Macquarie Infrastructure Company LLC Reports Second Quarter 2013 Financial Results, Increases Cash Dividend To $3.50 Per Year

Macquarie Infrastructure Company LLC (NYSE: MIC) reported financial results for the second quarter of 2013 including an announcement that the Company’s Board approved an increase in MIC’s quarterly cash dividend to $0.875 per share for the second quarter of 2013 from $0.6875 per share in the first quarter of 2013. MIC is now expected to distribute $3.50 per share in dividends on an annualized basis.

MIC’s businesses generated proportionately combined Free Cash Flow of $46.7 million or $0.92 per share during the quarter, compared with $43.5 million or $0.93 per share in the comparable period in 2012. Per share amounts in 2013 reflect an approximately 4.4 million share (9.4%) increase in the weighted average number of shares outstanding. The increase is associated primarily with management and performance fees settled in shares during the past year and with a public equity offering conducted by the Company in May 2013. Proportionately combined Free Cash Flow per share increased 15.1% to $2.17 for the six months ended June 30, 2013 compared with $1.88 for the six months ended June 30, 2012.

The increase in MIC’s dividend was anticipated. Management had indicated in its results release in May, that with the refinancing of its Atlantic Aviation business and subject to the continued stability in the performance of MIC’s businesses and the broader market, it expected the higher dividend would be authorized for the second quarter. The refinancing of the long-term debt of Atlantic Aviation was completed on May 31, 2013. The increased dividend will be payable on August 15, 2013 to shareholders of record on August 12, 2013.

“The decision by our Board to increase our quarterly cash dividend reflects confidence in the performance and prospects of our businesses and a belief that the increase in MIC’s quarterly cash dividend to an annualized $3.50 per share is prudent” said James Hooke, Chief Executive Officer of Macquarie Infrastructure Company LLC.

“We are reaffirming our guidance for the full year 2013 with respect to the Free Cash Flow of between $4.10 and $4.20 per share that we expect MIC to generate. We finished the first half of 2013 with $2.17 per share and after six months we are clearly at the higher end of that range. However, with a 2013 increase in maintenance capital expenditures at IMTT, we have decided not to revise our guidance upwards. With the dividend at an annualized $3.50 per share we are also delivering on our expectation of paying out between 80% and 85% of Free Cash Flow.”

MIC raised a net $217.8 million in an equity offering during the second quarter and used the proceeds to repay a portion of the long-term debt of Atlantic Aviation. A remaining $465.0 million of long-term debt at Atlantic Aviation was then refinanced using a 7-year term loan. Following these transactions and including MIC’s results for the second quarter, the Company’s proportionately combined net debt/EBITDA was reduced to 3.5x from 4.3x at the end of the first quarter.

At quarter end the weighted average duration of MIC’s debt increased to 5.7 years (excluding MIC Solar debt) from 2.1 years at the same point in 2012. MIC also reported having more than $100.0 million of cash on hand. “With an investment grade rating, a much stronger balance sheet, longer-dated and less expensive debt, and a substantial cash balance, MIC is well positioned,” Hooke added.

MIC established a new line of business in the fourth quarter of 2012 with an investment of $5.7 million in two contracted solar power generation facilities. The investment was made in a joint venture with a non-controlling interest co-investor. Located in the southwestern U.S., these photovoltaic facilities have the capacity to generate a combined approximately 30 megawatt hours of electricity. The electricity is sold to nearby utilities pursuant to long-term power purchase agreements.

Following the June quarter end, MIC invested an additional $7.9 million in a third contracted solar power generating facility currently under construction. Upon completion of the project, MIC expects to receive a return of capital that will result in its having made a net investment of approximately $2.2 million. The Tucson, Arizona facility will have the capacity to produce approximately 13 megawatt hours of renewable power and is expected to commence commercial operations near the end of the year. MIC is also in advanced stages of negotiation around the acquisition of a fourth facility.

MIC regards Free Cash Flow as an important tool in assessing the performance of its capital intensive, cash generative businesses. Proportionately combined Free Cash Flow refers to the sum of the Free Cash Flow generated by MIC’s businesses and investments in proportion to its equity interest in each entity after holding company costs. See “Cash Generation” below for MIC’s definition of Free Cash Flow and further information.

Consolidated Results for Second Quarter and Six Months

The Company reported a net loss, before tax, of $2.0 million for the second quarter of 2013 compared with net income of $22.0 million for the second quarter of 2012. For the six months ended June 30, 2013, MIC reported net income, before tax, of $9.2 million compared with net income of $42.7 million for the comparable period in 2012. The decrease versus the prior comparable periods is primarily attributable to performance fees incurred in 2013 of $22.0 million in the first quarter and $24.5 million in the second quarter.

MIC’s consolidated revenue for the second quarter of 2013 decreased 2.3% to $252.6 million compared with $258.5 million in the second quarter of 2012. Consolidated revenue decreased 1.3% for the six-month period ended June 30, 2013 versus with the comparable period in 2012. The decrease in revenue reflects a decline in the volume of gas sold by Hawaii Gas and lower energy costs, such as those for aviation fuel, which are passed through to customers of MIC’s businesses, partially offset by revenue from MIC Solar, a business line that was established in the fourth quarter of 2012.

Reported gross profit – defined as revenue less cost of goods sold – removes the volatility in revenue associated with fluctuations in energy costs. MIC’s consolidated gross profit rose 3.8% to $101.4 million in the second quarter of 2013 from $97.7 million in the same period in 2012. For the six months ended June 30, 2013 the Company’s gross profit increased 4.0% versus the comparable period in 2012.

Cash Generation

MIC reports EBITDA excluding non-cash items on a consolidated and operating segment basis and reconciles each to consolidated net income (loss). EBITDA excluding non-cash items is a measure relied upon by management in evaluating the performance of its businesses and investments. EBITDA excluding non-cash items is defined as earnings before interest, taxes, depreciation and amortization and non-cash items, which may include impairments, gains and losses on derivatives and adjustments for certain other items reflected in the statement of operations.

MIC believes that EBITDA excluding non-cash items provides additional insight into the performance of its operating businesses, relative to each other and to similar businesses, without regard to capital structure, and their ability to service or reduce debt, fund capital expenditures and/or support distributions to the holding company.

MIC also reports Free Cash Flow, as defined below, on both a consolidated and operating segment basis as a means of assessing the amount of cash generated by its businesses and as a supplement to other information provided in accordance with GAAP, and reconciles each to cash from operating activities. MIC believes that reporting Free Cash Flow provides additional insight into its ability to deploy cash, as GAAP measures, such as net income (loss) and cash from operating activities, do not reflect all of the items that management considers in estimating the amount of cash generated by its operating businesses. MIC defines Free Cash Flow as cash from operating activities, less maintenance capital expenditures and changes in working capital except with respect to MIC Solar for which Free Cash Flow is defined as distributions received or receivable from the business.

Free Cash Flow does not fully reflect MIC’s ability to freely deploy generated cash, as it does not reflect required payments to be made on MIC’s indebtedness and other fixed obligations or the other cash items excluded when calculating Free Cash Flow. Free Cash Flow may be calculated in a different manner by other companies, which limits its usefulness as a comparative measure. Therefore, Free Cash Flow should be used as a supplemental measure and not in lieu of MIC’s financial results as reported under GAAP.

MIC may report certain financial metrics on a proportionately combined basis including, proportionately combined gross profit, proportionately combined EBITDA excluding non-cash items, proportionately combined cash interest, proportionately combined cash taxes, proportionately combined maintenance capital expenditures, proportionately combined Free Cash Flow, proportionately combined Free Cash Flow per share, proportionately combined growth capital expenditures and proportionately combined net debt. The Company believes that such measures provide investors and management with additional insight into the financial results and cash generated on the basis of its varied ownership interests in its businesses and investments for the reporting period.

Proportionately combined metrics used by MIC 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 supplement to and not in lieu of financial results reported in accordance with GAAP.

The following table summarizes MIC’s financial performance on a proportionately combined basis during the quarter and six month periods ended June 30, 2013 and the prior comparable periods.
     

For the Quarter Ended June 30, 2013

($ in Thousands) (Unaudited)

IMTT50%

HawaiiGas

DistrictEnergy50.01%

AtlanticAviation

MICCorporate

ProportionatelyCombined(1)

IMTT100%
 

DistrictEnergy100%
 
Gross profit 37,671 17,147 2,086 77,839 2,279 137,022 75,342 4,171
EBITDA excluding non-cash items 33,965 11,411 2,544 34,845 (193) 82,572 67,930 5,087
Free cash flow 12,145 6,489 1,801 26,332 (104) 46,663 24,290   3,601
 

For the Quarter Ended June 30, 2012

IMTT50%

HawaiiGas

DistrictEnergy50.01%

AtlanticAviation

MICCorporate

ProportionatelyCombined(1)

IMTT100%
 

DistrictEnergy100%
 
Gross profit 31,706 18,076 2,535 74,542 - 126,859 63,412 5,069
EBITDA excluding non-cash items 28,441 14,450 2,947 31,335 (1,927) 75,246 56,882 5,892
Free cash flow 18,557 8,595 1,925 14,634 (203) 43,507 37,113   3,849
                 
Gross profit variance 18.8% (5.1)% (17.7)% 4.4% NM 8.0% 18.8%   (17.7)%
EBITDA excluding non-cash items variance 19.4% (21.0)% (13.7)% 11.2% 90.0% 9.7% 19.4%   (13.7)%
Free cash flow variance (34.6)% (24.5)% (6.4)% 79.9% 48.8% 7.3% (34.6)%   (6.4)%

 
NM- Not meaningful
(1) Proportionately combined free cash flow is equal to the sum of free cash flow attributable to MIC's ownership interest in each of its operating businesses and MIC Corporate.
 
