 330 | 336 | |||||
Investment in unconsolidated business | 8 | 9 | |||||
Goodwill | 2,044 | 2,043 | |||||
Intangible assets, net | 705 | 729 | |||||
Other noncurrent assets | 11 | 13 | |||||
Total assets | $ | 7,347 | $ | 6,861 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Due to Manager-related party | $ | 2 | $ | 3 | |||
Accounts payable | 37 | 67 | |||||
Accrued expenses | 76 | 86 | |||||
Current portion of long-term debt | 11 | 12 | |||||
Operating lease liabilities - current | 20 | 20 | |||||
Fair value of derivative liabilities | 8 | 7 | |||||
Other current liabilities | 26 | 35 | |||||
Total current liabilities | 180 | 230 | |||||
Long-term debt, net of current portion | 3,254 | 2,654 | |||||
Deferred income taxes | 679 | 679 | |||||
Operating lease liabilities - noncurrent | 316 | 320 | |||||
Other noncurrent liabilities | 176 | 167 | |||||
Total liabilities | 4,605 | 4,050 | |||||
Commitments and contingencies | — | — | |||||
Stockholders' equity (1): | |||||||
Additional paid in capital | 1,127 | 1,198 | |||||
Accumulated other comprehensive loss | (38) | (37) | |||||
Retained earnings | 1,644 | 1,641 | |||||
Total stockholders' equity | 2,733 | 2,802 | |||||
Noncontrolling interests | 9 | 9 | |||||
Total equity | 2,742 | 2,811 | |||||
Total liabilities and equity | $ | 7,347 | $ | 6,861 |
__________ _ |
(1) | The Company is authorized to issue the following classes of stock: (i) 500,000,000 shares of common stock, par value $0.001 per share. At June 30, 2020 and December 31, 2019, the Company had 86,969,144 shares and 86,600,302 shares of common stock issued and outstanding, respectively; (ii) 100,000,000 shares of preferred stock, par value $0.001 per share authorized. At June 30, 2020 and December 31, 2019, no preferred stocks were issued or outstanding; and (iii) 100 shares of special stock, par value $0.001 per share, issued and outstanding to its Manager as at June 30, 2020 and December 31, 2019. |
MACQUARIE INFRASTRUCTURE CORPORATION | |||||||||||||||
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS | |||||||||||||||
(Unaudited) | |||||||||||||||
($ in Millions, Except Share and Per Share Data) | |||||||||||||||
Quarter ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Revenue | |||||||||||||||
Service revenue | $ | 224 | $ | 355 | $ | 580 | $ | 773 | |||||||
Product revenue | 37 | 61 | 97 | 125 | |||||||||||
Total revenue | 261 | 416 | 677 | 898 | |||||||||||
Costs and expenses | |||||||||||||||
Cost of services | 75 | 162 | 220 | 330 | |||||||||||
Cost of product sales | 18 | 45 | 60 | 85 | |||||||||||
Selling, general and administrative | 83 | 84 | 179 | 164 | |||||||||||
Fees to Manager-related party | 4 | 7 | 11 | 15 | |||||||||||
Depreciation | 50 | 48 | 101 | 96 | |||||||||||
Amortization of intangibles | 13 | 15 | 27 | 30 | |||||||||||
Total operating expenses | 243 | 361 | 598 | 720 | |||||||||||
Operating income | 18 | 55 | 79 | 178 | |||||||||||
Other income (expense) | |||||||||||||||
Interest income | — | 1 | — | 4 | |||||||||||
Interest expense(1) | (33) | (46) | (75) | (88) | |||||||||||
Other income (expense), net | 2 | (2) | 3 | 2 | |||||||||||
Net (loss) income from continuing operations before income taxes | (13) | 8 | 7 | 96 | |||||||||||
Benefit (provision) for income taxes | 5 | (2) | (4) | (26) | |||||||||||
Net (loss) income from continuing operations | (8) | 6 | 3 | 70 | |||||||||||
Discontinued Operations(2) | |||||||||||||||
Net income from discontinued operations before income taxes | — | 5 | — | 8 | |||||||||||
Provision for income taxes | — | (2) | — | — | |||||||||||
Net income from discontinued operations | — | 3 | — | 8 | |||||||||||
Net (loss) income | (8) | 9 | 3 | 78 | |||||||||||
Net (loss) income from continuing operations | (8) | 6 | 3 | 70 | |||||||||||
Net (loss) income from continuing operations attributable to MIC | (8) | 6 | 3 | 70 | |||||||||||
Net income from discontinued operations | — | 3 | — | 8 | |||||||||||
Less: net loss attributable to noncontrolling interests | — | (2) | — | (3) | |||||||||||
Net income from discontinued operations attributable to MIC | — | 5 | — | 11 | |||||||||||
Net (loss) income attributable to MIC | $ | (8) | $ | 11 | $ | 3 | $ | 81 | |||||||
Basic (loss) income per share from continuing operations attributable to | $ | (0.09) | $ | 0.07 | $ | 0.04 | $ | 0.81 | |||||||
Basic income per share from discontinued operations attributable to MIC | — | 0.06 | — | 0.13 | |||||||||||
Basic (loss) income per share attributable to MIC | $ | (0.09) | $ | 0.13 | $ | 0.04 | $ | 0.94 | |||||||
Weighted average number of shares outstanding: basic | 86,871,892 | 86,073,372 | 86,779,432 | 85,973,308 | |||||||||||
Diluted (loss) income per share from continuing operations attributable to | $ | (0.09) | $ | 0.07 | $ | 0.04 | $ | 0.81 | |||||||
Diluted income per share from discontinued operations attributable to MIC | — | 0.06 | — | 0.13 | |||||||||||
Diluted (loss) income per share attributable to MIC | $ | (0.09) | $ | 0.13 | $ | 0.04 | $ | 0.94 | |||||||
Weighted average number of shares outstanding: diluted | 86,871,892 | 86,099,111 | 86,838,519 | 85,998,006 | |||||||||||
Cash dividends declared per share | $ | — | $ | 1.00 | $ | — | $ | 2.00 |
__________ _ |
(1) | Interest expense includes non-cash losses on derivative instruments of $1 million and $10 million for the quarter and six months ended June 30, 2020, respectively, compared with non-cash losses of $8 million and $12 million for the quarter and six months ended June 30, 2019, respectively. |
(2) | See Note 4, "Discontinued Operations and Dispositions", in our Notes to Consolidated Condensed Financial Statements in Part I of Form 10-Q for the quarter ended June 30, 2020, for discussions on businesses classified as held for sale. |
MACQUARIE INFRASTRUCTURE CORPORATION | |||||||
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS | |||||||
(Unaudited) | |||||||
($ in Millions) | |||||||
Six Months Ended June 30, | |||||||
2020 | 2019 | ||||||
Operating activities | |||||||
Net income from continuing operations | $ | 3 | $ | 70 | |||
Adjustments to reconcile net income to net cash provided by operating activities fromcontinuing | |||||||
Depreciation and amortization of property and equipment | 101 | 96 | |||||
Amortization of intangible assets | 27 | 30 | |||||
Amortization of debt financing costs | 5 | 5 | |||||
Amortization of debt discount | 1 | 2 | |||||
Adjustments to derivative instruments | 6 | 22 | |||||
Fees to Manager - related party | 11 | 15 | |||||
Deferred taxes | 2 | 17 | |||||
Other non-cash expense, net | 9 | 9 | |||||
Changes in other assets and liabilities, net of acquisitions: | |||||||
Accounts receivable | 32 | (2) | |||||
Inventories | 6 | (1) | |||||
Prepaid expenses and other current assets | (1) | (11) | |||||
Accounts payable and accrued expenses | (28) | 1 | |||||
Income taxes payable | (2) | 3 | |||||
Other, net | — | 3 | |||||
Net cash provided by operating activities from continuing operations | 172 | 259 | |||||
Investing activities | |||||||
Acquisitions of businesses and investments, net of cash, cashequivalents and restricted cash acquired | (13) | — | |||||
Purchases of property and equipment | (135) | (102) | |||||
Loan to project developer | — | (1) | |||||
Net cash used in investing activities from continuing operations | (148) | (103) | |||||
Financing activities | |||||||
Proceeds from long-term debt | 874 | — | |||||
Payment of long-term debt | (281) | (3) | |||||
Dividends paid to common stockholders | (87) | (172) | |||||
Debt financing costs paid | — | (1) | |||||
Net cash provided by (used in) financing activities from continuing operations | 506 | (176) | |||||
Net change in cash, cash equivalents and restricted cash from continuing operations | 530 | (20) |
MACQUARIE INFRASTRUCTURE CORPORATION | |||||||
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS – (continued) | |||||||
(Unaudited) | |||||||
($ in Millions) | |||||||
Six Months Ended June 30, | |||||||
2020 | 2019 | ||||||
Cash flows (used in) provided by discontinued operations: | |||||||
Net cash used in operating activities | $ | — | $ | (11) | |||
Net cash used in investing activities | — | (16) | |||||
Net cash provided by financing activities | — | 27 | |||||
Net cash provided by discontinued operations | — | — | |||||
Net change in cash, cash equivalents and restricted cash | 530 | (20) | |||||
Cash, cash equivalents and restricted cash, beginning of period | 358 | 629 | |||||
Cash, cash equivalents and restricted cash, end of period | $ | 888 | $ | 609 | |||
Supplemental disclosures of cash flow information from continuing | |||||||
Non-cash investing and financing activities: | |||||||
Accrued purchases of property and equipment | $ | 20 | $ | 13 | |||
Leased assets obtained in exchange for new operating lease liabilities | 6 | 2 | |||||
Taxes paid, net | 4 | 6 | |||||
Interest paid, net | 59 | 67 |
The following table provides a reconciliation of cash, cash equivalents and restricted cash from both continuing and discontinued operations reported within the consolidated condensed balance sheets that is presented in the consolidated condensed statements of cash flows:
As of June 30, | |||||||
2020 | 2019 | ||||||
Cash and cash equivalents | $ | 874 | $ | 573 | |||
Restricted cash | 14 | 17 | |||||
Cash, cash equivalents and restricted cash included in assets held for sale(1) | — | 19 | |||||
Total of cash, cash equivalents and restricted cash shown in the consolidated statement of cash flows | $ | 888 | $ | 609 |
__________ _ |
(1) | Represents cash, cash equivalents and restricted cash related to businesses classified as held for sale. See Note 4, "Discontinued Operations and Dispositions", in our Notes to Consolidated Condensed Financial Statements in Part I of Form 10-Q for the quarter ended June 30, 2020, for further discussion. |
MACQUARIE INFRASTRUCTURE CORPORATION | |||||||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS – MD&A | |||||||||||||||||||||||||||
Quarter Ended | Change | Six Months Ended | Change | ||||||||||||||||||||||||
2020 | 2019 | $ | % | 2020 | 2019 | $ | % | ||||||||||||||||||||
($ In Millions, Except Share and Per Share Data) (Unaudited) | |||||||||||||||||||||||||||
Revenue | |||||||||||||||||||||||||||
Service revenue | $ | 224 | $ | 355 | (131) | (37) | $ | 580 | $ | 773 | (193) | (25) | |||||||||||||||
Product revenue | 37 | 61 | (24) | (39) | 97 | 125 | (28) | (22) | |||||||||||||||||||
Total revenue | 261 | 416 | (155) | (37) | 677 | 898 | (221) | (25) | |||||||||||||||||||
Costs and expenses | |||||||||||||||||||||||||||
Cost of services | 75 | 162 | 87 | 54 | 220 | 330 | 110 | 33 | |||||||||||||||||||
Cost of product sales | 18 | 45 | 27 | 60 | 60 | 85 | 25 | 29 | |||||||||||||||||||
Selling, general and administrative | 83 | 84 | 1 | 1 | 179 | 164 | (15) | (9) | |||||||||||||||||||
Fees to Manager - related party | 4 | 7 | 3 | 43 | 11 | 15 | 4 | 27 | |||||||||||||||||||
Depreciation and amortization | 63 | 63 | — | — | 128 | 126 | (2) | (2) | |||||||||||||||||||
Total operating expenses | 243 | 361 | 118 | 33 | 598 | 720 | 122 | 17 | |||||||||||||||||||
Operating income | 18 | 55 | (37) | (67) | 79 | 178 | (99) | (56) | |||||||||||||||||||
Other income (expense) | |||||||||||||||||||||||||||
Interest income | — | 1 | (1) | (100) | — | 4 | (4) | (100) | |||||||||||||||||||
Interest expense(1) | (33) | (46) | 13 | 28 | (75) | (88) | 13 | 15 | |||||||||||||||||||
Other income (expense), net | 2 | (2) | 4 | 200 | 3 | 2 | 1 | 50 | |||||||||||||||||||
Net (loss) income from continuing | (13) | 8 | (21) | NM | 7 | 96 | (89) | (93) | |||||||||||||||||||
Benefit (provision) for income taxes | 5 | (2) | 7 | NM | (4) | (26) | 22 | 85 | |||||||||||||||||||
Net (loss) income from continuing | (8) | 6 | (14) | NM | 3 | 70 | (67) | (96) | |||||||||||||||||||
Discontinued Operations | |||||||||||||||||||||||||||
Net income from discontinued | — | 5 | (5) | (100) | — | 8 | (8) | (100) | |||||||||||||||||||
Provision for income taxes | — | (2) | 2 | 100 | — | — | — | — | |||||||||||||||||||
Net income from discontinued operations | — | 3 | (3) | (100) | — | 8 | (8) | (100) | |||||||||||||||||||
Net (loss) income | (8) | 9 | (17) | (189) | 3 | 78 | (75) | (96) | |||||||||||||||||||
Net (loss) income from continuing operations | (8) | 6 | (14) | NM | 3 | 70 | (67) | (96) | |||||||||||||||||||
Net (loss) income from continuing | (8) | 6 | (14) | NM | 3 | 70 | (67) | (96) | |||||||||||||||||||
Net income from discontinued operations | — | 3 | (3) | (100) | — | 8 | (8) | (100) | |||||||||||||||||||
Less: net loss attributable to | — | (2) | (2) | (100) | — | (3) | (3) | (100) | |||||||||||||||||||
Net income from discontinued | — | 5 | (5) | (100) | — | 11 | (11) | (100) | |||||||||||||||||||
Net (loss) income attributable to MIC | $ | (8) | $ | 11 | (19) | (173) | $ | 3 | $ | 81 | (78) | (96) | |||||||||||||||
Basic (loss) income per share from | $ | (0.09) | $ | 0.07 | (0.16) | NM | $ | 0.04 | $ | 0.81 | (0.77) | (95) | |||||||||||||||
Basic income per share from discontinued | — | 0.06 | (0.06) | (100) | — | 0.13 | (0.13) | (100) | |||||||||||||||||||
Basic (loss) income per share | $ | (0.09) | $ | 0.13 | (0.22) | (169) | $ | 0.04 | $ | 0.94 | (0.90) | (96) | |||||||||||||||
Weighted average number of shares | 86,871,892 | 86,073,372 | 798,520 | 1 | 86,779,432 | 85,973,308 | 806,124 | 1 |
__________ _ |
NM — Not meaningful | |
(1) | Interest expense includes non-cash losses on derivative instruments of $1 million and $10 million for the quarter and six months ended June 30, 2020, respectively, compared with non-cash losses of $8 million and $12 million for the quarter and six months ended June 30, 2019, respectively. |
MACQUARIE INFRASTRUCTURE CORPORATION | |||||||||||||||||||||||||||
RECONCILIATION OF CONSOLIDATED NET (LOSS) INCOME TO EBITDA EXCLUDING | |||||||||||||||||||||||||||
NON-CASH ITEMS AND A RECONCILIATION FROM CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW | |||||||||||||||||||||||||||
Quarter Ended | Change | Six Months Ended | Change | ||||||||||||||||||||||||
2020 | 2019 | $ | % | 2020 | 2019 | $ | % | ||||||||||||||||||||
($ In Millions) (Unaudited) | |||||||||||||||||||||||||||
Net (loss) income from continuing operations | $ | (8) | $ | 6 | $ | 3 | $ | 70 | |||||||||||||||||||
Interest expense, net(1) | 33 | 45 | 75 | 84 | |||||||||||||||||||||||
(Benefit) Provision for income taxes | (5) | 2 | 4 | 26 | |||||||||||||||||||||||
Depreciation and amortization | 63 | 63 | 128 | 126 | |||||||||||||||||||||||
Fees to Manager - related party | 4 | 7 | 11 | 15 | |||||||||||||||||||||||
Other non-cash (income) expense, net (2) | (2) | 9 | 5 | 13 | |||||||||||||||||||||||
EBITDA excluding non-cash items - continuing | $ | 85 | $ | 132 | (47) | (36) | $ | 226 | $ | 334 | (108) | (32) | |||||||||||||||
EBITDA excluding non-cash items - continuing | $ | 85 | $ | 132 | $ | 226 | $ | 334 | |||||||||||||||||||
Interest expense, net(1) | (33) | (45) | (75) | (84) | |||||||||||||||||||||||
Non-cash interest expense, net(1) | 3 | 14 | 16 | 25 | |||||||||||||||||||||||
Benefit (provision) for current income taxes | 5 | (2) | (2) | (9) | |||||||||||||||||||||||
Changes in working capital | 13 | 9 | 7 | (7) | |||||||||||||||||||||||
Cash provided by operating activities - continuing | 73 | 108 | 172 | 259 | |||||||||||||||||||||||
Changes in working capital | (13) | (9) | (7) | 7 | |||||||||||||||||||||||
Maintenance capital expenditures | (16) | (13) | (28) | (23) | |||||||||||||||||||||||
Free cash flow - continuing operations | 44 | 86 | (42) | (49) | 137 | 243 | (106) | (44) | |||||||||||||||||||
Free cash flow - discontinued operations | — | 7 | (7) | (100) | — | 14 | (14) | (100) | |||||||||||||||||||
Total Free Cash Flow | $ | 44 | $ | 93 | (49) | (53) | $ | 137 | $ | 257 | (120) | (47) |
__________ _ | |
(1) | Interest expense, net, includes adjustments to derivative instruments, non-cash amortization of deferred financing fees and non-cash amortization of debt discount related to the 2.00% Convertible Senior Notes due October 2023. |
(2) | Other non-cash (income) expense, net, includes primarily pension expense of $2 million and $4 million for the quarter and six month periods ended June 30, 2020 and 2019, respectively, unrealized gains (losses) on commodity hedge contracts, non-cash compensation expense incurred in relation to the incentive plans for senior management of our operating businesses and non-cash gains (losses) related to the disposal of assets. Pension expense consists primarily of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses. Other non-cash (income) expense, net, excludes the adjustment to bad debt expense related to the specific reserve component, net of recoveries, for which this adjustment is reported in working capital in the above table. See "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items and Free Cash Flow" above for further discussion. |
MACQUARIE INFRASTRUCTURE CORPORATION | |||||||||||||||||||||||
RECONCILIATION OF SEGMENT NET INCOME (LOSS) TO EBITDA | |||||||||||||||||||||||
EXCLUDING NON-CASH ITEMS AND A RECONCILIATION FROM CASH PROVIDED | |||||||||||||||||||||||
BY (USED IN) OPERATING ACTIVITIES TO FREE CASH FLOW | |||||||||||||||||||||||
IMTT | |||||||||||||||||||||||
Quarter Ended | Change | Six Months Ended | Change | ||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
$ | $ | $ | % | $ | $ | $ | % | ||||||||||||||||
($ In Millions) (Unaudited) | |||||||||||||||||||||||
Revenue | 120 | 119 | 1 | 1 | 252 | 280 | (28) | (10) | |||||||||||||||
Cost of services | 46 | 49 | 3 | 6 | 96 | 99 | 3 | 3 | |||||||||||||||
Selling, general and administrative expenses | 10 | 9 | (1) | (11) | 19 | 17 | (2) | (12) | |||||||||||||||
Depreciation and amortization | 34 | 33 | (1) | (3) | 68 | 66 | (2) | (3) | |||||||||||||||
Operating income | 30 | 28 | 2 | 7 | 69 | 98 | (29) | (30) | |||||||||||||||
Interest expense, net(1) | (10) | (15) | 5 | 33 | (25) | (28) | 3 | 11 | |||||||||||||||
Other income, net | 2 | — | 2 | NM | 3 | — | 3 | NM | |||||||||||||||
Provision for income taxes | (6) | (4) | (2) | (50) | (13) | (20) | 7 | 35 | |||||||||||||||
Net income | 16 | 9 | 7 | 78 | 34 | 50 | (16) | (32) | |||||||||||||||
Reconciliation of net income to EBITDA | |||||||||||||||||||||||
Net income | 16 | 9 | 34 | 50 | |||||||||||||||||||
Interest expense, net(1) | 10 | 15 | 25 | 28 | |||||||||||||||||||
Provision for income taxes | 6 | 4 | 13 | 20 | |||||||||||||||||||
Depreciation and amortization | 34 | 33 | 68 | 66 | |||||||||||||||||||
Other non-cash expense, net(2) | 2 | 3 | 5 | 4 | |||||||||||||||||||
EBITDA excluding non-cash items | 68 | 64 | 4 | 6 | 145 | 168 | (23) | (14) | |||||||||||||||
EBITDA excluding non-cash items | 68 | 64 | 145 | 168 | |||||||||||||||||||
Interest expense, net(1) | (10) | (15) | (25) | (28) | |||||||||||||||||||
Non-cash interest expense, net(1) | — | 5 | 5 | 8 | |||||||||||||||||||
Provision for current income taxes | (1) | (1) | (3) | (12) | |||||||||||||||||||
Changes in working capital | (3) | 2 | (20) | 10 | |||||||||||||||||||
Cash provided by operating activities | 54 | 55 | 102 | 146 | |||||||||||||||||||
Changes in working capital | 3 | (2) | 20 | (10) | |||||||||||||||||||
Maintenance capital expenditures | (13) | (8) | (19) | (14) | |||||||||||||||||||
Free cash flow | 44 | 45 | (1) | (2) | 103 | 122 | (19) | (16) |
________ | |
NM — Not meaningful | |
(1) | Interest expense, net, includes non-cash adjustments to derivative instruments and non-cash amortization of deferred financing fee. |
(2) | Other non-cash expense, net, includes primarily pension expense of $2 million and $4 million for the quarter and six month periods ended June 30, 2020 and 2019, respectively, and non-cash compensation expense incurred in relation to incentive plans. Pension expense consists primarily of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses. Other non-cash expenses, net, excludes the adjustment to bad debt expense related to the specific reserve component, net of recoveries, for which this adjustment is reported in working capital in the above table. See "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items and Free Cash Flow" above for further discussion. |
Atlantic Aviation | |||||||||||||||||||||||
Quarter Ended | Change | Six Months Ended | Change | ||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
$ | $ | $ | % | $ | $ | $ | % | ||||||||||||||||
($ In Millions) (Unaudited) | |||||||||||||||||||||||
Revenue | 104 | 236 | (132) | (56) | 328 | 494 | (166) | (34) | |||||||||||||||
Cost of services (exclusive of depreciation and | 29 | 113 | 84 | 74 | 124 | 231 | 107 | 46 | |||||||||||||||
Gross margin | 75 | 123 | (48) | (39) | 204 | 263 | (59) | (22) | |||||||||||||||
Selling, general and administrative expenses | 59 | 62 | 3 | 5 | 123 | 123 | — | — | |||||||||||||||
Depreciation and amortization | 25 | 26 | 1 | 4 | 52 | 52 | — | — | |||||||||||||||
Operating (loss) income | (9) | 35 | (44) | (126) | 29 | 88 | (59) | (67) | |||||||||||||||
Interest expense, net(1) | (14) | (22) | 8 | 36 | (33) | (41) | 8 | 20 | |||||||||||||||
Benefit (provision) for income taxes | 6 | (4) | 10 | NM | 1 | (13) | 14 | 108 | |||||||||||||||
Net (loss) income | (17) | 9 | (26) | NM | (3) | 34 | (37) | (109) | |||||||||||||||
Reconciliation of net (loss) income to EBITDA | |||||||||||||||||||||||
Net (loss) income | (17) | 9 | (3) | 34 | |||||||||||||||||||
Interest expense, net(1) | 14 | 22 | 33 | 41 | |||||||||||||||||||
(Benefit) provision for income taxes | (6) | 4 | (1) | 13 | |||||||||||||||||||
Depreciation and amortization | 25 | 26 | 52 | 52 | |||||||||||||||||||
Other non-cash expense, net(2) | 1 | 1 | 2 | 1 | |||||||||||||||||||
EBITDA excluding non-cash items | 17 | 62 | (45) | (73) | 83 | 141 | (58) | (41) | |||||||||||||||
EBITDA excluding non-cash items | 17 | 62 | 83 | 141 | |||||||||||||||||||
Interest expense, net(1) | (14) | (22) | (33) | (41) | |||||||||||||||||||
Non-cash interest expense, net(1) | 2 | 7 | 7 | 12 | |||||||||||||||||||
Benefit (provision) for current income taxes | 9 | (3) | — | (10) | |||||||||||||||||||
Changes in working capital | 9 | 6 | 25 | 2 | |||||||||||||||||||
Cash provided by operating activities | 23 | 50 | 82 | 104 | |||||||||||||||||||
Changes in working capital | (9) | (6) | (25) | (2) | |||||||||||||||||||
Maintenance capital expenditures | (2) | (3) | (5) | (5) | |||||||||||||||||||
Free cash flow | 12 | 41 | (29) | (71) | 52 | 97 | (45) | (46) |
__________ | |
NM — Not meaningful | |
(1) | Interest expense, net, includes non-cash adjustments to derivative instruments and non-cash amortization of deferred financing fees. |
(2) | Other non-cash expense, net, includes primarily non-cash compensation expense incurred in relation to incentive plans and non-cash gains (losses) related to the disposal of assets. Other non-cash expenses, net, excludes the adjustment to bad debt expense related to the specific reserve component, net of recoveries, for which this adjustment is reported in working capital in the above table. See "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items and Free Cash Flow" above for further discussion. |
MIC Hawaii | |||||||||||||||||||||||
Quarter Ended | Change | Six Months Ended | Change | ||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
$ | $ | $ | % | $ | $ | $ | % | ||||||||||||||||
($ In Millions) (Unaudited) | |||||||||||||||||||||||
Revenue | 37 | 61 | (24) | (39) | 97 | 125 | (28) | (22) | |||||||||||||||
Cost of product sales (exclusive of | 18 | 45 | 27 | 60 | 60 | 85 | 25 | 29 | |||||||||||||||
Gross margin | 19 | 16 | 3 | 19 | 37 | 40 | (3) | (8) | |||||||||||||||
Selling, general and administrative expenses | 6 | 5 | (1) | (20) | 12 | 11 | (1) | (9) | |||||||||||||||
Depreciation and amortization | 4 | 4 | — | — | 8 | 8 | — | — | |||||||||||||||
Operating income | 9 | 7 | 2 | 29 | 17 | 21 | (4) | (19) | |||||||||||||||
Interest expense, net(1) | (2) | (2) | — | — | (5) | (5) | — | — | |||||||||||||||
Other expense, net | — | (2) | 2 | 100 | — | (2) | 2 | 100 | |||||||||||||||
Provision for income taxes | (2) | (1) | (1) | (100) | (4) | (4) | — | — | |||||||||||||||
Net income | 5 | 2 | 3 | 150 | 8 | 10 | (2) | (20) | |||||||||||||||
Reconciliation of net income to EBITDA | |||||||||||||||||||||||
Net income | 5 | 2 | 8 | 10 | |||||||||||||||||||
Interest expense, net(1) | 2 | 2 | 5 | 5 | |||||||||||||||||||
Provision for income taxes | 2 | 1 | 4 | 4 | |||||||||||||||||||
Depreciation and amortization | 4 | 4 | 8 | 8 | |||||||||||||||||||
Other non-cash (income) expense, net(2) | (6) | 5 | (3) | 7 | |||||||||||||||||||
EBITDA excluding non-cash items | 7 | 14 | (7) | (50) | 22 | 34 | (12) | (35) | |||||||||||||||
EBITDA excluding non-cash items | 7 | 14 | 22 | 34 | |||||||||||||||||||
Interest expense, net(1) | (2) | (2) | (5) | (5) | |||||||||||||||||||
Non-cash interest expense, net(1) | — | — | 1 | 1 | |||||||||||||||||||
Provision for current income taxes | (1) | — | (3) | (3) | |||||||||||||||||||
Changes in working capital | 9 | 3 | 4 | 1 | |||||||||||||||||||
Cash provided by operating activities | 13 | 15 | 19 | 28 | |||||||||||||||||||
Changes in working capital | (9) | (3) | (4) | (1) | |||||||||||||||||||
Maintenance capital expenditures | (1) | (2) | (4) | (4) | |||||||||||||||||||
Free cash flow | 3 | 10 | (7) | (70) | 11 | 23 | (12) | (52) |
________ | |
(1) | Interest expense, net, includes non-cash adjustments to derivative instruments related to interest rate swaps and non-cash amortization of deferred financing fees. |
(2) | Other non-cash (income) expense, net, includes primarily non-cash adjustments related to unrealized gains (losses) on commodity hedge contracts, pension expense and non-cash compensation expense incurred in relation to incentive plans. Pension expense consists primarily of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses. Other non-cash (income) expense, net, excludes the adjustment to bad debt expense related to the specific reserve component, net of recoveries, for which this adjustment is reported in working capital in the above table. See "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items and Free Cash Flow" above for further discussion. |
Corporate and Other | |||||||||||||||||||||||
Quarter Ended | Change | Six Months Ended | Change | ||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
$ | $ | $ | % | $ | $ | $ | % | ||||||||||||||||
($ In Millions) (Unaudited) | |||||||||||||||||||||||
Selling, general and administrative expenses | 8 | 8 | — | — | 25 | 14 | (11) | (79) | |||||||||||||||
Fees to Manager - related party | 4 | 7 | 3 | 43 | 11 | 15 | 4 | 27 | |||||||||||||||
Operating loss | (12) | (15) | 3 | 20 | (36) | (29) | (7) | (24) | |||||||||||||||
Interest expense, net(1) | (7) | (6) | (1) | (17) | (12) | (10) | (2) | (20) | |||||||||||||||
Other income, net | — | — | — | — | — | 4 | (4) | (100) | |||||||||||||||
Benefit for income taxes | 7 | 7 | — | — | 12 | 11 | 1 | 9 | |||||||||||||||
Net loss | (12) | (14) | 2 | 14 | (36) | (24) | (12) | (50) | |||||||||||||||
Reconciliation of net loss to EBITDA | |||||||||||||||||||||||
Net loss | (12) | (14) | (36) | (24) | |||||||||||||||||||
Interest expense, net(1) | 7 | 6 | 12 | 10 | |||||||||||||||||||
Benefit for income taxes | (7) | (7) | (12) | (11) | |||||||||||||||||||
Fees to Manager - related party | 4 | 7 | 11 | 15 | |||||||||||||||||||
Other non-cash expense, net | 1 | — | 1 | 1 | |||||||||||||||||||
EBITDA excluding non-cash items | (7) | (8) | 1 | 13 | (24) | (9) | (15) | (167) | |||||||||||||||
EBITDA excluding non-cash items | (7) | (8) | (24) | (9) | |||||||||||||||||||
Interest expense, net(1) | (7) | (6) | (12) | (10) | |||||||||||||||||||
Non-cash interest expense, net(1) | 1 | 2 | 3 | 4 | |||||||||||||||||||
(Provision) benefit for current income taxes | (2) | 2 | 4 | 16 | |||||||||||||||||||
Changes in working capital | (2) | (2) | (2) | (20) | |||||||||||||||||||
Cash used in operating activities | (17) | (12) | (31) | (19) | |||||||||||||||||||
Changes in working capital | 2 | 2 | 2 | 20 | |||||||||||||||||||
Free cash flow | (15) | (10) | (5) | (50) | (29) | 1 | (30) | NM |
__________ | |
NM — Not meaningful | |
(1) | Interest expense, net, included non-cash amortization of deferred financing fees and non-cash amortization of debt discount related to the 2.00% Convertible Senior Notes due October 2023. |
MACQUARIE INFRASTRUCTURE CORPORATION | |||||||||||||||||||||||||||||||||||
RECONCILIATION OF NET INCOME (LOSS) TO EBITDA EXCLUDING | |||||||||||||||||||||||||||||||||||
NON-CASH ITEMS AND A RECONCILIATION FROM CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES TO FREE CASH FLOW | |||||||||||||||||||||||||||||||||||
For the Quarter Ended June 30, 2020 | |||||||||||||||||||||||||||||||||||
IMTT | Atlantic | MIC | Corporate | Total Continuing | |||||||||||||||||||||||||||||||
($ in Millions) (Unaudited) | |||||||||||||||||||||||||||||||||||
Net income (loss) | 16 | (17) | 5 | (12) | (8) | ||||||||||||||||||||||||||||||
Interest expense, net(1) | 10 | 14 | 2 | 7 | 33 | ||||||||||||||||||||||||||||||
Provision (benefit) for income taxes | 6 | (6) | 2 | (7) | (5) | ||||||||||||||||||||||||||||||
Depreciation and amortization | 34 | 25 | 4 | — | 63 | ||||||||||||||||||||||||||||||
Fees to Manager-related party | — | — | — | 4 | 4 | ||||||||||||||||||||||||||||||
Other non-cash expense (income), net(2) | 2 | 1 | (6) | 1 | (2) | ||||||||||||||||||||||||||||||
EBITDA excluding non-cash items | 68 | 17 | 7 | (7) | 85 | ||||||||||||||||||||||||||||||
EBITDA excluding non-cash items | 68 | 17 | 7 | (7) | 85 | ||||||||||||||||||||||||||||||
Interest expense, net(1) | (10) | (14) | (2) | (7) | (33) | ||||||||||||||||||||||||||||||
Non-cash interest expense, net(1) | — | 2 | — | 1 | 3 | ||||||||||||||||||||||||||||||
(Provision) benefit for current income taxes | (1) | 9 | (1) | (2) | 5 | ||||||||||||||||||||||||||||||
Changes in working capital | (3) | 9 | 9 | (2) | 13 | ||||||||||||||||||||||||||||||
Cash provided by (used in) operating activities | 54 | 23 | 13 | (17) | 73 | ||||||||||||||||||||||||||||||
Changes in working capital | 3 | (9) | (9) | 2 | (13) | ||||||||||||||||||||||||||||||
Maintenance capital expenditures | (13) | (2) | (1) | — | (16) | ||||||||||||||||||||||||||||||
Free Cash Flow | 44 | 12 | 3 | (15) | 44 | ||||||||||||||||||||||||||||||
For the Quarter Ended June 30, 2019 | |||||||||||||||||||||||||||||||||||
IMTT | Atlantic | MIC | Corporate | Total | Discontinued | Total | |||||||||||||||||||||||||||||
($ in Millions) (Unaudited) | |||||||||||||||||||||||||||||||||||
Net income (loss) | 9 | 9 | 2 | (14) | 6 | 3 | 9 | ||||||||||||||||||||||||||||
Interest expense, net(1) | 15 | 22 | 2 | 6 | 45 | 7 | 52 | ||||||||||||||||||||||||||||
Provision (benefit) for income taxes | 4 | 4 | 1 | (7) | 2 | 2 | 4 | ||||||||||||||||||||||||||||
Depreciation and amortization | 33 | 26 | 4 | — | 63 | — | 63 | ||||||||||||||||||||||||||||
Fees to Manager-related party | — | — | — | 7 | 7 | — | 7 | ||||||||||||||||||||||||||||
Other non-cash expense, net(2) | 3 | 1 | 5 | — | 9 | — | 9 | ||||||||||||||||||||||||||||
EBITDA excluding non-cash items | 64 | 62 | 14 | (8) | 132 | 12 | 144 | ||||||||||||||||||||||||||||
EBITDA excluding non-cash items | 64 | 62 | 14 | (8) | 132 | 12 | 144 | ||||||||||||||||||||||||||||
Interest expense, net(1) | (15) | (22) | (2) | (6) | (45) | (7) | (52) | ||||||||||||||||||||||||||||
Non-cash interest expense, net(1) | 5 | 7 | — | 2 | 14 | 2 | 16 | ||||||||||||||||||||||||||||
(Provision) benefit for current income taxes | (1) | (3) | — | 2 | (2) | — | (2) | ||||||||||||||||||||||||||||
Changes in working capital | 2 | 6 | 3 | (2) | 9 | (5) | 4 | ||||||||||||||||||||||||||||
Cash provided by (used in) operating activities | 55 | 50 | 15 | (12) | 108 | 2 | 110 | ||||||||||||||||||||||||||||
Changes in working capital | (2) | (6) | (3) | 2 | (9) | 5 | (4) | ||||||||||||||||||||||||||||
Maintenance capital expenditures | (8) | (3) | (2) | — | (13) | — | (13) | ||||||||||||||||||||||||||||
Free Cash Flow | 45 | 41 | 10 | (10) | 86 | 7 | 93 | ||||||||||||||||||||||||||||
For the Six Months Ended June 30, 2020 | |||||||||||||||||||||||||||||||||||
IMTT | Atlantic | MIC | Corporate | Total Continuing | |||||||||||||||||||||||||||||||
($ in Millions) (Unaudited) | |||||||||||||||||||||||||||||||||||
Net income (loss) | 34 | (3) | 8 | (36) | 3 | ||||||||||||||||||||||||||||||
Interest expense, net(1) | 25 | 33 | 5 | 12 | 75 | ||||||||||||||||||||||||||||||
Provision (benefit) for income taxes | 13 | (1) | 4 | (12) | 4 | ||||||||||||||||||||||||||||||
Depreciation and amortization | 68 | 52 | 8 | — | 128 | ||||||||||||||||||||||||||||||
Fees to Manager-related party | — | — | — | 11 | 11 | ||||||||||||||||||||||||||||||
Other non-cash expense (income), net(2) | 5 | 2 | (3) | 1 | 5 | ||||||||||||||||||||||||||||||
EBITDA excluding non-cash items | 145 | 83 | 22 | (24) | 226 | ||||||||||||||||||||||||||||||
EBITDA excluding non-cash items | 145 | 83 | 22 | (24) | 226 | ||||||||||||||||||||||||||||||
Interest expense, net(1) | (25) | (33) | (5) | (12) | (75) | ||||||||||||||||||||||||||||||
Non-cash interest expense, net(1) | 5 | 7 | 1 | 3 | 16 | ||||||||||||||||||||||||||||||
(Provision) benefit for current income taxes | (3) | — | (3) | 4 | (2) | ||||||||||||||||||||||||||||||
Changes in working capital | (20) | 25 | 4 | (2) | 7 | ||||||||||||||||||||||||||||||
Cash provided by (used in) operating activities | 102 | 82 | 19 | (31) | 172 | ||||||||||||||||||||||||||||||
Changes in working capital | 20 | (25) | (4) | 2 | (7) | ||||||||||||||||||||||||||||||
Maintenance capital expenditures | (19) | (5) | (4) | — | (28) | ||||||||||||||||||||||||||||||
Free Cash Flow | 103 | 52 | 11 | (29) | 137 | ||||||||||||||||||||||||||||||
For the Six Months Ended June 30, 2019 | |||||||||||||||||||||||||||||||||||
IMTT | Atlantic | MIC | Corporate | Total | Discontinued | Total | |||||||||||||||||||||||||||||
($ in Millions) (Unaudited) | |||||||||||||||||||||||||||||||||||
Net income (loss) | 50 | 34 | 10 | (24) | 70 | 8 | 78 | ||||||||||||||||||||||||||||
Interest expense, net(1) | 28 | 41 | 5 | 10 | 84 | 12 | 96 | ||||||||||||||||||||||||||||
Provision (benefit) for income taxes | 20 | 13 | 4 | (11) | 26 | — | 26 | ||||||||||||||||||||||||||||
Depreciation and amortization | 66 | 52 | 8 | — | 126 | — | 126 | ||||||||||||||||||||||||||||
Fees to Manager-related party | — | — | — | 15 | 15 | — | 15 | ||||||||||||||||||||||||||||
Other non-cash expense, net(2) | 4 | 1 | 7 | 1 | 13 | 2 | 15 | ||||||||||||||||||||||||||||
EBITDA excluding non-cash items | 168 | 141 | 34 | (9) | 334 | 22 | 356 | ||||||||||||||||||||||||||||
EBITDA excluding non-cash items | 168 | 141 | 34 | (9) | 334 | 22 | 356 | ||||||||||||||||||||||||||||
Interest expense, net(1) | (28) | (41) | (5) | (10) | (84) | (12) | (96) | ||||||||||||||||||||||||||||
Non-cash interest expense, net(1) | 8 | 12 | 1 | 4 | 25 | 4 | 29 | ||||||||||||||||||||||||||||
(Provision) benefit for current income | (12) | (10) | (3) | 16 | (9) | — | (9) | ||||||||||||||||||||||||||||
Changes in working capital | 10 | 2 | 1 | (20) | (7) | (25) | (32) | ||||||||||||||||||||||||||||
Cash provided by (used in) operating | 146 | 104 | 28 | (19) | 259 | (11) | 248 | ||||||||||||||||||||||||||||
Changes in working capital | (10) | (2) | (1) | 20 | 7 | 25 | 32 | ||||||||||||||||||||||||||||
Maintenance capital expenditures | (14) | (5) | (4) | — | (23) | — | (23) | ||||||||||||||||||||||||||||
Free Cash Flow | 122 | 97 | 23 | 1 | 243 | 14 | 257 | ||||||||||||||||||||||||||||
__________ _ | |
(1) | Interest expense, net, includes non-cash adjustments to derivative instruments, non-cash amortization of deferred financing fees and non-cash amortization of debt discount related to the 2.00% Convertible Senior Notes due October 2023. |
(2) | Other non-cash expense (income), net, includes primarily pension expense of $2 million and $4 million for the quarter and six month periods ended June 30, 2020 and 2019, respectively, unrealized gains (losses) on commodity hedge contracts, non-cash compensation expense incurred in relation to the incentive plans for senior management of our operating businesses and non-cash gains (losses) related to the disposal of assets. Pension expense consists primarily of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses. Other non-cash expense (income), net, excludes the adjustment to bad debt expense related to the specific reserve component, net of recoveries, for which this adjustment is reported in working capital in the above table. See "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items and Free Cash Flow" above for further discussion. |
View original content:http://www.prnewswire.com/news-releases/mic-reports-second-quarter-2020-financial-and-operational-results-301105185.html
SOURCE Macquarie Infrastructure Corporation
NEW YORK, May 5, 2020 /PRNewswire/ -- Macquarie Infrastructure Corporation (NYSE: MIC) today announced its first quarter 2020 operational and financial results. The first quarter results reflect the stable performance of its operating businesses through the first ten weeks of the quarter and a sharp decline in Atlantic Aviation and MIC Hawaii's performance in the last two weeks as a result of the implementation of travel, public gathering and other restrictions to combat the outbreak of COVID-19.
The impact of the COVID-19 pandemic on Atlantic Aviation and MIC Hawaii was partially offset by improved performance by International-Matex Tank Terminals ("IMTT"), excluding the impact of an approximately $39 million contract termination payment ("termination fee") received in the first quarter of 2019 ("the prior comparable period"). IMTT benefited from the recognition of $15 million in fees from customers for tank cleaning and higher utilization driven by increased demand for storage of petroleum and other liquids.
MIC's Chief Executive Officer, Christopher Frost, said: "I am very proud of our team's efforts and appreciate their commitment to ensuring that the essential services our businesses provide continue to be delivered safely and efficiently as we navigate the unprecedented challenges of the COVID-19 pandemic. We remain focused on ensuring the health and safety of our employees and customers, while maintaining business continuity."
MIC reported net income from continuing operations of $11 million, down 83% compared with the first quarter of 2019. This decrease reflects the absence of the termination fee at IMTT, reduced sales activity at Atlantic Aviation and MIC Hawaii and increased general and administrative expenses primarily related to MIC's pursuit of strategic alternatives.
Adjusted EBITDA excluding non-cash items from continuing operations totaled $152 million for the quarter, down 25% versus the prior comparable period or 7% excluding the termination fee. The decrease reflects the reductions in contributions from each of Atlantic Aviation and MIC Hawaii and costs recorded in Corporate and Other related to MIC's pursuit of strategic alternatives, partially offset by the larger contribution from IMTT, excluding the 2019 termination fee.
MIC generated cash from operating activities of $99 million for the quarter, a decrease of 34% versus the prior comparable period. The decrease primarily reflects the reduction in EBITDA and declines in the amounts of products purchased and lower wholesale product prices, partially offset by declines in the amount of products sold and lower retail product prices.
The Company's Adjusted Free Cash Flow from continuing operations totaled $104 million, down 34% versus the prior comparable period or 13% excluding the termination fee. The decrease reflects the reduction in EBITDA, higher maintenance capital expenditures and cash interest.
Actions Related to COVID-19
In response to the impact of COVID-19 and the uncertainty around when travel and other restrictions may be eased, MIC's businesses have taken decisive steps to reduce operating expenses and maintain strong cash positions. These include furloughing a small number of employees and reducing scheduled work hours, eliminating certain non-payroll expenses, deferring maintenance capital expenditures unrelated to health and safety and reducing general and administrative expenses.
To preserve value and ensure the continued safe operation of its businesses through the pandemic, MIC has also sought to retain and increase its available cash where appropriate. In mid-March the Company announced that it had drawn $599 million on its holding company revolving credit facility and $275 million on the revolving credit facility at Atlantic Aviation. The drawn cash added to the Company's approximately $300 million of cash on hand.
MIC has since repaid and terminated the revolving credit facility at Atlantic Aviation (other than with respect to a $10 million commitment, currently undrawn, in place solely in support of outstanding letters of credit). The amendment of the revolving credit facility de-risks the Company's investment in Atlantic Aviation by eliminating any ongoing leverage-based maintenance covenant from the business' debt package. As a result, MIC currently has cash on hand of approximately $870 million.
In addition to drawing on credit facilities, on April 2, 2020, MIC announced that it was suspending its quarterly cash dividend as a means of retaining cash. The Company will retain approximately $260 million should the suspension remain in place through 2020. MIC notes that it has no immediate need for the additional liquidity and that these measures are prudent and strictly precautionary given the uncertainty surrounding the impact of COVID-19 on the Company's businesses and the absence of visibility into an easing of travel restrictions and economic recovery.
As an additional precaution, the MIC Board has established an Executive Committee ("the Committee") comprising the Chairman (or alternate), the Chief Executive Officer (or alternate) and one of the independent members of the board (or alternate) to exercise all powers and authority of the board when the board is not in session or in the event one or more of its members are incapacitated. Decisions of the Committee require the approval of a majority of its independent members, and a majority of the Committee's independent members may refer any matter to the full board for determination. The Committee does not have powers that, under Delaware corporate law, cannot be delegated including approving a sale of the Company. In addition, the Committee may not, among other things, reinstate or declare a dividend or amend or terminate the Company's Disposition Agreement with its Manager, Macquarie Infrastructure Management (USA), Inc.
First Quarter 2020 Segment Results and Outlook
"Atlantic Aviation performed well through the first ten weeks of the year consistent with the increases in general aviation flight activity reported by the Federal Aviation Administration although stay-at-home orders and other travel restrictions have reduced average daily flight activity substantially from mid-March. Similarly, travel restrictions and mandatory quarantines have all but eliminated visitors to Hawaii. The impact on Hawaii's hotels and restaurants has materially reduced demand for gas produced and distributed by Hawaii Gas.
"IMTT performed well with demand for storage of petroleum and liquid chemical products increasing materially during the quarter. Storage utilization is expected to increase to over 95% by mid-May from 86% at the end of 2019 with the incremental leases having an average duration of approximately one year," said Frost. "Nearly all leasable capacity is now under contract."
Balance Sheet Strength and Financial Flexibility
MIC's results from ongoing operations in the first quarter increased the Company's aggregate leverage to approximately 4.3x net debt/Adjusted EBITDA excluding non-cash items (trailing twelve-month basis) at March 31, 2020. Additional reductions in trailing twelve-month EBITDA related to the expected decrease in contributions from Atlantic Aviation and MIC Hawaii, along with MIC's use of cash to fund growth investments, is likely to result in a further increase in leverage during the year. MIC continues to forecast deployment of growth capital of between $200 and $225 million across its portfolio in 2020 to projects which it has previously committed.
"We believe that the continued funding of growth projects is prudent from the standpoint of meeting our contractual obligations to our customers and ensures that we will benefit from the incremental earnings they are expected to generate," noted Frost. "The Company's current cash balance and the additional funds we expect to retain from the suspension of our dividend, combined with the cash generated by our ongoing operations, is anticipated to fund operations and meet our financial obligations over the course of the year."
Strategic Alternatives
On October 31, 2019, MIC announced its intention to pursue strategic alternatives for the Company and has since been actively engaged in processes that could result in the sale of the Company or one or more of its operating businesses. MIC continues to believe that this course of action will ultimately maximize value for shareholders and it intends to move forward with these alternatives, although recent volatility in the capital markets and the limitations of travel bans and other restrictions on interactions imposed by COVID-19 are expected to slow the process. The measures undertaken to date, including the suspension of the quarterly dividend, will provide MIC with additional financial flexibility to proceed with such processes in a manner consistent with maximizing value for shareholders.
"We remain confident that there is a significant opportunity to unlock value for our shareholders through a sale of the Company or one or more of our businesses and we are continuing to pursue all opportunities that we believe could be in the best interests of the Company and its shareholders," said Frost.
Summary Financial Information
Quarter Ended | Change | |||||||||||||
2020 | 2019 | $ | % | |||||||||||
($ In Millions, Except Share and Per Share Data) (Unaudited) | ||||||||||||||
GAAP Metrics | ||||||||||||||
Continuing Operations | ||||||||||||||
Net income | $ | 11 | $ | 64 | (53) | (83) | ||||||||
Net income per share attributable to MIC | 0.13 | 0.75 | (0.62) | (83) | ||||||||||
Cash provided by operating activities | 99 | 151 | (52) | (34) | ||||||||||
Discontinued Operations | ||||||||||||||
Net income | $ | — | $ | 5 | (5) | (100) | ||||||||
Net income per share attributable to MIC | — | 0.07 | (0.07) | (100) | ||||||||||
Cash used in operating activities | — | (13) | 13 | 100 | ||||||||||
Weighted average number of shares outstanding: basic | 86,686,972 | 85,872,132 | 814,840 | 1 | ||||||||||
MIC Non-GAAP Metrics | ||||||||||||||
EBITDA excluding non-cash items - continuing operations | $ | 141 | $ | 202 | (61) | (30) | ||||||||
Investment and acquisition/disposition costs | 11 | 1 | 10 | NM | ||||||||||
Adjusted EBITDA excluding non - cash items–continuing operations | $ | 152 | $ | 203 | (51) | (25) | ||||||||
Cash interest | $ | (29) | $ | (28) | (1) | (4) | ||||||||
Cash taxes | (7) | (7) | — | — | ||||||||||
Maintenance capital expenditures | (12) | (10) | (2) | (20) | ||||||||||
Adjusted Free Cash Flow - continuing operations | $ | 104 | $ | 158 | (54) | (34) | ||||||||
EBITDA excluding non-cash items - discontinued operations | $ | — | $ | 10 | (10) | (100) | ||||||||
Cash interest | — | (3) | 3 | 100 | ||||||||||
Free Cash Flow - discontinued operations | $ | — | $ | 7 | (7) | (100) | ||||||||
Adjusted Free Cash Flow - consolidated | $ | 104 | $ | 165 | (61) | (37) |
NM — Not meaningful |
Conference Call and Webcast
When: MIC has scheduled a conference call for 8:00 a.m. Eastern Time on Tuesday, May 5, 2020 during which management will review and comment on the first quarter 2020 results.
How: To listen to the conference call dial +1(650) 521-5252 or +1(877) 852-2928 at least ten 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. Allow extra time prior to the call to visit the site and download the software needed to listen to the webcast.
Slides: MIC will prepare materials in support of its conference call. The materials will be available for downloading from the Company's website prior to the call.
Replay: For interested individuals unable to participate in the live conference call, a replay will be available after 2:00 p.m. on May 5, 2020 through midnight on May 12, 2020, at +1(404) 537-3406 or +1(855) 859-2056, Passcode: 4997454. An online archive of the webcast will be available on the Company's website for one year following the call.
About MIC
MIC owns and operates a diversified group of businesses providing basic services to customers in the United States. Its businesses consist of a bulk liquid terminals business, International-Matex Tank Terminals; an airport services business, Atlantic Aviation; and entities comprising an energy services, production and distribution segment, MIC Hawaii. For additional information, please visit the MIC website at www.macquarie.com/mic.
Use of Non-GAAP Measures
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items and Free Cash Flow
In addition to MIC's results under U.S. GAAP, the Company uses certain non-GAAP measures to assess the performance and prospects of its businesses. In particular, MIC uses EBITDA excluding non-cash items and Free Cash Flow.
MIC measures EBITDA excluding non-cash items as a reflection of its businesses' ability to effectively manage the volume of products sold or services provided, the operating margin earned on those transactions and the management of operating expenses independent of the capitalization and tax attributes of those businesses. The Company believes investors use EBITDA excluding non-cash items primarily as a measure to assess the operating performance of its businesses and to make comparisons with the operating performance of other businesses whose depreciation and amortization expense may vary widely from MIC's, particularly where acquisitions and other non-operating factors are involved. MIC defines EBITDA excluding non-cash items as net income (loss) or earnings - the most comparable GAAP measure - before interest, taxes, depreciation and amortization and non-cash items including impairments, unrealized derivative gains and losses, adjustments for other non-cash items and pension expense reflected in the statements of operations. EBITDA excluding non-cash items also excludes base management fees and performance fees, if any, whether paid in cash or stock.
The Company's businesses can be characterized as owners of high-value, long-lived assets capable of generating substantial Free Cash Flow. MIC defines Free Cash Flow as cash from operating activities - the most comparable GAAP measure - which reflects cash paid for interest, taxes and pension contributions, less maintenance capital expenditures, which includes principal repayments on capital lease obligations used to fund maintenance capital expenditures and excludes changes in working capital.
Management uses Free Cash Flow as a measure of its ability to provide investors with an attractive risk-adjusted return by sustaining and potentially increasing MIC's quarterly cash dividend and funding a portion of the Company's growth. GAAP metrics such as net income (loss) do not provide MIC management with the same level of visibility to into the performance and prospects of the business as a result of: (i) the capital intensive nature of MIC's businesses and the generation of non-cash depreciation and amortization; (ii) shares issued to the Company's external manager under the Management Services Agreement, (iii) the Company's ability to defer all or a portion of current federal income taxes; (iv) non-cash unrealized gains or losses on derivative instruments; (v) gains (losses) on disposal of assets, and (vi) pension expense. Pension expenses primarily consist of interest expense, expected return on plan assets and amortization of actuarial and performance gains and losses. Any cash contributions to pension plans are reflected as a reduction in Free Cash Flow and are not included in pension expense. Management believes that external consumers of its financial statements, including investors and research analysts, use Free Cash Flow both to assess the Company's performance and as an indicator of its success in generating an attractive risk-adjusted return.
In its Quarterly Report on Form 10-Q, the Company has disclosed Free Cash Flow on a consolidated basis and for each of its operating segments and MIC Corporate. Management believes that both EBITDA excluding non-cash items and Free Cash Flow support a more complete and accurate understanding of the financial and operating performance of its businesses than would otherwise be achieved using GAAP results alone.
Free Cash Flow does not take into consideration required payments on indebtedness and other fixed obligations or other cash items that are excluded from MIC's definition of Free Cash Flow. Management notes that Free Cash Flow may be calculated differently by other companies thereby limiting its usefulness as a comparative measure. Free Cash Flow should be used as a supplemental measure to help understand MIC's financial performance and not in lieu of its financial results reported under GAAP.
See the tables below for a reconciliation of Net Income (loss) to EBITDA excluding non-cash items from continuing operations and a reconciliation of cash provided by operating activities from continuing operations to Free Cash Flow from continuing operations.
Classification of Maintenance Capital Expenditures and Growth Capital Expenditures
MIC categorizes capital expenditures as either maintenance capital expenditures or growth capital expenditures. As neither maintenance capital expenditure nor growth capital expenditure is a GAAP term, the Company has adopted a framework to categorize specific capital expenditures. In broad terms, maintenance capital expenditures primarily maintain MIC's businesses at current levels of operations, capability, profitability or cash flow, while growth capital expenditures primarily provide new or enhanced levels of operations, capability, profitability or cash flow. Management considers a number of factors in determining whether a specific capital expenditure will be classified as maintenance or growth.
MIC does not bifurcate specific capital expenditures into growth and maintenance components. Each discrete capital expenditure is considered within the above framework and the entire capital expenditure is classified as either maintenance or growth.
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. Such statements include, among others, those concerning our expected financial performance and strategic and operational plans, statements regarding the anticipated specific and overall impacts of the COVID-19 pandemic, as well as all assumptions, expectations, predictions, intentions or beliefs about future events. Forward-looking statements in this release 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; the short and long term impact of the COVID-19 pandemic; its ability to service, comply with the terms of and refinance debt, successfully integrate and manage acquired businesses, retain or replace qualified employees, complete growth projects, deploy growth capital and manage growth, make and finance future acquisitions, and implement its strategy; the regulatory environment; demographic trends, the political environment, the economy, tourism, construction and transportation costs, air travel, environmental costs and risks; fuel and gas and other commodity costs; its ability to recover increases in costs from customers, cybersecurity risks, work interruptions or other labor stoppages; risks associated with acquisitions or dispositions, litigation risks; risks related to its shared services initiative and its ability to achieve cost savings; 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.
MIC is not an authorized deposit-taking institution for the purposes of the Banking Act 1959 (Commonwealth of Australia). The obligations of MIC 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 MIC.
