02.08.2017 23:00:00
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MIC Reports Second Quarter 2017 Financial Results, Announces Acquisition and Investment, Increases Quarterly Cash Dividend
NEW YORK, Aug. 2, 2017 /PRNewswire/ -- Macquarie Infrastructure Corporation (NYSE: MIC) today reported financial results for the second quarter of 2017.
"MIC's performance overall continued to be at levels consistent with our expectations for the full year and we have been able to improve our prospects with the attractive transactions announced today," said James Hooke, chief executive officer of MIC. "The improved cash generation by our existing operations supported an increase in MIC's quarterly cash distribution of 10.4%, consistent with our expectations and guidance. We continue to expect to increase cash generation in 2017 by between 10% and 15%, per share, and to grow our cash dividend by 10%."
MIC reported a 23.5% increase in net income compared with the second quarter of 2016. The Company reported net income of $26.0 million for the quarter ended June 30, 2017. For the first six months of the year, MIC's net income increased 42.2% to $58.7 million.
The Company reported cash generated by operating activities of $120.6 million and $249.2 million in the quarter and six months ended June 30, 2017, respectively, compared with $129.4 million and $277.9 million reported in the prior comparable periods. The decrease in cash from operations reflects primarily the absence of insurance proceeds, higher state taxes and changes in working capital related to higher inventory costs and the timing of payments in 2017 compared with 2016. The impact of these was partially offset by improved operating results and contributions from acquired businesses.
MIC's businesses produced an aggregate $141.1 million and $288.0 million of Adjusted Free Cash Flow in the second quarter and year to date periods ended June 30, 2017, respectively, up 11.7% and 10.9% from the amounts generated in the prior corresponding periods. The Company defines Adjusted Free Cash Flow as cash from operating activities (including from its proportionate interest in businesses in which it has a less than 100% equity interest), less maintenance capital expenditures, less changes in working capital, adjusted for certain one-time items. (See Summary Financial Information below)
The implementation of MIC's previously announced shared services initiative resulted in a reduction in the rate of increase in general and administrative expenses. As anticipated, the savings were offset by expenses including primarily severance payments and consulting fees totaling $3.1 million and $5.4 million in the June quarter and year to date periods, respectively, and incremental expenses associated with acquisitions completed in 2016. The Company does not expect to incur shared services implementation costs in 2018 and has excluded those incurred in 2017 from its presentation of both Adjusted EBITDA excluding non-cash items and Adjusted Free Cash Flow in an effort to provide clarity with respect to the recurring cash flows being generated by its businesses.
MIC expects to realize annual general and administrative and procurement cost savings of between $12.0 million and $15.0 million in 2018, compared with its 2016 baseline, as a result of the shared services initiative. The expected savings will not be spread evenly, or even proportionately, across MIC's businesses and some businesses may simply benefit from an improvement in service levels. Shared services provides business support functions including Accounting, Human Resource, Tax, Information Technology and Risk Management support to each of MIC's operating entities.
As a result of a heightened level of activity associated with the evaluation of various investment and acquisition opportunities, MIC incurred approximately $4.9 million of transaction related expenses during the second quarter. These costs have been recorded as an expense in the Corporate and Other segment of its financial statements and have been excluded from the Company's presentation of both Adjusted EBITDA excluding non-cash items and Adjusted Free Cash Flow in an effort to provide clarity with respect to the recurring cash flows being generated by its businesses.
The MIC board of directors authorized a cash dividend of $1.38 per share, or $5.52 annualized, for the second quarter of 2017. The dividend will be payable August 17, 2017 to shareholders of record on August 14, 2017. The payment represents a 10.4% increase over the dividend paid for the second quarter of 2016 and is consistent with MIC's guidance for a 10% increase in its annual dividend in 2017 over 2016.
In June, MIC increased its guidance with respect to growth capital deployment in 2017 to approximately $500.0 million from $400.0 million. Assuming the transactions announced today are successfully concluded, MIC will have deployed more than $450.0 million of growth capital in 2017 and has increased its full-year capital deployment target to between $600.0 million and $650.0 million.
"Earlier in the year we highlighted an increase in the number and size of investment opportunities that we were reviewing and a further increase in our growth capital deployment target for this year reflects our capitalizing on those opportunities," said Hooke. "In addition to increasing planned growth investments within our four existing segments, we continue to pursue opportunities outside of these, some of which could be transformative for the Company."
