Macquarie Infrastructure Company LLC (MIC)

Q1 2010 Earnings Call

May 6, 2010 8:00 am ET

Executives

Jay A. Davis - Investor Relations

James Hooke - Chief Executive Officer

Todd Weintraub - Chief Financial Officer

Analysts

Rama Bondada - Macquarie Research

Greg Mason - Stifel Nicolaus

Brendan Maiorana - Wells Fargo Securities

Richard Shane - Jefferies & Company, Inc.

[Jacob Meeler - KYM Capital]

Presentation

Operator

Good day ladies and gentlemen and welcome to the Macquarie Infrastructure Company first quarter conference call. At this time all lines are in a listen only mode. Later we will conduct a question and answer session and instructions will be given at that time. (Operator Instructions)

I would now like to introduce Mr. Jay Davis.

Jay A. Davis

Good morning and welcome to Macquarie Infrastructure Company’s earnings conference call covering the first quarter of 2010. Our call today is being webcast and is open to the media. In addition to discussing our financial performance eon this call, we have published a press release summarizing our quarterly results and filed a quarterly financial report on Form 10-Q with the Securities and Exchange Commission. Copies of these items are available on our website, www. Macquarie.com/mic.

To help illustrate some of the key points in our results we have produced materials that will be referenced during the call. The materials are also available on our website. A link to the materials is located under the Events portion of the home page. If you have not already done so, I would encourage you to download this information at this time.

Participating in our call this morning are Macquarie Infrastructure Company’s Chief Executive Officer, James Hooke, and our Chief Financial Officer, Todd Weintraub. Before turning the presentation over to James, let me remind you that this presentation by Macquarie Infrastructure Company is proprietary and all rights are reserved. Any recording, rebroadcast, or other use of this presentation in whole or in part without the prior written consent of Macquarie Infrastructure Company is prohibited.

This presentation is based on information generally available to the public and does not contain any material non-public information. The presentation has been prepared solely for information purposes. It is not a solicitation of an offer to buy or sell any security or instrument.

This presentation contains forward-looking statements. We may, in some cases, use words that convey uncertainty of future events or outcomes to identify these forward-looking statements. Forward-looking statements in this presentation are subject to a number of risks and uncertainties. A description of known risks that could cause our actual results to differ appear under the caption “Risk Factors” in our Form 10-K.

Our actual results, performance, prospects or opportunities could differ materially from those expressed in or implied by the forward-looking statements. Additional risks of which we are not currently aware could also cause its actual results to differ. The forward-looking events discussed in this presentation may not occur. These forward-looking statements are made as of the date of this presentation and we undertake no obligation to publicly update or revise any forward-looking statements after the completion of this presentation whether as a result of new information, future events, or otherwise, except as required by law.

With that, it is my pleasure to introduce Macquarie Infrastructure Company’s Chief Executive Officer, James Hooke.

James Hooke

Thank you, Jay, and good morning and thank you to all of you for participating in our call today, especially those of you on the west coast given our earlier start time this quarter. We hope that the release of our results and filing of our 10-Q yesterday afternoon provided you with a better opportunity to review our performance.

I’ll begin our update this morning with a quick overview of our results. Two things stand out for this period. First, the overall performance of our bulk liquid storage business IMTT was outstanding. In the key area of cash generation, IMTT reported a year-over-year increase in free cash flow of 53%. The performance reflects the continued strong demand for storage and increasing capacity utilization and the contribution from projects completed during the past year.

Second, at Atlantic Aviation, the favorable trend in general aviation jet flight activity that began in the middle of 2009 continued through the first quarter of 2010. Activity on the airports which we operate was up 11% for the first three months of 2010 compared with 2009. The momentum was favorable within the quarter with activity up 14% in March compared with March in 2009.

As a result, fuel sales were up and although margins were down slightly, active management of the business produced free cash flow of more than $13 million for the quarter. That’s more than double the amount generated in the first quarter of 2009. In all, our businesses produced $36.7 million in free cash flow in the first quarter or approximately $0.81 per share.

This is an excellent result for MIC for the first quarter and provides a solid basis on which to build in 2010. I would suggest, however, that this figure should probably not be annualized for reasons I’ll go into in a moment.

Following some additional prepared remarks, we’ll take your questions about MIC’s performance and prospects. I’ll begin by providing some additional color on MIC’s operating performance during the quarter as well as commentary on some of the key elements of our consolidated results.

I will also have a few observations on our prospects for the balance of 2010. As most of you know by now, MIC is a cash driven story. As reported in our results press release last night, we enjoyed continued strong performance from our operating businesses during the first quarter. The cash produced in our businesses in the manner we employed during our full year 2009 results call in February.

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