MACQUARIE INFRASTRUCTURE CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS | |||||||
March 31, | December 31, | ||||||
(Unaudited) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 1,156 | $ | 357 | |||
Restricted cash | 1 | 1 | |||||
Accounts receivable, net of allowance for doubtful accounts | 71 | 97 | |||||
Inventories | 24 | 31 | |||||
Prepaid expenses | 14 | 13 | |||||
Income tax receivable | 12 | 11 | |||||
Other current assets | 16 | 19 | |||||
Total current assets | 1,294 | 529 | |||||
Property, equipment, land and leasehold improvements, net | 3,220 | 3,202 | |||||
Operating lease assets, net | 332 | 336 | |||||
Investment in unconsolidated business | 8 | 9 | |||||
Goodwill | 2,044 | 2,043 | |||||
Intangible assets, net | 717 | 729 | |||||
Other noncurrent assets | 11 | 13 | |||||
Total assets | $ | 7,626 | $ | 6,861 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Due to Manager-related party | $ | 2 | $ | 3 | |||
Accounts payable | 34 | 67 | |||||
Accrued expenses | 83 | 86 | |||||
Current portion of long-term debt | 286 | 12 | |||||
Operating lease liabilities - current | 19 | 20 | |||||
Fair value of derivative liabilities | 13 | 7 | |||||
Other current liabilities | 26 | 35 | |||||
Total current liabilities | 463 | 230 | |||||
Long-term debt, net of current portion | 3,253 | 2,654 | |||||
Deferred income taxes | 679 | 679 | |||||
Operating lease liabilities - noncurrent | 318 | 320 | |||||
Other noncurrent liabilities | 169 | 167 | |||||
Total liabilities | 4,882 | 4,050 | |||||
Commitments and contingencies | — | — | |||||
Stockholders' equity (1): | |||||||
Additional paid in capital | 1,123 | 1,198 | |||||
Accumulated other comprehensive loss | (40) | (37) | |||||
Retained earnings | 1,652 | 1,641 | |||||
Total stockholders' equity | 2,735 | 2,802 | |||||
Noncontrolling interests | 9 | 9 | |||||
Total equity | 2,744 | 2,811 | |||||
Total liabilities and equity | $ | 7,626 | $ | 6,861 |
(1) | The Company is authorized to issue the following classes of stock: (i) 500,000,000 shares of common stock, par value $0.001 per share. At March 31, 2020 and December 31, 2019, the Company had 86,814,466 shares and 86,600,302 shares of common stock issued and outstanding, respectively; (ii) 100,000,000 shares of preferred stock, par value $0.001 per share authorized. At March 31, 2020 and December 31, 2019, no preferred stocks were issued or outstanding; and (iii) 100 shares of special stock, par value $0.001 per share, issued and outstanding to its Manager as at March 31, 2020 and December 31, 2019. |
MACQUARIE INFRASTRUCTURE CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS | |||||||
Quarter Ended March 31, | |||||||
2020 | 2019 | ||||||
Revenue | |||||||
Service revenue | $ | 356 | $ | 418 | |||
Product revenue | 60 | 64 | |||||
Total revenue | 416 | 482 | |||||
Costs and expenses | |||||||
Cost of services | 145 | 168 | |||||
Cost of product sales | 42 | 40 | |||||
Selling, general and administrative | 96 | 80 | |||||
Fees to Manager-related party | 7 | 8 | |||||
Depreciation | 51 | 48 | |||||
Amortization of intangibles | 14 | 15 | |||||
Total operating expenses | 355 | 359 | |||||
Operating income | 61 | 123 | |||||
Other income (expense) | |||||||
Interest income | — | 3 | |||||
Interest expense(1) | (42) | (42) | |||||
Other income, net | 1 | 4 | |||||
Net income from continuing operations before income taxes | 20 | 88 | |||||
Provision for income taxes | (9) | (24) | |||||
Net income from continuing operations | 11 | 64 | |||||
Discontinued Operations(2) | |||||||
Net income from discontinued operations before income taxes | — | 3 | |||||
Benefit for income taxes | — | 2 | |||||
Net income from discontinued operations | — | 5 | |||||
Net income | 11 | 69 | |||||
Net income from continuing operations | 11 | 64 | |||||
Net income from continuing operations attributable to MIC | 11 | 64 | |||||
Net income from discontinued operations | — | 5 | |||||
Less: net loss attributable to noncontrolling interests | — | (1) | |||||
Net income from discontinued operations attributable to MIC | — | 6 | |||||
Net income attributable to MIC | $ | 11 | $ | 70 | |||
Basic income per share from continuing operations attributable to MIC | $ | 0.13 | $ | 0.75 | |||
Basic income per share from discontinued operations attributable to MIC | — | 0.07 | |||||
Basic income per share attributable to MIC | $ | 0.13 | $ | 0.82 | |||
Weighted average number of shares outstanding: basic | 86,686,972 | 85,872,132 | |||||
Diluted income per share from continuing operations attributable to MIC | $ | 0.13 | $ | 0.73 | |||
Diluted income per share from discontinued operations attributable to MIC | — | 0.06 | |||||
Diluted income per share attributable to MIC | $ | 0.13 | $ | 0.79 | |||
Weighted average number of shares outstanding: diluted | 86,718,067 | 93,913,267 | |||||
Cash dividends declared per share | $ | — | $ | 1.00 |
(1) | Interest expense includes losses on derivative instruments of $9 million and $4 million for the quarters ended March 31, 2020 and 2019, respectively. | ||
(2) | See Note 4, "Discontinued Operations and Dispositions", in our Notes to Consolidated Condensed Financial Statements in Part I of Form 10-Q for the quarter ended March 31, 2020, for further discussions. |
MACQUARIE INFRASTRUCTURE CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) ($ in Millions) | |||||||
Quarter Ended March 31, | |||||||
2020 | 2019 | ||||||
Operating activities | |||||||
Net income from continuing operations | $ | 11 | $ | 64 | |||
Adjustments to reconcile net income to net cash provided by operating activities from continuing operations: | |||||||
Depreciation and amortization of property and equipment | 51 | 48 | |||||
Amortization of intangible assets | 14 | 15 | |||||
Amortization of debt financing costs | 2 | 3 | |||||
Amortization of debt discount | 1 | 1 | |||||
Adjustments to derivative instruments | 12 | 7 | |||||
Fees to Manager - related party | 7 | 8 | |||||
Deferred taxes | 2 | 17 | |||||
Other non-cash expense, net | 5 | 4 | |||||
Changes in other assets and liabilities, net of acquisitions: | |||||||
Accounts receivable | 23 | (11) | |||||
Inventories | 7 | — | |||||
Prepaid expenses and other current assets | (2) | (5) | |||||
Accounts payable and accrued expenses | (27) | (2) | |||||
Income taxes payable | 4 | 7 | |||||
Other, net | (11) | (5) | |||||
Net cash provided by operating activities from continuing operations | 99 | 151 | |||||
Investing activities | |||||||
Acquisitions of businesses and investments, net of cash, cash | (13) | — | |||||
Purchases of property and equipment | (71) | (44) | |||||
Loan to project developer | — | (1) | |||||
Net cash used in investing activities from continuing operations | (84) | (45) | |||||
Financing activities | |||||||
Proceeds from long-term debt | 874 | — | |||||
Payment of long-term debt | (3) | (3) | |||||
Dividends paid to common stockholders | (87) | (86) | |||||
Debt financing costs paid | — | (1) | |||||
Net cash provided by (used in) financing activities from continuing operations | 784 | (90) | |||||
Net change in cash, cash equivalents and restricted cash from continuing operations | 799 | 16 |
MACQUARIE INFRASTRUCTURE CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS – (continued) (Unaudited) | |||||||
Quarter Ended March 31, | |||||||
2020 | 2019 | ||||||
Cash flows (used in) provided by discontinued operations: | |||||||
Net cash used in operating activities | $ | — | $ | (13) | |||
Net cash used in investing activities | — | (8) | |||||
Net cash provided by financing activities | — | 23 | |||||
Net cash provided by discontinued operations | — | 2 | |||||
Net change in cash, cash equivalents and restricted cash | 799 | 18 | |||||
Cash, cash equivalents and restricted cash, beginning of period | 358 | 629 | |||||
Cash, cash equivalents and restricted cash, end of period | $ | 1,157 | $ | 647 | |||
Supplemental disclosures of cash flow information from continuing operations: | |||||||
Non-cash investing and financing activities: | |||||||
Accrued purchases of property and equipment | $ | 25 | $ | 12 | |||
Issuance of shares to Manager | 9 | 8 | |||||
Leased assets obtained in exchange for new operating lease liabilities | 5 | 1 | |||||
Taxes paid, net | 3 | 1 | |||||
Interest paid, net | 21 | 31 |
The following table provides a reconciliation of cash, cash equivalents and restricted cash from both continuing and discontinued operations reported within the consolidated condensed balance sheets that is presented in the consolidated condensed statements of cash flows: | |||||||
As of March 31, | |||||||
2020 | 2019 | ||||||
Cash and cash equivalents | $ | 1,156 | $ | 603 | |||
Restricted cash - current | 1 | 23 | |||||
Cash, cash equivalents and restricted cash included in assets held for sale(1) | — | 21 | |||||
Total of cash, cash equivalents and restricted cash shown in the consolidated statement of cash flows | $ | 1,157 | $ | 647 |
(1) | Represents cash, cash equivalents and restricted cash related to businesses classified as held for sale. See Note 4, "Discontinued Operations and Dispositions", in our Notes to Consolidated Condensed Financial Statements in Part I of Form 10-Q for the quarter ended March 31, 2020, for further discussion. |
MACQUARIE INFRASTRUCTURE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS – MD&A | |||||||||||||
Quarter Ended | Change Favorable/(Unfavorable) | ||||||||||||
2020 | 2019 | $ | % | ||||||||||
($ In Millions, Except Share and Per Share Data) (Unaudited) | |||||||||||||
Revenue | |||||||||||||
Service revenue | $ | 356 | $ | 418 | (62) | (15) | |||||||
Product revenue | 60 | 64 | (4) | (6) | |||||||||
Total revenue | 416 | 482 | (66) | (14) | |||||||||
Costs and expenses | |||||||||||||
Cost of services | 145 | 168 | 23 | 14 | |||||||||
Cost of product sales | 42 | 40 | (2) | (5) | |||||||||
Selling, general and administrative | 96 | 80 | (16) | (20) | |||||||||
Fees to Manager - related party | 7 | 8 | 1 | 13 | |||||||||
Depreciation | 51 | 48 | (3) | (6) | |||||||||
Amortization of intangibles | 14 | 15 | 1 | 7 | |||||||||
Total operating expenses | 355 | 359 | 4 | 1 | |||||||||
Operating income | 61 | 123 | (62) | (50) | |||||||||
Other income (expense) | |||||||||||||
Interest income | — | 3 | (3) | (100) | |||||||||
Interest expense(1) | (42) | (42) | — | — | |||||||||
Other income, net | 1 | 4 | (3) | (75) | |||||||||
Net income from continuing operations before income taxes | 20 | 88 | (68) | (77) | |||||||||
Provision for income taxes | (9) | (24) | 15 | 63 | |||||||||
Net income from continuing operations | 11 | 64 | (53) | (83) | |||||||||
Discontinued Operations | |||||||||||||
Net income from discontinued operations before income taxes | — | 3 | (3) | (100) | |||||||||
Benefit for income taxes | — | 2 | (2) | (100) | |||||||||
Net income from discontinued operations | — | 5 | (5) | (100) | |||||||||
Net income | 11 | 69 | (58) | (84) | |||||||||
Net income from continuing operations | 11 | 64 | (53) | (83) | |||||||||
Net income from continuing operations attributable to MIC | 11 | 64 | (53) | (83) | |||||||||
Net income from discontinued operations | — | 5 | (5) | (100) | |||||||||
Less: net loss attributable to noncontrolling interests | — | (1) | (1) | (100) | |||||||||
Net income from discontinued operations attributable to MIC | — | 6 | (6) | (100) | |||||||||
Net income attributable to MIC | $ | 11 | $ | 70 | (59) | (84) | |||||||
Basic income per share from continuing operations attributable to MIC | $ | 0.13 | $ | 0.75 | (0.62) | (83) | |||||||
Basic income per share from discontinued operations attributable to MIC | — | 0.07 | (0.07) | (100) | |||||||||
Basic income per share attributable to MIC | $ | 0.13 | $ | 0.82 | (0.69) | (84) | |||||||
Weighted average number of shares outstanding: basic | 86,686,972 | 85,872,132 | 814,840 | 1 |
(1) | Interest expense includes non-cash losses on derivative instruments of $9 million and $4 million for the quarters ended March 31, 2020 and 2019, respectively. |
MACQUARIE INFRASTRUCTURE CORPORATION
RECONCILIATION OF CONSOLIDATED NET INCOME TO EBITDA EXCLUDING NON-CASH ITEMS AND A RECONCILIATION FROM CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW | |||||||||||||
Quarter Ended | Change | ||||||||||||
2020 | 2019 | $ | % | ||||||||||
($ In Millions) (Unaudited) | |||||||||||||
Net income from continuing operations | $ | 11 | $ | 64 | |||||||||
Interest expense, net(1) | 42 | 39 | |||||||||||
Provision for income taxes | 9 | 24 | |||||||||||
Depreciation | 51 | 48 | |||||||||||
Amortization of intangibles | 14 | 15 | |||||||||||
Fees to Manager - related party | 7 | 8 | |||||||||||
Other non-cash expense, net (2) | 7 | 4 | |||||||||||
EBITDA excluding non-cash items - continuing operations | $ | 141 | $ | 202 | (61) | (30) | |||||||
EBITDA excluding non-cash items - continuing operations | $ | 141 | $ | 202 | |||||||||
Interest expense, net(1) | (42) | (39) | |||||||||||
Non-cash interest expense, net(1) | 13 | 11 | |||||||||||
Provision for current income taxes | (7) | (7) | |||||||||||
Changes in working capital | (6) | (16) | |||||||||||
Cash provided by operating activities - continuing operations | 99 | 151 | |||||||||||
Changes in working capital | 6 | 16 | |||||||||||
Maintenance capital expenditures | (12) | (10) | |||||||||||
Free cash flow - continuing operations | 93 | 157 | (64) | (41) | |||||||||
Free cash flow - discontinued operations | — | 7 | (7) | (100) | |||||||||
Total Free Cash Flow | $ | 93 | $ | 164 | (71) | (43) |
(1) | Interest expense, net, includes adjustments to derivative instruments, non-cash amortization of deferred financing fees and non-cash amortization of debt discount related to the 2.00% Convertible Senior Notes due October 2023. | |||||
(2) | Other non-cash expense, net, includes primarily pension expense of $2 million for the quarters ended March 31, 2020 and 2019, unrealized gains (losses) on commodity hedges, non-cash compensation expense incurred in relation to the incentive plans for senior management of our operating businesses and non-cash gains (losses) related to the disposal of assets. Pension expense consists primarily of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses. See "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items and Free Cash Flow" above for further discussion. |
MACQUARIE INFRASTRUCTURE CORPORATION
RECONCILIATION OF SEGMENT NET INCOME (LOSS) TO EBITDA EXCLUDING NON-CASH ITEMS AND A RECONCILIATION FROM CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES TO FREE CASH FLOW | |||||||||||
IMTT | |||||||||||
Quarter Ended March 31, | Change Favorable/(Unfavorable) | ||||||||||
2020 | 2019 | ||||||||||
$ | $ | $ | % | ||||||||
($ In Millions) (Unaudited) | |||||||||||
Revenue | 132 | 161 | (29) | (18) | |||||||
Cost of services | 50 | 50 | — | — | |||||||
Selling, general and administrative expenses | 9 | 8 | (1) | (13) | |||||||
Depreciation and amortization | 34 | 33 | (1) | (3) | |||||||
Operating income | 39 | 70 | (31) | (44) | |||||||
Interest expense, net(1) | (15) | (13) | (2) | (15) | |||||||
Other income, net | 1 | — | 1 | NM | |||||||
Provision for income taxes | (7) | (16) | 9 | 56 | |||||||
Net income | 18 | 41 | (23) | (56) | |||||||
Reconciliation of net income to EBITDA excluding | |||||||||||
Net income | 18 | 41 | |||||||||
Interest expense, net(1) | 15 | 13 | |||||||||
Provision for income taxes | 7 | 16 | |||||||||
Depreciation and amortization | 34 | 33 | |||||||||
Other non-cash expense, net(2) | 3 | 1 | |||||||||
EBITDA excluding non-cash items | 77 | 104 | (27) | (26) | |||||||
EBITDA excluding non-cash items | 77 | 104 | |||||||||
Interest expense, net(1) | (15) | (13) | |||||||||
Non-cash interest expense, net(1) | 5 | 3 | |||||||||
Provision for current income taxes | (2) | (11) | |||||||||
Changes in working capital | (17) | 8 | |||||||||
Cash provided by operating activities | 48 | 91 | |||||||||
Changes in working capital | 17 | (8) | |||||||||
Maintenance capital expenditures | (6) | (6) | |||||||||
Free cash flow | 59 | 77 | (18) | (23) |
NM — Not meaningful | |||
(1) | Interest expense, net, includes non-cash adjustments to derivative instruments and non-cash amortization of deferred financing fee. | ||
(2) | Other non-cash expense, net, includes primarily pension expense of $2 million for the quarters ended March 31, 2020 and 2019 and non-cash compensation expense incurred in relation to incentive plans. Pension expense consists primarily of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses. See "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items and Free Cash Flow" above for further discussion. |
Atlantic Aviation | |||||||||||
Quarter Ended March 31, | Change | ||||||||||
2020 | 2019 | ||||||||||
$ | $ | $ | % | ||||||||
($ In Millions) (Unaudited) | |||||||||||
Revenue | 224 | 258 | (34) | (13) | |||||||
Cost of services (exclusive of depreciation and | 95 | 118 | 23 | 19 | |||||||
Gross margin | 129 | 140 | (11) | (8) | |||||||
Selling, general and administrative expenses | 64 | 61 | (3) | (5) | |||||||
Depreciation and amortization | 27 | 26 | (1) | (4) | |||||||
Operating income | 38 | 53 | (15) | (28) | |||||||
Interest expense, net(1) | (19) | (19) | — | — | |||||||
Provision for income taxes | (5) | (9) | 4 | 44 | |||||||
Net income | 14 | 25 | (11) | (44) | |||||||
Reconciliation of net income to EBITDA excluding non-cash | |||||||||||
Net income | 14 | 25 | |||||||||
Interest expense, net(1) | 19 | 19 | |||||||||
Provision for income taxes | 5 | 9 | |||||||||
Depreciation and amortization | 27 | 26 | |||||||||
Other non-cash expense, net(2) | 1 | — | |||||||||
EBITDA excluding non-cash items | 66 | 79 | (13) | (16) | |||||||
EBITDA excluding non-cash items | 66 | 79 | |||||||||
Interest expense, net(1) | (19) | (19) | |||||||||
Non-cash interest expense, net(1) | 5 | 5 | |||||||||
Provision for current income taxes | (9) | (7) | |||||||||
Changes in working capital | 16 | (4) | |||||||||
Cash provided by operating activities | 59 | 54 | |||||||||
Changes in working capital | (16) | 4 | |||||||||
Maintenance capital expenditures | (3) | (2) | |||||||||
Free cash flow | 40 | 56 | (16) | (29) |
(1) | Interest expense, net, includes non-cash adjustments to derivative instruments and non-cash amortization of deferred financing fees. | |
(2) | Other non-cash expense, net, includes primarily non-cash compensation expense incurred in relation to incentive plans and non-cash gains (losses) related to the disposal of assets. See "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items and Free Cash |
MIC Hawaii | |||||||||||
Quarter Ended March 31, | Change | ||||||||||
2020 | 2019 | ||||||||||
$ | $ | $ | % | ||||||||
($ In Millions) (Unaudited) | |||||||||||
Revenue | 60 | 64 | (4) | (6) | |||||||
Cost of product sales (exclusive of depreciation | 42 | 40 | (2) | (5) | |||||||
Gross margin | 18 | 24 | (6) | (25) | |||||||
Selling, general and administrative expenses | 6 | 6 | — | — | |||||||
Depreciation and amortization | 4 | 4 | — | — | |||||||
Operating income | 8 | 14 | (6) | (43) | |||||||
Interest expense, net(1) | (3) | (3) | — | — | |||||||
Provision for income taxes | (2) | (3) | 1 | 33 | |||||||
Net income | 3 | 8 | (5) | (63) | |||||||
Reconciliation of net income to EBITDA | |||||||||||
Net income | 3 | 8 | |||||||||
Interest expense, net(1) | 3 | 3 | |||||||||
Provision for income taxes | 2 | 3 | |||||||||
Depreciation and amortization | 4 | 4 | |||||||||
Other non-cash expense, net(2) | 3 | 2 | |||||||||
EBITDA excluding non-cash items | 15 | 20 | (5) | (25) | |||||||
EBITDA excluding non-cash items | 15 | 20 | |||||||||
Interest expense, net(1) | (3) | (3) | |||||||||
Non-cash interest expense, net(1) | 1 | 1 | |||||||||
Provision for current income taxes | (2) | (3) | |||||||||
Changes in working capital | (5) | (2) | |||||||||
Cash provided by operating activities | 6 | 13 | |||||||||
Changes in working capital | 5 | 2 | |||||||||
Maintenance capital expenditures | (3) | (2) | |||||||||
Free cash flow | 8 | 13 | (5) | (38) |
(1) | Interest expense, net, includes non-cash adjustments to derivative instruments related to interest rate swaps and non-cash amortization of deferred financing fees. | ||
(2) | Other non-cash expense, net, includes primarily non-cash adjustments related to unrealized gains (losses) on commodity hedges, pension expense and non-cash compensation expense incurred in relation to incentive plans. Pension expense consists primarily of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses. See "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items and Free Cash Flow" above for further discussion. |
Corporate and Other | Quarter Ended March 31, | Change Favorable/(Unfavorable) | |||||||||
2020 | 2019 | ||||||||||
$ | $ | $ | % | ||||||||
($ In Millions) (Unaudited) | |||||||||||
Selling, general and administrative expenses | 17 | 6 | (11) | (183) | |||||||
Fees to Manager - related party | 7 | 8 | 1 | 13 | |||||||
Operating loss | (24) | (14) | (10) | (71) | |||||||
Interest expense, net(1) | (5) | (4) | (1) | (25) | |||||||
Other income, net | — | 4 | (4) | (100) | |||||||
Benefit for income taxes | 5 | 4 | 1 | 25 | |||||||
Net loss | (24) | (10) | (14) | (140) | |||||||
Reconciliation of net loss to EBITDA excluding | |||||||||||
Net loss | (24) | (10) | |||||||||
Interest expense, net(1) | 5 | 4 | |||||||||
Benefit for income taxes | (5) | (4) | |||||||||
Fees to Manager - related party | 7 | 8 | |||||||||
Other non-cash expense, net | — | 1 | |||||||||
EBITDA excluding non-cash items | (17) | (1) | (16) | NM | |||||||
EBITDA excluding non-cash items | (17) | (1) | |||||||||
Interest expense, net(1) | (5) | (4) | |||||||||
Non-cash interest expense, net(1) | 2 | 2 | |||||||||
Benefit for current income taxes | 6 | 14 | |||||||||
Changes in working capital | — | (18) | |||||||||
Cash used in operating activities | (14) | (7) | |||||||||
Changes in working capital | — | 18 | |||||||||
Free cash flow | (14) | 11 | (25) | NM |
NM — Not meaningful | ||||
(1) | Interest expense, net, included non-cash amortization of deferred financing fees and non-cash amortization of debt discount related to the 2.00% Convertible Senior Notes. |
MACQUARIE INFRASTRUCTURE CORPORATION
RECONCILIATION OF NET INCOME (LOSS) TO EBITDA EXCLUDING NON-CASH ITEMS AND A RECONCILIATION FROM CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES TO FREE CASH FLOW | ||||||||||||||
For the Quarter Ended March 31, 2020 | ||||||||||||||
IMTT | Atlantic Aviation | MIC Hawaii | Corporate and Other | Total | ||||||||||
($ in Millions) (Unaudited) | ||||||||||||||
Net income (loss) | 18 | 14 | 3 | (24) | 11 | |||||||||
Interest expense, net(1) | 15 | 19 | 3 | 5 | 42 | |||||||||
Provision (benefit) for income taxes | 7 | 5 | 2 | (5) | 9 | |||||||||
Depreciation and amortization | 34 | 27 | 4 | — | 65 | |||||||||
Fees to Manager-related party | — | — | — | 7 | 7 | |||||||||
Other non-cash expense, net(2) | 3 | 1 | 3 | — | 7 | |||||||||
EBITDA excluding non-cash items | 77 | 66 | 15 | (17) | 141 | |||||||||
EBITDA excluding non-cash items | 77 | 66 | 15 | (17) | 141 | |||||||||
Interest expense, net(1) | (15) | (19) | (3) | (5) | (42) | |||||||||
Non-cash interest expense, net(1) | 5 | 5 | 1 | 2 | 13 | |||||||||
(Provision) benefit for current income taxes | (2) | (9) | (2) | 6 | (7) | |||||||||
Changes in working capital | (17) | 16 | (5) | — | (6) | |||||||||
Cash provided by (used in) operating activities | 48 | 59 | 6 | (14) | 99 | |||||||||
Changes in working capital | 17 | (16) | 5 | — | 6 | |||||||||
Maintenance capital expenditures | (6) | (3) | (3) | — | (12) | |||||||||
Free Cash Flow | 59 | 40 | 8 | (14) | 93 |
For the Quarter Ended March 31, 2019 | ||||||||||||||||||||
IMTT | Atlantic | MIC | Corporate and Other | Total | Discontinued | Total | ||||||||||||||
($ in Millions) (Unaudited) | ||||||||||||||||||||
Net income (loss) | 41 | 25 | 8 | (10) | 64 | 5 | 69 | |||||||||||||
Interest expense, net(1) | 13 | 19 | 3 | 4 | 39 | 5 | 44 | |||||||||||||
Provision (benefit) for income taxes | 16 | 9 | 3 | (4) | 24 | (2) | 22 | |||||||||||||
Depreciation and amortization | 33 | 26 | 4 | — | 63 | — | 63 | |||||||||||||
Fees to Manager-related party | — | — | — | 8 | 8 | — | 8 | |||||||||||||
Other non-cash expense, net(2) | 1 | — | 2 | 1 | 4 | 2 | 6 | |||||||||||||
EBITDA excluding non-cash items | 104 | 79 | 20 | (1) | 202 | 10 | 212 | |||||||||||||
EBITDA excluding non-cash items | 104 | 79 | 20 | (1) | 202 | 10 | 212 | |||||||||||||
Interest expense, net(1) | (13) | (19) | (3) | (4) | (39) | (5) | (44) | |||||||||||||
Non-cash interest expense, net(1) | 3 | 5 | 1 | 2 | 11 | 2 | 13 | |||||||||||||
(Provision) benefit for current income taxes | (11) | (7) | (3) | 14 | (7) | — | (7) | |||||||||||||
Changes in working capital | 8 | (4) | (2) | (18) | (16) | (20) | (36) | |||||||||||||
Cash provided by (used in) operating activities | 91 | 54 | 13 | (7) | 151 | (13) | 138 | |||||||||||||
Changes in working capital | (8) | 4 | 2 | 18 | 16 | 20 | 36 | |||||||||||||
Maintenance capital expenditures | (6) | (2) | (2) | — | (10) | — | (10) | |||||||||||||
Free Cash Flow | 77 | 56 | 13 | 11 | 157 | 7 | 164 |
(1) | Interest expense, net, includes adjustments to derivative instruments, non-cash amortization of deferred financing fees and non-cash amortization of debt discount related to the 2.00% Convertible Senior Notes. | ||
(2) | Other non-cash expense, net, includes primarily pension expense of $2 million for the quarters ended March 31, 2020 and 2019, unrealized gains (losses) on commodity hedge contracts, non-cash compensation expense incurred in relation to the incentive plans for senior management of our operating businesses and non-cash gains (losses) related to the disposal of assets. Pension expense consists primarily of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses. See "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items and Free Cash Flow" above for further discussion. |
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SOURCE Macquarie Infrastructure Corporation
NEW YORK, Feb. 25, 2020 /PRNewswire/ -- Macquarie Infrastructure Corporation (NYSE: MIC) today reported financial and operational results for the full year 2019 that were in line with the Company's guidance.
MIC's net income from continuing operations totaled $101 million in 2019, up from $65 million in 2018 (the prior comparable period). The increase reflects primarily higher operating income and lower income taxes, partially offset by an increase in interest expense associated principally with higher average rates on debt balances outstanding.
Consolidated revenue declined 2% to $1,727 million in 2019 from $1,761 million in 2018, primarily as a result of MIC's divestiture of non-core businesses in 2018 and a lower average wholesale cost of jet fuel purchased by Atlantic Aviation, partially offset by increased revenue including a contract termination payment recorded by International-Matex Tank Terminals ("IMTT"). Jet fuel costs are passed through to Atlantic Aviation's customers and, together with a dollar-based margin, recorded as revenue. The decline in consolidated revenue was partially offset by increases in the amount of jet fuel sold and hangar rental revenue generated by Atlantic Aviation and the full year impact of higher utility gas rates generated by Hawaii Gas.
Expenses (cost of services/product sales and selling, general and administrative combined) declined by 5% in 2019 primarily as a result of the absence of costs related to businesses sold during the prior year, the lower average wholesale cost of jet fuel and smaller unfavorable movements (non-cash) in the value of commodity hedges associated with Liquefied Petroleum Gas purchases recorded by the Company's MIC Hawaii segment. The expense reductions were partially offset by anticipated increases in labor costs at each operating business.
MIC reported Adjusted EBITDA excluding non-cash items from continuing operations that was flat with 2018 at $604 million. In calculating Adjusted EBITDA, the Company excluded approximately $5 million of professional services fees incurred primarily in connection with its pursuit of strategic alternatives.
Cash generated by MIC's operating activities in 2019 was largely flat with 2018 at $468 million.
Adjusted Free Cash Flow from continuing operations totaled $410 million in 2019, down 7% versus the prior comparable period, reflecting the flat Adjusted EBITDA excluding non-cash items and lower cash taxes, offset by anticipated increases in maintenance capital expenditures and interest expense.
The Company's sales of discontinued operations in 2019 generated approximately $223 million of proceeds net of taxes and transaction fees. The deconsolidation of debt associated with the sold businesses and the repayment of $350 million of convertible notes in July 2019 reduced MIC's consolidated debt by $655 million. At December 31, 2019, MIC had debt outstanding of $2,722 million.
MIC's leverage (net debt / EBITDA) was 3.9x at December 31, 2019, down from 4.0x at December 31, 2018. The Company expects its leverage to increase to between 4.25x and 4.5x at the end of 2020 as it continues to utilize cash on hand to fund growth projects.
MIC deployed $211 million in support of growth projects across its businesses in 2019 including $68 million in the fourth quarter.
MIC's Chief Executive Officer, Christopher Frost, said of the Company's results for 2019: "MIC's financial and operational results for the year were consistent with our expectations and guidance to the market. We are pleased with the favorable trends in storage utilization at IMTT and the opportunities to expand the business and we remain confident in its prospects.
"Atlantic Aviation delivered an anticipated contribution to our overall results despite growth in U.S. general aviation flight activity that was below the average of the past several years. Atlantic Aviation was successful in attracting and servicing larger aircraft and recorded an increase in both the amount of fuel sold and earnings from ancillary services such as hangar rentals.
"Results for MIC Hawaii reflect moderation in demand for gas services provided by Hawaii Gas associated with above average temperatures, although these were offset by the full-year benefit of the new utility rates implemented in mid-2018 and lower propane prices.
"I am pleased with both the performance of our operating businesses in 2019 and our liquidity and believe they position us well as we work to unlock additional value for shareholders through a sale of the Company or one or more of its operating businesses," Frost added.
On October 31, 2019 MIC announced its intention to actively pursue sales of the whole of the Company or its operating businesses. The Company notes that there can be no assurances as to the form and timing of any transaction as a result of this pursuit of strategic alternatives, or if any transactions will be consummated, and any final decisions remain subject to approval by the MIC board of directors.
IMTT to Construct Renewable Diesel Pipelines in Louisiana
MIC's bulk liquid storage and handling subsidiary, IMTT, has entered into an agreement with Diamond Green Diesel ("DGD") pursuant to which it will construct two pipelines connecting its St. Rose, LA terminal with the DGD renewable diesel refinery at Norco, LA five miles away. IMTT will also expand its marine and rail infrastructure and repurpose approximately 790,000 barrels of existing storage capacity from heavy and residual petroleum service to renewable diesel feedstocks and finished product. All aspects of the project are expected to be in service prior to the end of 2021.
"This is an exciting opportunity for IMTT to partner with the market leader in the production of renewable diesel in the U.S. and to contribute to a greener energy complex," said Rick Courtney, chief executive officer of IMTT. "The project also highlights our success with initiatives that reposition IMTT by increasing our exposure to products and markets with strong growth prospects."
DGD is a joint venture between Valero Energy Corporation and Darling Ingredients. DGD has commenced an expansion of its renewable diesel facility that is expected to more than double its production capacity.
In addition to the renewable diesel project, IMTT has entered into an agreement with a nearby manufacturer to construct additional chemical storage capacity and related infrastructure at its Geismar, LA facility. The agreement contemplates approximately 70,000 barrels of new, dedicated capacity and pipelines to and from the IMTT docks at the facility. The tanks and related infrastructure are expected to be in service at year end 2020.
Including previously announced projects with a combined value of approximately $175 million, IMTT has committed to growth projects with an aggregate value of approximately $350 million. The projects collectively are expected to generate incremental EBITDA at stabilization of approximately $39 million over an initial weighted average contract term of 19 years.
Atlantic Aviation to Acquire FBO in Connecticut
Atlantic Aviation has entered into an agreement to acquire the assets of Volo Aviation, Inc. at Sikorsky Memorial Airport in Bridgeport, CT. The acquisition will expand Atlantic Aviation's existing presence on the airfield with the Volo facilities adding approximately 35,000 square feet of hangar space and 4,000 square feet of office space to the Atlantic Aviation portfolio pursuant to a long-dated lease expiring in 2040. The acquisition is expected to close in the first quarter of 2020.
2020 Guidance
MIC has initiated financial guidance for 2020. For the full year the Company expects to generate Adjusted EBITDA excluding non-cash items of between $575 million and $600 million. The midpoint of the guidance represents a year on year increase of approximately 4%, excluding the contract termination payment received by IMTT in 2019. The Company expects the improvement in Adjusted EBITDA to be driven by a combination of continued stable growth at Atlantic Aviation, continued increases in utilization at IMTT, partially offset by an anticipated decrease in average storage rates reflecting the full-year impact of lower renewals in second half of 2019, and a consistent contribution from MIC Hawaii.
The buildup of the EBITDA guidance for 2020 on segment basis is as follows:
Segment | EBITDA Range ($mm) |
Atlantic Aviation | $290 - $300 |
IMTT | $245 - $255 |
MIC Hawaii | $60 - $65 |
Corporate & Other | ($20) |
Total | $575 - $600 |
Adjusted EBITDA excluding non-cash items also excludes costs associated with pursuit of strategic alternatives so as to ensure comparability with prior period reports. The costs will form part of the management reporting line item, investment and acquisition/disposition costs in the Company's reconciliation from Net income to Adjusted EBITDA excluding non-cash items.
MIC also initiated guidance for the generation of Adjusted Free Cash Flow of between $360 million and $400 million in 2020. The decrease versus 2019 reflects the absence of the contract termination fee received by IMTT and expected increases in cash taxes and interest expense. The anticipated increase in cash taxes reflects, in part, MIC's utilization of all remaining federal Net Operating Loss carryforwards in 2019.
The Company intends to pay a dividend of $1.00 per share, per quarter, in 2020. The payment of the dividend is predicated on, i) the composition of the MIC portfolio of businesses being unchanged, ii) the businesses performing as expected and at levels that support the dividend, iii) stable economic and equity market conditions generally, and iv) the authorization of the dividend by the Company's board of directors.
MIC expects to continue to invest in the growth and development of its businesses. The Company expects to deploy between $200 million and $225 million in 2020, including projects commenced in 2019 and the portion of the IMTT Pipeline Project announced today that will be expended this year.
In addition to investing in the growth of its businesses, MIC expects to support the continued cash generating capacity of its businesses by making maintenance capital expenditures of between $55 million and $65 million in 2020. The decrease in forecast maintenance capital expenditures versus 2019 reflects a reduction in anticipated expenditures related to the refurbishment of a pier at IMTT in Bayonne.
With respect to the Company's guidance for EBITDA and Free Cash Flow in 2020, a reconciliation of EBITDA to net income (loss), the most comparable GAAP measure and a reconciliation of Free Cash Flow to cash from operating activities, the most comparable GAAP measure, are not available without unreasonable effort due to the Company's limited visibility into and an inability to make accurate projections and estimates of items including management fees, hedging agreements, depreciation and any (benefit) provision for income taxes. These items may vary greatly from year to year and could significantly impact MIC's results as reported in accordance with GAAP.
Fourth Quarter and Full Year 2019 Segment Results
Fourth Quarter 2019 Dividend
The board of directors of MIC authorized a cash dividend of $1.00 per share, or $4.00 annualized, for the fourth quarter of 2019 consistent with guidance provided to the market in October 2019. The dividend will be paid on March 11, 2020 to shareholders of record on March 6, 2020.
Including the dividend for the fourth quarter, MIC will have distributed approximately 84% of its Adjusted Free Cash Flow from continuing operations generated in 2019.
Summary Financial Information
Quarter Ended | Change Favorable/ | Year Ended | Change | ||||||||||||||||||||||||||
2019 | 2018 | $ | % | 2019 | 2018 | $ | % | ||||||||||||||||||||||
($ In Millions, Except Share and Per Share Data) (Unaudited) | |||||||||||||||||||||||||||||
GAAP Metrics | |||||||||||||||||||||||||||||
Continuing Operations | |||||||||||||||||||||||||||||
Net income (loss) | $ | 16 | $ | (4) | 20 | NM | $ | 101 | $ | 65 | 36 | 55 | |||||||||||||||||
Net income (loss) per share attributable to MIC | 0.18 | (0.01) | 0.19 | NM | 1.17 | 0.80 | 0.37 | 46 | |||||||||||||||||||||
Cash provided by operating activities | 52 | 107 | (55) | (51) | 468 | 473 | (5) | (1) | |||||||||||||||||||||
Discontinued Operations | |||||||||||||||||||||||||||||
Net (loss) income | $ | (2) | $ | (6) | 4 | 67 | $ | 52 | $ | 30 | 22 | 73 | |||||||||||||||||
Net (loss) income per share attributable to MIC | (0.02) | — | (0.02) | NM | 0.65 | 0.80 | (0.15) | (19) | |||||||||||||||||||||
Cash provided by (used in) operating activities | 9 | (1) | 10 | NM | (48) | 46 | (94) | NM | |||||||||||||||||||||
Weighted average number of shares outstanding: basic | 86,483,313 | 85,643,587 | 839,726 | 1 | 86,178,212 | 85,233,989 | 944,223 | 1 | |||||||||||||||||||||
MIC Non-GAAP Metrics | |||||||||||||||||||||||||||||
EBITDA excluding non-cash items – continuing | $ | 132 | $ | 144 | (12) | (8) | $ | 599 | $ | 569 | 30 | 5 | |||||||||||||||||
Investment and acquisition/disposition costs | 4 | 8 | (4) | (50) | 5 | 15 | (10) | (67) | |||||||||||||||||||||
Write-down in investment | — | — | — | — | — | 17 | (17) | (100) | |||||||||||||||||||||
Adjusted EBITDA excluding non-cash items – | $ | 136 | $ | 152 | (16) | (11) | $ | 604 | $ | 601 | 3 | — | |||||||||||||||||
Cash interest | $ | (27) | $ | (24) | (3) | (13) | $ | (113) | $ | (98) | (15) | (15) | |||||||||||||||||
Cash taxes | 1 | (3) | 4 | 133 | (12) | (14) | 2 | 14 | |||||||||||||||||||||
Maintenance capital expenditures | (28) | (18) | (10) | (56) | (69) | (49) | (20) | (41) | |||||||||||||||||||||
Adjusted Free Cash Flow – continuing operations | $ | 82 | $ | 107 | (25) | (23) | $ | 410 | $ | 440 | (30) | (7) | |||||||||||||||||
EBITDA excluding non-cash items – discontinued | $ | (1) | $ | 14 | (15) | (107) | $ | 20 | $ | 99 | (79) | (80) | |||||||||||||||||
Cash interest | — | (4) | 4 | 100 | (9) | (24) | 15 | 63 | |||||||||||||||||||||
Cash taxes | 10 | (7) | 17 | NM | (42) | (7) | (35) | NM | |||||||||||||||||||||
Maintenance capital expenditures | — | — | — | — | — | (1) | 1 | 100 | |||||||||||||||||||||
Free Cash Flow – discontinued operations | $ | 9 | $ | 3 | 6 | NM | $ | (31) | $ | 67 | (98) | (146) | |||||||||||||||||
Adjusted Free Cash Flow - consolidated | $ | 91 | $ | 110 | (19) | (17) | $ | 379 | $ | 507 | (128) | (25) | |||||||||||||||||
NM — Not meaningful |
Conference Call and Webcast
When: MIC has scheduled a conference call for 8:00 a.m. Eastern Time on Tuesday, February 25, 2020 during which management will review and comment on the Company's 2019 results and outlook for 2020.
How: To listen to the conference call dial +1(650) 521-5252 or +1(877) 852-2928 at least ten 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. Allow extra time prior to the call to visit the site and download the software needed to listen to the webcast.
Supplemental Materials: MIC will prepare materials in support of its conference call. The materials will be available for downloading from the Company's website prior to the call.
Replay: For interested individuals unable to participate in the live conference call, a replay will be available after 2:00 p.m. on February 25, 2020 through midnight on March 3, 2020, at +1(404) 537-3406 or +1(855) 859-2056, Passcode: 8647367. An on-line archive of the webcast will be available on the Company's website for one year following the call.
About MIC
MIC owns and operates a diversified group of businesses providing basic services to customers in the United States. Its businesses consist of a bulk liquid terminals business, International-Matex Tank Terminals; an airport services business, Atlantic Aviation; and entities comprising an energy services, production and distribution segment, MIC Hawaii. For additional information, please visit the MIC website at www.macquarie.com/mic.
Use of Non-GAAP Measures
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items and Free Cash Flow
In addition to MIC's results under U.S. GAAP, the Company uses certain non-GAAP measures including EBITDA excluding non-cash items and Free Cash Flow to assess the performance and prospects of its businesses.
MIC measures EBITDA excluding non-cash items as a reflection of its businesses' ability to effectively manage the amount of products sold or services provided, the operating margin earned on those transactions and the management of operating expenses independent of the capitalization and tax attributes of those businesses. The Company believes investors use EBITDA excluding non-cash items primarily as a measure to assess the operating performance of its businesses and to make comparisons with the operating performance of other businesses whose depreciation and amortization expense may vary widely from MIC's, particularly where acquisitions and other non-operating factors are involved. MIC defines EBITDA excluding non-cash items as net income (loss) or earnings -the most comparable GAAP measure- before interest, taxes, depreciation and amortization and non-cash items including impairments, unrealized derivative gains and losses, adjustments for other non-cash items and pension expense reflected in the statements of operations. EBITDA excluding non-cash items also excludes base management fees and performance fees, if any, whether paid in cash or stock.
The Company's businesses can be characterized as owners of high-value, long-lived assets capable of generating substantial Free Cash Flow. MIC defines Free Cash Flow as cash from operating activities - the most comparable GAAP measure - which includes cash paid for interest, taxes and pension contributions, less maintenance capital expenditures, which includes principal repayments on capital lease obligations used to fund maintenance capital expenditures and excludes changes in working capital.
Management uses Free Cash Flow as a measure of its ability to provide investors with an attractive risk-adjusted return by sustaining and potentially increasing MIC's quarterly cash dividend and funding a portion of the Company's growth. GAAP metrics such as net income (loss) do not provide MIC management with the same level of visibility to into the performance and prospects of the business as a result of: (i) the capital intensive nature of MIC's businesses and the generation of non-cash depreciation and amortization; (ii) shares issued to the Company's external manager under the Management Services Agreement, (iii) the Company's ability to defer all or a portion of current federal income taxes; (iv) non-cash unrealized gains or losses on derivative instruments; (v) gains (losses) on disposal of assets, and (vi) pension expense. Pension expenses primarily consist of interest expense, expected return on plan assets and amortization of actuarial and performance gains and losses. Any cash contributions to pension plans are reflected as a reduction in Free Cash Flow and are not included in pension expense. Management believes that external consumers of its financial statements, including investors and research analysts, use Free Cash Flow both to assess the Company's performance and as an indicator of its success in generating an attractive risk-adjusted return.
In its Annual Report on Form 10-K, the Company has disclosed Free Cash Flow on a consolidated basis and for each of its operating segments and MIC Corporate. Management believes that both EBITDA excluding non-cash items and Free Cash Flow support a more complete and accurate understanding of the financial and operating performance of its businesses than would otherwise be achieved using GAAP results alone.
Free Cash Flow does not take into consideration required payments on indebtedness and other fixed obligations or other cash items that are excluded from MIC's definition of Free Cash Flow. Management notes that Free Cash Flow may be calculated differently by other companies thereby limiting its usefulness as a comparative measure. Free Cash Flow should be used as a supplemental measure to help understand MIC's financial performance and not in lieu of its financial results reported under GAAP.
See the tables below for a reconciliation of Net Income (loss) to EBITDA excluding non-cash items from continuing operations and a reconciliation of cash provided by operating activities from continuing operations to Free Cash Flow from continuing operations.
Classification of Maintenance Capital Expenditures and Growth Capital Expenditures
MIC categorizes capital expenditures as either maintenance capital expenditures or growth capital expenditures. As neither maintenance capital expenditure nor growth capital expenditure is a GAAP term, the Company has adopted a framework to categorize specific capital expenditures. In broad terms, maintenance capital expenditures primarily maintain MIC's businesses at current levels of operations, capability, profitability or cash flow, while growth capital expenditures primarily provide new or enhanced levels of operations, capability, profitability or cash flow. Management considers a number of factors in determining whether a specific capital expenditure will be classified as maintenance or growth.
MIC does not bifurcate specific capital expenditures into growth and maintenance components. Each discrete capital expenditure is considered within the above framework and the entire capital expenditure is classified as either maintenance or growth.
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 release are subject to a number of risks and uncertainties, some of which are beyond MIC's control including, among other things: the sale of MIC of any of its operating businesses as a result of its pursuit of strategic alternatives, or the termination of the sale effort, 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, complete growth projects, deploy growth capital and manage growth, make and finance future acquisitions, and implement its strategy; the regulatory environment; demographic trends, the political environment, the economy, tourism, construction and transportation costs, air travel, environmental costs and risks; fuel and gas and other commodity costs; its ability to recover increases in costs from customers, cybersecurity risks, work interruptions or other labor stoppages; risks associated with acquisitions or dispositions, litigation risks; risks related to its shared services initiative and its ability to achieve cost savings; 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.
MIC is not an authorized deposit-taking institution for the purposes of the Banking Act 1959 (Commonwealth of Australia). The obligations of MIC 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 MIC.
MACQUARIE INFRASTRUCTURE CORPORATION
CONSOLIDATED BALANCE SHEETS | |||||||
As of December 31, | |||||||
2019 | 2018 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 357 | $ | 589 | |||
Restricted cash | 1 | 23 | |||||
Accounts receivable, net of allowance for doubtful accounts | 97 | 95 | |||||
Inventories | 31 | 29 | |||||
Prepaid expenses | 13 | 13 | |||||
Other current assets | 30 | 23 | |||||
Current assets held for sale(1) | — | 648 | |||||
Total current assets | 529 | 1,420 | |||||
Property, equipment, land and leasehold improvements, net | 3,202 | 3,141 | |||||
Operating lease assets, net | 336 | — | |||||
Investment in unconsolidated business | 9 | 8 | |||||
Goodwill | 2,043 | 2,043 | |||||
Intangible assets, net | 729 | 789 | |||||
Other noncurrent assets | 13 | 43 | |||||
Total assets | $ | 6,861 | $ | 7,444 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Due to Manager-related party | $ | 3 | $ | 3 | |||
Accounts payable | 67 | 38 | |||||
Accrued expenses | 86 | 86 | |||||
Current portion of long-term debt | 12 | 361 | |||||
Operating lease liabilities - current | 20 | — | |||||
Other current liabilities | 42 | 33 | |||||
Current liabilities held for sale(1) | — | 317 | |||||
Total current liabilities | 230 | 838 | |||||
Long-term debt, net of current portion | 2,654 | 2,653 | |||||
Deferred income taxes | 679 | 681 | |||||
Operating lease liabilities - noncurrent | 320 | — | |||||
Other noncurrent liabilities | 167 | 155 | |||||
Total liabilities | 4,050 | 4,327 | |||||
Commitments and contingencies | — | — | |||||
Stockholders' equity(2): | |||||||
Additional paid in capital | 1,198 | 1,510 | |||||
Accumulated other comprehensive loss | (37) | (30) | |||||
Retained earnings | 1,641 | 1,485 | |||||
Total stockholders' equity | 2,802 | 2,965 | |||||
Noncontrolling interests(3) | 9 | 152 | |||||
Total equity | 2,811 | 3,117 | |||||
Total liabilities and equity | $ | 6,861 | $ | 7,444 | |||
(1) | See Note 5, "Discontinued Operations and Dispositions", in our Notes to Consolidated Financial Statements in Part II, Item 8, of Form 10-K for the year ended December 31, 2019, for further discussion on assets and liabilities held for sale. |
(2) | The Company is authorized to issue the following classes of stock: (i) 500,000,000 shares of common stock, par value $0.001 per share. At December 31, 2019 and 2018, the Company had 86,600,302 shares and 85,800,303 shares of common stock issued and outstanding, respectively; (ii) 100,000,000 shares of preferred stock, par value $0.001 per share. At December 31, 2019 and 2018, no preferred stocks were issued or outstanding; and (iii) 100 shares of special stock, par value $0.001 per share, issued and outstanding to its Manager as at December 31, 2019 and 2018. See Note 11, "Stockholders' Equity", in our Notes to Consolidated Financial Statements in Part II, Item 8, of Form 10-K for the year ended December 31, 2019, for further discussions. |
(3) | Includes $141 million of noncontrolling interest related to discontinued operations at December 31, 2018. See Note 5, "Discontinued Operations and Dispositions", in our Notes to Consolidated Financial Statements in Part II, Item 8, of Form 10-K for the year ended December 31, 2019, for further discussions. |
MACQUARIE INFRASTRUCTURE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||
Year Ended December 31, | |||||||||||
2019 | 2018 | 2017 | |||||||||
Revenue | |||||||||||
Service revenue | $ | 1,484 | $ | 1,515 | $ | 1,446 | |||||
Product revenue | 243 | 246 | 223 | ||||||||
Total revenue | 1,727 | 1,761 | 1,669 | ||||||||
Costs and expenses | |||||||||||
Cost of services | 653 | 712 | 624 | ||||||||
Cost of product sales | 165 | 179 | 144 | ||||||||
Selling, general and administrative | 334 | 327 | 306 | ||||||||
Fees to Manager-related party | 32 | 45 | 71 | ||||||||
Goodwill impairment | — | 3 | — | ||||||||
Depreciation | 195 | 193 | 178 | ||||||||
Amortization of intangibles | 59 | 68 | 64 | ||||||||
Total operating expenses | 1,438 | 1,527 | 1,387 | ||||||||
Operating income | 289 | 234 | 282 | ||||||||
Other income (expense) | |||||||||||
Interest income | 7 | 1 | — | ||||||||
Interest expense(1) | (154) | (113) | (87) | ||||||||
Other (expense) income, net | (2) | (7) | 9 | ||||||||
Net income from continuing operations before income taxes | 140 | 115 | 204 | ||||||||
(Provision) benefit for income taxes | (39) | (50) | 230 | ||||||||
Net income from continuing operations | 101 | 65 | 434 | ||||||||
Discontinued Operations(2) | |||||||||||
Net income from discontinued operations before income taxes | 85 | 32 | 18 | ||||||||
(Provision) benefit for income taxes | (33) | (2) | 4 | ||||||||
Net income from discontinued operations | 52 | 30 | 22 | ||||||||
Net income | 153 | 95 | 456 | ||||||||
Net income from continuing operations | 101 | 65 | 434 | ||||||||
Less: net loss attributable to noncontrolling interests | — | (3) | — | ||||||||
Net income from continuing operations attributable to MIC | 101 | 68 | 434 | ||||||||
Net income from discontinued operations | 52 | 30 | 22 | ||||||||
Less: net (loss) income attributable to noncontrolling interests | (3) | (39) | 5 | ||||||||
Net income from discontinued operations attributable to MIC | 55 | 69 | 17 | ||||||||
Net income attributable to MIC | $ | 156 | $ | 137 | $ | 451 | |||||
Basic income per share from continuing operations attributable to MIC | $ | 1.17 | $ | 0.80 | $ | 5.22 | |||||
Basic income per share from discontinued operations attributable to MIC | 0.65 | 0.80 | 0.20 | ||||||||
Basic income per share attributable to MIC | $ | 1.82 | $ | 1.60 | $ | 5.42 | |||||
Weighted average number of shares outstanding: basic | 86,178,212 | 85,233,989 | 83,204,404 | ||||||||
Diluted income per share from continuing operations attributable to MIC | $ | 1.17 | $ | 0.80 | $ | 4.94 | |||||
Diluted income per share from discontinued operations attributable to MIC | 0.65 | 0.80 | 0.19 | ||||||||
Diluted income per share attributable to MIC | $ | 1.82 | $ | 1.60 | $ | 5.13 | |||||
Weighted average number of shares outstanding: diluted | 86,204,301 | 85,249,865 | 91,073,362 | ||||||||
Cash dividends declared per share | $ | 4.00 | $ | 4.00 | $ | 5.56 | |||||
(1) | Interest expense includes losses on derivative instruments of $13 million and gains on derivative instruments of $8 million and $2 million in 2019, 2018 and 2017, respectively. |
(2) | See Note 5, "Discontinued Operations and Dispositions", in our Notes to Consolidated Financial Statements in Part II, Item 8, of Form 10-K for the year ended December 31, 2019, for discussions on businesses classified as held for sale. |
MACQUARIE INFRASTRUCTURE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||
Year Ended December 31, | ||||||||||||||
2019 | 2018 | 2017 | ||||||||||||
Operating activities | ||||||||||||||
Net income from continuing operations | $ | 101 | $ | 65 | $ | 434 | ||||||||
Adjustments to reconcile net income to net cash provided by operating activities from | ||||||||||||||
Goodwill impairment | — | 3 | — | |||||||||||
Depreciation and amortization of property and equipment | 195 | 193 | 178 | |||||||||||
Amortization of intangible assets | 59 | 68 | 64 | |||||||||||
Amortization of debt financing costs | 9 | 11 | 7 | |||||||||||
Amortization of debt discount | 4 | 4 | 3 | |||||||||||
Adjustments to derivative instruments | 25 | 12 | (4) | |||||||||||
Fees to Manager- related party | 32 | 45 | 71 | |||||||||||
Deferred taxes | 27 | 36 | (240) | |||||||||||
Other non-cash expense, net(1) | 22 | 31 | 14 | |||||||||||
Changes in other assets and liabilities, net of acquisitions: | ||||||||||||||
Accounts receivable | (2) | 14 | (32) | |||||||||||
Inventories | (3) | (2) | (6) | |||||||||||
Prepaid expenses and other current assets | (5) | (2) | (5) | |||||||||||
Accounts payable and accrued expenses | 14 | — | (7) | |||||||||||
Income taxes payable | (10) | 1 | — | |||||||||||
Other, net | — | (6) | (13) | |||||||||||
Net cash provided by operating activities from continuing operations | 468 | 473 | 464 | |||||||||||
Investing activities | ||||||||||||||
Acquisitions of businesses and investments, net of cash, cash equivalents and restricted cash | — | (18) | (201) | |||||||||||
Purchases of property and equipment | (260) | (177) | (214) | |||||||||||
Loan to project developer | (1) | (19) | (23) | |||||||||||
Loan repayment from project developer | 16 | 17 | 17 | |||||||||||
Proceeds from sale of business, net of cash divested | — | 41 | — | |||||||||||
Other, net | (3) | — | — | |||||||||||
Net cash used in investing activities from continuing operations | (248) | (156) | (421) | |||||||||||
Financing activities | ||||||||||||||
Proceeds from long-term debt | — | 1,407 | 931 | |||||||||||
Payment of long-term debt | (361) | (1,385) | (413) | |||||||||||
Proceeds from the issunce of shares | — | — | 6 | |||||||||||
Contributions received from noncontrolling interests | — | 1 | — | |||||||||||
Dividends paid to common stockholders | (344) | (379) | (453) | |||||||||||
Debt financing costs paid | (1) | (34) | (1) | |||||||||||
Net cash (used in) provided by financing activities from continuing operations | (706) | (390) | 70 | |||||||||||
Net change in cash, cash equivalents and restricted cash from continuing operations | (486) | (73) | 113 | |||||||||||
Year Ended December 31, | ||||||||||||||
2019 | 2018 | 2017 | ||||||||||||
Cash flows (used in) provided by discontinued operations: | ||||||||||||||
Net cash (used in) provided by operating activities | $ | (48) | $ | 46 | $ | 65 | ||||||||
Net cash provided by (used in) investing activities | 239 | 616 | (136) | |||||||||||
Net cash provided by (used in) financing activities | 24 | (31) | (32) | |||||||||||
Net cash provided by (used in) discontinued operations | 215 | 631 | (103) | |||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | (1) | 1 | |||||||||||
Net change in cash, cash equivalents and restricted cash | (271) | 557 | 11 | |||||||||||
Cash, cash equivalents and restricted cash, beginning of period | 629 | 72 | 61 | |||||||||||
Cash, cash equivalents and restricted cash, end of period | $ | 358 | $ | 629 | $ | 72 | ||||||||
Supplemental disclosures of cash flow information from continuing operations: | ||||||||||||||
Non-cash investing and financing activities: | ||||||||||||||
Accrued purchases of property and equipment | $ | 32 | $ | 23 | $ | 22 | ||||||||
Issuance of shares to Manager | 31 | 48 | 72 | |||||||||||
Issuance of shares to independent directors | 1 | 1 | 1 | |||||||||||
Issuance of shares for acquisition of business | — | — | 125 | |||||||||||
Leased assets obtained in exchange for new operating lease liabilities | 21 | — | — | |||||||||||
Taxes paid, net(2) | 65 | 21 | 11 | |||||||||||
Interest paid, net | 131 | 98 | 85 | |||||||||||
(1) Other non-cash expense, net, includes the write-down of the Company's investment in the mechanical contractor business at MIC Hawaii in 2018. | ||||||||||||||
(2) Taxes paid, net, includes taxes paid for discontinued operations of $54 million and $8 million in 2019 and 2018, respectively. | ||||||||||||||
The following table provides a reconciliation of cash, cash equivalents and restricted cash from both continuing and discontinued operations reported within the | ||||||||||||||
As of December 31, | ||||||||||||||
2019 | 2018 | 2017 | ||||||||||||
Cash and cash equivalents | $ | 357 | $ | 589 | $ | 46 | ||||||||
Restricted cash - current | 1 | 23 | 10 | |||||||||||
Cash, cash equivalents and restricted cash included in assets held for sale(3) | — | 17 | 16 | |||||||||||
Total of cash, cash equivalents and restricted cash shown in the consolidated statement of cash flows | $ | 358 | $ | 629 | $ | 72 | ||||||||
(3) Represents cash, cash equivalents and restricted cash related to businesses classified as held for sale. See Note 5, "Discontinued Operations and Dispositions", |
MACQUARIE INFRASTRUCTURE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS – MD&A | ||||||||||||||||||||||||||||
Quarter Ended | Change | Year Ended | Change Favorable/ | |||||||||||||||||||||||||
2019 | 2018 | $ | % | 2019 | 2018 | $ | % | |||||||||||||||||||||
($ In Millions, Except Share and Per Share Data) (Unaudited) | ||||||||||||||||||||||||||||
Revenue | ||||||||||||||||||||||||||||
Service revenue | $ | 364 | $ | 375 | $ | (11) | (3) | $ | 1,484 | $ | 1,515 | (31) | (2) | |||||||||||||||
Product revenue | 60 | 62 | (2) | (3) | 243 | 246 | (3) | (1) | ||||||||||||||||||||
Total revenue | 424 | 437 | (13) | (3) | 1,727 | 1,761 | (34) | (2) | ||||||||||||||||||||
Costs and expenses | ||||||||||||||||||||||||||||
Cost of services | 169 | 178 | 9 | 5 | 653 | 712 | 59 | 8 | ||||||||||||||||||||
Cost of product sales | 37 | 51 | 14 | 27 | 165 | 179 | 14 | 8 | ||||||||||||||||||||
Selling, general and administrative | 89 | 87 | (2) | (2) | 334 | 327 | (7) | (2) | ||||||||||||||||||||
Fees to Manager - related party | 9 | 9 | — | — | 32 | 45 | 13 | 29 | ||||||||||||||||||||
Goodwill impairment | — | — | — | — | — | 3 | 3 | 100 | ||||||||||||||||||||
Depreciation | 50 | 50 | — | — | 195 | 193 | (2) | (1) | ||||||||||||||||||||
Amortization of intangibles | 15 | 15 | — | — | 59 | 68 | 9 | 13 | ||||||||||||||||||||
Total operating expenses | 369 | 390 | 21 | 5 | 1,438 | 1,527 | 89 | 6 | ||||||||||||||||||||
Operating income | 55 | 47 | 8 | 17 | 289 | 234 | 55 | 24 | ||||||||||||||||||||
Other income (expense) | ||||||||||||||||||||||||||||
Interest income | 1 | 1 | — | — | 7 | 1 | 6 | NM | ||||||||||||||||||||
Interest expense(1) | (30) | (42) | 12 | 29 | (154) | (113) | (41) | (36) | ||||||||||||||||||||
Other (expense) income, net | (4) | 8 | (12) | (150) | (2) | (7) | 5 | 71 | ||||||||||||||||||||
Net income from continuing operations before | 22 | 14 | 8 | 57 | 140 | 115 | 25 | 22 | ||||||||||||||||||||
Provision for income taxes | (6) | (18) | 12 | 67 | (39) | (50) | 11 | 22 | ||||||||||||||||||||
Net income (loss) from continuing operations | $ | 16 | $ | (4) | $ | 20 | NM | $ | 101 | $ | 65 | 36 | 55 | |||||||||||||||
Discontinued Operations | ||||||||||||||||||||||||||||
Net (loss) income from discontinued operations | $ | (1) | $ | (9) | $ | 8 | 89 | $ | 85 | $ | 32 | 53 | 166 | |||||||||||||||
(Provision) benefit for income taxes | (1) | 3 | (4) | (133) | (33) | (2) | (31) | NM | ||||||||||||||||||||
Net (loss) income from discontinued operations | $ | (2) | $ | (6) | $ | 4 | 67 | $ | 52 | $ | 30 | 22 | 73 | |||||||||||||||
Net income (loss) | $ | 14 | $ | (10) | $ | 24 | NM | $ | 153 | $ | 95 | 58 | 61 | |||||||||||||||
Net income (loss) from continuing operations | $ | 16 | $ | (4) | $ | 20 | NM | $ | 101 | $ | 65 | 36 | 55 | |||||||||||||||
Less: net loss attributable to noncontrolling | — | (3) | (3) | (100) | — | (3) | (3) | (100) | ||||||||||||||||||||
Net income (loss) from continuing | $ | 16 | $ | (1) | $ | 17 | NM | $ | 101 | $ | 68 | 33 | 49 | |||||||||||||||
Net (loss) income from discontinued operations | $ | (2) | $ | (6) | $ | 4 | 67 | $ | 52 | $ | 30 | 22 | 73 | |||||||||||||||
Less: net loss attributable to noncontrolling | — | (7) | (7) | (100) | (3) | (39) | (36) | (92) | ||||||||||||||||||||
Net (loss) income from discontinued | $ | (2) | $ | 1 | $ | (3) | NM | $ | 55 | $ | 69 | (14) | (20) | |||||||||||||||
Net income attributable to MIC | $ | 14 | $ | — | $ | 14 | NM | $ | 156 | $ | 137 | 19 | 14 | |||||||||||||||
Basic income (loss) per share from continuing | $ | 0.18 | $ | (0.01) | $ | 0.19 | NM | $ | 1.17 | $ | 0.80 | 0.37 | 46 | |||||||||||||||
Basic (loss) income per share from discontinued | (0.02) | — | (0.02) | NM | 0.65 | 0.80 | (0.15) | (19) | ||||||||||||||||||||
Basic income (loss) per share attributable to MIC | $ | 0.16 | $ | (0.01) | $ | 0.17 | NM | $ | 1.82 | $ | 1.60 | 0.22 | 14 | |||||||||||||||
Weighted average number of shares outstanding: | 86,483,313 | 85,643,587 | 839,726 | 1 | 86,178,212 | 85,233,989 | 944,223 | 1 |
NM — Not meaningful | ||||||||
(1) | Interest expense includes gain on derivative instruments of $1 million and loss on derivative instruments of $13 million for the quarter and year ended December |
MACQUARIE INFRASTRUCTURE CORPORATION
RECONCILIATION OF CONSOLIDATED NET INCOME (LOSS) TO EBITDA EXCLUDING | |||||||||||||||||||||||||||
Quarter Ended | Change | Year Ended | Change | ||||||||||||||||||||||||
2019 | 2018 | $ | % | 2019 | 2018 | $ | % | ||||||||||||||||||||
($ In Millions) (Unaudited) | |||||||||||||||||||||||||||
Net income (loss) from continuing operations | $ | 16 | $ | (4) | $ | 101 | $ | 65 | |||||||||||||||||||
Interest expense, net(1) | 29 | 41 | 147 | 112 | |||||||||||||||||||||||
Provision for income taxes | 6 | 18 | 39 | 50 | |||||||||||||||||||||||
Depreciation | 50 | 50 | 195 | 193 | |||||||||||||||||||||||
Amortization of intangibles | 15 | 15 | 59 | 68 | |||||||||||||||||||||||
Fees to Manager- related party | 9 | 9 | 32 | 45 | |||||||||||||||||||||||
Goodwill impairment | — | — | — | 3 | |||||||||||||||||||||||
Other non-cash expense, net(2) | 7 | 15 | 26 | 33 | |||||||||||||||||||||||
EBITDA excluding non-cash items - continuing operations | $ | 132 | $ | 144 | (12) | (8) | $ | 599 | $ | 569 | 30 | 5 | |||||||||||||||
EBITDA excluding non-cash items - continuing | $ | 132 | $ | 144 | $ | 599 | $ | 569 | |||||||||||||||||||
Interest expense, net(1) | (29) | (41) | (147) | (112) | |||||||||||||||||||||||
Adjustments to derivative instruments recorded in interest expense(1) | (1) | 11 | 21 | (1) | |||||||||||||||||||||||
Amortization of debt financing costs(1) | 2 | 5 | 9 | 11 | |||||||||||||||||||||||
Amortization of debt discount(1) | 1 | 1 | 4 | 4 | |||||||||||||||||||||||
Benefit (provision) for current income taxes | 1 | (3) | (12) | (14) | |||||||||||||||||||||||
Changes in working capital(3) | (54) | (10) | (6) | 16 | |||||||||||||||||||||||
Cash provided by operating activities - continuing operations | 52 | 107 | 468 | 473 | |||||||||||||||||||||||
Changes in working capital(3) | 54 | 10 | 6 | (16) | |||||||||||||||||||||||
Maintenance capital expenditures | (28) | (18) | (69) | (49) | |||||||||||||||||||||||
Free cash flow - continuing operations | 78 | 99 | (21) | (21) | 405 | 408 | (3) | (1) | |||||||||||||||||||
Free cash flow - discontinued operations | 9 | 3 | 6 | NM | (31) | 67 | (98) | (146) | |||||||||||||||||||
Total Free Cash Flow | $ | 87 | $ | 102 | (15) | (15) | $ | 374 | $ | 475 | (101) | (21) |
NM — Not meaningful | |||||||||
(1) | Interest expense, net, includes adjustments to derivative instruments, non-cash amortization of deferred financing fees and non-cash amortization of debt discount | ||||||||
(2) | Other non-cash expense, net, primarily includes pension expense of $3 million and $9 million for the quarter and year ended December 31, 2019, respectively, | ||||||||
(3) | During the quarter and year ended December 31, 2019, the changes in working capital include the current federal income tax paid primarily related to the gain on |
MACQUARIE INFRASTRUCTURE CORPORATION
RECONCILIATION OF SEGMENT NET INCOME (LOSS) TO EBITDA | |||||||||||||||||||||||
IMTT | |||||||||||||||||||||||
Quarter Ended | Change | Year Ended | Change Favorable/ | ||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||
$ | $ | $ | % | $ | $ | $ | % | ||||||||||||||||
($ In Millions) (Unaudited) | |||||||||||||||||||||||
Revenue | 117 | 124 | (7) | (6) | 515 | 510 | 5 | 1 | |||||||||||||||
Cost of services | 55 | 53 | (2) | (4) | 204 | 201 | (3) | (1) | |||||||||||||||
Selling, general and administrative expenses | 7 | 8 | 1 | 13 | 33 | 32 | (1) | (3) | |||||||||||||||
Depreciation and amortization | 34 | 33 | (1) | (3) | 132 | 132 | — | — | |||||||||||||||
Operating income | 21 | 30 | (9) | (30) | 146 | 145 | 1 | 1 | |||||||||||||||
Interest expense, net(1) | (9) | (15) | 6 | 40 | (47) | (46) | (1) | (2) | |||||||||||||||
Other income, net | 1 | — | 1 | NM | 1 | — | 1 | NM | |||||||||||||||
Provision for income taxes | (4) | (12) | 8 | 67 | (29) | (36) | 7 | 19 | |||||||||||||||
Net income | 9 | 3 | 6 | NM | 71 | 63 | 8 | 13 | |||||||||||||||
Reconciliation of net income to EBITDA excluding non-cash items and a reconciliation of cash provided | |||||||||||||||||||||||
Net income | 9 | 3 | 71 | 63 | |||||||||||||||||||
Interest expense, net(1) | 9 | 15 | 47 | 46 | |||||||||||||||||||
Provision for income taxes | 4 | 12 | 29 | 36 | |||||||||||||||||||
Depreciation and amortization | 34 | 33 | 132 | 132 | |||||||||||||||||||
Other non-cash expense, net(2) | 2 | 2 | 9 | 9 | |||||||||||||||||||
EBITDA excluding non-cash items | 58 | 65 | (7) | (11) | 288 | 286 | 2 | 1 | |||||||||||||||
EBITDA excluding non-cash items | 58 | 65 | 288 | 286 | |||||||||||||||||||
Interest expense, net(1) | (9) | (15) | (47) | (46) | |||||||||||||||||||
Adjustments to derivative instruments recorded in | (1) | 4 | 7 | (2) | |||||||||||||||||||
Amortization of debt financing costs(1) | — | 1 | 1 | 2 | |||||||||||||||||||
Provision for current income taxes | 13 | (1) | (6) | (6) | |||||||||||||||||||
Changes in working capital | (15) | (5) | 10 | 5 | |||||||||||||||||||
Cash provided by operating activities | 46 | 49 | 253 | 239 | |||||||||||||||||||
Changes in working capital | 15 | 5 | (10) | (5) | |||||||||||||||||||
Maintenance capital expenditures | (18) | (12) | (46) | (33) | |||||||||||||||||||
Free cash flow | 43 | 42 | 1 | 2 | 197 | 201 | (4) | (2) | |||||||||||||||
NM — Not meaningful | ||||||||||||||||
(1) | Interest expense, net, includes adjustments to derivative instruments and non-cash amortization of deferred financing fees. | |||||||||||||||
(2) | Other non-cash expense, net, primarily includes pension expense of $2 million and $8 million for the quarters and years ended December 31, 2019 and 2018, |
Atlantic Aviation | |||||||||||||||||||||||
Quarter Ended December 31, | Change | Year Ended | Change | ||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||
$ | $ | $ | % | $ | $ | $ | % | ||||||||||||||||
($ In Millions) (Unaudited) | |||||||||||||||||||||||
Revenue | 248 | 247 | 1 | — | 972 | 962 | 10 | 1 | |||||||||||||||
Cost of services (exclusive of depreciation and | 114 | 121 | 7 | 6 | 449 | 467 | 18 | 4 | |||||||||||||||
Gross margin | 134 | 126 | 8 | 6 | 523 | 495 | 28 | 6 | |||||||||||||||
Selling, general and administrative expenses | 64 | 58 | (6) | (10) | 249 | 232 | (17) | (7) | |||||||||||||||
Depreciation and amortization | 27 | 28 | 1 | 4 | 106 | 106 | — | — | |||||||||||||||
Operating income | 43 | 40 | 3 | 8 | 168 | 157 | 11 | 7 | |||||||||||||||
Interest expense, net(1) | (15) | (16) | 1 | 6 | (74) | (25) | (49) | (196) | |||||||||||||||
Other expense, net | (1) | — | (1) | NM | (1) | (1) | — | — | |||||||||||||||
Provision for income taxes | (6) | (6) | — | — | (24) | (35) | 11 | 31 | |||||||||||||||
Net income | 21 | 18 | 3 | 17 | 69 | 96 | (27) | (28) | |||||||||||||||
Reconciliation of net income to EBITDA excluding | |||||||||||||||||||||||
Net income | 21 | 18 | 69 | 96 | |||||||||||||||||||
Interest expense, net(1) | 15 | 16 | 74 | 25 | |||||||||||||||||||
Provision for income taxes | 6 | 6 | 24 | 35 | |||||||||||||||||||
Depreciation and amortization | 27 | 28 | 106 | 106 | |||||||||||||||||||
Other non-cash expense, net(2) | 2 | — | 3 | 1 | |||||||||||||||||||
EBITDA excluding non-cash items | 71 | 68 | 3 | 4 | 276 | 263 | 13 | 5 | |||||||||||||||
EBITDA excluding non-cash items | 71 | 68 | 276 | 263 | |||||||||||||||||||
Interest expense, net(1) | (15) | (16) | (74) | (25) | |||||||||||||||||||
Convertible senior notes interest(3) | — | (1) | — | (7) | |||||||||||||||||||
Adjustments to derivative instruments | — | 6 | 12 | 1 | |||||||||||||||||||
Amortization of debt financing costs(1) | 1 | 3 | 4 | 4 | |||||||||||||||||||
Provision for current income taxes | (8) | (3) | (22) | (23) | |||||||||||||||||||
Changes in working capital | 7 | (3) | 13 | 13 | |||||||||||||||||||
Cash provided by operating activities | 56 | 54 | 209 | 226 | |||||||||||||||||||
Changes in working capital | (7) | 3 | (13) | (13) | |||||||||||||||||||
Maintenance capital expenditures | (8) | (3) | (16) | (8) | |||||||||||||||||||
Free cash flow | 41 | 54 | (13) | (24) | 180 | 205 | (25) | (12) |
NM — Not meaningful | |||||||||
(1) | Interest expense, net, includes adjustments to derivative instruments and non-cash amortization of deferred financing fees. In 2018, interest expense also included non-cash write-off of deferred financing costs related to the December 2018 refinancing. | ||||||||