Acquisition and Investment Announced
On July 28, 2017, IMTT entered into an agreement to acquire Epic Midstream (Epic) from affiliates of White Deer Energy and Blue Water Energy for $171.5 million, not including working capital adjustments. The transaction is expected to close in the third quarter of 2017 and be accretive to MIC's Free Cash Flow in 2018. Closing is subject to customary regulatory approvals and satisfaction of other conditions precedent.
The purchase price reflects a multiple of Epic's full year 2018 Pro-Forma EBITDA (Earnings before Interest, Taxes, Depreciation, and Amortization) of approximately 11.0x. MIC expects to fund the acquisition with the issuance of $125.0 million in new MIC shares to the sellers and $46.5 million in cash, including with drawings on IMTT's revolving credit facility. The new shares will be issued at a 1.5% discount to the 30-day volume weighted average price of MIC's shares, as reported by the New York Stock Exchange, at the end of the second day prior to closing of the transaction.
Epic will continue to operate a portfolio of seven bulk liquid terminals in the U.S. Southeast and Southwest, with principal operations in the Port of Savannah, Georgia. Its facilities comprise more than 3.1 million barrels of storage capacity, a significant portion of which is in service for jet fuel. Revenue produced by the Epic business is generated pursuant to take-or-pay contracts similar to those at MIC's IMTT business. Customers include an affiliate of the U.S. Department of Defense that has been an Epic customer for more than 20 years.
"The addition of the Epic terminals will expand IMTT's operations into important new markets, including Savannah, and materially expand its jet fuel handling capability — something we had been seeking to do for some time," noted Hooke.
On July 10, 2017, MIC formed a new joint venture with Intersect Power, a developer of renewable power generation and storage projects across the U.S., to fund and potentially acquire Intersect projects. Founded in 2016, Intersect Power is in the early stages of development of approximately 700MW of power in California and Texas and anticipates pursuing projects in Hawaii as well. MIC expects to invest up to $135.0 million of equity, contingent equity, and credit facilities that will be used to fund Intersect Power's operations and project development pipeline.
"The arrangement we have with Intersect Power is expected to provide MIC with access to a flow of high quality renewable energy projects beginning in 2019," said Hooke. "Including Intersect, we now expect to have access to opportunities in both wind and solar generation and power storage and are even better positioned to grow the size of our existing portfolio of approximately 350MW of generation without having to compete in costly auction processes."
Quarterly Segment Highlights
Utilization rates at IMTT decreased to historically normal levels of 94.0% and 95.2% in the quarter and six month periods ended June 30, 2017, respectively, from what had been elevated rates in the mid-96% range. An improved top line result that included deferred revenue resulting from termination of a construction project by a biodiesel customer was partially offset by higher repair and maintenance expenses in the quarter. Near term, the focus for the business remains on effective deployment of growth capital.
Continued strong growth in general aviation flight activity supported improvement in the financial performance of Atlantic Aviation. General aviation flight activity increased by approximately 3.7% in the second quarter, based on data reported by the Federal Aviation Administration. Activity levels across the Atlantic network, along with effective upselling of fuel, effective margin management and the operational leverage inherent in the business, resulted in growth in EBITDA and Free Cash Flow at multiples of the rate of increase in flight activity. Completing attractive bolt-on acquisition opportunities remains a priority for the business.
The renewable facilities in MIC's Contracted Power (CP) segment enjoyed improved wind and solar resources in the second quarter. Resources were at or slightly above long-term average levels. Contributions from facilities acquired in 2016 added to segment results. The formation of a new joint venture with a developer of renewable projects positions the segment for continued growth.
The Bayonne Energy Center (BEC), the thermal power generation facility in MIC's CP segment, underperformed as a result of previously announced lower capacity prices in NYISO Zone J and a reduction in utilization. The completion of construction projects, including a recent interconnection with a second pipeline serving BEC, is expected to improve utilization of the facility beginning in the third quarter.
Hawaii Gas, the largest component of the MIC Hawaii segment, benefitted from increased gas sales versus the same period last year. A portion of the increased contribution was offset at the segment level by costs associated with acquisitions completed in 2016. Following the quarter end, Hawaii Gas filed a general rate case seeking a $15.0 million annual increase in regulated utility revenue. To the extent new rates are approved by regulators, the Company expects that an interim increase, if any, could take effect in mid-2018.