 
 

For the Six Months Ended June 30, 2013

($ in Thousands) (Unaudited)

IMTT50%

HawaiiGas

DistrictEnergy50.01%

AtlanticAviation

MICCorporate

ProportionatelyCombined(1)
 

IMTT100%

DistrictEnergy100%
 

Gross profit
74,318 37,564 3,667 157,473 3,856 276,878 148,636 7,333

EBITDA excluding non-cash items
66,742 27,126 4,470 70,863 (417) 168,784 133,484 8,939

Free cash flow
29,345 16,429 2,839 53,424 4,807 106,844 58,689 5,677
 
 

For the Six Months Ended June 30, 2012

 

IMTT50%

HawaiiGas

DistrictEnergy50.01%

AtlanticAviation

MICCorporate

ProportionatelyCombined(1)

IMTT100%

DistrictEnergy100%

 

Gross profit
64,894 36,775 4,381 152,794 - 258,844 129,788 8,760

EBITDA excluding non-cash items
58,172 28,630 5,122 65,486 (6,973) 150,437 116,344 10,241

Free cash flow
37,579 16,605 3,268 33,743 (3,672) 87,523 75,158 6,534

 
               

Gross profit variance
14.5% 2.1% (16.3)% 3.1% NM 7.0% 14.5% (16.3)%

EBITDA excluding non-cash items variance
14.7% (5.3)% (12.7)% 8.2% 94.0% 12.2% 14.7% (12.7)%

Free cash flow variance
(21.9)% (1.1)% (13.1)% 58.3% NM 22.1% (21.9)% (13.1)%

 
NM - Not meaningful
(1) Proportionately combined free cash flow is equal to the sum of free cash flow attributable to MIC's ownership interest in each of its operating businesses and MIC Corporate.
 

IMTT

MIC has a 50% equity interest in International-Matex Tank Terminals (IMTT), the operator of one of the largest independent bulk liquid storage terminal businesses in the U.S. IMTT owns and operates 10 marine storage terminals in the U.S. and is the part owner and operator of two terminals in Canada. The terminals store and handle a wide variety of petroleum grades, chemicals and vegetable and animal oils. To aid in meaningful analysis of the performance of IMTT across periods, the table and discussion below refer to results for 100% of the business, not MIC’s 50% interest.

For the second quarter of 2013 compared with the second quarter of 2012:

  • Terminal revenue increased 9.5%
  • Average storage rental rates increased 6.5%; MIC continues to believe that average storage rental rates will increase by between 5.0% and 7.0% for the full year
  • Capacity utilization was stable at 92.9%; utilization increased from 92.7% in the first quarter of 2013 but remains below historically normal levels, as expected, as a result of certain large tanks being out of service for cleaning and inspection and conversion to alternate product services

Maintenance capital expenditures increased to $26.9 and $46.0 million for the quarter and year to date periods in 2013 compared with $7.3 and $15.5 million in the prior comparable periods. The majority of the increase in 2013 pertains to costs to repair the damage from Hurricane Sandy at IMTT’s Bayonne, New Jersey facility, higher costs related to tank cleaning and repair, the upgrade of fire protection equipment, dock improvements in California and a number of projects that could not be completed in 2012 due to Hurricane Sandy. Maintenance capital expenditures in 2014 are expected to return to the range of levels observed in 2010 through 2012.

IMTT’s tax provision contemplates payment of approximately $11.4 million of federal income taxes and $5.2 million of state income taxes for 2013. The $8.2 million provision for the six months ended June 30, 2013 includes $5.7 million for federal income taxes and $2.5 million for state income taxes.

Free Cash Flow generated by IMTT decreased 34.6% to $24.3 million and 21.9% to $58.7 million for the quarter and six months ended June 30, 2013, respectively. The decline in Free Cash Flow stems from higher maintenance capital expenditures and an increased tax provision that more than offset the increase in EBITDA excluding non-cash items in each period.

IMTT made a distribution of $11.1 million for the second quarter to each of its two shareholders on July 30, 2013.

Hawaii Gas

Hawaii Gas is the owner and operator of the only regulated (“utility”) gas processing and pipeline distribution network on the islands of Hawaii. The business is also the owner and operator of the largest unregulated (“non-utility”) gas distribution operation on the islands.

For the second quarter of 2013 compared with the second quarter of 2012:
  • Non-utility contribution margin decreased 6.8% to $15.1 million from $16.2 million
  • Utility contribution margin decreased 2.0% to $9.5 million from $9.7 million
  • Selling, general and administrative expenses increased 31.4% to $6.0 million from $4.6 million primarily as a result of expenses incurred in connection with the appointment of a new CEO to the business in May

The combined volume of utility and non-utility gas sold decreased 2.9% in the second quarter of 2013 compared with the second quarter in 2012. The decrease reflects reduced consumption resulting from a large commercial customer on Kauai being off-line for a portion of the first half of the year and a reduction in the average amount of customer inventory in 2013 versus 2012. The change in distribution pertains to inventory management associated with uncertainty in the timing of supplies of LPG leading up to and following the closure of the Tesoro refinery. Excluding these two items, non-utility volume increased.

Hawaii Gas expects that the potential for instability in the local supply of LPG and the resultant need to import a larger percentage of the LPG it distributes could cause increased volatility in non-utility contribution margin and exaggerate movements in working capital over the medium term. The business is constructing additional LPG storage facilities that it believes will mitigate a portion of the volatility associated with this instability.

The decrease in the volume of gas sold was partially offset by successful marketing efforts that resulted in an increase in the number of customers being served by both utility and non-utility portions of the business. The volume of gas sold year to date in 2013 was essentially flat with 2012.

The Free Cash Flow generated by Hawaii Gas decreased by 24.5% and 1.1% to $6.5 million and $16.4 million for the quarter and six months ended June 30, 2013, respectively. The decline in Free Cash Flow reflects the reduced revenue and higher operating expenses, including those associated with appointing a new CEO of the business in the second quarter, partially offset by lower interest and taxes.

District Energy

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 facility in Las Vegas, Nevada that supplies both cooling and heating services to three customers there. MIC has a 50.01% (controlling) interest in District Energy. The table and discussion below refer to results for 100% of the business, not MIC’s 50.01% interest.

For the second quarter of 2013 compared with the second quarter of 2012:
  • Cooling consumption revenue decreased 24.4% to $5.2 million from $6.9 million in 2012; lower average temperatures in 2013 compared with 2012 and the expected loss of a customer (previously disclosed) reduced demand for cooling
  • Capacity revenue increased 3.4% to $5.8 million from $5.6 million; increases in the number of customers being served and inflation adjustments to existing contracts contributed to the improved performance

District Energy’s results for the second quarter reflect the termination of service by one customer resulting in a reduction in cash EBITDA. In addition to terminating its contract, the customer has refused to make unamortized lease principal payments to which District Energy believes it is entitled. The parties have agreed to mediate the matter in a process that is expected to commence in October.

Free Cash Flow generated by District Energy decreased 6.4% to $3.6 million for the second quarter and decreased 13.1% to $5.7 million for the six months ended June 30, 2013. The decreases reflect primarily the reduction in revenue noted above.

Atlantic Aviation

Atlantic Aviation owns and operates a network of fixed-base operations (FBO) that primarily provide fuel, terminal and aircraft hangar services to owners and operators of general aviation (GA) aircraft at 62 airports in the U.S. The network is the one of the largest in the U.S. air transportation industry.

For the second quarter of 2013 compared with the second quarter of 2012 (same store basis):
  • Fuel related gross profit increased 5.0% on same store GA volume increases of 2.9% and average margin increases of 3.6%
  • Non-fuel gross profit increased primarily due to higher hangar rental revenue

The performance of Atlantic Aviation is, in general, more closely correlated with the economic vitality of the U.S. as a whole than that of MIC’s other businesses. MIC believes that the improvement in gross profit generated by Atlantic Aviation is reflective of the ongoing improvement in the U.S. economy broadly, as well as the popularity of the destinations in the portfolio specifically.

Atlantic Aviation’s long term debt was refinanced in May. The refinancing utilized $217.8 million in net proceeds from a public offering of approximately 3.9 million shares of MIC and cash on hand, and a 7-year, $465.0 million term loan facility that bears interest at a rate of LIBOR+2.5%. As a result of these transactions, Atlantic Aviation’s net debt/EBITDA decreased to 3.3x from 5.3x at March 31, 2013.

Effective July 31, 2013, Atlantic Aviation entered into a swap agreement hedging the floating rate interest component (the LIBOR element) of the term loan facility. The swap fixed the floating rate component at 2.2% resulting in an all-in cost of 4.7% for the next six years.

As a part of the refinancing of the business’ long term debt, Atlantic Aviation secured access to a $70.0 million revolving credit facility. The facility will be used by the business to fund growth projects and working capital needs. The revolving credit facility bears interest at a rate of LIBOR+2.5%. The floating rate exposure is not expected to be hedged and the facility is undrawn at this time.