(2) | Other non-cash expense, net, primarily includes expenses related to a long-term incentive compensation plan implemented in 2019 and non-cash gains (losses) | ||||||||
(3) | Represents the cash interest expense related to the $403 million of MIC Corporate 2.00% Convertible Senior Notes due October 2023 that was reclassified to |
MIC Hawaii | |||||||||||||||||||||||
Quarter Ended December 31, | Change | Year Ended | Change | ||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||
$ | $ | $ | % | $ | $ | $ | % | ||||||||||||||||
($ In Millions) (Unaudited) | |||||||||||||||||||||||
Product revenue | 60 | 61 | (1) | (2) | 243 | 245 | (2) | (1) | |||||||||||||||
Service revenue | — | 5 | (5) | (100) | — | 47 | (47) | (100) | |||||||||||||||
Total revenue | 60 | 66 | (6) | (9) | 243 | 292 | (49) | (17) | |||||||||||||||
Cost of product sales (exclusive of depreciation and | 37 | 51 | 14 | 27 | 165 | 179 | 14 | 8 | |||||||||||||||
Cost of services (exclusive of depreciation and | — | 4 | 4 | 100 | — | 44 | 44 | 100 | |||||||||||||||
Cost of revenue — total | 37 | 55 | 18 | 33 | 165 | 223 | 58 | 26 | |||||||||||||||
Gross margin | 23 | 11 | 12 | 109 | 78 | 69 | 9 | 13 | |||||||||||||||
Selling, general and administrative expenses | 7 | 6 | (1) | (17) | 24 | 29 | 5 | 17 | |||||||||||||||
Goodwill impairment | — | — | — | — | — | 3 | 3 | 100 | |||||||||||||||
Depreciation and amortization | 4 | 4 | — | — | 16 | 23 | 7 | 30 | |||||||||||||||
Operating income | 12 | 1 | 11 | NM | 38 | 14 | 24 | 171 | |||||||||||||||
Interest expense, net(1) | (2) | (3) | 1 | 33 | (10) | (8) | (2) | (25) | |||||||||||||||
Other expense, net | (4) | (1) | (3) | NM | (6) | (24) | 18 | 75 | |||||||||||||||
(Provision) benefit for income taxes | (4) | 2 | (6) | NM | (9) | 6 | (15) | NM | |||||||||||||||
Net income (loss) | 2 | (1) | 3 | NM | 13 | (12) | 25 | NM | |||||||||||||||
Less: net loss attributable to noncontrolling interests | — | (3) | (3) | (100) | — | (3) | (3) | (100) | |||||||||||||||
Net income (loss) attributable to MIC | 2 | 2 | — | — | 13 | (9) | 22 | NM | |||||||||||||||
Reconciliation of net income (loss) to EBITDA | |||||||||||||||||||||||
Net income (loss) | 2 | (1) | 13 | (12) | |||||||||||||||||||
Interest expense, net(1) | 2 | 3 | 10 | 8 | |||||||||||||||||||
Provision (benefit) for income taxes | 4 | (2) | 9 | (6) | |||||||||||||||||||
Goodwill impairment | — | — | — | 3 | |||||||||||||||||||
Depreciation and amortization | 4 | 4 | 16 | 23 | |||||||||||||||||||
Other non-cash expense, net(2) | 2 | 12 | 12 | 22 | |||||||||||||||||||
EBITDA excluding non-cash items | 14 | 16 | (2) | (13) | 60 | 38 | 22 | 58 | |||||||||||||||
EBITDA excluding non-cash items | 14 | 16 | 60 | 38 | |||||||||||||||||||
Interest expense, net(1) | (2) | (3) | (10) | (8) | |||||||||||||||||||
Adjustments to derivative instruments recorded in | — | 1 | 2 | — | |||||||||||||||||||
Benefit (provision) for current income taxes | — | 4 | (4) | 1 | |||||||||||||||||||
Changes in working capital | 5 | (3) | 8 | 14 | |||||||||||||||||||
Cash provided by operating activities | 17 | 15 | 56 | 45 | |||||||||||||||||||
Changes in working capital | (5) | 3 | (8) | (14) | |||||||||||||||||||
Maintenance capital expenditures | (2) | (3) | (7) | (8) | |||||||||||||||||||
Free cash flow | 10 | 15 | (5) | (33) | 41 | 23 | 18 | 78 |
NM — Not meaningful | |||||||||
(1) | Interest expense, net, includes adjustments to derivative instruments related to interest rate swaps and non-cash amortization of deferred financing fees. | ||||||||
(2) | Other non-cash expense, net, primarily includes non-cash adjustments related to unrealized gains (losses) on commodity hedges, pension expense, expenses |
Corporate and Other | ||||||||||||||||||||||||
Quarter Ended December 31, | Change | Year Ended | Change Favorable/ | |||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||||||||||
$ | $ | $ | % | $ | $ | $ | % | |||||||||||||||||
($ In Millions) (Unaudited) | ||||||||||||||||||||||||
Product revenue | — | 1 | (1) | (100) | — | 1 | (1) | (100) | ||||||||||||||||
Total revenue | — | 1 | (1) | (100) | — | 1 | (1) | (100) | ||||||||||||||||
Selling, general and administrative expenses | 12 | 16 | 4 | 25 | 31 | 38 | 7 | 18 | ||||||||||||||||
Fees to Manager-related party | 9 | 9 | — | — | 32 | 45 | 13 | 29 | ||||||||||||||||
Operating loss | (21) | (24) | 3 | 13 | (63) | (82) | 19 | 23 | ||||||||||||||||
Interest expense, net(1) | (3) | (7) | 4 | 57 | (16) | (33) | 17 | 52 | ||||||||||||||||
Other income, net | — | 9 | (9) | (100) | 4 | 18 | (14) | (78) | ||||||||||||||||
Benefit (provision) for income taxes | 8 | (2) | 10 | NM | 23 | 15 | 8 | 53 | ||||||||||||||||
Net loss | (16) | (24) | 8 | 33 | (52) | (82) | 30 | 37 | ||||||||||||||||
Reconciliation of net loss to EBITDA excluding non- | ||||||||||||||||||||||||
Net loss | (16) | (24) | (52) | (82) | ||||||||||||||||||||
Interest expense, net(1) | 3 | 7 | 16 | 33 | ||||||||||||||||||||
(Benefit) provision for income taxes | (8) | 2 | (23) | (15) | ||||||||||||||||||||
Fees to Manager-related party | 9 | 9 | 32 | 45 | ||||||||||||||||||||
Other non-cash expense, net | 1 | 1 | 2 | 1 | ||||||||||||||||||||
EBITDA excluding non-cash items | (11) | (5) | (6) | (120) | (25) | (18) | (7) | (39) | ||||||||||||||||
EBITDA excluding non-cash items | (11) | (5) | (25) | (18) | ||||||||||||||||||||
Interest expense, net(1) | (3) | (7) | (16) | (33) | ||||||||||||||||||||
Convertible senior notes interest(2) | — | 1 | — | 7 | ||||||||||||||||||||
Amortization of debt financing costs(1) | 1 | 1 | 4 | 5 | ||||||||||||||||||||
Amortization of debt discount(1) | 1 | 1 | 4 | 4 | ||||||||||||||||||||
(Provision) benefit for current income taxes | (4) | (3) | 20 | 14 | ||||||||||||||||||||
Changes in working capital(3) | (51) | 1 | (37) | (16) | ||||||||||||||||||||
Cash used in operating activities | (67) | (11) | (50) | (37) | ||||||||||||||||||||
Changes in working capital(3) | 51 | (1) | 37 | 16 | ||||||||||||||||||||
Free cash flow | (16) | (12) | (4) | (33) | (13) | (21) | 8 | 38 |
NM — Not meaningful | ||||||||||
(1) | Interest expense, net, included non-cash amortization of deferred financing fees and non-cash amortization of debt discount related to the 2.00% Convertible Senior Notes due October 2023. | |||||||||
(2) | Represents the cash interest expense related to the $403 million of MIC Corporate 2.00% Convertible Senior Notes due October 2023 reclassified to Atlantic | |||||||||
(3) | During the quarter and year ended December 31, 2019, the changes in working capital include the current federal income tax paid primarily related to the gain on sale of the renewable businesses reported in the results from discontinued operations. |
MACQUARIE INFRASTRUCTURE CORPORATION
RECONCILIATION OF NET INCOME (LOSS) TO EBITDA EXCLUDING | ||||||||||||||||||||
For the Quarter Ended December 31, 2019 | ||||||||||||||||||||
IMTT | Atlantic Aviation | MIC Hawaii | Corporate and Other | Total Operations | Discontinued Operations | Total | ||||||||||||||
($ in Millions) (Unaudited) | ||||||||||||||||||||
Net income (loss) | 9 | 21 | 2 | (16) | 16 | (2) | 14 | |||||||||||||
Interest expense, net(1) | 9 | 15 | 2 | 3 | 29 | — | 29 | |||||||||||||
Provision (benefit) for income taxes | 4 | 6 | 4 | (8) | 6 | 1 | 7 | |||||||||||||
Depreciation and amortization | 34 | 27 | 4 | — | 65 | — | 65 | |||||||||||||
Fees to Manager-related party | — | — | — | 9 | 9 | — | 9 | |||||||||||||
Other non-cash expense, net(2) | 2 | 2 | 2 | 1 | 7 | — | 7 | |||||||||||||
EBITDA excluding non-cash items | 58 | 71 | 14 | (11) | 132 | (1) | 131 | |||||||||||||
EBITDA excluding non-cash items | 58 | 71 | 14 | (11) | 132 | (1) | 131 | |||||||||||||
Interest expense, net(1) | (9) | (15) | (2) | (3) | (29) | — | (29) | |||||||||||||
Adjustments to derivative instruments | (1) | — | — | — | (1) | — | (1) | |||||||||||||
Amortization of debt financing costs(1) | — | 1 | — | 1 | 2 | — | 2 | |||||||||||||
Amortization of debt discount(1) | — | — | — | 1 | 1 | — | 1 | |||||||||||||
Provision (benefit) for current income | 13 | (8) | — | (4) | 1 | 10 | 11 | |||||||||||||
Changes in working capital(3) | (15) | 7 | 5 | (51) | (54) | — | (54) | |||||||||||||
Cash provided by (used in) operating activities | 46 | 56 | 17 | (67) | 52 | 9 | 61 | |||||||||||||
Changes in working capital(3) | 15 | (7) | (5) | 51 | 54 | — | 54 | |||||||||||||
Maintenance capital expenditures | (18) | (8) | (2) | — | (28) | — | (28) | |||||||||||||
Free Cash Flow | 43 | 41 | 10 | (16) | 78 | 9 | 87 |
For the Quarter Ended December 31, 2018 | ||||||||||||||||||||
IMTT | Atlantic Aviation | MIC Hawaii | Corporate and Other | Total Operations | Discontinued Operations | Total | ||||||||||||||
($ in Millions) (Unaudited) | ||||||||||||||||||||
Net income (loss) | 3 | 18 | (1) | (24) | (4) | (6) | (10) | |||||||||||||
Interest expense, net(1) | 15 | 16 | 3 | 7 | 41 | 6 | 47 | |||||||||||||
Provision (benefit) for income taxes | 12 | 6 | (2) | 2 | 18 | (3) | 15 | |||||||||||||
Depreciation and amortization | 33 | 28 | 4 | — | 65 | — | 65 | |||||||||||||
Fees to Manager-related party | — | — | — | 9 | 9 | — | 9 | |||||||||||||
Other non-cash expense, net(2) | 2 | — | 12 | 1 | 15 | 17 | 32 | |||||||||||||
EBITDA excluding non-cash items | 65 | 68 | 16 | (5) | 144 | 14 | 158 | |||||||||||||
EBITDA excluding non-cash items | 65 | 68 | 16 | (5) | 144 | 14 | 158 | |||||||||||||
Interest expense, net(1) | (15) | (16) | (3) | (7) | (41) | (6) | (47) | |||||||||||||
Convertible senior notes interest(4) | — | (1) | — | 1 | — | — | — | |||||||||||||
Adjustments to derivative instruments | 4 | 6 | 1 | — | 11 | 2 | 13 | |||||||||||||
Amortization of debt financing costs(1) | 1 | 3 | — | 1 | 5 | — | 5 | |||||||||||||
Amortization of debt discount(1) | — | — | — | 1 | 1 | — | 1 | |||||||||||||
(Provision) benefit for current income taxes | (1) | (3) | 4 | (3) | (3) | (7) | (10) | |||||||||||||
Changes in working capital | (5) | (3) | (3) | 1 | (10) | (4) | (14) | |||||||||||||
Cash provided by (used in) operating | 49 | 54 | 15 | (11) | 107 | (1) | 106 | |||||||||||||
Changes in working capital | 5 | 3 | 3 | (1) | 10 | 4 | 14 | |||||||||||||
Maintenance capital expenditures | (12) | (3) | (3) | — | (18) | — | (18) | |||||||||||||
Free Cash Flow | 42 | 54 | 15 | (12) | 99 | 3 | 102 |
For the Year Ended December 31, 2019 | ||||||||||||||||||||
IMTT | Atlantic Aviation | MIC Hawaii | Corporate and Other | Total Operations | Discontinued Operations | Total | ||||||||||||||
($ in Millions) (Unaudited) | ||||||||||||||||||||
Net income (loss) | 71 | 69 | 13 | (52) | 101 | 52 | 153 | |||||||||||||
Interest expense, net(1) | 47 | 74 | 10 | 16 | 147 | 13 | 160 | |||||||||||||
Provision (benefit) for income taxes | 29 | 24 | 9 | (23) | 39 | 33 | 72 | |||||||||||||
Depreciation and amortization | 132 | 106 | 16 | — | 254 | — | 254 | |||||||||||||
Fees to Manager-related party | — | — | — | 32 | 32 | — | 32 | |||||||||||||
Other non-cash expense (income), net(2) | 9 | 3 | 12 | 2 | 26 | (78) | (52) | |||||||||||||
EBITDA excluding non-cash items | 288 | 276 | 60 | (25) | 599 | 20 | 619 | |||||||||||||
EBITDA excluding non-cash items | 288 | 276 | 60 | (25) | 599 | 20 | 619 | |||||||||||||
Interest expense, net(1) | (47) | (74) | (10) | (16) | (147) | (13) | (160) | |||||||||||||
Adjustments to derivative instruments | 7 | 12 | 2 | — | 21 | 4 | 25 | |||||||||||||
Amortization of debt financing costs(1) | 1 | 4 | — | 4 | 9 | — | 9 | |||||||||||||
Amortization of debt discount(1) | — | — | — | 4 | 4 | — | 4 | |||||||||||||
(Provision) benefit for current income | (6) | (22) | (4) | 20 | (12) | (42) | (54) | |||||||||||||
Changes in working capital(3) | 10 | 13 | 8 | (37) | (6) | (17) | (23) | |||||||||||||
Cash provided by (used in) operating | 253 | 209 | 56 | (50) | 468 | (48) | 420 | |||||||||||||
Changes in working capital(3) | (10) | (13) | (8) | 37 | 6 | 17 | 23 | |||||||||||||
Maintenance capital expenditures | (46) | (16) | (7) | — | (69) | — | (69) | |||||||||||||
Free Cash Flow | 197 | 180 | 41 | (13) | 405 | (31) | 374 |
For the Year Ended December 31, 2018 | ||||||||||||||||||||
IMTT | Atlantic Aviation | MIC Hawaii | Corporate and Other | Total | Discontinued Operations | Total | ||||||||||||||
($ in Millions) (Unaudited) | ||||||||||||||||||||
Net income (loss) | 63 | 96 | (12) | (82) | 65 | 30 | 95 | |||||||||||||
Interest expense, net(1) | 46 | 25 | 8 | 33 | 112 | 17 | 129 | |||||||||||||
Provision (benefit) for income taxes | 36 | 35 | (6) | (15) | 50 | 2 | 52 | |||||||||||||
Goodwill impairment | — | — | 3 | — | 3 | — | 3 | |||||||||||||
Depreciation and amortization | 132 | 106 | 23 | — | 261 | 38 | 299 | |||||||||||||
Fees to Manager-related party | — | — | — | 45 | 45 | — | 45 | |||||||||||||
Other non-cash expense, net(2) | 9 | 1 | 22 | 1 | 33 | 12 | 45 | |||||||||||||
EBITDA excluding non-cash items | 286 | 263 | 38 | (18) | 569 | 99 | 668 | |||||||||||||
EBITDA excluding non-cash items | 286 | 263 | 38 | (18) | 569 | 99 | 668 | |||||||||||||
Interest expense, net(1) | (46) | (25) | (8) | (33) | (112) | (17) | (129) | |||||||||||||
Convertible senior notes interest(4) | — | (7) | — | 7 | — | — | — | |||||||||||||
Adjustments to derivative instruments | (2) | 1 | — | — | (1) | (8) | (9) | |||||||||||||
Amortization of debt financing costs(1) | 2 | 4 | — | 5 | 11 | 1 | 12 | |||||||||||||
Amortization of debt discount(1) | — | — | — | 4 | 4 | — | 4 | |||||||||||||
(Provision) benefit for current income taxes | (6) | (23) | 1 | 14 | (14) | (7) | (21) | |||||||||||||
Changes in working capital | 5 | 13 | 14 | (16) | 16 | (22) | (6) | |||||||||||||
Cash provided by (used in) operating activities | 239 | 226 | 45 | (37) | 473 | 46 | 519 | |||||||||||||
Changes in working capital | (5) | (13) | (14) | 16 | (16) | 22 | 6 | |||||||||||||
Maintenance capital expenditures | (33) | (8) | (8) | — | (49) | (1) | (50) | |||||||||||||
Free Cash Flow | 201 | 205 | 23 | (21) | 408 | 67 | 475 |
(1) | Interest expense, net, includes adjustments to derivative instruments, non-cash amortization of deferred financing fees and non-cash amortization of debt discount | ||||||
(2) | Other non-cash expense (income), net, primarily includes pension expense of $3 million and $9 million for the quarter and year ended December 31, 2019, | ||||||
(3) | During the quarter and year ended December 31, 2019, the changes in working capital include the current federal income tax paid primarily related to the gain on | ||||||
(4) | Represents the cash interest expense related to the $403 million of MIC Corporate 2.00% Convertible Senior Notes due October 2023 that was reclassified to |
View original content:http://www.prnewswire.com/news-releases/mic-reports-fourth-quarter-and-full-year-2019-results-301010400.html
SOURCE Macquarie Infrastructure Corporation
NEW YORK, Oct. 31, 2019 /PRNewswire/ -- Macquarie Infrastructure Corporation (NYSE: MIC) today announced its third quarter 2019 financial results including the generation of net income from continuing operations of $15 million compared with net income of $2 million in the third quarter of 2018 (the prior comparable period). The increase primarily reflects the impact of a write-down in the prior comparable period of a business that was sold in the fourth quarter of 2018.
MIC's consolidated revenue declined to $405 million from $421 million in the prior comparable period reflecting primarily the absence of revenue from smaller businesses sold during the past year partially offset by an increase in the volume of fuel sold and services provided by Atlantic Aviation as well as an increase in storage utilization at International-Matex Tank Terminals (IMTT).
Expenses (cost of services/product sales and selling, general and administrative combined) incurred in the quarter declined by 2% primarily as a result of the absence of costs related to businesses sold during the past year and a lower average wholesale price of jet fuel. These gains were partially offset by anticipated increases in labor costs and property taxes at IMTT and unfavorable movements (non-cash) in the value of commodity hedges.
MIC's reported Adjusted EBITDA excluding non-cash items from continuing operations of $131 million was down 7% versus the prior comparable period. The decline reflects primarily expected higher labor costs and property taxes at IMTT.
Cash generated by MIC's operating activities during the third quarter increased 30% to $157 million versus the prior comparable period primarily as a result of current taxes payable as a result of the sale of the Company's portfolio of renewable power businesses.
Adjusted Free Cash Flow from continuing operations totaled $82 million, down 17% versus the prior comparable period reflecting the decrease in Adjusted EBITDA together with higher maintenance capital expenditures, interest expense and cash taxes.
MIC's Chief Executive Officer, Christopher Frost, said: "MIC's results for the third quarter of 2019 were consistent with our guidance and commentary previously provided to the market. Utilization at IMTT continued to recover and, although a portion of the recovery was offset by an expected increase in operating costs, the trajectory for the business remains positive over the medium term.
"Atlantic Aviation recorded an increase in both the volume of fuel sold and hangar rental services provided to our customers, driven in part by an increase in general aviation flight activity."
"I am pleased with the strength of MIC's balance sheet, which reflects the progress we have made to complete the sales of smaller and non-core businesses in our portfolio. These transactions have increased our financial flexibility and we expect to use the net proceeds to fund additional growth projects," Frost added.
MIC expects to deploy between $200 and $220 million in support of growth projects across its businesses in 2019. The Company deployed $52 million in the third quarter as work commenced on projects that had been delayed by high water on the Lower Mississippi River, bringing total deployment of growth capital to $143 million through the end of the third quarter.
The Company completed the sale of its portfolio of wind and solar power businesses in the third quarter, generating approximately $210 million net of taxes and transaction fees. The deconsolidation of debt associated with the renewables businesses and the repayment of $350 million of convertible notes in July reduced MIC's overall indebtedness by $625 million.
Reflecting the reduction in debt, MIC's leverage (net debt / EBITDA) was 3.6x at the end of the third quarter. The Company expects leverage to be approximately 4.1x at the end of 2019 as it funds growth projects and pays capital gains taxes resulting from the sale of the renewables businesses.
MIC reaffirmed its full-year 2019 guidance for the generation of Adjusted EBITDA excluding non-cash items of between $600 and $625 million.
IMTT: | $287 – $297 million |
Atlantic Aviation: | $275 – $285 million |
MIC Hawaii: | $60 – $65 million |
Corporate and Other: | $(22) million |
MIC also reaffirmed its guidance for the generation of Adjusted Free Cash Flow in a range of $390 to $435 million in 2019.
With respect to the Company's guidance for EBITDA and Free Cash Flow in 2019, a reconciliation of EBITDA to net income (loss), the most comparable GAAP measure and a reconciliation of Free Cash Flow to cash from operating activities, the most comparable GAAP measure, are not available without unreasonable effort due to the Company's limited visibility into and an inability to make accurate projections and estimates of items including management fees, hedging agreements, depreciation and any (benefit) provision for income taxes. These items may vary greatly from year to year and could significantly impact MIC's results as reported in accordance with GAAP.
Third Quarter 2019 Segment Results
Third Quarter 2019 Dividend
The MIC board of directors authorized a cash dividend of $1.00 per share, or $4.00 annualized, for the third quarter consistent with guidance provided in February 2019. The dividend will be paid November 14, 2019 to shareholders of record on November 11, 2019. MIC reaffirmed its guidance for the payment of dividend of $1.00 per share in the fourth quarter of 2019.
Including the dividend for the third quarter, MIC will have distributed approximately 79% of its Adjusted Free Cash Flow from continuing operations generated year to date. For the full year MIC expects to distribute approximately 84% of its Adjusted Free Cash Flow as dividends.
MIC intends to pay a dividend of $1.00 per share, per quarter, in 2020 as well. The payment of a dividend is predicated on, 1) the composition of the MIC portfolio of businesses remaining unchanged, 2) the businesses and operations performing as expected and at levels that support the dividend, and 3) general economic conditions and stability in the broader market.
Pursuit of Strategic Alternatives
In a separate press release, MIC today announced its intention to pursue strategic alternatives including the sale of the Company or its operating businesses as a part of ongoing efforts to unlock shareholder value. To facilitate the pursuit of strategic alternatives, MIC also announced that it has entered into a disposition agreement with Macquarie Infrastructure Management (USA) Inc. ("MIMUSA"), the external manager of the Company. The agreement was filed with the Securities and Exchange Commission this morning. A copy of the release can be found on MIC's website.
MIC has appointed Lazard as its lead financial advisor and White & Case as its legal counsel in connection with its pursuit of strategic alternatives.
Summary Financial Information
Quarter Ended | Change | Nine Months Ended | Change | |||||||||||||||||||
2019 | 2018 | $ | % | 2019 | 2018 | $ | % | |||||||||||||||
($ in Millions, Except Share and Per Share Data) (Unaudited) | ||||||||||||||||||||||
GAAP Metrics | ||||||||||||||||||||||
Continuing Operations | ||||||||||||||||||||||
Net income | $ | 15 | $ | 2 | $ | 13 | NM | $ | 85 | $ | 69 | $ | 16 | 23 | ||||||||
Net income per share attributable to MIC | 0.18 | 0.02 | 0.16 | NM | 0.99 | 0.81 | 0.18 | 22 | ||||||||||||||
Cash provided by operating activities | 157 | 121 | 36 | 30 | 416 | 366 | 50 | 14 | ||||||||||||||
Discontinued Operations | ||||||||||||||||||||||
Net income | $ | 46 | $ | 20 | $ | 26 | 130 | $ | 54 | $ | 36 | $18 | 50 | |||||||||
Net income per share attributable to MIC | 0.53 | 0.23 | 0.30 | 130 | 0.67 | 0.80 | (0.13) | (16) | ||||||||||||||
Cash (used in) provided by operating activities | (46) | 26 | (72) | NM | (57) | 47 | (104) | NM | ||||||||||||||
Weighted average number of shares outstanding: basic | 86,276,237 | 85,378,088 | 898,149 | 1 | 86,075,394 | 85,095,956 | 979,438 | 1 | ||||||||||||||
MIC Non-GAAP Metrics | ||||||||||||||||||||||
EBITDA excluding non-cash items - continuing | $ | 133 | $ | 123 | $ | 10 | 8 | $ | 467 | $ | 425 | $ | 42 | 10 | ||||||||
Investment and acquisition/disposition costs | (2) | 1 | (3) | NM | 1 | 7 | (6) | (86) | ||||||||||||||
Write-down in investment | - | 17 | (17) | (100) | - | 17 | (17) | (100) | ||||||||||||||
Adjusted EBITDA excluding non-cash items - continuing | $ | 131 | $ | 141 | $ | (10) | (7) | $ | 468 | $ | 449 | $ | 19 | 4 | ||||||||
Cash interest | $ | (27) | $ | (26) | $ | (1) | (4) | $ | (86) | $ | (74) | $ | (12) | (16) | ||||||||
Cash taxes | (4) | (3) | (1) | (33) | (13) | (11) | (2) | (18) | ||||||||||||||
Maintenance capital expenditures | (18) | (13) | (5) | (38) | (41) | (31) | (10) | (32) | ||||||||||||||
Adjusted Free Cash Flow - continuing operations | $ | 82 | $ | 99 | $ | (17) | (17) | $ | 328 | $ | 333 | $ | (5) | (2) | ||||||||
EBITDA excluding non-cash items - Discontinued | (1) | 37 | (38) | (103) | 21 | 85 | (64) | (75) | ||||||||||||||
Cash interest | (1) | (6) | 5 | 83 | (9) | (20) | 11 | 55 | ||||||||||||||
Cash taxes | (52) | - | (52) | NM | (52) | - | (52) | NM | ||||||||||||||
Maintenance capital expenditures | - | - | - | - | - | (1) | 1 | 100 | ||||||||||||||
Free Cash Flow - Discontinued operations | $ | (54) | $ | 31 | $ | (85) | NM | $ | (40) | $ | 64 | $ | (104) | (163) | ||||||||
Adjusted Free Cash Flows | $ | 28 | $ | 130 | $ | (102) | (78) | $ | 288 | $ | 397 | $ | (109) | (27) |
(1) | For the quarter and nine months ended September 30, 2019, cash provided by continuing operations includes the current federal tax liability of $43 million primarily related to the gain on sale of the renewable businesses reported in the results from discontinued operations. | |||||
(2) | For the quarter and nine months ended September 30, 2019, the Company reclassified investment and acquisition/ disposition costs from continuing operations to discontinued operations. |
Conference Call and Webcast
When: MIC has scheduled a conference call for 8:00 a.m. Eastern Time on Thursday, October 31, 2019 during which management will review and comment on the third quarter 2019 results.
How: To listen to the conference call dial +1(650) 521-5252 or +1(877) 852-2928 at least ten 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. Allow extra time prior to the call to visit the site and download the software needed to listen to the webcast.
Supplemental Materials: MIC will prepare slides in support of its conference call. The materials will be available for downloading from the Company's website prior to the call.
Replay: For interested individuals unable to participate in the live conference call, a replay will be available after 2:00 p.m. on October 31, 2019 through midnight on November 6, 2019, at +1(404) 537-3406 or +1(855) 859-2056, Passcode: 9578278. An online archive of the webcast will be available on the Company's website for one year following the call.
About MIC
MIC owns and operates a diversified group of businesses providing basic services to customers in the United States. Its businesses consist of a bulk liquid terminals business, International-Matex Tank Terminals; an airport services business, Atlantic Aviation; and entities comprising an energy services, production and distribution segment, MIC Hawaii. For additional information, please visit the MIC website at www.macquarie.com/mic.
Use of Non-GAAP Measures
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items and Free Cash Flow
In addition to MIC's results under U.S. GAAP, the Company uses certain non-GAAP measures to assess the performance and prospects of its businesses. In particular MIC uses EBITDA excluding non-cash items and Free Cash Flow.
MIC measures EBITDA excluding non-cash items as a reflection of its businesses' ability to effectively manage the volume of products sold or services provided, the operating margin earned on those transactions and the management of operating expenses independent of the capitalization and tax attributes of those businesses. The Company believes investors use EBITDA excluding non-cash items primarily as a measure to assess the operating performance of its businesses and to make comparisons with the operating performance of other businesses whose depreciation and amortization expense may vary widely from MIC's, particularly where acquisitions and other non-operating factors are involved. MIC defines EBITDA excluding non-cash items as net income (loss) or earnings —the most comparable GAAP measure— before interest, taxes, depreciation and amortization and non-cash items including impairments, unrealized derivative gains and losses, adjustments for other non-cash items and pension expense reflected in the statements of operations. EBITDA excluding non-cash items also excludes base management fees and performance fees, if any, whether paid in cash or stock.
The Company's businesses can be characterized as owners of high-value, long-lived assets capable of generating substantial Free Cash Flow. MIC defines Free Cash Flow as cash from operating activities —the most comparable GAAP measure — which includes cash paid for interest, taxes and pension contributions, less maintenance capital expenditures, which includes principal repayments on capital lease obligations used to fund maintenance capital expenditures and excludes changes in working capital.
Management uses Free Cash Flow as a measure of its ability to provide investors with an attractive risk-adjusted return by sustaining and potentially increasing MIC's quarterly cash dividend and funding a portion of the Company's growth. GAAP metrics such as net income (loss) do not provide MIC management with the same level of visibility to into the performance and prospects of the business as a result of: (i) the capital intensive nature of MIC's businesses and the generation of non-cash depreciation and amortization; (ii) shares issued to the Company's external manager under the Management Services Agreement, (iii) the Company's ability to defer all or a portion of current federal income taxes; (iv) non-cash unrealized gains or losses on derivative instruments; (v) gains (losses) on disposal of assets, (vi) non-cash compensation expenses related to a long-term incentive compensation plan for senior management of the operating businesses implemented in 2019; and (vii) pension expense. Pension expenses primarily consist of interest expense, expected return on plan assets and amortization of actuarial and performance gains and losses. Any cash contributions to pension plans are reflected as a reduction in Free Cash Flow and are not included in pension expense. Management believes that external consumers of its financial statements, including investors and research analysts, use Free Cash Flow both to assess the Company's performance and as an indicator of its success in generating an attractive risk-adjusted return.
In its Quarterly Report on Form 10-Q, the Company has disclosed Free Cash Flow on a consolidated basis and for each of its operating segments and MIC Corporate. Management believes that both EBITDA excluding non-cash items and Free Cash Flow support a more complete and accurate understanding of the financial and operating performance of its businesses than would otherwise be achieved using GAAP results alone.
Free Cash Flow does not take into consideration required payments on indebtedness and other fixed obligations or other cash items that are excluded from MIC's definition of Free Cash Flow. Management notes that Free Cash Flow may be calculated differently by other companies thereby limiting its usefulness as a comparative measure. Free Cash Flow should be used as a supplemental measure to help understand MIC's financial performance and not in lieu of its financial results reported under GAAP.
See the tables below for a reconciliation of Net Income (loss) to EBITDA excluding non-cash items from continuing operations and a reconciliation of cash provided by operating activities from continuing operations to Free Cash Flow from continuing operations.
Classification of Maintenance Capital Expenditures and Growth Capital Expenditures
MIC categorizes capital expenditures as either maintenance capital expenditures or growth capital expenditures. As neither maintenance capital expenditure nor growth capital expenditure is a GAAP term, the Company has adopted a framework to categorize specific capital expenditures. In broad terms, maintenance capital expenditures primarily maintain MIC's businesses at current levels of operations, capability, profitability or cash flow, while growth capital expenditures primarily provide new or enhanced levels of operations, capability, profitability or cash flow. Management considers a number of factors in determining whether a specific capital expenditure will be classified as maintenance or growth.
MIC does not bifurcate specific capital expenditures into growth and maintenance components. Each discrete capital expenditure is considered within the above framework and the entire capital expenditure is classified as either maintenance or growth.
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 release 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, complete growth projects, deploy growth capital and manage growth, make and finance future acquisitions, and implement its strategy; the regulatory environment; demographic trends, the political environment, the economy, tourism, construction and transportation costs, air travel, environmental costs and risks; fuel and gas and other commodity costs; its ability to recover increases in costs from customers, cybersecurity risks, work interruptions or other labor stoppages; risks associated with acquisitions or dispositions, litigation risks; risks related to its shared services initiative and its ability to achieve cost savings; 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.
MIC is not an authorized deposit-taking institution for the purposes of the Banking Act 1959 (Commonwealth of Australia). The obligations of MIC 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 MIC.
MACQUARIE INFRASTRUCTURE CORPORATION | ||||||
CONSOLIDATED CONDENSED BALANCE SHEETS | ||||||
($ in Millions, Except Share Data) | ||||||
September 30, | December 31, | |||||
(Unaudited) | ||||||
ASSETS | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | 473 | $ | 589 | ||
Restricted cash | 1 | 23 | ||||
Accounts receivable, net of allowance for doubtful accounts | 89 | 95 | ||||
Inventories | 29 | 29 | ||||
Prepaid expenses | 15 | 13 | ||||
Other current assets | 23 | 23 | ||||
Current assets held for sale(1) | - | 648 | ||||
Total current assets | 630 | 1,420 | ||||
Property, equipment, land and leasehold improvements, net | 3,153 | 3,141 | ||||
Operating lease assets, net | 330 | - | ||||
Investment in unconsolidated business | 9 | 8 | ||||
Goodwill | 2,043 | 2,043 | ||||
Intangible assets, net | 745 | 789 | ||||
Other noncurrent assets | 14 | 43 | ||||
Total assets | $ | 6,924 | $ | 7,444 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
Current liabilities: | ||||||
Due to Manager-related party | $ | 3 | $ | 3 | ||
Accounts payable | 48 | 38 | ||||
Accrued expenses | 80 | 86 | ||||
Current portion of long-term debt | 11 | 361 | ||||
Operating lease liabilities - current | 20 | - | ||||
Income taxes payable | 47 | - | ||||
Other current liabilities | 40 | 33 | ||||
Current liabilities held for sale(1) | - | 317 | ||||
Total current liabilities | 249 | 838 | ||||
Long-term debt, net of current portion | 2,654 | 2,653 | ||||
Deferred income taxes | 665 | 681 | ||||
Operating lease liabilities - noncurrent | 314 | - | ||||
Other noncurrent liabilities | 159 | 155 | ||||
Total liabilities | 4,041 | 4,327 | ||||
Commitments and contingencies | - | - | ||||
Stockholders' equity(2): | ||||||
Additional paid in capital | $ | 1,276 | $ | 1,510 | ||
Accumulated other comprehensive loss | (29) | (30) | ||||
Retained earnings | 1,627 | 1,485 | ||||
Total stockholders' equity | 2,874 | 2,965 | ||||
Noncontrolling interests(3) | 9 | 152 | ||||
Total equity | 2,883 | 3,117 | ||||
Total liabilities and equity | $ | 6,924 | $ | 7,444 |
(1) | See Note 3, "Discontinued Operations and Dispositions", in our Notes to Consolidated Condensed Financial Statements in Part 1 of Form 10-Q for the quarter ended September 30, 2019, for further discussion on assets and liabilities held for sale. | |||||
(2) | The Company is authorized to issue the following classes of stock: (i) 500,000,000 shares of common stock, par value $0.001 per share. At September 30, 2019 and December 31, 2018, the Company had 86,394,716 shares and 85,800,303 shares of common stock issued and outstanding, respectively; (ii) 100,000,000 shares of preferred stock, par value $0.001 per share. At September 30, 2019 and December 31, 2018, no preferred stocks were issued or outstanding; and (iii) 100 shares of special stock, par value $0.001 per share, issued and outstanding to its Manager as at September 30, 2019 and December 31, 2018. | |||||
(3) | Includes $141 million of noncontrolling interest related to discontinued operations at December 31, 2018. See Note 3, "Discontinued Operations and Dispositions", in our Notes to Consolidated Condensed Financial Statements in Part 1 of Form 10-Q for the quarter ended September 30, 2019, for further discussions. |
MACQUARIE INFRASTRUCTURE CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (Unaudited) ($ in Millions, Except Share and Per Share Data) | |||||||||||
Quarter Ended | Nine Months Ended | ||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||
Revenue | |||||||||||
Service revenue | $ | 347 | $ | 361 | $ | 1,120 | $ | 1,140 | |||
Product revenue | 58 | 60 | 183 | 184 | |||||||
Total revenue | 405 | 421 | 1,303 | 1,324 | |||||||
Costs and expenses | |||||||||||
Cost of services | 154 | 167 | 484 | 534 | |||||||
Cost of product sales | 43 | 39 | 128 | 128 | |||||||
Selling, general and administrative | 81 | 78 | 245 | 240 | |||||||
Fees to Manager-related party | 8 | 12 | 23 | 36 | |||||||
Goodwill Impairment | - | 3 | - | 3 | |||||||
Depreciation | 49 | 49 | 145 | 143 | |||||||
Amortization of intangibles | 14 | 20 | 44 | 53 | |||||||
Total operating expenses | 349 | 368 | 1,069 | 1,137 | |||||||
Operating income | 56 | 53 | 234 | 187 | |||||||
Other income (expense) | |||||||||||
Interest income | 2 | - | 6 | - | |||||||
Interest expense(1) | (36) | (28) | (124) | (71) | |||||||
Other (expense) income, net | - | (21) | 2 | (15) | |||||||
Net income from continuing operations before income taxes | 22 | 4 | 118 | 101 | |||||||
Provision for income taxes | (7) | (2) | (33) | (32) | |||||||
Net income from continuing operations | $ | 15 | $ | 2 | $ | 85 | $ | 69 | |||
Discontinued Operations(2) | |||||||||||
Net income from discontinued operations before income taxes | $ | 78 | $ | 26 | $ | 86 | $ | 41 | |||
(Provision) benefit for income taxes | (32) | (6) | (32) | (5) | |||||||
Net income from discontinued operations | $ | 46 | $ | 20 | $ | 54 | $ | 36 | |||
Net income | $ | 61 | $ | 22 | $ | 139 | $ | 105 | |||
Net income from continuing operations | $ | 15 | $ | 2 | $ | 85 | $ | 69 | |||
Net income from continuing operations attributable to MIC | $ | 15 | $ | 2 | $ | 85 | $ | 69 | |||
Net income from discontinued operations | $ | 46 | $ | 20 | $ | 54 | $ | 36 | |||
Less: net loss attributable to noncontrolling interests | - | - | (3) | (32) | |||||||
Net income from discontinued operations attributable to MIC | $ | 46 | $ | 20 | $ | 57 | $ | 68 | |||
Net income attributable to MIC | $ | 61 | $ | 22 | $ | 142 | $ | 137 | |||
Basic income per share from continuing operations attributable to MIC | $ | 0.18 | $ | 0.02 | $ | 0.99 | $ | 0.81 | |||
Basic income per share from discontinued operations attributable to MIC | 0.53 | 0.23 | 0.67 | 0.80 | |||||||
Basic income per share attributable to MIC | $ | 0.71 | $ | 0.25 | $ | 1.66 | $ | 1.61 | |||
Weighted average number of shares outstanding: basic | 86,276,237 | 85,378,088 | 86,075,394 | 85,095,956 | |||||||
Diluted income per share from continuing operations attributable to MIC | $ | 0.18 | $ | 0.02 | $ | 0.99 | $ | 0.81 | |||
Diluted income per share from discontinued operations attributable to MIC | 0.53 | 0.23 | 0.67 | 0.80 | |||||||
Diluted income per share attributable to MIC | $ | 0.71 | $ | 0.25 | $ | 1.66 | $ | 1.61 | |||
Weighted average number of shares outstanding: diluted | 86,303,694 | 85,398,566 | 86,101,022 | 85,109,213 | |||||||
Cash dividends declared per share | $ | 1.00 | $ | 1.00 | $ | 3.00 | $ | 3.00 |
(1) | Interest expense includes losses on derivative instruments of $2 million and $14 million for the quarter and nine months ended September 30, 2019, respectively. Interest expense includes gains on derivative instruments of $3 million and $17 million for the quarter and nine months ended September 30, 2018, respectively. | |||||
(2) | See Note 3, "Discontinued Operations and Dispositions", in our Notes to Consolidated Condensed Financial Statements in Part 1 of Form 10-Q for the quarter ended September 30, 2019, for discussions on businesses classified as held for sale. |
MACQUARIE INFRASTRUCTURE CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) ($ in Millions) | |||||
Nine Months Ended | |||||
2019 | 2018 | ||||
Operating activities | |||||
Net income from continuing operations | $ | 85 | $ | 69 | |
Adjustments to reconcile net income to net cash provided by operating activities from continuing | |||||
Goodwill impairment | - | 3 | |||
Depreciation and amortization of property and equipment | 145 | 143 | |||
Amortization of intangible assets | 44 | 53 | |||
Amortization of debt financing costs | 7 | 6 | |||
Amortization of debt discount | 3 | 3 | |||
Adjustments to derivative instruments | 29 | (9) | |||
Fees to Manager- related party | 23 | 36 | |||
Deferred taxes | 20 | 21 | |||
Other non-cash expense, net | 12 | 26 | |||
Changes in other assets and liabilities, net of acquisitions: | |||||
Accounts receivable | 4 | 13 | |||
Inventories | (1) | (2) | |||
Prepaid expenses and other current assets | (10) | 1 | |||
Accounts payable and accrued expenses | 5 | 6 | |||
Income taxes payable | 47 | 1 | |||
Other, net | 3 | (4) | |||
Net cash provided by operating activities from continuing operations | 416 | 366 | |||
Investing activities | |||||
Acquisitions of businesses and investments, net of cash, cash equivalents and restricted cash acquired | - | (13) | |||
Purchases of property and equipment | (172) | (131) | |||
Loan to project developer | (1) | (18) | |||
Loan repayment from project developer | 16 | 17 | |||
Proceeds from sale of business, net of cash divested | - | 41 | |||
Other, net | (3) | - | |||
Net cash used in investing activities from continuing operations | (160) | (104) | |||
Financing activities | |||||
Proceeds from long-term debt | - | 276 | |||
Payment of long-term debt | (358) | (204) | |||
Contributions received from noncontrolling interests | - | 1 | |||
Dividends paid to common stockholders | (258) | (293) | |||
Debt financing costs paid | (1) | (3) | |||
Net cash used in financing activities from continuing operations | (617) | (223) | |||
Net change in cash, cash equivalents and restricted cash from continuing operations | (361) | 39 |
MACQUARIE INFRASTRUCTURE CORPORATION | ||||||
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS – (continued) | ||||||
(Unaudited) | ||||||
($ in Millions) | ||||||
Nine Months Ended | ||||||
2019 | 2018 | |||||
Cash flows (used in) provided by discontinued operations: | ||||||
Net cash (used in) provided by operating activities | (57) | 47 | ||||
Net cash provided by (used in) investing activities | 239 | (28) | ||||
Net cash provided by (used in) financing activities | 24 | (23) | ||||
Net cash provided by (used in) discontinued operations | 206 | (4) | ||||
Net change in cash, cash equivalents and restricted cash | (155) | 35 | ||||
Cash, cash equivalents and restricted cash, beginning of period | 629 | 72 | ||||
Cash, cash equivalents and restricted cash, end of period | $474 | $107 | ||||
Supplemental disclosures of cash flow information from continuing operations: | ||||||
Non-cash investing and financing activities: | ||||||
Accrued purchases of property and equipment | $ | 18 | $ | 20 | ||
Issuance of shares to Manager | 23 | 37 | ||||
Issuance of shares to Independent Directors | 1 | 1 | ||||
Taxes paid, net | 9 | 11 | ||||
Interest paid, net | 95 | 73 | ||||
The following table provides a reconciliation of cash, cash equivalents and restricted cash from both continuing and discontinued operations reported within the consolidated condensed balance sheets that is presented in the consolidated condensed statements of cash flows: | ||||||
As of September 30, | ||||||
2019 | 2018 | |||||
Cash and cash equivalents | $ | 473 | $ | 49 | ||
Restricted cash - current | 1 | 23 | ||||
Cash, cash equivalents and restricted cash included in assets held for sale(1) | - | 35 | ||||
Total of cash, cash equivalents and restricted cash shown in the consolidated condensed statement of | $ | 474 | $ | 107 |
(1) | Represents cash, cash equivalents and restricted cash related to businesses classified as held for sale. See Note 3, "Discontinued Operations and Dispositions", in our Notes to Consolidated Condensed Financial Statements in Part 1 of Form 10-Q for the quarter ended September 30, 2019, for further discussion. |
MACQUARIE INFRASTRUCTURE CORPORATION | ||||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS – MD&A | ||||||||||||||||||
Quarter Ended | Change | Nine Months Ended | Change | |||||||||||||||
2019 | 2018 | $ | % | 2019 | 2018 | $ | % | |||||||||||
($ In Millions, Except Share and Per Share Data) (Unaudited) | ||||||||||||||||||
Revenue | ||||||||||||||||||
Service revenue | $ | 347 | $ | 361 | (14) | (4) | $ | 1,120 | $ | 1,140 | (20) | (2) | ||||||
Product revenue | 58 | 60 | (2) | (3) | 183 | 184 | (1) | (1) | ||||||||||
Total revenue | 405 | 421 | (16) | (4) | 1303 | 1324 | (21) | (2) | ||||||||||
Costs and expenses | ||||||||||||||||||
Cost of services | 154 | 167 | 13 | 8 | 484 | 534 | 50 | 9 | ||||||||||
Cost of product sales | 43 | 39 | (4) | (10) | 128 | 128 | - | - | ||||||||||
Selling, general and administrative | 81 | 78 | (3) | (4) | 245 | 240 | (5) | (2) | ||||||||||
Fees to Manager - related party | 8 | 12 | 4 | 33 | 23 | 36 | 13 | 36 | ||||||||||
Goodwill Impairment | - | 3 | 3 | 100 | - | 3 | 3 | 100 | ||||||||||
Depreciation | 49 | 49 | - | - | 145 | 143 | (2) | (1) | ||||||||||
Amortization of intangibles | 14 | 20 | 6 | 30 | 44 | 53 | 9 | 17 | ||||||||||
Total operating expenses | 349 | 368 | 19 | 5 | 1069 | 1137 | 68 | 6 | ||||||||||
Operating income | 56 | 53 | 3 | 6 | 234 | 187 | 47 | 25 | ||||||||||
Other income (expense) | ||||||||||||||||||
Interest income | 2 | - | 2 | NM | 6 | - | 6 | NM | ||||||||||
Interest expense(1) | (36) | (28) | (8) | (29) | (124) | (71) | (53) | (75) | ||||||||||
Other income (expense) , net | - | (21) | 21 | 100 | 2 | (15) | 17 | 113 | ||||||||||
Net income from continuing operations before income | 22 | 4 | 18 | NM | 118 | 101 | 17 | 17 | ||||||||||
Provision for income taxes | (7) | (2) | (5) | NM | (33) | (32) | (1) | (3) | ||||||||||
Net income from continuing operations | $15 | $2 | 13 | NM | $ | 85 | $ | 69 | 16 | 23 | ||||||||
Discontinued Operations | ||||||||||||||||||
Net income from discontinued operations before income | $ | 78 | $ | 26 | 52 | 200 | $ | 86 | $ | 41 | 45 | 110 | ||||||
Provision for income taxes | (32) | (6) | (26) | NM | (32) | (5) | (27) | NM | ||||||||||
Net income from discontinued operations | $ | 46 | $ | 20 | 26 | 130 | $ | 54 | $ | 36 | 18 | 50 | ||||||
Net income | $ | 61 | $ | 22 | 39 | 177 | $ | 139 | $ | 105 | 34 | 32 | ||||||
Net income from continuing operations | $ | 15 | $ | 2 | 13 | NM | $ | 85 | $ | 69 | 16 | 23 | ||||||
Net income from continuing operations attributable | $ | 15 | $ | 2 | 13 | NM | $ | 85 | $ | 69 | 16 | 23 | ||||||
Net income from discontinued operations | $ | 46 | $ | 20 | 26 | 130 | $ | 54 | $ | 36 | 18 | 50 | ||||||
Less: net loss attributable to noncontrolling interests | - | - | - | - | (3) | (32) | (29) | (91) | ||||||||||
Net income from discontinued operations attributable | $ | 46 | $ | 20 | 26 | 130 | $ | 57 | $ | 68 | (11) | (16) | ||||||
Net income attributable to MIC | $ | 61 | $ | 22 | 39 | 177 | $ | 142 | $ | 137 | 5 | 4 | ||||||
Basic income per share from continuing operations | $ | 0.18 | $ | 0.02 | 0.16 | NM | $ | 0.99 | $ | 0.81 | 0.18 | 22 | ||||||
Basic income per share from discontinued operations | 0.53 | 0.23 | 0.30 | 130 | 0.67 | 0.80 | (0.13) | (16) | ||||||||||
Basic income per share attributable to MIC | $ | 0.71 | $ | 0.25 | 0.46 | 184 | $ | 1.66 | $ | 1.61 | 0.05 | 3 | ||||||
Weighted average number of shares outstanding: basic | 86,276,237 | 85,378,088 | 898,149 | 1 | 86,075,394 | 85,095,956 | 979,438 | 1 |
NM — Not meaningful | ||||||
(1) | Interest expense includes losses on derivative instruments of $2 million and $14 million for the quarter and nine months ended September 30, 2019, respectively. For the quarter and nine months ended September 30, 2018, interest expense includes gains on derivative instruments of $3 million and $17 million, respectively. |
MACQUARIE INFRASTRUCTURE CORPORATION | ||||||||||||||||||
RECONCILIATION OF CONSOLIDATED NET INCOME TO EBITDA EXCLUDING | ||||||||||||||||||
NON-CASH ITEMS AND A RECONCILIATION FROM CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW | ||||||||||||||||||
Quarter Ended | Change | Nine Months | Change | |||||||||||||||
2019 | 2018 | $ | % | 2019 | 2018 | $ | % | |||||||||||
($ In Millions) (Unaudited) | ||||||||||||||||||
Net income from continuing operations | $ | 15 | $ | 2 | $ | 85 | $ | 69 | ||||||||||
Interest expense, net(1) | 34 | 28 | 118 | 71 | ||||||||||||||
Provision for income taxes | 7 | 2 | 33 | 32 | ||||||||||||||
Goodwill Impairment | - | 3 | - | 3 | ||||||||||||||
Depreciation | 49 | 49 | 145 | 143 | ||||||||||||||
Amortization of intangibles | 14 | 20 | 44 | 53 | ||||||||||||||
Fees to Manager- related party | 8 | 12 | 23 | 36 | ||||||||||||||
Other non-cash expense, net (2) | 6 | 7 | 19 | 18 | ||||||||||||||
EBITDA excluding non-cash items - continuing operations | $ | 133 | $ | 123 | 10 | 8 | $ | 467 | $ | 425 | 42 | 10 | ||||||
EBITDA excluding non-cash items - continuing operations | $ | 133 | $ | 123 | $ | 467 | $ | 425 | ||||||||||
Interest expense, net(1) | (34) | (28) | (118) | (71) | ||||||||||||||
Adjustments to derivative instruments recorded in | 4 | (1) | 22 | (12) | ||||||||||||||
Amortization of debt financing costs(1) | 2 | 2 | 7 | 6 | ||||||||||||||
Amortization of debt discount(1) | 1 | 1 | 3 | 3 | ||||||||||||||
Provision for current income taxes | (4) | (3) | (13) | (11) | ||||||||||||||
Changes in working capital (3) | 55 | 27 | 48 | 26 | ||||||||||||||
Cash provided by operating activities - continuing operations | 157 | 121 | 416 | 366 | ||||||||||||||
Changes in working capital (3) | (55) | (27) | (48) | (26) | ||||||||||||||
Maintenance capital expenditures | (18) | (13) | (41) | (31) | ||||||||||||||
Free cash flow - continuing operations | 84 | 81 | 3 | 4 | 327 | 309 | 18 | 6 | ||||||||||
Free cash flow - discontinued operations | (54) | 31 | (85) | NM | (40) | 64 | (104) | (163) | ||||||||||
Total Free Cash Flow | $ | 30 | $ | 112 | (82) | (73) | $ | 287 | $ | 373 | (86) | (23) |
NM - Not meaningful | ||||||
(1) | Interest expense, net, includes adjustments to derivative instruments, non-cash amortization of deferred financing fees and non-cash amortization of debt discount related to the 2.00% Convertible Senior Notes due October 2023. | |||||
(2) | Other non-cash expense, net, primarily includes pension expense of $2 million and $6 million for the quarter and nine month periods ended September 30, 2019 and 2018, respectively, unrealized gains (losses) on commodity hedges, expenses related to a long-term incentive compensation plan for senior management of the operating businesses implemented in 2019 and non-cash gains (losses) related to the disposal of assets. Pension expense primarily consists of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses. Other non-cash expense, net, also includes the write-down of our investment in the mechanical contractor business for the quarter and nine months ended September 30, 2018. See "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items and Free Cash Flow" above for further discussion. | |||||
(3) | For the quarter and nine months ended September 30, 2019, the change in working capital includes the current federal income tax liability of $43 million primarily related to the gain on sale of the renewable businesses reported in the results from discontinued operations. |
MACQUARIE INFRASTRUCTURE CORPORATION | ||||||||||||||||
RECONCILIATION OF SEGMENT NET INCOME (LOSS) TO EBITDA | ||||||||||||||||
EXCLUDING NON-CASH ITEMS AND A RECONCILIATION FROM CASH PROVIDED | ||||||||||||||||
BY (USED IN) OPERATING ACTIVITIES TO FREE CASH FLOW | ||||||||||||||||
IMTT | ||||||||||||||||
Quarter Ended | Change | Nine Months | Change | |||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
$ | $ | $ | % | $ | $ | $ | % | |||||||||
($ In Millions) (Unaudited) | ||||||||||||||||
Revenue | 118 | 118 | - | - | 398 | 386 | 12 | 3 | ||||||||
Cost of services | 50 | 44 | (6) | (14) | 149 | 148 | (1) | (1) | ||||||||
Selling, general and administrative expenses | 9 | 7 | (2) | (29) | 26 | 24 | (2) | (8) | ||||||||
Depreciation and amortization | 32 | 33 | 1 | 3 | 98 | 99 | 1 | 1 | ||||||||
Operating income | 27 | 34 | (7) | (21) | 125 | 115 | 10 | 9 | ||||||||
Interest expense, net(1) | (10) | (12) | 2 | 17 | (38) | (31) | (7) | (23) | ||||||||
Provision for income taxes | (5) | (6) | 1 | 17 | (25) | (24) | (1) | (4) | ||||||||
Net income | 12 | 16 | (4) | (25) | 62 | 60 | 2 | 3 | ||||||||
Reconciliation of net income to EBITDA | ||||||||||||||||
Net income | 12 | 16 | 62 | 60 | ||||||||||||
Interest expense, net(1) | 10 | 12 | 38 | 31 | ||||||||||||
Provision for income taxes | 5 | 6 | 25 | 24 | ||||||||||||
Depreciation and amortization | 32 | 33 | 98 | 99 | ||||||||||||
Other non-cash expense, net (2) | 3 | 2 | 7 | 7 | ||||||||||||
EBITDA excluding non-cash items | 62 | 69 | (7) | (10) | 230 | 221 | 9 | 4 | ||||||||
EBITDA excluding non-cash items | 62 | 69 | 230 | 221 | ||||||||||||
Interest expense, net(1) | (10) | (12) | (38) | (31) | ||||||||||||
Adjustments to derivative instruments recorded | 1 | (1) | 8 | (6) | ||||||||||||
Amortization of debt financing costs(1) | - | 1 | 1 | 1 | ||||||||||||
Provision for current income taxes | (7) | 3 | (19) | (5) | ||||||||||||
Changes in working capital | 15 | (1) | 25 | 10 | ||||||||||||
Cash provided by operating activities | 61 | 59 | 207 | 190 | ||||||||||||
Changes in working capital | (15) | 1 | (25) | (10) | ||||||||||||
Maintenance capital expenditures | (14) | (9) | (28) | (21) | ||||||||||||
Free cash flow | 32 | 51 | (19) | (37) | 154 | 159 | (5) | (3) |
(1) | Interest expense, net, includes adjustments to derivative instruments and non-cash amortization of deferred financing fees. | |||||
(2) | Other non-cash expense, net, primarily includes pension expense of $2 million and $6 million for the quarter and nine month periods ended September 30, 2019 and 2018, respectively, and expenses related to a long-term incentive compensation plan implemented in 2019. Pension expense primarily consists of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses. See "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items and Free Cash Flow" above for further discussion. |
Atlantic Aviation | ||||||||||||||||
Quarter Ended | Change | Nine Months | Change | |||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
$ | $ | $ | % | $ | $ | $ | % | |||||||||
($ In Millions) (Unaudited) | ||||||||||||||||
Revenue | 230 | 235 | (5) | (2) | 724 | 715 | 9 | 1 | ||||||||
Cost of services (exclusive of depreciation and | 104 | 113 | 9 | 8 | 335 | 346 | 11 | 3 | ||||||||
Gross margin | 126 | 122 | 4 | 3 | 389 | 369 | 20 | 5 | ||||||||
Selling, general and administrative expenses | 62 | 57 | (5) | (9) | 185 | 174 | (11) | (6) | ||||||||
Depreciation and amortization | 27 | 26 | (1) | (4) | 79 | 78 | (1) | (1) | ||||||||
Operating income | 37 | 39 | (2) | (5) | 125 | 117 | 8 | 7 | ||||||||
Interest expense, net(1) | (18) | (5) | (13) | NM | (59) | (9) | (50) | NM | ||||||||
Other expense, net | - | - | - | - | - | (1) | 1 | 100 | ||||||||
Provision for income taxes | (5) | (9) | 4 | 44 | (18) | (29) | 11 | 38 | ||||||||
Net income | 14 | 25 | (11) | (44) | 48 | 78 | (30) | (38) | ||||||||
Reconciliation of net income to EBITDA | ||||||||||||||||
Net income | 14 | 25 | 48 | 78 | ||||||||||||
Interest expense, net(1) | 18 | 5 | 59 | 9 | ||||||||||||
Provision for income taxes | 5 | 9 | 18 | 29 | ||||||||||||
Depreciation and amortization | 27 | 26 | 79 | 78 | ||||||||||||
Other non-cash expense, net(2) | - | - | 1 | 1 | ||||||||||||
EBITDA excluding non-cash items | 64 | 65 | (1) | (2) | 205 | 195 | 10 | 5 | ||||||||
EBITDA excluding non-cash items | 64 | 65 | 205 | 195 | ||||||||||||
Interest expense, net(1) | (18) | (5) | (59) | (9) | ||||||||||||
Convertible senior notes interest(3) | - | (2) | - | (6) | ||||||||||||
Adjustments to derivative instruments recorded | 2 | - | 12 | (5) | ||||||||||||
Amortization of debt financing costs(1) | 1 | - | 3 | 1 | ||||||||||||
Provision for current income taxes | (4) | (6) | (14) | (20) | ||||||||||||
Changes in working capital | 4 | 6 | 6 | 16 | ||||||||||||
Cash provided by operating activities | 49 | 58 | 153 | 172 | ||||||||||||
Changes in working capital | (4) | (6) | (6) | (16) | ||||||||||||
Maintenance capital expenditures | (3) | (2) | (8) | (5) | ||||||||||||
Free cash flow | 42 | 50 | (8) | (16) | 139 | 151 | (12) | (8) |
NM — Not meaningful | ||||||
(1) | Interest expense, net, includes adjustments to derivative instruments and non-cash amortization of deferred financing fees. | |||||
(2) | Other non-cash expense, net, primarily includes expenses related to a long-term incentive compensation plan implemented in 2019 and non-cash gains (losses) related to the disposal of assets. See "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items and Free Cash Flow" above for further discussion. | |||||
(3) | Represents the cash interest expense related to the $403 million of MIC Corporate 2.00% Convertible Senior Notes due October 2023 that was reclassified to Atlantic Aviation through December 6, 2018, the date of Atlantic Aviation's refinancing. The proceeds from this Note issuance in October 2016 were used principally to reduce the drawn balance on Atlantic Aviation's revolving credit facility. Cash interest expense on the Note issuance is recorded in Corporate and Other after December 6, 2018. |
MIC Hawaii | ||||||||||||||||
Quarter Ended | Change | Nine Months | Change | |||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
$ | $ | $ | % | $ | $ | $ | % | |||||||||
($ In Millions) (Unaudited) | ||||||||||||||||
Product revenue | 58 | 60 | (2) | (3) | 183 | 184 | (1) | (1) | ||||||||
Service revenue | - | 9 | (9) | (100) | - | 42 | (42) | (100) | ||||||||
Total revenue | 58 | 69 | (11) | (16) | 183 | 226 | (43) | (19) | ||||||||
Cost of product sales (exclusive of depreciation | 43 | 39 | (4) | (10) | 128 | 128 | - | - | ||||||||
Cost of services (exclusive of depreciation and | - | 10 | 10 | 100 | - | 40 | 40 | 100 | ||||||||
Cost of revenue — total | 43 | 49 | 6 | 12 | 128 | 168 | 40 | 24 | ||||||||
Gross margin | 15 | 20 | (5) | (25) | 55 | 58 | (3) | (5) | ||||||||
Selling, general and administrative expenses | 6 | 8 | 2 | 25 | 17 | 23 | 6 | 26 | ||||||||
Goodwill impairment | - | 3 | 3 | 100 | - | 3 | 3 | 100 | ||||||||
Depreciation and amortization | 4 | 10 | 6 | 60 | 12 | 19 | 7 | 37 | ||||||||
Operating income (loss) | 5 | (1) | 6 | NM | 26 | 13 | 13 | 100 | ||||||||
Interest expense, net(1) | (3) | (2) | (1) | (50) | (8) | (5) | (3) | (60) | ||||||||
Other expense, net | - | (22) | 22 | 100 | (2) | (23) | 21 | 91 | ||||||||
(Provision) benefit for income taxes | (1) | 7 | (8) | (114) | (5) | 4 | (9) | NM | ||||||||
Net income (loss) | 1 | (18) | 19 | 106 | 11 | (11) | 22 | 200 | ||||||||
Reconciliation of net income (loss) to EBITDA | ||||||||||||||||
Net income (loss) | 1 | (18) | 11 | (11) | ||||||||||||
Interest expense, net(1) | 3 | 2 | 8 | 5 | ||||||||||||
Provision (benefit) for income taxes | 1 | (7) | 5 | (4) | ||||||||||||
Goodwill impairment | - | 3 | - | 3 | ||||||||||||
Depreciation and amortization | 4 | 10 | 12 | 19 | ||||||||||||
Other non-cash expense, net(2) | 3 | 5 | 10 | 10 | ||||||||||||
EBITDA excluding non-cash items | 12 | (5) | 17 | NM | 46 | 22 | 24 | 109 | ||||||||
EBITDA excluding non-cash items | 12 | (5) | 46 | 22 | ||||||||||||
Interest expense, net(1) | (3) | (2) | (8) | (5) | ||||||||||||
Adjustments to derivative instruments recorded | 1 | - | 2 | (1) | ||||||||||||
Provision for current income taxes | (1) | (2) | (4) | (3) | ||||||||||||
Changes in working capital | 2 | 23 | 3 | 17 | ||||||||||||
Cash provided by operating activities | 11 | 14 | 39 | 30 | ||||||||||||
Changes in working capital | (2) | (23) | (3) | (17) | ||||||||||||
Maintenance capital expenditures | (1) | (2) | (5) | (5) | ||||||||||||
Free cash flow | 8 | (11) | 19 | 173 | 31 | 8 | 23 | NM |
NM — Not meaningful | ||||||
(1) | Interest expense, net, includes adjustments to derivative instruments related to interest rate swaps and non-cash amortization of deferred financing fees. | |||||
(2) | Other non-cash expense, net, primarily includes non-cash adjustments related to unrealized gains (losses) on commodity hedges, expenses related to a long-term incentive compensation plan implemented in 2019 and non-cash gains (losses) related to the disposal of assets. Other non-cash expense, net, also includes the write-down of our investment in the mechanical contractor business for the quarter and nine months ended September 30, 2018. See "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items and Free Cash Flow" above for further discussion. |
Corporate and Other | ||||||||||||||||
Quarter Ended | Change | Nine Months | Change | |||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
$ | $ | $ | % | $ | $ | $ | % | |||||||||
($ In Millions) (Unaudited) | ||||||||||||||||
Selling, general and administrative expenses | 5 | 7 | 2 | 29 | 19 | 22 | 3 | 14 | ||||||||
Fees to Manager-related party | 8 | 12 | 4 | 33 | 23 | 36 | 13 | 36 | ||||||||
Operating loss | (13) | (19) | 6 | 32 | (42) | (58) | 16 | 28 | ||||||||
Interest expense, net(1) | (3) | (9) | 6 | 67 | (13) | (26) | 13 | 50 | ||||||||
Other income, net | - | 1 | (1) | (100) | 4 | 9 | (5) | (56) | ||||||||
Benefit for income taxes | 4 | 6 | (2) | (33) | 15 | 17 | (2) | (12) | ||||||||
Net loss | (12) | (21) | 9 | 43 | (36) | (58) | 22 | 38 | ||||||||
Reconciliation of net loss to EBITDA excluding | ||||||||||||||||
Net loss | (12) | (21) | (36) | (58) | ||||||||||||
Interest expense, net(1) | 3 | 9 | 13 | 26 | ||||||||||||
Benefit for income taxes | (4) | (6) | (15) | (17) | ||||||||||||
Fees to Manager-related party | 8 | 12 | 23 | 36 | ||||||||||||
Other non-cash expense, net | - | - | 1 | - | ||||||||||||
EBITDA excluding non-cash items | (5) | (6) | 1 | 17 | (14) | (13) | (1) | (8) | ||||||||
EBITDA excluding non-cash items | (5) | (6) | (14) | (13) | ||||||||||||
Interest expense, net (1) | (3) | (9) | (13) | (26) | ||||||||||||
Convertible senior notes interest(2) | - | 2 | - | 6 | ||||||||||||
Amortization of debt financing costs(1) | 1 | 1 | 3 | 4 | ||||||||||||
Amortization of debt discount(1) | 1 | 1 | 3 | 3 | ||||||||||||
Benefit for current income taxes | 8 | 2 | 24 | 17 | ||||||||||||
Changes in working capital(3) | 34 | (1) | 14 | (17) | ||||||||||||
Cash provided by (used) used in operating activities | 36 | (10) | 17 | (26) | ||||||||||||
Changes in working capital(3) | (34) | 1 | (14) | 17 | ||||||||||||
Free cash flow | 2 | (9) | 11 | 122 | 3 | (9) | 12 | 133 |
NM — Not meaningful | ||||||
(1) | Interest expense, net, included non-cash amortization of deferred financing fees and non-cash amortization of debt discount related to the 2.00% Convertible Senior Notes due October 2023. | |||||
(2) | Represents the cash interest expense related to the $403 million of MIC Corporate 2% Convertible Senior Notes due October 2023 reclassified to Atlantic Aviation related to the 2.00% Convertible Senior Notes due October 2023 through December 6, 2018, the date of Atlantic Aviation's refinancing. The proceeds from this Note issuance in October 2016 were used principally to reduce the drawn balance on Atlantic Aviation's revolving credit facility. Cash interest expense on this Note issuance is included in Corporate and Other subsequent to December 6, 2018. | |||||
(3) | For the quarter and nine months ended September 30, 2019, the change in working capital includes the current federal tax liability of $43 million primarily related to the gain on sale of the renewable business. |
MACQUARIE INFRASTRUCTURE CORPORATION | ||||||||||||||
RECONCILIATION OF NET INCOME (LOSS) TO EBITDA EXCLUDING | ||||||||||||||
NON-CASH ITEMS AND A RECONCILIATION FROM CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES TO FREE CASH FLOW | ||||||||||||||
For the Quarter Ended September 30, 2019 | ||||||||||||||
IMTT | Atlantic | MIC | Corporate | Total | Discontinued | Total | ||||||||
($ In Millions) (Unaudited) | ||||||||||||||
Net income (loss) | 12 | 14 | 1 | (12) | 15 | 46 | 61 | |||||||
Interest expense, net(1) | 10 | 18 | 3 | 3 | 34 | 1 | 35 | |||||||
Provision (benefit) for income | 5 | 5 | 1 | (4) | 7 | 32 | 39 | |||||||
Depreciation and amortization | 32 | 27 | 4 | - | 63 | - | 63 | |||||||
Fees to Manager-related party | - | - | - | 8 | 8 | - | 8 | |||||||
Other non-cash expense | 3 | - | 3 | - | 6 | (80) | (74) | |||||||
EBITDA excluding non-cash | 62 | 64 | 12 | (5) | 133 | (1) | 132 | |||||||
EBITDA excluding non-cash | 62 | 64 | 12 | (5) | 133 | (1) | 132 | |||||||
Interest expense, net(1) | (10) | (18) | (3) | (3) | (34) | (1) | (35) | |||||||
Adjustments to derivative | 1 | 2 | 1 | - | 4 | - | 4 | |||||||
Amortization of debt financing | - | 1 | - | 1 | 2 | - | 2 | |||||||
Amortization of debt discount(1) | - | - | - | 1 | 1 | - | 1 | |||||||
(Provision) benefit for current | (7) | (4) | (1) | 8 | (4) | (52) | (56) | |||||||
Changes in working capital(3) | 15 | 4 | 2 | 34 | 55 | 8 | 63 | |||||||
Cash provided by (used in) | 61 | 49 | 11 | 36 | 157 | (46) | 111 | |||||||
Changes in working capital(3) | (15) | (4) | (2) | (34) | (55) | (8) | (63) | |||||||
Maintenance capital expenditures | (14) | (3) | (1) | - | (18) | - | (18) | |||||||
Free Cash Flow | 32 | 42 | 8 | 2 | 84 | (54) | 30 |
For the Quarter Ended September 30, 2018 | ||||||||||||||
IMTT | Atlantic | MIC | Corporate | Total | Discontinued | Total | ||||||||
($ In Millions) (Unaudited) | ||||||||||||||
Net income (loss) | 16 | 25 | (18) | (21) | 2 | 20 | 22 | |||||||
Interest expense, net(1) | 12 | 5 | 2 | 9 | 28 | 5 | 33 | |||||||
Provision (benefit) for income | 6 | 9 | (7) | (6) | 2 | 6 | 8 | |||||||
Goodwill impairment | - | - | 3 | - | 3 | - | 3 | |||||||
Depreciation and amortization | 33 | 26 | 10 | - | 69 | 8 | 77 | |||||||
Fees to Manager-related party | - | - | - | 12 | 12 | - | 12 | |||||||
Other non-cash expense (income), | 2 | - | 5 | - | 7 | (2) | 5 | |||||||
EBITDA excluding non-cash | 69 | 65 | (5) | (6) | 123 | 37 | 160 | |||||||
EBITDA excluding non-cash | 69 | 65 | (5) | (6) | 123 | 37 | 160 | |||||||
Interest expense, net(1) | (12) | (5) | (2) | (9) | (28) | (5) | (33) | |||||||
Convertible senior notes | - | (2) | - | 2 | - | - | - | |||||||
Adjustments to derivative | (1) | - | - | - | (1) | (1) | (2) | |||||||
Amortization of debt financing | 1 | - | - | 1 | 2 | - | 2 | |||||||
Amortization of debt discount(1) | - | - | - | 1 | 1 | - | 1 | |||||||
(Provision) benefit for current | 3 | (6) | (2) | 2 | (3) | - | (3) | |||||||
Changes in working capital | (1) | 6 | 23 | (1) | 27 | (5) | 22 | |||||||
Cash provided by (used in) | 59 | 58 | 14 | (10) | 121 | 26 | 147 | |||||||
Changes in working capital | 1 | (6) | (23) | 1 | (27) | 5 | (22) | |||||||
Maintenance capital expenditures | (9) | (2) | (2) | - | (13) | - | (13) | |||||||
Free Cash Flow | 51 | 50 | (11) | (9) | 81 | 31 | 112 |
For the Nine Months Ended September 30, 2019 | ||||||||||||||
IMTT | Atlantic | MIC | Corporate | Total | Discontinued | Total | ||||||||
($ in Millions) (Unaudited) | ||||||||||||||
Net income (loss) | 62 | 48 | 11 | (36) | 85 | 54 | 139 | |||||||
Interest expense, net(1) | 38 | 59 | 8 | 13 | 118 | 13 | 131 | |||||||
Provision (benefit) for income | 25 | 18 | 5 | (15) | 33 | 32 | 65 | |||||||
Depreciation and amortization | 98 | 79 | 12 | - | 189 | - | 189 | |||||||
Fees to Manager-related party | - | - | - | 23 | 23 | - | 23 | |||||||
Other non-cash expense, | 7 | 1 | 10 | 1 | 19 | (78) | (59) | |||||||
EBITDA excluding non-cash | 230 | 205 | 46 | (14) | 467 | 21 | 488 | |||||||
EBITDA excluding non-cash | 230 | 205 | 46 | (14) | 467 | 21 | 488 | |||||||
Interest expense, net(1) | (38) | (59) | (8) | (13) | (118) | (13) | (131) | |||||||
Adjustments to derivative | 8 | 12 | 2 | - | 22 | 4 | 26 | |||||||
Amortization of debt financing | 1 | 3 | - | 3 | 7 | - | 7 | |||||||
Amortization of debt discount(1) | - | - | - | 3 | 3 | - | 3 | |||||||
(Provision) benefit for current | (19) | (14) | (4) | 24 | (13) | (52) | (65) | |||||||
Changes in working capital(3) | 25 | 6 | 3 | 14 | 48 | (17) | 31 | |||||||
Cash provided by (used in) | 207 | 153 | 39 | 17 | 416 | (57) | 359 | |||||||
Changes in working capital(3) | (25) | (6) | (3) | (14) | (48) | 17 | (31) | |||||||
Maintenance capital expenditures | (28) | (8) | (5) | - | (41) | - | (41) | |||||||
Free Cash Flow | 154 | 139 | 31 | 3 | 327 | (40) | 287 |
For the Nine Months Ended September 30, 2018 | ||||||||||||||
IMTT | Atlantic | MIC | Corporate | Total | Discontinued | Total | ||||||||
($ in Millions) (Unaudited) | ||||||||||||||
Net income (loss) | 60 | 78 | (11) | (58) | 69 | 36 | 105 | |||||||
Interest expense, net(1) | 31 | 9 | 5 | 26 | 71 | 11 | 82 | |||||||
Provision (benefit) for income | 24 | 29 | (4) | (17) | 32 | 5 | 37 | |||||||
Goodwill Impairment | - | - | 3 | - | 3 | - | 3 | |||||||
Depreciation and amortization | 99 | 78 | 19 | - | 196 | 38 | 234 | |||||||
Fees to Manager-related party | - | - | - | 36 | 36 | - | 36 | |||||||
Other non-cash expense | 7 | 1 | 10 | - | 18 | (5) | 13 | |||||||
EBITDA excluding non-cash | 221 | 195 | 22 | (13) | 425 | 85 | 510 | |||||||
EBITDA excluding non-cash | 221 | 195 | 22 | (13) | 425 | 85 | 510 | |||||||
Interest expense, net(1) | (31) | (9) | (5) | (26) | (71) | (11) | (82) | |||||||
Convertible senior notes | - | (6) | - | 6 | - | - | - | |||||||
Adjustments to derivative | (6) | (5) | (1) | - | (12) | (10) | (22) | |||||||
Amortization of debt financing | 1 | 1 | - | 4 | 6 | 1 | 7 | |||||||
Amortization of debt | - | - | - | 3 | 3 | - | 3 | |||||||
(Provision) benefit for current | (5) | (20) | (3) | 17 | (11) | - | (11) | |||||||
Changes in working capital | 10 | 16 | 17 | (17) | 26 | (18) | 8 | |||||||
Cash provided by (used in) | 190 | 172 | 30 | (26) | 366 | 47 | 413 | |||||||
Changes in working capital | (10) | (16) | (17) | 17 | (26) | 18 | (8) | |||||||
Maintenance capital | (21) | (5) | (5) | - | (31) | (1) | (32) | |||||||
Free Cash Flow | 159 | 151 | 8 | (9) | 309 | 64 | 373 |
(1) | Interest expense, net, includes adjustments to derivative instruments, non-cash amortization of deferred financing fees and non-cash amortization of debt discount related to the 2.00% Convertible Senior Notes due October 2023. | |||||
(2) | Other non-cash expense (income), net, primarily includes pension expense of $2 million and $6 million for the quarter and nine month periods ended September 30, 2019 and 2018, respectively, unrealized gains (losses) on commodity hedges, expenses related to a long term incentive compensation plan for senior management of the operating businesses implemented in 2019 and non-cash gains (losses) related to the disposal of assets. Pension expense primarily consists of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses. Other non-cash expense (income), net, also includes the write-down of our investment in mechanical contractor business for the quarter and nine months ended September 30, 2018. See "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items and Free Cash Flow" above for further discussion. | |||||
(3) | For the quarter and nine months ended September 30, 2019, the change in working capital includes the current federal tax liability of $43 million primarily related to the gain on sale of the renewable businesses reported in the results from discontinued operations. | |||||
(4) | Represents the cash interest expense related to the $403 million of MIC Corporate 2.00% Convertible Senior Notes due October 2023 that was reclassified to Atlantic Aviation through December 6, 2018, the date of Atlantic Aviation's refinancing. The proceeds from this Note issuance in October 2016 were used principally to reduce the drawn balance of Atlantic Aviation's revolving credit facility. Cash interest expense on the Note issuance is recorded in Corporate and Other after December 6, 2018. |
View original content:http://www.prnewswire.com/news-releases/mic-reports-third-quarter-2019-financial-and-operational-results-300948773.html
SOURCE Macquarie Infrastructure Corporation
SAN DIEGO, Feb. 5, 2019 /PRNewswire/ -- Shareholder Rights Law Firm Johnson Fistel, LLP is investigating potential claims against the following companies:
AbbVie Inc. (NYSE: ABBV) [click here to join this action]
Macquarie Infrastructure Corporation (NYSE:MIC) [click here to join this action]
OPKO Health, Inc. (NASDAQ: OPK) [click here to join this action]
Uxin Limited (NASDAQ: UXIN) [click here to join this action]
AbbVie Inc. (Abbv)
Shareholder Rights Law Firm Johnson Fistel, LLP is investigating potential violations of federal and state laws by AbbVie Inc. (NYSE: ABBV) and certain of its officers.
