NEW YORK, July 31, 2019 /PRNewswire/ -- Macquarie
Infrastructure Corporation (NYSE: MIC) today announced its second
quarter 2019 financial results including the generation of net
income from continuing operations of $6
million, down 78% versus the second quarter in 2018 (prior
comparable period). The decline in net income was driven by a
reduction in revenue and higher interest expense comprising largely
non-cash changes in the fair value of interest rate hedging
instruments, partially offset by a reduction in costs including
fees to MIC's external manager.
The decline in revenue to $416
million from $436 million
primarily reflects a previously reported reduction in storage
utilization at the Company's bulk liquid storage terminal business,
International-Matex Tank Terminals ("IMTT"), and the absence of
revenue from businesses that were sold in 2018. The decline was
partially offset by revenue growth at the Company's aviation
services business, Atlantic Aviation, as a result of increases in
the volume of jet fuel sold and hangar rental revenue.
Overall expenses declined primarily due to lower cost of
services, partially offset by an increase in selling, general and
administrative expenses. Selling, general and administrative
expenses were higher as a result of higher professional services
fees and increases in salaries and benefits primarily related to
the implementation of new long-term incentive plans for senior
management of MIC's operating businesses. The expenses recorded in
connection with the incentive plans are non-cash accruals that are
expected to be settled with the issuance of MIC shares, subject to
plan participants exceeding performance hurdles.
Reported interest expense increased to $46 million from $25
million in the prior comparable period as a result of
non-cash losses on interest rate hedges in 2019 and higher debt
balances. Excluding the derivative losses, cash interest rose to
$31 million from $25 million primarily as a result of an increase
in the debt balance outstanding at Atlantic Aviation. A portion of
the proceeds from the increase were used to fully repay a tranche
of holding company level Convertible Senior Notes in July 2019.
Fees payable to MIC's external manager declined to $7 million from $11
million as a result of the manager's waiver in November 2018 of certain elements of the base
management fee to which it was otherwise entitled and a decline in
the market capitalization of the Company.
MIC reported Adjusted EBITDA excluding non-cash items from
continuing operations of $134
million, down 8% versus the prior comparable period. The
reduced earnings contribution from IMTT was partially offset by
improved results at each of Atlantic Aviation and MIC Hawaii.
Cash generated by operating activities during the quarter
ended June 30 2019 declined 6% to
$108 million versus the prior
comparable period, primarily due to lower earnings and a higher
interest expense, partially offset by favorable movements in
working capital and lower taxes.
Adjusted Free Cash Flow from continuing operations was
$88 million, down 19% versus the
prior comparable period. The result reflects the lower reported
EBITDA as well as increases in interest expense and maintenance
capital expenditures, partially offset by lower cash taxes.
MIC's Chief Executive Officer, Christopher Frost, said: "MIC's results for the
second quarter of 2019 were largely consistent with our guidance
and reflect both the importance of a diversified portfolio of
infrastructure businesses as well as the effective execution of our
strategy, particularly with respect to streamlining our portfolio
and strengthening our balance sheet."
"Atlantic Aviation and MIC Hawaii continued to perform well and
offset the majority of the year on year decrease in the
contribution from IMTT; Atlantic Aviation's results benefitted from
stable general aviation flight activity and improved margins on
fuel sales; results for IMTT were consistent with our
expectations and we have been pleased with the level of
interest in contracting for bulk liquid storage and logistics
services, particularly along the Lower Mississippi River; MIC
Hawaii's contribution reflects the implementation of new utility
rates in July 2018 and the essential
services nature of that business. Collectively, the underlying
performance of our businesses was solid, as anticipated," Frost
added.
In July 2019, MIC successfully
closed on the sales of its operating wind power portfolio, all
but one of the facilities in its operating solar power portfolio
and its majority interest in a developer of solar projects.
The sale of the remaining solar facility is expected to close
in early August 2019. Following the
final closing, the sales will have generated total gross proceeds
of approximately $276 million and MIC
will have deconsolidated approximately $297
million of debt. The net proceeds, after transaction fees
and taxes, are expected to be used to fund a portion of future
growth projects across MIC's portfolio. The sales substantially
complete efforts by the Company to exit smaller and non-core
businesses.
At maturity on July 15, 2019, MIC
repaid the entirety of a $350 million
tranche of 2.875% Convertible Senior Notes outstanding using cash
on hand. Together with the effects of the sales of its renewable
power businesses, MIC's gross debt was reduced to approximately
$2.7 billion at July 31, 2019 and its proforma leverage ratio was
reduced to 3.6x net debt / EBITDA.
MIC currently expects to deploy between $250 and $275
million of capital in support of growth projects across
its businesses in 2019. The forecast range was reduced from between
$275 and $300
million as a consequence of work on certain projects at
IMTT's Louisiana terminals having
been slowed by the historically high level of the Mississippi
River. The delays are not expected to have a material impact on
MIC's financial results for 2019 as the effected projects would not
have been completed until late 2019 and early 2020. MIC deployed
$91 million of growth capital through
the end of the second quarter.
Based on its financial and operating results for the quarter,
MIC reaffirmed its full-year 2019 guidance for its operating
businesses and revised guidance for its Corporate and Other segment
lower by $10 million. The forecast
increase in Corporate and Other expenses reflects the earlier than
anticipated conclusion of a relationship with a developer of
solar power projects, ongoing litigation costs and professional
services fees including consulting fees incurred in conjunction
with an evaluation of opportunities for improved efficiencies. In
total, the Company currently expects to generate between
$600 and $625
million of Adjusted EBITDA excluding non-cash items.
IMTT:
|
$287 – $297
million
|
Atlantic
Aviation:
|
$275 – $285
million
|
MIC
Hawaii:
|
$60 – $65
million
|
Corporate and
Other:
|
$(22)
million
|
Reflective of the increased corporate expenses, MIC also reduced
its guidance for the generation of Adjusted Free Cash Flow to a
range of $390 and $435 million in 2019.
With respect to the Company's guidance for EBITDA and Free Cash
Flow in 2019, a reconciliation of EBITDA to net income (loss), the
most comparable GAAP measure and a reconciliation of Free Cash Flow
to cash from operating activities, the most comparable GAAP
measure, are not available without unreasonable effort due to the
Company's limited visibility into and inability to make accurate
projections and estimates of items including management fees,
hedging agreements, depreciation and any (benefit) provision for
income taxes. These items may vary greatly from year to year and
could significantly impact MIC's results as reported in accordance
with GAAP.
Second Quarter 2019 Segment Results
Each of MIC's operating businesses reported an increase in
selling, general and administrative expenses related to the
implementation of a new, long-term incentive compensation program
for senior management of its operating businesses. The expenses are
non-cash but serve to reduce reported net income by $1 million in total.
- IMTT generated EBITDA of $64
million, down 14% compared with the second quarter in 2018
primarily as a result of the reduction in average capacity
utilization to 82.9% from 86.1% in the prior comparable period and
higher selling, general and administrative expenses. IMTT
contracted storage capacity for petroleum products on the Lower
Mississippi River during the quarter and customer inquiries
regarding storage related to the implementation of IMO 2020 on
January 1, 2020 have increased.
IMTT currently believes that storage utilization rates will average
in the low- to mid-80s percent range in 2019. Storage utilization
is expected to be in the mid- to high-80s percent range at year
end.
- Atlantic Aviation generated EBITDA of $62 million, up 3% versus the prior comparable
period. Increases in fuel sales and hangar rental revenue were
partially offset by higher salaries and benefits as well as repairs
and maintenance. General aviation flight activity, as reported by
the Federal Aviation Administration, was flat in the
second quarter of 2019 compared with the same period in 2018.
- MIC Hawaii generated EBITDA of $14
million, up 27% compared with the second quarter in 2018, as
a result of the implementation of new utility rates in July 2018 and the absence of losses related to a
business that was sold in November
2018. The gains were partially offset by a decline in the
volume of gas products sold.
- MIC's Corporate and Other segment recorded increased
professional services fees and a reduction in income from a
relationship with a developer of solar power projects. These
resulted in a decrease in segment EBITDA to ($8) million for the quarter compared with
($4) million in the prior comparable
period. The relationship with the solar project developer was
concluded in July 2019.
Second Quarter 2019 Dividend
The MIC board of directors authorized a cash dividend of
$1.00 per share, or $4.00 annualized, for the second quarter of 2019
consistent with guidance provided to the market in February 2019. The dividend will be payable
August 15, 2019 to shareholders of
record on August 12, 2019 and
together with the first quarter dividend paid in May represents a
distribution of approximately 70% of MIC's Adjusted Free Cash Flow
from continuing operations year to date.
MIC reaffirmed its previous guidance for a distribution of
$1.00 per share in each of the third
and fourth quarters in 2019. The Company expects to distribute
approximately 83.5% of its Adjusted Free Cash Flow for the full
year as dividends.