Free Cash Flow generated by Atlantic Aviation increased 79.9% to $26.3 million and 58.3% to $53.4 million for the quarter and six month periods ended June 30, 2013, respectively. The increase in cash generation reflects primarily the reduction in the amount and cost of the business’ long-term debt outstanding versus 2012 and the improved operating results.

Free Cash Flow gains at Atlantic Aviation were partially offset by an increase in the business’ provision for current income taxes of $359,000 and $4.2 million in the quarter and six month periods ending June 30, 2013, respectively. The federal portion of Atlantic Aviation’s current income taxes for 2013 is expected to be wholly offset in consolidation by the application of Net Operating Loss carryforwards.

MIC Solar

MIC has invested a total of $5.7 million in two contracted solar power generation facilities located in the southwestern U.S. Together these facilities are capable of generating approximately 30 megawatt hours of electricity that is sold to nearby utilities pursuant to long-term power purchase agreements. At June 30, 2013, MIC’s investment in solar power generation is reported as a component of its Corporate and Other segment. The power generation assets alone do not constitute a reportable segment under GAAP.

MIC’s solar investments performed as anticipated during the second quarter of 2013. The combined operations generated $390,000 and $679,000 in distributions to MIC in the quarter and year to date periods ended June 30, 2013.

Following the June quarter end, MIC invested an additional $7.9 million in a third contracted solar power generating facility currently under construction. Upon completion of the project, MIC expects to receive a return of capital that will result in a net investment of approximately $2.2 million. The Tucson, Arizona facility will have the capacity to produce approximately 13 megawatt hours of renewable power and is expected to commence commercial operations near the end of the year. MIC is also in advanced stages of negotiation around the acquisition of a fourth facility.

Business Outlook

MIC reaffirmed its full year 2013 guidance for proportionately combined free cash flow of between approximately $4.10 and $4.20 per share. Through the six months ended June 30, 2013 MIC’s businesses generated $2.17 per share in proportionately combined Free Cash Flow.
  • MIC continues to expect that IMTT will generate EBITDA of between $260.0 and $270.0 million for the full year 2013. Full year increases in average storage rates are expected to be between 5.0% and 7.0%. Utilization is expected to remain lower than historical norms as a result of the cleaning and inspection of certain large tanks in 2013. Maintenance capital expenditures are now expected to be in a range of approximately $80.0 million to $85.0 million for the full year.
  • Hawaii Gas is expected to generate EBITDA of between $57.0 and $63.0 million in 2013 including the impact of costs associated with appointing a new CEO of the business.
  • District Energy is expected to generate EBITDA of approximately $20.0 million in 2013. Cooling demand is typically at its highest during the third quarter of the year.
  • Atlantic Aviation is expected to generate EBITDA in a range between $137.0 and $145.0 million in 2013. The expectation reflects the year to date improvement in gross profit.
  • The MIC Solar portfolio is expected to produce distributable cash totaling approximately $1.0 million in 2013.

Conference Call and WEBCAST

When: Management has scheduled a conference call for 8:00 a.m. Eastern Time on Thursday, August 1, 2013 during which it will review the Company’s results and answer questions from analysts and investors.

How: To listen to the conference call, please dial +1(650) 521-5252 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 the morning of August 1, 2013 prior to the conference call. A link to the materials will be located on the homepage of the MIC website.

Replay: For interested individuals unable to participate in the live conference call, a replay will be available after 2:00 p.m. on August 1, 2013 through August 8, 2013, at +1(404) 537-3406, Passcode: 93685696. An online archive of the webcast will be available on the Company’s website for one year following the call. MIC-G

About Macquarie Infrastructure Company

Macquarie Infrastructure Company owns, operates and invests in a diversified group of infrastructure businesses providing basic services to customers in the United States. Its businesses consist of a gas processing and distribution business, Hawaii Gas, a controlling interest in a District Energy business in Chicago, and a 50% interest in a bulk liquid storage terminal business, International-Matex Tank Terminals. MIC also owns and operates an airport services business, Atlantic Aviation, and three solar power generation facilities, collectively MIC Solar. The Company is managed by a wholly-owned subsidiary of the Macquarie Group. For additional information, please visit the Macquarie Infrastructure Company website at www.macquarie.com/mic.

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 report 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; its shared decision-making with co-investors over investments including the distribution of dividends; 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 costs; its ability to recover increases in costs from customers, 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 Company LLC 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 Company LLC.
 
MACQUARIE INFRASTRUCTURE COMPANY LLC
 
CONSOLIDATED CONDENSED BALANCE SHEETS
($ In Thousands, Except Share Data)
 
  June 30,

2013
  December 31,

2012
ASSETS (Unaudited)
Current assets:
Cash and cash equivalents $ 106,768 $ 141,376
Restricted cash(1) 12,623 3,133
Accounts receivable, less allowance for doubtful accounts
of $695 and $875, respectively 63,651 56,553
Inventories 23,623 20,617
Prepaid expenses 6,091 8,908
Deferred income taxes 6,447 6,803
Equipment lease receivables - current 12,739 4,448
Other   9,942   12,072
Total current assets 241,884 253,910
Property, equipment, land and leasehold improvements, net 728,845 708,031
Equipment lease receivables - non-current 18,335 28,177
Investment in unconsolidated business 89,109 75,205
Goodwill 513,939 514,640
Intangible assets, net 608,963 626,902
Deferred financing costs, net of accumulated amortization 22,549 7,845
Other   4,707   8,984
Total assets $ 2,228,331 $ 2,223,694
 
LIABILITIES AND MEMBERS' EQUITY
Current liabilities:
Due to manager - related party $ 32,659 $ 50,253
Accounts payable 29,068 26,499
Accrued expenses 31,555 35,499
Current portion of long-term debt 22,404 106,580
Fair value of derivative instruments 7,401 7,450
Other   17,535   19,049
Total current liabilities 140,622 245,330
Long-term debt, net of current portion 876,475 1,052,584
Deferred income taxes 170,911 169,392
Fair value of derivative instruments 1,736 5,360
Other   52,981   53,463

Total liabilities
  1,242,725   1,526,129
Commitments and contingencies - -
Members’ equity:
LLC interests, no par value; 500,000,000 authorized; 52,865,943 LLC

interests issued and outstanding at June 30, 2013 and 47,453,943 LLCinterests issued and outstanding at December 31, 2012
1,143,738 883,143
Additional paid in capital 21,447 21,447
Accumulated other comprehensive loss (20,532) (20,801)
Accumulated deficit   (223,738)   (228,761)
Total members’ equity 920,915 655,028
Noncontrolling interests   64,691   42,537
Total equity   985,606   697,565
Total liabilities and equity $ 2,228,331 $ 2,223,694
 

 
(1) Restricted cash current balance at June 30, 2013 represents the balance from MIC Solar.
 
 
MACQUARIE INFRASTRUCTURE COMPANY LLC
 
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
($ In Thousands, Except Share and Per Share Data)
 
 

Quarter Ended
     

Six Months Ended

June 30, 2013
   

June 30, 2012
   

June 30, 2013
   

June 30, 2012
 
Revenue
Revenue from product sales $ 167,181 $ 169,129 $ 341,296 $ 342,083
Revenue from product sales - utility 34,193 36,807 71,114 75,121
Service revenue 50,286 51,430 102,401 103,839
Financing and equipment lease income   907   1,150     1,962   2,329
Total revenue   252,567   258,516     516,773   523,372
Costs and expenses
Cost of product sales 109,155 115,720 226,148 235,101
Cost of product sales - utility 29,464 31,324 60,953 63,496
Cost of services 12,512 13,784 23,446 26,445
Selling, general and administrative 52,120 50,467 101,329 105,730
Fees to manager - related party 32,493 4,760 61,670 9,755
Depreciation 9,436 7,557 18,691 15,108
Amortization of intangibles 8,620 8,546 17,248 17,092
Loss from customer contract termination 1,626 - 1,626 -
Loss on disposal of assets   3   327   176   327
Total operating expenses   255,429   232,485   511,287   473,054
Operating (loss) income (2,862) 26,031 5,486 50,318
Other income (expense)
Interest income 49 4 143 6
Interest expense(1) (7,737) (10,925) (15,423) (23,932)
Loss on extinguishment of debt (2,472) - (2,472) -
Equity in earnings and amortization charges of investee 11,289 6,805 21,751 16,306
Other (expense) income, net   (313)   48   (315)   (4)
Net (loss) income before income taxes (2,046) 21,963 9,170 42,694
Benefit (provision) for income taxes(2)   1,090   (9,935)   (3,412)   (16,456)
Net (loss) income $ (956) $ 12,028 $ 5,758 $ 26,238
Less: net (loss) income attributable to noncontrolling interests   (108)   890   735   1,008
Net (loss) income attributable to MIC LLC $ (848) $ 11,138 $ 5,023 $ 25,230
 
Basic (loss) income per share attributable to MIC LLC interest holders $ (0.02) $ 0.24 $ 0.10 $ 0.54
Weighted average number of shares outstanding: basic   50,889,021   46,532,402   49,245,969   46,444,280
Diluted (loss) income per share attributable to MIC LLC interest holders $ (0.02) $ 0.24 $ 0.10 $ 0.54
Weighted average number of shares outstanding: diluted   50,889,021   46,553,858   49,263,383   46,466,575
Cash dividends declared per share $ 0.875 $ 0.625 $ 1.5625 $ 0.825
 
(1) Interest expense includes losses on derivative instruments of $487,000 and $1.5 million for the quarter and six months ended June 30, 2013, respectively, of which net losses of $423,000 and $821,000, respectively, was reclassified from accumulated other comprehensive income. For the quarter and six months ended June 30, 2012, interest expense includes losses on derivative instruments of $4.6 million and $10.9 million, respectively, of which net losses of $4.0 million and $8.4 million, respectively, was reclassified from accumulated other comprehensive income.
(2) Includes $168,000 and $326,000 of benefit for income taxes from accumulated other comprehensive income reclassifications for the quarter and six months ended June 30, 2013, respectively. For the quarter and six months ended June 30, 2012, benefit for income taxes includes $1.7 million and $3.4 million from accumulated other comprehensive income reclassifications, respectively.
 
 

MACQUARIE INFRASTRUCTURE COMPANY LLC
 
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
($ In Thousands)
 
  Six Months Ended
June 30, 2013   June 30, 2012
 
Operating activities
Net income $ 5,758 $ 26,238
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization of property and equipment 22,092 18,459
Amortization of intangible assets 17,248 17,092
Loss on disposal of assets 106 47
Loss from customer contract termination 1,626 -
Equity in earnings and amortization charges of investee (21,751) (16,306)
Equity distributions from investee 7,879 70,931
Amortization of debt financing costs 1,897 1,943
Loss on extinguishment of debt 2,434 -
Adjustments to derivative instruments (3,289) (13,114)
Base management fees to be settled/settled in LLC interests 15,188 9,755
Performance fees to be settled/settled in LLC interests 46,482 -
Equipment lease receivable, net 2,074 1,710
Deferred rent 128 185
Deferred taxes 1,537 14,130
Other non-cash (income) expenses, net (1,492) 1,532
Changes in other assets and liabilities:
Restricted cash (9,490) -
Accounts receivable (6,865) (8,656)
Inventories (2,338) 1,734
Prepaid expenses and other current assets 4,081 1,486
Due to manager - related party 31 33
Accounts payable and accrued expenses (2,960) (472)
Income taxes payable (845) (66)
Other, net   (2,434)   (1,830)
Net cash provided by operating activities   77,097   124,831
 
Investing activities
Purchases of property and equipment (38,450) (15,333)
Proceeds from sale of assets - 375
Return of investment in unconsolidated business - 39,648
Other, net   (10)   146
Net cash (used in) provided by investing activities   (38,460)   24,836
 
Financing activities
Proceeds from issuance of LLC interests 227,558 -
Proceeds from long-term debt 471,752 10,000
Offering and equity raise costs paid (11,006) -
Dividends paid to holders of LLC interests (35,881) (18,562)
Contributions received from noncontrolling interests 22,362 -
Distributions paid to noncontrolling interests (1,189) (2,133)
Payment of long-term debt (732,037) (15,845)
Debt financing costs paid (18,906) (66)
Change in restricted cash 5,009 -
Payment of notes and capital lease obligations   (907)   (273)
Net cash used in financing activities   (73,245)   (26,879)
 
Net change in cash and cash equivalents (34,608) 122,788
Cash and cash equivalents, beginning of period   141,376   22,786
Cash and cash equivalents, end of period $ 106,768 $ 145,574
 
Supplemental disclosures of cash flow information
Non-cash investing and financing activities:
Accrued equity offering costs $ 11 $ -
Accrued refinancing costs $ 93 $ -
Accrued purchases of property and equipment $ 2,739 $ 2,064
Acquisition of equipment through capital leases $ 1,135 $ 2,624
Issuance of LLC interests to manager for base management fees $ 13,434 $ 9,217

Issuance of LLC interests to manager for performance fees
$ 65,862 $ -
Issuance of LLC interests to independent directors $ 640 $ 571
Taxes paid $ 2,720 $ 2,613
Interest paid $ 16,184 $ 34,972
 
 

CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS - MD&A
 
 
  Quarter Ended June 30,   Change

Favorable/(Unfavorable)
  Six Months Ended June 30,   Change

Favorable/(Unfavorable)
2013   2012   $   %   2013   2012 $   %
($ In Thousands) (Unaudited)
Revenue      
Revenue from product sales $ 167,181 $ 169,129 (1,948) (1.2) $ 341,296 $ 342,083 (787) (0.2)
Revenue from product sales - utility 34,193 36,807 (2,614) (7.1) 71,114 75,121 (4,007) (5.3)
Service revenue 50,286 51,430 (1,144) (2.2) 102,401 103,839 (1,438) (1.4)
Financing and equipment lease income   907   1,150     (243) (21.1)   1,962   2,329     (367) (15.8)
Total revenue   252,567   258,516     (5,949) (2.3)   516,773   523,372     (6,599) (1.3)
Costs and expenses
Cost of product sales 109,155 115,720 6,565 5.7 226,148 235,101 8,953 3.8
Cost of product sales - utility 29,464 31,324 1,860 5.9 60,953 63,496 2,543 4.0
Cost of services   12,512   13,784     1,272 9.2   23,446   26,445     2,999 11.3
Gross profit 101,436 97,688 3,748 3.8 206,226 198,330 7,896 4.0
Selling, general and administrative 52,120 50,467 (1,653) (3.3) 101,329 105,730 4,401 4.2
Fees to manager - related party 32,493 4,760 (27,733) NM 61,670 9,755 (51,915) NM
Depreciation 9,436 7,557 (1,879) (24.9) 18,691 15,108 (3,583) (23.7)
Amortization of intangibles 8,620 8,546 (74) (0.9) 17,248 17,092 (156) (0.9)
Loss from customer contract termination 1,626 - (1,626) NM 1,626 - (1,626) NM
Loss on disposal of assets   3   327     324 99.1   176   327     151 46.2
Total operating expenses   104,298   71,657     (32,641) (45.6)   200,740   148,012     (52,728) (35.6)
Operating (loss) income (2,862) 26,031 (28,893) (111.0) 5,486 50,318 (44,832) (89.1)
Other income (expense)
Interest income 49 4 45 NM 143 6 137 NM
Interest expense(1) (7,737) (10,925) 3,188 29.2 (15,423) (23,932) 8,509 35.6
Loss on extinguishment of debt (2,472) - (2,472) NM (2,472) - (2,472) NM
Equity in earnings and amortization charges of investee 11,289 6,805 4,484 65.9 21,751 16,306 5,445 33.4
Other (expense) income, net   (313)   48     (361) NM   (315)   (4)     (311) NM
Net (loss) income before income taxes (2,046) 21,963 (24,009) (109.3) 9,170 42,694 (33,524) (78.5)
Benefit (provision) for income taxes   1,090   (9,935)     11,025 111.0   (3,412)   (16,456)     13,044 79.3
Net (loss) income $ (956) $ 12,028 (12,984) (107.9) $ 5,758 $ 26,238 (20,480) (78.1)
Less: net (loss) income attributable to noncontrolling interests   (108)   890   998 112.1   735   1,008     273 27.1
Net (loss) income attributable to MIC LLC $ (848) $ 11,138     (11,986) (107.6) $ 5,023 $ 25,230     (20,207) (80.1)
 
NM - Not meaningful
(1) Interest expense includes losses on derivative instruments of $487,000 and $1.5 million for the quarter and six months ended June 30, 2013, respectively. For the quarter and six months ended June 30, 2012, interest expense includes losses on derivative instruments of $4.6 million and $10.9 million, respectively.
 
 

MACQUARIE INFRASTRUCTURE COMPANY LLC

RECONCILIATION OF CONSOLIDATED NET (LOSS) INCOME ATTRIBUTABLE TO MIC LLC TO EBITDA EXCLUDING NON-CASH ITEMS AND CASH

FROM OPERATING ACTIVITIES TO FREE CASH FLOW
 
Quarter Ended June 30,     Change

Favorable/(Unfavorable)
  Six Months Ended June 30,   Change

Favorable/(Unfavorable)
2013     2012   $   % 2013     2012 $   %
($ In Thousands) (Unaudited)
     
Net (loss) income attributable to MIC LLC(1) $ (848) $ 11,138 $ 5,023 $ 25,230
Interest expense, net(2) 7,688 10,921 15,280 23,926
(Benefit) provision for income taxes (1,090) 9,935 3,412 16,456
Depreciation(3) 9,436 7,557 18,691 15,108
Depreciation - cost of services(3) 1,703 1,677 3,401 3,351
Amortization of intangibles(4) 8,620 8,546 17,248 17,092
Loss from customer contract termination 1,626 - 1,626 -
Loss on extinguishment of debt 2,434 - 2,434 -
Loss on disposal of assets - 47 106 47
Equity in earnings and amortization charges of investee(5) (3,410) 9,501 (13,872) -
Base management fees to be settled/settled in LLC interests 8,053 4,760 15,188 9,755
Performance fees to be settled/settled in LLC interests 24,440 - 46,482 -
Other non-cash expense (income), net   377   1,974       (629)   2,725  
EBITDA excluding non-cash items $ 59,029 $ 66,056   (7,027) (10.6) $ 114,390 $ 113,690 700 0.6
 