Last year a securities class action complaint was filed against AbbVie. Throughout the class period, AbbVie allegedly made materially false and/or misleading statements and/or failed to disclose that: (1) AbbVie's strategy to increase the sales growth of its blockbuster drug, HUMIRA, relied in part upon illegal kickbacks and unlawful sales and marketing tactics; (2) such practices would foreseeably lead to heightened scrutiny by State governments and agencies; and (3) as a result, Defendants' public statements were materially false and misleading at all relevant times.
If you are a long-term shareholder of AbbVie continuously holding shares before,October 2013, you may have standing to hold AbbVie harmless from the damage the officers and directors caused by making them personally responsible. You may also be able to assist in reforming the Company's corporate governance to prevent future wrongdoing.
If you are interested in learning more about your legal rights and remedies, please contact Jim Baker (jimb@johnsonfistel.com) at 619-814-4471. If you email, please include your phone number.
Additionally, you can [click here to join this action]. There is no cost or obligation to you.
Macquarie Infrastructure Corporation (MIC)
Shareholder Rights Law Firm Johnson Fistel, LLP is investigating potential violations of federal and state laws by Macquarie Infrastructure Corporation (NYSE:MIC) (Macquarie) and certain of its officers.
Last year a securities class action lawsuit was filed on behalf of purchasers of the securities of Macquarie from February 22, 2016 through February 21, 2018, (the "Class Period"). According to the lawsuit, defendants during the Class Period made materially false and/or misleading statements and/or failed to disclose that: (1) Macquarie's International-Matex Tank Terminals' ("IMTT") performance and utilization were at risk of significant decline due to ongoing industrywide changes in the market for heavy residual oils, and in particular, declining demand and pricing for No. 6 fuel oil; (2) IMTT relied significantly on demand for storage of heavy residual fuel oils, including No. 6 fuel oil; and (3) Macquarie needed to undertake significant capital expenditures to repurpose IMTT storage tanks to accommodate alternative products.
If you are a long-term shareholder of Macquarie continuously holding shares before February 2016, you may have standing to hold Macquarie harmless from the alleged harm caused by the officers and directors of the Company by making them personally responsible. You may also be able to assist in reforming the Company's corporate governance to prevent future wrongdoing.
If you are interested in learning more about your legal rights and remedies, please contact Jim Baker (jimb@johnsonfistel.com) at 619-814-4471. If you email, please include your phone number.
Additionally, you can [click here to join this action]. There is no cost or obligation to you.
OPKO Health, Inc. (OPK)
Shareholder Rights Law Firm Johnson Fistel, LLP is investigating potential violations of federal and state laws by OPKO Health, Inc. (NASDAQ: OPK) (OPKO) and certain of its officers.
Last year a securities class action lawsuit was filed on behalf of purchasers of the securities of OPKO from September 26, 2013 through September 7, 2018, (the "Class Period"). According to the lawsuit, defendants made false and/or misleading statements and/or failed to disclose that: (1) OPKO and its Chairman and Chief Executive Officer, Phillip Frost, were engaged in a pump-and-dump scheme with several other individuals and companies in their investments in several penny stocks; (2) this illicit scheme would result in governmental scrutiny including from the SEC; and (3) as a result, defendants' statements about OPKO's business, operations and prospects were materially false and misleading and/or lacked a reasonable basis at all relevant times.
If you are a long-term shareholder of OPKO continuously holding shares before September 2013, you may have standing to hold OPKO harmless from the alleged harm caused by the officers and directors of the Company by making them personally responsible. You may also be able to assist in reforming the Company's corporate governance to prevent future wrongdoing.
If you are interested in learning more about your legal rights and remedies, please contact Jim Baker (jimb@johnsonfistel.com) at 619-814-4471. If you email, please include your phone number.
Additionally, you can [click here to join this action] . There is no cost or obligation to you.
Uxin Limited (UXIN)
Shareholder Rights Law Firm Johnson Fistel, LLP is investigating potential violations of federal securities laws by Uxin Limited (NASDAQ: UXIN) (Uxin) and certain of its officers.
On or about June 27, 2018, Uxin sold 25 million shares of stock in its initial public stock offering (the "IPO"), at $9 a share raising $225,200,000 in new capital. However, since the IPO, Uxin stock has plunged, on February 1, 2019, the stock closed at $3.44.
Specifically, Johnson Fistel's investigation seeks to determine whether the Company's filings with the U.S. Securities and Exchange Commission in connection with its June 2018 initial public stock offering (the "IPO") contained untrue statements of material facts or omitted to state other facts necessary to make the statements made therein not misleading concerning the Company's business, and operations.
If you have information that could assist in this investigation, or if you are a Uxin shareholder and are interested in learning more about the investigation or your legal rights and remedies, please contact Jim Baker (jimb@johnsonfistel.com) at 619-814-4471. If emailing, please include a phone number.
Additionally, you can [click here to join this action]. There is no cost or obligation to you.
About Johnson Fistel, LLP:
Johnson Fistel, LLP is a nationally recognized shareholder rights law firm with offices in California, New York, and Georgia. The firm represents individual and institutional investors in shareholder derivative and securities class action lawsuits. For more information about the firm and its attorneys, please visit http://www.johnsonfistel.com. Attorney advertising. Past results do not guarantee future outcomes.
Contact:
Johnson Fistel, LLP
Jim Baker, 619-814-4471
jimb@johnsonfistel.com
SOURCE Johnson Fistel, LLP
NEW YORK, May 7, 2018 /PRNewswire/ -- Macquarie Infrastructure Corporation (NYSE: MIC) ("MIC") today issued the following statement regarding matters to be voted on at its upcoming stockholder meeting:
MIC's financial results for the first quarter of 2018 were in line with expectations and reflect the underlying strength and diversity of its portfolio of businesses. Based on those results, along with MIC's view on trading to date in the second quarter, the Company reaffirmed its guidance for 2018 including EBITDA (Earnings Before Interest Taxes Depreciation and Amortization) projections that are broadly flat with 2017 results.
MIC is focused on its core priorities to build long-term shareholder value, as outlined on its first quarter 2018 earnings call including:
MIC is pleased that leading independent proxy advisory firm Glass Lewis recommended that MIC stockholders vote for all of MIC's director nominees at the Company's 2018 Annual Meeting.
MIC strongly disagrees with proxy advisory firm Institutional Shareholder Services' ("ISS") recommendation to vote against three of the six MIC directors standing for re-election. ISS's recommendation, notwithstanding the continued strength of MIC's business, relies substantially on the incorrect assertions of Moab Capital Partners ("Moab"). Moab seems to either lack a fundamental understanding of MIC's disclosures and governance or is deliberately misrepresenting them to distort the underlying truth.
The following are incorrect assertions made by Moab, along with the relevant facts from MIC's public disclosures:
The fact that the fee is tied largely to MIC's equity market capitalization, and the fact that the Manager is a substantial stockholder, clearly demonstrates a strong alignment of interest between the Manager and other MIC stockholders. Furthermore, fees payable to the Manager are typically reinvested in MIC shares, thus increasing the long-term alignment of interest between the Manager and other stockholders.
By adopting Moab's misleading version of events and not considering all of the publicly available information to the contrary disclosed by MIC, MIC believes that ISS has reached the wrong conclusion in recommending that stockholders vote against MIC's directors George Carmany and James Hooke, as well as Lead Independent Director and Audit Committee Chair Norman Brown.
It is also inconsistent that ISS would recommend voting against Mr. Brown because he serves as Chair of the Audit Committee, even though he has overseen transparent disclosure of financial information beyond what is required, MIC has had no prior audit-related issues, and ISS specifically recognized the Company for providing greater disclosure than its peers and previously awarded MIC an ISS QualityScore of "1" (indicating lowest risk). In addition, Mr. Carmany has chaired the Board's nominating and governance committee, which has delivered a diverse Board that has continued to be refreshed, while Mr. Hooke brings extensive senior leadership experience and deep and unique operational knowledge of MIC's businesses. Further MIC is committed to maintaining strong corporate governance and in that regard has engaged a leading executive search firm to evaluate new independent director candidates for future Board renewal. MIC urges its stockholders to set aside the ISS recommendation and support ALL six MIC director nominees at the Company's 2018 Annual Meeting.
Since MIC's IPO, the Company has outperformed the S&P500, Russell 1000, MSCI US Utilities indices and also the midstream peers identified in the ISS report. MIC has also achieved attractive fundamental growth across key financial metrics with compound annual growth in revenues of 9.2%, EBITDA of 20.6% and adjusted free cash flow of 28.2% for the five years from 2013 to 2017. MIC recognizes the impact that the recent share price performance has had on stockholders, and the Board and management team are taking decisive actions to address a dynamic market and position the Company for long-term success. In executing its strategy, MIC has and will continue to, deliver on its long-standing commitment to the highest standards of disclosure. MIC encourages stockholders to focus on the Company's core priorities and ensure that its ability to deliver growth and value creation continues without interruption.
About MIC
MIC owns and operates a diversified group of businesses providing basic services to customers primarily in the United States. Its businesses consist of a bulk liquid terminals business, International-Matex Tank Terminals; an airport services business, Atlantic Aviation; entities comprising an energy services, production and distribution segment, MIC Hawaii; and entities comprising a Contracted Power segment. For additional information, please visit the MIC website at www.macquarie.com/mic. MIC-G
MIC is not an authorized deposit-taking institution for the purposes of the Banking Act 1959 (Commonwealth of Australia). The obligations of MIC 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 MIC.
Contacts
Investor enquiries:
Jay A. Davis
Investor Relations, MIC
(212) 231-1825
or
Bruce H. Goldfarb / Patrick McHugh
Okapi Partners LLC
(212) 297-0720
Media enquiries:
Melissa McNamara
Corporate Communications, MIC
(212) 231-1667
or
Dan Katcher / Nick Lamplough / Mike Landau
Joele Frank, Wilkinson Brimmer Katcher
(212) 355-4449
View original content:http://www.prnewswire.com/news-releases/mic-provides-additional-update-following-solid-quarterly-results-and-initiatives-outlined-by-new-chief-executive-officer-christopher-frost-300643555.html
SOURCE Macquarie Infrastructure Corporation
NEW YORK, May 2, 2018 /PRNewswire/ -- Macquarie Infrastructure Corporation (NYSE: MIC) today announced its first quarter 2018 financial results including an increase in net income of 43.4% to $46.8 million from $32.6 million in the prior comparable period on lower taxes and unrealized gains on derivative instruments.
Adjusted Proportionately Combined EBITDA excluding non-cash items of $178.7 million was broadly in line with the $180.2 million recorded in the prior comparable period.
Cash generated by operating activities of $144.1 million increased 12.9% over the $127.6 million recorded in the prior comparable period largely due to favorable movements in working capital.
Adjusted Free Cash Flow, which excludes certain one-time items including transaction related costs, was $135.9 million, down 7.5% from $146.9 million in the prior comparable period and flat on the $135.5 million reported in the fourth quarter of 2017. The decline was due primarily to increased maintenance capital expenditures and higher interest expense.
MIC also announced a quarterly cash dividend of $1.00 per share, consistent with guidance provided in February 2018.
MIC Chief Executive Officer Christopher Frost said: "MIC's financial results for the first quarter of 2018 reflect the underlying strength and diversity of our portfolio of infrastructure businesses."
"Atlantic Aviation maintained its strong performance and Contracted Power delivered a better than anticipated contribution. This performance was offset by the previously forecast and disclosed reduction in contribution from IMTT and higher expenses at MIC Hawaii. We have also taken meaningful steps to address the enhancements required at IMTT with respect to certain storage assets."
Drivers of first quarter 2018 segment results included:
Core Priorities
MIC provided the following additional information concerning its core priorities.
Repurposing and Repositioning of IMTT
In February 2018, MIC announced that it was undertaking initiatives related to the repurposing and repositioning of certain IMTT assets in response to shifts in global demand and trade flows impacting on IMTT's Lower Mississippi River and New York Harbor terminal locations.
The Company anticipates repurposing approximately three million barrels of storage capacity at IMTT away from primarily heavy and residual oils to gasoline and distillates, ethanol, chemicals and vegetable and/or tropical oils. Capacity utilization at IMTT is expected to average in the mid-80s percent in 2018 and to increase to the low 90s percent range in 2020, both subject to market conditions.
In 2018, IMTT is expected to invest approximately $15 million in the repurposing of storage capacity. IMTT is also expected to deploy an additional $10 to $20 million on projects designed to reposition or increase the capacity and enhance the capability of the business.
"As repurposing initiatives continue to be evaluated and the scope of capital projects refined, the forecast level of spending at IMTT in 2018 has decreased modestly. However, we continue to expect that up to $225 million will be deployed by IMTT on repurposing and repositioning in 2018 through 2020," said Frost.
Portfolio and Capital Management
MIC noted in its fourth quarter 2017 results release that it expected to deploy approximately $350 million of capital in growth projects across all of its businesses in 2018.
Through the end of March 2018 MIC had deployed or committed to deploy approximately $50 million on projects including the acquisition (on-field consolidation) of a fixed base operation by Atlantic Aviation and the ongoing development of additional power generating capacity at BEC.
With the refinement of investment at IMTT together with revised scoping of other capital projects, MIC now believes that its growth capital deployment in 2018 will be approximately $300 million.
MIC's construction of additional power generating capacity at BEC is nearing completion and, as announced in February, the Company continues to evaluate strategic options regarding its Contracted Power businesses including the sale of a portion or all of BEC.
On April 24, 2018, IMTT closed on the sale of its OMI Environmental Solutions, Inc. subsidiary. The oil spill cleanup business had generated negative EBITDA in each of the past eight quarters. After transaction costs and other payments, IMTT is expected to receive net cash of approximately $11 million subject to adjustments for changes in working capital.
Balance Sheet Strength
Proceeds from the sale of any portion of BEC, or from smaller, non-core assets generally, would likely be used to accelerate the de-levering of MIC from its current 4.9 times net debt to EBITDA (trailing twelve months adjusted for the full year impact of acquisitions) to a level closer to its low- to mid- four times target.
"We expect to fund our 2018 capital spending with a combination of Free Cash Flow not used to support our dividend, together with proceeds from the sale of any portion of BEC or smaller assets in our portfolio. Any additional sale proceeds will strengthen our balance sheet and increase our financial flexibility," commented Frost.
Guidance Reaffirmed
MIC reiterated its guidance for 2018 EBITDA in a range between $690 and $720 million, broadly in line with 2017. The guidance reflects both the seasonality in certain businesses and the previously forecast decline in average storage utilization at IMTT over the balance of the year.
The Company also provided the following segment level buildup of its 2018 EBITDA guidance:
IMTT: |
$285 – $295 million |
Atlantic Aviation: |
$265 – $275 million |
Contracted Power: |
$95 – $100 million |
MIC Hawaii: |
$60 – $65 million |
Corporate/Other: |
$(15) – $(15) million |
First Quarter 2018 Dividend
The MIC board of directors authorized a cash dividend of $1.00 per share, or $4.00 annualized, for the first quarter of 2018. The dividend will be payable May 17, 2018 to shareholders of record on May 14, 2018. The Company reaffirmed its previous guidance for a distribution of $1.00 per share in each quarter in 2018.
"Given financial and operational performance of our businesses in the quarter that were consistent with our guidance, we believe that a dividend of $1.00 per share, per quarter, is sustainable through 2018," said Frost. "As we make progress against initiatives tied to our priorities, and subject to market conditions, we believe we will be well-positioned for future dividend growth."
Summary Financial Information |
|||||||
Quarter Ended |
Change | ||||||
2018 |
2017 |
$ |
% | ||||
($ In Thousands, Except Share and Per Share Data) (Unaudited) | |||||||
GAAP Metrics |
|||||||
Net income |
$ 46,795 |
$ 32,638 |
14,157 |
43.4 | |||
Weighted average number of shares outstanding: |
84,821,453 |
82,138,168 |
2,683,285 |
3.3 | |||
Net income per share attributable to MIC |
$ 0.91 |
$ 0.44 |
0.47 |
106.8 | |||
Cash provided by operating activities(1) |
144,102 |
127,594 |
16,508 |
12.9 | |||
MIC Non-GAAP Metrics |
|||||||
EBITDA excluding non-cash items(2) |
$ 180,919 |
$ 180,315 |
604 |
0.3 | |||
Shared service implementation costs(3) |
— |
2,354 |
(2,354) |
(100.0) | |||
Investment and acquisition costs(3) |
944 |
— |
944 |
NM | |||
Adjusted EBITDA excluding non-cash items(3) |
$ 181,863 |
$ 182,669 |
(806) |
(0.4) | |||
Cash interest(4) |
$ (29,813) |
$ (25,874) |
(3,939) |
(15.2) | |||
Cash taxes |
(3,871) |
(3,721) |
(150) |
(4.0) | |||
Maintenance capital expenditures |
(9,862) |
(4,476) |
(5,386) |
(120.3) | |||
Noncontrolling interest(5) |
(2,431) |
(1,671) |
(760) |
(45.5) | |||
Adjusted Free Cash Flow(3) |
$ 135,886 |
$ 146,927 |
(11,041) |
(7.5) | |||
NM — Not meaningful | |||||||
(1) Conformed to current period presentation for the adoption of ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. See Note 2, "Basis of Presentation", in our Notes to Consolidated Condensed Financial Statements in Part I of Form 10-Q for the quarter ended March 31, 2018. | |||||||
(2) EBITDA excluding non-cash items is calculated as net income before interest expense, taxes, depreciation and amortization expense, management fees, pension expense and other non-cash (income) expense recorded in the consolidated statement of operations. See below for reconciliation of net income (loss) to EBITDA excluding non-cash items. | |||||||
(3) Adjusted EBITDA excluding non-cash items and Adjusted Free Cash Flow exclude costs relating to certain investment and acquisition activities for the quarter ended March 31, 2018 and exclude costs relating to implementation of our shared services center for the quarter ended March 31, 2017. | |||||||
(4) Cash interest is calculated as interest expense, net, excluding the impact of non-cash adjustments for unrealized (gains) losses from derivative instruments, amortization of deferred financing costs and the amortization of debt discount recorded in the consolidated statement of operations. | |||||||
(5) Noncontrolling interest adjustment represents the portion of Free Cash Flow not attributable to MIC's ownership interest. |
Conference Call and Webcast
When: MIC has scheduled a conference call for 8:00 a.m. Eastern Time on Thursday, May 3, 2018 during which management will review and comment on the first quarter 2018 results.
How: To listen to the conference call dial +1(650) 521-5252 or +1(877) 852-2928 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. Allow extra time prior to the call to visit the site and download the software needed to listen to the webcast.
Slides: MIC will prepare materials in support of its conference call. The materials will be available for downloading from the Company's website prior to the call.
Replay: For interested individuals unable to participate in the live conference call, a replay will be available after 2:00 p.m. on May 3, 2018 through midnight on May 11, 2018, at +1(404) 537-3406 or +1(855) 859-2056, Passcode: 4495099. An online archive of the webcast will be available on the Company's website for one year following the call.
About MIC
MIC owns and operates a diversified group of businesses providing basic services to customers in the United States. Its businesses consist of a bulk liquid terminals business, International-Matex Tank Terminals; an airport services business, Atlantic Aviation; entities comprising an energy services, production and distribution segment, MIC Hawaii; and entities comprising a Contracted Power segment. For additional information, please visit the MIC website at www.macquarie.com/mic. MIC-G
Use of Non-GAAP Measures
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items, Free Cash Flow and Proportionately Combined Metrics
In addition to MIC's results under U.S. GAAP, the Company uses certain non-GAAP measures to assess the performance and prospects of its businesses. In particular, MIC uses EBITDA excluding non-cash items, Free Cash Flow and certain proportionately combined financial metrics. Proportionately combined financial metrics, including Free Cash Flow, reflect MIC's proportionate interest in its wind and solar facilities.
MIC measures EBITDA excluding non-cash items as a reflection of its businesses' ability to effectively manage the volume of products sold or services provided, the operating margin earned on those transactions and the management of operating expenses independent of the capitalization and tax attributes of those businesses. The Company believes investors use EBITDA excluding non-cash items primarily as a measure to assess the operating performance of its businesses and to make comparisons with the operating performance of other businesses whose depreciation and amortization expense may vary widely from MIC's, particularly where acquisitions and other non-operating factors are involved. MIC defines EBITDA excluding non-cash items as net income (loss) or earnings — the most comparable GAAP measure — before interest, taxes, depreciation and amortization and non-cash items including impairments, unrealized derivative gains and losses, adjustments for other non-cash items and pension expense reflected in the statements of operations. EBITDA excluding non-cash items also excludes base management fees and performance fees, if any, whether paid in cash or stock.
Given MIC's varied ownership levels in its Contracted Power and MIC Hawaii segments, together with obligations to report the results of these businesses on a consolidated basis, GAAP measures such as net income (loss) do not fully reflect all of the items management considers in assessing the amount of cash generated based on its ownership interest in its businesses. The Company notes that the proportionately combined metrics used 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 supplemental measure to help understand MIC's financial performance and not in lieu of financial results reported under GAAP.
The Company's businesses can be characterized as owners of high-value, long-lived assets capable of generating substantial Free Cash Flow. MIC defines Free Cash Flow as cash from operating activities — the most comparable GAAP measure — which includes cash paid for interest, taxes and pension contributions, less maintenance capital expenditures, which includes principal repayments on capital lease obligations used to fund maintenance capital expenditures, and excludes changes in working capital.
Management uses Free Cash Flow as a measure of its ability to provide investors with an attractive risk-adjusted return by sustaining and potentially increasing MIC's quarterly cash dividend and funding a portion of the Company's growth. GAAP metrics such as net income (loss) do not provide MIC management with the same level of visibility to into the performance and prospects of the business as a result of: (i) the capital intensive nature of MIC's businesses and the generation of non-cash depreciation and amortization; (ii) shares issued to the Company's external manager under the Management Services Agreement, (iii) the Company's ability to defer all or a portion of current federal income taxes; (iv) non-cash unrealized gains or losses on derivative instruments; (v) amortization of tolling liabilities; (vi) gains (losses) on disposal of assets, and (vii) pension expense. Pension expenses primarily consist of interest expense, expected return on plan assets and amortization of actuarial and performance gains and losses. Any cash contributions to pension plans are reflected as a reduction to Free Cash Flow and are not included in pension expense. Management believes that external consumers of its financial statements, including investors and research analysts, use Free Cash Flow both to assess the Company's performance and as an indicator of its success in generating an attractive risk-adjusted return.
In its Quarterly Report on Form 10-Q, the Company has disclosed Free Cash Flow on a consolidated basis and for each of its operating segments and MIC Corporate. Management believes that both EBITDA excluding non-cash items and Free Cash Flow support a more complete and accurate understanding of the financial and operating performance of its businesses than would otherwise be achieved using GAAP results alone.
Free Cash Flow does not take into consideration required payments on indebtedness and other fixed obligations or other cash items that are excluded from MIC's definition of Free Cash Flow. Management notes that Free Cash Flow may be calculated differently by other companies thereby limiting its usefulness as a comparative measure. Free Cash Flow should be used as a supplemental measure to help understand MIC's financial performance and not in lieu of its financial results reported under GAAP.
See "Reconciliation of Consolidated Net Income to EBITDA excluding non-cash items and a Reconciliation from Cash Provided by Operating Activities to Free Cash Flow" below.
Classification of Maintenance Capital Expenditures and Growth Capital Expenditures
MIC categorizes capital expenditures as either maintenance capital expenditures or growth capital expenditures. As neither maintenance capital expenditure nor growth capital expenditure is a GAAP term, the Company has adopted a framework to categorize specific capital expenditures. In broad terms, maintenance capital expenditures primarily maintain MIC's businesses at current levels of operations, capability, profitability or cash flow, while growth capital expenditures primarily provide new or enhanced levels of operations, capability, profitability or cash flow. Management considers a number of factors in determining whether a specific capital expenditure will be classified as maintenance or growth.
MIC does not bifurcate specific capital expenditures into growth and maintenance components. Each discrete capital expenditure is considered within the above framework and the entire capital expenditure is classified as either maintenance or growth.
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 release 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; risks associated with development, investment and expansion in the power industry; 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 and other commodity costs; its ability to recover increases in costs from customers, cybersecurity risks, work interruptions or other labor stoppages; risks related to its shared services initiative; 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 Corporation 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 Corporation.
MACQUARIE INFRASTRUCTURE CORPORATION | |||
March 31, 2018 |
December 31, 2017 | ||
(Unaudited) |
|||
ASSETS |
|||
Current assets: |
|||
Cash and cash equivalents |
$ 76,021 |
$ 47,121 | |
Restricted cash |
26,622 |
24,963 | |
Accounts receivable, less allowance for doubtful accounts of $1,073 and $895, respectively |
153,419 |
158,152 | |
Inventories |
38,743 |
36,955 | |
Prepaid expenses |
13,086 |
14,685 | |
Fair value of derivative instruments |
13,398 |
11,965 | |
Other current assets |
17,254 |
13,804 | |
Total current assets |
338,543 |
307,645 | |
Property, equipment, land and leasehold improvements, net |
4,644,350 |
4,659,614 | |
Investment in unconsolidated business |
9,408 |
9,526 | |
Goodwill |
2,068,799 |
2,068,668 | |
Intangible assets, net |
902,933 |
914,098 | |
Fair value of derivative instruments |
30,799 |
24,455 | |
Other noncurrent assets |
30,465 |
24,945 | |
Total assets |
$ 8,025,297 |
$ 8,008,951 | |
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||
Current liabilities: |
|||
Due to Manager – related party |
$ 7,550 |
$ 5,577 | |
Accounts payable |
52,424 |
60,585 | |
Accrued expenses |
87,800 |
89,496 | |
Current portion of long-term debt |
51,208 |
50,835 | |
Fair value of derivative instruments |
974 |
1,710 | |
Other current liabilities |
51,266 |
47,762 | |
Total current liabilities |
251,222 |
255,965 | |
Long-term debt, net of current portion |
3,608,812 |
3,530,311 | |
Deferred income taxes |
644,143 |
632,070 | |
Fair value of derivative instruments |
2,449 |
4,668 | |
Tolling agreements – noncurrent |
50,651 |
52,595 | |
Other noncurrent liabilities |
184,344 |
182,639 | |
Total liabilities |
4,741,621 |
4,658,248 | |
Commitments and contingencies |
— |
— |
MACQUARIE INFRASTRUCTURE CORPORATION | |||
March 31, 2018 |
December 31, 2017 | ||
(Unaudited) | |||
Stockholders' equity(1): |
|||
Common stock ($0.001 par value; 500,000,000 authorized; 84,902,562 shares issued and outstanding at March 31, 2018 and 84,733,957 shares issued and outstanding at December 31, 2017) |
$ 85 |
$ 85 | |
Additional paid in capital |
1,728,712 |
1,840,033 | |
Accumulated other comprehensive loss |
(31,357) |
(29,993) | |
Retained earnings |
1,420,401 |
1,343,567 | |
Total stockholders' equity |
3,117,841 |
3,153,692 | |
Noncontrolling interests |
165,835 |
197,011 | |
Total equity |
3,283,676 |
3,350,703 | |
Total Liabilities and equity |
$ 8,025,297 |
$ 8,008,951 | |
(1) The Company is authorized to issue 100,000,000 shares of preferred stock, par value $0.001 per share. At March 31, 2018 and December 31, 2017, no preferred stock were issued or outstanding. The Company had 100 shares of special stock issued and outstanding to its Manager at March 31, 2018 and December 31, 2017. |
MACQUARIE INFRASTRUCTURE CORPORATION | |||
Quarter Ended March 31, | |||
2018 |
2017 | ||
Revenue |
|||
Service revenue |
$ 402,609 |
$ 363,804 | |
Product revenue |
98,947 |
87,653 | |
Total revenue |
501,556 |
451,457 | |
Costs and expenses |
|||
Cost of services |
187,470 |
154,706 | |
Cost of product sales |
53,385 |
47,225 | |
Selling, general and administrative |
86,957 |
76,952 | |
Fees to Manager – related party |
12,928 |
18,223 | |
Depreciation |
61,358 |
57,681 | |
Amortization of intangibles |
17,216 |
17,693 | |
Total operating expenses |
419,314 |
372,480 | |
Operating income |
82,242 |
78,977 | |
Other income (expense) |
|||
Interest income |
80 |
34 | |
Interest expense(1) |
(18,790) |
(25,482) | |
Other income, net |
42 |
1,182 | |
Net income before income taxes |
63,574 |
54,711 | |
Provision for income taxes |
(16,779) |
(22,073) | |
Net income |
$ 46,795 |
$ 32,638 | |
Less: net loss attributable to noncontrolling interests |
(30,039) |
(3,377) | |
Net income attributable to MIC |
$ 76,834 |
$ 36,015 | |
Basic income per share attributable to MIC |
$ 0.91 |
$ 0.44 | |
Weighted average number of shares outstanding: basic |
84,821,453 |
82,138,168 | |
Diluted income per share attributable to MIC |
$ 0.88 |
$ 0.44 | |
Weighted average number of shares outstanding: diluted |
92,793,852 |
82,147,763 | |
Cash dividends declared per share |
$ 1.00 |
$ 1.32 | |
1) Interest expense includes gains on derivative instruments of $15.1 million and $954,000 for the quarters ended March 31, 2018 and 2017, respectively. |
MACQUARIE INFRASTRUCTURE CORPORATION | |||
| |||
2018 |
2017(1) | ||
Operating activities |
|||
Net income |
$ 46,795 |
$ 32,638 | |
Adjustments to reconcile net income to net cash provided by operating activities: |
|||
Depreciation and amortization of property and equipment |
61,358 |
57,681 | |
Amortization of intangible assets |
17,216 |
17,693 | |
Amortization of debt financing costs |
3,049 |
2,202 | |
Amortization of debt discount |
897 |
619 | |
Adjustments to derivative instruments |
(10,732) |
1,972 | |
Fees to Manager – related party |
12,928 |
18,223 | |
Deferred taxes |
12,908 |
18,352 | |
Pension expense |
2,253 |
2,694 | |
Other non-cash expense (income), net |
563 |
(1,354) | |
Changes in other assets and liabilities, net of acquisitions: |
|||
Accounts receivable |
4,242 |
1,059 | |
Inventories |
(2,141) |
(3,718) | |
Prepaid expenses and other current assets |
(1,798) |
(7,559) | |
Due to Manager – related party |
(68) |
11 | |
Accounts payable and accrued expenses |
(5,945) |
(12,382) | |
Income taxes payable |
1,559 |
1,341 | |
Other, net |
1,018 |
(1,878) | |
Net cash provided by operating activities |
144,102 |
127,594 | |
Investing activities |
|||
Acquisitions of businesses and investments, net of cash acquired |
(11.433) |
— | |
Purchases of property and equipment |
(48,181) |
(59,869) | |
Loan to project developer |
(10,800) |
(8,000) | |
Loan repayment from project developer |
5,217 |
— | |
Other, net |
86 |
50 | |
Net cash used in investing activities |
(65,111) |
(67,819) |
MACQUARIE INFRASTRUCTURE CORPORATION | |||
Quarter Ended March 31, | |||
2018 |
2017(1) | ||
Financing activities |
|||
Proceeds from long-term debt |
$ 141,500 |
$ 104,000 | |
Payment of long-term debt |
(63,848) |
(72,634) | |
Proceeds from the issuance of shares |
125 |
2,049 | |
Dividends paid to common stockholders |
(122,259) |
(107,714) | |
Contributions received from noncontrolling interests |
271 |
— | |
Distributions paid to noncontrolling interests |
(1,397) |
(1,351) | |
Offering and equity raise costs paid |
— |
(69) | |
Debt financing costs paid |
(2,595) |
(435) | |
Payment of capital lease obligations |
(22) |
(21) | |
Net cash used in financing activities |
(48,225) |
(76,175) | |
Effect of exchange rate changes on cash and cash equivalents |
(207) |
— | |
Net change in cash, cash equivalents and restricted cash |
30,559 |
(16,400) | |
Cash, cash equivalents and restricted cash, beginning of period |
72,084 |
61,257 | |
Cash, cash equivalents and restricted cash, end of period |
$ 102,643 |
$ 44,857 | |
Supplemental disclosures of cash flow information |
|||
Non-cash investing and financing activities: |
|||
Accrued equity offering costs |
$ 80 |
$ 93 | |
Accrued financing costs |
$ 233 |
$ — | |
Accrued purchases of property and equipment |
$ 19,038 |
$ 25,598 | |
Issuance of shares to Manager |
$ 10,887 |
$ 18,462 | |
Conversion of convertible senior notes to shares |
$ 6 |
$ 17 | |
Distributions payable to noncontrolling interests |
$ 33 |
$ 29 | |
Taxes paid, net |
$ 2,040 |
$ 2,379 | |
Interest paid |
$ 25,986 |
$ 26,764 | |
(1) Conformed to current period presentation for the adoption of ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. See Note 2, "Basis of Presentation", in our Notes to Consolidated Condensed Financial Statements in Part I of Form 10-Q for the quarter ended March 31, 2018. |
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated condensed balance sheets that sum to the total of the same amounts presented in the consolidated condensed statements of cash flows: | |||
As of March 31, | |||
2018 |
2017 | ||
Cash and cash equivalents |
$ 76,021 |
$ 29,618 | |
Restricted cash – current |
26,622 |
15,169 | |
Restricted cash – non-current(2) |
— |
70 | |
Total of cash, cash equivalents and restricted cash shown in the |
$ 102,643 |
$ 44,857 | |
(2) Restricted cash - non-current is included in Other noncurrent assets in the consolidated condensed balance sheet. |
MACQUARIE INFRASTRUCTURE CORPORATION | |||||||
Quarter Ended March 31, |
Change Favorable/ | ||||||
2018 |
2017 |
$ |
% | ||||
(In Thousands, Except Share and Per Share Data) (Unaudited) | |||||||
Revenue |
|||||||
Service revenue |
$ 402,609 |
$ 363,804 |
38,805 |
10.7 | |||
Product revenue |
98,947 |
87,653 |
11,294 |
12.9 | |||
Total revenue |
501,556 |
451,457 |
50,099 |
11.1 | |||
Costs and expenses |
|||||||
Cost of services |
187,470 |
154,706 |
(32,764) |
(21.2) | |||
Cost of product sales |
53,385 |
47,225 |
(6,160) |
(13.0) | |||
Selling, general and administrative |
86,957 |
76,952 |
(10,005) |
(13.0) | |||
Fees to Manager – related party |
12,928 |
18,223 |
5,295 |
29.1 | |||
Depreciation |
61,358 |
57,681 |
(3,677) |
(6.4) | |||
Amortization of intangibles |
17,216 |
17,693 |
477 |
2.7 | |||
Total operating expenses |
419,314 |
372,480 |
(46,834) |
(12.6) | |||
Operating income |
82,242 |
78,977 |
3,265 |
4.1 | |||
Other income (expense) |
|||||||
Interest income |
80 |
34 |
46 |
135.3 | |||
Interest expense(1) |
(18,790) |
(25,482) |
6,692 |
26.3 | |||
Other income, net |
42 |
1,182 |
(1,140) |
(96.4) | |||
Net income before income taxes |
63,574 |
54,711 |
8,863 |
16.2 | |||
Provision for income taxes |
(16,779) |
(22,073) |
5,294 |
24.0 | |||
Net income |
$ 46,795 |
$ 32,638 |
14,157 |
43.4 | |||
Less: net loss attributable to noncontrolling interests |
(30,039) |
(3,377) |
26,662 |
NM | |||
Net income attributable to MIC |
$ 76,834 |
$ 36,015 |
40,819 |
113.3 | |||
Basic income per share attributable to MIC |
$ 0.91 |
$ 0.44 |
0.47 |
106.8 | |||
Weighted average number of shares outstanding: |
|||||||
basic |
84,821,453 |
82,138,168 |
2,683,285 |
3.3 | |||
NM — Not meaningful | |||||||
(1) Interest expense includes gains on derivative instruments of $15.1 million and $954,000 for the quarters ended March 31, 2018 and 2017, respectively. |
MACQUARIE INFRASTRUCTURE CORPORATION |
|||||||||
Quarter Ended March 31, |
Change | ||||||||
2018 |
2017 |
$ |
% | ||||||
($ In Thousands) (Unaudited) | |||||||||
Net income |
$ 46,795 |
$ 32,638 |
|||||||
Interest expense, net(1) |
18,710 |
25,448 |
|||||||
Provision for income taxes |
16,779 |
22,073 |
|||||||
Depreciation |
61,358 |
57,681 |
|||||||
Amortization of intangibles |
17,216 |
17,693 |
|||||||
Fees to Manager-related party |
12,928 |
18,223 |
|||||||
Pension expense(2) |
2,253 |
2,694 |
|||||||
Other non-cash expense, net(3) |
4,880 |
3,865 |
|||||||
EBITDA excluding non-cash items |
$ 180,919 |
$ 180,315 |
604 |
0.3 | |||||
EBITDA excluding non-cash items |
$ 180,919 |
$ 180,315 |
|||||||
Interest expense, net(1) |
(18,710) |
(25,448) |
|||||||
Adjustments to derivative instruments recorded in interest expense(1) |
(15,049) |
(3,247) |
|||||||
Amortization of debt financing costs(1) |
3,049 |
2,202 |
|||||||
Amortization of debt discount(1) |
897 |
619 |
|||||||
Provision for current income taxes |
(3,871) |
(3,721) |
|||||||
Changes in working capital(4) |
(3,133) |
(23,126) |
|||||||
Cash provided by operating activities |
144,102 |
127,594 |
|||||||
Changes in working capital(4) |
3,133 |
23,126 |
|||||||
Maintenance capital expenditures |
(9,862) |
(4,476) |
|||||||
Free cash flow |
$ 137,373 |
$ 146,244 |
(8,871) |
(6.1) | |||||
1) Interest expense, net, includes adjustments to derivative instruments, non-cash amortization of deferred financing fees and non- cash amortization of debt discount related to the 2.00% Convertible Senior Notes due October 2023. |
|||||||||
(2) Pension expense primarily consists of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses. |
|||||||||
(3) Other non-cash expense, net, primarily includes non-cash amortization of tolling liabilities, unrealized gains (losses) on commodity hedges and non-cash gains (losses) related to disposal of assets. See "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items, Free Cash Flow and Proportionately Combined Metrics" above for further discussion. |
|||||||||
(4) Conformed to current period presentation for the adoption of ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. See Note 2, "Basis of Presentation", in our Notes to Consolidated Condensed Financial Statements in Part I of Form 10-Q for the quarter ended March 31, 2018. |
MACQUARIE INFRASTRUCTURE CORPORATION |
|||||||
Quarter Ended March 31, |
Change Favorable/ (Unfavorable) | ||||||
2018 |
2017 |
$ |
% | ||||
($ In Thousands) (Unaudited) | |||||||
Free Cash Flow – Consolidated basis |
$ 137,373 |
$ 146,244 |
(8,871) |
(6.1) | |||
100% of Contracted Power Free Cash Flow included in |
(14,527) |
(9,839) |
|||||
MIC's share of Contracted Power Free Cash Flow |
12,099 |
8,171 |
|||||
100% of MIC Hawaii Free Cash Flow included in |
(10,750) |
(14,936) |
|||||
MIC's share of MIC Hawaii Free Cash Flow |
10,747 |
14,933 |
|||||
Free Cash Flow – Proportionately Combined basis |
$ 134,942 |
$ 144,573 |
(9,631) |
(6.7) |
MACQUARIE INFRASTRUCTURE CORPORATION | |||||||
IMTT |
|||||||
Quarter Ended March 31, |
|||||||
2018 |
2017 |
Change Favorable/ | |||||
$ |
$ |
$ |
% | ||||
($ In Thousands) (Unaudited) | |||||||
Revenue |
139,389 |
138,817 |
572 |
0.4 | |||
Cost of services |
54,425 |
49,846 |
(4,579) |
(9.2) | |||
Selling, general and administrative expenses |
9,306 |
9,038 |
(268) |
(3.0) | |||
Depreciation and amortization |
33,249 |
31,520 |
(1,729) |
(5.5) | |||
Operating income |
42,409 |
48,413 |
(6,004) |
(12.4) | |||
Interest expense, net(1) |
(7,739) |
(8,757) |
1,018 |
11.6 | |||
Other income, net |
296 |
708 |
(412) |
(58.2) | |||
Provision for income taxes |
(9,686) |
(16,548) |
6,862 |
41.5 | |||
Net income |
25,280 |
23,816 |
1,464 |
6.1 | |||
Reconciliation of net income to EBITDA excluding |
|||||||
Net income |
25,280 |
23,816 |
|||||
Interest expense, net(1) |
7,739 |
8,757 |
|||||
Provision for income taxes |
9,686 |
16,548 |
|||||
Depreciation and amortization |
33,249 |
31,520 |
|||||
Pension expense(2) |
2,080 |
2,416 |
|||||
Other non-cash expense, net |
94 |
68 |
|||||
EBITDA excluding non-cash items |
78,128 |
83,125 |
(4,997) |
(6.0) | |||
EBITDA excluding non-cash items |
78,128 |
83,125 |
|||||
Interest expense, net(1) |
(7,739) |
(8,757) |
|||||
Adjustments to derivative instruments recorded in |
|||||||
interest expense(1) |
(4,042) |
(1,320) |
|||||
Amortization of debt financing costs(1) |
411 |
411 |
|||||
Provision for current income taxes |
(4,276) |
(2,258) |
|||||
Changes in working capital |
5,089 |
736 |
|||||
Cash provided by operating activities |
67,571 |
71,937 |
|||||
Changes in working capital |
(5,089) |
(736) |
|||||
Maintenance capital expenditures |
(6,989) |
(2,460) |
|||||
Free cash flow |
55,493 |
68,741 |
(13,248) |
(19.3) | |||
1) Interest expense, net, includes adjustments to derivative instruments and non-cash amortization of deferred financing fees. | |||||||
(2) Pension expense primarily consists of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses. |
Atlantic Aviation |
|||||||
Quarter Ended March 31, |
|||||||
2018 |
2017 |
Change Favorable/ | |||||
$ |
$ |
$ |
% | ||||
($ In Thousands) (Unaudited) | |||||||
Revenue |
247,202 |
212,753 |
34,449 |
16.2 | |||
Cost of services (exclusive of depreciation and amortization |
116,693 |
93,922 |
(22,771) |
(24.2) | |||
Gross margin |
130,509 |
118,831 |
11,678 |
9.8 | |||
Selling, general and administrative expenses |
59,939 |
53,890 |
(6,049) |
(11.2) | |||
Depreciation and amortization |
25,479 |
25,033 |
(446) |
(1.8) | |||
Operating income |
45,091 |
39,908 |
5,183 |
13.0 | |||
Interest expense, net(1) |
(69) |
(3,446) |
3,377 |
98.0 | |||
Other income (expense), net |
56 |
(86) |
142 |
165.1 | |||
Provision for income taxes |
(12,111) |
(14,550) |
2,439 |
16.8 | |||
Net income |
32,967 |
21,826 |
11,141 |
51.0 | |||
Reconciliation of net income to EBITDA excluding non-cash |
|||||||
Net income |
32,967 |
21,826 |
|||||
Interest expense, net(1) |
69 |
3,446 |
|||||
Provision for income taxes |
12,111 |
14,550 |
|||||
Depreciation and amortization |
25,479 |
25,033 |
|||||
Pension expense(2) |
5 |
5 |
|||||
Other non-cash expense, net |
312 |
62 |
|||||
EBITDA excluding non-cash items |
70,943 |
64,922 |
6,021 |
9.3 | |||
EBITDA excluding non-cash items |
70,943 |
64,922 |
|||||
Interest expense, net(1) |
(69) |
(3,446) |
|||||
Convertible senior notes interest(3) |
(2,012) |
(1,744) |
|||||
Adjustments to derivative instruments recorded in interest |
(4,367) |
133 |
|||||
Amortization of debt financing costs(1) |
279 |
314 |
|||||
Provision for current income taxes |
(6,533) |
(2,872) |
|||||
Changes in working capital |
6,019 |
(6,116) |
|||||
Cash provided by operating activities |
64,260 |
51,191 |
|||||
Changes in working capital |
(6,019) |
6,116 |
|||||
Maintenance capital expenditures |
(1,302) |
(925) |
|||||
Free cash flow |
56,939 |
56,382 |
557 |
1.0 | |||
(1) Interest expense, net, includes adjustments to derivative instruments and non-cash amortization of deferred financing fees. | |||||||
(2) Pension expense primarily consists of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses. | |||||||
(3) Represents the cash interest expense reclassified from MIC Corporate related to the 2.00% Convertible Senior Notes due October 2023, proceeds of which were used to pay down a portion of Atlantic Aviation's credit facility in October 2016. |
Contracted Power |
|||||||
Quarter Ended March 31, |
|||||||
2018 |
2017 |
Change | |||||
$ |
$ |
$ |
% | ||||
($ In Thousands) (Unaudited) | |||||||
Product revenue |
35,287 |
28,070 |
7,217 |
25.7 | |||
Cost of product sales |
5,837 |
4,859 |
(978) |
(20.1) | |||
Selling, general and administrative expenses |
7,512 |
5,165 |
(2,347) |
(45.4) | |||
Depreciation and amortization |
15,527 |
15,340 |
(187) |
(1.2) | |||
Operating income |
6,411 |
2,706 |
3,705 |
136.9 | |||
Interest expense, net(1) |
(885) |
(5,383) |
4,498 |
83.6 | |||
Other income, net |
1,005 |
765 |
240 |
31.4 | |||
Provision for income taxes |
(950) |
(27) |
(923) |
NM | |||
Net income (loss) |
5,581 |
(1,939) |
7,520 |
NM | |||
Less: net loss attributable to noncontrolling interest |
(30,056) |
(3,349) |
26,707 |
NM | |||
Net income attributable to MIC |
35,637 |
1,410 |
34,227 |
NM | |||
Reconciliation of net income (loss) to EBITDA |
|||||||
Net income (loss) |
5,581 |
(1,939) |
|||||
Interest expense, net(1) |
885 |
5,383 |
|||||
Provision for income taxes |
950 |
27 |
|||||
Depreciation and amortization |
15,527 |
15,340 |
|||||
Other non-cash income, net(2) |
(1,888) |
(2,024) |
|||||
EBITDA excluding non-cash items |
21,055 |
16,787 |
4,268 |
25.4 | |||
EBITDA excluding non-cash items |
21,055 |
16,787 |
|||||
Interest expense, net(1) |
(885) |
(5,383) |
|||||
Adjustments to derivative instruments recorded in |
|||||||
interest expense(1) |
(5,970) |
(1,834) |
|||||
Amortization of debt financing costs(1) |
379 |
379 |
|||||
Provision for current income taxes |
(16) |
(88) |
|||||
Changes in working capital(3) |
919 |
(585) |
|||||
Cash provided by operating activities |
15,482 |
9,276 |
|||||
Changes in working capital(3) |
(919) |
585 |
|||||
Maintenance capital expenditures |
(36) |
(22) |
|||||
Free cash flow |
14,527 |
9,839 |
4,688 |
47.6 | |||
NM — Not meaningful | |||||||
(1) Interest expense, net, includes adjustments to derivative instruments and non-cash amortization of deferred financing fees. | |||||||
(2) Other non-cash income, net, primarily includes amortization of tolling liabilities. See "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items, Free Cash Flow and Proportionately Combined Metrics" above for further discussion. | |||||||
(3) Conformed to current period presentation for the adoption of ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. See Note 2, "Basis of Presentation", in our Notes to Consolidated Condensed Financial Statements in Part I of Form 10-Q for the quarter ended March 31, 2018. |
MIC Hawaii |
|||||||
Quarter Ended March 31, |
|||||||
2018 |
2017 |
Change | |||||
$ |
$ |
$ |
% | ||||
($ In Thousands) (Unaudited) | |||||||
Product revenue |
63,660 |
59,583 |
4,077 |
6.8 | |||
Service revenue |
17,249 |
13,457 |
3,792 |
28.2 | |||
Total revenue |
80,909 |
73,040 |
7,869 |
10.8 | |||
Cost of product sales (exclusive of depreciation and amortization shown |
|||||||
separately below) |
47,548 |
42,366 |
(5,182) |
(12.2) | |||
Cost of services (exclusive of depreciation and amortization shown separately below) |
16,352 |
10,940 |
(5,412) |
(49.5) | |||
Cost of revenue – total |
63,900 |
53,306 |
(10,594) |
(19.9) | |||
Gross margin |
17,009 |
19,734 |
(2,725) |
(13.8) | |||
Selling, general and administrative expenses |
7,229 |
6,085 |
(1,144) |
(18.8) | |||
Depreciation and amortization |
4,155 |
3,481 |
(674) |
(19.4) | |||
Operating income |
5,625 |
10,168 |
(4,543) |
(44.7) | |||
Interest expense, net(1) |
(1,290) |
(1,711) |
421 |
24.6 | |||
Other expense, net |
(1,319) |
(205) |
(1,114) |
NM | |||
Provision for income taxes |
(805) |
(3,379) |
2,574 |
76.2 | |||
Net income |
2,211 |
4,873 |
(2,662) |
(54.6) | |||
Less: net income (loss) attributable to noncontrolling interests |
17 |
(28) |
(45) |
(160.7) | |||
Net income attributable to MIC |
2,194 |
4,901 |
(2,707) |
(55.2) | |||
Reconciliation of net income to EBITDA excluding non-cash items |
|||||||
and a reconciliation of cash provided by operating activities to Free |
|||||||
Net income |
2,211 |
4,873 |
|||||
Interest expense, net(1) |
1,290 |
1,711 |
|||||
Provision for income taxes |
805 |
3,379 |
|||||
Depreciation and amortization |
4,155 |
3,481 |
|||||
Pension expense(2) |
127 |
273 |
|||||
Other non-cash expense, net(3) |
6,199 |
5,571 |
|||||
EBITDA excluding non-cash items |
14,787 |
19,288 |
(4,501) |
(23.3) | |||
EBITDA excluding non-cash items |
14,787 |
19,288 |
|||||
Interest expense, net(1) |
(1,290) |
(1,711) |
|||||
Adjustments to derivative instruments recorded in interest expense(1) |
(670) |
(226) |
|||||
Amortization of debt financing costs(1) |
97 |
105 |
|||||
Provision for current income taxes |
(639) |
(1,451) |
|||||
Changes in working capital(4) |
(6,139) |
(8,727) |
|||||
Cash provided by operating activities |
6,146 |
7,278 |
|||||
Changes in working capital(4) |
6,139 |
8,727 |
|||||
Maintenance capital expenditures |
(1,535) |
(1,069) |
|||||
Free cash flow |
10,750 |
14,936 |
(4,186) |
(28.0) | |||
NM — Not meaningful | |||||||
(1) Interest expense, net, includes adjustments to derivative instruments related to interest rate swaps and non-cash amortization of deferred financing fees. | |||||||
(2) Pension expense primarily consists of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses. | |||||||
(3) Other non-cash expense, net, primarily includes non-cash adjustments related to unrealized gains (losses) on commodity hedges and non-cash gains (losses) related to disposal of assets. See "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items, Free Cash Flow and Proportionately Combined Metrics" above for further discussion. | |||||||
(4) Conformed to current period presentation for the adoption of ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. See Note 2, "Basis of Presentation", in our Notes to Consolidated Condensed Financial Statements in Part I of Form 10-Q for the quarter ended March 31, 2018. |
Corporate and Other |
|||||||
Quarter Ended March 31, |
|||||||
2018 |
2017 |
Change | |||||
$ |
$ |
$ |
% | ||||
($ In Thousands) (Unaudited) | |||||||
Fees to Manager-related party |
12,928 |
18,223 |
5,295 |
29.1 | |||
Selling, general and administrative expenses(1) |
4,202 |
3,995 |
(207) |
(5.2) | |||
Depreciation |
164 |
— |
(164) |
NM | |||
Operating loss |
(17,294) |
(22,218) |
4,924 |
22.2 | |||
Interest expense, net(2) |
(8,727) |
(6,151) |
(2,576) |
(41.9) | |||
Other income, net |
4 |
— |
4 |
NM | |||
Benefit for income taxes |
6,773 |
12,431 |
(5,658) |
(45.5) | |||
Net loss |
(19,244) |
(15,938) |
(3,306) |
(20.7) | |||
Reconciliation of net loss to EBITDA excluding non-cash items and a reconciliation of cash used in operating activities to Free Cash Flow: |
|||||||
Net loss |
(19,244) |
(15,938) |
|||||
Interest expense, net(2) |
8,727 |
6,151 |
|||||
Benefit for income taxes |
(6,773) |
(12,431) |
|||||
Depreciation |
164 |
— |
|||||
Fees to Manager-related party |
12,928 |
18,223 |
|||||
Pension expense(3) |
41 |
— |
|||||
Other non-cash expense |
163 |
188 |
|||||
EBITDA excluding non-cash items |
(3,994) |
(3,807) |
(187) |
(4.9) | |||
EBITDA excluding non-cash items |
(3,994) |
(3,807) |
|||||
Interest expense, net(2) |
(8,727) |
(6,151) |
|||||
Convertible senior notes interest(4) |
2,012 |
1,744 |
|||||
Amortization of debt financing costs(2) |
1,883 |
993 |
|||||
Amortization of debt discount(2) |
897 |
619 |
|||||
Benefit for current income taxes |
7,593 |
2,948 |
|||||
Changes in working capital |
(9,021) |
(8,434) |
|||||
Cash used in operating activities |
(9,357) |
(12,088) |
|||||
Changes in working capital |
9,021 |
8,434 |
|||||
Free cash flow |
(336) |
(3,654) |
3,318 |
90.8 | |||
NM — Not meaningful | |||||||
(1) For the quarter ended March 31, 2018, selling, general and administrative expenses included $944,000 of costs incurred in connection with the evaluation of various investment and acquisition opportunities. For the quarter ended March 31, 2017, selling, general and administrative expenses included $2.3 million of costs related to the implementation of a shared service center. | |||||||
(2) Interest expense, net, included non-cash amortization of deferred financing fees and non-cash amortization of debt discount related to the 2.00% Convertible Senior Notes due October 2023. | |||||||
(3) Pension expense primarily consists of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses. | |||||||
(4) Represents the cash interest expense reclassified to Atlantic Aviation related to the 2.00% Convertible Senior Notes due October 2023, proceeds of which were used to pay down a portion of Atlantic Aviation's credit facility in October 2016. |
MACQUARIE INFRASTRUCTURE CORPORATION | |||||||||||||||
For the Quarter Ended March 31, 2018 |
|||||||||||||||
IMTT |
Atlantic |
Contracted |
MIC |
MIC |
Proportionately |
Contracted |
MIC | ||||||||
($ In Thousands) (Unaudited) |
|||||||||||||||
Net income (loss) |
25,280 |
32,967 |
4,268 |
2,210 |
(19,244) |
45,481 |
5,581 |
2,211 | |||||||
Interest expense, net(3) |
7,739 |
69 |
896 |
1,292 |
8,727 |
18,723 |
885 |
1,290 | |||||||
Provision (benefit) for income taxes |
9,686 |
12,111 |
950 |
805 |
(6,773) |
16,779 |
950 |
805 | |||||||
Depreciation and amortization |
|||||||||||||||
of intangibles |
33,249 |
25,479 |
13,644 |
4,150 |
164 |
76,686 |
15,527 |
4,155 | |||||||
Fees to Manager-related party |
— |
— |
— |
— |
12,928 |
12,928 |
— |
— | |||||||
Pension expense(4) |
2,080 |
5 |
— |
127 |
41 |
2,253 |
— |
127 | |||||||
Other non-cash expense (income), net(5) |
94 |
312 |
(1,884) |
6,199 |
163 |
4,884 |
(1,888) |
6,199 | |||||||
EBITDA excluding non-cash items |
78,128 |
70,943 |
17,874 |
14,783 |
(3,994) |
177,734 |
21,055 |
14,787 | |||||||
items |
78,128 |
70,943 |
17,874 |
14,783 |
(3,994) |
177,734 |
21,055 |
14,787 | |||||||
Interest expense, net(3) |
(7,739) |
(69) |
(896) |
(1,292) |
(8,727) |
(18,723) |
(885) |
(1,290) | |||||||
Convertible senior notes |
|||||||||||||||
interest(6) |
— |
(2,012) |
— |
— |
2,012 |
— |
— |
— | |||||||
Adjustments to derivative |
|||||||||||||||
instruments recorded in |
|||||||||||||||
interest expense, net(3) |
(4,042) |
(4,367) |
(5,201) |
(667) |
— |
(14,277) |
(5,970) |
(670) | |||||||
Amortization of debt |
|||||||||||||||
financing costs(3) |
411 |
279 |
365 |
97 |
1,883 |
3,035 |
379 |
97 | |||||||
Amortization of debt |
|||||||||||||||
discount(3) |
— |
— |
— |
— |
897 |
897 |
— |
— | |||||||
(Provision) benefit for current |
|||||||||||||||
income taxes |
(4,276) |
(6,533) |
(16) |
(639) |
7,593 |
(3,871) |
(16) |
(639) | |||||||
Changes in working capital |
5,089 |
6,019 |
1,189 |
(6,139) |
(9,021) |
(2,863) |
919 |
(6,139) | |||||||
Cash provided by (used in) |
|||||||||||||||
operating activities |
67,571 |
64,260 |
13,315 |
6,143 |
(9,357) |
141,932 |
15,482 |
6,146 | |||||||
Changes in working capital |
(5,089) |
(6,019) |
(1,189) |
6,139 |
9,021 |
2,863 |
(919) |
6,139 | |||||||
Maintenance capital |
|||||||||||||||
expenditures |
(6,989) |
(1,302) |
(27) |
(1,535) |
— |
(9,853) |
(36) |
(1,535) | |||||||
Proportionately Combined Free Cash Flow |
55,493 |
56,939 |
12,099 |
10,747 |
(336) |
134,942 |
14,527 |
10,750 |
For the Quarter Ended March 31, 2017 |
|||||||||||||||
IMTT |
Atlantic |
Contracted Power(1) |
MIC |
MIC |
Proportionately |
Contracted |
MIC | ||||||||
($ in Thousands) (Unaudited) |
|||||||||||||||
Net income (loss) |
23,816 |
21,826 |
(1,954) |
4,875 |
(15,938) |
32,625 |
(1,939) |
4,873 | |||||||
Interest expense, net(3) |
8,757 |
3,446 |
4,790 |
1,710 |
6,151 |
24,854 |
5,383 |
1,711 | |||||||
Provision (benefit) for income taxes |
16,548 |
14,550 |
27 |
3,379 |
(12,431) |
22,073 |
27 |
3,379 | |||||||
Depreciation and amortization |
|||||||||||||||
of intangibles |
31,520 |
25,033 |
13,461 |
3,476 |
— |
73,490 |
15,340 |
3,481 | |||||||
Fees to Manager-related party |
— |
— |
— |
— |
18,223 |
18,223 |
— |
— | |||||||
Pension expense(4) |
2,416 |
5 |
— |
273 |
— |
2,694 |
— |
273 | |||||||
Other non-cash expense(income), net(5) |
68 |
62 |
(2,003) |
5,571 |
188 |
3,886 |
(2,024) |
5,571 | |||||||
EBITDA excluding non-cash items |
83,125 |
64,922 |
14,321 |
19,284 |
(3,807) |
177,845 |
16,787 |
19,288 | |||||||
EBITDA excluding non-cash |
|||||||||||||||
items |
83,125 |
64,922 |
14,321 |
19,284 |
(3,807) |
177,845 |
16,787 |
19,288 | |||||||
Interest expense, net(3) |
(8,757) |
(3,446) |
(4,790) |
(1,710) |
(6,151) |
(24,854) |
(5,383) |
(1,711) | |||||||
Convertible senior notes |
|||||||||||||||
interest(6) |
— |
(1,744) |
— |
— |
1,744 |
— |
— |
— | |||||||
Adjustments to derivative |
|||||||||||||||
instruments recorded in |
|||||||||||||||
interest expense, net(3) |
(1,320) |
133 |
(1,614) |
(226) |
— |
(3,027) |
(1,834) |
(226) | |||||||
Amortization of debt |
|||||||||||||||
financing costs(3) |
411 |
314 |
364 |
105 |
993 |
2,187 |
379 |
105 | |||||||
Amortization of debt |
|||||||||||||||
discount(3) |
— |
— |
— |
— |
619 |
619 |
— |
— | |||||||
(Provision) benefit for current income taxes |
(2,258) |
(2,872) |
(88) |
(1,451) |
2,948 |
(3,721) |
(88) |
(1,451) | |||||||
Changes in working capital(7) |
736 |
(6,116) |
(879) |
(8,726) |
(8,434) |
(23,419) |
(585) |
(8,727) | |||||||
Cash provided by (used in) operating activities |
71,937 |
51,191 |
7,314 |
7,276 |
(12,088) |
125,630 |
9,276 |
7,278 | |||||||
Changes in working capital(7) |
(736) |
6,116 |
879 |
8,726 |
8,434 |
23,419 |
585 |
8,727 | |||||||
Maintenance capital expenditures |
(2,460) |
(925) |
(22) |
(1,069) |
— |
(4,476) |
(22) |
(1,069) | |||||||
Proportionately Combined Free Cash Flow |
68,741 |
56,382 |
8,171 |
14,933 |
(3,654) |
144,573 |
9,839 |
14,936 | |||||||
(1) Represents MIC's proportionately combined interests in the businesses comprising these reportable segments. | |||||||||||||||
(2) The sum of the amounts attributable to MIC in proportion to its ownership. | |||||||||||||||
(3) Interest expense, net, includes adjustments to derivative instruments, non-cash amortization of deferred financing fees and non- cash amortization of debt discount related to the 2.00% Convertible Senior Notes due October 2023. | |||||||||||||||
(4) Pension expense primarily consists of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses. | |||||||||||||||
(5) Other non-cash expense (income), net, primarily includes non-cash amortization of tolling liabilities, unrealized gains (losses) on commodity hedges and non-cash gains (losses) related to disposal of assets. See "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items, Free Cash Flow and Proportionately Combined Metrics" above for further discussion. | |||||||||||||||
(6) Represents the cash interest expense reclassified from MIC Corporate to Atlantic Aviation related to the 2.00% Convertible Senior Notes due October 2023, proceeds of which were used to pay down a portion of Atlantic Aviation's credit facility in October 2016. | |||||||||||||||
(7) Conformed to current period presentation for the adoption of ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. See Note 2, "Basis of Presentation", in our Notes to Consolidated Condensed Financial Statements in Part I of Form 10-Q for the quarter ended March 31, 2018. |
View original content:http://www.prnewswire.com/news-releases/mic-reports-first-quarter-2018-financial-results-and-strategic-update-300641503.html
SOURCE Macquarie Infrastructure Corporation
NEW YORK, April 25, 2018 /PRNewswire/ -- Attorney Advertising -- Bronstein, Gewirtz & Grossman, LLC notifies investors that a class action lawsuit has been filed against Macquarie Infrastructure Corporation ("Macquarie" or the "Company") (NYSE: MIC) and certain of its officers, on behalf of shareholders who purchased or otherwise acquired Macquarie securities between February 22, 2016 and February 21, 2018, both dates inclusive (the "Class Period"). Such investors are encouraged to join this case by visiting the firm's site: http://www.bgandg.com/mic.
