Hawaii Gas’ improved operating results, particularly the increased non-utility contribution margin, reduced cash interest paid and lower capital expenditures, were entirely offset by several items. In addition to the swap break payment, the business incurred higher cash taxes, and increased wages and benefits. Hawaii Gas also incurred costs in connection with both the preparation of filings related to a proposed small scale importation of LNG into Hawaii and the rebranding of the business.
In August 2012, MIC successfully refinanced the debt facilities of Hawaii Gas and established a new revolving credit facility that is expected to partially support the continued growth of the business. Existing operating company level debt was replaced with $100.0 million of senior secured 10-year private placement notes and a 5-year senior secured $60.0 million revolving credit facility (undrawn). Existing intermediate holding debt was replaced with a 5-year $80.0 million senior secured term loan facility. The weighted average cost of all Hawaii Gas debt facilities, including interest rate hedges, was reduced from 4.9% to 3.6% and cash interest expense is expected to be reduced by approximately $2.4 million annually.
MIC’s District Energy business produces chilled water that it distributes via underground pipelines in downtown Chicago to high-rise buildings for use in air conditioning and process cooling systems. The business also operates a site-specific operation that supplies both cooling and heating services to three customers in Las Vegas, Nevada. MIC has a 50.01% (controlling) interest in District Energy. The discussion below refers to results for 100% of the business, not MIC’s 50.01% interest.In 2012 compared with the prior comparable periods in 2011:
- Cooling consumption revenue decreased 5.4% in the third quarter and increased 7.2% for the nine months ended September 30, 2012 - cooling consumption, net of electricity costs passed through to consumers, increased 4.4% in the third quarter and 16.0% for the year to date versus the prior comparable periods as higher average temperatures in 2012 compared with 2011 resulted in increased demand for cooling;
- Capacity revenue increased 1.6% and 2.4% to $5.6 million and $16.7 million for the quarter and nine months ended September 30, 2012, respectively - capacity revenue growth reflects increases in the number of customers being served and inflation adjustments to existing contracts; and
- Gross profit was flat with the prior comparable quarter and up 9.3% for the nine months ended September 30.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV