Macquarie Infrastructure Company Trust (MIC) Q2 2012 Earnings Call August 02, 2012 08:00 a.m. ET Executives Jay A. Davis - Investor Relations James Hooke - Chief Executive Officer Todd Weintraub - Chief Financial Officer Analysts Andrew Gadlin Ian Zaffino – Oppenheimer & Co Brendan Maiorana – Wells Fargo Securities Presentation Operator
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 and it’s 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 appears 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 our actual results to differ. These 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, Jack. Good morning to everyone and thank you all for participating in our earnings conference call this morning. I’ll focus on two key areas in my prepared remarks this morning. These are, firstly, our announced dividend increase and the prospects of additional increases in the future. Secondly, an update on the continued good performance of our businesses throughout the first half of 2012 and our updated guidance for the full year. As always, we’ll answer any questions you might have about MIC following my prepared remarks. First things first however. For those of you with limited time and multiple earnings calls this morning I’ll begin with a very short summary of our results for the quarter. Once again each of our four businesses delivered financial performance during the quarter that was consistently better than our expectations. The gas company generated strong growth in contribution margin on a 5.4% increase in volume of total debt sold including a 10% growth in the non-utility volume and continued strength in non-utility margins.
Free cash flow increased by more than 37% even with a larger tax provision stemming from the improved results. The gas company’s federal income tax liability will of course be absorbed by MIC’s federal NOL in consolidation. With a strong first half in the books, we are looking for the gas company to exceed our prior guidance for EBITDA for the full year and generate between $55 million and $57.5 million of EBITDA for the full year 2012.IMTT’s results reflected continued growth in terminal revenue and gross profit and a softer quarter for the Oil Mop environmental services business. Expenses were lower than the second quarter of last year on lower fuel costs, and without the unusual healthcare costs and unusual repair and maintenance costs incurred in 2011. In addition, we recalculated IMTT’s tax provision for the first and second quarters in accordance with GAAP. In doing so, we reduced IMTT’s provision for the first quarter and now provide for a federal income tax liability of $12 million and a state income tax liability of $5.2 million for 2012. IMTT’s actual federal income tax liability could be higher or lower, depending on whether or not sufficient capital assets are placed in service during the year to provide IMTT with a tax shield from the resulting bonus depreciation. Free cash flow at IMTT increased to $37.1 million from $26.9 million in the second quarter of last year. We’ve updated our EBITDA guidance for 2012 at IMTT, and increased the expected range of results from between $220 million to $235 million to narrow our expected range of results is to between $230 million and $240 million. Read the rest of this transcript for free on seekingalpha.com