This class action seeks to recover damages against Defendants for alleged violations of the federal securities laws under the Securities Exchange Act of 1934.
On February 21, 2018, Macquarie revealed negative Q4 results, including earnings per share below analysts' estimates and a substantial dividend cut. The Company said that its poor performance was due to a drop in demand for a specific fuel oil product, revealing the significance of that specific product to its business segment, despite previous statements advertising the stability of that segment. Following this news, Macquarie stock dropped to $37.41 per share on February 22, 2018.
A class action lawsuit has already been filed. If you wish to review a copy of the Complaint you can visit the firm's site: http://www.bgandg.com/mic or you may contact Peretz Bronstein, Esq. or his Investor Relations Analyst, Yael Hurwitz of Bronstein, Gewirtz & Grossman, LLC at 212-697-6484. If you suffered a loss in Macquarie you have until June 25, 2018 to request that the Court appoint you as lead plaintiff. Your ability to share in any recovery doesn't require that you serve as a lead plaintiff.
Bronstein, Gewirtz & Grossman, LLC is a corporate litigation boutique. Our primary expertise is the aggressive pursuit of litigation claims on behalf of our clients. In addition to representing institutions and other investor plaintiffs in class action security litigation, the firm's expertise includes general corporate and commercial litigation, as well as securities arbitration. Attorney advertising. Prior results do not guarantee similar outcomes.
Contact:
Bronstein, Gewirtz & Grossman, LLC
Peretz Bronstein or Yael Hurwitz
212-697-6484 | info@bgandg.com
View original content with multimedia:http://www.prnewswire.com/news-releases/shareholder-alert---bronstein-gewirtz--grossman-llc-notifies-investors-of-class-action-against-macquarie-infrastructure-corporation-mic--lead-plaintiff-deadline--june-25-2018-300636176.html
SOURCE Bronstein, Gewirtz & Grossman, LLC
DALLAS, March 9, 2018 /PRNewswire/ -- Alerian announced the results of the March quarterly review for the Alerian Index Series. All changes will be implemented as of the close of business on Friday, March 16, 2018.
There are no constituent changes to the Alerian MLP Infrastructure Index (AMZI), Alerian Natural Gas MLP Index (ANGI), Alerian Energy Infrastructure Index (AMEI), and the Alerian MLP Closed End Fund Index (AMCI).
In addition, each index will be rebalanced in accordance with their existing methodology. Constituent additions to and deletions from an index do not reflect an opinion by Alerian on the investment merits of the respective securities.
About Alerian
Alerian equips investors to make informed decisions about Master Limited Partnerships (MLPs) and energy infrastructure. Its benchmarks, including the flagship Alerian MLP Index (AMZ), are widely used by industry executives, investment professionals, research analysts, and national media to analyze relative performance. As of February 28, over $14 billion is directly tied to the Alerian Index Series through exchange-traded funds and notes, separately managed accounts, and structured products. For more information, including index values and constituents, research content, and announcements regarding rebalancings, please visit alerian.com.
View original content:http://www.prnewswire.com/news-releases/alerian-index-series-march-2018-index-review-300611251.html
SOURCE Alerian
NEW YORK, Feb. 21, 2018 /PRNewswire/ -- Macquarie Infrastructure Corporation (NYSE: MIC) today reported financial results for full year 2017 that included growth investments of more than $625.0 million and a cash dividend of $1.44 per share for the fourth quarter.
"The performance of our businesses in the fourth quarter and the full year 2017 resulted in year over year growth in cash generation of 8.2%, including the impact of a 2.9% increase in the weighted number of shares outstanding," said Christopher Frost, chief executive officer of MIC. "Effective deployment of a substantial amount of growth capital offset a slightly weaker than anticipated rate of organic growth. With the increase in cash generation, we are pleased to announce that the MIC board has approved a cash dividend for the fourth quarter that raises the total distribution for 2017 to $5.56 per share, consistent with our guidance for a year over year increase of 10%."
"While our results for 2017 were solid, in an effort to improve MIC's overall mix of business we are undertaking a review of strategic options available to us with respect to the Bayonne Energy Center, OMI Environmental Solutions and other smaller businesses in our portfolio," Frost noted. "Having largely completed the development of the Bayonne Energy Center as envisioned when we acquired the business in 2015, we believe now may be an opportune time to monetize a portion of it. To address changing demand drivers for certain liquid products, as we have in the past, we intend to repurpose certain of the assets of our bulk liquid terminals business as well. We believe these actions will position MIC to continue to deliver attractive total shareholder returns."
"In addition, we have made the decision to reduce our 2018 dividend in favor of internally funding the repurposing of the assets at International-Matex Tank Terminals and to take advantage of the incentives to invest in growth projects that are a part of recent tax reform," Frost added. "We believe that our guidance for a dividend of $1.00 per share, per quarter, in 2018 strikes a balance between continuing to return the majority of our Free Cash Flow to shareholders in the form of a dividend and strengthening our balance sheet in support of future dividend growth."
MIC reported fourth quarter and full year 2017 net income of $361.3 million and $456.1 million, respectively, an increase of 408% and 195% compared with $71.1 million and $154.9 million in the comparable periods in 2016. The increases in net income were primarily the result of changes in U.S. tax law that went into effect with the signing of the Tax Cuts and Jobs Act of 2017 ("Tax Act") in December of 2017. A reduction in the Company's net Deferred Tax Liability to reflect a reduction in the corporate federal income tax rate constituted the largest portion of the benefit.
Net income before taxes decreased to $61.8 million and $222.0 million, respectively, for the fourth quarter and full year in 2017, compared with $82.0 million and $226.1 million in comparable periods in 2016. The decrease in pre-tax net income reflects primarily higher interest expense in the fourth quarter and a decrease in other income related to the absence of insurance recoveries in 2017 in the full year period.
The Company reported generation of cash from operating activities of $131.8 million and $529.5 million in the quarter and full-year periods ended December 31, 2017, respectively, compared with $123.3 million and $560.3 million in the comparable periods in 2016. Cash from operating activities declined primarily as a result of changes in working capital related to fluctuations in the price of jet fuel and gas sold by certain of MIC's businesses.
MIC produced $135.5 million and $568.0 million of Adjusted Free Cash Flow in the fourth quarter and full year periods in 2017, respectively, up from $118.6 million and $510.2 million in the comparable periods in 2016. The aggregate increase in Adjusted Free Cash Flow of 14.2% and 11.3% for the quarter and full-year, respectively, was partially offset by an increase in the weighted average number of shares of MIC outstanding.
Fourth Quarter 2017 Dividend
The MIC board of directors has authorized a cash dividend of $1.44 per share for the fourth quarter of 2017. The dividend will be payable March 8, 2018 to shareholders of record on March 5, 2018. Including the dividend of $1.44, MIC will have distributed approximately 81.4% of the Adjusted Free Cash Flow generated during 2017 for a dividend coverage ratio of approximately 1.2 times.
Outlook
Taking into consideration the planned repurposing of certain of the assets of International-Matex Tank Terminals ("IMTT"), MIC is forecasting generation of consolidated earnings before interest, taxes, depreciation and amortization ("EBITDA") excluding non-cash items in a range of between $690.0 million and $720.0 million in 2018. The year over year decline reflects a decrease in EBITDA generated by IMTT, offset by continued increases at Atlantic Aviation, Contracted Power and MIC Hawaii. Atlantic Aviation is expected to benefit from ongoing increases in flight activity while Contracted Power is expected to benefit from the completion of the BEC II expansion project.
With respect to the Company's preliminary outlook for EBITDA excluding non-cash items in 2018, a reconciliation to net income (loss), the most comparable GAAP measure, is not available without unreasonable effort due to the Company's limited visibility into and inability to make accurate projections and estimates of items including management fees, hedging agreements, depreciation and any (benefit) provision for income taxes. These items may vary greatly from year to year and could significantly impact MIC's results as reported in accordance with GAAP.
MIC expects Free Cash Flow produced in 2018 to decline by between 8% and 10% versus 2017 including the impact of expected share issuance. The Company's forecast reflects primarily a reduction in cash generation by IMTT, increased interest expense and the near-term impact of tax reform. IMTT is forecast to generate a reduced amount of cash in 2018 as consequence of global shifts in refined petroleum product production and consumption that have reduced demand for residual and heavy oil and trading activity related to those products. IMTT's cash generating capacity will be lower while certain of its tanks are out of service for cleaning and repurposing.
Offsetting a portion of the anticipated decline in Free Cash Flow are contributions from the more than $625.0 million deployed in growth investments in 2017, together with the partial year impact of the pending Hawaii Gas rate case and potential capital deployment in 2018. The primary components of the 2017 capital deployment activity were:
MIC believes that the contribution to EBITDA from these investments will be approximately $60.0 million on an annualized basis.
"We believe that MIC's performance will continue to reflect the generally strong demand for the products and services its businesses provide," Frost said. "While we foresee a temporary downturn in the contribution from IMTT tied primarily to reduced demand for storage and handling of residual and heavy oil, we have a clear repurposing strategy with respect to capitalizing on our preeminent locations in the Lower Mississippi River and New York Harbor markets and taking advantage of positive demand trends in other products and segments of the bulk liquid marketplace."
The Company anticipates deploying approximately $350.0 million of growth capital per year in each of the next several years. Approximately half of the expected deployments in 2018 relate to residual expenditures for initiatives including previously granted lease extensions at Atlantic Aviation and the completion of BEC II. MIC anticipates funding the entirety of its planned 2018 deployments using internally generated resources including capital retained as a consequence of the dividend reduction, and potential proceeds from sales of non-core assets.
"We remain confident in our prospects and our ability to drive value for our shareholders. We have the financial and human capital to deploy in the construction or acquisition of quality, cash generative opportunities in each of our segments and look forward to making the most of favorable trends in those in 2018 and beyond," said Frost.
2017 Segment Cash Generation
MIC's fourth quarter and full-year results reflected continued strong performance by its airport services business, Atlantic Aviation, including contributions from two acquisitions completed in 2017. In May, Atlantic Aviation acquired the fixed base operator at Waterbury-Oxford Airport in Oxford, CT and acquired a fixed base operator at Miami Opa-Locka airport in Opa-Locka, FL in September. Excluding interest rate swap breakage fees and the premium paid on an interest rate cap associated with the refinancing of the business in 2016, Free Cash Flow generated by Atlantic Aviation decreased by 2.3% in the fourth quarter and increased 9.5% for the full year versus the prior comparable periods. The period over period decrease in Free Cash Flow generation in the fourth quarter was attributable in part to the timing of certain state income tax payments. Atlantic Aviation's performance was underpinned by growth in general aviation flight activity in the U.S. of approximately 3.6% in 2017.
The Company's bulk liquid terminals business, IMTT, benefitted from an acquisition of a portfolio of seven terminals in August of 2017 and generated increases in Free Cash Flow of 7.6% and 9.4%, respectively, in the fourth quarter and full year periods versus the comparable periods in 2016. Contributions from the acquired terminals helped offset non-renewal of a small number of primarily residual and heavy oil contracts late in the year and a full-year loss at IMTT subsidiary OMI Environmental Services, Inc. ("OMI"). OMI generates revenue primarily from oil spill clean-up and tank cleaning and inspection activities.
MIC's Contracted Power segment includes a thermal facility in Bayonne, NJ, the Bayonne Energy Center ("BEC"), and a portfolio of renewable facilities primarily in the southwest U.S. Together, these produced growth in segment Free Cash Flow of 15.7% in the fourth quarter and 3.4% for the full year versus the prior comparable periods. The increases in cash generation were the result of a full-year contribution from the acquisition of a renewable facility in 2016 and additional tariff-based services completed in 2017, together with receipt of development profits related to the sale of wind projects during the year. The increases were offset by higher interest expense and by mild weather in the Northeast that reduced demand for power from BEC as well as unplanned outages that had an adverse impact on portions of the renewables portfolio.
MIC Hawaii comprises Hawaii Gas, a mechanical contractor and several renewable power facilities, all located in Hawaii. Free Cash Flow produced by the segment increased by 8.0% in the fourth quarter and by 6.6% for the full year compared with 2016. The increases were attributable to a reduction in maintenance capital expenditures and the absence of a cash pension contribution, partially offset by negative Free Cash Flow generation by the mechanical contracting business reflecting primarily cost overruns on projects with fixed revenue.
MIC's Corporate and Other segment comprises primarily interest expense on holding company level debt, investments in various development platforms and costs not otherwise covered by the fee paid to MIC's external manager. The segment recorded positive Free Cash Flow in the fourth quarter of $2.4 million compared with negative Free Cash Flow of $5.2 million in the prior comparable quarter primarily as a result of a current federal income tax benefit that reflects tax sharing payments made to MIC by its subsidiaries. For the full year 2017, the Corporate and Other segment recorded negative Free Cash Flow of $21.0 million compared with negative Free Cash Flow of $15.3 million in 2016 as a result of increased costs related to both acquisitions and the implementation of the Company's shared services center.
"Each of our larger businesses produced solid growth in cash generation including the impact of capital deployed in 2017," noted Frost. "Portfolio wide, aggregate same store growth in Free Cash Flow was approximately 3% for the year with capital deployment contributing the balance. The deployment of growth capital relatively late in the year and in some case into projects that will not be in service until this year means that those deployments will have a larger impact on our 2018 results."
Impact of Tax Reform
At year-end 2016, MIC had gross Net Operating Loss ("NOL") carryforwards of approximately $400.0 million. At year-end 2017, MIC's gross NOL was approximately $350.0 million with $50.0 million having been used to offset current federal income taxes of approximately $63.0 million. As a consequence of the recent reforms to the U.S. Tax Code and their impact on the utilization of NOLs, MIC does not foresee having a material federal income tax liability prior to 2020.
The Tax Act includes a provision that allows for immediate expensing, or bonus depreciation, of investments in qualifying capital assets. MIC expects a substantial portion of its approximately $350.0 million per year of growth capital deployments over the 2018 – 2021 time period will be into qualifying assets. If the Company is successful in these efforts, it expects they will shield it from any material federal income tax liability until 2022.
The enactment of the Tax Act has an immediate impact on two of MIC's businesses. Although the regulated portion of MIC's Hawaii Gas business is expected to realize a year over year increase in revenue as a result of the pending rate case, any increase will be partially offset as a consequence of the business collecting a smaller amount of federal taxes. The revenue reduction will be offset by a corresponding decrease in Hawaii Gas' standalone federal income tax liability. Tax reform should have a positive impact on the unregulated portion of MIC Hawaii.
Second, IMTT has been capitalized in part using tax exempt bonds. The indenture agreements related to those bonds provide that the bondholder must be compensated for a reduction in federal tax rates. As a result, the interest on the bonds will increase by approximately 0.6% to compensate the bondholders for the reduced tax advantage under the new federal income tax regime.
Summary Financial Information |
||||||||||||||||||||||||||||||||
Quarter Ended |
Change |
Year Ended |
Change | |||||||||||||||||||||||||||||
2017 |
2016 |
$ |
% |
2017 |
2016 |
$ |
% | |||||||||||||||||||||||||
($ In Thousands, Except Share and Per Share Data) (Unaudited) | ||||||||||||||||||||||||||||||||
GAAP Metrics |
||||||||||||||||||||||||||||||||
Net income |
$ |
361,276 |
$ |
71,131 |
290,145 |
NM |
$ |
456,112 |
$ |
154,869 |
301,243 |
194.5 |
||||||||||||||||||||
Weighted average number of shares outstanding: basic |
84,572,725 |
81,853,027 |
2,719,698 |
3.3 |
83,204,404 |
80,892,654 |
2,311,750 |
2.9 |
||||||||||||||||||||||||
Net income per share attributable to MIC |
$ |
4.13 |
$ |
0.89 |
3.24 |
NM |
$ |
5.42 |
$ |
1.93 |
3.49 |
180.8 |
||||||||||||||||||||
Cash provided by operating activities |
131,790 |
123,332 |
8,458 |
6.9 |
529,459 |
560,320 |
(30,861) |
(5.5) |
||||||||||||||||||||||||
MIC Non-GAAP Metrics |
||||||||||||||||||||||||||||||||
EBITDA excluding non-cash items(1)(2) |
$ |
177,980 |
$ |
166,006 |
11,974 |
7.2 |
$ |
711,903 |
$ |
695,588 |
16,315 |
2.3 |
||||||||||||||||||||
Shared service implementation costs(3) |
1,655 |
— |
1,655 |
NM |
8,502 |
— |
8,502 |
NM |
||||||||||||||||||||||||
Investment and acquisition costs(3) |
1,381 |
— |
1,381 |
NM |
9,254 |
— |
9,254 |
NM |
||||||||||||||||||||||||
Adjusted EBITDA excluding non-cash items(2)(3) |
$ |
181,016 |
$ |
166,006 |
15,010 |
9.0 |
$ |
729,659 |
$ |
695,588 |
34,071 |
4.9 |
||||||||||||||||||||
Cash interest(4) |
$ |
(28,106) |
$ |
(25,922) |
(2,184) |
(8.4) |
$ |
(107,541) |
$ |
(107,930) |
389 |
0.4 |
||||||||||||||||||||
Cash taxes |
(2,667) |
(2,027) |
(640) |
(31.6) |
(11,160) |
(7,310) |
(3,850) |
(52.7) |
||||||||||||||||||||||||
Cash pension contribution |
— |
(3,500) |
3,500 |
100.0 |
— |
(3,500) |
3,500 |
100.0 |
||||||||||||||||||||||||
Maintenance capital expenditures(5) |
(12,140) |
(13,478) |
1,338 |
9.9 |
(35,202) |
(58,203) |
23,001 |
39.5 |
||||||||||||||||||||||||
Noncontrolling interest(6) |
(2,583) |
(2,446) |
(137) |
(5.6) |
(7,806) |
(8,400) |
594 |
7.1 |
||||||||||||||||||||||||
Adjusted Free Cash Flow(3)(4) |
$ |
135,520 |
$ |
118,633 |
16,887 |
14.2 |
$ |
567,950 |
$ |
510,245 |
57,705 |
11.3 |
||||||||||||||||||||
______________________ | ||||||||||||||||||||||||||||||||
NM — Not meaningful | ||||||||||||||||||||||||||||||||
(1) EBITDA excluding non-cash items is calculated as net income before interest expense, taxes, depreciation and amortization expense, management fees, pension expense and other non-cash (income) expense recorded in the consolidated statement of operations. See below for reconciliation of net income (loss) to EBITDA excluding non-cash items. | ||||||||||||||||||||||||||||||||
(2) For the quarter and year ended December 31, 2016, EBITDA excluding non-cash items included $1.0 million and $16.5 million, respectively, of insurance recoveries related to damaged docks at IMTT. | ||||||||||||||||||||||||||||||||
(3) For the quarter and year ended December 31, 2017, Adjusted EBITDA excluding non-cash items and Adjusted Free Cash Flow exclude costs relating to implementation of our shared services initiative and costs relating to certain investment and acquisition activities. | ||||||||||||||||||||||||||||||||
(4) Cash interest is calculated as interest expense, net, excluding the impact of non-cash adjustments for unrealized (gains) losses from derivative instruments, amortization of deferred financing costs and the amortization of debt discount recorded in the consolidated statement of operations. For purposes of calculating Adjusted Free Cash Flow, for the quarter and year ended December 31, 2016, cash interest excludes $17.8 million for the payment of interest rate swap breakage fees and $8.6 million for the payment of interest rate cap premium. | ||||||||||||||||||||||||||||||||
(5) For the year ended December 31, 2016, maintenance capital expenditures included $13.9 million associated with the rebuilding of damaged docks, the majority of which were insured losses, at IMTT. | ||||||||||||||||||||||||||||||||
(6) Noncontrolling interest adjustment represents the portion of Free Cash Flow not attributable to MIC's ownership interest. |
Conference Call and Webcast
When: Management has scheduled a conference call for 8:00 a.m. Eastern Time on Thursday, February 22, 2018 during which it will review and comment on MIC's results for the fourth quarter and full year 2017.
How: To listen to the conference call please dial +1(650) 521-5252 or +1(877) 852-2928 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 prior to the conference call.
Replay: For interested individuals unable to participate in the live conference call, a replay will be available after 2:00 p.m. on February 22, 2018 through midnight on March 1, 2018, at +1(404) 537-3406 or +1(855) 859-2056, Passcode: 9489207. An online archive of the webcast will be available on the Company's website for one year following the call.
About MIC
MIC owns and operates a diversified group of businesses providing basic services to customers in the United States. Its businesses consist of a bulk liquid terminals business, International-Matex Tank Terminals, an airport services business, Atlantic Aviation, entities comprising an energy services, production and distribution segment, MIC Hawaii, and entities comprising a Contracted Power segment. For additional information, please visit the MIC website at www.macquarie.com/mic. MIC-G
Use of Non-GAAP Measures
Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") excluding non-cash items, Free Cash Flow and Proportionately Combined Metrics
In addition to MIC's results under U.S. GAAP, the Company uses certain non-GAAP measures to assess the performance and prospects of its businesses. In particular, MIC uses EBITDA excluding non-cash items, Free Cash Flow and certain proportionately combined financial metrics. Proportionately combined financial metrics reflect the Company's proportionate interest in its wind and solar facilities.
MIC measures EBITDA excluding non-cash items as a reflection of its businesses' ability to effectively manage the volume of products sold or services provided, the operating margin earned on those transactions and the management of operating expenses independent of the capitalization and tax attributes of those businesses. The Company believes investors use EBITDA excluding non-cash items primarily as a measure to assess the operating performance of its businesses and to make comparisons with the operating performance of other businesses whose depreciation and amortization expense may vary widely from MIC's, particularly where acquisitions and other non-operating factors are involved. MIC defines EBITDA excluding non-cash items as net income (loss) or earnings — the most comparable GAAP measure — before interest, taxes, depreciation and amortization and non-cash items including impairments, unrealized derivative gains and losses, adjustments for other non-cash items and pension expenses reflected in the statements of operations. EBITDA excluding non-cash items also excludes base management fees and performance fees, if any, whether paid in cash or stock.
Given MIC's varied ownership levels in its Contracted Power and MIC Hawaii segments, together with obligations to report the results of these businesses on a consolidated basis, GAAP measures such as net income (loss) do not fully reflect all of the items management considers in assessing the amount of cash generated based on its proportionate interest in its wind and solar facilities. The Company notes that the proportionately combined metrics used 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 supplemental measure and not in lieu of its financial results reported under GAAP.
The Company's businesses are characteristically owners of high-value, long-lived assets capable of generating substantial Free Cash Flow. MIC defines Free Cash Flow as cash from operating activities — the most comparable GAAP measure — which includes cash paid for interest, taxes and pension contributions, less maintenance capital expenditures, which includes principal repayments on capital lease obligations used to fund maintenance capital expenditures, and excludes changes in working capital.
Management uses Free Cash Flow as a measure of its ability to provide investors with an attractive risk-adjusted total return by sustaining and potentially increasing MIC's quarterly cash dividend and funding a portion of the Company's growth. GAAP metrics such as net income (loss) do not provide MIC management with the same level of visibility into the performance and prospects of the business as a result of: (i) the capital intensive nature of MIC's businesses and the generation of non-cash depreciation and amortization; (ii) shares issued to the Company's external manager under the Management Services Agreement; (iii) the Company's ability to defer all or a portion of current federal income taxes; (iv) non-cash unrealized gains or losses on derivative instruments; (v) amortization of tolling liabilities; (vi) gains (losses) on disposal of assets; and (vii) pension expenses. Pension expenses primarily consist of interest expense, expected return on plan assets and amortization of actuarial and performance gains and losses. Any cash contributions to pension plans are reflected as a reduction to Free Cash Flow. Management believes that external consumers of its financial statements, including investors and research analysts, use Free Cash Flow both to assess the Company's performance and as an indicator of its success in generating an attractive risk-adjusted total return.
In its Report on Form 10-K, the Company has disclosed Free Cash Flow on a consolidated basis and for each of its operating segments and MIC Corporate. Management believes that both EBITDA excluding non-cash items and Free Cash Flow support a more complete and accurate understanding of the financial and operating performance of its businesses than would otherwise be achieved using GAAP results alone.
Free Cash Flow does not take into consideration required payments on indebtedness and other fixed obligations or other cash items that are excluded from MIC's definition of Free Cash Flow. Management notes that Free Cash Flow may be calculated differently by other companies thereby limiting its usefulness as a comparative measure. Free Cash Flow should be used as a supplemental measure and not in lieu of its financial results reported under GAAP.
See also "Reconciliation of Consolidated Net Income (Loss) to EBITDA excluding non-cash items and a Reconciliation from Cash Provided by Operating Activities to Free Cash Flow" below.
Classification of Maintenance Capital Expenditures and Growth Capital Expenditures
MIC categorizes capital expenditures as either maintenance capital expenditures or growth capital expenditures. As neither maintenance capital expenditure nor growth capital expenditure is a GAAP term, the Company has adopted a framework to categorize specific capital expenditures. In broad terms, maintenance capital expenditures primarily maintain MIC's businesses at current levels of operations, capability, profitability or cash flow, while growth capital expenditures primarily provide new or enhanced levels of operations, capability, profitability or cash flow. Management considers a number of factors in determining whether a specific capital expenditure will be classified as maintenance or growth.
MIC does not bifurcate specific capital expenditures into maintenance and growth components. Each discrete capital expenditure is considered within the above framework and the entire capital expenditure is classified as either maintenance or growth.
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 release 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; risks associated with development, investment and expansion in the power industry; 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 and other commodity costs; its ability to recover increases in costs from customers, cybersecurity risks, work interruptions or other labor stoppages; risks related to its shared services initiative; 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 Corporation 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 Corporation.
MACQUARIE INFRASTRUCTURE CORPORATION | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
($ in Thousands, Except Share Data) | ||||||||
As of December 31, | ||||||||
2017 |
2016 | |||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ |
47,121 |
$ |
44,767 |
||||
Restricted cash |
24,963 |
16,420 |
||||||
Accounts receivable, less allowance for doubtful accounts of $895 and $1,434, respectively |
158,152 |
124,846 |
||||||
Inventories |
36,955 |
31,461 |
||||||
Prepaid expenses |
14,685 |
14,561 |
||||||
Fair value of derivative instruments |
11,965 |
5,514 |
||||||
Other current assets |
13,804 |
7,099 |
||||||
Total current assets |
307,645 |
244,668 |
||||||
Property, equipment, land and leasehold improvements, net |
4,659,614 |
4,346,536 |
||||||
Investment in unconsolidated business |
9,526 |
8,835 |
||||||
Goodwill |
2,068,668 |
2,024,409 |
||||||
Intangible assets, net |
914,098 |
888,971 |
||||||
Fair value of derivative instruments |
24,455 |
30,781 |
||||||
Other noncurrent assets |
24,945 |
15,053 |
||||||
Total assets |
$ |
8,008,951 |
$ |
7,559,253 |
||||
LIABILITIES AND STOCKHOLDERS' EQUITY |
||||||||
Current liabilities: |
||||||||
Due to Manager – related party |
$ |
5,577 |
$ |
6,594 |
||||
Accounts payable |
60,585 |
69,566 |
||||||
Accrued expenses |
89,496 |
83,734 |
||||||
Current portion of long-term debt |
50,835 |
40,016 |
||||||
Fair value of derivative instruments |
1,710 |
9,297 |
||||||
Other current liabilities |
47,762 |
41,802 |
||||||
Total current liabilities |
255,965 |
251,009 |
||||||
Long-term debt, net of current portion |
3,530,311 |
3,039,966 |
||||||
Deferred income taxes |
632,070 |
896,116 |
||||||
Fair value of derivative instruments |
4,668 |
5,966 |
||||||
Tolling agreements – noncurrent |
52,595 |
60,373 |
||||||
Other noncurrent liabilities |
182,639 |
158,289 |
||||||
Total liabilities |
4,658,248 |
4,411,719 |
||||||
Commitments and contingencies |
— |
— |
||||||
Stockholders' equity: |
||||||||
Common stock ($0.001 par value; 500,000,000 authorized; 84,733,957 shares issued and outstanding at December 31, 2017 and 82,047,526 shares issued and outstanding at December 31, 2016) |
$ |
85 |
$ |
82 |
||||
Additional paid in capital |
1,840,033 |
2,089,407 |
||||||
Accumulated other comprehensive loss |
(29,993) |
(28,960) |
||||||
Retained earnings |
1,343,567 |
892,365 |
||||||
Total stockholders' equity |
3,153,692 |
2,952,894 |
||||||
Noncontrolling interests |
197,011 |
194,640 |
||||||
Total equity |
3,350,703 |
3,147,534 |
||||||
Total liabilities and equity |
$ |
8,008,951 |
$ |
7,559,253 |
MACQUARIE INFRASTRUCTURE CORPORATION | |||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||
($ in Thousands, Except Share and Per Share Data) | |||||||||||
Year Ended December 31, | |||||||||||
2017 |
2016 |
2015 | |||||||||
Revenue |
|||||||||||
Service revenue |
$ |
1,445,832 |
$ |
1,288,562 |
$ |
1,288,501 | |||||
Product revenue |
368,881 |
363,169 |
350,749 | ||||||||
Total revenue |
1,814,713 |
1,651,731 |
1,639,250 | ||||||||
Costs and expenses |
|||||||||||
Cost of services |
624,214 |
524,423 |
551,029 | ||||||||
Cost of product sales |
164,311 |
142,731 |
168,954 | ||||||||
Selling, general and administrative |
331,345 |
303,033 |
304,862 | ||||||||
Fees to Manager – related party |
71,388 |
68,486 |
354,959 | ||||||||
Depreciation |
234,164 |
226,492 |
215,243 | ||||||||
Amortization of intangibles |
68,253 |
65,425 |
101,435 | ||||||||
Total operating expenses |
1,493,675 |
1,330,590 |
1,696,482 | ||||||||
Operating income (loss) |
321,038 |
321,141 |
(57,232) | ||||||||
Other income (expense) |
|||||||||||
Interest income |
199 |
132 |
55 | ||||||||
Interest expense(1) |
(110,602) |
(116,933) |
(123,079) | ||||||||
Other income, net |
11,323 |
21,786 |
1,288 | ||||||||
Net income (loss) before income taxes |
221,958 |
226,126 |
(178,968) | ||||||||
Benefit (provision) for income taxes |
234,154 |
(71,257) |
65,161 | ||||||||
Net income (loss) |
$ |
456,112 |
$ |
154,869 |
$ |
(113,807) | |||||
Less: net income (loss) attributable to noncontrolling interests |
4,910 |
(1,512) |
(5,270) | ||||||||
Net income (loss) attributable to MIC |
$ |
451,202 |
$ |
156,381 |
$ |
(108,537) | |||||
Basic income (loss) per share attributable to MIC |
$ |
5.42 |
$ |
1.93 |
$ |
(1.39) | |||||
Weighted average number of shares outstanding: basic |
83,204,404 |
80,892,654 |
77,997,826 | ||||||||
Diluted income (loss) per share attributable to MIC |
$ |
5.13 |
$ |
1.85 |
$ |
(1.39) | |||||
Weighted average number of shares outstanding: diluted |
91,073,362 |
82,218,627 |
77,997,826 | ||||||||
Cash dividends declared per share |
$ |
5.56 |
$ |
5.05 |
$ |
4.46 | |||||
(1) Interest expense includes gains on derivative instruments of $3.0 million and losses on derivative instruments of $5.0 million and $28.5 million for the years ended December 31, 2017, 2016 and 2015, respectively. |
MACQUARIE INFRASTRUCTURE CORPORATION | ||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||
($ in Thousands) | ||||||||||||
Year Ended December 31, | ||||||||||||
2017 |
2016 |
2015 | ||||||||||
Operating activities |
||||||||||||
Net income (loss) |
$ |
456,112 |
$ |
154,869 |
$ |
(113,807) |
||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
||||||||||||
Depreciation and amortization of property and equipment |
234,164 |
226,492 |
215,243 |
|||||||||
Amortization of intangible assets |
68,253 |
65,425 |
101,435 |
|||||||||
Amortization of debt financing costs |
8,700 |
21,041 |
9,075 |
|||||||||
Amortization of debt discount |
3,266 |
1,007 |
— |
|||||||||
Adjustments to derivative instruments |
(9,010) |
(54,549) |
(47,208) |
|||||||||
Fees to Manager – related party |
71,388 |
68,486 |
287,139 |
|||||||||
Deferred taxes |
(245,314) |
63,947 |
(58,734) |
|||||||||
Pension expense |
8,106 |
8,601 |
7,300 |
|||||||||
Other non-cash income, net |
(2,463) |
(1,370) |
(1,047) |
|||||||||
Changes in other assets and liabilities, net of acquisitions: |
||||||||||||
Restricted cash |
425 |
525 |
722 |
|||||||||
Accounts receivable |
(31,444) |
(8,415) |
5,418 |
|||||||||
Inventories |
(6,182) |
(2,343) |
(84) |
|||||||||
Prepaid expenses and other current assets |
(7,044) |
7,794 |
(6,964) |
|||||||||
Due to Manager – related party |
(130) |
135 |
(33) |
|||||||||
Accounts payable and accrued expenses |
(7,073) |
4,686 |
(8,002) |
|||||||||
Income taxes payable |
464 |
8,251 |
(5,926) |
|||||||||
Pension contribution |
— |
(3,500) |
— |
|||||||||
Other, net |
(12,759) |
(762) |
(3,371) |
|||||||||
Net cash provided by operating activities |
529,459 |
560,320 |
381,156 |
|||||||||
Investing activities |
||||||||||||
Acquisitions of businesses and investments, net of cash acquired |
(209,962) |
(69,168) |
(266,895) |
|||||||||
Purchases of property and equipment |
(340,952) |
(314,684) |
(194,148) |
|||||||||
Proceeds from insurance claim |
83 |
11,068 |
— |
|||||||||
Loan to project developer |
(23,341) |
(5,000) |
— |
|||||||||
Loan repayment from project developer |
17,079 |
— |
— |
|||||||||
Change in restricted cash |
(9,295) |
(84) |
10,559 |
|||||||||
Other, net |
272 |
1,023 |
1,668 |
|||||||||
Net cash used in investing activities |
(566,116) |
(376,845) |
(448,816) |
MACQUARIE INFRASTRUCTURE CORPORATION | ||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS – (continued) | ||||||||||||
($ in Thousands) | ||||||||||||
Year Ended December 31, | ||||||||||||
2017 |
2016 |
2015 | ||||||||||
Financing activities |
||||||||||||
Proceeds from long-term debt |
$ |
931,001 |
$ |
1,311,000 |
$ |
2,486,569 |
||||||
Payment of long-term debt |
(440,950) |
(1,476,228) |
(2,554,552) |
|||||||||
Proceeds from the issuance of shares |
6,060 |
12,623 |
492,433 |
|||||||||
Dividends paid to common stockholders |
(452,949) |
(396,093) |
(341,560) |
|||||||||
Contributions received from noncontrolling interests |
458 |
15,431 |
532 |
|||||||||
Purchase of noncontrolling interest |
— |
(9,909) |
— |
|||||||||
Distributions paid to noncontrolling interests |
(3,936) |
(4,630) |
(2,546) |
|||||||||
Offering and equity raise costs paid |
(466) |
(1,601) |
(16,984) |
|||||||||
Debt financing costs paid |
(717) |
(17,392) |
(23,816) |
|||||||||
Proceeds from the issuance of convertible senior notes |
— |
402,500 |
— |
|||||||||
Change in restricted cash |
397 |
5,587 |
5,166 |
|||||||||
Payment of capital lease obligations |
(398) |
(2,601) |
(2,346) |
|||||||||
Net cash provided by (used in) financing activities |
38,500 |
(161,313) |
42,896 |
|||||||||
Effect of exchange rate changes on cash and |
511 |
211 |
(856) |
|||||||||
Net change in cash and cash equivalents |
2,354 |
22,373 |
(25,620) |
|||||||||
Cash and cash equivalents, beginning of period |
44,767 |
22,394 |
48,014 |
|||||||||
Cash and cash equivalents, end of period |
$ |
47,121 |
$ |
44,767 |
$ |
22,394 |
||||||
Supplemental disclosures of cash flow information |
||||||||||||
Non-cash investing and financing activities: |
||||||||||||
Accrued financing costs |
$ |
107 |
$ |
3 |
$ |
3 |
||||||
Accrued purchases of property and equipment |
$ |
24,940 |
$ |
28,228 |
$ |
23,396 |
||||||
Acquisition of equipment through capital leases |
$ |
— |
$ |
— |
$ |
398 |
||||||
Issuance of shares to Manager |
$ |
72,274 |
$ |
135,345 |
$ |
218,645 |
||||||
Issuance of shares to independent directors |
$ |
681 |
$ |
750 |
$ |
750 |
||||||
Issuance of shares for acquisition of business |
$ |
125,000 |
$ |
— |
$ |
— |
||||||
Conversion of convertible senior notes to shares |
$ |
20 |
$ |
4 |
$ |
25 |
||||||
Conversion of LLC interests to common stock |
$ |
— |
$ |
— |
$ |
79 |
||||||
Conversion of LLC interests to additional paid in capital |
$ |
— |
$ |
— |
$ |
2,428,334 |
||||||
Distributions payable to noncontrolling interests |
$ |
22 |
$ |
42 |
$ |
33 |
||||||
Taxes paid (refund), net |
$ |
10,704 |
$ |
(898) |
$ |
6,654 |
||||||
Interest paid |
$ |
112,132 |
$ |
108,737 |
$ |
109,450 |
MACQUARIE INFRASTRUCTURE CORPORATION | ||||||||||||||||||||||||||||||||
CONSOLIDATED STATEMENT OF OPERATIONS – MD&A | ||||||||||||||||||||||||||||||||
Quarter Ended |
Change |
Year Ended |
Change | |||||||||||||||||||||||||||||
2017 |
2016 |
$ |
% |
2017 |
2016 |
$ |
% | |||||||||||||||||||||||||
($ In Thousands, Except Share and Per Share Data) (Unaudited) | ||||||||||||||||||||||||||||||||
Revenue |
||||||||||||||||||||||||||||||||
Service revenue |
$ |
378,763 |
$ |
346,125 |
32,638 |
9.4 |
$ |
1,445,832 |
$ |
1,288,562 |
157,270 |
12.2 |
||||||||||||||||||||
Product revenue |
92,442 |
91,116 |
1,326 |
1.5 |
368,881 |
363,169 |
5,712 |
1.6 |
||||||||||||||||||||||||
Total revenue |
471,205 |
437,241 |
33,964 |
7.8 |
1,814,713 |
1,651,731 |
162,982 |
9.9 |
||||||||||||||||||||||||
Costs and expenses |
||||||||||||||||||||||||||||||||
Cost of services |
169,176 |
152,591 |
(16,585) |
(10.9) |
624,214 |
524,423 |
(99,791) |
(19.0) |
||||||||||||||||||||||||
Cost of product sales |
41,168 |
34,808 |
(6,360) |
(18.3) |
164,311 |
142,731 |
(21,580) |
(15.1) |
||||||||||||||||||||||||
Selling, general and administrative |
86,528 |
80,851 |
(5,677) |
(7.0) |
331,345 |
303,033 |
(28,312) |
(9.3) |
||||||||||||||||||||||||
Fees to Manager - related party |
16,778 |
18,916 |
2,138 |
11.3 |
71,388 |
68,486 |
(2,902) |
(4.2) |
||||||||||||||||||||||||
Depreciation |
61,411 |
54,367 |
(7,044) |
(13.0) |
234,164 |
226,492 |
(7,672) |
(3.4) |
||||||||||||||||||||||||
Amortization of intangibles |
17,333 |
15,508 |
(1,825) |
(11.8) |
68,253 |
65,425 |
(2,828) |
(4.3) |
||||||||||||||||||||||||
Total operating expenses |
392,394 |
357,041 |
(35,353) |
(9.9) |
1,493,675 |
1,330,590 |
(163,085) |
(12.3) |
||||||||||||||||||||||||
Operating income |
78,811 |
80,200 |
(1,389) |
(1.7) |
321,038 |
321,141 |
(103) |
— |
||||||||||||||||||||||||
Other income (expense) |
||||||||||||||||||||||||||||||||
Interest (expense) income, net(1) |
(20,403) |
382 |
(20,785) |
NM |
(110,403) |
(116,801) |
6,398 |
5.5 |
||||||||||||||||||||||||
Other income, net |
3,430 |
1,397 |
2,033 |
145.5 |
11,323 |
21,786 |
(10,463) |
(48.0) |
||||||||||||||||||||||||
Net income before income taxes |
61,838 |
81,979 |
(20,141) |
(24.6) |
221,958 |
226,126 |
(4,168) |
(1.8) |
||||||||||||||||||||||||
Benefit (provision) for income taxes |
299,438 |
(10,848) |
310,286 |
NM |
234,154 |
(71,257) |
305,411 |
NM |
||||||||||||||||||||||||
Net income |
$ |
361,276 |
$ |
71,131 |
290,145 |
NM |
$ |
456,112 |
$ |
154,869 |
301,243 |
194.5 |
||||||||||||||||||||
Less: net income (loss) attributable to noncontrolling |
12,204 |
(1,677) |
(13,881) |
NM |
4,910 |
(1,512) |
(6,422) |
NM |
||||||||||||||||||||||||
Net income attributable to MIC |
$ |
349,072 |
$ |
72,808 |
276,264 |
NM |
$ |
451,202 |
$ |
156,381 |
294,821 |
188.5 |
||||||||||||||||||||
Basic income per share attributable to MIC |
$ |
4.13 |
$ |
0.89 |
3.24 |
NM |
$ |
5.42 |
$ |
1.93 |
3.49 |
180.8 |
||||||||||||||||||||
Weighted average number of shares outstanding: basic |
84,572,725 |
81,853,027 |
2,719,698 |
3.3 |
83,204,404 |
80,892,654 |
2,311,750 |
2.9 |
||||||||||||||||||||||||
____________________ | ||||||||||||||||||||||||||||||||
NM — Not meaningful | ||||||||||||||||||||||||||||||||
(1) Interest expense, net, includes gains on derivative instruments of $9.9 million and $3.0 million for the quarter and year ended December 31, 2017, respectively. For the quarter and year ended December 31, 2016, interest (expense) income, net, includes gains on derivative instruments of $38.0 million and losses on derivative instruments of $5.0 million, respectively. |
MACQUARIE INFRASTRUCTURE CORPORATION | ||||||||||||||||||||||||||||||||
RECONCILIATION OF CONSOLIDATED NET INCOME TO EBITDA EXCLUDING NON-CASH | ||||||||||||||||||||||||||||||||
ITEMS AND A RECONCILIATION FROM CASH PROVIDED BY OPERATING ACTIVITIES TO | ||||||||||||||||||||||||||||||||
FREE CASH FLOW | ||||||||||||||||||||||||||||||||
Quarter Ended |
Change |
Year Ended |
Change | |||||||||||||||||||||||||||||
2017 |
2016 |
$ |
% |
2017 |
2016 |
$ |
% | |||||||||||||||||||||||||
($ In Thousands) (Unaudited) | ||||||||||||||||||||||||||||||||
Net income |
$ |
361,276 |
$ |
71,131 |
$ |
456,112 |
$ |
154,869 |
||||||||||||||||||||||||
Interest expense (income), net(1) |
20,403 |
(382) |
110,403 |
116,801 |
||||||||||||||||||||||||||||
(Benefit) provision for income taxes |
(299,438) |
10,848 |
(234,154) |
71,257 |
||||||||||||||||||||||||||||
Depreciation |
61,411 |
54,367 |
234,164 |
226,492 |
||||||||||||||||||||||||||||
Amortization of intangibles |
17,333 |
15,508 |
68,253 |
65,425 |
||||||||||||||||||||||||||||
Fees to Manager – related party |
16,778 |
18,916 |
71,388 |
68,486 |
||||||||||||||||||||||||||||
Pension expense(2) |
1,625 |
2,088 |
8,106 |
8,601 |
||||||||||||||||||||||||||||
Other non-cash income, net(3) |
(1,408) |
(6,470) |
(2,369) |
(16,343) |
||||||||||||||||||||||||||||
EBITDA excluding non-cash items(4) |
$ |
177,980 |
$ |
166,006 |
11,974 |
7.2 |
$ |
711,903 |
$ |
695,588 |
16,315 |
2.3 |
||||||||||||||||||||
EBITDA excluding non-cash items(4) |
$ |
177,980 |
$ |
166,006 |
$ |
711,903 |
$ |
695,588 |
||||||||||||||||||||||||
Interest (expense) income, net(1) |
(20,403) |
382 |
(110,403) |
(116,801) |
||||||||||||||||||||||||||||
Adjustments to derivative instruments recorded in interest expense(1) |
(10,828) |
(40,816) |
(9,104) |
(13,177) |
||||||||||||||||||||||||||||
Amortization of debt financing costs(1) |
2,236 |
13,505 |
8,700 |
21,041 |
||||||||||||||||||||||||||||
Amortization of debt discount(1) |
889 |
1,007 |
3,266 |
1,007 |
||||||||||||||||||||||||||||
Interest rate swap breakage fees |
— |
(17,770) |
— |
(17,770) |
||||||||||||||||||||||||||||
Interest rate cap premium |
— |
(8,629) |
— |
(8,629) |
||||||||||||||||||||||||||||
Provision for current income taxes |
(2,667) |
(2,027) |
(11,160) |
(7,310) |
||||||||||||||||||||||||||||
Pension contribution |
— |
(3,500) |
— |
(3,500) |
||||||||||||||||||||||||||||
Changes in working capital |
(15,417) |
15,174 |
(63,743) |
9,871 |
||||||||||||||||||||||||||||
Cash provided by operating activities |
131,790 |
123,332 |
529,459 |
560,320 |
||||||||||||||||||||||||||||
Changes in working capital |
15,417 |
(15,174) |
63,743 |
(9,871) |
||||||||||||||||||||||||||||
Maintenance capital expenditures(5) |
(12,140) |
(13,478) |
(35,202) |
(58,203) |
||||||||||||||||||||||||||||
Free cash flow |
$ |
135,067 |
$ |
94,680 |
40,387 |
42.7 |
$ |
558,000 |
$ |
492,246 |
65,754 |
13.4 |
||||||||||||||||||||
_________________ | ||||||||||||||||||||||||||||||||
(1) Interest expense (income), net, includes adjustments to derivative instruments, non-cash amortization of deferred financing fees and non-cash amortization of debt discount related to the 2.00% Convertible Senior Notes due October 2023. Interest expense (income), net, also included a non-cash write-off of deferred financing fees related to the February 2016 refinancing at Hawaii Gas and the October 2016 refinancing at Atlantic Aviation. | ||||||||||||||||||||||||||||||||
(2) Pension expense primarily consists of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses. Any cash contributions to pension plans are not included in pension expense, but rather reflected as a reduction to Free Cash Flow, as noted in the table above. | ||||||||||||||||||||||||||||||||
(3) Other non-cash income, net, primarily includes non-cash amortization of tolling liabilities, unrealized gains (losses) on commodity hedges, adjustments to asset retirement obligations and non-cash gains (losses) related to disposal of assets. See "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items, Free Cash Flow and Proportionately Combined Metrics" above for further discussion. | ||||||||||||||||||||||||||||||||
(4) For the quarter and year ended December 31, 2016, EBITDA excluding non-cash items included $1.0 million and $16.5 million, respectively, of insurance recoveries related to damaged docks at IMTT. | ||||||||||||||||||||||||||||||||
(5) For the year ended December 31, 2016, maintenance capital expenditures included $13.9 million associated with the rebuilding of damaged docks, the majority of which were insured losses, at IMTT. |
MACQUARIE INFRASTRUCTURE CORPORATION | ||||||||||||||||||||||||||||||||
RECONCILIATION FROM CONSOLIDATED FREE CASH FLOW TO PROPORTIONATELY COMBINED FREE CASH FLOW | ||||||||||||||||||||||||||||||||
Quarter Ended |
Change |
Year Ended |
Change | |||||||||||||||||||||||||||||
2017 |
2016 |
$ |
% |
2017 |
2016 |
$ |
% | |||||||||||||||||||||||||
($ In Thousands) (Unaudited) | ||||||||||||||||||||||||||||||||
Free Cash Flow – Consolidated basis |
$ |
135,067 |
$ |
94,680 |
40,387 |
42.7 |
$ |
558,000 |
$ |
492,246 |
65,754 |
13.4 |
||||||||||||||||||||
100% of CP Free Cash Flow included in consolidated Free Cash Flow |
(18,621) |
(16,099) |
(75,134) |
(72,631) |
||||||||||||||||||||||||||||
MIC's share of CP Free Cash Flow |
16,042 |
13,654 |
67,342 |
64,234 |
||||||||||||||||||||||||||||
100% of MIC Hawaii Free Cash Flow included in consolidated Free Cash Flow |
(6,347) |
(5,879) |
(38,715) |
(36,311) |
||||||||||||||||||||||||||||
MIC's share of MIC Hawaii Free Cash Flow |
6,343 |
5,878 |
38,701 |
36,308 |
||||||||||||||||||||||||||||
Free Cash Flow – Proportionately Combined basis |
$ |
132,484 |
$ |
92,234 |
40,250 |
43.6 |
$ |
550,194 |
$ |
483,846 |
66,348 |
13.7 |
MACQUARIE INFRASTRUCTURE CORPORATION | ||||||||||||||||||||||||||||||||
RECONCILIATION OF SEGMENT NET INCOME (LOSS) TO EBITDA EXCLUDING NON-CASH ITEMS AND A | ||||||||||||||||||||||||||||||||
RECONCILIATION FROM CASH PROVIDED BY/(USED IN) OPERATING ACTIVITIES TO FREE CASH FLOW | ||||||||||||||||||||||||||||||||
IMTT | ||||||||||||||||||||||||||||||||
Quarter Ended |
Change |
Year Ended |
Change | |||||||||||||||||||||||||||||
2017 |
2016 |
2017 |
2016 | |||||||||||||||||||||||||||||
$ |
$ |
$ |
% |
$ |
$ |
$ |
% | |||||||||||||||||||||||||
($ In Thousands) (Unaudited) | ||||||||||||||||||||||||||||||||
Revenue |
139,294 |
135,686 |
3,608 |
2.7 |
549,422 |
532,472 |
16,950 |
3.2 |
||||||||||||||||||||||||
Cost of services |
48,317 |
54,434 |
6,117 |
11.2 |
196,369 |
204,279 |
7,910 |
3.9 |
||||||||||||||||||||||||
Selling, general and administrative expenses |
10,779 |
8,365 |
(2,414) |
(28.9) |
36,406 |
32,687 |
(3,719) |
(11.4) |
||||||||||||||||||||||||
Depreciation and amortization |
32,637 |
30,773 |
(1,864) |
(6.1) |
126,463 |
134,385 |
7,922 |
5.9 |
||||||||||||||||||||||||
Operating income |
47,561 |
42,114 |
5,447 |
12.9 |
190,184 |
161,121 |
29,063 |
18.0 |
||||||||||||||||||||||||
Interest (expense) income, net(1) |
(7,650) |
2,710 |
(10,360) |
NM |
(38,357) |
(38,752) |
395 |
1.0 |
||||||||||||||||||||||||
Other (expense) income, net |
(196) |
1,562 |
(1,758) |
(112.5) |
1,758 |
18,509 |
(16,751) |
(90.5) |
||||||||||||||||||||||||
Benefit (provision) for income taxes |
256,150 |
(19,019) |
275,169 |
NM |
209,464 |
(57,736) |
267,200 |
NM |
||||||||||||||||||||||||
Net income |
295,865 |
27,367 |
268,498 |
NM |
363,049 |
83,142 |
279,907 |
NM |
||||||||||||||||||||||||
Less: net income attributable to noncontrolling interests |
— |
— |
— |
— |
— |
59 |
59 |
100.0 |
||||||||||||||||||||||||
Net income attributable to MIC |
295,865 |
27,367 |
268,498 |
NM |
363,049 |
83,083 |
279,966 |
NM |
||||||||||||||||||||||||
Reconciliation of net income to EBITDA excluding non-cash items and a reconciliation of cash provided by operating activities to Free Cash Flow: |
||||||||||||||||||||||||||||||||
Net income |
295,865 |
27,367 |
363,049 |
83,142 |
||||||||||||||||||||||||||||
Interest expense (income), net(1) |
7,650 |
(2,710) |
38,357 |
38,752 |
||||||||||||||||||||||||||||
(Benefit) provision for income taxes |
(256,150) |
19,019 |
(209,464) |
57,736 |
||||||||||||||||||||||||||||
Depreciation and amortization |
32,637 |
30,773 |
126,463 |
134,385 |
||||||||||||||||||||||||||||
Pension expense(2) |
1,347 |
1,805 |
6,996 |
7,219 |
||||||||||||||||||||||||||||
Other non-cash expense, net |
452 |
26 |
767 |
657 |
||||||||||||||||||||||||||||
EBITDA excluding non-cash items(3) |
81,801 |
76,280 |
5,521 |
7.2 |
326,168 |
321,891 |
4,277 |
1.3 |
||||||||||||||||||||||||
EBITDA excluding non-cash items(3) |
81,801 |
76,280 |
326,168 |
321,891 |
||||||||||||||||||||||||||||
Interest (expense) income, net(1) |
(7,650) |
2,710 |
(38,357) |
(38,752) |
||||||||||||||||||||||||||||
Adjustments to derivative instruments recorded in interest expense(1) |
(3,577) |
(12,892) |
(3,834) |
(2,169) |
||||||||||||||||||||||||||||
Amortization of debt financing costs(1) |
411 |
412 |
1,647 |
1,654 |
||||||||||||||||||||||||||||
Provision for current income taxes |
(1,348) |
(2,367) |
(4,417) |
(5,438) |
||||||||||||||||||||||||||||
Changes in working capital |
(20,382) |
7,992 |
(32,795) |
(3,734) |
||||||||||||||||||||||||||||
Cash provided by operating activities |
49,255 |
72,135 |
248,412 |
273,452 |
||||||||||||||||||||||||||||
Changes in working capital |
20,382 |
(7,992) |
32,795 |
3,734 |
||||||||||||||||||||||||||||
Maintenance capital expenditures(4) |
(6,580) |
(5,521) |
(20,143) |
(38,620) |
||||||||||||||||||||||||||||
Free cash flow |
63,057 |
58,622 |
4,435 |
7.6 |
261,064 |
238,566 |
22,498 |
9.4 |
||||||||||||||||||||||||
____________________ | ||||||||||||||||||||||||||||||||
NM — Not meaningful | ||||||||||||||||||||||||||||||||
(1) Interest (expense) income, net, includes adjustments to derivative instruments and non-cash amortization of deferred financing fees. | ||||||||||||||||||||||||||||||||
(2) Pension expense primarily consists of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses. | ||||||||||||||||||||||||||||||||
(3) For the quarter and year ended December 31, 2016, EBITDA excluding non-cash items included $1.0 million and $16.5 million, respectively, of insurance recoveries related to damaged docks. These insurance recoveries were used to repair damaged docks and recorded in Other (expense) income, net. The cost of those repairs were recorded in Maintenance Capital Expenditures. Excluding insurance proceeds, EBITDA excluding non-cash items would have been $75.3 million and $305.4 million for the quarter and year ended December 31, 2016, respectively. On that basis, EBITDA excluding non-cash items would have increased by $6.5 million, or 8.6%, for the quarter ended December 31, 2017, and increased by $20.8 million, or 6.8%, for the year ended December 31, 2017 compared with the prior comparable periods. | ||||||||||||||||||||||||||||||||
(4) For the year ended December 31, 2016, maintenance capital expenditures included $13.9 million associated with the rebuilding of damaged docks, the majority of which were insured losses. Excluding these costs, maintenance capital expenditures would have been $24.7 million for the year ended December 31, 2016. On that basis, maintenance capital expenditures would have decreased by $4.6 million, or 18.6%, for the year ended December 31, 2017 compared with the prior comparable period. |
Atlantic Aviation |
||||||||||||||||||||||||||||||||
Quarter Ended |
Change |
Year Ended |
Change | |||||||||||||||||||||||||||||
2017 |
2016 |
2017 |
2016 | |||||||||||||||||||||||||||||
$ |
$ |
$ |
% |
$ |
$ |
$ |
% | |||||||||||||||||||||||||
($ In Thousands) (Unaudited) | ||||||||||||||||||||||||||||||||
Revenue |
225,282 |
196,180 |
29,102 |
14.8 |
846,431 |
740,209 |
106,222 |
14.4 |
||||||||||||||||||||||||
Cost of services (exclusive of depreciation and amortization of intangibles shown separately below) |
105,509 |
85,773 |
(19,736) |
(23.0) |
378,494 |
303,899 |
(74,595) |
(24.5) |
||||||||||||||||||||||||
Gross margin |
119,773 |
110,407 |
9,366 |
8.5 |
467,937 |
436,310 |
31,627 |
7.2 |
||||||||||||||||||||||||
Selling, general and administrative expenses |
58,693 |
55,312 |
(3,381) |
(6.1) |
222,205 |
212,331 |
(9,874) |
(4.7) |
||||||||||||||||||||||||
Depreciation and amortization |
26,296 |
21,618 |
(4,678) |
(21.6) |
100,190 |
90,659 |
(9,531) |
(10.5) |
||||||||||||||||||||||||
Operating income |
34,784 |
33,477 |
1,307 |
3.9 |
145,542 |
133,320 |
12,222 |
9.2 |
||||||||||||||||||||||||
Interest expense, net(1) |
(864) |
(6,524) |
5,660 |
86.8 |
(14,512) |
(33,961) |
19,449 |
57.3 |
||||||||||||||||||||||||
Other (expense) income, net |
(32) |
(123) |
91 |
74.0 |
(151) |
68 |
(219) |
NM |
||||||||||||||||||||||||
Benefit (provision) for income taxes |
30,257 |
(10,631) |
40,888 |
NM |
(6,509) |
(39,889) |
33,380 |
83.7 |
||||||||||||||||||||||||
Net income |
64,145 |
16,199 |
47,946 |
NM |
124,370 |
59,538 |
64,832 |
108.9 |
||||||||||||||||||||||||
Reconciliation of net income to EBITDA excluding non-cash items and a reconciliation of cash provided by operating activities to Free Cash Flow: |
||||||||||||||||||||||||||||||||
Net income |
64,145 |
16,199 |
124,370 |
59,538 |
||||||||||||||||||||||||||||
Interest expense, net(1) |
864 |
6,524 |
14,512 |
33,961 |
||||||||||||||||||||||||||||
(Benefit) provision for income taxes |
(30,257) |
10,631 |
6,509 |
39,889 |
||||||||||||||||||||||||||||
Depreciation and amortization |
26,296 |
21,618 |
100,190 |
90,659 |
||||||||||||||||||||||||||||
Pension expense(2) |
5 |
60 |
20 |
110 |
||||||||||||||||||||||||||||
Other non-cash expense, net |
390 |
457 |
1,642 |
905 |
||||||||||||||||||||||||||||
EBITDA excluding non-cash items |
61,443 |
55,489 |
5,954 |
10.7 |
247,243 |
225,062 |
22,181 |
9.9 |
||||||||||||||||||||||||
EBITDA excluding non-cash items |
61,443 |
55,489 |
247,243 |
225,062 |
||||||||||||||||||||||||||||
Interest expense, net(1) |
(864) |
(6,524) |
(14,512) |
(33,961) |
||||||||||||||||||||||||||||
Convertible senior notes interest(3) |
(2,013) |
(1,969) |
(7,782) |
(1,969) |
||||||||||||||||||||||||||||
Adjustments to derivative instruments recorded in interest expense(1) |
(2,721) |
(8,574) |
429 |
(4,158) |
||||||||||||||||||||||||||||
Amortization of debt financing costs(1) |
351 |
11,699 |
1,170 |
14,195 |
||||||||||||||||||||||||||||
Interest rate swap breakage fees |
— |
(17,770) |
— |
(17,770) |
||||||||||||||||||||||||||||
Interest rate cap premium |
— |
(8,629) |
— |
(8,629) |
||||||||||||||||||||||||||||
(Provision) benefit for current income taxes |
(8,647) |
384 |
(14,457) |
(2,137) |
||||||||||||||||||||||||||||
Changes in working capital |
(573) |
(248) |
(7,240) |
11,164 |
||||||||||||||||||||||||||||
Cash provided by operating activities |
46,976 |
23,858 |
204,851 |
181,797 |
||||||||||||||||||||||||||||
Changes in working capital |
573 |
248 |
7,240 |
(11,164) |
||||||||||||||||||||||||||||
Maintenance capital expenditures |
(2,894) |
(4,816) |
(7,965) |
(10,632) |
||||||||||||||||||||||||||||
Free cash flow |
44,655 |
19,290 |
25,365 |
131.5 |
204,126 |
160,001 |
44,125 |
27.6 |
||||||||||||||||||||||||
____________________ | ||||||||||||||||||||||||||||||||
NM — Not meaningful | ||||||||||||||||||||||||||||||||
(1) Interest expense, net, included adjustments to derivative instruments and non-cash amortization of deferred financing fees. For the quarter and year ended December 31, 2016, interest expense also included non-cash write-off of deferred financing costs related to the October 2016 refinancing. | ||||||||||||||||||||||||||||||||
(2) Pension expense primarily consists of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses. | ||||||||||||||||||||||||||||||||
(3) Represents the cash interest expense reclassified from MIC Corporate related to the 2.00% Convertible Senior Notes due October 2023, proceeds of which were used to pay down a portion of Atlantic Aviation's credit facility in October 2016. |
Contracted Power |
||||||||||||||||||||||||||||||||
Quarter Ended |
Change |
Year Ended |
Change | |||||||||||||||||||||||||||||
2017 |
2016 |
2017 |
2016 | |||||||||||||||||||||||||||||
$ |
$ |
$ |
% |
$ |
$ |
$ |
% | |||||||||||||||||||||||||
($ In Thousands) (Unaudited) | ||||||||||||||||||||||||||||||||
Product revenue |
35,245 |
35,993 |
(748) |
(2.1) |
145,926 |
150,010 |
(4,084) |
(2.7) |
||||||||||||||||||||||||
Cost of product sales |
4,996 |
5,807 |
811 |
14.0 |
20,524 |
23,302 |
2,778 |
11.9 |
||||||||||||||||||||||||
Selling, general and administrative expenses |
7,385 |
6,143 |
(1,242) |
(20.2) |
25,703 |
25,474 |
(229) |
(0.9) |
||||||||||||||||||||||||
Depreciation and amortization |
15,269 |
13,855 |
(1,414) |
(10.2) |
60,300 |
55,548 |
(4,752) |
(8.6) |
||||||||||||||||||||||||
Operating income |
7,595 |
10,188 |
(2,593) |
(25.5) |
39,399 |
45,686 |
(6,287) |
(13.8) |
||||||||||||||||||||||||
Interest (expense) income, net(1) |
(3,056) |
10,328 |
(13,384) |
(129.6) |
(23,487) |
(21,286) |
(2,201) |
(10.3) |
||||||||||||||||||||||||
Other income, net |
5,025 |
182 |
4,843 |
NM |
11,465 |
4,021 |
7,444 |
185.1 |
||||||||||||||||||||||||
Benefit (provision) for income taxes |
2,040 |
(6,702) |
8,742 |
130.4 |
(6,169) |
(14,328) |
8,159 |
56.9 |
||||||||||||||||||||||||
Net income |
11,604 |
13,996 |
(2,392) |
(17.1) |
21,208 |
14,093 |
7,115 |
50.5 |
||||||||||||||||||||||||
Less: net income attributable to noncontrolling interest |
12,281 |
1,875 |
(10,406) |
NM |
5,058 |
2,092 |
(2,966) |
(141.8) |
||||||||||||||||||||||||
Net (loss) income attributable to MIC |
(677) |
12,121 |
(12,798) |
(105.6) |
16,150 |
12,001 |
4,149 |
34.6 |
||||||||||||||||||||||||
Reconciliation of net income to EBITDA excluding non-cash items and a reconciliation of cash provided by operating activities to Free Cash Flow: |
||||||||||||||||||||||||||||||||
Net income |
11,604 |
13,996 |
21,208 |
14,093 |
||||||||||||||||||||||||||||
Interest expense (income), net(1) |
3,056 |
(10,328) |
23,487 |
21,286 |
||||||||||||||||||||||||||||
(Benefit) provision for income taxes |
(2,040) |
6,702 |
6,169 |
14,328 |
||||||||||||||||||||||||||||
Depreciation and amortization |
15,269 |
13,855 |
60,300 |
55,548 |
||||||||||||||||||||||||||||
Other non-cash income, net(2) |
(1,933) |
(1,623) |
(8,103) |
(7,047) |
||||||||||||||||||||||||||||
EBITDA excluding non-cash |
25,956 |
22,602 |
3,354 |
14.8 |
103,061 |
98,208 |
4,853 |
4.9 |
||||||||||||||||||||||||
EBITDA excluding non-cash |
25,956 |
22,602 |
103,061 |
98,208 |
||||||||||||||||||||||||||||
Interest (expense) income, net(1) |
(3,056) |
10,328 |
(23,487) |
(21,286) |
||||||||||||||||||||||||||||
Adjustments to derivative instruments recorded in interest expense(1) |
(4,019) |
(16,756) |
(5,301) |
(4,762) |
||||||||||||||||||||||||||||
Amortization of debt financing costs(1) |
379 |
376 |
1,516 |
1,489 |
||||||||||||||||||||||||||||
(Provision) benefit for current income taxes |
(135) |
2 |
(129) |
(6) |
||||||||||||||||||||||||||||
Changes in working capital |
6,223 |
780 |
(3,480) |
(1,129) |
||||||||||||||||||||||||||||
Cash provided by operating activities |
25,348 |
17,332 |
72,180 |
72,514 |
||||||||||||||||||||||||||||
Changes in working capital |
(6,223) |
(780) |
3,480 |
1,129 |
||||||||||||||||||||||||||||
Maintenance capital expenditures |
(504) |
(453) |
(526) |
(1,012) |
||||||||||||||||||||||||||||
Free cash flow |
18,621 |
16,099 |
2,522 |
15.7 |
75,134 |
72,631 |
2,503 |
3.4 |
||||||||||||||||||||||||
_____________________ | ||||||||||||||||||||||||||||||||
NM — Not meaningful | ||||||||||||||||||||||||||||||||
(1) Interest (expense) income, net, includes adjustments to derivative instruments and non-cash amortization of deferred financing fees. | ||||||||||||||||||||||||||||||||
(2) Other non-cash income, net, primarily includes amortization of tolling liabilities. See "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items, Free Cash Flow and Proportionately Combined Metrics" above for further discussion. |
MIC Hawaii |
||||||||||||||||||||||||||||||||
Quarter Ended |
Change |
Year Ended |
Change | |||||||||||||||||||||||||||||
2017 |
2016 |
2017 |
2016 | |||||||||||||||||||||||||||||
$ |
$ |
$ |
% |
$ |
$ |
$ |
% | |||||||||||||||||||||||||
($ In Thousands) (Unaudited) | ||||||||||||||||||||||||||||||||
Product revenue |
57,197 |
55,123 |
2,074 |
3.8 |
222,955 |
213,159 |
9,796 |
4.6 |
||||||||||||||||||||||||
Service revenue |
15,437 |
15,504 |
(67) |
(0.4) |
54,913 |
20,762 |
34,151 |
164.5 |
||||||||||||||||||||||||
Total revenue |
72,634 |
70,627 |
2,007 |
2.8 |
277,868 |
233,921 |
43,947 |
18.8 |
||||||||||||||||||||||||
Cost of product sales (exclusive of depreciation and amortization of intangibles shown separately below) |
36,172 |
29,001 |
(7,171) |
(24.7) |
143,787 |
119,429 |
(24,358) |
(20.4) |
||||||||||||||||||||||||
Cost of services (exclusive of depreciation and amortization of intangibles shown separately below) |
15,350 |
12,389 |
(2,961) |
(23.9) |
49,365 |
16,335 |
(33,030) |
NM |
||||||||||||||||||||||||
Cost of revenue – total |
51,522 |
41,390 |
(10,132) |
(24.5) |
193,152 |
135,764 |
(57,388) |
(42.3) |
||||||||||||||||||||||||
Gross margin |
21,112 |
29,237 |
(8,125) |
(27.8) |
84,716 |
98,157 |
(13,441) |
(13.7) |
||||||||||||||||||||||||
Selling, general and administrative expenses |
7,209 |
8,046 |
837 |
10.4 |
26,938 |
24,276 |
(2,662) |
(11.0) |
||||||||||||||||||||||||
Depreciation and amortization |
4,381 |
3,629 |
(752) |
(20.7) |
15,303 |
11,325 |
(3,978) |
(35.1) |
||||||||||||||||||||||||
Operating income |
9,522 |
17,562 |
(8,040) |
(45.8) |
42,475 |
62,556 |
(20,081) |
(32.1) |
||||||||||||||||||||||||
Interest (expense) income, net(1) |
(1,246) |
665 |
(1,911) |
NM |
(7,041) |
(5,559) |
(1,482) |
(26.7) |
||||||||||||||||||||||||
Other expense, net |
(349) |
(224) |
(125) |
(55.8) |
(731) |
(812) |
81 |
10.0 |
||||||||||||||||||||||||
Benefit (provision) for income taxes |
1,485 |
(5,578) |
7,063 |
126.6 |
(9,287) |
(20,441) |
11,154 |
54.6 |
||||||||||||||||||||||||
Net income |
9,412 |
12,425 |
(3,013) |
(24.2) |
25,416 |
35,744 |
(10,328) |
(28.9) |
||||||||||||||||||||||||
Less: net loss attributable to noncontrolling interests |
(77) |
(3,552) |
(3,475) |
(97.8) |
(148) |
(3,663) |
(3,515) |
(96.0) |
||||||||||||||||||||||||
Net income attributable to MIC |
9,489 |
15,977 |
(6,488) |
(40.6) |
25,564 |
39,407 |
(13,843) |
(35.1) |
||||||||||||||||||||||||
Reconciliation of net income to EBITDA excluding non-cash items and a reconciliation of cash provided by operating activities to Free Cash Flow: |
||||||||||||||||||||||||||||||||
Net income |
9,412 |
12,425 |
25,416 |
35,744 |
||||||||||||||||||||||||||||
Interest expense (income), net(1) |
1,246 |
(665) |
7,041 |
5,559 |
||||||||||||||||||||||||||||
(Benefit) provision for income taxes |
(1,485) |
5,578 |
9,287 |
20,441 |
||||||||||||||||||||||||||||
Depreciation and amortization |
4,381 |
3,629 |
15,303 |
11,325 |
||||||||||||||||||||||||||||
Pension expense(2) |
273 |
223 |
1,090 |
1,272 |
||||||||||||||||||||||||||||
Other non-cash (income) expense, net(3) |
(614) |
(5,448) |
2,494 |
(11,539) |
||||||||||||||||||||||||||||
EBITDA excluding non-cash items |
13,213 |
15,742 |
(2,529) |
(16.1) |
60,631 |
62,802 |
(2,171) |
(3.5) |
||||||||||||||||||||||||
EBITDA excluding non-cash items |
13,213 |
15,742 |
60,631 |
62,802 |
||||||||||||||||||||||||||||
Interest (expense) income, net(1) |
(1,246) |
665 |
(7,041) |
(5,559) |
||||||||||||||||||||||||||||
Adjustments to derivative instruments recorded in interest expense(1) |
(511) |
(2,594) |
(398) |
(2,088) |
||||||||||||||||||||||||||||
Amortization of debt financing costs(1) |
100 |
100 |
403 |
948 |
||||||||||||||||||||||||||||
Provision for current income taxes |
(3,047) |
(1,846) |
(8,312) |
(8,353) |
||||||||||||||||||||||||||||
Pension contribution |
— |
(3,500) |
— |
(3,500) |
||||||||||||||||||||||||||||
Changes in working capital |
6,488 |
3,788 |
(6,364) |
9,342 |
||||||||||||||||||||||||||||
Cash provided by operating activities |
14,997 |
12,355 |
38,919 |
53,592 |
||||||||||||||||||||||||||||
Changes in working capital |
(6,488) |
(3,788) |
6,364 |
(9,342) |
||||||||||||||||||||||||||||
Maintenance capital expenditures |
(2,162) |
(2,688) |
(6,568) |
(7,939) |
||||||||||||||||||||||||||||
Free cash flow |
6,347 |
5,879 |
468 |
8.0 |
38,715 |
36,311 |
2,404 |
6.6 |
||||||||||||||||||||||||
___________________ | ||||||||||||||||||||||||||||||||
NM — Not meaningful | ||||||||||||||||||||||||||||||||
(1) Interest (expense) income, net, includes adjustments to derivative instruments related to interest rate swaps and non-cash amortization of deferred financing fees. For the year ended December 31, 2016, interest (expense) income, net, also included a non-cash write-off of deferred financing fees related to the February 2016 refinancing at Hawaii Gas. | ||||||||||||||||||||||||||||||||
(2) Pension expense primarily consists of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses. Any cash contributions to pension plans are not included in pension expense, but rather reflected as a reduction to Free Cash Flow, as noted in the table above. | ||||||||||||||||||||||||||||||||
(3) Other non-cash (income) expense, net, primarily includes non-cash adjustments related to unrealized gains (losses) on commodity hedges and asset retirement obligations. See "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items, Free Cash Flow and Proportionately Combined Metrics" above for further discussion. |
Corporate and Other |
||||||||||||||||||||||||||||||||
Quarter Ended |
Change |
Year Ended |
Change | |||||||||||||||||||||||||||||
2017 |
2016 |
2017 |
2016 | |||||||||||||||||||||||||||||
$ |
$ |
$ |
% |
$ |
$ |
$ |
% | |||||||||||||||||||||||||
($ In Thousands) (Unaudited) | ||||||||||||||||||||||||||||||||
Fees to Manager – related party |
16,778 |
18,916 |
2,138 |
11.3 |
71,388 |
68,486 |
(2,902) |
(4.2) |
||||||||||||||||||||||||
Selling, general and administrative expenses(1) |
3,712 |
4,225 |
513 |
12.1 |
25,013 |
13,056 |
(11,957) |
(91.6) |
||||||||||||||||||||||||
Depreciation |
161 |
— |
(161) |
NM |
161 |
— |
(161) |
NM |
||||||||||||||||||||||||
Operating loss |
(20,651) |
(23,141) |
2,490 |
10.8 |
(96,562) |
(81,542) |
(15,020) |
(18.4) |
||||||||||||||||||||||||
Interest expense, net(2) |
(7,587) |
(6,797) |
(790) |
(11.6) |
(27,006) |
(17,243) |
(9,763) |
(56.6) |
||||||||||||||||||||||||
Other expense, net |
(1,018) |
— |
(1,018) |
NM |
(1,018) |
— |
(1,018) |
NM |
||||||||||||||||||||||||
Benefit for income taxes |
9,506 |
31,082 |
(21,576) |
(69.4) |
46,655 |
61,137 |
(14,482) |
(23.7) |
||||||||||||||||||||||||
Net (loss) income |
(19,750) |
1,144 |
(20,894) |
NM |
(77,931) |
(37,648) |
(40,283) |
(107.0) |
||||||||||||||||||||||||
Reconciliation of net (loss) income to EBITDA excluding non-cash items and a reconciliation of cash used in operating activities to Free Cash Flow: |
||||||||||||||||||||||||||||||||
Net (loss) income |
(19,750) |
1,144 |
(77,931) |
(37,648) |
||||||||||||||||||||||||||||
Interest expense, net(2) |
7,587 |
6,797 |
27,006 |
17,243 |
||||||||||||||||||||||||||||
Benefit for income taxes |
(9,506) |
(31,082) |
(46,655) |
(61,137) |
||||||||||||||||||||||||||||
Depreciation |
161 |
— |
161 |
— |
||||||||||||||||||||||||||||
Fees to Manager-related party |
16,778 |
18,916 |
71,388 |
68,486 |
||||||||||||||||||||||||||||
Other non-cash expense |
297 |
118 |
831 |
681 |
||||||||||||||||||||||||||||
EBITDA excluding non-cash items |
(4,433) |
(4,107) |
(326) |
(7.9) |
(25,200) |
(12,375) |
(12,825) |
(103.6) |
||||||||||||||||||||||||
EBITDA excluding non-cash items |
(4,433) |
(4,107) |
(25,200) |
(12,375) |
||||||||||||||||||||||||||||
Interest expense, net(2) |
(7,587) |
(6,797) |
(27,006) |
(17,243) |
||||||||||||||||||||||||||||
Convertible senior notes interest(3) |
2,013 |
1,969 |
7,782 |
1,969 |
||||||||||||||||||||||||||||
Amortization of debt financing costs(2) |
995 |
918 |
3,964 |
2,755 |
||||||||||||||||||||||||||||
Amortization of debt discount(2) |
889 |
1,007 |
3,266 |
1,007 |
||||||||||||||||||||||||||||
Benefit for current income taxes |
10,510 |
1,800 |
16,155 |
8,624 |
||||||||||||||||||||||||||||
Changes in working capital |
(7,173) |
2,862 |
(13,864) |
(5,772) |
||||||||||||||||||||||||||||
Cash used in operating activities |
(4,786) |
(2,348) |
(34,903) |
(21,035) |
||||||||||||||||||||||||||||
Changes in working capital |
7,173 |
(2,862) |
13,864 |
5,772 |
||||||||||||||||||||||||||||
Free cash flow |
2,387 |
(5,210) |
7,597 |
145.8 |
(21,039) |
(15,263) |
(5,776) |
(37.8) |
||||||||||||||||||||||||
____________________ | ||||||||||||||||||||||||||||||||
NM — Not meaningful | ||||||||||||||||||||||||||||||||
(1) For the quarter and year ended December 31, 2017, selling, general and administrative expenses included $1.7 million and $8.5 million, respectively, of costs related to the implementation of a shared service initiative and $1.4 million and $9.3 million, respectively, of costs incurred in connection with the evaluation of various investment and acquisition opportunities. | ||||||||||||||||||||||||||||||||
(2) Interest expense, net, includes non-cash amortization of deferred financing fees and amortization of debt discount related to the 2.00% Convertible Senior Notes due October 2023. | ||||||||||||||||||||||||||||||||
(3) Represents the cash interest expense reclassified to Atlantic Aviation related to the 2.00% Convertible Senior Notes due October 2023, proceeds of which were used to pay down a portion of Atlantic Aviation's credit facility in October 2016. |
MACQUARIE INFRASTRUCTURE CORPORATION | ||||||||||||||||||||||||||||||||||||
RECONCILIATION OF NET INCOME (LOSS) TO EBITDA EXCLUDING | ||||||||||||||||||||||||||||||||||||
NON-CASH ITEMS AND A RECONCILIATION FROM CASH PROVIDED BY/(USED IN) | ||||||||||||||||||||||||||||||||||||
OPERATING ACTIVITIES TO PROPORTIONATELY COMBINED FREE CASH FLOW | ||||||||||||||||||||||||||||||||||||
For the Quarter Ended December 31, 2017 |
||||||||||||||||||||||||||||||||||||
IMTT |
Atlantic |
Contracted |
MIC |
MIC |
Proportionately |
Contracted |
MIC | |||||||||||||||||||||||||||||
($ in Thousands) (Unaudited) |
||||||||||||||||||||||||||||||||||||
Net income (loss) |
295,865 |
64,145 |
10,394 |
9,413 |
(19,750) |
360,067 |
11,604 |
9,412 |
||||||||||||||||||||||||||||
Interest expense, net(3) |
7,650 |
864 |
2,660 |
1,246 |
7,587 |
20,007 |
3,056 |
1,246 |
||||||||||||||||||||||||||||
Benefit for income taxes |
(256,150) |
(30,257) |
(2,040) |
(1,485) |
(9,506) |
(299,438) |
(2,040) |
(1,485) |
||||||||||||||||||||||||||||
Depreciation and amortization of intangibles |
32,637 |
26,296 |
13,387 |
4,376 |
161 |
76,857 |
15,269 |
4,381 |
||||||||||||||||||||||||||||
Fees to Manager – related |
— |
— |
— |
— |
16,778 |
16,778 |
— |
— |
||||||||||||||||||||||||||||
Pension expense(4) |
1,347 |
5 |
— |
273 |
— |
1,625 |
— |
273 |
||||||||||||||||||||||||||||
Other non-cash expense (income), net(5) |
452 |
390 |
(1,934) |
(614) |
297 |
(1,409) |
(1,933) |
(614) |
||||||||||||||||||||||||||||
EBITDA excluding non-cash items |
81,801 |
61,443 |
22,467 |
13,209 |
(4,433) |
174,487 |
25,956 |
13,213 |
||||||||||||||||||||||||||||
EBITDA excluding non-cash items |
81,801 |
61,443 |
22,467 |
13,209 |
(4,433) |
174,487 |
25,956 |
13,213 |
||||||||||||||||||||||||||||
Interest expense, net(3) |
(7,650) |
(864) |
(2,660) |
(1,246) |
(7,587) |
(20,007) |
(3,056) |
(1,246) |
||||||||||||||||||||||||||||
Convertible senior notes interest(6) |
— |
(2,013) |
— |
— |
2,013 |
— |
— |
— |
||||||||||||||||||||||||||||
Adjustments to derivative instruments recorded in interest expense, net(3) |
(3,577) |
(2,721) |
(3,616) |
(510) |
— |
(10,424) |
(4,019) |
(511) |
||||||||||||||||||||||||||||
Amortization of debt financing costs(3) |
411 |
351 |
364 |
99 |
995 |
2,220 |
379 |
100 |
||||||||||||||||||||||||||||
Amortization of debt discount(3) |
— |
— |
— |
— |
889 |
889 |
— |
— |
||||||||||||||||||||||||||||
(Provision) benefit for current income taxes |
(1,348) |
(8,647) |
(136) |
(3,047) |
10,510 |
(2,668) |
(135) |
(3,047) |
||||||||||||||||||||||||||||
Changes in working capital |
(20,382) |
(573) |
6,832 |
6,477 |
(7,173) |
(14,819) |
6,223 |
6,488 |
||||||||||||||||||||||||||||
Cash provided by (used in) operating activities |
49,255 |
46,976 |
23,251 |
14,982 |
(4,786) |
129,678 |
25,348 |
14,997 |
||||||||||||||||||||||||||||
Changes in working capital |
20,382 |
573 |
(6,832) |
(6,477) |
7,173 |
14,819 |
(6,223) |
(6,488) |
||||||||||||||||||||||||||||
Maintenance capital expenditures |
(6,580) |
(2,894) |
(377) |
(2,162) |
— |
(12,013) |
(504) |
(2,162) |
||||||||||||||||||||||||||||
Proportionately Combined Free Cash flow |
63,057 |
44,655 |
16,042 |
6,343 |
2,387 |
132,484 |
18,621 |
6,347 |
For the Quarter Ended December 31, 2016 |
||||||||||||||||||||||||||||||||||||
IMTT |
Atlantic |
Contracted |
MIC |
MIC |
Proportionately |
Contracted |
MIC | |||||||||||||||||||||||||||||
($ in Thousands) (Unaudited) |
||||||||||||||||||||||||||||||||||||
Net income |
27,367 |
16,199 |
11,413 |
12,419 |
1,144 |
68,542 |
13,996 |
12,425 |
||||||||||||||||||||||||||||
Interest (income) expense, net(3) |
(2,710) |
6,524 |
(9,260) |
(657) |
6,797 |
694 |
(10,328) |
(665) |
||||||||||||||||||||||||||||
Provision (benefit) for income taxes |
19,019 |
10,631 |
6,702 |
5,578 |
(31,082) |
10,848 |
6,702 |
5,578 |
||||||||||||||||||||||||||||
Depreciation and amortization of intangibles |
30,773 |
21,618 |
11,980 |
3,623 |
— |
67,994 |
13,855 |
3,629 |
||||||||||||||||||||||||||||
Fees to Manager – related party |
— |
— |
— |
— |
18,916 |
18,916 |
— |
— |
||||||||||||||||||||||||||||
Pension expense(4) |
1,805 |
60 |
— |
223 |
— |
2,088 |
— |
223 |
||||||||||||||||||||||||||||
Other non-cash expense (income), net(5) |
26 |
457 |
(1,623) |
(5,448) |
118 |
(6,470) |
(1,623) |
(5,448) |
||||||||||||||||||||||||||||
EBITDA excluding non-cash items(7) |
76,280 |
55,489 |
19,212 |
15,738 |
(4,107) |
162,612 |
22,602 |
15,742 |
||||||||||||||||||||||||||||
EBITDA excluding non-cash items(7) |
76,280 |
55,489 |
19,212 |
15,738 |
(4,107) |
162,612 |
22,602 |
15,742 |
||||||||||||||||||||||||||||
Interest income (expense), net(3) |
2,710 |
(6,524) |
9,260 |
657 |
(6,797) |
(694) |
10,328 |
665 |
||||||||||||||||||||||||||||
Convertible senior notes interest(6) |
— |
(1,969) |
— |
— |
1,969 |
— |
— |
— |
||||||||||||||||||||||||||||
Adjustments to derivative instruments recorded in interest expense, net(3) |
(12,892) |
(8,574) |
(14,844) |
(2,583) |
— |
(38,893) |
(16,756) |
(2,594) |
||||||||||||||||||||||||||||
Amortization of debt financing costs(3) |
412 |
11,699 |
363 |
100 |
918 |
13,492 |
376 |
100 |
||||||||||||||||||||||||||||
Amortization of debt discount(3) |
— |
— |
— |
— |
1,007 |
1,007 |
— |
— |
||||||||||||||||||||||||||||
Interest rate swap breakage fees |
— |
(17,770) |
— |
— |
— |
(17,770) |
— |
— |
||||||||||||||||||||||||||||
Interest rate cap premium |
— |
(8,629) |
— |
— |
— |
(8,629) |
— |
— |
||||||||||||||||||||||||||||
(Provision) benefit for current income taxes |
(2,367) |
384 |
2 |
(1,846) |
1,800 |
(2,027) |
2 |
(1,846) |
||||||||||||||||||||||||||||
Pension contribution |
— |
— |
— |
(3,500) |
— |
(3,500) |
— |
(3,500) |
||||||||||||||||||||||||||||
Changes in working capital |
7,992 |
(248) |
1,039 |
3,777 |
2,862 |
15,422 |
780 |
3,788 |
||||||||||||||||||||||||||||
Cash provided by (used in) operating activities |
72,135 |
23,858 |
15,032 |
12,343 |
(2,348) |
121,020 |
17,332 |
12,355 |
||||||||||||||||||||||||||||
Changes in working capital |
(7,992) |
248 |
(1,039) |
(3,777) |
(2,862) |
(15,422) |
(780) |
(3,788) |
||||||||||||||||||||||||||||
Maintenance capital expenditures |
(5,521) |
(4,816) |
(339) |
(2,688) |
— |
(13,364) |
(453) |
(2,688) |
||||||||||||||||||||||||||||
Proportionately Combined Free Cash Flow |
58,622 |
19,290 |
13,654 |
5,878 |
(5,210) |
92,234 |
16,099 |
5,879 |
For the Year Ended December 31, 2017 |
||||||||||||||||||||||||||||||||||||
IMTT |
Atlantic |
Contracted |
MIC |
MIC |
Proportionately |
Contracted |
MIC | |||||||||||||||||||||||||||||
($ in Thousands) (Unaudited) |
||||||||||||||||||||||||||||||||||||
Net income (loss) |
363,049 |
124,370 |
20,252 |
25,422 |
(77,931) |
455,162 |
21,208 |
25,416 |
||||||||||||||||||||||||||||
Interest expense, net(3) |
38,357 |
14,512 |
20,837 |
7,035 |
27,006 |
107,747 |
23,487 |
7,041 |
||||||||||||||||||||||||||||
(Benefit) provision for income taxes |
(209,464) |
6,509 |
6,169 |
9,287 |
(46,655) |
(234,154) |
6,169 |
9,287 |
||||||||||||||||||||||||||||
Depreciation and amortization of intangibles |
126,463 |
100,190 |
52,777 |
15,284 |
161 |
294,875 |
60,300 |
15,303 |
||||||||||||||||||||||||||||
Fees to Manager – related party |
— |
— |
— |
— |
71,388 |
71,388 |
— |
— |
||||||||||||||||||||||||||||
Pension expense(4) |
6,996 |
20 |
— |
1,090 |
— |
8,106 |
— |
1,090 |
||||||||||||||||||||||||||||
Other non-cash expense (income), net(5) |
767 |
1,642 |
(8,082) |
2,494 |
831 |
(2,348) |
(8,103) |
2,494 |
||||||||||||||||||||||||||||
EBITDA excluding non-cash items |
326,168 |
247,243 |
91,953 |
60,612 |
(25,200) |
700,776 |
103,061 |
60,631 |
||||||||||||||||||||||||||||
EBITDA excluding non-cash items |
326,168 |
247,243 |
91,953 |
60,612 |
(25,200) |
700,776 |
103,061 |
60,631 |
||||||||||||||||||||||||||||
Interest expense, net(3) |
(38,357) |
(14,512) |
(20,837) |
(7,035) |
(27,006) |
(107,747) |
(23,487) |
(7,041) |
||||||||||||||||||||||||||||
Convertible senior notes interest(6) |
— |
(7,782) |
— |
— |
7,782 |
— |
— |
— |
||||||||||||||||||||||||||||
Adjustments to derivative instruments recorded in interest expense, net(3) |
(3,834) |
429 |
(4,704) |
(398) |
— |
(8,507) |
(5,301) |
(398) |
||||||||||||||||||||||||||||
Amortization of debt financing costs(3) |
1,647 |
1,170 |
1,458 |
402 |
3,964 |
8,641 |
1,516 |
403 |
||||||||||||||||||||||||||||
Amortization of debt discount(3) |
— |
— |
— |
— |
3,266 |
3,266 |
— |
— |
||||||||||||||||||||||||||||
(Provision) benefit for current income taxes |
(4,417) |
(14,457) |
(129) |
(8,312) |
16,155 |
(11,160) |
(129) |
(8,312) |
||||||||||||||||||||||||||||
Changes in working capital |
(32,795) |
(7,240) |
(2,992) |
(6,356) |
(13,864) |
(63,247) |
(3,480) |
(6,364) |
||||||||||||||||||||||||||||
Cash provided by (used in) operating activities |
248,412 |
204,851 |
64,749 |
38,913 |
(34,903) |
522,022 |
72,180 |
38,919 |
||||||||||||||||||||||||||||
Changes in working capital |
32,795 |
7,240 |
2,992 |
6,356 |
13,864 |
63,247 |
3,480 |
6,364 |
||||||||||||||||||||||||||||
Maintenance capital expenditures |
(20,143) |
(7,965) |
(399) |
(6,568) |
— |
(35,075) |
(526) |
(6,568) |
||||||||||||||||||||||||||||
Proportionately Combined Free Cash Flow |
261,064 |
204,126 |
67,342 |
38,701 |
(21,039) |
550,194 |
75,134 |
38,715 |
For the Year Ended December 31, 2016 |
||||||||||||||||||||||||||||||||||||
IMTT(8) |
Atlantic |
Contracted Power(1) |
MIC Hawaii(1) |
MIC Corporate |
Proportionately Combined(2) |
Contracted Power |
MIC | |||||||||||||||||||||||||||||
($ in Thousands) (Unaudited) |
||||||||||||||||||||||||||||||||||||
Net income (loss) |
83,142 |
59,538 |
12,309 |
35,741 |
(37,648) |
153,082 |
14,093 |
35,744 |
||||||||||||||||||||||||||||
Interest expense, net(3) |
38,752 |
33,961 |
18,541 |
5,564 |
17,243 |
114,061 |
21,286 |
5,559 |
||||||||||||||||||||||||||||
Provision (benefit) for income taxes |
57,736 |
39,889 |
14,327 |
20,441 |
(61,137) |
71,256 |
14,328 |
20,441 |
||||||||||||||||||||||||||||
Depreciation and amortization of intangibles |
134,385 |
90,659 |
48,047 |
11,317 |
— |
284,408 |
55,548 |
11,325 |
||||||||||||||||||||||||||||
Fees to Manager – related party |
— |
— |
— |
— |
68,486 |
68,486 |
— |
— |
||||||||||||||||||||||||||||
Pension expense(4) |
7,219 |
110 |
— |
1,272 |
— |
8,601 |
— |
1,272 |
||||||||||||||||||||||||||||
Other non-cash expense (income), net(5) |
657 |
905 |
(7,028) |
(11,539) |
681 |
(16,324) |
(7,047) |
(11,539) |
||||||||||||||||||||||||||||
EBITDA excluding non-cash items(7) |
321,891 |
225,062 |
86,196 |
62,796 |
(12,375) |
683,570 |
98,208 |
62,802 |
||||||||||||||||||||||||||||
EBITDA excluding non-cash items(7) |
321,891 |
225,062 |
86,196 |
62,796 |
(12,375) |
683,570 |
98,208 |
62,802 |
||||||||||||||||||||||||||||
Interest expense, net(3) |
(38,752) |
(33,961) |
(18,541) |
(5,564) |
(17,243) |
(114,061) |
(21,286) |
(5,559) |
||||||||||||||||||||||||||||
Convertible senior notes interest(6) |
— |
(1,969) |
— |
— |
1,969 |
— |
— |
— |
||||||||||||||||||||||||||||
Adjustments to derivative instruments recorded in interest expense, net(3) |
(2,169) |
(4,158) |
(4,088) |
(2,080) |
— |
(12,495) |
(4,762) |
(2,088) |
||||||||||||||||||||||||||||
Amortization of debt financing costs(3) |
1,654 |
14,195 |
1,434 |
948 |
2,755 |
20,986 |
1,489 |
948 |
||||||||||||||||||||||||||||
Amortization of debt discount(3) |
— |
— |
— |
— |
1,007 |
1,007 |
— |
— |
||||||||||||||||||||||||||||
Interest rate swap breakage |
— |
(17,770) |
— |
— |
— |
(17,770) |
— |
— |
||||||||||||||||||||||||||||
Interest rate cap premium |
— |
(8,629) |
— |
— |
— |
(8,629) |
— |
— |
||||||||||||||||||||||||||||
(Provision) benefit for current income taxes |
(5,438) |
(2,137) |
(7) |
(8,353) |
8,624 |
(7,311) |
(6) |
(8,353) |
||||||||||||||||||||||||||||
Pension contribution |
— |
— |
— |
(3,500) |
— |
(3,500) |
— |
(3,500) |
||||||||||||||||||||||||||||
Changes in working capital |
(3,734) |
11,164 |
(1,148) |
9,335 |
(5,772) |
9,845 |
(1,129) |
9,342 |
||||||||||||||||||||||||||||
Cash provided by (used in) operating activities |
273,452 |
181,797 |
63,846 |
53,582 |
(21,035) |
551,642 |
72,514 |
53,592 |
||||||||||||||||||||||||||||
Changes in working capital |
3,734 |
(11,164) |
1,148 |
(9,335) |
5,772 |
(9,845) |
1,129 |
(9,342) |
||||||||||||||||||||||||||||
Maintenance capital expenditures(9) |
(38,620) |
(10,632) |
(760) |
(7,939) |
— |
(57,951) |
(1,012) |
(7,939) |
||||||||||||||||||||||||||||
Proportionately Combined Free Cash Flow |
238,566 |
160,001 |
64,234 |
36,308 |
(15,263) |
483,846 |
72,631 |
36,311 |
||||||||||||||||||||||||||||
____________________ |
||||||||||||||||||||||||||||||||||||
(1) Represents MIC's proportionately combined interests in the businesses comprising these reportable segments. |
||||||||||||||||||||||||||||||||||||
(2) The sum of the amounts attributable to MIC in proportion to its ownership. |
||||||||||||||||||||||||||||||||||||
(3) Interest expense (income), net, includes adjustments to derivative instruments, non-cash amortization of deferred financing fees and non-cash amortization of debt discount related to the 2.00% Convertible Senior Notes due October 2023. Interest expense (income), net, also includes a non-cash write-off of deferred financing fees related to the February 2016 refinancing at Hawaii Gas and the October 2016 refinancing at Atlantic Aviation. |
||||||||||||||||||||||||||||||||||||
(4) Pension expense primarily consists of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses. Any cash contributions to pension plans are not included in pension expense, but rather reflected as a reduction to Free Cash Flow, as noted in the table above. |
||||||||||||||||||||||||||||||||||||
(5) Other non-cash expense (income), net, primarily includes non-cash amortization of tolling liabilities, unrealized gains (losses) on commodity hedges, adjustments to asset retirement obligations and non-cash gains (losses) related to disposal of assets. See "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items, Free Cash Flow and Proportionately Combined Metrics" above for further discussion. |
||||||||||||||||||||||||||||||||||||
(6) Represents the cash interest expense reclassified from MIC Corporate to Atlantic Aviation related to the 2.00% Convertible Senior Notes due October 2023, proceeds of which were used to pay down a portion of Atlantic Aviation's credit facility in October 2016. |
||||||||||||||||||||||||||||||||||||
(7) For the quarter and year ended December 31, 2016, EBITDA excluding non-cash items included $1.0 million and $16.5 million, respectively, of insurance recoveries related to damaged docks at IMTT. |
||||||||||||||||||||||||||||||||||||
(8) On March 31, 2016, IMTT acquired the remaining 33.3% interest in its Quebec terminal that it did not previously own. IMTT was previously providing management services to this terminal and no operational changes are expected. Prior to the acquisition, IMTT consolidated the results of the Quebec terminal in its financial statements and adjusted for the portion that it did not own through noncontrolling interests. Since the IMTT Acquisition in July 2014 and prior to the acquisition of the noncontrolling interest, MIC reported IMTT's EBITDA excluding non-cash items and Free Cash Flow including the 33.3% portion of the Quebec terminal. The contribution from the minority interest was not significant. Therefore, there were no changes to our historical EBITDA excluding non-cash items, Free Cash Flow or results generally as a function of acquiring this noncontrolling interest. |
||||||||||||||||||||||||||||||||||||
(9) For the year ended December 31, 2016, maintenance capital expenditures included $13.9 million associated with the rebuilding of damaged docks, the majority of which were insured losses, at IMTT. |
View original content:http://www.prnewswire.com/news-releases/mic-reports-2017-financial-results-increase-in-quarterly-dividend-300602321.html
SOURCE Macquarie Infrastructure Corporation
DALLAS, Jan. 3, 2018 /PRNewswire/ -- Alerian announced today the real-time launch of the Alerian Energy Infrastructure Capital Strength Select Index, a composite of North American midstream, refining, and utility companies chosen for their ownership of pipeline transportation assets, leverage profile, and above-market dividend payments. The index is disseminated real-time on a price-return basis (AMCS) and on a total-return basis (AMCST).
"The AMCS was designed with the understanding that the portion of the North American energy value chain from midstream to distribution has become increasingly integrated," said Alerian President and CEO Kenny Feng. "The composition of this index also seeks to address growing investor focus on strengthening balance sheets and improving corporate governance."
Constituents as of January 2, 2018
Name |
Ticker |
AltaGas Ltd |
ALA |
Antero Midstream Partners LP |
AM |
Andeavor |
ANDV |
Buckeye Partners LP |
BPL |
Boardwalk Pipeline Partners LP |
BWP |
CenterPoint Energy Inc |
CNP |
Cheniere Energy Partners LP Holdings LLC |
CQH |
Dominion Energy Inc |
D |
Enbridge Inc |
ENB |
EnLink Midstream LLC |
ENLC |
Enterprise Products Partners LP |
EPD |
EQT GP Holdings LP |
EQGP |
Gibson Energy Inc |
GEI |
HollyFrontier Corp |
HFC |
Inter Pipeline Ltd |
IPL |
Keyera Corp |
KEY |
Kinder Morgan Inc |
KMI |
Macquarie Infrastructure Corp |
MIC |
Magellan Midstream Partners LP |
MMP |
Marathon Petroleum Corp |
MPC |
OGE Energy Corp |
OGE |
ONEOK Inc |
OKE |
Plains GP Holdings LP |
PAGP |
Pembina Pipeline Corp |
PPL |
Phillips 66 |
PSX |
Sempra Energy |
SRE |
Tallgrass Energy GP LP |
TEGP |
TransCanada Corp |
TRP |
Valero Energy Corp |
VLO |
Western Gas Equity Partners LP |
WGP |
The Williams Companies Inc |
WMB |
About Alerian
Alerian equips investors to make informed decisions about Master Limited Partnerships (MLPs) and energy infrastructure. Its benchmarks, including the flagship Alerian MLP Index (AMZ), are widely used by industry executives, investment professionals, research analysts, and national media to analyze relative performance. As of December 31, 2017, over $16 billion is directly tied to the Alerian Index Series through exchange-traded funds and notes, separately managed accounts, and structured products. For more information, including index values and constituents, research content, and announcements regarding rebalancings, please visit alerian.com.
View original content:http://www.prnewswire.com/news-releases/alerian-announces-real-time-launch-of-the-alerian-energy-infrastructure-capital-strength-select-index-300576838.html
SOURCE Alerian
NEW YORK, Nov. 1, 2017 /PRNewswire/ -- Macquarie Infrastructure Corporation (NYSE: MIC) today reported its financial results for the third quarter of 2017.
"MIC's performance in the third quarter was consistent with the first half of the year with continued strong performance at Atlantic Aviation tempered by modest headwinds at our Contracted Power business," said James Hooke, chief executive officer of MIC. "We successfully completed the acquisitions of Epic Midstream and Orion Jet Center, as anticipated, and we continue to find opportunities to put growth capital to work at a rate that should see the Company achieve full year deployments of at least $650.0 million."
"MIC's financial results for the quarter supported an increase in our quarterly cash dividend to $1.42 per share — a 10.1% uptick versus the third quarter in 2016," Hooke added. The Company reaffirmed its guidance with respect to a 10% increase year over year in its cash dividend in 2017. Management's expectation for growth in cash generation and dividends assumes the continued improvement in operating results of existing businesses, together with anticipated contributions from investments and acquisitions.
MIC reported a 14.8% decrease in net income to $36.2 million for the quarter ended September 30, 2017 compared with $42.5 million in the third quarter of 2016. The decrease reflects primarily unrealized non-cash losses on interest rate hedging contracts compared with unrealized gains on similar contracts in the prior period. The losses were partially offset by improved operating results. Through nine months of the year, MIC's net income increased 13.3% to $94.8 million.
The Company reported cash generated by operating activities of $148.5 million and $397.7 million in the quarter and nine months ended September 30, 2017, respectively, compared with $159.1 million and $437.0 million reported in the prior comparable periods. The decrease in cash from operations in the quarter reflects primarily the timing of payment of insurance premiums, higher state taxes and changes in working capital related to higher inventory costs. The impact of these was partially offset by improved operating results and contributions from acquired businesses.
MIC's businesses produced an aggregate $144.4 million and $432.4 million of Adjusted Free Cash Flow in the quarter and year to date periods ended September 30, 2017, respectively, up 9.5% and 10.4% from the amounts generated in the prior corresponding periods. The Company defines Adjusted Free Cash Flow as cash from operating activities (including from its proportionate interest in wind and solar facilities), less maintenance capital expenditures, less changes in working capital, adjusted for certain one-time items. (See Summary Financial Information below)
"With the consistent performance of our existing businesses, we made a decision to spend approximately $5.0 million more on our business development platforms and insourcing of operations of our renewable power business," Hooke noted. "This decision will make it likely that the Company will now generate growth in Free Cash Flow of approximately 9% in 2017 compared with 2016."
MIC has committed capital to various development platforms, including those involved in fuel storage, logistics and wind and solar power that are not expected to deliver cash flow generating projects over the near term. MIC also incurred costs in 2017 to insource aspects of the operations and oversight of the Company's renewable energy power generation projects that had previously been conducted by various third party providers. Management believes that insourcing will lead to improved performance from these projects. The combined cost of the two initiatives is expected to result in a reduction in Free Cash Flow generation of approximately $5.0 million, or $0.06 per share, for the full year.
Consistent with past practices, MIC is expected to provide the market with its views on 2018 performance in the context of its full year results release next February. 2018 guidance is likely to reflect the benefit of growth capital deployed in 2017, the impact of a fully functioning shared services capability and the expected uplift associated with the general rate filing by MIC's Hawaii Gas business.
"We're excited about our prospects in 2018, given the pending completion of the buildout of BEC II and the benefits of the gas lateral completed this past year, as well as the full-year contribution from the several acquisitions we have been able to complete," said Hooke. "We also expect to see some initial economic benefits from our investment in development of renewable power projects."
The MIC board of directors authorized a cash dividend of $1.42 per share, or $5.68 annualized, for the third quarter of 2017. The dividend will be payable November 16, 2017 to shareholders of record on November 13, 2017. The payment represents a 10.1% increase over the dividend paid for the third quarter of 2016 and is consistent with MIC's guidance for a 10% increase in its annual dividend in 2017 over 2016.
The ongoing implementation of MIC's shared services initiative is resulting in reductions in general and administrative expenses consistent with the Company's guidance for savings of between $7.0 and $8.0 million in 2017. As anticipated, the savings have been offset by expenses including primarily severance payments and consulting fees. Those expenses totaled $1.4 million in the third quarter and $6.8 million in the year to date periods. The Company does not expect to incur implementation costs in 2018 and has excluded those incurred in 2017 from its presentation of both Adjusted EBITDA excluding non-cash items and Adjusted Free Cash Flow in an effort to provide clarity with respect to the recurring cash flows generated by its businesses.
MIC expects to realize annual general and administrative cost savings of between $12.0 million and $15.0 million in 2018, compared with its 2016 baseline, as a result of the shared services initiative. The expected savings will not be spread evenly, or even proportionately, across MIC's businesses and some businesses may simply benefit from an improvement in service levels. Shared services provides business support functions including Accounting, Human Resources, Tax, Information Technology, Procurement and Risk Management support to each of MIC's operating entities.
MIC incurred approximately $3.0 million of transaction related expenses during the third quarter as a result of a heightened level of activity associated with the evaluation of various investment and acquisition opportunities. Through nine months, transaction related costs have totaled $7.9 million. These costs have been recorded as an expense in the Corporate and Other segment of MIC's financial statements and have been excluded from the Company's presentation of both Adjusted EBITDA excluding non-cash items and Adjusted Free Cash Flow in an effort to provide clarity with respect to the recurring cash flows being generated by its businesses.
Management Changes
On September 11, 2017, James Hooke, MIC's chief executive officer notified the Company's board of directors of his intent to resign. Subsequently, Hooke and the board agreed that the effective date of his resignation would be December 31, 2017.
On October 30, 2017, the MIC board appointed Christopher Frost as chief executive officer of the Company, effective January 1, 2018. Frost, age 48, was appointed president and chief operating officer of the Company effective October 26, 2017.
Quarterly Segment Highlights
Growth in revenue at IMTT reflected a partial quarter contribution from the recently acquired Epic Midstream terminalling business, partially offset by a decline in utilization and a reduced contribution from IMTT subsidiary OMI Environmental Solutions due to reduced spill response activity. Utilization rates at IMTT decreased to 92.7% and 94.3% for the quarter and nine month periods ended September 30, 2017, respectively, versus 96.7% and 96.4% in the prior comparable periods. The sequential decline from 94.0% in the second quarter of 2017 reflected primarily the impact of two large tanks in Louisiana being out of service for portions of the quarter. Both tanks were re-leased by the middle of October.
Comparison of IMTT's results for the quarter to date period ended September 30, 2017 should be considered in light of the approximately $13.0 million of insurance proceeds related to dock damage recorded in Other Income, net and $13.9 million of related maintenance capital expenditures in the third quarter in 2016. Excluding these, IMTT's EBITDA excluding non-cash items would have increased by $4.9 million or 6.6% for the third quarter and by $14.2 million or 6.2% for the nine months ended September 30, 2017. Free Cash Flow generated by IMTT increased by 7.9% in the quarter ended September 30, 2017 and by 10.0% on a year to date basis in part as a result of improvement in operations and a reduction in maintenance capital expenditures.
Strong growth in general aviation flight activity during the third quarter, together with contributions from acquisitions, drove improvement in the financial performance of Atlantic Aviation. Domestic general aviation flight activity increased by approximately 4.0%, based on data reported by the Federal Aviation Administration.
The increase in flight activity, together with contributions from two additional sites added to the Atlantic Aviation network of fixed base operations (FBO) over the past twelve months, drove growth in EBITDA excluding non-cash items and Free Cash Flow of 12.8% and 15.4%, respectively, in the quarter. For the nine months ended September 30, 2017, EBITDA excluding non-cash items and Free Cash Flow generated by Atlantic increased 9.6% and 13.3%, respectively. At the end of the third quarter Atlantic Aviation completed its second FBO acquisition of the year, acquiring the Orion Jet Center at Opa Locka-Miami Executive Airport north of downtown Miami. The south Florida region is one of the fastest growing general aviation markets in the U.S.
MIC's portfolio of wind and solar power facilities benefitted from contributions from acquisitions completed during the past year, although these were partially offset by a reduction in wind and solar resources versus the prior comparable quarter and year to date periods. MIC has entered into agreements with developers of both wind and solar projects and continues to make a portion of its capital available for the construction of additional renewable power facilities. One of those developers sold a number of solar projects in the third quarter and distributed of a portion of the profits to MIC, per the terms of the development agreement, during the period.
MIC has elected to insource the operations oversight of its renewable power businesses. The insourcing was undertaken as a result of a lack of oversight on the part of third party service providers that led to lost power generation revenue and opportunities to optimize the performance of certain assets. With ten renewable facilities in its portfolio and additional facilities in development, MIC expects the insourced capability to facilitate creation of scale in the sector and to provide control benefits.
MIC's Bayonne Energy Center (BEC) is a thermal power facility providing peaking power to parts of New York City from a plant located in Bayonne, NJ. 62.5% of the plant's capacity generates revenue pursuant to a tolling agreement independent of the power needs of the community. 37.5% of the capacity is available on a merchant basis and therefore exposed to demand for peak power. The merchant portion of the facility underperformed expectations in the third quarter as a result of lower than anticipated capacity prices during the summer of 2017 and a reduction in utilization and energy margins relative to prior years driven by milder weather in 2017 versus 2016. The reduced contribution was partially offset by lower natural gas costs as a result of connecting the plant to a second, less expensive source of gas during the summer of 2017 and by additional tariff revenue from the grid operator for new services provided.
In aggregate, the businesses comprising MIC's Contracted Power segment generated $0.66 million, or 2.0%, less EBITDA excluding non-cash items and $0.75 million, or 2.8%, less Free Cash Flow in the third quarter of 2017 compared with the third quarter in 2016. For the nine months ended September 30, 2017, the segment produced an increase in EBITDA excluding non-cash items of $1.5 million and no change in Free Cash Flow.
The Company's MIC Hawaii segment reported revenue growth driven by an increase in the volume of gas sold by Hawaii Gas and contributions from acquisitions compared with the third quarter of 2016. A portion of the increase was offset by higher state taxes in the quarter and lower prices achieved on gas sales in certain markets.
For the quarter ended September 30, 2017, EBITDA excluding non-cash items and Free Cash Flow generated by MIC Hawaii decreased by $0.27 million, or 2.0%, and $0.56 million or 6.4%, respectively, versus the prior comparable period. For the nine months ended September 30, 2017, EBITDA excluding non-cash items was flat and Free Cash Flow increased by $1.9 million or 6.4%.
Summary Financial Information | ||||||||||||||||||||||||||||||||
Quarter Ended |
Change |
Nine Months Ended |
Change | |||||||||||||||||||||||||||||
2017 |
2016 |
$ |
% |
2017 |
2016 |
$ |
% | |||||||||||||||||||||||||
($ In Thousands, Except Share and Per Share Data) (Unaudited) | ||||||||||||||||||||||||||||||||
GAAP Metrics |
||||||||||||||||||||||||||||||||
Net income |
$ |
36,173 |
$ |
42,481 |
(6,308) |
(14.8) |
$ |
94,836 |
$ |
83,738 |
11,098 |
13.3 |
||||||||||||||||||||
Weighted average |
83,644,806 |
81,220,841 |
2,423,965 |
3.0 |
82,743,285 |
80,570,192 |
2,173,093 |
2.7 |
||||||||||||||||||||||||
Net income per |
$ |
0.48 |
$ |
0.52 |
(0.04) |
(7.7) |
$ |
1.23 |
$ |
1.04 |
0.19 |
18.3 |
||||||||||||||||||||
Cash provided by |
148,465 |
159,070 |
(10,605) |
(6.7) |
397,669 |
436,988 |
(39,319) |
(9.0) |
||||||||||||||||||||||||
MIC Non-GAAP |
||||||||||||||||||||||||||||||||
EBITDA excluding |
$ |
182,684 |
$ |
186,823 |
(4,139) |
(2.2) |
$ |
533,923 |
$ |
529,582 |
4,341 |
0.8 |
||||||||||||||||||||
Shared service |
1,402 |
— |
1,402 |
NM |
6,847 |
— |
6,847 |
NM |
||||||||||||||||||||||||
Investment and |
3,023 |
— |
3,023 |
NM |
7,873 |
— |
7,873 |
NM |
||||||||||||||||||||||||
Adjusted EBITDA |
$ |
187,109 |
$ |
186,823 |
286 |
0.2 |
$ |
548,643 |
$ |
529,582 |
19,061 |
3.6 |
||||||||||||||||||||
Cash interest(3) |
$ |
(27,151) |
$ |
(27,389) |
238 |
0.9 |
$ |
(79,435) |
$ |
(82,008) |
2,573 |
3.1 |
||||||||||||||||||||
Cash taxes |
(2,154) |
(1,115) |
(1,039) |
(93.2) |
(8,493) |
(5,283) |
(3,210) |
(60.8) |
||||||||||||||||||||||||
Maintenance |
(12,106) |
(24,472) |
12,366 |
50.5 |
(23,062) |
(44,725) |
21,663 |
48.4 |
||||||||||||||||||||||||
Noncontrolling interest(5) |
(1,308) |
(1,947) |
639 |
32.8 |
(5,223) |
(5,954) |
731 |
12.3 |
||||||||||||||||||||||||
Adjusted Free Cash Flow |
$ |
144,390 |
$ |
131,900 |
12,490 |
9.5 |
$ |
432,430 |
$ |
391,612 |
40,818 |
10.4 |
||||||||||||||||||||
NM — Not meaningful | ||||||||||||||||||||||||||||||||
(1) EBITDA excluding non-cash items is calculated as net income before interest expense, taxes, depreciation and amortization expense, management fees, pension expense and other non-cash (income) expense recorded in the consolidated statement of operations. See below for reconciliation of net income (loss) to EBITDA excluding non-cash items. | ||||||||||||||||||||||||||||||||
(2) For the quarter and nine months ended September 30, 2016, EBITDA excluding non-cash items included $13.0 million and $15.5 million, respectively, of insurance recoveries related to damaged docks at IMTT. | ||||||||||||||||||||||||||||||||
(3) Cash interest is calculated as interest expense excluding the impact of non-cash adjustments for unrealized (gains) losses from derivative instruments, amortization of deferred financing costs and the amortization of debt discount recorded in the consolidated statement of operations. | ||||||||||||||||||||||||||||||||
(4) For the quarter and nine months ended September 30, 2016, maintenance capital expenditures included $13.9 million associated with the rebuilding of damaged docks, the majority of which were insured losses, at IMTT. | ||||||||||||||||||||||||||||||||
(5) Noncontrolling interest adjustment represents the portion of Free Cash Flow not attributable to MIC's ownership interest. |
Adjusted EBITDA excluding non-cash items, on a proportionately combined basis, would have increased by 8.2% to $185.0 million in the quarter ended September 30, 2017 excluding the impact of the insurance recovery by IMTT in 2016 discussed above. Through the nine months ended September 30, 2017, the increase would have been 7.0% to $541.0 million.