EBITDA excluding non-cash items $ 59,029 $ 66,056 $ 114,390 $ 113,690
Interest expense, net(2) (7,688) (10,921) (15,280) (23,926)
Interest rate swap breakage fees(2) - (252) - (500)
Adjustments to derivative instruments recorded in interest expense(2) (1,950) (7,232) (3,289) (12,614)
Amortization of debt financing costs(2) 950 965 1,897 1,943
Cash distributions received in excess of equity in earnings and amortization
charges of investee(6) - 54,625 - 54,625
Equipment lease receivables, net 1,107 872 2,074 1,710
Benefit/provision for income taxes, net of changes in deferred taxes (443) (1,573) (1,875) (2,326)
Changes in working capital   (7,577)   (1,439)   (20,820)   (7,771)
Cash provided by operating activities 43,428 101,101 77,097 124,831
Changes in working capital 7,577 1,439 20,820 7,771
Adjustment to free cash flow for MIC Solar(7) (854) - (1,130) -
Maintenance capital expenditures   (5,954)   (4,734)       (8,571)   (8,461)  
Free cash flow $ 44,197 $ 97,806   (53,609) (54.8) $ 88,216 $ 124,141 (35,925) (28.9)
 

(1) Net (loss) income attributable to MIC LLC excludes net loss attributable to noncontrolling interests of $108,000 and net income attributable to noncontrolling interests of $735,000 for the quarter and six months ended June 30, 2013, respectively, and net income attributable to noncontrolling interests of $890,000 and $1.0 million for the quarter and six months ended June 30, 2012, respectively.

(2) Interest expense, net, includes adjustment to derivative instruments, non-cash amortization of deferred financing fees and interest rate swap breakage fees.

(3) Depreciation - cost of services includes depreciation expense for District Energy, which is reported in cost of services in our consolidated condensed statements of operations. Depreciation and Depreciation - cost of services does not include acquisition- related step-up depreciation expense of $2.0 million and $3.9 million for the quarter and six months ended June 30, 2013, respectively, and $2.0 million and $3.9 million for the quarter and six months ended June 30, 2012, respectively, in connection with our investment in IMTT, which is reported in equity in earnings and amortization charges of investee in our consolidated condensed statements of operations.

(4) Amortization of intangibles does not include acquisition-related step-up amortization expense of $85,000 and $171,000 for the quarter and six months ended June 30, 2013, respectively, and $85,000 and $171,000 for the quarter and six months ended June 30, 2012, respectively, in connection with our investment in IMTT, which is reported in equity in earnings and amortization charges of investee in our consolidated condensed statements of operations.

(5) Equity in earnings and amortization charges of investee in the above table includes our 50% share of IMTT's earnings, offset by the distributions we received only up to our share of the earnings recorded in the calculation for EBITDA excluding non-cash items. For the quarter and six months ended June 30, 2013, we recognized equity in earnings and amortization charges of investee income of $11.3 million and $21.8 million, respectively, in the consolidated condensed statements of operations, which was offset by the cash distributions received of $7.9 million during the quarter ended June 30, 2013. For the quarter and six months ended June 30, 2012, we recognized equity in earnings and amortization charges of investee income of $6.8 million and $16.3 million, respectively, in the consolidated condensed statements of operations, which was fully offset by the cash distributions received in June of 2012. The $9.5 million for the quarter ended June 30, 2012 represents the excess cash distributions received from IMTT over $16.3 million that was applied on the equity in earnings and amortization charges of investee income recognized during the quarter.

(6) Cash distributions received in excess of equity in earnings and amortization charges of investee in the above table is the excess cumulative distributions received to the cumulative earnings recorded in equity in earnings and amortization charges of investee, since our investment in IMTT, adjusted for the current periods equity in earnings and amortization charges of investee in the calculation from net income (loss) attributable to MIC LLC to EBITDA excluding non-cash items above. The cumulative allocation of the $110.6 million distributions received in June of 2012 was $70.9 million recorded in net cash provided by operating activities and $39.6 million recorded in net cash provided by investing activities, as a return on investment, on the consolidated condensed statements of cash flows.

(7) Adjustment to free cash flow for MIC Solar adjusts the free cash flow from this business to include only the cash distributions generated during the reporting period, if any. During the quarter and six months ended June 30, 2013, MIC Solar generated $390,000 and $679,000, respectively, of distributable cash.
 

 

MACQUARIE INFRASTRUCTURE COMPANY LLC

RECONCILIATION OF SEGMENT NET INCOME (LOSS) TO EBITDA EXCLUDING NON-CASH

ITEMS AND CASH FROM OPERATING ACTIVITIES TO FREE CASH FLOW
 

IMTT
 
  Quarter Ended

June 30,
        Six Months Ended

June 30,
   

 
2013   2012  

Change

Favorable/(Unfavorable)

2013
 

2012
 

Change

Favorable/(Unfavorable)
$ $ $ % $ $ $ %

 

($ In Thousands) (Unaudited)
Revenue

 
Terminal revenue 119,520 109,167 10,353 9.5 240,852 220,784 20,068 9.1
Environmental response revenue 6,301 4,596 1,705 37.1 16,454 10,983 5,471 49.8
Total revenue 125,821 113,763 12,058 10.6 257,306 231,767 25,539 11.0
Costs and expenses
Terminal operating costs 44,906 45,905 999 2.2 95,210 92,377 (2,833) (3.1)
Environmental response operating costs 5,573 4,446 (1,127) (25.3) 13,460 9,602 (3,858) (40.2)
Total operating costs 50,479 50,351 (128) (0.3) 108,670 101,979 (6,691) (6.6)
Terminal gross profit 74,614 63,262 11,352 17.9 145,642 128,407 17,235 13.4
Environmental response gross profit 728 150 578 NM 2,994 1,381 1,613 116.8
Gross profit 75,342 63,412 11,930 18.8 148,636 129,788 18,848 14.5
General and administrative expenses 7,854 7,341 (513) (7.0) 16,336 14,800 (1,536) (10.4)
Depreciation and amortization 18,636 17,117 (1,519) (8.9) 37,058 34,024 (3,034) (8.9)
Casualty losses, net(1) 6,500 - (6,500) NM 6,500 - (6,500) NM
Operating income 42,352 38,954 3,398 8.7 88,742 80,964 7,778 9.6
Interest expense, net(2) (1,117) (11,790) 10,673 90.5 (7,723) (18,381) 10,658 58.0
Other income 442 807 (365) (45.2) 1,184 1,263 (79) (6.3)
Provision for income taxes (16,592) (11,869) (4,723) (39.8) (33,713) (26,236) (7,477) (28.5)
Noncontrolling interest (101) (86) (15) (17.4) (176) (185) 9 4.9
Net income 24,984 16,016 8,968 56.0 48,314 37,425 10,889 29.1
 
Reconciliation of net income to EBITDA excluding non-cash items:
Net income 24,984 16,016 48,314 37,425
Interest expense, net(2) 1,117 11,790 7,723 18,381
Provision for income taxes 16,592 11,869 33,713 26,236
Depreciation and amortization 18,636 17,117 37,058 34,024
Casualty losses, net(1) 6,500 - 6,500 -
Other non-cash expenses 101 90   176 278  
EBITDA excluding non-cash items 67,930 56,882 11,048 19.4 133,484 116,344 17,140 14.7
 
EBITDA excluding non-cash items 67,930 56,882 133,484 116,344
Interest expense, net(2) (1,117) (11,790) (7,723) (18,381)
Adjustments to derivative instruments recorded in interest expense(2) (9,607) 2,316 (14,016) (363)
Amortization of debt financing costs(2) 500 809 1,166 1,614
Provision for income taxes, net of changes in deferred taxes (6,538) (3,769) (8,223) (8,603)
Changes in working capital 12,303 4,683 (5,084) 12,298
Cash provided by operating activities 63,471 49,131 99,604 102,909
Changes in working capital (12,303) (4,683) 5,084 (12,298)
Maintenance capital expenditures(3) (26,878) (7,335)   (45,999) (15,453)  
Free cash flow 24,290 37,113 (12,823) (34.6) 58,689 75,158 (16,469) (21.9)

 
NM - Not meaningful

(1) Casualty losses, net, includes $2.5 million and $1.5 million related to the quarters ended December 31, 2012 and March 31, 2013, respectively, which were recorded in terminal operating costs in those periods. These amounts have been included in the quarter and six months ended June 30, 2013.
(2) Interest expense, net, includes adjustments to derivative instruments and non-cash amortization of deferred financing fees.
(3) Maintenance capital expenditures includes a reclassification from growth capital expenditures in the quarters ended December 31, 2012 and March 31, 2013 of $1.2 million and $509,000, respectively. These amounts have been included in the quarter and six months ended June 30, 2013.
 
