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.
- 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.