Summary Financial Information
Quarter Ended | Change | Six Months Ended | Change | ||||||||||||||||||||||||||||
2017 | 2016 | $ | % | 2017 | 2016 | $ | % | ||||||||||||||||||||||||
($ In Thousands, Except Share and Per Share Data) (Unaudited) | |||||||||||||||||||||||||||||||
GAAP Metrics | |||||||||||||||||||||||||||||||
Net income | $ | 26,025 | $ | 21,081 | 4,944 | 23.5 | $ | 58,663 | $ | 41,257 | 17,406 | 42.2 | |||||||||||||||||||
Weighted average number of shares outstanding: basic | 82,430,324 | 80,369,575 | 2,060,749 | 2.6 | 82,285,053 | 80,241,293 | 2,043,760 | 2.5 | |||||||||||||||||||||||
Net income per share attributable to MIC | $ | 0.32 | $ | 0.24 | 0.08 | 33.3 | $ | 0.75 | $ | 0.52 | 0.23 | 44.2 | |||||||||||||||||||
Cash provided by operating activities | 120,636 | 129,352 | (8,716) | (6.7) | 249,204 | 277,918 | (28,714) | (10.3) | |||||||||||||||||||||||
MIC Non-GAAP Metrics | |||||||||||||||||||||||||||||||
EBITDA excluding non-cash items(1) | $ | 170,924 | $ | 166,784 | 4,140 | 2.5 | $ | 351,239 | $ | 342,759 | 8,480 | 2.5 | |||||||||||||||||||
Shared service implementation costs | 3,091 | — | 3,091 | NM | 5,445 | — | 5,445 | NM | |||||||||||||||||||||||
Investment and acquisition | 4,850 | — | 4,850 | NM | 4,850 | — | 4,850 | NM | |||||||||||||||||||||||
Adjusted EBITDA excluding | $ | 178,865 | $ | 166,784 | 12,081 | 7.2 | $ | 361,534 | $ | 342,759 | 18,775 | 5.5 | |||||||||||||||||||
Cash interest(2) | $ | (26,410) | $ | (27,241) | 831 | 3.1 | $ | (52,284) | $ | (54,619) | 2,335 | 4.3 | |||||||||||||||||||
Cash taxes | (2,618) | (1,662) | (956) | (57.5) | (6,339) | (4,168) | (2,171) | (52.1) | |||||||||||||||||||||||
Maintenance capital | (6,480) | (9,840) | 3,360 | 34.1 | (10,956) | (20,253) | 9,297 | 45.9 | |||||||||||||||||||||||
Noncontrolling interest(3) | (2,244) | (1,724) | (520) | (30.2) | (3,915) | (4,007) | 92 | 2.3 | |||||||||||||||||||||||
Adjusted Free Cash | $ | 141,113 | $ | 126,317 | 14,796 | 11.7 | $ | 288,040 | $ | 259,712 | 28,328 | 10.9 |
NM — Not meaningful | ||
(1) | EBITDA excluding non-cash items is calculated as net income before interest expense, taxes, depreciation and amortization expense, management fees, pension expense and other non-cash (income) expense recorded in the consolidated statement of operations. See below for reconciliation of net income (loss) to EBITDA excluding non-cash items. |
(2) | Cash interest is calculated as interest expense excluding the impact of non-cash adjustments for unrealized (gains) losses from derivative instruments, amortization of deferred financing costs and the amortization of debt discount recorded in the consolidated statement of operations. |
(3) | Noncontrolling interest adjustment represents the portion of Free Cash Flow not attributable to MIC's ownership interest. |
Conference Call and Webcast
When: MIC has scheduled a conference call for 8:00 a.m. Eastern Time on Thursday, August 3, 2017 during which management will review and comment on the second quarter 2017 results.
How: To listen to the conference call dial +1(650) 521-5252 or +1(877) 852-2928 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. Allow extra time prior to the call to visit the site and download the software needed to listen to the webcast.
Slides: MIC will prepare materials 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 3, 2017 through midnight on August 10, 2017, at +1(404) 537-3406 or +1(855) 859-2056, Passcode: 48792183. 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 primarily in the United States. Its businesses consist of a bulk liquid terminals business, International-Matex Tank Terminals; an airport services business, Atlantic Aviation; entities comprising an energy services, production and distribution segment, MIC Hawaii; and entities comprising a Contracted Power segment. For additional information, please visit the MIC website at www.macquarie.com/mic. MIC-G
Use of Non-GAAP Measures
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items, Free Cash Flow and Proportionately Combined Metrics
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, Free Cash Flow and certain proportionately combined financial metrics. Proportionately combined financial metrics, including Free Cash Flow, reflect MIC Corporate and the Company's ownership interest in each of its businesses.