 

Hawaii Gas
 
 

 
   

 
 

Quarter Ended

June 30,

 

Six Months Ended

June 30,

 
2013   2012

Change

Favorable/(Unfavorable)
2013   2012

Change

Favorable/(Unfavorable)

 
$

$
$   % $ $ $   %

 

($ In Thousands) (Unaudited)
Contribution margin

 
Revenue - non-utility 28,420 29,748 (1,328) (4.5) 60,505 61,377 (872) (1.4)
Cost of revenue - non-utility 13,333 13,554 221 1.6 26,687 29,127 2,440 8.4
Contribution margin - non-utility 15,087 16,194 (1,107) (6.8) 33,818 32,250 1,568 4.9
Revenue - utility 34,193 36,807 (2,614) (7.1) 71,114 75,121 (4,007) (5.3)
Cost of revenue - utility 24,726 27,149 2,423 8.9 51,380 55,366 3,986 7.2
Contribution margin - utility 9,467 9,658 (191) (2.0) 19,734 19,755 (21) (0.1)
Total contribution margin 24,554 25,852 (1,298) (5.0) 53,552 52,005 1,547 3.0
Production 2,667 2,127 (540) (25.4) 5,382 4,133 (1,249) (30.2)
Transmission and distribution(1) 4,740 5,649 909 16.1 10,606 11,097 491 4.4
Gross profit 17,147 18,076 (929) (5.1) 37,564 36,775 789 2.1
Selling, general and administrative expenses 5,989 4,558 (1,431) (31.4) 11,321 9,815 (1,506) (15.3)
Depreciation and amortization 2,190 1,902 (288) (15.1) 4,348 3,843 (505) (13.1)
Operating income 8,968 11,616 (2,648) (22.8) 21,895 23,117 (1,222) (5.3)
Interest expense, net(2) (1,238) (1,516) 278 18.3 (2,943) (3,407) 464 13.6
Other expense (73) (63) (10) (15.9) (105) (132) 27 20.5
Provision for income taxes (2,995) (3,913) 918 23.5 (7,478) (7,712) 234 3.0
Net income(3) 4,662 6,124 (1,462) (23.9) 11,369 11,866 (497) (4.2)
 
Reconciliation of net income to EBITDA excluding non-cash items:
Net income(3) 4,662 6,124 11,369 11,866
Interest expense, net(2) 1,238 1,516 2,943 3,407
Provision for income taxes 2,995 3,913 7,478 7,712
Depreciation and amortization 2,190 1,902 4,348 3,843
Other non-cash expenses(1) 326 995   988 1,802  
EBITDA excluding non-cash items 11,411 14,450 (3,039) (21.0) 27,126 28,630 (1,504) (5.3)
 
EBITDA excluding non-cash items 11,411 14,450 27,126 28,630
Interest expense, net(2) (1,238) (1,516) (2,943) (3,407)
Adjustments to derivative instruments recorded in interest expense(2) (617) (832) (695) (1,297)
Amortization of debt financing costs(2) 123 119 229 239
Provision for income taxes, net of changes in deferred taxes (775) (2,205) (3,867) (4,375)
Changes in working capital 9,780 (847) (787) (3,705)
Cash provided by operating activities 18,684 9,169 19,063 16,085
Changes in working capital (9,780) 847 787 3,705
Maintenance capital expenditures (2,415) (1,421)   (3,421) (3,185)  
Free cash flow 6,489 8,595 (2,106) (24.5) 16,429 16,605 (176) (1.1)

 
(1) For the quarter and six months ended June 30, 2013, transmission and distribution includes non-cash income of $518,000 for asset retirement obligation credit that is not expected to recur. This non-cash income is excluded when calculating EBITDA excluding non-cash items.

(2) Interest expense, net, adjustments to derivative instruments and non-cash amortization of deferred financing fees.
(3) Corporate allocation expense, intercompany fees and the tax effect have been excluded from the above table as they are eliminated on consolidation at the MIC Inc. level.
 
 

District Energy
  Quarter Ended

June 30,
  Six Months Ended

June 30,
 
 

 
 

 
2013 2012

Change

Favorable/(Unfavorable)
2013 2012

Change

Favorable/(Unfavorable)
$ $ $   % $ $ $   %

 

($ In Thousands) (Unaudited)
 
Cooling capacity revenue 5,757 5,567 190 3.4 11,417 11,062 355 3.2
Cooling consumption revenue 5,207 6,890 (1,683) (24.4) 7,168 10,363 (3,195) (30.8)
Other revenue 749 682 67 9.8 1,447 1,321 126 9.5
Finance lease revenue

907
1,150 (243) (21.1) 1,962 2,329 (367) (15.8)
Total revenue 12,620 14,289 (1,669) (11.7) 21,994 25,075 (3,081) (12.3)
Direct expenses — electricity 3,231 4,148

 
917 22.1 4,627 6,686 2,059 30.8
Direct expenses — other(1) 5,218 5,072 (146) (2.9) 10,034 9,629 (405) (4.2)
Direct expenses — total 8,449 9,220 771 8.4 14,661 16,315 1,654 10.1
Gross profit 4,171 5,069 (898) (17.7) 7,333 8,760 (1,427) (16.3)
Selling, general and administrative expenses 874 961 87 9.1 1,763 1,852 89 4.8
Amortization of intangibles 331 341 10 2.9 668 682 14 2.1
Loss from customer contract termination 1,626 - (1,626) NM 1,626 - (1,626) NM
Operating income 1,340 3,767 (2,427) (64.4) 3,276 6,226 (2,950) (47.4)
Interest expense, net(2) (1,233) (2,127) 894 42.0 (2,518) (4,456) 1,938 43.5
Other income 72 75 (3) (4.0) 131 132 (1) (0.8)
Benefit (provision) for income taxes 1 (621) 622 100.2 (213) (611) 398 65.1
Noncontrolling interest (182) (208) 26 12.5 (371) (419) 48 11.5
Net (loss) income (2) 886 (888) (100.2) 305 872 (567) (65.0)
 
Reconciliation of net (loss) income to EBITDA excluding non-
cash items:
Net (loss) income (2) 886 305 872
Interest expense, net(2) 1,233 2,127 2,518 4,456
(Benefit) provision for income taxes (1) 621 213 611
Depreciation(1) 1,703 1,677 3,401 3,351
Amortization of intangibles 331 341 668 682
Loss from customer contract termination 1,626 - 1,626 -
Other non-cash expenses 197 240   208 269  
EBITDA excluding non-cash items 5,087 5,892 (805) (13.7) 8,939 10,241 (1,302) (12.7)
 
EBITDA excluding non-cash items 5,087 5,892 8,939 10,241
Interest expense, net(2) (1,233) (2,127) (2,518) (4,456)
Adjustments to derivative instruments recorded in interest expense(2) (1,361) (566) (2,647) (869)
Amortization of debt financing costs(2) 177 175 354 345
Equipment lease receivable, net 1,107 872 2,074 1,710
Benefit/provision for income taxes, net of changes in deferred taxes (73) (320) (276) (273)
Changes in working capital (1,771) (47) (2,187) (1,872)
Cash provided by operating activities 1,933 3,879 3,739 4,826
Changes in working capital 1,771 47 2,187 1,872
Maintenance capital expenditures (103) (77)   (249) (164)  
Free cash flow 3,601 3,849 (248) (6.4) 5,677 6,534 (857) (13.1)

 
NM - Not meaningful
(1) Includes depreciation expense of $1.7 million and $3.4 million for the quarter and six months ended June 30, 2013, respectively, and $1.7 million and $3.4 million for the quarter and six months ended June 30, 2012, respectively.
(2) Interest expense, net, includes adjustments to derivative instruments and non-cash amortization of deferred financing fees.
 
 

Atlantic Aviation
 
 
  Quarter Ended

June 30,
    Six Months Ended

June 30,
 
2013   2012   Change

Favorable/(Unfavorable)
2013   2012   Change

Favorable/(Unfavorable)
$ $ $   %   $ $ $   %

 

($ In Thousands) (Unaudited)
Revenue
Fuel revenue 135,929 139,381 (3,452) (2.5) 276,273 280,706 (4,433) (1.6)
Non-fuel revenue 38,573 38,291 282 0.7 82,369 81,093 1,276 1.6
Total revenue 174,502 177,672 (3,170) (1.8) 358,642 361,799 (3,157) (0.9)
Cost of revenue
Cost of revenue-fuel 93,038 98,567 5,529 5.6 192,823 198,875 6,052 3.0
Cost of revenue-non-fuel 3,625 4,563 938 20.6 8,346 10,130 1,784 17.6
Total cost of revenue 96,663 103,130 6,467 6.3 201,169 209,005 7,836 3.7
Fuel gross profit 42,891 40,814 2,077 5.1 83,450 81,831 1,619 2.0
Non-fuel gross profit 34,948 33,728 1,220 3.6 74,023 70,963 3,060 4.3
Gross profit 77,839 74,542 3,297 4.4 157,473 152,794 4,679 3.1
Selling, general and administrative expenses 42,910 42,903 (7) - 86,387 86,847 460 0.5
Depreciation and amortization 13,974 13,860 (114) (0.8) 27,845 27,675 (170) (0.6)
Loss on disposal of assets 3 327 324 99.1 176 327 151 46.2
Operating income 20,952 17,452 3,500 20.1 43,065 37,945 5,120 13.5
Interest expense, net(1) (4,626) (7,282) 2,656 36.5 (8,725) (16,067) 7,342 45.7
Loss on extinguishment of debt (2,472) - (2,472) NM (2,472) - (2,472) NM
Other income 4 64 (60) (93.8) - 48 (48) (100.0)
Provision for income taxes (5,426) (4,574) (852) (18.6) (12,824) (9,284) (3,540) (38.1)
Net income(2) 8,432 5,660 2,772 49.0 19,044 12,642 6,402 50.6
 