Summary Financial
Information
|
|
|
|
|
|
|
|
|
|
Quarter Ended
June 30,
|
Change
Favorable/
(Unfavorable)
|
|
Six Months
Ended
June 30,
|
|
Change
Favorable/
(Unfavorable)
|
|
2019
|
|
2018
|
|
|
$
|
|
%
|
|
2019
|
|
2018
|
|
$
|
|
%
|
|
|
($ In Millions,
Except Share and Per Share Data) (Unaudited)
|
GAAP
Metrics
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
6
|
|
|
$
|
27
|
|
|
(21)
|
|
|
(78)
|
|
|
$
|
70
|
|
|
$
|
67
|
|
|
3
|
|
|
4
|
|
Net income per share
attributable to MIC
|
0.07
|
|
|
0.32
|
|
|
(0.25)
|
|
|
(78)
|
|
|
0.81
|
|
|
0.79
|
|
|
0.02
|
|
|
3
|
|
Cash provided by
operating activities
|
108
|
|
|
115
|
|
|
(7)
|
|
|
(6)
|
|
|
259
|
|
|
245
|
|
|
14
|
|
|
6
|
|
Discontinued
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
3
|
|
|
$
|
9
|
|
|
(6)
|
|
|
(67)
|
|
|
$
|
8
|
|
|
$
|
16
|
|
|
(8)
|
|
|
(50)
|
|
Net income per share
attributable to MIC
|
0.06
|
|
|
0.13
|
|
|
(0.07)
|
|
|
(54)
|
|
|
0.13
|
|
|
0.57
|
|
|
(0.44)
|
|
|
(77)
|
|
Cash provided by
(used in) operating activities
|
2
|
|
|
7
|
|
|
(5)
|
|
|
(71)
|
|
|
(11)
|
|
|
21
|
|
|
(32)
|
|
|
(152)
|
|
Weighted average
number of shares outstanding: basic
|
86,073,372
|
|
|
85,082,209
|
|
|
991,163
|
|
|
1
|
|
|
85,973,308
|
|
|
84,952,551
|
|
|
1,020,757
|
|
|
1
|
|
MIC Non-GAAP
Metrics
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA excluding
non-cash items – continuing operations
|
$
|
132
|
|
|
$
|
141
|
|
|
(9)
|
|
|
(6)
|
|
|
$
|
334
|
|
|
$
|
302
|
|
|
32
|
|
|
11
|
|
Investment and
acquisition/disposition costs
|
2
|
|
|
5
|
|
|
(3)
|
|
|
(60)
|
|
|
3
|
|
|
6
|
|
|
(3)
|
|
|
(50)
|
|
Adjusted EBITDA
excluding non-cash items – continuing
operations
|
$
|
134
|
|
|
$
|
146
|
|
|
(12)
|
|
|
(8)
|
|
|
$
|
337
|
|
|
$
|
308
|
|
|
29
|
|
|
9
|
|
Cash
interest
|
$
|
(31)
|
|
|
$
|
(25)
|
|
|
(6)
|
|
|
(24)
|
|
|
$
|
(59)
|
|
|
$
|
(48)
|
|
|
(11)
|
|
|
(23)
|
|
Cash taxes
|
(2)
|
|
|
(4)
|
|
|
2
|
|
|
50
|
|
|
(9)
|
|
|
(8)
|
|
|
(1)
|
|
|
(13)
|
|
Maintenance capital
expenditures
|
(13)
|
|
|
(8)
|
|
|
(5)
|
|
|
(63)
|
|
|
(23)
|
|
|
(18)
|
|
|
(5)
|
|
|
(28)
|
|
Adjusted Free Cash
Flow – continuing operations
|
$
|
88
|
|
|
$
|
109
|
|
|
(21)
|
|
|
(19)
|
|
|
$
|
246
|
|
|
$
|
234
|
|
|
12
|
|
|
5
|
|
EBITDA excluding
non-cash items – discontinued operations
|
$
|
12
|
|
|
$
|
28
|
|
|
(16)
|
|
|
(57)
|
|
|
$
|
22
|
|
|
$
|
48
|
|
|
(26)
|
|
|
(54)
|
|
Cash
interest
|
(5)
|
|
|
(7)
|
|
|
2
|
|
|
29
|
|
|
(8)
|
|
|
(14)
|
|
|
6
|
|
|
43
|
|
Maintenance capital
expenditures
|
—
|
|
|
(1)
|
|
|
1
|
|
|
100
|
|
|
—
|
|
|
(1)
|
|
|
1
|
|
|
100
|
|
Free Cash
Flow – discontinued operations
|
$
|
7
|
|
|
$
|
20
|
|
|
(13)
|
|
|
(65)
|
|
|
$
|
14
|
|
|
$
|
33
|
|
|
(19)
|
|
|
(58)
|
|
Adjusted Free Cash
Flow - consolidated
|
$
|
95
|
|
|
$
|
129
|
|
|
(34)
|
|
|
(26)
|
|
|
$
|
260
|
|
|
$
|
267
|
|
|
(7)
|
|
|
(3)
|
|
Conference Call and Webcast
When: MIC has scheduled a conference call for 8:00 a.m. Eastern Time on Thursday, August 1,
2019 during which management will review and comment on the second
quarter 2019 results.
How: To listen to the conference call dial +1(650) 521-5252 or
+1(877) 852-2928 at least ten 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. Allow extra time prior to the
call to visit the site and download the software needed to listen
to the webcast.
Supplemental Materials: MIC will prepare slides in support of
its conference call. The materials will be available for
downloading from the Company's website prior to the call.
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,
2019 through midnight on August 7,
2019, at +1(404) 537-3406 or +1(855) 859-2056, Passcode:
4966803. An online archive of the webcast will be available on the
Company's website for one year following the call.
About MIC
MIC owns and operates a diversified group of businesses
providing basic services to customers in the United States. Its businesses consist of a
bulk liquid terminals business, International-Matex Tank Terminals;
an airport services business, Atlantic Aviation; and entities
comprising an energy services, production and distribution segment,
MIC Hawaii. For additional information, please visit the MIC
website at www.macquarie.com/mic.
Use of Non-GAAP Measures
Earnings Before Interest, Taxes, Depreciation and
Amortization (EBITDA) excluding non-cash items and Free Cash
Flow
In addition to MIC's results under U.S. GAAP, the Company uses
certain non-GAAP measures to assess the performance and prospects
of its businesses. In particular, MIC uses EBITDA excluding
non-cash items and Free Cash Flow.
MIC measures EBITDA excluding non-cash items as a reflection of
its businesses' ability to effectively manage the volume of
products sold or services provided, the operating margin earned on
those transactions and the management of operating expenses
independent of the capitalization and tax attributes of those
businesses. The Company believes investors use EBITDA excluding
non-cash items primarily as a measure to assess the operating
performance of its businesses and to make comparisons with the
operating performance of other businesses whose depreciation and
amortization expense may vary widely from MIC's, particularly where
acquisitions and other non-operating factors are involved. MIC
defines EBITDA excluding non-cash items as net income (loss) or
earnings —the most comparable GAAP measure— before interest, taxes,
depreciation and amortization and non-cash items including
impairments, unrealized derivative gains and losses, adjustments
for other non-cash items and pension expense reflected in the
statements of operations. EBITDA excluding non-cash items also
excludes base management fees and performance fees, if any, whether
paid in cash or stock.
The Company's businesses can be characterized as owners of
high-value, long-lived assets capable of generating substantial
Free Cash Flow. MIC defines Free Cash Flow as cash from operating
activities —the most comparable GAAP measure — which includes cash
paid for interest, taxes and pension contributions, less
maintenance capital expenditures, which includes principal
repayments on capital lease obligations used to fund maintenance
capital expenditures and excludes changes in working capital.
Management uses Free Cash Flow as a measure of its ability to
provide investors with an attractive risk-adjusted return by
sustaining and potentially increasing MIC's quarterly cash dividend
and funding a portion of the Company's growth. GAAP metrics such as
net income (loss) do not provide MIC management with the same level
of visibility to into the performance and prospects of the business
as a result of: (i) the capital intensive nature of MIC's
businesses and the generation of non-cash depreciation and
amortization; (ii) shares issued to the Company's external manager
under the Management Services Agreement, (iii) the Company's
ability to defer all or a portion of current federal income taxes;
(iv) non-cash unrealized gains or losses on derivative instruments;
(v) gains (losses) on disposal of assets; (vi) non-cash
compensation expenses related to a long-term incentive compensation
plan for senior management of the operating businesses implemented
in 2019; and (vii) pension expense. Pension expenses primarily
consist of interest expense, expected return on plan assets and
amortization of actuarial and performance gains and losses. Any
cash contributions to pension plans are reflected as a reduction in
Free Cash Flow and are not included in pension expense. Management
believes that external consumers of its financial statements,
including investors and research analysts, use Free Cash Flow both
to assess the Company's performance and as an indicator of its
success in generating an attractive risk-adjusted return.
In its Quarterly Report on Form 10-Q, the Company has disclosed
Free Cash Flow on a consolidated basis and for each of its
operating segments and MIC Corporate. Management believes that both
EBITDA excluding non-cash items and Free Cash Flow support a more
complete and accurate understanding of the financial and operating
performance of its businesses than would otherwise be achieved
using GAAP results alone.
Free Cash Flow does not take into consideration required
payments on indebtedness and other fixed obligations or other cash
items that are excluded from MIC's definition of Free Cash Flow.
Management notes that Free Cash Flow may be calculated differently
by other companies thereby limiting its usefulness as a comparative
measure. Free Cash Flow should be used as a supplemental measure to
help understand MIC's financial performance and not in lieu of its
financial results reported under GAAP.
See the tables below for a reconciliation of Net Income (loss)
to EBITDA excluding non-cash items from continuing operations and a
reconciliation of cash provided by operating activities from
continuing operations to Free Cash Flow from continuing
operations.
Classification of Maintenance Capital Expenditures and Growth
Capital Expenditures
MIC categorizes capital expenditures as either maintenance
capital expenditures or growth capital expenditures. As neither
maintenance capital expenditure nor growth capital expenditure is a
GAAP term, the Company has adopted a framework to categorize
specific capital expenditures. In broad terms, maintenance capital
expenditures primarily maintain MIC's businesses at current levels
of operations, capability, profitability or cash flow, while growth
capital expenditures primarily provide new or enhanced levels of
operations, capability, profitability or cash flow. Management
considers a number of factors in determining whether a specific
capital expenditure will be classified as maintenance or
growth.
MIC does not bifurcate specific capital expenditures into growth
and maintenance components. Each discrete capital expenditure is
considered within the above framework and the entire capital
expenditure is classified as either maintenance or growth.
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
release 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, complete growth projects, deploy growth
capital and manage growth, make and finance future acquisitions,
and implement its strategy; the regulatory environment; demographic
trends, the political environment, the economy, tourism,
construction and transportation costs, air travel, environmental
costs and risks; fuel and gas and other commodity costs; its
ability to recover increases in costs from customers, cybersecurity
risks, work interruptions or other labor stoppages; risks
associated with acquisitions or dispositions, litigation risks;
risks related to its shared services initiative and its ability to
achieve cost savings; 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.
MIC is not an authorized deposit-taking institution for the
purposes of the Banking Act 1959 (Commonwealth of Australia). The obligations of MIC 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 MIC.