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 expenses 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.
Given MIC's varied ownership levels in its CP and MIC Hawaii segments, together with obligations to report the results of these businesses on a consolidated basis, GAAP measures such as net income (loss) do not fully reflect all of the items management considers in assessing the amount of cash generated based on its ownership interest in its businesses. The Company notes that the proportionately combined metrics used 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 supplemental measure and not in lieu of its financial results reported under GAAP.
The Company's businesses are characteristically 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 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) amortization of tolling liabilities; (vi) gains (losses) on disposal of assets; and (vii) pension expenses. 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 to Free Cash Flow. 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 and not in lieu of its financial results reported under GAAP.
See also "Reconciliation of Consolidated Net Income (Loss) to EBITDA Excluding Non-Cash Items and a Reconciliation from Cash Provided by Operating Activities to Free Cash Flow" below.
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.
In some cases, specific capital expenditures contain characteristics of both maintenance and growth capital expenditures. MIC does not bifurcate specific capital expenditures into maintenance and growth 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, manage growth, make and finance future acquisitions, and implement its strategy; risks associated with development, investment and expansion in the power industry; 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 and other commodity costs; its ability to recover increases in costs from customers, cybersecurity risks, work interruptions or other labor stoppages; risks related to its shared services initiative; 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 Corporation 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 Corporation.
MACQUARIE INFRASTRUCTURE CORPORATION | |||||||
CONSOLIDATED CONDENSED BALANCE SHEETS | |||||||
($ in Thousands, Except Share Data) | |||||||
June 30, | December 31, | ||||||
(Unaudited) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 28,873 | $ | 44,767 | |||
Restricted cash | 23,368 | 16,420 | |||||
Accounts receivable, less allowance for doubtful accounts of $871 and $1,434, respectively | 133,562 | 124,846 | |||||
Inventories | 35,474 | 31,461 | |||||
Prepaid expenses | 16,406 | 14,561 | |||||
Fair value of derivative instruments | 4,902 | 5,514 | |||||
Other current assets | 9,433 | 7,099 | |||||
Total current assets | 252,018 | 244,668 | |||||
Property, equipment, land and leasehold improvements, net | 4,408,254 | 4,346,536 | |||||
Investment in unconsolidated business | 9,192 | 8,835 | |||||
Goodwill | 2,031,720 | 2,024,409 | |||||
Intangible assets, net | 884,112 | 888,971 | |||||
Fair value of derivative instruments | 19,432 | 30,781 | |||||
Other noncurrent assets | 30,183 | 15,053 | |||||
Total assets | $ | 7,634,911 | $ | 7,559,253 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Due to Manager – related party | $ | 6,200 | $ | 6,594 | |||
Accounts payable | 60,200 | 69,566 | |||||
Accrued expenses | 91,390 | 83,734 | |||||
Current portion of long-term debt | 45,544 | 40,016 | |||||
Fair value of derivative instruments | 5,527 | 9,297 | |||||
Other current liabilities | 39,783 | 41,802 | |||||
Total current liabilities | 248,644 | 251,009 | |||||
Long-term debt, net of current portion | 3,205,733 | 3,039,966 | |||||
Deferred income taxes | 930,565 | 896,116 | |||||
Fair value of derivative instruments | 6,157 | 5,966 | |||||
Tolling agreements – noncurrent | 56,484 | 60,373 | |||||
Other noncurrent liabilities | 155,812 | 158,289 | |||||
Total liabilities | 4,603,395 | 4,411,719 | |||||
Commitments and contingencies | — | — | |||||