Reconciliation of net income to EBITDA excluding non-cash items:
Net income(2) 8,432 5,660 19,044 12,642
Interest expense, net(1) 4,626 7,282 8,725 16,067
Provision for income taxes 5,426 4,574 12,824 9,284
Depreciation and amortization 13,974 13,860 27,845 27,675
Loss on extinguishment of debt 2,434 - 2,434 -
Loss on disposal of assets - 47 106 47
Other non-cash income (47) (88)   (115) (229)  
EBITDA excluding non-cash items 34,845 31,335 3,510 11.2 70,863 65,486 5,377 8.2
 
EBITDA excluding non-cash items 34,845 31,335 70,863 65,486
Interest expense, net(1) (4,626) (7,282) (8,725) (16,067)
Interest rate swap breakage fees(1) - (252) - (500)
Adjustments to derivative instruments recorded in interest expense(1) 28 (5,834) 53 (10,448)
Amortization of debt financing costs(1) 648 671 1,309 1,359
Provision for income taxes, net of changes in deferred taxes (1,127) (768) (5,175) (975)
Changes in working capital 1,735 305 4,893 645
Cash provided by operating activities 31,503 18,175 63,218 39,500
Changes in working capital (1,735) (305) (4,893) (645)
Maintenance capital expenditures (3,436) (3,236)   (4,901) (5,112)  
Free cash flow 26,332 14,634 11,698 79.9 53,424 33,743 19,681 58.3

 
NM - Not meaningful
(1) Interest expense, net, includes adjustments to derivative instruments, non-cash amortization of deferred financing fees and interest rate swap breakage fees.
(2) Corporate allocation expense, intercompany fees and the tax effect have been excluded from the above table as they are eliminated on consolidation at the MIC Inc. level.
 
 

Corporate and Other
                   
 
 

 
  Quarter Ended

June 30,
  Six Months Ended

June 30,
 
2013 2012 Change

Favorable/(Unfavorable)
    2013 2012 Change

Favorable/(Unfavorable)
$ $ $ % $ $ $ %

($ In Thousands) (Unaudited)
 
Contracted revenue 2,832 - 2,832 NM 4,518 - 4,518 NM
Cost of revenue 553 - (553) NM 662 - (662) NM
Gross profit 2,279 - 2,279 NM 3,856 - 3,856 NM
 
Base management fees 8,053 4,760 (3,293) (69.2) 15,188 9,755 (5,433) (55.7)
Performance fees 24,440 - (24,440) NM 46,482 - (46,482) NM
Selling, general and administrative expenses 2,346 2,045 (301) (14.7) 4,288 7,216 2,928 40.6
Depreciation 1,561 - (1,561) NM 3,078   - (3,078) NM
Operating loss (34,121) (6,805) (27,316) NM (65,180) (16,971) (48,209) NM
Interest (expense) income, net(1) (591) 4 (595) NM (1,094) 4 (1,098) NM
Other (expense) income, net (317) (28) (289) NM 2,089 (52) 2,141 NM
Benefit (provision) for income taxes 9,510 (827) 10,337 NM 17,103 1,151 15,952 NM
Noncontrolling interest 290 (681) 971 142.6 (364) (588) 224 38.1
Net loss(2) (25,229) (8,337) (16,892) NM (47,446) (16,456) (30,990) (188.3)
 
Reconciliation of net loss to EBITDA excluding non-cash items:
Net loss(2) (25,229) (8,337) (47,446) (16,456)
Interest expense (income), net(1) 591 (4) 1,094 (4)
(Benefit) provision for income taxes (9,510) 827 (17,103) (1,151)
Depreciation 1,561 - 3,078 -
Base management fees to be settled/settled in LLC interests 8,053 4,760 15,188 9,755
Performance fees to be settled/settled in LLC interests 24,440 - 46,482 -
Other non-cash (income) expense (99) 827   (1,710) 883  
EBITDA excluding non-cash items (193) (1,927) 1,734 90.0 (417) (6,973) 6,556 94.0
 
EBITDA excluding non-cash items (193) (1,927) (417) (6,973)
Interest (expense) income, net(1) (591) 4 (1,094) 4
Amortization of debt financing costs(1) 2 - 5 -
Benefit/provision for income taxes, net of changes in deferred taxes 1,532 1,720 7,443 3,297
Changes in working capital (17,321) (850) (22,739) (2,839)
Cash used in operating activities (16,571) (1,053) (16,802) (6,511)
Changes in working capital 17,321 850 22,739 2,839
Adjustment to free cash flow for MIC Solar(3) (854) -   (1,130) -  
Free cash flow (104) (203) 99 48.8 4,807 (3,672) 8,479 NM

 
NM - Not meaningful
(1) Interest expense, net, includes 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) Adjustment to free cash flow for MIC Solar adjusts the free cash flow from this business to include only the cash distributions generated during the reporting period, if any. During the quarter and six months ended June 30, 2013, MIC Solar generated $390,000 and $679,000, respectively, of distributable cash.
 

MACQUARIE INFRASTRUCTURE COMPANY LLC

RECONCILIATION OF PROPORTIONATELY COMBINED NET INCOME (LOSS) TO EBITDA EXCLUDING NON-CASH ITEMS AND CASH FROM

OPERATING ACTIVITIES TO FREE CASH FLOW
 
     

For the Quarter Ended June 30, 2013
($ in Thousands) (Unaudited) IMTT 50% Hawaii Gas District Energy 50.01% Atlantic Aviation MIC Corporate Proportionately Combined(1) IMTT 100%   District Energy 100%
 
Net income (loss) attributable to MIC LLC 12,492 4,662 (1 ) 8,432 (25,229 ) 356 24,984 (2 )
Interest expense, net(2) 559 1,238 617 4,626 591 7,630 1,117 1,233
Provision (benefit) for income taxes 8,296 2,995 (1 ) 5,426 (9,510 ) 7,206 16,592 (1 )
Depreciation 9,076 1,878 852 5,997 1,561 19,363 18,151 1,703
Amortization of intangibles 243 312 166 7,977 - 8,697 485 331
Loss from customer contract termination - - 813 - - 813 - 1,626
Casualty losses, net(3) 3,250 - - - - 3,250 6,500 -
Loss on extinguishment of debt - - - 2,434 - 2,434 - -
Base management fee paid in LLC interests - - - - 8,053 8,053 - -
Performance fee paid in LLC interests - - - - 24,440 24,440 - -
Other non-cash expense (income) 51   326   99   (47 ) (99 ) 329   101     197  
EBITDA excluding non-cash items 33,965   11,411   2,544   34,845   (193 ) 82,572   67,930     5,087  
 
EBITDA excluding non-cash items 33,965 11,411 2,544 34,845 (193 ) 82,572 67,930 5,087
Interest expense, net(2) (559 ) (1,238 ) (617 ) (4,626 ) (591 ) (7,630 ) (1,117 ) (1,233 )

Adjustments to derivative instruments recorded in interest expense, net(2)
(4,804 ) (617 ) (681 ) 28 - (6,073 ) (9,607 ) (1,361 )
Amortization of deferred finance charges(2) 250 123 89 648 2 1,112 500 177
Equipment lease receivables, net - - 554 - - 554 - 1,107
Provision for income taxes, net of changes in deferred taxes (3,269 ) (775 ) (37 ) (1,127 ) 1,532 (3,676 ) (6,538 ) (73 )
Changes in working capital 6,152   9,780   (886 ) 1,735   (17,321 ) (540 ) 12,303     (1,771 )
Cash provided by (used in) operating activities 31,736 18,684 967 31,503 (16,571 ) 66,318 63,471 1,933
Changes in working capital (6,152 ) (9,780 ) 886 (1,735 ) 17,321 540 (12,303 ) 1,771
Maintenance capital expenditures(4) (13,439 ) (2,415 ) (52 ) (3,436 ) - (19,342 ) (26,878 ) (103 )

Adjustments to Free Cash Flow for MIC Solar(5)
-   -   -   -   (854 ) (854 ) -     -  
Free cash flow 12,145   6,489   1,801   26,332   (104 ) 46,663   24,290     3,601  
 

For the Quarter Ended June 30, 2012
($ in Thousands) (Unaudited) IMTT 50% Hawaii Gas District Energy 50.01% Atlantic Aviation MIC Corporate Proportionately Combined(1) IMTT 100%   District Energy 100%
 
Net income (loss) attributable to MIC LLC 8,008 6,124 443 5,660 (8,337 ) 11,898 16,016 886
Interest expense (income), net(2) 5,895 1,516 1,064 7,282 (4 ) 15,753 11,790 2,127
Provision for income taxes 5,935 3,913

311
4,574 827

15,559
11,869 621
Depreciation 8,174 1,697 839 5,860 - 16,570 16,348 1,677
Amortization of intangibles 385 205 171 8,000 - 8,760 769 341

Loss on disposal of assets
- - - 47 - 47 - -
Base management fee paid in LLC interests - - - - 4,760 4,760 - -
Other non-cash expense (income) 45   995   120   (88 ) 827   1,899   90     240  
EBITDA excluding non-cash items 28,441   14,450  

2,947
  31,335   (1,927 )

75,246
  56,882     5,892  
 
EBITDA excluding non-cash items 28,441 14,450 2,947 31,335 (1,927 )

75,246
56,882 5,892
Interest (expense) income, net(2) (5,895 ) (1,516 ) (1,064 ) (7,282 ) 4 (15,753 ) (11,790 ) (2,127 )
Interest rate swap breakage fees(2) - - - (252 ) - (252 ) - -
Adjustments to derivative instruments recorded in interest expense, net(2) 1,158 (832 ) (283 ) (5,834 ) - (5,791 ) 2,316 (566 )
Amortization of deferred finance charges(2) 405 119 88 671 - 1,282 809 175
Equipment lease receivables, net - - 436 - - 436 - 872
Provision for income taxes, net of changes in deferred taxes (1,885 ) (2,205 ) (160 ) (768 ) 1,720 (3,298 ) (3,769 ) (320 )
Changes in working capital 2,342   (847 ) (24 ) 305   (850 ) 926   4,683     (47 )
Cash provided by (used in) operating activities 24,566 9,169 1,940 18,175 (1,053 ) 52,796 49,131 3,879
Changes in working capital (2,342 ) 847 24 (305 ) 850 (926 ) (4,683 ) 47
Maintenance capital expenditures (3,668 ) (1,421 ) (39 ) (3,236 ) -   (8,363 ) (7,335 )   (77 )
Free cash flow 18,557   8,595   1,925   14,634   (203 ) 43,507   37,113     3,849  
(1) Proportionately combined free cash flow is equal to the sum of free cash flow attributable to MIC's ownership interest in each of its operating businesses and MIC Corporate.
(2) Interest expense, net, includes adjustments to derivative instruments, non-cash amortization of deferred financing fees and interest rate swap breakage fees for 2012.