MACQUARIE
INFRASTRUCTURE CORPORATION
|
|
CONSOLIDATED
CONDENSED BALANCE SHEETS
|
($ in Millions,
Except Share Data)
|
|
|
June 30,
2019
|
|
December 31,
2018
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
573
|
|
|
$
|
589
|
|
Restricted
cash
|
17
|
|
|
23
|
|
Accounts receivable,
net of allowance for doubtful accounts
|
97
|
|
|
95
|
|
Inventories
|
31
|
|
|
29
|
|
Prepaid
expenses
|
16
|
|
|
13
|
|
Fair value of
derivative instruments
|
4
|
|
|
11
|
|
Other current
assets
|
34
|
|
|
12
|
|
Current assets held
for sale(1)
|
730
|
|
|
648
|
|
Total current
assets
|
1,502
|
|
|
1,420
|
|
Property, equipment,
land and leasehold improvements, net
|
3,127
|
|
|
3,141
|
|
Operating lease
assets, net
|
326
|
|
|
—
|
|
Investment in
unconsolidated business
|
9
|
|
|
8
|
|
Goodwill
|
2,043
|
|
|
2,043
|
|
Intangible assets,
net
|
759
|
|
|
789
|
|
Fair value of
derivative instruments
|
4
|
|
|
15
|
|
Other noncurrent
assets
|
13
|
|
|
28
|
|
Total
assets
|
$
|
7,783
|
|
|
$
|
7,444
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Due to
Manager-related party
|
$
|
3
|
|
|
$
|
3
|
|
Accounts
payable
|
49
|
|
|
38
|
|
Accrued
expenses
|
72
|
|
|
86
|
|
Current portion of
long-term debt
|
364
|
|
|
361
|
|
Operating lease
liabilities – current
|
20
|
|
|
—
|
|
Other current
liabilities
|
45
|
|
|
33
|
|
Current liabilities
held for sale(1)
|
388
|
|
|
317
|
|
Total current
liabilities
|
941
|
|
|
838
|
|
Long-term debt, net
of current portion
|
2,653
|
|
|
2,653
|
|
Deferred income
taxes
|
685
|
|
|
681
|
|
Operating lease
liabilities – noncurrent
|
312
|
|
|
—
|
|
Other noncurrent
liabilities
|
154
|
|
|
155
|
|
Total
liabilities
|
4,745
|
|
|
4,327
|
|
Commitments and
contingencies
|
—
|
|
|
—
|
|
Stockholders'
equity(2):
|
|
|
|
Additional paid in
capital
|
$
|
1,354
|
|
|
$
|
1,510
|
|
Accumulated other
comprehensive loss
|
(28)
|
|
|
(30)
|
|
Retained
earnings
|
1,566
|
|
|
1,485
|
|
Total stockholders'
equity
|
2,892
|
|
|
2,965
|
|
Noncontrolling
interests(3)
|
146
|
|
|
152
|
|
Total
equity
|
3,038
|
|
|
3,117
|
|
Total liabilities and
equity
|
$
|
7,783
|
|
|
$
|
7,444
|
|
___________
|
|
|
(1)
|
See Note 3,
"Discontinued Operations and Dispositions", in our Notes to
Consolidated Condensed Financial Statements in Part 1 of Form 10-Q
for the quarter ended June 30, 2019, for further discussion on
assets and liabilities held for sale.
|
(2)
|
The Company is
authorized to issue the following classes of stock: (i) 500,000,000
shares of common stock, par value $0.001 per share. At
June 30, 2019 and December 31, 2018, the Company had
86,195,946 shares and 85,800,303 shares of common stock issued and
outstanding, respectively; (ii) 100,000,000 shares of preferred
stock, par value $0.001 per share. At June 30, 2019 and
December 31, 2018, no preferred stocks were issued or
outstanding; and (iii) 100 shares of special stock, par value
$0.001 per share, issued and outstanding to its Manager as at
June 30, 2019 and December 31, 2018.
|
(3)
|
Includes $138 million
and $141 million of noncontrolling interest related to discontinued
operations at June 30, 2019 and December 31, 2018. See
Note 3, "Discontinued Operations and Dispositions", in our Notes to
Consolidated Condensed Financial Statements in Part 1 of Form 10-Q
for the quarter ended June 30, 2019, for further
discussions.
|
MACQUARIE
INFRASTRUCTURE CORPORATION
|
|
CONSOLIDATED
CONDENSED STATEMENTS OF OPERATIONS
|
(Unaudited)
|
($ in Millions,
Except Share and Per Share Data)
|
|
|
|
Quarter Ended June
30,
|
|
Six Months Ended
June 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Revenue
|
|
|
|
|
|
|
|
Service
revenue
|
$
|
355
|
|
|
$
|
376
|
|
|
$
|
773
|
|
|
$
|
779
|
|
Product
revenue
|
61
|
|
|
60
|
|
|
125
|
|
|
124
|
|
Total
revenue
|
416
|
|
|
436
|
|
|
898
|
|
|
903
|
|
Costs and
expenses
|
|
|
|
|
|
|
|
Cost of
services
|
162
|
|
|
180
|
|
|
330
|
|
|
367
|
|
Cost of product
sales
|
45
|
|
|
41
|
|
|
85
|
|
|
89
|
|
Selling, general and
administrative
|
84
|
|
|
82
|
|
|
164
|
|
|
162
|
|
Fees to
Manager-related party
|
7
|
|
|
11
|
|
|
15
|
|
|
24
|
|
Depreciation
|
48
|
|
|
47
|
|
|
96
|
|
|
94
|
|
Amortization of
intangibles
|
15
|
|
|
17
|
|
|
30
|
|
|
33
|
|
Total operating
expenses
|
361
|
|
|
378
|
|
|
720
|
|
|
769
|
|
Operating
income
|
55
|
|
|
58
|
|
|
178
|
|
|
134
|
|
Other income
(expense)
|
|
|
|
|
|
|
|
Interest
income
|
1
|
|
|
—
|
|
|
4
|
|
|
—
|
|
Interest
expense(1)
|
(46)
|
|
|
(25)
|
|
|
(88)
|
|
|
(43)
|
|
Other (expense)
income, net
|
(2)
|
|
|
6
|
|
|
2
|
|
|
6
|
|
Net income from
continuing operations before income taxes
|
8
|
|
|
39
|
|
|
96
|
|
|
97
|
|
Provision for income
taxes
|
(2)
|
|
|
(12)
|
|
|
(26)
|
|
|
(30)
|
|
Net income from
continuing operations
|
$
|
6
|
|
|
$
|
27
|
|
|
$
|
70
|
|
|
$
|
67
|
|
Discontinued
Operations(2)
|
|
|
|
|
|
|
|
Net income from
discontinued operations before income taxes
|
$
|
5
|
|
|
$
|
9
|
|
|
$
|
8
|
|
|
$
|
15
|
|
(Provision) benefit
for income taxes
|
|
(2)
|
|
|
—
|
|
|
—
|
|
|
1
|
|
Net income from
discontinued operations
|
$
|
3
|
|
|
$
|
9
|
|
|
$
|
8
|
|
|
$
|
16
|
|
Net
income
|
$
|
9
|
|
|
$
|
36
|
|
|
$
|
78
|
|
|
$
|
83
|
|
Net income from
continuing operations
|
$
|
6
|
|
|
$
|
27
|
|
|
$
|
70
|
|
|
$
|
67
|
|
Net income from
continuing operations attributable to MIC
|
$
|
6
|
|
|
$
|
27
|
|
|
$
|
70
|
|
|
$
|
67
|
|
Net income from
discontinued operations
|
$
|
3
|
|
|
$
|
9
|
|
|
$
|
8
|
|
|
$
|
16
|
|
Less: net loss
attributable to noncontrolling interests
|
$
|
(2)
|
|
|
$
|
(2)
|
|
|
$
|
(3)
|
|
|
$
|
(32)
|
|
Net income from
discontinued operations attributable to MIC
|
$
|
5
|
|
|
$
|
11
|
|
|
$
|
11
|
|
|
$
|
48
|
|
Net income
attributable to MIC
|
$
|
11
|
|
|
$
|
38
|
|
|
$
|
81
|
|
|
$
|
115
|
|
Basic income per
share from continuing operations attributable to MIC
|
$
|
0.07
|
|
|
$
|
0.32
|
|
|
$
|
0.81
|
|
|
$
|
0.79
|
|
Basic income per
share from discontinued operations attributable to MIC
|
0.06
|
|
|
0.13
|
|
|
0.13
|
|
|
0.57
|
|
Basic income per
share attributable to MIC
|
$
|
0.13
|
|
|
$
|
0.45
|
|
|
$
|
0.94
|
|
|
$
|
1.36
|
|
Weighted average
number of shares outstanding: basic
|
86,073,372
|
|
|
85,082,209
|
|
|
85,973,308
|
|
|
84,952,551
|
|
Diluted income per
share from continuing operations attributable to MIC
|
$
|
0.07
|
|
|
$
|
0.32
|
|
|
$
|
0.81
|
|
|
$
|
0.79
|
|
Diluted income per
share from discontinued operations attributable to MIC
|
0.06
|
|
|
0.13
|
|
|
0.13
|
|
|
0.57
|
|
Diluted income per
share attributable to MIC
|
$
|
0.13
|
|
|
$
|
0.45
|
|
|
$
|
0.94
|
|
|
$
|
1.36
|
|
Weighted average
number of shares outstanding: diluted
|
86,099,111
|
|
|
85,091,945
|
|
|
85,998,006
|
|
|
84,962,138
|
|
Cash dividends
declared per share
|
$
|
1.00
|
|
|
$
|
1.00
|
|
|
$
|
2.00
|
|
|
$
|
2.00
|
|
___________
|
|
|
(1)
|
Interest expense
includes losses on derivative instruments of $8 million and $12
million for the quarter and six months ended June 30, 2019,
respectively. Interest expense includes gains on derivative
instruments of $4 million and $14 million for the quarter and six
months ended June 30, 2018, respectively.
|
(2)
|
See Note 3,
"Discontinued Operations and Dispositions", in our Notes to
Consolidated Condensed Financial Statements in Part 1 of Form 10-Q
for the quarter ended June 30, 2019, for discussions on
businesses classified as held for sale.