Stockholders' equity(1): | |||||||
Common stock ($0.001 par value; 500,000,000 authorized; 82,589,776 shares issued and outstanding at June 30, 2017 and 82,047,526 shares issued and outstanding at December 31, 2016) | $ | 83 | $ | 82 | |||
Additional paid in capital | 1,915,626 | 2,089,407 | |||||
Accumulated other comprehensive loss | (27,863) | (28,960) | |||||
Retained earnings | 954,400 | 892,365 | |||||
Total stockholders' equity | 2,842,246 | 2,952,894 | |||||
Noncontrolling interests | 189,270 | 194,640 | |||||
Total equity | 3,031,516 | 3,147,534 | |||||
Total liabilities and equity | $ | 7,634,911 | $ | 7,559,253 |
(1) | The Company is authorized to issue 100,000,000 shares of preferred stock, par value $0.001 per share. At June 30, 2017 and December 31, 2016, no preferred stock were issued or outstanding. The Company has 100 shares of special stock issued and outstanding to its Manager at June 30, 2017 and December 31, 2016. |
MACQUARIE INFRASTRUCTURE CORPORATION | |||||||||||||||
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS | |||||||||||||||
(Unaudited) | |||||||||||||||
($ in Thousands, Except Share and Per Share Data) | |||||||||||||||
Quarter Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Revenue | |||||||||||||||
Service revenue | $ | 345,045 | $ | 306,221 | $ | 708,849 | $ | 618,462 | |||||||
Product revenue | 93,945 | 91,358 | 181,598 | 175,504 | |||||||||||
Total revenue | 438,990 | 397,579 | 890,447 | 793,966 | |||||||||||
Costs and expenses | |||||||||||||||
Cost of services | 147,114 | 120,857 | 301,820 | 237,320 | |||||||||||
Cost of product sales | 40,249 | 35,018 | 87,474 | 68,078 | |||||||||||
Selling, general and administrative | 82,967 | 72,430 | 159,919 | 144,714 | |||||||||||
Fees to Manager – related party | 18,433 | 16,392 | 36,656 | 31,188 | |||||||||||
Depreciation | 57,063 | 59,662 | 114,744 | 112,883 | |||||||||||
Amortization of intangibles | 15,898 | 16,713 | 33,591 | 34,500 | |||||||||||
Total operating expenses | 361,724 | 321,072 | 734,204 | 628,683 | |||||||||||
Operating income | 77,266 | 76,507 | 156,243 | 165,283 | |||||||||||
Other income (expense) | |||||||||||||||
Interest income | 41 | 25 | 75 | 58 | |||||||||||
Interest expense(1) | (35,356) | (39,502) | (60,838) | (96,397) | |||||||||||
Other income, net | 1,738 | 271 | 2,920 | 3,700 | |||||||||||
Net income before income taxes | 43,689 | 37,301 | 98,400 | 72,644 | |||||||||||
Provision for income taxes | (17,664) | (16,220) | (39,737) | (31,387) | |||||||||||
Net income | $ | 26,025 | $ | 21,081 | $ | 58,663 | $ | 41,257 | |||||||
Less: net income (loss) attributable to noncontrolling interests | 5 | 1,889 | (3,372) | (290) | |||||||||||
Net income attributable to MIC | $ | 26,020 | $ | 19,192 | $ | 62,035 | $ | 41,547 | |||||||
Basic income per share attributable to MIC | $ | 0.32 | $ | 0.24 | $ | 0.75 | $ | 0.52 | |||||||
Weighted average number of shares outstanding: basic | 82,430,324 | 80,369,575 | 82,285,053 | 80,241,293 | |||||||||||
Diluted income per share attributable to MIC | $ | 0.32 | $ | 0.24 | $ | 0.75 | $ | 0.51 | |||||||
Weighted average number of shares outstanding: diluted | 82,439,840 | 81,323,294 | 82,294,608 | 81,194,505 | |||||||||||
Cash dividends declared per share | $ | 1.38 | $ | 1.25 | $ | 2.70 | $ | 2.45 |
(1) | Interest expense includes losses on derivative instruments of $7.7 million and $6.8 million for the quarter and six months ended June 30, 2017, respectively. For the quarter and six months ended June 30, 2016, interest expense includes losses on derivative instruments of $14.9 million and $46.7 million, respectively. |
MACQUARIE INFRASTRUCTURE CORPORATION | ||||||||
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS | ||||||||
(Unaudited) | ||||||||
($ in Thousands) | ||||||||
Six Months Ended | ||||||||
2017 | 2016 | |||||||
Operating activities | ||||||||
Net income | $ | 58,663 | $ | 41,257 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization of property and equipment | 114,744 | 112,883 | ||||||