Conference Call and Webcast
When: MIC has scheduled a conference call for 8:00 a.m. Eastern Time on Thursday, November 2, 2017 during which management will review and comment on the third quarter 2017 results.
How: To listen to the conference call dial +1(650) 521-5252 or +1(877) 852-2928 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. Allow extra time prior to the call to visit the site and download the software needed to listen to the webcast.
Slides: MIC will prepare materials in support of its conference call. The materials will be available for downloading from the Company's website prior to the call.
Replay: For interested individuals unable to participate in the live conference call, a replay will be available after 2:00 p.m. on November 2, 2017 through midnight on November 8, 2017, at +1(404) 537-3406 or +1(855) 859-2056, Passcode: 98492892. An online archive of the webcast will be available on the Company's website for one year following the call.
About MIC
MIC owns and operates a diversified group of businesses providing basic services to customers primarily in the United States. Its businesses consist of a bulk liquid terminals business, International-Matex Tank Terminals; an airport services business, Atlantic Aviation; entities comprising an energy services, production and distribution segment, MIC Hawaii; and entities comprising a Contracted Power segment. For additional information, please visit the MIC website at www.macquarie.com/mic. MIC-G
Use of Non-GAAP Measures
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items, Free Cash Flow and Proportionately Combined Metrics
In addition to MIC's results under U.S. GAAP, the Company uses certain non-GAAP measures to assess the performance and prospects of its businesses. In particular, MIC uses EBITDA excluding non-cash items, Free Cash Flow and certain proportionately combined financial metrics. Proportionately combined financial metrics, including Free Cash Flow, reflect the Company's proportionate interest in its wind and solar facilities.
MIC measures EBITDA excluding non-cash items as a reflection of its businesses' ability to effectively manage the volume of products sold or services provided, the operating margin earned on those transactions and the management of operating expenses independent of the capitalization and tax attributes of those businesses. The Company believes investors use EBITDA excluding non-cash items primarily as a measure to assess the operating performance of its businesses and to make comparisons with the operating performance of other businesses whose depreciation and amortization expense may vary widely from MIC's, particularly where acquisitions and other non-operating factors are involved. MIC defines EBITDA excluding non-cash items as net income (loss) or earnings — the most comparable GAAP measure — before interest, taxes, depreciation and amortization and non-cash items including impairments, unrealized derivative gains and losses, adjustments for other non-cash items and pension expenses reflected in the statements of operations. EBITDA excluding non-cash items also excludes base management fees and performance fees, if any, whether paid in cash or stock.
Given MIC's varied ownership levels in its CP and MIC Hawaii segments, together with obligations to report the results of these businesses on a consolidated basis, GAAP measures such as net income (loss) do not fully reflect all of the items management considers in assessing the amount of cash generated based on its proportionate interest in its wind and solar facilities. The Company notes that the proportionately combined metrics used 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 supplemental measure and not in lieu of its financial results reported under GAAP.
The Company's businesses are characteristically owners of high-value, long-lived assets capable of generating substantial Free Cash Flow. MIC defines Free Cash Flow as cash from operating activities — the most comparable GAAP measure — which includes cash paid for interest, taxes and pension contributions, less maintenance capital expenditures, which includes principal repayments on capital lease obligations used to fund maintenance capital expenditures, and excludes changes in working capital.
Management uses Free Cash Flow as a measure of its ability to provide investors with an attractive risk-adjusted return by sustaining and potentially increasing MIC's quarterly cash dividend and funding a portion of the Company's growth. GAAP metrics such as net income (loss) do not provide MIC management with the same level of visibility into the performance and prospects of the business as a result of: (i) the capital intensive nature of MIC's businesses and the generation of non-cash depreciation and amortization; (ii) shares issued to the Company's external manager under the Management Services Agreement; (iii) the Company's ability to defer all or a portion of current federal income taxes; (iv) non-cash unrealized gains or losses on derivative instruments; (v) amortization of tolling liabilities; (vi) gains (losses) on disposal of assets; and (vii) pension expenses. Pension expenses primarily consist of interest expense, expected return on plan assets and amortization of actuarial and performance gains and losses. Any cash contributions to pension plans are reflected as a reduction to Free Cash Flow. Management believes that external consumers of its financial statements, including investors and research analysts, use Free Cash Flow both to assess the Company's performance and as an indicator of its success in generating an attractive risk-adjusted return.
In its Quarterly Report on Form 10-Q, the Company has disclosed Free Cash Flow on a consolidated basis and for each of its operating segments and MIC Corporate. Management believes that both EBITDA excluding non-cash items and Free Cash Flow support a more complete and accurate understanding of the financial and operating performance of its businesses than would otherwise be achieved using GAAP results alone.
Free Cash Flow does not take into consideration required payments on indebtedness and other fixed obligations or other cash items that are excluded from MIC's definition of Free Cash Flow. Management notes that Free Cash Flow may be calculated differently by other companies thereby limiting its usefulness as a comparative measure. Free Cash Flow should be used as a supplemental measure and not in lieu of its financial results reported under GAAP.
See also "Reconciliation of Consolidated Net Income (Loss) to EBITDA Excluding Non-Cash Items and a Reconciliation from Cash Provided by Operating Activities to Free Cash Flow" below.
Classification of Maintenance Capital Expenditures and Growth Capital Expenditures
MIC categorizes capital expenditures as either maintenance capital expenditures or growth capital expenditures. As neither maintenance capital expenditure nor growth capital expenditure is a GAAP term, the Company has adopted a framework to categorize specific capital expenditures. In broad terms, maintenance capital expenditures primarily maintain MIC's businesses at current levels of operations, capability, profitability or cash flow, while growth capital expenditures primarily provide new or enhanced levels of operations, capability, profitability or cash flow. Management considers a number of factors in determining whether a specific capital expenditure will be classified as maintenance or growth.
In some cases, specific capital expenditures contain characteristics of both maintenance and growth capital expenditures. MIC does not bifurcate specific capital expenditures into maintenance and growth components. Each discrete capital expenditure is considered within the above framework and the entire capital expenditure is classified as either maintenance or growth.
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 release 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; risks associated with development, investment and expansion in the power industry; 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 and other commodity costs; its ability to recover increases in costs from customers, cybersecurity risks, work interruptions or other labor stoppages; risks related to its shared services initiative; 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 Corporation 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 Corporation.
MACQUARIE INFRASTRUCTURE CORPORATION | ||||||||
CONSOLIDATED CONDENSED BALANCE SHEETS | ||||||||
September 30, |
December 31, | |||||||
(Unaudited) |
||||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ |
35,737 |
$ |
44,767 | ||||
Restricted cash |
22,809 |
16,420 | ||||||
Accounts receivable, less allowance for doubtful accounts of $1,037 and $1,434, |
145,506 |
124,846 | ||||||
Inventories |
35,960 |
31,461 | ||||||
Prepaid expenses |
13,799 |
14,561 | ||||||
Fair value of derivative instruments |
8,675 |
5,514 | ||||||
Other current assets |
16,742 |
7,099 | ||||||
Total current assets |
279,228 |
244,668 | ||||||
Property, equipment, land and leasehold improvements, net |
4,611,633 |
4,346,536 | ||||||
Investment in unconsolidated business |
9,526 |
8,835 | ||||||
Goodwill |
2,075,965 |
2,024,409 | ||||||
Intangible assets, net |
931,433 |
888,971 | ||||||
Fair value of derivative instruments |
18,743 |
30,781 | ||||||
Other noncurrent assets |
28,835 |
15,053 | ||||||
Total assets |
$ |
7,955,363 |
$ |
7,559,253 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY |
||||||||
Current liabilities: |
||||||||
Due to Manager-related party |
$ |
6,098 |
$ |
6,594 | ||||
Accounts payable |
59,078 |
69,566 | ||||||
Accrued expenses |
101,766 |
83,734 | ||||||
Current portion of long-term debt |
48,335 |
40,016 | ||||||
Fair value of derivative instruments |
3,992 |
9,297 | ||||||
Other current liabilities |
40,932 |
41,802 | ||||||
Total current liabilities |
260,201 |
251,009 | ||||||
Long-term debt, net of current portion |
3,424,776 |
3,039,966 | ||||||
Deferred income taxes |
955,542 |
896,116 | ||||||
Fair value of derivative instruments |
5,807 |
5,966 | ||||||
Tolling agreements – noncurrent |
54,540 |
60,373 | ||||||
Other noncurrent liabilities |
158,308 |
158,289 | ||||||
Total liabilities |
4,859,174 |
4,411,719 | ||||||
Commitments and contingencies |
— |
— | ||||||
Stockholders' equity(1): |
||||||||
Common stock ($0.001 par value; 500,000,000 authorized; 84,481,865 shares issued |
$ |
84 |
$ |
82 | ||||
Additional paid in capital |
1,942,417 |
2,089,407 | ||||||
Accumulated other comprehensive loss |
(26,222) |
(28,960) | ||||||
Retained earnings |
994,495 |
892,365 | ||||||
Total stockholders' equity |
2,910,774 |
2,952,894 | ||||||
Noncontrolling interests |
185,415 |
194,640 | ||||||
Total equity |
3,096,189 |
3,147,534 | ||||||
Total liabilities and equity |
$ |
7,955,363 |
$ |
7,559,253 | ||||
(1) The Company is authorized to issue 100,000,000 shares of preferred stock, par value $0.001 per share. At September 30, 2017 and December 31, 2016, no preferred stock were issued or outstanding. The Company has 100 shares of special stock issued and outstanding to its Manager at September 30, 2017 and December 31, 2016. |
MACQUARIE INFRASTRUCTURE CORPORATION | ||||||||||||||||
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS | ||||||||||||||||
Quarter Ended September 30, |
Nine Months Ended September 30, | |||||||||||||||
2017 |
2016 |
2017 |
2016 | |||||||||||||
Revenue |
||||||||||||||||
Service revenue |
$ |
358,220 |
$ |
323,975 |
$ |
1,067,069 |
$ |
942,437 | ||||||||
Product revenue |
94,841 |
96,549 |
276,439 |
272,053 | ||||||||||||
Total revenue |
453,061 |
420,524 |
1,343,508 |
1,214,490 | ||||||||||||
Costs and expenses |
||||||||||||||||
Cost of services |
153,218 |
134,512 |
455,038 |
371,832 | ||||||||||||
Cost of product sales |
35,669 |
39,845 |
123,143 |
107,923 | ||||||||||||
Selling, general and administrative |
84,898 |
77,468 |
244,817 |
222,182 | ||||||||||||
Fees to Manager – related party |
17,954 |
18,382 |
54,610 |
49,570 | ||||||||||||
Depreciation |
58,009 |
59,242 |
172,753 |
172,125 | ||||||||||||
Amortization of intangibles |
17,329 |
15,417 |
50,920 |
49,917 | ||||||||||||
Total operating expenses |
367,077 |
344,866 |
1,101,281 |
973,549 | ||||||||||||
Operating income |
85,984 |
75,658 |
242,227 |
240,941 | ||||||||||||
Other income (expense) |
||||||||||||||||
Interest income |
54 |
27 |
129 |
85 | ||||||||||||
Interest expense(1) |
(29,291) |
(20,871) |
(90,129) |
(117,268) | ||||||||||||
Other income, net |
4,973 |
16,689 |
7,893 |
20,389 | ||||||||||||
Net income before income taxes |
61,720 |
71,503 |
160,120 |
144,147 | ||||||||||||
Provision for income taxes |
(25,547) |
(29,022) |
(65,284) |
(60,409) | ||||||||||||
Net income |
$ |
36,173 |
$ |
42,481 |
$ |
94,836 |
$ |
83,738 | ||||||||
Less: net (loss) income attributable to noncontrolling |
(3,922) |
455 |
(7,294) |
165 | ||||||||||||
Net income attributable to MIC |
$ |
40,095 |
$ |
42,026 |
$ |
102,130 |
$ |
83,573 | ||||||||
Basic income per share attributable to MIC |
$ |
0.48 |
$ |
0.52 |
$ |
1.23 |
$ |
1.04 | ||||||||
Weighted average number of shares |
83,644,806 |
81,220,841 |
82,743,285 |
80,570,192 | ||||||||||||
Diluted income per share attributable to MIC |
$ |
0.48 |
$ |
0.51 |
$ |
1.23 |
$ |
1.03 | ||||||||
Weighted average number of shares |
87,916,538 |
85,750,096 |
82,752,800 |
81,313,767 | ||||||||||||
Cash dividends declared per share |
$ |
1.42 |
$ |
1.29 |
$ |
4.12 |
$ |
3.74 | ||||||||
(1) Interest expense includes losses on derivative instruments of $162,000 and $6.9 million for the quarter and nine months ended September 30, 2017, respectively. For the quarter and nine months ended September 30, 2016, interest expense includes gains on derivative instruments of $3.7 million and losses on derivative instruments of $43.0 million, respectively. |
MACQUARIE INFRASTRUCTURE CORPORATION | ||||||||
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS | ||||||||
Nine Months Ended | ||||||||
2017 |
2016 | |||||||
Operating activities |
||||||||
Net income |
$ |
94,836 |
$ |
83,738 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
Depreciation and amortization of property and equipment |
172,753 |
172,125 | ||||||
Amortization of intangible assets |
50,920 |
49,917 | ||||||
Amortization of debt financing costs |
6,464 |
7,536 | ||||||
Amortization of debt discount |
2,377 |
— | ||||||
Adjustments to derivative instruments |
3,414 |
20,022 | ||||||
Fees to Manager- related party |
54,610 |
49,570 | ||||||
Deferred taxes |
56,791 |
55,126 | ||||||
Pension expense |
6,481 |
6,512 | ||||||
Other non-cash income, net |
(2,651) |
(2,255) | ||||||
Changes in other assets and liabilities, net of acquisitions: |
||||||||
Restricted cash |
(691) |
727 | ||||||
Accounts receivable |
(18,938) |
(10,094) | ||||||
Inventories |
(4,563) |
(1,047) | ||||||
Prepaid expenses and other current assets |
(7,040) |
5,967 | ||||||
Due to Manager-related party |
(178) |
21 | ||||||
Accounts payable and accrued expenses |
(4,444) |
(3,365) | ||||||
Income taxes payable |
(1,223) |
3,848 | ||||||
Other, net |
(11,249) |
(1,360) | ||||||
Net cash provided by operating activities |
397,669 |
436,988 | ||||||
Investing activities |
||||||||
Acquisitions of businesses and investments, net of cash acquired |
(208,377) |
(38,989) | ||||||
Purchases of property and equipment |
(234,833) |
(198,151) | ||||||
Proceeds from insurance claim |
— |
10,002 | ||||||
Loan to project developer |
(18,675) |
— | ||||||
Loan repayment from project developer |
6,604 |
— | ||||||
Change in restricted cash |
(6,154) |
— | ||||||
Other, net |
178 |
861 | ||||||
Net cash used in investing activities |
(461,257) |
(226,277) |
MACQUARIE INFRASTRUCTURE CORPORATION | ||||||||
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS – (continued) | ||||||||
Nine Months Ended | ||||||||
2017 |
2016 | |||||||
Financing activities |
||||||||
Proceeds from long-term debt |
$ |
585,500 |
$ |
370,000 |
||||
Payment of long-term debt |
(200,722) |
(295,950) |
||||||
Proceeds from the issuance of shares |
5,699 |
7,651 |
||||||
Dividends paid to common stockholders |
(332,867) |
(290,527) |
||||||
Contributions received from noncontrolling interests |
102 |
15,431 |
||||||
Purchase of noncontrolling interest |
— |
(9,909) |
||||||
Distributions paid to noncontrolling interests |
(2,962) |
(3,682) |
||||||
Offering and equity raise costs paid |
(355) |
(678) |
||||||
Debt financing costs paid |
(447) |
(1,784) |
||||||
Change in restricted cash |
527 |
5,379 |
||||||
Payment of capital lease obligations |
(366) |
(1,151) |
||||||
Net cash provided by (used in) financing activities |
54,109 |
(205,220) |
||||||
Effect of exchange rate changes on cash and cash equivalents |
449 |
494 |
||||||
Net change in cash and cash equivalents |
(9,030) |
5,985 |
||||||
Cash and cash equivalents, beginning of period |
44,767 |
22,394 |
||||||
Cash and cash equivalents, end of period |
$ |
35,737 |
$ |
28,379 |
||||
Supplemental disclosures of cash flow information |
||||||||
Non-cash investing and financing activities: |
||||||||
Accrued equity offering costs |
$ |
97 |
$ |
90 |
||||
Accrued financing costs |
$ |
21 |
$ |
548 |
||||
Accrued purchases of property and equipment |
$ |
33,184 |
$ |
31,728 |
||||
Issuance of shares to Manager |
$ |
54,927 |
$ |
116,373 |
||||
Issuance of shares to independent directors |
$ |
681 |
$ |
750 |
||||
Issuance of shares for acquisition of business |
$ |
125,000 |
$ |
— |
||||
Conversion of convertible senior notes to shares |
$ |
17 |
$ |
4 |
||||
Distributions payable to noncontrolling interests |
$ |
32 |
$ |
10 |
||||
Taxes paid, net |
$ |
9,810 |
$ |
1,426 |
||||
Interest paid |
$ |
82,108 |
$ |
81,998 |
MACQUARIE INFRASTRUCTURE CORPORATION | ||||||||||||||||||||||||||||||||
Quarter Ended |
Change |
Nine Months Ended |
Change | |||||||||||||||||||||||||||||
2017 |
2016 |
$ |
% |
2017 |
2016 |
$ |
% | |||||||||||||||||||||||||
($ In Thousands, Except Share and Per Share Data) (Unaudited) |
||||||||||||||||||||||||||||||||
Revenue |
||||||||||||||||||||||||||||||||
Service revenue |
$ |
358,220 |
$ |
323,975 |
34,245 |
10.6 |
$ |
1,067,069 |
$ |
942,437 |
124,632 |
13.2 |
||||||||||||||||||||
Product revenue |
94,841 |
96,549 |
(1,708) |
(1.8) |
276,439 |
272,053 |
4,386 |
1.6 |
||||||||||||||||||||||||
Total revenue |
453,061 |
420,524 |
32,537 |
7.7 |
1,343,508 |
1,214,490 |
129,018 |
10.6 |
||||||||||||||||||||||||
Costs and expenses |
||||||||||||||||||||||||||||||||
Cost of services |
153,218 |
134,512 |
(18,706) |
(13.9) |
455,038 |
371,832 |
(83,206) |
(22.4) |
||||||||||||||||||||||||
Cost of product sales |
35,669 |
39,845 |
4,176 |
10.5 |
123,143 |
107,923 |
(15,220) |
(14.1) |
||||||||||||||||||||||||
Selling, general and administrative |
84,898 |
77,468 |
(7,430) |
(9.6) |
244,817 |
222,182 |
(22,635) |
(10.2) |
||||||||||||||||||||||||
Fees to Manager – related party |
17,954 |
18,382 |
428 |
2.3 |
54,610 |
49,570 |
(5,040) |
(10.2) |
||||||||||||||||||||||||
Depreciation |
58,009 |
59,242 |
1,233 |
2.1 |
172,753 |
172,125 |
(628) |
(0.4) |
||||||||||||||||||||||||
Amortization of intangibles |
17,329 |
15,417 |
(1,912) |
(12.4) |
50,920 |
49,917 |
(1,003) |
(2.0) |
||||||||||||||||||||||||
Total operating expenses |
367,077 |
344,866 |
(22,211) |
(6.4) |
1,101,281 |
973,549 |
(127,732) |
(13.1) |
||||||||||||||||||||||||
Operating income |
85,984 |
75,658 |
10,326 |
13.6 |
242,227 |
240,941 |
1,286 |
0.5 |
||||||||||||||||||||||||
Other income (expense) |
||||||||||||||||||||||||||||||||
Interest income |
54 |
27 |
27 |
100.0 |
129 |
85 |
44 |
51.8 |
||||||||||||||||||||||||
Interest expense(1) |
(29,291) |
(20,871) |
(8,420) |
(40.3) |
(90,129) |
(117,268) |
27,139 |
23.1 |
||||||||||||||||||||||||
Other income, net |
4,973 |
16,689 |
(11,716) |
(70.2) |
7,893 |
20,389 |
(12,496) |
(61.3) |
||||||||||||||||||||||||
Net income before income taxes |
61,720 |
71,503 |
(9,783) |
(13.7) |
160,120 |
144,147 |
15,973 |
11.1 |
||||||||||||||||||||||||
Provision for income taxes |
(25,547) |
(29,022) |
3,475 |
12.0 |
(65,284) |
(60,409) |
(4,875) |
(8.1) |
||||||||||||||||||||||||
Net income |
$ |
36,173 |
$ |
42,481 |
(6,308) |
(14.8) |
$ |
94,836 |
$ |
83,738 |
11,098 |
13.3 |
||||||||||||||||||||
Less: net (loss) income attributable to |
(3,922) |
455 |
4,377 |
NM |
(7,294) |
165 |
7,459 |
NM |
||||||||||||||||||||||||
Net income attributable to MIC |
$ |
40,095 |
$ |
42,026 |
(1,931) |
(4.6) |
$ |
102,130 |
$ |
83,573 |
18,557 |
22.2 |
||||||||||||||||||||
Basic income per share attributable to |
$ |
0.48 |
$ |
0.52 |
(0.04) |
(7.7) |
$ |
1.23 |
$ |
1.04 |
0.19 |
18.3 |
||||||||||||||||||||
Weighted average number of shares |
83,644,806 |
81,220,841 |
2,423,965 |
3.0 |
82,743,285 |
80,570,192 |
2,173,093 |
2.7 |
||||||||||||||||||||||||
NM — Not meaningful | ||||||||||||||||||||||||||||||||
(1) Interest expense includes losses on derivative instruments of $162,000 and $6.9 million for the quarter and nine months ended September 30, 2017, respectively. For the quarter and nine months ended September 30, 2016, interest expense includes gains on derivative instruments of $3.7 million and losses on derivative instruments of $43.0 million, respectively. |
MACQUARIE INFRASTRUCTURE CORPORATION | ||||||||||||||||||||||||||||||||
Quarter Ended |
Change |
Nine Months Ended |
Change | |||||||||||||||||||||||||||||
2017 |
2016 |
$ |
% |
2017 |
2016 |
$ |
% | |||||||||||||||||||||||||
($ In Thousands) (Unaudited) | ||||||||||||||||||||||||||||||||
Net income |
$ |
36,173 |
$ |
42,481 |
$ |
94,836 |
$ |
83,738 |
||||||||||||||||||||||||
Interest expense, net(1) |
29,237 |
20,844 |
90,000 |
117,183 |
||||||||||||||||||||||||||||
Provision for income taxes |
25,547 |
29,022 |
65,284 |
60,409 |
||||||||||||||||||||||||||||
Depreciation |
58,009 |
59,242 |
172,753 |
172,125 |
||||||||||||||||||||||||||||
Amortization of intangibles |
17,329 |
15,417 |
50,920 |
49,917 |
||||||||||||||||||||||||||||
Fees to Manager-related party |
17,954 |
18,382 |
54,610 |
49,570 |
||||||||||||||||||||||||||||
Pension expense(2) |
2,160 |
2,117 |
6,481 |
6,512 |
||||||||||||||||||||||||||||
Other non-cash income, net(3) |
(3,725) |
(682) |
(961) |
(9,872) |
||||||||||||||||||||||||||||
EBITDA excluding non-cash items(4) |
$ |
182,684 |
$ |
186,823 |
(4,139) |
(2.2) |
$ |
533,923 |
$ |
529,582 |
4,341 |
0.8 |
||||||||||||||||||||
EBITDA excluding non-cash items(4) |
$ |
182,684 |
$ |
186,823 |
$ |
533,923 |
$ |
529,582 |
||||||||||||||||||||||||
Interest expense, net(1) |
(29,237) |
(20,844) |
(90,000) |
(117,183) |
||||||||||||||||||||||||||||
Adjustments to derivative instruments recorded |
(959) |
(8,832) |
1,724 |
27,639 |
||||||||||||||||||||||||||||
Amortization of debt financing costs(1) |
2,163 |
2,287 |
6,464 |
7,536 |
||||||||||||||||||||||||||||
Amortization of debt discount(1) |
882 |
— |
2,377 |
— |
||||||||||||||||||||||||||||
Provision for income taxes, net of changes in deferred taxes |
(2,154) |
(1,115) |
(8,493) |
(5,283) |
||||||||||||||||||||||||||||
Changes in working capital |
(4,914) |
751 |
(48,326) |
(5,303) |
||||||||||||||||||||||||||||
Cash provided by operating activities |
148,465 |
159,070 |
397,669 |
436,988 |
||||||||||||||||||||||||||||
Changes in working capital |
4,914 |
(751) |
48,326 |
5,303 |
||||||||||||||||||||||||||||
Maintenance capital |
(12,106) |
(24,472) |
(23,062) |
(44,725) |
||||||||||||||||||||||||||||
Free cash flow |
$ |
141,273 |
$ |
133,847 |
7,426 |
5.5 |
$ |
422,933 |
$ |
397,566 |
25,367 |
6.4 |
||||||||||||||||||||
(1) Interest expense, net, includes adjustments to derivative instruments, non-cash amortization of deferred financing fees and non-cash amortization of debt discount related to the 2.00% Convertible Senior Notes due October 2023. For the nine months ended September 30, 2016, interest expense also included a non-cash write-off of deferred financing fees related to the February 2016 refinancing at Hawaii Gas. | ||||||||||||||||||||||||||||||||
(2) Pension expense primarily consists of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses. | ||||||||||||||||||||||||||||||||
(3) Other non-cash income, net, primarily includes non-cash amortization of tolling liabilities, unrealized gains (losses) on commodity hedges and non-cash gains (losses) related to disposal of assets. See "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items, Free Cash Flow and Proportionately Combined Metrics" above for further discussion. | ||||||||||||||||||||||||||||||||
(4) For the quarter and nine months ended September 30, 2016, EBITDA excluding non-cash items included $13.0 million and $15.5 million, respectively, of insurance recoveries related to damaged docks at IMTT. | ||||||||||||||||||||||||||||||||
(5) For the quarter and nine months ended September 30, 2016, maintenance capital expenditures included $13.9 million associated with the rebuilding of damaged docks, the majority of which were insured losses, at IMTT. |
MACQUARIE INFRASTRUCTURE CORPORATION | ||||||||||||||||||||||||||||||||
Quarter Ended |
Change |
Nine Months Ended |
Change | |||||||||||||||||||||||||||||
2017 |
2016 |
$ |
% |
2017 |
2016 |
$ |
% | |||||||||||||||||||||||||
($ In Thousands) (Unaudited) | ||||||||||||||||||||||||||||||||
Free Cash Flow – Consolidated basis |
$ |
141,273 |
$ |
133,847 |
7,426 |
5.5 |
$ |
422,933 |
$ |
397,566 |
25,367 |
6.4 |
||||||||||||||||||||
100% of CP Free Cash Flow included in |
(25,970) |
(26,718) |
(56,513) |
(56,532) |
||||||||||||||||||||||||||||
MIC's share of CP Free Cash Flow |
24,667 |
24,773 |
51,300 |
50,580 |
||||||||||||||||||||||||||||
100% of MIC Hawaii Free Cash Flow |
(8,137) |
(8,696) |
(32,368) |
(30,432) |
||||||||||||||||||||||||||||
MIC's share of MIC Hawaii Free Cash Flow |
8,132 |
8,694 |
32,358 |
30,430 |
||||||||||||||||||||||||||||
Free Cash Flow – Proportionately Combined |
$ |
139,965 |
$ |
131,900 |
8,065 |
6.1 |
$ |
417,710 |
$ |
391,612 |
26,098 |
6.7 |
MACQUARIE INFRASTRUCTURE CORPORATION | ||||||||||||||||||||||||||||||||
IMTT | ||||||||||||||||||||||||||||||||
Quarter Ended |
Change |
Nine Months Ended |
Change | |||||||||||||||||||||||||||||
2017 |
2016 |
2017 |
2016 | |||||||||||||||||||||||||||||
$ |
$ |
$ |
% |
$ |
$ |
$ |
% | |||||||||||||||||||||||||
($ In Thousands) (Unaudited) | ||||||||||||||||||||||||||||||||
Revenue |
134,167 |
133,143 |
1,024 |
0.8 |
410,128 |
396,786 |
13,342 |
3.4 |
||||||||||||||||||||||||
Cost of services |
48,982 |
53,085 |
4,103 |
7.7 |
148,052 |
149,845 |
1,793 |
1.2 |
||||||||||||||||||||||||
Selling, general and administrative expenses |
9,104 |
8,358 |
(746) |
(8.9) |
25,627 |
24,322 |
(1,305) |
(5.4) |
||||||||||||||||||||||||
Depreciation and amortization |
31,511 |
35,709 |
4,198 |
11.8 |
93,826 |
103,612 |
9,786 |
9.4 |
||||||||||||||||||||||||
Operating income |
44,570 |
35,991 |
8,579 |
23.8 |
142,623 |
119,007 |
23,616 |
19.8 |
||||||||||||||||||||||||
Interest expense, net(1) |
(10,187) |
(7,827) |
(2,360) |
(30.2) |
(30,707) |
(41,462) |
10,755 |
25.9 |
||||||||||||||||||||||||
Other income, net |
794 |
13,495 |
(12,701) |
(94.1) |
1,954 |
16,947 |
(14,993) |
(88.5) |
||||||||||||||||||||||||
Provision for income taxes |
(14,422) |
(17,079) |
2,657 |
15.6 |
(46,686) |
(38,717) |
(7,969) |
(20.6) |
||||||||||||||||||||||||
Net income |
20,755 |
24,580 |
(3,825) |
(15.6) |
67,184 |
55,775 |
11,409 |
20.5 |
||||||||||||||||||||||||
Less: net income attributable to noncontrolling interests |
— |
— |
— |
— |
— |
59 |
59 |
100.0 |
||||||||||||||||||||||||
Net income attributable to MIC |
20,755 |
24,580 |
(3,825) |
(15.6) |
67,184 |
55,716 |
11,468 |
20.6 |
||||||||||||||||||||||||
Reconciliation of net income to EBITDA |
||||||||||||||||||||||||||||||||
Net income |
20,755 |
24,580 |
67,184 |
55,775 |
||||||||||||||||||||||||||||
Interest expense, net(1) |
10,187 |
7,827 |
30,707 |
41,462 |
||||||||||||||||||||||||||||
Provision for income taxes |
14,422 |
17,079 |
46,686 |
38,717 |
||||||||||||||||||||||||||||
Depreciation and amortization |
31,511 |
35,709 |
93,826 |
103,612 |
||||||||||||||||||||||||||||
Pension expense(2) |
1,883 |
1,752 |
5,649 |
5,414 |
||||||||||||||||||||||||||||
Other non-cash expense, net |
178 |
73 |
315 |
631 |
||||||||||||||||||||||||||||
EBITDA excluding non-cash items(3) |
78,936 |
87,020 |
(8,084) |
(9.3) |
244,367 |
245,611 |
(1,244) |
(0.5) |
||||||||||||||||||||||||
EBITDA excluding non-cash items(3) |
78,936 |
87,020 |
244,367 |
245,611 |
||||||||||||||||||||||||||||
Interest expense, net(1) |
(10,187) |
(7,827) |
(30,707) |
(41,462) |
||||||||||||||||||||||||||||
Adjustments to derivative instruments recorded in interest expense(1) |
(524) |
(2,433) |
(257) |
10,723 |
||||||||||||||||||||||||||||
Amortization of debt financing costs(1) |
413 |
411 |
1,236 |
1,242 |
||||||||||||||||||||||||||||
Provision for income taxes, net of changes in deferred taxes |
344 |
(904) |
(3,069) |
(3,071) |
||||||||||||||||||||||||||||
Changes in working capital |
3,732 |
(1,243) |
(12,413) |
(11,726) |
||||||||||||||||||||||||||||
Cash provided by operating activities |
72,714 |
75,024 |
199,157 |
201,317 |
||||||||||||||||||||||||||||
Changes in working capital |
(3,732) |
1,243 |
12,413 |
11,726 |
||||||||||||||||||||||||||||
Maintenance capital expenditures(4) |
(8,116) |
(19,860) |
(13,563) |
(33,099) |
||||||||||||||||||||||||||||
Free cash flow |
60,866 |
56,407 |
4,459 |
7.9 |
198,007 |
179,944 |
18,063 |
10.0 |
||||||||||||||||||||||||
(1) Interest expense, net, includes adjustments to derivative instruments and non-cash amortization of deferred financing fees. | ||||||||||||||||||||||||||||||||
(2) Pension expense primarily consists of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses. | ||||||||||||||||||||||||||||||||
(3) For the quarter and nine months ended September 30, 2016, EBITDA excluding non-cash items included $13.0 million and $15.5 million, respectively, of insurance recoveries related to damaged docks. These insurance recoveries were used to repair damaged docks and were recorded in Other Income, net. The cost of those repairs were recorded in Maintenance Capital Expenditures. Excluding insurance proceeds, EBITDA excluding non-cash items would have been $74.0 million and $230.1 million for the quarter and nine months ended September 30, 2016, respectively. On that basis, EBITDA excluding non-cash items would have increased by $4.9 million, or 6.6%, for the quarter ended September 30, 2017, and increased by $14.2 million, or 6.2%, for the nine months ended September 30, 2017, compared with the prior comparable periods. | ||||||||||||||||||||||||||||||||
(4) For the quarter and nine months ended September 30, 2016, maintenance capital expenditures included $13.9 million associated with the rebuilding of damaged docks, the majority of which were insured losses. Excluding these costs, maintenance capital expenditures would have been $6.0 million and $19.2 million for the quarter and nine months ended September 30, 2016, respectively. On that basis, maintenance capital expenditures would have increased by $2.1 million, or 35.2%, for the quarter ended September 30, 2017, and decreased by $5.7 million, or 29.5%, for the nine months ended September 30, 2017, compared with the prior comparable periods. |
Atlantic Aviation | ||||||||||||||||||||||||||||||||
Quarter Ended |
Change |
Nine Months Ended |
Change | |||||||||||||||||||||||||||||
2017 |
2016 |
2017 |
2016 | |||||||||||||||||||||||||||||
$ |
$ |
$ |
% |
$ |
$ |
$ |
% | |||||||||||||||||||||||||
($ In Thousands) (Unaudited) | ||||||||||||||||||||||||||||||||
Revenue |
211,457 |
186,823 |
24,634 |
13.2 |
621,149 |
544,029 |
77,120 |
14.2 |
||||||||||||||||||||||||
Cost of services (exclusive of depreciation |
92,106 |
77,524 |
(14,582) |
(18.8) |
272,985 |
218,126 |
(54,859) |
(25.2) |
||||||||||||||||||||||||
Gross margin |
119,351 |
109,299 |
10,052 |
9.2 |
348,164 |
325,903 |
22,261 |
6.8 |
||||||||||||||||||||||||
Selling, general and administrative expenses |
57,026 |
53,027 |
(3,999) |
(7.5) |
163,512 |
157,019 |
(6,493) |
(4.1) |
||||||||||||||||||||||||
Depreciation and amortization |
25,286 |
22,148 |
(3,138) |
(14.2) |
73,894 |
69,041 |
(4,853) |
(7.0) |
||||||||||||||||||||||||
Operating income |
37,039 |
34,124 |
2,915 |
8.5 |
110,758 |
99,843 |
10,915 |
10.9 |
||||||||||||||||||||||||
Interest expense, net(1) |
(4,295) |
(5,199) |
904 |
17.4 |
(13,648) |
(27,437) |
13,789 |
50.3 |
||||||||||||||||||||||||
Other (expense) income, net |
(14) |
(150) |
136 |
90.7 |
(119) |
191 |
(310) |
(162.3) |
||||||||||||||||||||||||
Provision for income taxes |
(11,139) |
(11,543) |
404 |
3.5 |
(36,766) |
(29,258) |
(7,508) |
(25.7) |
||||||||||||||||||||||||
Net income |
21,591 |
17,232 |
4,359 |
25.3 |
60,225 |
43,339 |
16,886 |
39.0 |
||||||||||||||||||||||||
Reconciliation of net income to EBITDA |
||||||||||||||||||||||||||||||||
Net income |
21,591 |
17,232 |
60,225 |
43,339 |
||||||||||||||||||||||||||||
Interest expense, net(1) |
4,295 |
5,199 |
13,648 |
27,437 |
||||||||||||||||||||||||||||
Provision for income taxes |
11,139 |
11,543 |
36,766 |
29,258 |
||||||||||||||||||||||||||||
Depreciation and amortization |
25,286 |
22,148 |
73,894 |
69,041 |
||||||||||||||||||||||||||||
Pension expense(2) |
5 |
16 |
15 |
50 |
||||||||||||||||||||||||||||
Other non-cash expense, net |
1,212 |
200 |
1,252 |
448 |
||||||||||||||||||||||||||||
EBITDA excluding non-cash |
63,528 |
56,338 |
7,190 |
12.8 |
185,800 |
169,573 |
16,227 |
9.6 |
||||||||||||||||||||||||
EBITDA excluding non-cash |
63,528 |
56,338 |
185,800 |
169,573 |
||||||||||||||||||||||||||||
Interest expense, net(1) |
(4,295) |
(5,199) |
(13,648) |
(27,437) |
||||||||||||||||||||||||||||
Convertible senior notes interest(3) |
(2,012) |
— |
(5,769) |
— |
||||||||||||||||||||||||||||
Adjustments to derivative instruments |
464 |
(2,371) |
3,150 |
4,416 |
||||||||||||||||||||||||||||
Amortization of debt financing costs(1) |
284 |
791 |
819 |
2,496 |
||||||||||||||||||||||||||||
Provision for income taxes, net of changes in |
(1,208) |
(159) |
(5,810) |
(2,521) |
||||||||||||||||||||||||||||
Changes in working capital |
(1,335) |
5,142 |
(6,667) |
11,412 |
||||||||||||||||||||||||||||
Cash provided by operating activities |
55,426 |
54,542 |
157,875 |
157,939 |
||||||||||||||||||||||||||||
Changes in working capital |
1,335 |
(5,142) |
6,667 |
(11,412) |
||||||||||||||||||||||||||||
Maintenance capital expenditures |
(2,165) |
(2,075) |
(5,071) |
(5,816) |
||||||||||||||||||||||||||||
Free cash flow |
54,596 |
47,325 |
7,271 |
15.4 |
159,471 |
140,711 |
18,760 |
13.3 |
||||||||||||||||||||||||
(1) Interest expense, net, includes adjustments to derivative instruments and non-cash amortization of deferred financing fees. | ||||||||||||||||||||||||||||||||
(2) Pension expense primarily consists of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses. | ||||||||||||||||||||||||||||||||
(3) Represents the cash interest expense reclassified from MIC Corporate related to the 2.00% Convertible Senior Notes due October 2023, proceeds of which were used to pay down a portion of Atlantic Aviation's credit facility in October 2016. |
Contracted Power | ||||||||||||||||||||||||||||||||
Quarter Ended |
Change |
Nine Months Ended |
Change | |||||||||||||||||||||||||||||
2017 |
2016 |
2017 |
2016 | |||||||||||||||||||||||||||||
$ |
$ |
$ |
% |
$ |
$ |
$ |
% | |||||||||||||||||||||||||
($ In Thousands) (Unaudited) | ||||||||||||||||||||||||||||||||
Product revenue |
42,445 |
45,538 |
(3,093) |
(6.8) |
110,681 |
114,017 |
(3,336) |
(2.9) |
||||||||||||||||||||||||
Cost of product sales |
5,171 |
7,344 |
2,173 |
29.6 |
15,528 |
17,495 |
1,967 |
11.2 |
||||||||||||||||||||||||
Selling, general and administrative expenses |
6,909 |
6,824 |
(85) |
(1.2) |
18,318 |
19,331 |
1,013 |
5.2 |
||||||||||||||||||||||||
Depreciation and amortization |
14,830 |
14,000 |
(830) |
(5.9) |
45,031 |
41,693 |
(3,338) |
(8.0) |
||||||||||||||||||||||||
Operating income |
15,535 |
17,370 |
(1,835) |
(10.6) |
31,804 |
35,498 |
(3,694) |
(10.4) |
||||||||||||||||||||||||
Interest expense, net(1) |
(6,281) |
(2,764) |
(3,517) |
(127.2) |
(20,431) |
(31,614) |
11,183 |
35.4 |
||||||||||||||||||||||||
Other income, net |
4,334 |
3,531 |
803 |
22.7 |
6,440 |
3,839 |
2,601 |
67.8 |
||||||||||||||||||||||||
Provision for income taxes |
(6,337) |
(8,013) |
1,676 |
20.9 |
(8,209) |
(7,626) |
(583) |
(7.6) |
||||||||||||||||||||||||
Net income |
7,251 |
10,124 |
(2,873) |
(28.4) |
9,604 |
97 |
9,507 |
NM |
||||||||||||||||||||||||
Less: net (loss) income attributable to noncontrolling interest |
(3,890) |
566 |
4,456 |
NM |
(7,223) |
217 |
7,440 |
NM |
||||||||||||||||||||||||
Net income (loss) attributable to MIC |
11,141 |
9,558 |
1,583 |
16.6 |
16,827 |
(120) |
16,947 |
NM |
||||||||||||||||||||||||
Reconciliation of net income to EBITDA |
||||||||||||||||||||||||||||||||
Net income |
7,251 |
10,124 |
9,604 |
97 |
||||||||||||||||||||||||||||
Interest expense, net(1) |
6,281 |
2,764 |
20,431 |
31,614 |
||||||||||||||||||||||||||||
Provision for income taxes |
6,337 |
8,013 |
8,209 |
7,626 |
||||||||||||||||||||||||||||
Depreciation and amortization |
14,830 |
14,000 |
45,031 |
41,693 |
||||||||||||||||||||||||||||
Other non-cash income, net(2) |
(1,914) |
(1,459) |
(6,170) |
(5,424) |
||||||||||||||||||||||||||||
EBITDA excluding non-cash items |
32,785 |
33,442 |
(657) |
(2.0) |
77,105 |
75,606 |
1,499 |
2.0 |
||||||||||||||||||||||||
EBITDA excluding non-cash items |
32,785 |
33,442 |
77,105 |
75,606 |
||||||||||||||||||||||||||||
Interest expense, net(1) |
(6,281) |
(2,764) |
(20,431) |
(31,614) |
||||||||||||||||||||||||||||
Adjustments to derivative instruments recorded |
(922) |
(3,778) |
(1,282) |
11,994 |
||||||||||||||||||||||||||||
Amortization of debt financing costs(1) |
379 |
376 |
1,137 |
1,113 |
||||||||||||||||||||||||||||
Provision for income taxes, net of changes in deferred taxes |
9 |
1 |
6 |
(8) |
||||||||||||||||||||||||||||
Changes in working capital |
(1,842) |
949 |
(9,703) |
(1,909) |
||||||||||||||||||||||||||||
Cash provided by operating activities |
24,128 |
28,226 |
46,832 |
55,182 |
||||||||||||||||||||||||||||
Changes in working capital |
1,842 |
(949) |
9,703 |
1,909 |
||||||||||||||||||||||||||||
Maintenance capital expenditures |
— |
(559) |
(22) |
(559) |
||||||||||||||||||||||||||||
Free cash flow |
25,970 |
26,718 |
(748) |
(2.8) |
56,513 |
56,532 |
(19) |
(0.0) |
||||||||||||||||||||||||
NM — Not meaningful | ||||||||||||||||||||||||||||||||
(1) Interest expense, net, includes adjustments to derivative instruments and non-cash amortization of deferred financing fees. | ||||||||||||||||||||||||||||||||
(2) Other non-cash income, net, primarily includes amortization of tolling liabilities. See "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items, Free Cash Flow and Proportionately Combined Metrics" above for further discussion. |
MIC Hawaii | ||||||||||||||||||||||||||||||||
Quarter Ended |
Change |
Nine Months Ended |
Change | |||||||||||||||||||||||||||||
2017 |
2016 |
2017 |
2016 | |||||||||||||||||||||||||||||
$ |
$ |
$ |
% |
$ |
$ |
$ |
% | |||||||||||||||||||||||||
($ In Thousands) (Unaudited) | ||||||||||||||||||||||||||||||||
Product revenue |
52,396 |
51,011 |
1,385 |
2.7 |
165,758 |
158,036 |
7,722 |
4.9 |
||||||||||||||||||||||||
Service revenue |
13,826 |
5,258 |
8,568 |
163.0 |
39,476 |
5,258 |
34,218 |
NM |
||||||||||||||||||||||||
Total revenue |
66,222 |
56,269 |
9,953 |
17.7 |
205,234 |
163,294 |
41,940 |
25.7 |
||||||||||||||||||||||||
Cost of product sales (exclusive of depreciation |
30,498 |
32,501 |
2,003 |
6.2 |
107,615 |
90,428 |
(17,187) |
(19.0) |
||||||||||||||||||||||||
Cost of services (exclusive of depreciation and amortization shown separately below) |
12,131 |
3,946 |
(8,185) |
NM |
34,015 |
3,946 |
(30,069) |
NM |
||||||||||||||||||||||||
Cost of revenue – total |
42,629 |
36,447 |
(6,182) |
(17.0) |
141,630 |
94,374 |
(47,256) |
(50.1) |
||||||||||||||||||||||||
Gross margin |
23,593 |
19,822 |
3,771 |
19.0 |
63,604 |
68,920 |
(5,316) |
(7.7) |
||||||||||||||||||||||||
Selling, general and administrative expenses |
6,874 |
6,540 |
(334) |
(5.1) |
19,729 |
16,230 |
(3,499) |
(21.6) |
||||||||||||||||||||||||
Depreciation and amortization |
3,711 |
2,802 |
(909) |
(32.4) |
10,922 |
7,696 |
(3,226) |
(41.9) |
||||||||||||||||||||||||
Operating income |
13,008 |
10,480 |
2,528 |
24.1 |
32,953 |
44,994 |
(12,041) |
(26.8) |
||||||||||||||||||||||||
Interest expense, net(1) |
(1,877) |
(1,571) |
(306) |
(19.5) |
(5,795) |
(6,224) |
429 |
6.9 |
||||||||||||||||||||||||
Other expense, net |
(141) |
(187) |
46 |
24.6 |
(382) |
(588) |
206 |
35.0 |
||||||||||||||||||||||||
Provision for income taxes |
(4,830) |
(3,246) |
(1,584) |
(48.8) |
(10,772) |
(14,863) |
4,091 |
27.5 |
||||||||||||||||||||||||
Net income |
6,160 |
5,476 |
684 |
12.5 |
16,004 |
23,319 |
(7,315) |
(31.4) |
||||||||||||||||||||||||
Less: net loss attributable to noncontrolling interests |
(32) |
(111) |
(79) |
(71.2) |
(71) |
(111) |
(40) |
(36.0) |
||||||||||||||||||||||||
Net income attributable to MIC |
6,192 |
5,587 |
605 |
10.8 |
16,075 |
23,430 |
(7,355) |
(31.4) |
||||||||||||||||||||||||
Reconciliation of net income to EBITDA |
||||||||||||||||||||||||||||||||
Net income |
6,160 |
5,476 |
16,004 |
23,319 |
||||||||||||||||||||||||||||
Interest expense, net(1) |
1,877 |
1,571 |
5,795 |
6,224 |
||||||||||||||||||||||||||||
Provision for income taxes |
4,830 |
3,246 |
10,772 |
14,863 |
||||||||||||||||||||||||||||
Depreciation and amortization |
3,711 |
2,802 |
10,922 |
7,696 |
||||||||||||||||||||||||||||
Pension expense(2) |
272 |
349 |
817 |
1,048 |
||||||||||||||||||||||||||||
Other non-cash (income) expense, |
(3,360) |
316 |
3,108 |
(6,090) |
||||||||||||||||||||||||||||
EBITDA excluding non-cash items |
13,490 |
13,760 |
(270) |
(2.0) |
47,418 |
47,060 |
358 |
0.8 |
||||||||||||||||||||||||
EBITDA excluding non-cash items |
13,490 |
13,760 |
47,418 |
47,060 |
||||||||||||||||||||||||||||
Interest expense, net(1) |
(1,877) |
(1,571) |
(5,795) |
(6,224) |
||||||||||||||||||||||||||||
Adjustments to derivative instruments recorded in interest expense(1) |
23 |
(250) |
113 |
506 |
||||||||||||||||||||||||||||
Amortization of debt financing |
99 |
96 |
303 |
848 |
||||||||||||||||||||||||||||
Provision for income taxes, net of changes in deferred taxes |
(1,773) |
(1,361) |
(5,265) |
(6,507) |
||||||||||||||||||||||||||||
Changes in working capital |
(2,535) |
(1,394) |
(12,852) |
5,554 |
||||||||||||||||||||||||||||
Cash provided by operating activities |
7,427 |
9,280 |
23,922 |
41,237 |
||||||||||||||||||||||||||||
Changes in working capital |
2,535 |
1,394 |
12,852 |
(5,554) |
||||||||||||||||||||||||||||
Maintenance capital expenditures |
(1,825) |
(1,978) |
(4,406) |
(5,251) |
||||||||||||||||||||||||||||
Free cash flow |
8,137 |
8,696 |
(559) |
(6.4) |
32,368 |
30,432 |
1,936 |
6.4 |
||||||||||||||||||||||||
NM — Not meaningful | ||||||||||||||||||||||||||||||||
(1) Interest expense, net, includes adjustments to derivative instruments related to interest rate swaps and non-cash amortization of deferred financing fees. For the nine months ended September 30, 2016, interest expense also included a non-cash write-off of deferred financing fees related to the February 2016 refinancing at Hawaii Gas. | ||||||||||||||||||||||||||||||||
(2) Pension expense primarily consists of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses. | ||||||||||||||||||||||||||||||||
(3) Other non-cash (income) expense, net, primarily includes non-cash adjustments related to unrealized gains (losses) on commodity hedges. See "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items, Free Cash Flow and Proportionately Combined Metrics" above for further discussion. |
Corporate and Other | ||||||||||||||||||||||||||||||||
Quarter Ended |
Change |
Nine Months Ended |
Change | |||||||||||||||||||||||||||||
2017 |
2016 |
2017 |
2016 | |||||||||||||||||||||||||||||
$ |
$ |
$ |
% |
$ |
$ |
$ |
% | |||||||||||||||||||||||||
($ In Thousands) (Unaudited) | ||||||||||||||||||||||||||||||||
Fees to Manager-related party |
17,954 |
18,382 |
428 |
2.3 |
54,610 |
49,570 |
(5,040) |
(10.2) |
||||||||||||||||||||||||
Selling, general and administrative |
6,214 |
3,925 |
(2,289) |
(58.3) |
21,301 |
8,831 |
(12,470) |
(141.2) |
||||||||||||||||||||||||
Operating loss |
(24,168) |
(22,307) |
(1,861) |
(8.3) |
(75,911) |
(58,401) |
(17,510) |
(30.0) |
||||||||||||||||||||||||
Interest expense, net(2) |
(6,597) |
(3,483) |
(3,114) |
(89.4) |
(19,419) |
(10,446) |
(8,973) |
(85.9) |
||||||||||||||||||||||||
Benefit for income taxes |
11,181 |
10,859 |
322 |
3.0 |
37,149 |
30,055 |
7,094 |
23.6 |
||||||||||||||||||||||||
Net loss |
(19,584) |
(14,931) |
(4,653) |
(31.2) |
(58,181) |
(38,792) |
(19,389) |
(50.0) |
||||||||||||||||||||||||
Reconciliation of net loss to EBITDA |
||||||||||||||||||||||||||||||||
Net loss |
(19,584) |
(14,931) |
(58,181) |
(38,792) |
||||||||||||||||||||||||||||
Interest expense, net(2) |
6,597 |
3,483 |
19,419 |
10,446 |
||||||||||||||||||||||||||||
Benefit for income taxes |
(11,181) |
(10,859) |
(37,149) |
(30,055) |
||||||||||||||||||||||||||||
Fees to Manager-related party |
17,954 |
18,382 |
54,610 |
49,570 |
||||||||||||||||||||||||||||
Other non-cash expense |
159 |
188 |
534 |
563 |
||||||||||||||||||||||||||||
EBITDA excluding non-cash items |
(6,055) |
(3,737) |
(2,318) |
(62.0) |
(20,767) |
(8,268) |
(12,499) |
(151.2) |
||||||||||||||||||||||||
EBITDA excluding non-cash items |
(6,055) |
(3,737) |
(20,767) |
(8,268) |
||||||||||||||||||||||||||||
Interest expense, net(2) |
(6,597) |
(3,483) |
(19,419) |
(10,446) |
||||||||||||||||||||||||||||
Convertible senior notes interest(3) |
2,012 |
— |
5,769 |
— |
||||||||||||||||||||||||||||
Amortization of debt financing costs(2) |
988 |
613 |
2,969 |
1,837 |
||||||||||||||||||||||||||||
Amortization of debt discount(2) |
882 |
— |
2,377 |
— |
||||||||||||||||||||||||||||
Benefit for income taxes, net of changes in deferred taxes |
474 |
1,308 |
5,645 |
6,824 |
||||||||||||||||||||||||||||
Changes in working capital |
(2,934) |
(2,703) |
(6,691) |
(8,634) |
||||||||||||||||||||||||||||
Cash used in operating activities |
(11,230) |
(8,002) |
(30,117) |
(18,687) |
||||||||||||||||||||||||||||
Changes in working capital |
2,934 |
2,703 |
6,691 |
8,634 |
||||||||||||||||||||||||||||
Free cash flow |
(8,296) |
(5,299) |
(2,997) |
(56.6) |
(23,426) |
(10,053) |
(13,373) |
(133.0) |
||||||||||||||||||||||||
(1) For the quarter and nine months ended September 30, 2017, selling, general and administrative expenses included $1.4 million and $6.8 million, respectively, of costs related to the implementation of a shared service initiative. Selling, general and administrative expenses for the quarter and nine months ended September 30, 2017 also includes $3.0 million and $7.9 million, respectively, of costs incurred in connection with the evaluation of various investment and acquisition opportunities. | ||||||||||||||||||||||||||||||||
(2) Interest expense, net, included non-cash amortization of deferred financing fees and non-cash amortization of debt discount related to the 2.00% Convertible Senior Notes due October 2023. | ||||||||||||||||||||||||||||||||
(3) Represents the cash interest expense reclassified to Atlantic Aviation related to the 2.00% Convertible Senior Notes due October 2023, proceeds of which were used to pay down a portion of Atlantic Aviation's credit facility in October 2016. |
MACQUARIE INFRASTRUCTURE CORPORATION | ||||||||||||||||||||||||||||||||||||
For the Quarter Ended September 30, 2017 |
||||||||||||||||||||||||||||||||||||
IMTT |
Atlantic Aviation |
Contracted Power(1) |
MIC Hawaii(1) |
MIC Corporate |
Proportionately Combined(2) |
Contracted Power 100% |
MIC | |||||||||||||||||||||||||||||
($ in Thousands) (Unaudited) | ||||||||||||||||||||||||||||||||||||
Net income (loss) |
20,755 |
21,591 |
7,705 |
6,161 |
(19,584) |
36,628 |
7,251 |
6,160 |
||||||||||||||||||||||||||||
Interest expense, net(3) |
10,187 |
4,295 |
5,598 |
1,875 |
6,597 |
28,552 |
6,281 |
1,877 |
||||||||||||||||||||||||||||
Provision (benefit) for income taxes |
14,422 |
11,139 |
6,337 |
4,830 |
(11,181) |
25,547 |
6,337 |
4,830 |
||||||||||||||||||||||||||||
Depreciation and |
31,511 |
25,286 |
12,949 |
3,706 |
— |
73,452 |
14,830 |
3,711 |
||||||||||||||||||||||||||||
Fees to Manager-related |
— |
— |
— |
— |
17,954 |
17,954 |
— |
— |
||||||||||||||||||||||||||||
Pension expense(4) |
1,883 |
5 |
— |
272 |
— |
2,160 |
— |
272 |
||||||||||||||||||||||||||||
Other non-cash expense (income), net(5) |
178 |
1,212 |
(1,913) |
(3,361) |
159 |
(3,725) |
(1,914) |
(3,360) |
||||||||||||||||||||||||||||
EBITDA excluding non-cash items |
78,936 |
63,528 |
30,676 |
13,483 |
(6,055) |
180,568 |
32,785 |
13,490 |
||||||||||||||||||||||||||||
EBITDA excluding non-cash items |
78,936 |
63,528 |
30,676 |
13,483 |
(6,055) |
180,568 |
32,785 |
13,490 |
||||||||||||||||||||||||||||
Interest expense, net(3) |
(10,187) |
(4,295) |
(5,598) |
(1,875) |
(6,597) |
(28,552) |
(6,281) |
(1,877) |
||||||||||||||||||||||||||||
Convertible senior notes interest(6) |
— |
(2,012) |
— |
— |
2,012 |
— |
— |
— |
||||||||||||||||||||||||||||
Adjustments to |
(524) |
464 |
(786) |
23 |
— |
(823) |
(922) |
23 |
||||||||||||||||||||||||||||
Amortization of debt financing charges(3) |
413 |
284 |
365 |
99 |
988 |
2,149 |
379 |
99 |
||||||||||||||||||||||||||||
Amortization of debt discount(3) |
— |
— |
— |
— |
882 |
882 |
— |
— |
||||||||||||||||||||||||||||
Provision/benefit for |
344 |
(1,208) |
10 |
(1,773) |
474 |
(2,153) |
9 |
(1,773) |
||||||||||||||||||||||||||||
Changes in working capital |
3,732 |
(1,335) |
(2,284) |
(2,534) |
(2,934) |
(5,355) |
(1,842) |
(2,535) |
||||||||||||||||||||||||||||
Cash provided by (used in) operating activities |
72,714 |
55,426 |
22,383 |
7,423 |
(11,230) |
146,716 |
24,128 |
7,427 |
||||||||||||||||||||||||||||
Changes in working capital |
(3,732) |
1,335 |
2,284 |
2,534 |
2,934 |
5,355 |
1,842 |
2,535 |
||||||||||||||||||||||||||||
Maintenance capital expenditures |
(8,116) |
(2,165) |
— |
(1,825) |
— |
(12,106) |
— |
(1,825) |
||||||||||||||||||||||||||||
Proportionately Combined Free Cash flow |
60,866 |
54,596 |
24,667 |
8,132 |
(8,296) |
139,965 |
25,970 |
8,137 |
For the Quarter Ended September 30, 2016 |
||||||||||||||||||||||||||||||||||||
IMTT |
Atlantic Aviation |
Contracted Power(1) |
MIC |
MIC |
Proportionately Combined(2) |
Contracted |
MIC | |||||||||||||||||||||||||||||
($ in Thousands) (Unaudited) | ||||||||||||||||||||||||||||||||||||
Net income (loss) |
24,580 |
17,232 |
9,489 |
5,479 |
(14,931) |
41,849 |
10,124 |
5,476 |
||||||||||||||||||||||||||||
Interest expense, net(3) |
7,827 |
5,199 |
2,352 |
1,568 |
3,483 |
20,429 |
2,764 |
1,571 |
||||||||||||||||||||||||||||
Provision (benefit) for |
17,079 |
11,543 |
8,014 |
3,246 |
(10,859) |
29,023 |
8,013 |
3,246 |
||||||||||||||||||||||||||||
Depreciation and |
35,709 |
22,148 |
12,122 |
2,800 |
— |
72,779 |
14,000 |
2,802 |
||||||||||||||||||||||||||||
Fees to Manager-related |
— |
— |
— |
— |
18,382 |
18,382 |
— |
— |
||||||||||||||||||||||||||||
Pension expense(4) |
1,752 |
16 |
— |
349 |
— |
2,117 |
— |
349 |
||||||||||||||||||||||||||||
Other non-cash expense |
73 |
200 |
(1,459) |
316 |
188 |
(682) |
(1,459) |
316 |
||||||||||||||||||||||||||||
EBITDA excluding non- |
87,020 |
56,338 |
30,518 |
13,758 |
(3,737) |
183,897 |
33,442 |
13,760 |
||||||||||||||||||||||||||||
EBITDA excluding non- |
87,020 |
56,338 |
30,518 |
13,758 |
(3,737) |
183,897 |
33,442 |
13,760 |
||||||||||||||||||||||||||||
Interest expense, net(3) |
(7,827) |
(5,199) |
(2,352) |
(1,568) |
(3,483) |
(20,429) |
(2,764) |
(1,571) |
||||||||||||||||||||||||||||
Adjustments to derivative instruments |
(2,433) |
(2,371) |
(3,334) |
(253) |
— |
(8,391) |
(3,778) |
(250) |
||||||||||||||||||||||||||||
Amortization of debt financing charges(3) |
411 |
791 |
362 |
96 |
613 |
2,273 |
376 |
96 |
||||||||||||||||||||||||||||
Provision/benefit for |
(904) |
(159) |
— |
(1,361) |
1,308 |
(1,116) |
1 |
(1,361) |
||||||||||||||||||||||||||||
Changes in working capital |
(1,243) |
5,142 |
875 |
(1,390) |
(2,703) |
681 |
949 |
(1,394) |
||||||||||||||||||||||||||||
Cash provided by (used |
75,024 |
54,542 |
26,069 |
9,282 |
(8,002) |
156,915 |
28,226 |
9,280 |
||||||||||||||||||||||||||||
Changes in working capital |
1,243 |
(5,142) |
(875) |
1,390 |
2,703 |
(681) |
(949) |
1,394 |
||||||||||||||||||||||||||||
Maintenance capital |
(19,860) |
(2,075) |
(421) |
(1,978) |
— |
(24,334) |
(559) |
(1,978) |
||||||||||||||||||||||||||||
Proportionately |
56,407 |
47,325 |
24,773 |
8,694 |
(5,299) |
131,900 |
26,718 |
8,696 |
For the Nine Months Ended September 30, 2017 |
||||||||||||||||||||||||||||||||||||
IMTT |
Atlantic Aviation |
Contracted Power(1) |
MIC |
MIC |
Proportionately Combined(2) |
Contracted Power 100% |
MIC | |||||||||||||||||||||||||||||
($ in Thousands) (Unaudited) | ||||||||||||||||||||||||||||||||||||
Net income (loss) |
67,184 |
60,225 |
9,858 |
16,009 |
(58,181) |
95,095 |
9,604 |
16,004 |
||||||||||||||||||||||||||||
Interest expense, net(3) |
30,707 |
13,648 |
18,177 |
5,789 |
19,419 |
87,740 |
20,431 |
5,795 |
||||||||||||||||||||||||||||
Provision (benefit) for |
46,686 |
36,766 |
8,209 |
10,772 |
(37,149) |
65,284 |
8,209 |
10,772 |
||||||||||||||||||||||||||||
Depreciation and amortization of intangibles |
93,826 |
73,894 |
39,390 |
10,908 |
— |
218,018 |
45,031 |
10,922 |
||||||||||||||||||||||||||||
Fees to Manager-related |
— |
— |
— |
— |
54,610 |
54,610 |
— |
— |
||||||||||||||||||||||||||||
Pension expense(4) |
5,649 |
15 |
— |
817 |
— |
6,481 |
— |
817 |
||||||||||||||||||||||||||||
Other non-cash expense (income), net(5) |
315 |
1,252 |
(6,148) |
3,108 |
534 |
(939) |
(6,170) |
3,108 |
||||||||||||||||||||||||||||
EBITDA excluding non-cash items |
244,367 |
185,800 |
69,486 |
47,403 |
(20,767) |
526,289 |
77,105 |
47,418 |
||||||||||||||||||||||||||||
EBITDA excluding non-cash items |
244,367 |
185,800 |
69,486 |
47,403 |
(20,767) |
526,289 |
77,105 |
47,418 |
||||||||||||||||||||||||||||
Interest expense, net(3) |
(30,707) |
(13,648) |
(18,177) |
(5,789) |
(19,419) |
(87,740) |
(20,431) |
(5,795) |
||||||||||||||||||||||||||||
Convertible senior notes interest(6) |
— |
(5,769) |
— |
— |
5,769 |
— |
— |
— |
||||||||||||||||||||||||||||
Adjustments to derivative instruments recorded in interest expense, net(3) |
(257) |
3,150 |
(1,088) |
112 |
— |
1,917 |
(1,282) |
113 |
||||||||||||||||||||||||||||
Amortization of debt financing charges(3) |
1,236 |
819 |
1,094 |
303 |
2,969 |
6,421 |
1,137 |
303 |
||||||||||||||||||||||||||||
Amortization of debt discount(3) |
— |
— |
— |
— |
2,377 |
2,377 |
— |
— |
||||||||||||||||||||||||||||
Provision/benefit for income taxes, net of changes in deferred taxes |
(3,069) |
(5,810) |
7 |
(5,265) |
5,645 |
(8,492) |
6 |
(5,265) |
||||||||||||||||||||||||||||
Changes in working capital |
(12,413) |
(6,667) |
(9,824) |
(12,833) |
(6,691) |
(48,428) |
(9,703) |
(12,852) |
||||||||||||||||||||||||||||
Cash provided by (used in) operating activities |
199,157 |
157,875 |
41,498 |
23,931 |
(30,117) |
392,344 |
46,832 |
23,922 |
||||||||||||||||||||||||||||
Changes in working capital |
12,413 |
6,667 |
9,824 |
12,833 |
6,691 |
48,428 |
9,703 |
12,852 |
||||||||||||||||||||||||||||
Maintenance capital expenditures |
(13,563) |
(5,071) |
(22) |
(4,406) |
— |
(23,062) |
(22) |
(4,406) |
||||||||||||||||||||||||||||
Proportionately Combined Free Cash Flow |
198,007 |
159,471 |
51,300 |
32,358 |
(23,426) |
417,710 |
56,513 |
32,368 |
For the Nine Months Ended September 30, 2016 |
||||||||||||||||||||||||||||||||||||
IMTT(9) |
Atlantic Aviation |
Contracted Power(1) |
MIC |
MIC |
Proportionately Combined(2) |
Contracted Power 100% |
MIC | |||||||||||||||||||||||||||||
($ in Thousands) (Unaudited) | ||||||||||||||||||||||||||||||||||||
Net income (loss) |
55,775 |
43,339 |
896 |
23,322 |
(38,792) |
84,540 |
97 |
23,319 |
||||||||||||||||||||||||||||
Interest expense, net(3) |
41,462 |
27,437 |
27,801 |
6,221 |
10,446 |
113,367 |
31,614 |
6,224 |
||||||||||||||||||||||||||||
Provision (benefit) for income taxes |
38,717 |
29,258 |
7,625 |
14,863 |
(30,055) |
60,408 |
7,626 |
14,863 |
||||||||||||||||||||||||||||
Depreciation and |
103,612 |
69,041 |
36,067 |
7,694 |
— |
216,414 |
41,693 |
7,696 |
||||||||||||||||||||||||||||
Fees to Manager-related |
— |
— |
— |
— |
49,570 |
49,570 |
— |
— |
||||||||||||||||||||||||||||
Pension expense(4) |
5,414 |
50 |
— |
1,048 |
— |
6,512 |
— |
1,048 |
||||||||||||||||||||||||||||
Other non-cash expense (income), net(5) |
631 |
448 |
(5,405) |
(6,090) |
563 |
(9,853) |
(5,424) |
(6,090) |
||||||||||||||||||||||||||||
EBITDA excluding non-cash items(7) |
245,611 |
169,573 |
66,984 |
47,058 |
(8,268) |
520,958 |
75,606 |
47,060 |
||||||||||||||||||||||||||||
EBITDA excluding non-cash items(7) |
245,611 |
169,573 |
66,984 |
47,058 |
(8,268) |
520,958 |
75,606 |
47,060 |
||||||||||||||||||||||||||||
Interest expense, net(3) |
(41,462) |
(27,437) |
(27,801) |
(6,221) |
(10,446) |
(113,367) |
(31,614) |
(6,224) |
||||||||||||||||||||||||||||
Adjustments to |
10,723 |
4,416 |
10,756 |
503 |
— |
26,398 |
11,994 |
506 |
||||||||||||||||||||||||||||
Amortization of debt financing charges(3) |
1,242 |
2,496 |
1,071 |
848 |
1,837 |
7,494 |
1,113 |
848 |
||||||||||||||||||||||||||||
Provision/benefit for |
(3,071) |
(2,521) |
(9) |
(6,507) |
6,824 |
(5,284) |
(8) |
(6,507) |
||||||||||||||||||||||||||||
Changes in working capital |
(11,726) |
11,412 |
(2,187) |
5,558 |
(8,634) |
(5,577) |
(1,909) |
5,554 |
||||||||||||||||||||||||||||
Cash provided by (used in) operating activities |
201,317 |
157,939 |
48,814 |
41,239 |
(18,687) |
430,622 |
55,182 |
41,237 |
||||||||||||||||||||||||||||
Changes in working capital |
11,726 |
(11,412) |
2,187 |
(5,558) |
8,634 |
5,577 |
1,909 |
(5,554) |
||||||||||||||||||||||||||||
Maintenance capital expenditures(8) |
(33,099) |
(5,816) |
(421) |
(5,251) |
— |
(44,587) |
(559) |
(5,251) |
||||||||||||||||||||||||||||
Proportionately Combined Free Cash Flow |
179,944 |
140,711 |
50,580 |
30,430 |
(10,053) |
391,612 |
56,532 |
30,432 |
||||||||||||||||||||||||||||
(1) Represents MIC's proportionately combined interests in the businesses comprising these reportable segments. | ||||||||||||||||||||||||||||||||||||
(2) The sum of the amounts attributable to MIC in proportion to its ownership. | ||||||||||||||||||||||||||||||||||||
(3)Interest expense, net, includes adjustments to derivative instruments, non-cash amortization of deferred financing charges and non-cash amortization of debt discount related to the 2.00% Convertible Senior Notes due October 2023. For the nine months ended September 30, 2016, interest expense, net, also included a non-cash write-off of deferred financing fees related to the February 2016 refinancing at Hawaii Gas. | ||||||||||||||||||||||||||||||||||||
(4) Pension expense primarily consists of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses. | ||||||||||||||||||||||||||||||||||||
(5) Other non-cash expense (income), net, primarily includes non-cash amortization of tolling liabilities, unrealized gains (losses) on commodity hedges and non-cash gains (losses) related to disposal of assets. See "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items, Free Cash Flow and Proportionately Combined Metrics" above for further discussion. | ||||||||||||||||||||||||||||||||||||
(6) Represents the cash interest expense reclassified from MIC Corporate to Atlantic Aviation related to the 2.00% Convertible Senior Notes due October 2023, proceeds of which were used to pay down a portion of Atlantic Aviation's credit facility in October 2016. | ||||||||||||||||||||||||||||||||||||
(7) For the quarter and nine months ended September 30, 2016, EBITDA excluding non-cash items included $13.0 million and $15.5 million, respectively, of insurance recoveries related to damaged docks at IMTT. | ||||||||||||||||||||||||||||||||||||
(8) For the quarter and nine months ended September 30, 2016, maintenance capital expenditures included $13.9 million associated with the rebuilding of damaged docks, the majority of which were insured losses, at IMTT. | ||||||||||||||||||||||||||||||||||||
(9) On March 31, 2016, IMTT acquired the remaining 33.3% interest in its Quebec terminal that it did not previously own. IMTT was previously providing management services to this terminal and no operational changes are expected. Prior to the acquisition, IMTT consolidated the results of the Quebec terminal in its financial statements and adjusted for the portion that it did not own through noncontrolling interests. Since the IMTT Acquisition in July 2014 and prior to the acquisition of the noncontrolling interest, MIC reported IMTT's EBITDA excluding non-cash items and Free Cash Flow including the 33.3% portion of the Quebec terminal. The contribution from the minority interest was not significant. Therefore, there were no changes to our historical EBITDA excluding non-cash items, Free Cash Flow or results generally as a function of acquiring this noncontrolling interest. |
View original content:http://www.prnewswire.com/news-releases/mic-reports-third-quarter-2017-financial-results-increases-quarterly-cash-dividend-300547835.html
SOURCE Macquarie Infrastructure Corporation
NEW YORK, May 8, 2017 /PRNewswire/ -- MIC (Macquarie Infrastructure Corporation) (NYSE: MIC) announced that Jay Davis, Managing Director, will address attendees at the Oppenheimer Industrial Growth Conference in New York City on Wednesday, May 10, 2017. Mr. Davis will deliver prepared remarks and address audience questions regarding the performance and prospects of the Company.