(3) Casualty losses, net, includes $2.5 million and $1.5 million related to the quarters ended December 31, 2012 and March 31, 2013, respectively, which were recorded in terminal operating costs in those periods. These amounts have been included in the quarter ended June 30, 2013.
(4) Maintenance capital expenditures at IMTT includes a reclassification from growth capital expenditures in the quarters ended December 31, 2012 and March 31, 2013 of $1.2 million and $509,000, respectively. These amounts have been included in the quarter ended June 30, 2013.

(5) Adjustment to free cash flow for MIC Solar adjusts the free cash flow from this business to include only the cash distributions generated during the reporting period, if any. During the quarter ended June 30, 2013, MIC Solar generated $390,000 of distributable cash.
 
 

For the Six Months Ended June 30, 2013
   
($ in Thousands) (Unaudited) IMTT 50% Hawaii Gas District Energy 50.01% Atlantic Aviation MIC Corporate Proportionately Combined(1) IMTT 100% District Energy 100%
 
Net income (loss) attributable to MIC LLC 24,157 11,369 153 19,044 (47,446 ) 7,277 48,314 305
Interest expense, net(2) 3,862 2,943 1,259 8,725 1,094 17,883 7,723 2,518
Provision (benefit) for income taxes 16,857 7,478 107 12,824 (17,103 ) 20,162 33,713 213
Depreciation 18,193 3,724 1,701 11,889 3,078 38,585 36,386 3,401
Amortization of intangibles 336 624 334 15,956 - 17,250 672 668
Loss from customer contract termination - - 813 - - 813 - 1,626
Casualty losses, net(3) 3,250 - - - - 3,250 6,500 -

Loss on disposal of assets
- - - 106 - 106 - -
Loss on extinguishment of debt - - - 2,434 - 2,434 - -
Base management fee paid in LLC interests - - - - 15,188 15,188 - -
Performance fee paid in LLC interests - - - - 46,482 46,482 - -
Other non-cash expense (income) 88   988   104   (115 ) (1,710 ) (645 ) 176   208  
EBITDA excluding non-cash items 66,742   27,126   4,470   70,863   (417 ) 168,784   133,484   8,939  
 
EBITDA excluding non-cash items 66,742 27,126 4,470 70,863 (417 ) 168,784 133,484 8,939
Interest expense, net(2) (3,862 ) (2,943 ) (1,259 ) (8,725 ) (1,094 ) (17,883 ) (7,723 ) (2,518 )

Adjustments to derivative instruments recorded in interest expense, net(2)
(7,008 ) (695 ) (1,324 ) 53 - (8,974 ) (14,016 ) (2,647 )
Amortization of deferred finance charges(2) 583 229 177 1,309 5 2,303 1,166 354
Equipment lease receivables, net - - 1,037 - - 1,037 - 2,074
Provision/benefit for income taxes, net of changes in deferred taxes (4,112 ) (3,867 ) (138 ) (5,175 ) 7,443 (5,849 ) (8,223 ) (276 )
Changes in working capital (2,542 ) (787 ) (1,094 ) 4,893   (22,739 ) (22,269 ) (5,084 ) (2,187 )
Cash provided by (used in) operating activities 49,802 19,063 1,870 63,218 (16,802 ) 117,151 99,604 3,739
Changes in working capital 2,542 787 1,094 (4,893 ) 22,739 22,269 5,084 2,187
Maintenance capital expenditures(4) (23,000 ) (3,421 ) (125 ) (4,901 ) - (31,446 ) (45,999 ) (249 )

Adjustments to Free Cash Flow for MIC Solar(5)
-   -   -   -   (1,130 ) (1,130 ) -   -  
Free cash flow 29,345   16,429   2,839   53,424   4,807   106,844   58,689   5,677  
 
 
 

For the Six Months Ended June 30, 2012
   
($ in Thousands) (Unaudited) IMTT 50% Hawaii Gas District Energy 50.01% Atlantic Aviation MIC Corporate Proportionately Combined(1) IMTT 100% District Energy 100%
 
Net income (loss) attributable to MIC LLC 18,713 11,866 436 12,642 (16,456 ) 27,201 37,425 872
Interest expense (income), net(2) 9,191 3,407 2,228 16,067 (4 ) 30,889 18,381 4,456
Provision (benefit) for income taxes 13,118 7,712 306 9,284 (1,151 ) 29,269 26,236 611
Depreciation 16,257 3,432 1,676 11,676 - 33,040 32,513 3,351
Amortization of intangibles 756 411 341 15,999 - 17,507 1,511 682

Loss on disposal of assets
- - - 47 - 47 - -
Base management fee paid in LLC interests - - - - 9,755 9,755 - -
Other non-cash expense (income) 139   1,802   135   (229 ) 883   2,730   278   269  
EBITDA excluding non-cash items 58,172   28,630   5,122   65,486   (6,973 ) 150,437   116,344   10,241  
 
EBITDA excluding non-cash items 58,172 28,630 5,122 65,486 (6,973 ) 150,437 116,344 10,241
Interest (expense) income, net(2) (9,191 ) (3,407 ) (2,228 ) (16,067 ) 4 (30,889 ) (18,381 ) (4,456 )
Interest rate swap breakage fees(2) - - - (500 ) - (500 ) - -
Adjustments to derivative instruments recorded in interest expense, net (2) (182 ) (1,297 ) (435 ) (10,448 ) - (12,361 ) (363 ) (869 )
Amortization of deferred finance charges(2) 807 239 173 1,359 - 2,578 1,614 345
Equipment lease receivables, net - - 855 - - 855 - 1,710
Provision/benefit for income taxes, net of changes in deferred taxes (4,302 ) (4,375 ) (137 ) (975 ) 3,297 (6,491 ) (8,603 ) (273 )
Changes in working capital 6,149   (3,705 ) (936 ) 645   (2,839 ) (686 ) 12,298   (1,872 )
Cash provided by (used in) operating activities 51,455 16,085 2,413 39,500 (6,511 ) 102,942 102,909 4,826
Changes in working capital (6,149 ) 3,705 936 (645 ) 2,839 686 (12,298 ) 1,872
Maintenance capital expenditures (7,727 ) (3,185 ) (82 ) (5,112 ) -   (16,106 ) (15,453 ) (164 )
Free cash flow 37,579   16,605   3,268   33,743   (3,672 ) 87,523   75,158   6,534  
(1) Proportionately combined free cash flow is equal to the sum of free cash flow attributable to MIC's ownership interest in each of its operating businesses and MIC Corporate.
(2) Interest expense, net, includes adjustments to derivative instruments, non-cash amortization of deferred financing fees and interest rate swap breakage fees for 2012.

(3) Casualty losses, net, includes $2.5 million and $1.5 million related to the quarters ended December 31, 2012 and March 31, 2013, respectively, which were recorded in terminal operating costs in those periods. These amounts have been included in the six months ended June 30, 2013.

(4) Maintenance capital expenditures at IMTT includes a reclassification from growth capital expenditures in the quarters ended December 31, 2012 and March 31, 2013 of $1.2 million and $509,000, respectively. These amounts have been included in the six months ended June 30, 2013.

(5) Adjustment to free cash flow for MIC Solar adjusts the free cash flow from this business to include only the cash distributions generated during the reporting period, if any. During the six months ended June 30, 2013, MIC Solar generated $679,000 of distributable cash.

Copyright Business Wire 2010

More from Press Releases

NFL Pushes for Regulation Following Supreme Court's Sports Gambling Ruling

NFL Pushes for Regulation Following Supreme Court's Sports Gambling Ruling

21st Century Fox Scoops Up Local News Stations

21st Century Fox Scoops Up Local News Stations

Walmart CEO: 'We Are Transforming Globally' With Flipkart

Walmart CEO: 'We Are Transforming Globally' With Flipkart

Three-Part FREE Webinar Series

Three-Part FREE Webinar Series

March 24 Full-Day Course Offering: Professional Approach to Trading SPX

March 24 Full-Day Course Offering: Professional Approach to Trading SPX