|
MACQUARIE
INFRASTRUCTURE CORPORATION
|
|
CONSOLIDATED
CONDENSED STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
($ in
Millions)
|
|
|
|
Six Months Ended
June 30,
|
|
2019
|
|
2018
|
Operating
activities
|
|
|
|
Net income from
continuing operations
|
$
|
70
|
|
|
$
|
67
|
|
Adjustments to
reconcile net income to net cash provided by operating activities
from continuing operations:
|
|
|
|
Depreciation and
amortization of property and equipment
|
96
|
|
|
94
|
|
Amortization of
intangible assets
|
30
|
|
|
33
|
|
Amortization of debt
financing costs
|
5
|
|
|
4
|
|
Amortization of debt
discount
|
2
|
|
|
2
|
|
Adjustments to
derivative instruments
|
22
|
|
|
(7)
|
|
Fees to
Manager-related party
|
15
|
|
|
24
|
|
Deferred
taxes
|
17
|
|
|
22
|
|
Other non-cash
expense, net
|
9
|
|
|
7
|
|
Changes in other
assets and liabilities, net of acquisitions:
|
|
|
|
Accounts
receivable
|
(2)
|
|
|
15
|
|
Inventories
|
(1)
|
|
|
(2)
|
|
Prepaid expenses and
other current assets
|
(11)
|
|
|
—
|
|
Accounts payable and
accrued expenses
|
1
|
|
|
(15)
|
|
Income taxes
payable
|
3
|
|
|
1
|
|
Other, net
|
3
|
|
|
—
|
|
Net cash provided by
operating activities from continuing operations
|
259
|
|
|
245
|
|
Investing
activities
|
|
|
|
Acquisitions of
businesses and investments, net of cash, cash equivalents and
restricted cash acquired
|
—
|
|
|
(12)
|
|
Purchases of property
and equipment
|
(102)
|
|
|
(86)
|
|
Loan to project
developer
|
(1)
|
|
|
(18)
|
|
Loan repayment from
project developer
|
—
|
|
|
17
|
|
Proceeds from sale of
business, net of cash divested
|
—
|
|
|
41
|
|
Net cash used in
investing activities from continuing operations
|
(103)
|
|
|
(58)
|
|
Financing
activities
|
|
|
|
Proceeds from
long-term debt
|
—
|
|
|
209
|
|
Payment of long-term
debt
|
(3)
|
|
|
(156)
|
|
Dividends paid to
common stockholders
|
(172)
|
|
|
(207)
|
|
Debt financing costs
paid
|
(1)
|
|
|
(3)
|
|
Net cash used in
financing activities from continuing operations
|
(176)
|
|
|
(157)
|
|
Net change in cash,
cash equivalents and restricted cash from continuing
operations
|
(20)
|
|
|
30
|
|
MACQUARIE
INFRASTRUCTURE CORPORATION
|
|
CONSOLIDATED
CONDENSED STATEMENTS OF CASH
FLOWS – (continued)
|
(Unaudited)
|
($ in
Millions)
|
|
|
Six Months Ended
June 30,
|
|
2019
|
|
2018
|
Cash flows (used
in) provided by discontinued operations:
|
|
|
|
Net cash (used in)
provided by operating activities
|
$
|
(11)
|
|
|
$
|
21
|
|
Net cash used in
investing activities
|
(16)
|
|
|
(24)
|
|
Net cash provided by
(used in) financing activities
|
27
|
|
|
(14)
|
|
Net cash used in
discontinued operations
|
—
|
|
|
(17)
|
|
|
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
—
|
|
|
(1)
|
|
|
|
|
|
Net change in cash,
cash equivalents and restricted cash
|
(20)
|
|
|
12
|
|
Cash, cash
equivalents and restricted cash, beginning of period
|
629
|
|
|
72
|
|
Cash, cash
equivalents and restricted cash, end of period
|
$
|
609
|
|
|
$
|
84
|
|
Supplemental
disclosures of cash flow information from continuing
operations:
|
|
|
|
Non-cash investing
and financing activities:
|
|
|
|
Accrued purchases of
property and equipment
|
$
|
13
|
|
|
$
|
15
|
|
Issuance of shares to
Manager
|
15
|
|
|
22
|
|
Issuance of shares to
Independent Directors
|
1
|
|
|
1
|
|
Taxes paid,
net
|
6
|
|
|
8
|
|
Interest paid,
net
|
67
|
|
|
51
|
|
|
The following table
provides a reconciliation of cash, cash equivalents and restricted
cash from both continuing and discontinued operations reported
within the consolidated condensed balance sheets that is presented
in the consolidated condensed statements of cash flows:
|
|
As of June
30,
|
|
2019
|
|
2018
|
Cash and cash
equivalents
|
$
|
573
|
|
|
$
|
53
|
|
Restricted
cash – current
|
17
|
|
|
11
|
|
Cash, cash
equivalents and restricted cash included in assets held for
sale(1)
|
19
|
|
|
20
|
|
Total of cash, cash
equivalents and restricted cash shown in the consolidated condensed
statement of cash flows
|
$
|
609
|
|
|
$
|
84
|
|
|
___________
|
(1)
|
Represents cash, cash
equivalents and restricted cash related to businesses classified as
held for sale. See Note 3, "Discontinued Operations and
Dispositions", in our Notes to Consolidated Condensed Financial
Statements in Part 1 of Form 10-Q for the quarter ended
June 30, 2019, for further discussion.
|
|
|
MACQUARIE
INFRASTRUCTURE CORPORATION
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS – MD&A
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
June 30,
|
|
Change
Favorable/
(Unfavorable)
|
|
Six Months
Ended
June 30,
|
|
Change
Favorable/
(Unfavorable)
|
|
2019
|
|
2018
|
|
$
|
|
%
|
|
2019
|
|
2018
|
|
$
|
|
%
|
|
($ In Millions,
Except Share and Per Share Data) (Unaudited)
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service
revenue
|
$
|
355
|
|
|
$
|
376
|
|
|
(21)
|
|
|
(6)
|
|
|
$
|
773
|
|
|
$
|
779
|
|
|
(6)
|
|
|
(1)
|
|
Product
revenue
|
61
|
|
|
60
|
|
|
1
|
|
|
2
|
|
|
125
|
|
|
124
|
|
|
1
|
|
|
1
|
|
Total
revenue
|
416
|
|
|
436
|
|
|
(20)
|
|
|
(5)
|
|
|
898
|
|
|
903
|
|
|
(5)
|
|
|
(1)
|
|
Costs and
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
services
|
162
|
|
|
180
|
|
|
18
|
|
|
10
|
|
|
330
|
|
|
367
|
|
|
37
|
|
|
10
|
|
Cost of product
sales
|
45
|
|
|
41
|
|
|
(4)
|
|
|
(10)
|
|
|
85
|
|
|
89
|
|
|
4
|
|
|
4
|
|
Selling, general and
administrative
|
84
|
|
|
82
|
|
|
(2)
|
|
|
(2)
|
|
|
164
|
|
|
162
|
|
|
(2)
|
|
|
(1)
|
|
Fees to
Manager-related party
|
7
|
|
|
11
|
|
|
4
|
|
|
36
|
|
|
15
|
|
|
24
|
|
|
9
|
|
|
38
|
|
Depreciation
|
48
|
|
|
47
|
|
|
(1)
|
|
|
(2)
|
|
|
96
|
|
|
94
|
|
|
(2)
|
|
|
(2)
|
|
Amortization of
intangibles
|
15
|
|
|
17
|
|
|
2
|
|
|
12
|
|
|
30
|
|
|
33
|
|
|
3
|
|
|
9
|
|
Total operating
expenses
|
361
|
|
|
378
|
|
|
17
|
|
|
4
|
|
|
720
|
|
|
769
|
|
|
49
|
|
|
6
|
|
Operating
income
|
55
|
|
|
58
|
|
|
(3)
|
|
|
(5)
|
|
|
178
|
|
|
134
|
|
|
44
|
|
|
33
|
|
Other income
(expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
1
|
|
|
—
|
|
|
1
|
|
|
NM
|
|
|
4
|
|
|
—
|
|
|
4
|
|
|
NM
|
|
Interest
expense(1)
|
(46)
|
|
|
(25)
|
|
|
(21)
|
|
|
(84)
|
|
|
(88)
|
|
|
(43)
|
|
|
(45)
|
|
|
(105)
|
|
Other (expense)
income, net
|
(2)
|
|
|
6
|
|
|
(8)
|
|
|
(133)
|
|
|
2
|
|
|
6
|
|
|
(4)
|
|
|
(67)
|
|
Net income from
continuing operations before income taxes
|
8
|
|
|
39
|
|
|
(31)
|
|
|
(79)
|
|
|
96
|
|
|
97
|
|
|
(1)
|
|
|
(1)
|
|
Provision for income
taxes
|
(2)
|
|
|
(12)
|
|
|
10
|
|
|
83
|
|
|
(26)
|
|
|
(30)
|
|
|
4
|
|
|
13
|
|
Net income from
continuing operations
|
$
|
6
|
|
|
$
|
27
|
|
|
(21)
|
|
|
(78)
|
|
|
$
|
70
|
|
|
$
|
67
|
|
|
3
|
|
|
4
|
|
Discontinued
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income from
discontinued operations before income taxes
|
$
|
5
|
|
|
$
|
9
|
|
|
(4)
|
|
|
(44)
|
|
|
$
|
8
|
|
|
$
|
15
|
|
|
(7)
|
|
|
(47)
|
|
(Provision) benefit
for income taxes
|
(2)
|
|
|
—
|
|
|
(2)
|
|
|
NM
|
|
|
—
|
|
|
1
|
|
|
(1)
|
|
|
(100)
|
|
Net income from
discontinued operations
|
$
|
3
|
|
|
$
|
9
|
|
|
(6)
|
|
|
(67)
|
|
|
$
|
8
|
|
|
$
|
16
|
|
|
(8)
|
|
|
(50)
|
|
Net
income
|
$
|
9
|
|
|
$
|
36
|
|
|
(27)
|
|
|
(75)
|
|
|
$
|
78
|
|
|
$
|
83
|
|
|
(5)
|
|
|
(6)
|
|
Net income from
continuing operations
|
$
|
6
|
|
|
$
|
27
|
|
|
(21)
|
|
|
(78)
|
|
|
$
|
70
|
|
|
$
|
67
|
|
|
3
|
|
|
4
|
|
Net income from
continuing operations attributable to MIC
|
$
|
6
|
|
|
$
|
27
|
|
|
(21)
|
|
|
(78)
|
|
|
$
|
70
|
|
|
$
|
67
|
|
|
3
|
|
|
4
|
|
Net income from
discontinued operations
|
$
|
3
|
|
|
$
|
9
|
|
|
(6)
|
|
|
(67)
|
|
|
$
|
8
|
|
|
$
|
16
|
|
|
(8)
|
|
|
(50)
|
|
Less: net loss
attributable to noncontrolling interests
|
(2)
|
|
|
(2)
|
|
|
—
|
|
|
—
|
|
|
(3)
|
|
|
(32)
|
|
|
(29)
|
|
|
(91)
|
|
Net income from
discontinued operations attributable to MIC
|
$
|
5
|
|
|
$
|
11
|
|
|
(6)
|
|
|
(55)
|
|
|
$
|
11
|
|
|
$
|
48
|
|
|
(37)
|
|
|
(77)
|
|
Net income
attributable to MIC
|
$
|
11
|
|
|
$
|
38
|
|
|
(27)
|
|
|
(71)
|
|
|
$
|
81
|
|
|
$
|
115
|
|
|
(34)
|
|
|
(30)
|
|
Basic income per
share from continuing operations attributable to MIC
|
$
|
0.07
|
|
|
$
|
0.32
|
|
|
(0.25)
|
|
|
(78)
|
|
|
$
|
0.81
|
|
|
$
|
0.79
|
|
|
0.02
|
|
|
3
|
|
Basic income per
share from discontinued operations attributable to MIC
|
0.06
|
|
|
0.13
|
|
|
(0.07)
|
|
|
(54)
|
|
|
0.13
|
|
|
0.57
|
|
|
(0.44)
|
|
|
(77)
|
|
Basic income per
share attributable to MIC
|
$
|
0.13
|
|
|
$
|
0.45
|
|
|
(0.32)
|
|
|
(71)
|
|
|
$
|
0.94
|
|
|
$
|
1.36
|
|
|
(0.42)
|
|
|
(31)
|
|
Weighted average
number of shares outstanding: basic
|
86,073,372
|
|
|
85,082,209
|
|
|
991,163
|
|
|
1
|
|
|
85,973,308
|
|
|
84,952,551
|
|
|
1,020,757
|
|
|
1
|
|
___________
|
|
|
NM — Not
meaningful
|
|
|
(1)
|
Interest expense
includes losses on derivative instruments of $8 million and $12
million for the quarter and six months ended June 30, 2019,
respectively. For the quarter and six months ended June 30,
2018, interest expense includes gains on derivative instruments of
$4 million and $14 million, respectively.
|
MACQUARIE
INFRASTRUCTURE CORPORATION
|
|
RECONCILIATION OF
CONSOLIDATED NET INCOME TO EBITDA EXCLUDING
|
NON-CASH ITEMS AND
A RECONCILIATION FROM CASH PROVIDED BY OPERATING ACTIVITIES
TO
|
FREE CASH
FLOW
|
|
|
Quarter Ended
June 30,
|
|
Change
Favorable/
(Unfavorable)
|
|
Six Months
Ended
June 30,
|
|
Change
Favorable/
(Unfavorable)
|
|
2019
|
|
2018
|
|
$
|
|
%
|
|
2019
|
|
2018
|
|
$
|
|
%
|
|
($ In
Millions) (Unaudited)
|
|
|
Net income from
continuing operations
|
$
|
6
|
|
|
$
|
27
|
|
|
|
|
|
|
70
|
|
|
67
|
|
|
|
|
|
Interest expense,
net(1)
|
45
|
|
|
25
|
|
|
|
|
|
|
84
|
|
|
43
|
|
|
|
|
|
Provision for income
taxes
|
2
|
|
|
12
|
|
|
|
|
|
|
26
|
|
|
30
|
|
|
|
|
|
Depreciation
|
48
|
|
|
47
|
|
|
|
|
|
|
96
|
|
|
94
|
|
|
|
|
|
Amortization of
intangibles
|
15
|
|
|
17
|
|
|
|
|
|
|
30
|
|
|
33
|
|
|
|
|
|
Fees to
Manager-related party
|
7
|
|
|
11
|
|
|
|
|
|
|
15
|
|
|
24
|
|
|
|
|
|
Other non-cash
expense, net(2)
|
9
|
|
|
2
|
|
|
|
|
|
|
13
|
|
|
11
|
|
|
|
|
|
EBITDA excluding
non-cash items-continuing operations
|
$
|
132
|
|
|
$
|
141
|
|
|
(9)
|
|
|
(6)
|
|
|
$
|
334
|
|
|
$
|
302
|
|
|
32
|
|
|
11
|
|
EBITDA excluding
non-cash items-continuing operations
|
$
|
132
|
|
|
$
|
141
|
|
|
|
|
|
|
$
|
334
|
|
|
$
|
302
|
|
|
|
|
|
Interest expense,
net(1)
|
(45)
|
|
|
(25)
|
|
|
|
|
|
|
(84)
|
|
|
(43)
|
|
|
|
|
|
Adjustments to
derivative instruments recorded in interest
expense(1)
|
11
|
|
|
(2)
|
|
|
|
|
|
|
18
|
|
|
(11)
|
|
|
|
|
|
Amortization of debt
financing costs(1)
|
2
|
|
|
1
|
|
|
|
|
|
|
5
|
|
|
4
|
|
|
|
|
|
Amortization of debt
discount(1)
|
1
|
|
|
1
|
|
|
|
|
|
|
2
|
|
|
2
|
|
|
|
|
|
Provision for current
income taxes
|
(2)
|
|
|
(4)
|
|
|
|
|
|
|
(9)
|
|
|
(8)
|
|
|
|
|
|
Changes in working
capital
|
9
|
|
|
3
|
|
|
|
|
|
|
(7)
|
|
|
(1)
|
|
|
|
|
|
Cash provided by
operating activities-continuing operations
|
108
|
|
|
115
|
|
|
|
|
|
|
259
|
|
|
245
|
|
|
|
|
|
Changes in working
capital
|
(9)
|
|
|
(3)
|
|
|
|
|
|
|
7
|
|
|
1
|
|
|
|
|
|
Maintenance capital
expenditures
|
(13)
|
|
|
(8)
|
|
|
|
|
|
|
(23)
|
|
|
(18)
|
|
|
|
|
|
Free cash
flow-continuing operations
|
86
|
|
|
104
|
|
|
(18)
|
|
|
(17)
|
|
|
243
|
|
|
228
|
|
|
15
|
|
|
7
|
|
Free cash
flow-discontinued operations
|
7
|
|
|
20
|
|
|
(13)
|
|
|
(65)
|
|
|
14
|
|
|
33
|
|
|
(19)
|
|
|
(58)
|
|
Total Free Cash
Flow
|
$
|
93
|
|
|
$
|
124
|
|
|
(31)
|
|
|
(25)
|
|
|
$
|
257
|
|
|
$
|
261
|
|
|
(4)
|
|
|
(2)
|
|
___________
|
|
|
(1)
|
Interest expense,
net, includes adjustments to derivative instruments, non-cash
amortization of deferred financing fees and non-cash amortization
of debt discount related to the 2.00% Convertible Senior Notes due
October 2023.
|
(2)
|
Other non-cash
expense, net, primarily includes pension expense of $2 million and
$4 million for the quarter and six month periods ended
June 30, 2019 and 2018, respectively, unrealized gains
(losses) on commodity hedges, expenses related to a long-term
incentive compensation plan for senior management of the operating
businesses implemented in 2019 and non-cash gains (losses)
related to the disposal of assets. Pension expense primarily
consists of interest cost, expected return on plan assets and
amortization of actuarial and performance gains and losses. See
"Earnings Before Interest, Taxes, Depreciation and Amortization
(EBITDA) excluding non-cash items and Free Cash
Flow" above for further discussion.
|
MACQUARIE
INFRASTRUCTURE CORPORATION
|
|
RECONCILIATION OF
SEGMENT NET INCOME (LOSS) TO EBITDA
|
EXCLUDING NON-CASH
ITEMS AND A RECONCILIATION FROM CASH PROVIDED
|
BY (USED IN)
OPERATING ACTIVITIES TO FREE CASH FLOW
|
|
IMTT
|
|
|
Quarter Ended
June 30,
|
|
Change
Favorable/
(Unfavorable)
|
|
Six Months
Ended
June 30,
|
|
Change
Favorable/
(Unfavorable)
|
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
|
$
|
|
$
|
|
$
|
|
%
|
|
$
|
|
$
|
|
$
|
|
%
|
|
($ In Millions)
(Unaudited)
|
Revenue
|
119
|
|
|
129
|
|
|
(10)
|
|
|
(8)
|
|
|
280
|
|
|
268
|
|
|
12
|
|
|
4
|
|
Cost of
services
|
49
|
|
|
50
|
|
|
1
|
|
|
2
|
|
|
99
|
|
|
104
|
|
|
5
|
|
|
5
|
|
Selling, general and
administrative expenses
|
9
|
|
|
8
|
|
|
(1)
|
|
|
(13)
|
|
|
17
|
|
|
17
|
|
|
—
|
|
|
—
|
|
Depreciation and
amortization
|
33
|
|
|
33
|
|
|
—
|
|
|
—
|
|
|
66
|
|
|
66
|
|
|
—
|
|
|
—
|
|
Operating
income
|
28
|
|
|
38
|
|
|
(10)
|
|
|
(26)
|
|
|
98
|
|
|
81
|
|
|
17
|
|
|
21
|
|
Interest expense,
net(1)
|
(15)
|
|
|
(11)
|
|
|
(4)
|
|
|
(36)
|
|
|
(28)
|
|
|
(19)
|
|
|
(9)
|
|
|
(47)
|
|
Provision for income
taxes
|
(4)
|
|
|
(8)
|
|
|
4
|
|
|
50
|
|
|
(20)
|
|
|
(18)
|
|
|
(2)
|
|
|
(11)
|
|
Net income
|
9
|
|
|
19
|
|
|
(10)
|
|
|
(53)
|
|
|
50
|
|
|
44
|
|
|
6
|
|
|
14
|
|
Reconciliation
of net income to EBITDA
excluding non-cash items and a reconciliation
of cash provided by operating activities to Free
Cash Flow:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
9
|
|
|
19
|
|
|
|
|
|
|
50
|
|
|
44
|
|
|
|
|
|
Interest expense,
net(1)
|
15
|
|
|
11
|
|
|
|
|
|
|
28
|
|
|
19
|
|
|
|
|
|
Provision for income
taxes
|
4
|
|
|
8
|
|
|
|
|
|
|
20
|
|
|
18
|
|
|
|
|
|
Depreciation and
amortization
|
33
|
|
|
33
|
|
|
|
|
|
|
66
|
|
|
66
|
|
|
|
|
|
Other non-cash
expense, net(2)
|
3
|
|
|
3
|
|
|
|
|
|
|
4
|
|
|
5
|
|
|
|
|
|
EBITDA excluding
non-cash items
|
64
|
|
|
74
|
|
|
(10)
|
|
|
(14)
|
|
|
168
|
|
|
152
|
|
|
16
|
|
|
11
|
|
EBITDA excluding
non-cash items
|
64
|
|
|
74
|
|
|
|
|
|
|
168
|
|
|
152
|
|
|
|
|
|
Interest expense,
net(1)
|
(15)
|
|
|
(11)
|
|
|
|
|
|
|
(28)
|
|
|
(19)
|
|
|
|
|
|
Adjustments to
derivative instruments recorded in
interest expense(1)
|
5
|
|
|
(1)
|
|
|
|
|
|
|
7
|
|
|
(5)
|
|
|
|
|
|
Amortization
of debt financing costs(1)
|
—
|
|
|
—
|
|
|
|
|
|
|
1
|
|
|
—
|
|
|
|
|
|
Provision for current
income taxes
|
(1)
|
|
|
(4)
|
|
|
|
|
|
|
(12)
|
|
|
(8)
|
|
|
|
|
|
Changes in working
capital
|
2
|
|
|
6
|
|
|
|
|
|
|
10
|
|
|
11
|
|
|
|
|
|
Cash provided by
operating activities
|
55
|
|
|
64
|
|
|
|
|
|
|
146
|
|
|
131
|
|
|
|
|
|
Changes in working
capital
|
(2)
|
|
|
(6)
|
|
|
|
|
|
|
(10)
|
|
|
(11)
|
|
|
|
|
|
Maintenance capital
expenditures
|
(8)
|
|
|
(5)
|
|
|
|
|
|
|
(14)
|
|
|
(12)
|
|
|
|
|
|
Free cash
flow
|
45
|
|
|
53
|
|
|
(8)
|
|
|
(15)
|
|
|
122
|
|
|
108
|
|
|
14
|
|
|
13
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Interest expense,
net, includes adjustments to derivative instruments and non-cash
amortization of deferred financing fees.
|
(2)
|
Other non-cash
expenses, net, primarily includes pension expense of $2 million and
$4 million for the quarter and six month periods ended
June 30, 2019 and 2018, respectively, and expenses related to
a long-term incentive compensation plan implemented in 2019.
Pension expense primarily consists of interest cost, expected
return on plan assets and amortization of actuarial and performance
gains and losses. See "Earnings Before Interest, Taxes,
Depreciation and Amortization (EBITDA) excluding non-cash items and
Free Cash Flow" above for further discussion.
|
Atlantic
Aviation
|
|
|
Quarter Ended
June 30,
|
|
Change
Favorable/
(Unfavorable)
|
|
Six Months
Ended
June 30,
|
|
Change
Favorable/
(Unfavorable)
|
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
|
$
|
|
$
|
|
$
|
|
%
|
|
$
|
|
$
|
|
$
|
|
%
|
|
($ In Millions)
(Unaudited)
|
Revenue
|
236
|
|
|
233
|
|
|
3
|
|
|
1
|
|
|
494
|
|
|
480
|
|
|
14
|
|
|
3
|
|
Cost of services
(exclusive of depreciation and
amortization shown separately below)
|
113
|
|
|
116
|
|
|
3
|
|
|
3
|
|
|
231
|
|
|
233
|
|
|
2
|
|
|
1
|
|
Gross
margin
|
123
|
|
|
117
|
|
|
6
|
|
|
5
|
|
|
263
|
|
|
247
|
|
|
16
|
|
|
6
|
|
Selling, general and
administrative expenses
|
62
|
|
|
57
|
|
|
(5)
|
|
|
(9)
|
|
|
123
|
|
|
117
|
|
|
(6)
|
|
|
(5)
|
|
Depreciation and
amortization
|
26
|
|
|
27
|
|
|
1
|
|
|
4
|
|
|
52
|
|
|
52
|
|
|
—
|
|
|
—
|
|
Operating
income
|
35
|
|
|
33
|
|
|
2
|
|
|
6
|
|
|
88
|
|
|
78
|
|
|
10
|
|
|
13
|
|
Interest expense,
net(1)
|
(22)
|
|
|
(4)
|
|
|
(18)
|
|
|
NM
|
|
|
(41)
|
|
|
(4)
|
|
|
(37)
|
|
|
NM
|
|
Other expense,
net
|
—
|
|
|
(1)
|
|
|
1
|
|
|
100
|
|
|
—
|
|
|
(1)
|
|
|
1
|
|
|
100
|
|
Provision for income
taxes
|
(4)
|
|
|
(8)
|
|
|
4
|
|
|
50
|
|
|
(13)
|
|
|
(20)
|
|
|
7
|
|
|
35
|
|
Net income
|
9
|
|
|
20
|
|
|
(11)
|
|
|
(55)
|
|
|
34
|
|
|
53
|
|
|
(19)
|
|
|
(36)
|
|
Reconciliation
of net income to EBITDA
excluding non-cash items and a reconciliation
of cash provided by operating activities to Free
Cash Flow:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
9
|
|
|
20
|
|
|
|
|
|
|
34
|
|
|
53
|
|
|
|
|
|
Interest expense,
net(1)
|
22
|
|
|
4
|
|
|
|
|
|
|
41
|
|
|
4
|
|
|
|
|
|
Provision for income
taxes
|
4
|
|
|
8
|
|
|
|
|
|
|
13
|
|
|
20
|
|
|
|
|
|
Depreciation and
amortization
|
26
|
|
|
27
|
|
|
|
|
|
|
52
|
|
|
52
|
|
|
|
|
|
Other non-cash
expense, net(2)
|
1
|
|
|
1
|
|
|
|
|
|
|
1
|
|
|
1
|
|
|
|
|
|
EBITDA excluding
non-cash items
|
62
|
|
|
60
|
|
|
2
|
|
|
3
|
|
|
141
|
|
|
130
|
|
|
11
|
|
|
8
|
|
EBITDA excluding
non-cash items
|
62
|
|
|
60
|
|
|
|
|
|
|
141
|
|
|
130
|
|
|
|
|
|
Interest expense,
net(1)
|
(22)
|
|
|
(4)
|
|
|
|
|
|
|
(41)
|
|
|
(4)
|
|
|
|
|
|
Convertible senior
notes interest(3)
|
—
|
|
|
(2)
|
|
|
|
|
|
|
—
|
|
|
(4)
|
|
|
|
|
|
Adjustments to
derivative instruments recorded
in interest expense(1)
|
6
|
|
|
(1)
|
|
|
|
|
|
|
10
|
|
|
(5)
|
|
|
|
|
|
Amortization of debt
financing costs(1)
|
1
|
|
|
—
|
|
|
|
|
|
|
2
|
|
|
1
|
|
|
|
|
|
Provision for current
income taxes
|
(3)
|
|
|
(7)
|
|
|
|
|
|
|
(10)
|
|
|
(14)
|
|
|
|
|
|
Changes in working
capital
|
6
|
|
|
4
|
|
|
|
|
|
|
2
|
|
|
10
|
|
|
|
|
|
Cash provided by
operating activities
|
50
|
|
|
50
|
|
|
|
|
|
|
104
|
|
|
114
|
|
|
|
|
|
Changes in working
capital
|
(6)
|
|
|
(4)
|
|
|
|
|
|
|
(2)
|
|
|
(10)
|
|
|
|
|
|
Maintenance capital
expenditures
|
(3)
|
|
|
(2)
|
|
|
|
|
|
|
(5)
|
|
|
(3)
|
|
|
|
|
|
Free cash
flow
|
41
|
|
|
44
|
|
|
(3)
|
|
|
(7)
|
|
|
97
|
|
|
101
|
|
|
(4)
|
|
|
(4)
|
|
___________
|
|
|
NM — Not
meaningful
|
|
|
(1)
|
Interest expense,
net, includes adjustments to derivative instruments and non-cash
amortization of deferred financing fees.
|
(2)
|
Other non-cash
expense, net, primarily includes expenses related to a long-term
incentive compensation plan implemented in 2019 and non-cash gains
(losses) related to the disposal of assets. See "Earnings Before
Interest, Taxes, Depreciation and Amortization (EBITDA) excluding
non-cash items and Free Cash Flow" above for further
discussion.
|
(3)
|
Represents the cash
interest expense related to the holding company level 2.00%
Convertible Senior Notes due October 2023 that was reclassified to
Atlantic Aviation through December 6, 2018, the date of Atlantic
Aviation's refinancing. The proceeds from this note issuance in
October 2016 were used principally to reduce the drawn balance on
Atlantic Aviation's revolving credit facility. Cash interest
expense on the note issuance is recorded in Corporate and Other
subsequent to December 6, 2018.
|
MIC
Hawaii
|
|
|
Quarter Ended
June 30,
|
|
Change
Favorable/
(Unfavorable)
|
|
Six Months
Ended
June 30,
|
|
Change
Favorable/
(Unfavorable)
|
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
|
$
|
|
$
|
|
$
|
|
%
|
|
$
|
|
$
|
|
$
|
|
%
|
|
($ In Millions)
(Unaudited)
|
Product
revenue
|
61
|
|
|
60
|
|
|
1
|
|
|
2
|
|
|
125
|
|
|
124
|
|
|
1
|
|
1
|
|
Service
revenue
|
—
|
|
|
15
|
|
|
(15)
|
|
|
(100)
|
|
|
—
|
|
|
33
|
|
|
(33)
|
|
|
(100)
|
|
Total
revenue
|
61
|
|
|
75
|
|
|
(14)
|
|
|
(19)
|
|
|
125
|
|
|
157
|
|
|
(32)
|
|
|
(20)
|
|
Cost of product sales
(exclusive of depreciation and
amortization shown separately below)
|
45
|
|
|
41
|
|
|
(4)
|
|
|
(10)
|
|
|
85
|
|
|
89
|
|
|
4
|
|
|
4
|
|
Cost of services
(exclusive of depreciation and
amortization shown separately below)
|
—
|
|
|
14
|
|
|
14
|
|
|
100
|
|
|
—
|
|
|
30
|
|
|
30
|
|
|
100
|
|
Cost of
revenue – total
|
45
|
|
|
55
|
|
|
10
|
|
|
18
|
|
|
85
|
|
|
119
|
|
|
34
|
|
|
29
|
|
Gross
margin
|
16
|
|
|
20
|
|
|
(4)
|
|
|
(20)
|
|
|
40
|
|
|
38
|
|
|
2
|
|
|
5
|
|
Selling, general and
administrative expenses
|
5
|
|
|
8
|
|
|
3
|
|
|
38
|
|
|
11
|
|
|
15
|
|
|
4
|
|
|
27
|
|
Depreciation and
amortization
|
4
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
9
|
|
|
1
|
|
|
11
|
|
Operating
income
|
7
|
|
|
8
|
|
|
(1)
|
|
|
(13)
|
|
|
21
|
|
|
14
|
|
|
7
|
|
|
50
|
|
Interest expense,
net(1)
|
(2)
|
|
|
(2)
|
|
|
—
|
|
|
—
|
|
|
(5)
|
|
|
(3)
|
|
|
(2)
|
|
|
(67)
|
|
Other expense,
net
|
(2)
|
|
|
—
|
|
|
(2)
|
|
|
NM
|
|
|
(2)
|
|
|
(1)
|
|
|
(1)
|
|
|
(100)
|
|
Provision for income
taxes
|
(1)
|
|
|
(2)
|
|
|
1
|
|
|
50
|
|
|
(4)
|
|
|
(3)
|
|
|
(1)
|
|
|
(33)
|
|
Net income
|
2
|
|
|
4
|
|
|
(2)
|
|
|
(50)
|
|
|
10
|
|
|
7
|
|
|
3
|
|
|
43
|
|
Reconciliation
of net income to EBITDA
excluding non-cash items and a reconciliation
of cash provided by operating activities to Free
Cash Flow:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
2
|
|
|
4
|
|
|
|
|
|
|
10
|
|
|
7
|
|
|
|
|
|
Interest expense,
net(1)
|
2
|
|
|
2
|
|
|
|
|
|
|
5
|
|
|
3
|
|
|
|
|
|
Provision for income
taxes
|
1
|
|
|
2
|
|
|
|
|
|
|
4
|
|
|
3
|
|
|
|
|
|
Depreciation and
amortization
|
4
|
|
|
4
|
|
|
|
|
|
|
8
|
|
|
9
|
|
|
|
|
|
Other non-cash
expense (income), net(2)
|
5
|
|
|
(1)
|
|
|
|
|
|
|
7
|
|
|
5
|
|
|
|
|
|
EBITDA excluding
non-cash items
|
14
|
|
|
11
|
|
|
3
|
|
|
27
|
|
|
34
|
|
|
27
|
|
|
7
|
|
|
26
|
|
EBITDA excluding
non-cash items
|
14
|
|
|
11
|
|
|
|
|
|
|
34
|
|
|
27
|
|
|
|
|
|
Interest expense,
net(1)
|
(2)
|
|
|
(2)
|
|
|
|
|
|
|
(5)
|
|
|
(3)
|
|
|
|
|
|
Adjustments to
derivative instruments recorded in interest
expense(1)
|
—
|
|
|
—
|
|
|
|
|
|
|
1
|
|
|
(1)
|
|
|
|
|
|
Provision for current
income taxes
|
—
|
|
|
—
|
|
|
|
|
|
|
(3)
|
|
|
(1)
|
|
|
|
|
|
Changes in working
capital
|
3
|
|
|
—
|
|
|
|
|
|
|
1
|
|
|
(6)
|
|
|
|
|
|
Cash provided by
operating activities
|
15
|
|
|
9
|
|
|
|
|
|
|
28
|
|
|
16
|
|
|
|
|
|
Changes in working
capital
|
(3)
|
|
|
—
|
|
|
|
|
|
|
(1)
|
|
|
6
|
|
|
|
|
|
Maintenance capital
expenditures
|
(2)
|
|
|
(1)
|
|
|
|
|
|
|
(4)
|
|
|
(3)
|
|
|
|
|
|
Free cash
flow
|
10
|
|
|
8
|
|
|
2
|
|
|
25
|
|
|
23
|
|
|
19
|
|
|
4
|
|
|
21
|
|
___________
|
|
|
NM — Not
meaningful
|
|
|
(1)
|
Interest expense,
net, includes adjustments to derivative instruments related to
interest rate swaps and non-cash amortization of deferred financing
fees.
|
(2)
|
Other non-cash
expense (income), net, primarily includes non-cash adjustments
related to unrealized gains (losses) on commodity hedges, expenses
related to a long-term incentive compensation plan implemented in
2019 and non-cash gains (losses) related to the disposal of assets.