Mr. Davis' presentation is scheduled to commence at 10:45 am Eastern Time.
A link to a live audio webcast of Mr. Davis' presentation will be available via the MIC website, www.macquarie.com/mic. The webcast will be available for replay for 90 days through August 8, 2017.
About MIC
MIC owns and operates a diversified group of businesses providing basic services to customers in the United States. Its businesses consist of a bulk liquid terminals business, International-Matex Tank Terminals, an airport services business, Atlantic Aviation, entities comprising an energy services, production and distribution segment, MIC Hawaii, and entities comprising a Contracted Power segment. For additional information, please visit the MIC website at www.macquarie.com/mic. MIC-G
MIC is not an authorized deposit-taking institution for the purposes of the Banking Act 1959 (Commonwealth of Australia). The obligations of MIC 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 MIC.
SOURCE Macquarie Infrastructure Corporation
NEW YORK, May 3, 2017 /PRNewswire/ -- Macquarie Infrastructure Corporation (NYSE: MIC) today reported its financial results for the first quarter of 2017.
"MIC generated financial results for the first quarter in line with our expectations including a strong performance by Atlantic Aviation that offset a reduced contribution from Contracted Power," said James Hooke, chief executive officer of MIC. "In addition to the solid increase in cash generation by our existing businesses collectively, we have deployed growth capital into attractive opportunities at a pace consistent with our full-year guidance."
MIC reported a 61.8% increase in net income to $32.6 million in the March 2017 quarter, compared with $20.2 million in the first quarter of 2016. The absence of a previously disclosed insurance recovery recorded in the first quarter of 2016 and the timing of payments of insurance premiums and higher cost of inventories in 2017 contributed to a decrease in cash from operations versus the prior comparable period. The Company reported cash generated by operating activities of $128.6 million compared with $148.6 million in 2016.
MIC's businesses produced an aggregate $146.9 million of Adjusted Free Cash Flow in the first quarter, up from $133.4 million in the first quarter of 2016. The Company defines Adjusted Free Cash Flow as cash from operating activities (including from its proportionate interest in businesses in which it has a less than 100% equity interest), less maintenance capital expenditures, less changes in working capital, adjusted for certain one-time items. In the first quarter of 2017, MIC excluded implementation costs related to its shared services initiative from its calculation of Adjusted Free Cash Flow. (See Summary Financial Information below)
The nominal increase in MIC's Adjusted Free Cash Flow of 10.1% was partially offset by a 2.5% increase in its weighted average number of shares outstanding to 82,138,168 in the first quarter of 2017 versus the first quarter in 2016. Including the impact of share issuance, MIC's Adjusted Free Cash Flow increased by 7.2% over the amount generated in the first quarter of 2016.
Segment results for the first quarter reflected:
The MIC board of directors authorized a cash dividend of $1.32 per share, or $5.28 annualized, for the first quarter of 2017. The dividend will be payable May 18, 2017 to shareholders of record on May 15, 2017. The payment represents a 10% increase over the dividend paid for the first quarter of 2016. For the full year 2017, the Company expects to increase its cash dividend by 10% over 2016.
Atlantic Aviation has completed the acquisition of the fixed base operation (FBO) at the Waterbury-Oxford airport in Waterbury, CT. "The acquisition of the FBO at Oxford provides Atlantic with an increased presence in the high-demand general aviation market in the greater New York City region," Hooke said. "Oxford extends the weighted average remaining lease life of the Atlantic portfolio and we expect it will generate network benefits as a result of marketing of the Atlantic network to Oxford base tenants."
In addition to serving general aviation traffic in and out of the surrounding region, Oxford is the hangar home-base FBO for many aircraft that service New York metropolitan airports, such as Teterboro and White Plains. The Oxford FBO has in excess of 200,000 square feet of hangar space — more than three times the amount of the average Atlantic FBO.
The implementation of MIC's previously announced shared services initiative resulted in a reduction in the rate of increase in general and administrative expenses. As anticipated, the savings were offset by expenses including primarily severance payments and consulting fees totaling $2.4 million and incremental expenses associated with acquisitions completed in 2016. The Company expects to realize annual cost savings of between $12.0 million and $15.0 million in 2018, compared with its 2016 baseline, as a result of the shared services initiative. Shared services provides back-office functions including Accounting, Human Resource, Tax, Information Technology and Risk Management support to each of MIC's operating entities.
In February, MIC issued guidance with respect to deployment of an estimated $350.0 million across growth capital projects and small acquisitions by its existing businesses in 2017. Including the acquisition of the Oxford FBO, the Company has deployed approximately $117.0 million of growth capital year to date. MIC had a backlog of approved growth projects having a total value of approximately $280.0 million at the beginning of May.
"We are pleased with both the rate of capital deployment to this point and the number and quality of projects that have been added to our backlog," Hooke said. During MIC's earnings conference call in February, he noted that effective deployment of growth capital is an important driver of expected 10% to 15% annual growth in Free Cash Flow.
Summary Financial Information
Quarter Ended March 31, |
Change Favorable/(Unfavorable) | |||||||||||||||
2017 |
2016 |
$ |
% | |||||||||||||
($ In Thousands, Except Share and Per Share Data) (Unaudited) | ||||||||||||||||
GAAP Metrics |
||||||||||||||||
Net income |
$ |
32,638 |
$ |
20,176 |
12,462 |
61.8 |
||||||||||
Weighted average number of shares outstanding: basic |
82,138,168 |
80,113,011 |
2,025,157 |
2.5 |
||||||||||||
Net income per share attributable to MIC |
$ |
0.44 |
$ |
0.28 |
0.16 |
57.1 |
||||||||||
Cash provided by operating activities |
128,568 |
148,566 |
(19,998) |
(13.5) |
||||||||||||
MIC Non-GAAP Metrics |
||||||||||||||||
EBITDA excluding non-cash items(1) |
$ |
180,315 |
$ |
175,975 |
4,340 |
2.5 |
||||||||||
Cash interest(2) |
(25,874) |
(27,378) |
1,504 |
5.5 |
||||||||||||
Cash taxes |
(3,721) |
(2,506) |
(1,215) |
(48.5) |
||||||||||||
Maintenance capital expenditures |
(4,476) |
(10,413) |
5,937 |
57.0 |
||||||||||||
Noncontrolling interest(3) |
(1,671) |
(2,283) |
612 |
26.8 |
||||||||||||
Proportionately Combined Free Cash Flow(4) |
$ |
144,573 |
$ |
133,395 |
11,178 |
8.4 |
||||||||||
Shared service implementation costs |
2,354 |
— |
2,354 |
100.0 |
||||||||||||
Adjusted Proportionately Combined Free Cash Flow |
$ |
146,927 |
$ |
133,395 |
13,532 |
10.1 |
||||||||||
(1) EBITDA excluding non-cash items is calculated as net income before interest expense, taxes, depreciation and amortization expense, management fees, pension expense and other non-cash (income) expense recorded in the consolidated statement of operations. See below for reconciliation of net income (loss) to EBITDA excluding non-cash items. | ||
(2) Cash interest is calculated as interest expense excluding the impact of non-cash adjustments for unrealized (gains) losses from derivative instruments, amortization of deferred financing costs and the amortization of debt discount recorded in the consolidated statement of operations. | ||
(3) Noncontrolling interest adjustment represents the portion of Free Cash Flow not attributable to MIC's ownership interest. | ||
(4) Proportionately Combined Free Cash Flow is calculated as cash from operating activities, which includes EBITDA excluding non-cash items less cash paid for interest, taxes, pension contribution, maintenance capital expenditures, which includes principal repayment of capital lease obligations used to fund maintenance capital expenditures, excludes the changes in working capital and adjusted for noncontrolling interest. See below for a reconciliation from cash from operating activities to Free Cash Flow. |
Outlook
MIC's businesses are providers of basic services. Absent external factors such as macroeconomic shocks, they tend to provide good visibility into their cash generating capacity. Company management is not aware of any near term matters that are likely to have a materially negative impact on the performance of MIC's businesses overall.
Effective deployment of capital in the development of additional capability or the acquisition of additional businesses remains one of MIC management's key objectives. In addition to the current backlog of approved growth projects, a portion of which will be completed as a part of the expected deployment of $350.0 million in 2017, MIC is actively engaged in discussions with various counterparties concerning additional investments and acquisitions. The Company has approximately $1.3 billion of undrawn capacity on existing credit facilities with which to fund investments and acquisitions.
"We are pleased with the number and size of the opportunities being generated by our team," said Hooke. "We have remained disciplined with respect to the evaluation and execution of new investments, and expect that we will only commit resources to what are clearly value-creating opportunities. Consistent with that, we have added to our backlog and continue to surface and review potentially transformational opportunities."
Conference Call and Webcast
When: MIC has scheduled a conference call for 8:00 a.m. Eastern Time on Thursday, May 4, 2017 during which management will review and comment on the first quarter 2017 results.
How: To listen to the conference call dial +1(650) 521-5252 or +1(877) 852-2928 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. Allow extra time prior to the call to visit the site and download the software needed to listen to the webcast.
Slides: MIC will prepare materials in support of its conference call. The materials will be available for downloading from the Company's website prior to the call.
Replay: For interested individuals unable to participate in the live conference call, a replay will be available after 2:00 p.m. on May 4, 2017 through midnight on May 12, 2017, at +1(404) 537-3406 or +1(855) 859-2056, Passcode: 48638082. An online archive of the webcast will be available on the Company's website for one year following the call.
About MIC
MIC owns and operates a diversified group of businesses providing basic services to customers in the United States. Its businesses consist of a bulk liquid terminals business, International-Matex Tank Terminals; an airport services business, Atlantic Aviation; entities comprising an energy services, production and distribution segment, MIC Hawaii; and entities comprising a Contracted Power segment. For additional information, please visit the MIC website at www.macquarie.com/mic. MIC-G
Use of Non-GAAP Measures
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items, Free Cash Flow and Proportionately Combined Metrics
In addition to MIC's results under U.S. GAAP, the Company uses certain non-GAAP measures to assess the performance and prospects of its businesses. In particular, MIC uses EBITDA excluding non-cash items, Free Cash Flow and certain proportionately combined financial metrics. Proportionately combined financial metrics, including Free Cash Flow, reflect MIC Corporate and the Company's ownership interest in each of its businesses.
MIC measures EBITDA excluding non-cash items as a reflection of its businesses' ability to effectively manage the volume of products sold or services provided, the operating margin earned on those transactions and the management of operating expenses independent of the capitalization and tax attributes of those businesses. The Company believes investors use EBITDA excluding non-cash items primarily as a measure to assess the operating performance of its businesses and to make comparisons with the operating performance of other businesses whose depreciation and amortization expense may vary widely from MIC's, particularly where acquisitions and other non-operating factors are involved. MIC defines EBITDA excluding non-cash items as net income (loss) or earnings — the most comparable GAAP measure — before interest, taxes, depreciation and amortization and non-cash items including impairments, unrealized derivative gains and losses, adjustments for other non-cash items and pension expense reflected in the statements of operations. EBITDA excluding non-cash items also excludes base management fees and performance fees, if any, whether paid in cash or stock.
Given MIC's varied ownership levels in its CP and MIC Hawaii segments, together with obligations to report the results of these businesses on a consolidated basis, GAAP measures such as net income (loss) do not fully reflect all of the items management considers in assessing the amount of cash generated based on its ownership interest in its businesses. The Company notes that the proportionately combined metrics used 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 supplemental measure to help understand MIC's financial performance and not in lieu of financial results reported under GAAP.
The Company's businesses can be characterized as owners of high-value, long-lived assets capable of generating substantial Free Cash Flow. MIC defines Free Cash Flow as cash from operating activities — the most comparable GAAP measure — which includes cash paid for interest, taxes and pension contributions, less maintenance capital expenditures, which includes principal repayments on capital lease obligations used to fund maintenance capital expenditures, and excludes changes in working capital.
Management uses Free Cash Flow as a measure of its ability to provide investors with an attractive risk-adjusted return by sustaining and potentially increasing MIC's quarterly cash dividend and funding a portion of the Company's growth. GAAP metrics such as net income (loss) do not provide MIC management with the same level of visibility to into the performance and prospects of the business as a result of: (i) the capital intensive nature of MIC's businesses and the generation of non-cash depreciation and amortization; (ii) shares issued to the Company's external manager under the Management Services Agreement, (iii) the Company's ability to defer all or a portion of current federal income taxes; (iv) non-cash unrealized gains or losses on derivative instruments; (v) amortization of tolling liabilities; (vi) gains (losses) on disposal of assets, and (vii) pension expenses. Pension expenses primarily consist of interest expense, expected return on plan assets and amortization of actuarial and performance gains and losses. Any cash contributions to pension plans are reflected as a reduction to Free Cash Flow. Management believes that external consumers of its financial statements, including investors and research analysts, use Free Cash Flow both to assess the Company's performance and as an indicator of its success in generating an attractive risk-adjusted return.
In its Quarterly Report on Form 10-Q, the Company has disclosed Free Cash Flow on a consolidated basis and for each of its operating segments and MIC Corporate. Management believes that both EBITDA excluding non-cash items and Free Cash Flow support a more complete and accurate understanding of the financial and operating performance of its businesses than would otherwise be achieved using GAAP results alone.
Free Cash Flow does not take into consideration required payments on indebtedness and other fixed obligations or other cash items that are excluded from MIC's definition of Free Cash Flow. Management notes that Free Cash Flow may be calculated differently by other companies thereby limiting its usefulness as a comparative measure. Free Cash Flow should be used as a supplemental measure to help understand MIC's financial performance and not in lieu of its financial results reported under GAAP.
See below for a reconciliation of EBITDA excluding non-cash items to net income (loss) and a reconciliation of Free Cash Flow to cash from operating activities on a consolidated basis, for our operating businesses, MIC Corporate and on a proportionately combined basis.
Classification of Maintenance Capital Expenditures and Growth Capital Expenditures
MIC categorizes capital expenditures as either maintenance capital expenditures or growth capital expenditures. As neither maintenance capital expenditure nor growth capital expenditure is a GAAP term, the Company has adopted a framework to categorize specific capital expenditures. In broad terms, maintenance capital expenditures primarily maintain MIC's businesses at current levels of operations, capability, profitability or cash flow, while growth capital expenditures primarily provide new or enhanced levels of operations, capability, profitability or cash flow. Management considers a number of factors in determining whether a specific capital expenditure will be classified as maintenance or growth.
In some cases, specific capital expenditures contain characteristics of both maintenance and growth capital expenditures. MIC does not bifurcate specific capital expenditures into maintenance and growth components. Each discrete capital expenditure is considered within the above framework and the entire capital expenditure is classified as either maintenance or growth.
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 release 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; risks associated with development, investment and expansion in the power industry; 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 and other commodity costs; its ability to recover increases in costs from customers, cybersecurity risks, work interruptions or other labor stoppages; risks related to its shared services initiative; 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 Corporation 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 Corporation.
MACQUARIE INFRASTRUCTURE CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS | ||||||||
March 31, 2017 |
December 31, 2016 | |||||||
(Unaudited) |
||||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ |
29,618 |
$ |
44,767 |
||||
Restricted cash |
15,169 |
16,420 |
||||||
Accounts receivable, less allowance for doubtful accounts of $1,238 and $1,434, respectively |
123,849 |
124,846 |
||||||
Inventories |
35,063 |
31,461 |
||||||
Prepaid expenses |
19,328 |
14,561 |
||||||
Fair value of derivative instruments |
4,515 |
5,514 |
||||||
Other current assets |
9,794 |
7,099 |
||||||
Total current assets |
237,336 |
244,668 |
||||||
Property, equipment, land and leasehold improvements, net |
4,346,597 |
4,346,536 |
||||||
Investment in unconsolidated business |
8,944 |
8,835 |
||||||
Goodwill |
2,024,484 |
2,024,409 |
||||||
Intangible assets, net |
871,278 |
888,971 |
||||||
Fair value of derivative instruments |
25,850 |
30,781 |
||||||
Other noncurrent assets |
24,073 |
15,053 |
||||||
Total assets |
$ |
7,538,562 |
$ |
7,559,253 |
||||
LIABILITIES AND STOCKHOLDERS' EQUITY |
||||||||
Current liabilities: |
||||||||
Due to Manager – related party |
$ |
6,366 |
$ |
6,594 |
||||
Accounts payable |
62,820 |
69,566 |
||||||
Accrued expenses |
76,260 |
83,734 |
||||||
Current portion of long-term debt |
42,782 |
40,016 |
||||||
Fair value of derivative instruments |
5,902 |
9,297 |
||||||
Other current liabilities |
42,977 |
41,802 |
||||||
Total current liabilities |
237,107 |
251,009 |
||||||
Long-term debt, net of current portion |
3,070,883 |
3,039,966 |
||||||
Deferred income taxes |
914,461 |
896,116 |
||||||
Fair value of derivative instruments |
5,403 |
5,966 |
||||||
Tolling agreements – noncurrent |
58,428 |
60,373 |
||||||
Other noncurrent liabilities |
160,787 |
158,289 |
||||||
Total liabilities |
4,447,069 |
4,411,719 |
||||||
Commitments and contingencies |
— |
— |
||||||
Stockholders' equity(1): |
||||||||
Common stock ($0.001 par value; 500,000,000 authorized; 82,306,372 shares issued and outstanding at March 31, 2017 and 82,047,526 shares issued and outstanding at December 31, 2016) |
$ |
82 |
$ |
82 |
||||
Additional paid in capital |
2,002,066 |
2,089,407 |
||||||
Accumulated other comprehensive loss |
(28,960) |
(28,960) |
||||||
Retained earnings |
928,380 |
892,365 |
||||||
Total stockholders' equity |
2,901,568 |
2,952,894 |
||||||
Noncontrolling interests |
189,925 |
194,640 |
||||||
Total equity |
3,091,493 |
3,147,534 |
||||||
Total liabilities and equity |
$ |
7,538,562 |
$ |
7,559,253 |
(1) The Company is authorized to issue 100,000,000 shares of preferred stock, par value $0.001 per share. At March 31, 2017 and December 31, 2016, no preferred stock were issued or outstanding. The Company has 100 shares of special stock issued and outstanding to its Manager at March 31, 2017 and December 31, 2016. |
MACQUARIE INFRASTRUCTURE CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS | ||||||||
Quarter Ended March 31, | ||||||||
2017 |
2016 | |||||||
Revenue |
||||||||
Service revenue |
$ |
363,804 |
$ |
312,241 |
||||
Product revenue |
87,653 |
84,146 |
||||||
Total revenue |
451,457 |
396,387 |
||||||
Costs and expenses |
||||||||
Cost of services |
154,706 |
116,463 |
||||||
Cost of product sales |
47,225 |
33,060 |
||||||
Selling, general and administrative |
76,952 |
72,284 |
||||||
Fees to Manager – related party |
18,223 |
14,796 |
||||||
Depreciation |
57,681 |
53,221 |
||||||
Amortization of intangibles |
17,693 |
17,787 |
||||||
Total operating expenses |
372,480 |
307,611 |
||||||
Operating income |
78,977 |
88,776 |
||||||
Other income (expense) |
||||||||
Interest income |
34 |
33 |
||||||
Interest expense(1) |
(25,482) |
(56,895) |
||||||
Other income, net |
1,182 |
3,429 |
||||||
Net income before income taxes |
54,711 |
35,343 |
||||||
Provision for income taxes |
(22,073) |
(15,167) |
||||||
Net income |
$ |
32,638 |
$ |
20,176 |
||||
Less: net loss attributable to noncontrolling interests |
(3,377) |
(2,179) |
||||||
Net income attributable to MIC |
$ |
36,015 |
$ |
22,355 |
||||
Basic income per share attributable to MIC |
$ |
0.44 |
$ |
0.28 |
||||
Weighted average number of shares outstanding: basic |
82,138,168 |
80,113,011 |
||||||
Diluted income per share attributable to MIC |
$ |
0.44 |
$ |
0.28 |
||||
Weighted average number of shares outstanding: diluted |
82,147,763 |
81,171,346 |
||||||
Cash dividends declared per share |
$ |
1.32 |
$ |
1.20 |
(1) Interest expense includes gains on derivative instruments of $954,000 and losses on derivative instruments of $31.8 million for the quarters ended March 31, 2017 and 2016, respectively. |
MACQUARIE INFRASTRUCTURE CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS | ||||||||
Quarter Ended March 31, | ||||||||
2017 |
2016 | |||||||
Operating activities |
||||||||
Net income |
$ |
32,638 |
$ |
20,176 |
||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
Depreciation and amortization of property and equipment |
57,681 |
53,221 |
||||||
Amortization of intangible assets |
17,693 |
17,787 |
||||||
Amortization of debt financing costs |
2,202 |
2,879 |
||||||
Amortization of debt discount |
619 |
— |
||||||
Adjustments to derivative instruments |
1,972 |
23,278 |
||||||
Fees to Manager-related party |
18,223 |
14,796 |
||||||
Deferred taxes |
18,352 |
12,661 |
||||||
Pension expense |
2,694 |
2,198 |
||||||
Other non-cash income, net |
(1,354) |
(905) |
||||||
Changes in other assets and liabilities, net of acquisitions: |
||||||||
Restricted cash |
974 |
2,202 |
||||||
Accounts receivable |
1,059 |
3,910 |
||||||
Inventories |
(3,718) |
1,879 |
||||||
Prepaid expenses and other current assets |
(7,559) |
9,352 |
||||||
Due to Manager – related party |
11 |
(73) |
||||||
Accounts payable and accrued expenses |
(12,382) |
(13,293) |
||||||
Income taxes payable |
1,341 |
2,753 |
||||||
Other, net |
(1,878) |
(4,255) |
||||||
Net cash provided by operating activities |
128,568 |
148,566 |
||||||
Investing activities |
||||||||
Acquisitions of businesses and investments, net of cash acquired |
— |
(3,153) |
||||||
Purchases of property and equipment |
(59,869) |
(62,593) |
||||||
Change in restricted cash |
83 |
— |
||||||
Other, net |
(7,950) |
48 |
||||||
Net cash used in investing activities |
(67,736) |
(65,698) |
MACQUARIE INFRASTRUCTURE CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS – (continued) | ||||||||
Quarter Ended March 31, | ||||||||
2017 |
2016 | |||||||
Financing activities |
||||||||
Proceeds from long-term debt |
$ |
104,000 |
$ |
176,000 |
||||
Payment of long-term debt |
(72,634) |
(159,730) |
||||||
Proceeds from the issuance of shares |
2,049 |
1,093 |
||||||
Dividends paid to common stockholders |
(107,714) |
(92,203) |
||||||
Purchase of noncontrolling interest |
— |
(9,909) |
||||||
Distributions paid to noncontrolling interests |
(1,351) |
(1,824) |
||||||
Offering and equity raise costs paid |
(69) |
(105) |
||||||
Debt financing costs paid |
(435) |
(1,119) |
||||||
Change in restricted cash |
194 |
5,013 |
||||||
Payment of capital lease obligations |
(21) |
(433) |
||||||
Net cash used in financing activities |
(75,981) |
(83,217) |
||||||
Effect of exchange rate changes on cash and cash equivalents |
— |
457 |
||||||
Net change in cash and cash equivalents |
(15,149) |
108 |
||||||
Cash and cash equivalents, beginning of period |
44,767 |
22,394 |
||||||
Cash and cash equivalents, end of period |
$ |
29,618 |
$ |
22,502 |
||||
Supplemental disclosures of cash flow information |
||||||||
Non-cash investing and financing activities: |
||||||||
Accrued equity offering costs |
$ |
93 |
$ |
229 |
||||
Accrued financing costs |
$ |
— |
$ |
68 |
||||
Accrued purchases of property and equipment |
$ |
25,598 |
$ |
19,318 |
||||
Issuance of shares to Manager |
$ |
18,462 |
$ |
15,108 |
||||
Conversion of convertible senior notes to shares |
$ |
17 |
$ |
4 |
||||
Distributions payable to noncontrolling interests |
$ |
29 |
$ |
42 |
||||
Taxes paid (refund), net |
$ |
2,379 |
$ |
(253) |
||||
Interest paid |
$ |
26,764 |
$ |
25,488 |
MACQUARIE INFRASTRUCTURE CORPORATION | ||||||||||||||||
Quarter Ended March 31, |
Change Favorable/(Unfavorable) | |||||||||||||||
2017 |
2016 |
$ |
% | |||||||||||||
($ In Thousands, Except Share and Per Share Data) (Unaudited) | ||||||||||||||||
Revenue |
||||||||||||||||
Service revenue |
$ |
363,804 |
$ |
312,241 |
51,563 |
16.5 |
||||||||||
Product revenue |
87,653 |
84,146 |
3,507 |
4.2 |
||||||||||||
Total revenue |
451,457 |
396,387 |
55,070 |
13.9 |
||||||||||||
Costs and expenses |
||||||||||||||||
Cost of services |
154,706 |
116,463 |
(38,243) |
(32.8) |
||||||||||||
Cost of product sales |
47,225 |
33,060 |
(14,165) |
(42.8) |
||||||||||||
Selling, general and administrative |
76,952 |
72,284 |
(4,668) |
(6.5) |
||||||||||||
Fees to Manager – related party |
18,223 |
14,796 |
(3,427) |
(23.2) |
||||||||||||
Depreciation |
57,681 |
53,221 |
(4,460) |
(8.4) |
||||||||||||
Amortization of intangibles |
17,693 |
17,787 |
94 |
0.5 |
||||||||||||
Total operating expenses |
372,480 |
307,611 |
(64,869) |
(21.1) |
||||||||||||
Operating income |
78,977 |
88,776 |
(9,799) |
(11.0) |
||||||||||||
Other income (expense) |
||||||||||||||||
Interest income |
34 |
33 |
1 |
3.0 |
||||||||||||
Interest expense(1) |
(25,482) |
(56,895) |
31,413 |
55.2 |
||||||||||||
Other income, net |
1,182 |
3,429 |
(2,247) |
(65.5) |
||||||||||||
Net income before income taxes |
54,711 |
35,343 |
19,368 |
54.8 |
||||||||||||
Provision for income taxes |
(22,073) |
(15,167) |
(6,906) |
(45.5) |
||||||||||||
Net income |
$ |
32,638 |
$ |
20,176 |
12,462 |
61.8 |
||||||||||
Less: net loss attributable to noncontrolling interests |
(3,377) |
(2,179) |
1,198 |
55.0 |
||||||||||||
Net income attributable to MIC |
$ |
36,015 |
$ |
22,355 |
13,660 |
61.1 |
||||||||||
Basic income per share attributable to MIC |
$ |
0.44 |
$ |
0.28 |
0.16 |
57.1 |
||||||||||
Weighted average number of shares outstanding: basic |
82,138,168 |
80,113,011 |
2,025,157 |
2.5 |
(1) Interest expense includes gains on derivative instruments of $954,000 and losses on derivative instruments of $31.8 million for the quarters ended March 31, 2017 and 2016, respectively. |
MACQUARIE INFRASTRUCTURE CORPORATION | ||||||||||||||||
Quarter Ended March 31, |
Change Favorable/(Unfavorable) | |||||||||||||||
2017 |
2016 |
$ |
% | |||||||||||||
($ In Thousands) (Unaudited) | ||||||||||||||||
Net income |
$ |
32,638 |
$ |
20,176 |
||||||||||||
Interest expense, net(1) |
25,448 |
56,862 |
||||||||||||||
Provision for income taxes |
22,073 |
15,167 |
||||||||||||||
Depreciation |
57,681 |
53,221 |
||||||||||||||
Amortization of intangibles |
17,693 |
17,787 |
||||||||||||||
Fees to Manager-related party |
18,223 |
14,796 |
||||||||||||||
Pension expense(2) |
2,694 |
2,198 |
||||||||||||||
Other non-cash expense (income), net(3) |
3,865 |
(4,232) |
||||||||||||||
EBITDA excluding non-cash items |
$ |
180,315 |
$ |
175,975 |
4,340 |
2.5 |
||||||||||
EBITDA excluding non-cash items |
$ |
180,315 |
$ |
175,975 |
||||||||||||
Interest expense, net(1) |
(25,448) |
(56,862) |
||||||||||||||
Adjustments to derivative instruments recorded in interest expense(1) |
(3,247) |
26,605 |
||||||||||||||
Amortization of debt financing costs(1) |
2,202 |
2,879 |
||||||||||||||
Amortization of debt discount(1) |
619 |
— |
||||||||||||||
Provision for income taxes, net of changes in deferred taxes |
(3,721) |
(2,506) |
||||||||||||||
Changes in working capital |
(22,152) |
2,475 |
||||||||||||||
Cash provided by operating activities |
128,568 |
148,566 |
||||||||||||||
Changes in working capital |
22,152 |
(2,475) |
||||||||||||||
Maintenance capital expenditures |
(4,476) |
(10,413) |
||||||||||||||
Free cash flow |
$ |
146,244 |
$ |
135,678 |
10,566 |
7.8 |
(1) Interest expense, net, includes adjustment to derivative instruments, non-cash amortization of deferred financing fees and non-cash amortization of debt discount related to the 2.00% Convertible Senior Notes due October 2023. For the quarter ended March 31, 2016, interest expense also included a non-cash write-off of deferred financing fees related to the February 2016 refinancing at Hawaii Gas. | ||
(2) Pension expense primarily consists of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses. | ||
(3) Other non-cash expense (income), net, primarily includes non-cash amortization of tolling liabilities, unrealized gains (losses) on commodity hedges and non-cash gains (losses) related to disposal of assets. See "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items, Free Cash Flow and Proportionately Combined Metrics" above for further discussion. |
MACQUARIE INFRASTRUCTURE CORPORATION | ||||||||||||||||
Quarter Ended March 31, |
Change Favorable/(Unfavorable) | |||||||||||||||
2017 |
2016 |
$ |
% | |||||||||||||
($ In Thousands) (Unaudited) | ||||||||||||||||
Free Cash Flow – Consolidated basis |
$ |
146,244 |
$ |
135,678 |
10,566 |
7.8 |
||||||||||
100% of CP Free Cash Flow included in consolidated Free Cash Flow |
(9,839) |
(11,943) |
||||||||||||||
MIC's share of CP Free Cash Flow |
8,171 |
9,660 |
||||||||||||||
100% of MIC Hawaii Free Cash Flow included in consolidated Free Cash Flow |
(14,936) |
(10,862) |
||||||||||||||
MIC's share of MIC Hawaii Free Cash Flow |
14,933 |
10,862 |
||||||||||||||
Free Cash Flow – Proportionately Combined basis |
$ |
144,573 |
$ |
133,395 |
11,178 |
8.4 |
MACQUARIE INFRASTRUCTURE CORPORATION | ||||||||||||||||
IMTT | ||||||||||||||||
Quarter Ended March 31, |
Change Favorable/(Unfavorable) | |||||||||||||||
2017 |
2016 | |||||||||||||||
$ |
$ |
$ |
% | |||||||||||||
($ In Thousands) (Unaudited) | ||||||||||||||||
Revenue |
138,817 |
135,425 |
3,392 |
2.5 |
||||||||||||
Cost of services |
49,846 |
50,301 |
455 |
0.9 |
||||||||||||
Selling, general and administrative expenses |
9,038 |
8,174 |
(864) |
(10.6) |
||||||||||||
Depreciation and amortization |
31,520 |
32,621 |
1,101 |
3.4 |
||||||||||||
Operating income |
48,413 |
44,329 |
4,084 |
9.2 |
||||||||||||
Interest expense, net(1) |
(8,757) |
(19,871) |
11,114 |
55.9 |
||||||||||||
Other income, net |
708 |
2,988 |
(2,280) |
(76.3) |
||||||||||||
Provision for income taxes |
(16,548) |
(11,229) |
(5,319) |
(47.4) |
||||||||||||
Net income(2) |
23,816 |
16,217 |
7,599 |
46.9 |
||||||||||||
Less: net income attributable to noncontrolling interests |
— |
59 |
59 |
100.0 |
||||||||||||
Net income attributable to MIC(2) |
23,816 |
16,158 |
7,658 |
47.4 |
||||||||||||
Reconciliation of net income to EBITDA excluding non-cash items and a reconciliation of cash provided by operating activities to Free Cash Flow: |
||||||||||||||||
Net income(2) |
23,816 |
16,217 |
||||||||||||||
Interest expense, net(1) |
8,757 |
19,871 |
||||||||||||||
Provision for income taxes |
16,548 |
11,229 |
||||||||||||||
Depreciation and amortization |
31,520 |
32,621 |
||||||||||||||
Pension expense(3) |
2,416 |
1,831 |
||||||||||||||
Other non-cash expense, net |
68 |
443 |
||||||||||||||
EBITDA excluding non-cash items |
83,125 |
82,212 |
913 |
1.1 |
||||||||||||
EBITDA excluding non-cash items |
83,125 |
82,212 |
||||||||||||||
Interest expense, net(1) |
(8,757) |
(19,871) |
||||||||||||||
Adjustments to derivative instruments recorded in interest expense(1) |
(1,320) |
9,610 |
||||||||||||||
Amortization of debt financing costs(1) |
411 |
420 |
||||||||||||||
Provision for income taxes, net of changes in deferred taxes |
(2,258) |
(1,230) |
||||||||||||||
Changes in working capital |
736 |
(2,807) |
||||||||||||||
Cash provided by operating activities |
71,937 |
68,334 |
||||||||||||||
Changes in working capital |
(736) |
2,807 |
||||||||||||||
Maintenance capital expenditures |
(2,460) |
(6,297) |
||||||||||||||
Free cash flow |
68,741 |
64,844 |
3,897 |
6.0 |
(1) Interest expense, net, includes adjustments to derivative instruments and non-cash amortization of deferred financing fees. | ||
(2) Corporate allocation expense, intercompany fees and the tax effect have been excluded from the above table as they are eliminated on consolidation. | ||
(3) Pension expense primarily consists of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses. |
Atlantic Aviation | ||||||||||||||||
Quarter Ended March 31, |
Change Favorable/(Unfavorable) | |||||||||||||||
2017 |
2016 | |||||||||||||||
$ |
$ |
$ |
% | |||||||||||||
($ In Thousands) (Unaudited) | ||||||||||||||||
Revenue |
212,753 |
177,988 |
34,765 |
19.5 |
||||||||||||
Cost of services (exclusive of depreciation and amortization of intangibles shown separately below) |
93,922 |
66,162 |
(27,760) |
(42.0) |
||||||||||||
Gross margin |
118,831 |
111,826 |
7,005 |
6.3 |
||||||||||||
Selling, general and administrative expenses |
53,890 |
52,611 |
(1,279) |
(2.4) |
||||||||||||
Depreciation and amortization |
25,033 |
22,191 |
(2,842) |
(12.8) |
||||||||||||
Operating income |
39,908 |
37,024 |
2,884 |
7.8 |
||||||||||||
Interest expense, net(1) |
(3,446) |
(13,314) |
9,868 |
74.1 |
||||||||||||
Other (expense) income, net |
(86) |
390 |
(476) |
(122.1) |
||||||||||||
Provision for income taxes |
(14,550) |
(9,742) |
(4,808) |
(49.4) |
||||||||||||
Net income(2) |
21,826 |
14,358 |
7,468 |
52.0 |
||||||||||||
Reconciliation of net income to EBITDA excluding non-cash items and a reconciliation of cash provided by operating activities to Free Cash Flow: |
||||||||||||||||
Net income(2) |
21,826 |
14,358 |
||||||||||||||
Interest expense, net(1) |
3,446 |
13,314 |
||||||||||||||
Provision for income taxes |
14,550 |
9,742 |
||||||||||||||
Depreciation and amortization |
25,033 |
22,191 |
||||||||||||||
Pension expense(3) |
5 |
17 |
||||||||||||||
Other non-cash expense (income), net |
62 |
(91) |
||||||||||||||
EBITDA excluding non-cash items |
64,922 |
59,531 |
5,391 |
9.1 |
||||||||||||
EBITDA excluding non-cash items |
64,922 |
59,531 |
||||||||||||||
Interest expense, net(1) |
(3,446) |
(13,314) |
||||||||||||||
Convertible senior notes interest(4) |
(1,744) |
— |
||||||||||||||
Adjustments to derivative instruments recorded in interest expense(1) |
133 |
5,608 |
||||||||||||||
Amortization of debt financing costs(1) |
314 |
800 |
||||||||||||||
Provision for income taxes, net of changes in deferred taxes |
(2,872) |
(1,452) |
||||||||||||||
Changes in working capital |
(6,116) |
6,044 |
||||||||||||||
Cash provided by operating activities |
51,191 |
57,217 |
||||||||||||||
Changes in working capital |
6,116 |
(6,044) |
||||||||||||||
Maintenance capital expenditures |
(925) |
(2,284) |
||||||||||||||
Free cash flow |
56,382 |
48,889 |
7,493 |
15.3 |
(1) Interest expense, net, includes adjustments to derivative instruments and non-cash amortization of deferred financing fees. |
(2) Corporate allocation expense, intercompany fees and the tax effect have been excluded from the above table as they are eliminated on consolidation. |
(3) Pension expense primarily consists of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses. |
(4) Represents the cash interest expense reclassified from MIC Corporate related to the 2.00% Convertible Senior Notes due October 2023, proceeds of which were used to pay down a portion of Atlantic Aviation's credit facility in October 2016. |
Contracted Power | ||||||||||||||||
Quarter Ended March 31, |
Change Favorable/(Unfavorable) | |||||||||||||||
2017 |
2016 | |||||||||||||||
$ |
$ |
$ |
% | |||||||||||||
($ In Thousands) (Unaudited) | ||||||||||||||||
Product revenue |
28,070 |
30,179 |
(2,109) |
(7.0) |
||||||||||||
Cost of product sales |
4,859 |
4,357 |
(502) |
(11.5) |
||||||||||||
Selling, general and administrative expenses |
5,165 |
5,960 |
795 |
13.3 |
||||||||||||
Depreciation and amortization |
15,340 |
13,846 |
(1,494) |
(10.8) |
||||||||||||
Operating income |
2,706 |
6,016 |
(3,310) |
(55.0) |
||||||||||||
Interest expense, net(1) |
(5,383) |
(17,848) |
12,465 |
69.8 |
||||||||||||
Other income, net |
765 |
305 |
460 |
150.8 |
||||||||||||
(Provision) benefit for income taxes |
(27) |
2,304 |
(2,331) |
(101.2) |
||||||||||||
Net loss(2) |
(1,939) |
(9,223) |
7,284 |
79.0 |
||||||||||||
Less: net loss attributable to noncontrolling interest |
(3,349) |
(2,238) |
1,111 |
49.6 |
||||||||||||
Net income (loss) attributable to MIC(2) |
1,410 |
(6,985) |
8,395 |
120.2 |
||||||||||||
Reconciliation of net loss to EBITDA excluding non-cash items and a reconciliation of cash provided by operating activities to Free Cash Flow: |
||||||||||||||||
Net loss(2) |
(1,939) |
(9,223) |
||||||||||||||
Interest expense, net(1) |
5,383 |
17,848 |
||||||||||||||
Provision (benefit) for income taxes |
27 |
(2,304) |
||||||||||||||
Depreciation and amortization |
15,340 |
13,846 |
||||||||||||||
Other non-cash income, net(3) |
(2,024) |
(2,020) |
||||||||||||||
EBITDA excluding non-cash items |
16,787 |
18,147 |
(1,360) |
(7.5) |
||||||||||||
EBITDA excluding non-cash items |
16,787 |
18,147 |
||||||||||||||
Interest expense, net(1) |
(5,383) |
(17,848) |
||||||||||||||
Adjustments to derivative instruments recorded in interest expense(1) |
(1,834) |
11,268 |
||||||||||||||
Amortization of debt financing costs(1) |
379 |
383 |
||||||||||||||
Provision/benefit for income taxes, net of changes in deferred taxes |
(88) |
(7) |
||||||||||||||
Changes in working capital |
142 |
2,612 |
||||||||||||||
Cash provided by operating activities |
10,003 |
14,555 |
||||||||||||||
Changes in working capital |
(142) |
(2,612) |
||||||||||||||
Maintenance capital expenditures |
(22) |
— |
||||||||||||||
Free cash flow |
9,839 |
11,943 |
(2,104) |
(17.6) |
(1) Interest expense, net, includes adjustments to derivative instruments and non-cash amortization of deferred financing fees. |
(2) Corporate allocation expense, intercompany fees and the tax effect have been excluded from the above table as they are eliminated on consolidation. |
(3) Other non-cash income, net, primarily includes amortization of tolling liabilities. See "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items, Free Cash Flow and Proportionately Combined Metrics" above for further discussion. |
MIC Hawaii | ||||||||||||||||
Quarter Ended March 31, |
Change Favorable/(Unfavorable) | |||||||||||||||
2017 |
2016 | |||||||||||||||
$ |
$ |
$ |
% | |||||||||||||
($ In Thousands) (Unaudited) | ||||||||||||||||
Product revenue |
59,583 |
53,967 |
5,616 |
10.4 |
||||||||||||
Service revenue |
13,457 |
— |
13,457 |
NM |
||||||||||||
Total revenue |
73,040 |
53,967 |
19,073 |
35.3 |
||||||||||||
Cost of product sales (exclusive of depreciation and amortization of intangibles shown separately below) |
42,366 |
28,703 |
(13,663) |
(47.6) |
||||||||||||
Cost of services (exclusive of depreciation and amortization of intangibles shown separately below) |
10,940 |
— |
(10,940) |
NM |
||||||||||||
Cost of revenue – total |
53,306 |
28,703 |
(24,603) |
(85.7) |
||||||||||||
Gross margin |
19,734 |
25,264 |
(5,530) |
(21.9) |
||||||||||||
Selling, general and administrative expenses |
6,085 |
5,256 |
(829) |
(15.8) |
||||||||||||
Depreciation and amortization |
3,481 |
2,350 |
(1,131) |
(48.1) |
||||||||||||
Operating income |
10,168 |
17,658 |
(7,490) |
(42.4) |
||||||||||||
Interest expense, net(1) |
(1,711) |
(2,424) |
713 |
29.4 |
||||||||||||
Other expense, net |
(205) |
(254) |
49 |
19.3 |
||||||||||||
Provision for income taxes |
(3,379) |
(5,911) |
2,532 |
42.8 |
||||||||||||
Net income(2) |
4,873 |
9,069 |
(4,196) |
(46.3) |
||||||||||||
Less: net loss attributable to noncontrolling interests |
(28) |
— |
28 |
NM |
||||||||||||
Net income attributable to MIC(2) |
4,901 |
9,069 |
(4,168) |
(46.0) |
||||||||||||
Reconciliation of net income to EBITDA excluding non-cash items and a reconciliation of cash provided by operating activities to Free Cash Flow: |
||||||||||||||||
Net income(2) |
4,873 |
9,069 |
||||||||||||||
Interest expense, net(1) |
1,711 |
2,424 |
||||||||||||||
Provision for income taxes |
3,379 |
5,911 |
||||||||||||||
Depreciation and amortization |
3,481 |
2,350 |
||||||||||||||
Pension expense(3) |
273 |
350 |
||||||||||||||
Other non-cash expense (income), net(4) |
5,571 |
(2,752) |
||||||||||||||
EBITDA excluding non-cash items |
19,288 |
17,352 |
1,936 |
11.2 |
||||||||||||
EBITDA excluding non-cash items |
19,288 |
17,352 |
||||||||||||||
Interest expense, net(1) |
(1,711) |
(2,424) |
||||||||||||||
Adjustments to derivative instruments recorded in interest expense(1) |
(226) |
119 |
||||||||||||||
Amortization of debt financing costs(1) |
105 |
664 |
||||||||||||||
Provision for income taxes, net of changes in deferred taxes |
(1,451) |
(3,017) |
||||||||||||||
Changes in working capital |
(8,480) |
2,937 |
||||||||||||||
Cash provided by operating activities |
7,525 |
15,631 |
||||||||||||||
Changes in working capital |
8,480 |
(2,937) |
||||||||||||||
Maintenance capital expenditures |
(1,069) |
(1,832) |
||||||||||||||
Free cash flow |
14,936 |
10,862 |
4,074 |
37.5 |
NM — Not meaningful | ||
(1) Interest expense, net, includes adjustments to derivative instruments related to interest rate swaps and non-cash amortization of deferred financing fees. For the quarter ended March 31, 2016, interest expense also included a non-cash write-off of deferred financing fees related to the February 2016 refinancing at Hawaii Gas. | ||
(2) Corporate allocation expense, intercompany fees and the tax effect have been excluded from the above table as they are eliminated on consolidation. | ||
(3) Pension expense primarily consists of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses. | ||
(4) Other non-cash expense (income), net, primarily includes non-cash adjustments related to unrealized gains (losses) on commodity hedges. See "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items, Free Cash Flow and Proportionately Combined Metrics" above for further discussion. |
Corporate and Other | ||||||||||||||||
Quarter Ended March 31, |
Change Favorable/(Unfavorable) | |||||||||||||||
2017 |
2016 | |||||||||||||||
$ |
$ |
$ |
% | |||||||||||||
($ In Thousands) (Unaudited) | ||||||||||||||||
Fees to Manager-related party |
18,223 |
14,796 |
(3,427) |
(23.2) |
||||||||||||
Selling, general and administrative expenses(1) |
3,995 |
1,455 |
(2,540) |
(174.6) |
||||||||||||
Operating loss |
(22,218) |
(16,251) |
(5,967) |
(36.7) |
||||||||||||
Interest expense, net(2) |
(6,151) |
(3,405) |
(2,746) |
(80.6) |
||||||||||||
Benefit for income taxes |
12,431 |
9,411 |
3,020 |
32.1 |
||||||||||||
Net loss(3) |
(15,938) |
(10,245) |
(5,693) |
(55.6) |
||||||||||||
Reconciliation of net loss to EBITDA excluding non-cash items and a reconciliation of cash used in operating activities to Free Cash Flow: |
||||||||||||||||
Net loss(3) |
(15,938) |
(10,245) |
||||||||||||||
Interest expense, net(2) |
6,151 |
3,405 |
||||||||||||||
Benefit for income taxes |
(12,431) |
(9,411) |
||||||||||||||
Fees to Manager-related party |
18,223 |
14,796 |
||||||||||||||
Other non-cash expense |
188 |
188 |
||||||||||||||
EBITDA excluding non-cash items |
(3,807) |
(1,267) |
(2,540) |
NM |
||||||||||||
EBITDA excluding non-cash items |
(3,807) |
(1,267) |
||||||||||||||
Interest expense, net(2) |
(6,151) |
(3,405) |
||||||||||||||
Convertible senior notes interest(4) |
1,744 |
— |
||||||||||||||
Amortization of debt financing costs(2) |
993 |
612 |
||||||||||||||
Amortization of debt discount(2) |
619 |
— |
||||||||||||||
Benefit for income taxes, net of changes in deferred taxes |
2,948 |
3,200 |
||||||||||||||
Changes in working capital |
(8,434) |
(6,311) |
||||||||||||||
Cash used in operating activities |
(12,088) |
(7,171) |
||||||||||||||
Changes in working capital |
8,434 |
6,311 |
||||||||||||||
Free cash flow |
(3,654) |
(860) |
(2,794) |
NM |
NM — Not meaningful | ||
(1) For the quarter ended March 31, 2017, selling, general and administrative expenses included $2.3 million of costs related to the implementation of a shared services initiative. |
(2) Interest expense, net, includes non-cash amortization of deferred financing fees and amortization of debt discount related to the 2.00% Convertible Senior Notes due October 2023. |
(3) Corporate allocation expense, intercompany fees and the tax effect have been excluded from the above table as they are eliminated on consolidation. |
(4) Represents the cash interest expense reclassified to Atlantic Aviation related to the 2.00% Convertible Senior Notes due October 2023, proceeds of which were used to pay down a portion of Atlantic Aviation's credit facility in October 2016. |
MACQUARIE INFRASTRUCTURE CORPORATION RECONCILIATION OF NET INCOME (LOSS) TO EBITDA EXCLUDING NON-CASH ITEMS AND A RECONCILIATION FROM CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES TO PROPORTIONATELY COMBINED FREE CASH FLOW ($ in Thousands Unaudited) | ||||||||||||||||||||||||||||||||||||
For the Quarter Ended March 31, 2017 |
||||||||||||||||||||||||||||||||||||
IMTT |
Atlantic Aviation |
Contracted Power(1) |
MIC Hawaii(1) |
MIC Corporate |
Proportionately Combined(2) |
Contracted Power 100% |
MIC Hawaii 100% | |||||||||||||||||||||||||||||
Net income (loss) |
23,816 |
21,826 |
(1,954) |
4,875 |
(15,938) |
32,625 |
(1,939) |
4,873 |
||||||||||||||||||||||||||||
Interest expense, net(3) |
8,757 |
3,446 |
4,790 |
1,710 |
6,151 |
24,854 |
5,383 |
1,711 |
||||||||||||||||||||||||||||
Provision (benefit) for income taxes |
16,548 |
14,550 |
27 |
3,379 |
(12,431) |
22,073 |
27 |
3,379 |
||||||||||||||||||||||||||||
Depreciation and amortization of intangibles |
31,520 |
25,033 |
13,461 |
3,476 |
— |
73,490 |
15,340 |
3,481 |
||||||||||||||||||||||||||||
Fees to Manager-related party |
— |
— |
— |
— |
18,223 |
18,223 |
— |
— |
||||||||||||||||||||||||||||
Pension expense(4) |
2,416 |
5 |
— |
273 |
— |
2,694 |
— |
273 |
||||||||||||||||||||||||||||
Other non-cash expense (income), net(5) |
68 |
62 |
(2,003) |
5,571 |
188 |
3,886 |
(2,024) |
5,571 |
||||||||||||||||||||||||||||
EBITDA excluding non-cash items |
83,125 |
64,922 |
14,321 |
19,284 |
(3,807) |
177,845 |
16,787 |
19,288 |
||||||||||||||||||||||||||||
EBITDA excluding non-cash items |
83,125 |
64,922 |
14,321 |
19,284 |
(3,807) |
177,845 |
16,787 |
19,288 |
||||||||||||||||||||||||||||
Interest expense, net(3) |
(8,757) |
(3,446) |
(4,790) |
(1,710) |
(6,151) |
(24,854) |
(5,383) |
(1,711) |
||||||||||||||||||||||||||||
Convertible senior notes interest(6) |
— |
(1,744) |
— |
— |
1,744 |
— |
— |
— |
||||||||||||||||||||||||||||
Adjustments to derivative instruments recorded in interest expense, net(3) |
(1,320) |
133 |
(1,614) |
(226) |
— |
(3,027) |
(1,834) |
(226) |
||||||||||||||||||||||||||||
Amortization of deferred finance charges(3) |
411 |
314 |
364 |
105 |
993 |
2,187 |
379 |
105 |
||||||||||||||||||||||||||||
Amortization of debt discount(3) |
— |
— |
— |
— |
619 |
619 |
— |
— |
||||||||||||||||||||||||||||
Provision/benefit for income taxes, net of changes in deferred taxes |
(2,258) |
(2,872) |
(88) |
(1,451) |
2,948 |
(3,721) |
(88) |
(1,451) |
||||||||||||||||||||||||||||
Changes in working capital |
736 |
(6,116) |
(148) |
(8,482) |
(8,434) |
(22,444) |
142 |
(8,480) |
||||||||||||||||||||||||||||
Cash provided by (used in) operating activities |
71,937 |
51,191 |
8,045 |
7,520 |
(12,088) |
126,605 |
10,003 |
7,525 |
||||||||||||||||||||||||||||
Changes in working capital |
(736) |
6,116 |
148 |
8,482 |
8,434 |
22,444 |
(142) |
8,480 |
||||||||||||||||||||||||||||
Maintenance capital expenditures |
(2,460) |
(925) |
(22) |
(1,069) |
— |
(4,476) |
(22) |
(1,069) |
||||||||||||||||||||||||||||
Proportionately Combined Free Cash Flow |
68,741 |
56,382 |
8,171 |
14,933 |
(3,654) |
144,573 |
9,839 |
14,936 |
For the Quarter Ended March 31, 2016 |
||||||||||||||||||||||||||||||||
IMTT(7) |
Atlantic Aviation |
Contracted Power(1) |
MIC Hawaii |
MIC Corporate |
Proportionately Combined(2) |
Contracted Power 100% | ||||||||||||||||||||||||||
Net income (loss) |
16,217 |
14,358 |
(8,439) |
9,069 |
(10,245) |
20,960 |
(9,223) |
|||||||||||||||||||||||||
Interest expense, net(3) |
19,871 |
13,314 |
15,788 |
2,424 |
3,405 |
54,802 |
17,848 |
|||||||||||||||||||||||||
Provision (benefit) for income taxes |
11,229 |
9,742 |
(2,304) |
5,911 |
(9,411) |
15,167 |
(2,304) |
|||||||||||||||||||||||||
Depreciation and amortization of intangibles |
32,621 |
22,191 |
11,972 |
2,350 |
— |
69,134 |
13,846 |
|||||||||||||||||||||||||
Fees to Manager-related party |
— |
— |
— |
— |
14,796 |
14,796 |
— |
|||||||||||||||||||||||||
Pension expense(4) |
1,831 |
17 |
— |
350 |
— |
2,198 |
— |
|||||||||||||||||||||||||
Other non-cash expense (income), net(5) |
443 |
(91) |
(2,002) |
(2,752) |
188 |
(4,214) |
(2,020) |
|||||||||||||||||||||||||
EBITDA excluding non-cash items |
82,212 |
59,531 |
15,015 |
17,352 |
(1,267) |
172,843 |
18,147 |
|||||||||||||||||||||||||
EBITDA excluding non-cash items |
82,212 |
59,531 |
15,015 |
17,352 |
(1,267) |
172,843 |
18,147 |
|||||||||||||||||||||||||
Interest expense, net(3) |
(19,871) |
(13,314) |
(15,788) |
(2,424) |
(3,405) |
(54,802) |
(17,848) |
|||||||||||||||||||||||||
Adjustments to derivative instruments recorded in interest expense, net(3) |
9,610 |
5,608 |
10,071 |
119 |
— |
25,408 |
11,268 |
|||||||||||||||||||||||||
Amortization of deferred finance charges(3) |
420 |
800 |
369 |
664 |
612 |
2,865 |
383 |
|||||||||||||||||||||||||
Provision/benefit for income taxes, net of changes in deferred taxes |
(1,230) |
(1,452) |
(7) |
(3,017) |
3,200 |
(2,506) |
(7) |
|||||||||||||||||||||||||
Changes in working capital |
(2,807) |
6,044 |
2,384 |
2,937 |
(6,311) |
2,247 |
2,612 |
|||||||||||||||||||||||||
Cash provided by (used in) operating activities |
68,334 |
57,217 |
12,044 |
15,631 |
(7,171) |
146,055 |
14,555 |
|||||||||||||||||||||||||
Changes in working capital |
2,807 |
(6,044) |
(2,384) |
(2,937) |
6,311 |
(2,247) |
(2,612) |
|||||||||||||||||||||||||
Maintenance capital expenditures |
(6,297) |
(2,284) |
— |
(1,832) |
— |
(10,413) |
— |
|||||||||||||||||||||||||
Proportionately Combined Free Cash Flow |
64,844 |
48,889 |
9,660 |
10,862 |
(860) |
133,395 |
11,943 |
(1) Represents MIC's proportionately combined interests in the businesses comprising this reportable segment. (2) The sum of the amounts attributable to MIC proportion to its ownership. (3) Interest expense, net, includes adjustments to derivative instruments, non-cash amortization of deferred financing charges and non-cash amortization of debt discount related to the 2.00% Convertible Senior Notes due October 2023. For the quarter ended March 31, 2016, interest expense, net, also includes a non-cash write-off of deferred financing fees related to the February 2016 refinancing at Hawaii Gas. (4) Pension expense primarily consists of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses. (5) Other non-cash expense (income), net, primarily includes non-cash amortization of tolling liabilities, unrealized gains (losses) on commodity hedges and non-cash gains (losses) related to disposal of assets. See" Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items, Free Cash Flow and Proportionately Combined Metrics" above for further discussion. (6) Represents the cash interest expense reclassified from MIC Corporate to Atlantic Aviation related to the 2.00% Convertible Senior Notes due October 2023, proceeds of which were used to pay down a portion of Atlantic Aviation's credit facility in October 2016. (7) On March 31, 2016, IMTT acquired the remaining 33.3% interest in its Quebec terminal that it did not previously own. IMTT was previously providing management services to this terminal and no operational changes are expected. Prior to the acquisition, IMTT consolidated the results of the Quebec terminal in its financial statements and adjusted for the portion that it did not own through noncontrolling interests. Since the IMTT Acquisition in July 2014 and prior to the acquisition of the noncontrolling interest, MIC reported IMTT's EBITDA excluding non-cash items and Free Cash Flow including the 33.3% portion of the Quebec terminal. The contribution from the minority interest was not significant. Therefore, there were no changes to our historical EBITDA excluding non-cash items, Free Cash Flow or results generally as a function of acquiring this noncontrolling interest.
SOURCE Macquarie Infrastructure Corporation
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