See "Earnings Before Interest, Taxes, Depreciation and
Amortization (EBITDA) excluding non-cash items and Free Cash
Flow" above for further discussion.
|
Corporate and
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
June 30,
|
|
Change
Favorable/
(Unfavorable)
|
|
Six Months
Ended June 30,
|
|
Change
Favorable/(Unfavorable)
|
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
|
$
|
|
$
|
|
$
|
|
%
|
|
$
|
|
$
|
|
$
|
|
%
|
|
($ In
Millions) (Unaudited)
|
Selling, general and
administrative expenses
|
8
|
|
|
10
|
|
|
2
|
|
|
20
|
|
|
14
|
|
|
15
|
|
|
1
|
|
|
7
|
Fees to
Manager-related party
|
7
|
|
|
11
|
|
|
4
|
|
|
36
|
|
|
15
|
|
|
24
|
|
|
9
|
|
|
38
|
Operating
loss
|
(15)
|
|
|
(21)
|
|
|
6
|
|
|
29
|
|
|
(29)
|
|
|
(39)
|
|
|
10
|
|
|
26
|
Interest expense,
net(1)
|
(6)
|
|
|
(8)
|
|
|
2
|
|
|
25
|
|
|
(10)
|
|
|
(17)
|
|
|
7
|
|
|
41
|
Other income,
net
|
—
|
|
|
7
|
|
|
(7)
|
|
|
(100)
|
|
|
4
|
|
|
8
|
|
|
(4)
|
|
|
(50)
|
Benefit for income
taxes
|
7
|
|
|
6
|
|
|
1
|
|
|
17
|
|
|
11
|
|
|
11
|
|
|
—
|
|
|
—
|
Net loss
|
(14)
|
|
|
(16)
|
|
|
2
|
|
|
13
|
|
|
(24)
|
|
|
(37)
|
|
|
13
|
|
|
35
|
Reconciliation
of net loss to EBITDA excluding
non-cash items and a reconciliation of cash
used in operating activities to Free Cash
Flow:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
(14)
|
|
|
(16)
|
|
|
|
|
|
|
(24)
|
|
|
(37)
|
|
|
|
|
|
Interest expense,
net(1)
|
6
|
|
|
8
|
|
|
|
|
|
|
10
|
|
|
17
|
|
|
|
|
|
Benefit for income
taxes
|
(7)
|
|
|
(6)
|
|
|
|
|
|
|
(11)
|
|
|
(11)
|
|
|
|
|
|
Fees to
Manager-related party
|
7
|
|
|
11
|
|
|
|
|
|
|
15
|
|
|
24
|
|
|
|
|
|
Other non-cash
(income) expense, net
|
—
|
|
|
(1)
|
|
|
|
|
|
|
1
|
|
|
—
|
|
|
|
|
|
EBITDA excluding
non-cash items
|
(8)
|
|
|
(4)
|
|
|
(4)
|
|
|
(100)
|
|
|
(9)
|
|
|
(7)
|
|
|
(2)
|
|
|
(29)
|
EBITDA excluding
non-cash items
|
(8)
|
|
|
(4)
|
|
|
|
|
|
|
(9)
|
|
|
(7)
|
|
|
|
|
|
Interest expense,
net(1)
|
(6)
|
|
|
(8)
|
|
|
|
|
|
|
(10)
|
|
|
(17)
|
|
|
|
|
|
Convertible senior
notes interest(2)
|
—
|
|
|
2
|
|
|
|
|
|
|
—
|
|
|
4
|
|
|
|
|
|
Amortization of debt
financing costs(1)
|
1
|
|
|
1
|
|
|
|
|
|
|
2
|
|
|
3
|
|
|
|
|
|
Amortization of debt
discount(1)
|
1
|
|
|
1
|
|
|
|
|
|
|
2
|
|
|
2
|
|
|
|
|
|
Benefit for current
income taxes
|
2
|
|
|
7
|
|
|
|
|
|
|
16
|
|
|
15
|
|
|
|
|
|
Changes in working
capital
|
(2)
|
|
|
(7)
|
|
|
|
|
|
|
(20)
|
|
|
(16)
|
|
|
|
|
|
Cash used in
operating activities
|
(12)
|
|
|
(8)
|
|
|
|
|
|
|
(19)
|
|
|
(16)
|
|
|
|
|
|
Changes in working
capital
|
2
|
|
|
7
|
|
|
|
|
|
|
20
|
|
|
16
|
|
|
|
|
|
Free cash
flow
|
(10)
|
|
|
(1)
|
|
|
(9)
|
|
|
NM
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
NM
|
___________
|
|
|
NM — Not
meaningful
|
|
|
(1)
|
Interest expense,
net, included non-cash amortization of deferred financing fees and
non-cash amortization of debt discount related to the 2.00%
Convertible Senior Notes due October 2023.
|
(2)
|
Represents the cash
interest expense related to the 2.00% Convertible Senior Notes due
October 2023 reclassified to Atlantic Aviation through
December 6, 2018, the date of Atlantic Aviation's refinancing. The
proceeds from this note issuance in October 2016 were used
principally to reduce the drawn balance on Atlantic Aviation's
revolving credit facility. Cash interest expense on this note
issuance is included in Corporate and Other subsequent to December
6, 2018.
|
MACQUARIE
INFRASTRUCTURE CORPORATION
|
|
RECONCILIATION OF
NET INCOME (LOSS) TO EBITDA EXCLUDING
|
NON-CASH ITEMS AND
A RECONCILIATION FROM CASH PROVIDED BY (USED IN)
OPERATING
|
ACTIVITIES TO FREE
CASH FLOW
|
|
|
|
For the Quarter
Ended June 30, 2019
|
|
IMTT
|
|
Atlantic
Aviation
|
|
MIC
Hawaii
|
|
Corporate
and
Other
|
|
Total
Continuing
Operations
|
|
Discontinued
Operations
|
|
Total
|
|
($ in Millions)
(Unaudited)
|
Net income
(loss)
|
9
|
|
|
9
|
|
|
2
|
|
|
(14)
|
|
|
6
|
|
|
3
|
|
|
9
|
|
Interest expense,
net(1)
|
15
|
|
|
22
|
|
|
2
|
|
|
6
|
|
|
45
|
|
|
7
|
|
|
52
|
|
Provision (benefit)
for income taxes
|
4
|
|
|
4
|
|
|
1
|
|
|
(7)
|
|
|
2
|
|
|
2
|
|
|
4
|
|
Depreciation and
amortization
|
33
|
|
|
26
|
|
|
4
|
|
|
—
|
|
|
63
|
|
|
—
|
|
|
63
|
|
Fees to
Manager-related party
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
7
|
|
|
—
|
|
|
7
|
|
Other non-cash
expense, net(2)
|
3
|
|
|
1
|
|
|
5
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
9
|
|
EBITDA excluding
non-cash items
|
64
|
|
|
62
|
|
|
14
|
|
|
(8)
|
|
|
132
|
|
|
12
|
|
|
144
|
|
EBITDA excluding
non-cash items
|
64
|
|
|
62
|
|
|
14
|
|
|
(8)
|
|
|
132
|
|
|
12
|
|
|
144
|
|
Interest expense,
net(1)
|
(15)
|
|
|
(22)
|
|
|
(2)
|
|
|
(6)
|
|
|
(45)
|
|
|
(7)
|
|
|
(52)
|
|
Adjustments to
derivative instruments recorded in interest expense,
net(1)
|
5
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
2
|
|
|
13
|
|
Amortization of debt
financing costs(1)
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
2
|
|
|
—
|
|
|
2
|
|
Amortization of debt
discount(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
1
|
|
(Provision) benefit
for current income taxes
|
(1)
|
|
|
(3)
|
|
|
—
|
|
|
2
|
|
|
(2)
|
|
|
—
|
|
|
(2)
|
|
Changes in working
capital
|
2
|
|
|
6
|
|
|
3
|
|
|
(2)
|
|
|
9
|
|
|
(5)
|
|
|
4
|
|
Cash provided by
(used in) operating activities
|
55
|
|
|
50
|
|
|
15
|
|
|
(12)
|
|
|
108
|
|
|
2
|
|
|
110
|
|
Changes in working
capital
|
(2)
|
|
|
(6)
|
|
|
(3)
|
|
|
2
|
|
|
(9)
|
|
|
5
|
|
|
(4)
|
|
Maintenance capital
expenditures
|
(8)
|
|
|
(3)
|
|
|
(2)
|
|
|
—
|
|
|
(13)
|
|
|
—
|
|
|
(13)
|
|
Free Cash
Flow
|
45
|
|
|
41
|
|
|
10
|
|
|
(10)
|
|
|
86
|
|
|
7
|
|
|
93
|
|
|
For the Quarter
Ended June 30, 2018
|
|
IMTT
|
|
Atlantic
Aviation
|
|
MIC
Hawaii
|
|
Corporate
and
Other
|
|
Total
Continuing
Operations
|
|
Discontinued
Operations
|
|
Total
|
|
($ in Millions)
(Unaudited)
|
Net income
(loss)
|
19
|
|
|
20
|
|
|
4
|
|
|
(16)
|
|
|
27
|
|
|
9
|
|
|
36
|
|
Interest expense,
net(1)
|
11
|
|
|
4
|
|
|
2
|
|
|
8
|
|
|
25
|
|
|
5
|
|
|
30
|
|
Provision (benefit)
for income taxes
|
8
|
|
|
8
|
|
|
2
|
|
|
(6)
|
|
|
12
|
|
|
—
|
|
|
12
|
|
Depreciation and
amortization
|
33
|
|
|
27
|
|
|
4
|
|
|
—
|
|
|
64
|
|
|
15
|
|
|
79
|
|
Fees to
Manager-related party
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
11
|
|
|
—
|
|
|
11
|
|
Other non-cash
expense (income), net(2)
|
3
|
|
|
1
|
|
|
(1)
|
|
|
(1)
|
|
|
2
|
|
|
(1)
|
|
|
1
|
|
EBITDA excluding
non-cash items
|
74
|
|
|
60
|
|
|
11
|
|
|
(4)
|
|
|
141
|
|
|
28
|
|
|
169
|
|
EBITDA excluding
non-cash items
|
74
|
|
|
60
|
|
|
11
|
|
|
(4)
|
|
|
141
|
|
|
28
|
|
|
169
|
|
Interest expense,
net(1)
|
(11)
|
|
|
(4)
|
|
|
(2)
|
|
|
(8)
|
|
|
(25)
|
|
|
(5)
|
|
|
(30)
|
|
Convertible senior
notes interest(3)
|
—
|
|
|
(2)
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Adjustments to
derivative instruments recorded in interest expense,
net(1)
|
(1)
|
|
|
(1)
|
|
|
—
|
|
|
—
|
|
|
(2)
|
|
|
(3)
|
|
|
(5)
|
|
Amortization of debt
financing costs(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|
2
|
|
Amortization of debt
discount(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
1
|
|
(Provision) benefit
for current income taxes
|
(4)
|
|
|
(7)
|
|
|
—
|
|
|
7
|
|
|
(4)
|
|
|
—
|
|
|
(4)
|
|
Changes in working
capital
|
6
|
|
|
4
|
|
|
—
|
|
|
(7)
|
|
|
3
|
|
|
(14)
|
|
|
(11)
|
|
Cash provided by
operating activities
|
64
|
|
|
50
|
|
|
9
|
|
|
(8)
|
|
|
115
|
|
|
7
|
|
|
122
|
|
Changes in working
capital
|
(6)
|
|
|
(4)
|
|
|
—
|
|
|
7
|
|
|
(3)
|
|
|
14
|
|
|
11
|
|
Maintenance capital
expenditures
|
(5)
|
|
|
(2)
|
|
|
(1)
|
|
|
—
|
|
|
(8)
|
|
|
(1)
|
|
|
(9)
|
|
Free Cash
Flow
|
53
|
|
|
44
|
|
|
8
|
|
|
(1)
|
|
|
104
|
|
|
20
|
|
|
124
|
|
|
For the Six Months
Ended June 30, 2019
|
|
IMTT
|
|
Atlantic
Aviation
|
|
MIC
Hawaii
|
|
Corporate
and
Other
|
|
Total
Continuing
Operations
|
|
Discontinued
Operations
|
|
Total
|
|
($ in Millions)
(Unaudited)
|
Net income
(loss)
|
50
|
|
|
34
|
|
|
10
|
|
|
(24)
|
|
|
70
|
|
|
8
|
|
|
78
|
|
Interest expense,
net(1)
|
28
|
|
|
41
|
|
|
5
|
|
|
10
|
|
|
84
|
|
|
12
|
|
|
96
|
|
Provision (benefit)
for income taxes
|
20
|
|
|
13
|
|
|
4
|
|
|
(11)
|
|
|
26
|
|
|
—
|
|
|
26
|
|
Depreciation and
amortization
|
66
|
|
|
52
|
|
|
8
|
|
|
—
|
|
|
126
|
|
|
—
|
|
|
126
|
|
Fees to
Manager-related party
|
—
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|
15
|
|
|
—
|
|
|
15
|
|
Other non-cash
expense, net(2)
|
4
|
|
|
1
|
|
|
7
|
|
|
1
|
|
|
13
|
|
|
2
|
|
|
15
|
|
EBITDA excluding
non-cash items
|
168
|
|
|
141
|
|
|
34
|
|
|
(9)
|
|
|
334
|
|
|
22
|
|
|
356
|
|
EBITDA excluding
non-cash items
|
168
|
|
|
141
|
|
|
34
|
|
|
(9)
|
|
|
334
|
|
|
22
|
|
|
356
|
|
Interest expense,
net(1)
|
(28)
|
|
|
(41)
|
|
|
(5)
|
|
|
(10)
|
|
|
(84)
|
|
|
(12)
|
|
|
(96)
|
|
Adjustments to
derivative instruments recorded in interest expense,
net(1)
|
7
|
|
|
10
|
|
|
1
|
|
|
—
|
|
|
18
|
|
|
4
|
|
|
22
|
|
Amortization of debt
financing costs(1)
|
1
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|
5
|
|
|
—
|
|
|
5
|
|
Amortization of debt
discount(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
|
—
|
|
|
2
|
|
(Provision) benefit
for current income taxes
|
(12)
|
|
|
(10)
|
|
|
(3)
|
|
|
16
|
|
|
(9)
|
|
|
—
|
|
|
(9)
|
|
Changes in working
capital
|
10
|
|
|
2
|
|
|
1
|
|
|
(20)
|
|
|
(7)
|
|
|
(25)
|
|
|
(32)
|
|
Cash provided by
(used in) operating activities
|
146
|
|
|
104
|
|
|
28
|
|
|
(19)
|
|
|
259
|
|
|
(11)
|
|
|
248
|
|
Changes in working
capital
|
(10)
|
|
|
(2)
|
|
|
(1)
|
|
|
20
|
|
|
7
|
|
|
25
|
|
|
32
|
|
Maintenance capital
expenditures
|
(14)
|
|
|
(5)
|
|
|
(4)
|
|
|
—
|
|
|
(23)
|
|
|
—
|
|
|
(23)
|
|
Free Cash
Flow
|
122
|
|
|
97
|
|
|
23
|
|
|
1
|
|
|
243
|
|
|
14
|
|
|
257
|
|
|
For the Six Months
Ended June 30, 2018
|
|
IMTT
|
|
Atlantic
Aviation
|
|
MIC
Hawaii
|
|
Corporate
and
Other
|
|
Total Continuing
Operations
|
|
Discontinued
Operations
|
|
Total
|
|
($ in Millions)
(Unaudited)
|
Net income
(loss)
|
44
|
|
|
53
|
|
|
7
|
|
|
(37)
|
|
|
67
|
|
|
16
|
|
|
83
|
|
Interest expense,
net(1)
|
19
|
|
|
4
|
|
|
3
|
|
|
17
|
|
|
43
|
|
|
6
|
|
|
49
|
|
Provision (benefit)
for income taxes
|
18
|
|
|
20
|
|
|
3
|
|
|
(11)
|
|
|
30
|
|
|
(1)
|
|
|
29
|
|
Depreciation and
amortization
|
66
|
|
|
52
|
|
|
9
|
|
|
—
|
|
|
127
|
|
|
30
|
|
|
157
|
|
Fees to
Manager-related party
|
—
|
|
|
—
|
|
|
—
|
|
|
24
|
|
|
24
|
|
|
—
|
|
|
24
|
|
Other non-cash
expense (income), net(2)
|
5
|
|
|
1
|
|
|
5
|
|
|
—
|
|
|
11
|
|
|
(3)
|
|
|
8
|
|
EBITDA excluding
non-cash items
|
152
|
|
|
130
|
|
|
27
|
|
|
(7)
|
|
|
302
|
|
|
48
|
|
|
350
|
|
EBITDA excluding
non-cash items
|
152
|
|
|
130
|
|
|
27
|
|
|
(7)
|
|
|
302
|
|
|
48
|
|
|
350
|
|
Interest expense,
net(1)
|
(19)
|
|
|
(4)
|
|
|
(3)
|
|
|
(17)
|
|
|
(43)
|
|
|
(6)
|
|
|
(49)
|
|
Convertible senior
notes interest(3)
|
—
|
|
|
(4)
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Adjustments to
derivative instruments recorded in interest expense,
net(1)
|
(5)
|
|
|
(5)
|
|
|
(1)
|
|
|
—
|
|
|
(11)
|
|
|
(9)
|
|
|
(20)
|
|
Amortization of debt
financing costs(1)
|
—
|
|
|
1
|
|
|
—
|
|
|
3
|
|
|
4
|
|
|
1
|
|
|
5
|
|
Amortization of debt
discount(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
|
—
|
|
|
2
|
|
(Provision) benefit
for current income taxes
|
(8)
|
|
|
(14)
|
|
|
(1)
|
|
|
15
|
|
|
(8)
|
|
|
—
|
|
|
(8)
|
|
Changes in working
capital
|
11
|
|
|
10
|
|
|
(6)
|
|
|
(16)
|
|
|
(1)
|
|
|
(13)
|
|
|
(14)
|
|
Cash provided by
(used in) operating activities
|
131
|
|
|
114
|
|
|
16
|
|
|
(16)
|
|
|
245
|
|
|
21
|
|
|
266
|
|
Changes in working
capital
|
(11)
|
|
|
(10)
|
|
|
6
|
|
|
16
|
|
|
1
|
|
|
13
|
|
|
14
|
|
Maintenance capital
expenditures
|
(12)
|
|
|
(3)
|
|
|
(3)
|
|
|
—
|
|
|
(18)
|
|
|
(1)
|
|
|
(19)
|
|
Free Cash
Flow
|
108
|
|
|
101
|
|
|
19
|
|
|
—
|
|
|
228
|
|
|
33
|
|
|
261
|
|
___________
|
(1)
|
Interest expense,
net, includes adjustments to derivative instruments, non-cash
amortization of deferred financing fees and non-cash amortization
of debt discount related to the 2.00% Convertible Senior Notes due
October 2023.
|
(2)
|
Other non-cash
expense (income), net, primarily includes pension expense of $2
million and $4 million for the quarter and six month periods ended
June 30, 2019 and 2018, respectively, unrealized gains (losses) on
commodity hedges, expenses related to a long term incentive
compensation plan for senior management of the operating businesses
implemented in 2019 and non-cash gains (losses) related to the
disposal of assets. Pension expense primarily consists of interest
cost, expected return on plan assets and amortization of actuarial
and performance gains and losses. See "Earnings Before Interest,
Taxes, Depreciation and Amortization (EBITDA) excluding non-cash
items and Free Cash Flow" above for further
discussion.
|
(3)
|
Represents the cash
interest expense reclassified to Atlantic Aviation related to the
2.00% Convertible Senior Notes due October 2023 through December 6,
2018, the date of Atlantic Aviation's refinancing. The proceeds
from this note issuance in October 2016 were used principally to
reduce the drawn balance on Atlantic Aviation's revolving credit
facility. Cash interest expense on this note issuance is included
in Corporate and Other subsequent to December 6, 2018.
|
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content:http://www.prnewswire.com/news-releases/mic-reports-second-quarter-2019-financial-and-operational-results-300894449.html
SOURCE Macquarie Infrastructure Corporation