Amortization of intangible assets | 33,591 | 34,500 | ||||||
Amortization of debt financing costs | 4,301 | 5,249 | ||||||
Amortization of debt discount | 1,495 | — | ||||||
Adjustments to derivative instruments | 8,382 | 29,030 | ||||||
Fees to Manager-related party | 36,656 | 31,188 | ||||||
Deferred taxes | 33,398 | 27,219 | ||||||
Pension expense | 4,321 | 4,395 | ||||||
Other non-cash income, net | (2,935) | (1,749) | ||||||
Changes in other assets and liabilities, net of acquisitions: | ||||||||
Restricted cash | 567 | 2,368 | ||||||
Accounts receivable | (7,871) | (1,788) | ||||||
Inventories | (4,256) | (2,104) | ||||||
Prepaid expenses and other current assets | (2,529) | 9,498 | ||||||
Due to Manager – related party | (122) | 90 | ||||||
Accounts payable and accrued expenses | (15,782) | (13,789) | ||||||
Income taxes payable | (1,506) | 1,393 | ||||||
Other, net | (11,913) | (1,722) | ||||||
Net cash provided by operating activities | 249,204 | 277,918 | ||||||
Investing activities | ||||||||
Acquisitions of businesses and investments, net of cash acquired | (66,321) | (16,613) | ||||||
Purchases of property and equipment | (130,351) | (118,734) | ||||||
Proceeds from insurance claim | — | 7,235 | ||||||
Loan to project developer | (14,675) | — | ||||||
Loan repayment from project developer | 1,396 | — | ||||||
Change in restricted cash | (8,001) | — | ||||||
Other, net | 60 | 513 | ||||||
Net cash used in investing activities | (217,892) | (127,599) |
MACQUARIE INFRASTRUCTURE CORPORATION | |||||||
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS – (continued) | |||||||
(Unaudited) | |||||||
($ in Thousands) | |||||||
Six Months Ended | |||||||
2017 | 2016 | ||||||
Financing activities | |||||||
Proceeds from long-term debt | $ | 264,500 | $ | 251,000 | |||
Payment of long-term debt | (98,542) | (216,581) | |||||
Proceeds from the issuance of shares | 5,321 | 1,323 | |||||
Dividends paid to common stockholders | (216,508) | (188,608) | |||||
Contributions received from noncontrolling interests | — | 15,431 | |||||
Purchase of noncontrolling interest | — | (9,909) | |||||
Distributions paid to noncontrolling interests | (2,040) | (2,505) | |||||
Offering and equity raise costs paid | (182) | (149) | |||||
Debt financing costs paid | (447) | (1,203) | |||||
Change in restricted cash | 557 | 2,096 | |||||
Payment of capital lease obligations | (53) | (789) | |||||
Net cash used in financing activities | (47,394) | (149,894) | |||||
Effect of exchange rate changes on cash and cash equivalents | 188 | 442 | |||||
Net change in cash and cash equivalents | (15,894) | 867 | |||||
Cash and cash equivalents, beginning of period | 44,767 | 22,394 | |||||
Cash and cash equivalents, end of period | $ | 28,873 | $ | 23,261 | |||
Supplemental disclosures of cash flow information | |||||||
Non-cash investing and financing activities: | |||||||
Accrued equity offering costs | $ | 44 | $ | 260 | |||
Accrued financing costs | $ | — | $ | 443 | |||
Accrued purchases of property and equipment | $ | 41,354 | $ | 20,794 | |||
Issuance of shares to Manager | $ | 36,927 | $ | 30,977 | |||
Issuance of shares to independent directors | $ | 681 | $ | 750 | |||
Conversion of convertible senior notes to shares | $ | 17 | $ | 4 | |||
Taxes paid, net | $ | 7,845 | $ | 2,766 | |||
Interest paid | $ | 54,601 | $ | 55,956 |
MACQUARIE INFRASTRUCTURE CORPORATION | |||||||||||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS – MD&A | |||||||||||||||||||||||||||||||
Quarter Ended | Change | Six Months Ended | Change | ||||||||||||||||||||||||||||
2017 | 2016 | $ | % | 2017 | 2016 | $ | % | ||||||||||||||||||||||||
($ In Thousands, Except Share and Per Share Data) (Unaudited) | |||||||||||||||||||||||||||||||
Revenue | |||||||||||||||||||||||||||||||
Service revenue | $ | 345,045 | $ | 306,221 | 38,824 | 12.7 | $ | 708,849 | $ | 618,462 | 90,387 | 14.6 | |||||||||||||||||||
Product revenue | 93,945 | 91,358 | 2,587 | 2.8 | 181,598 | 175,504 | 6,094 | 3.5 | |||||||||||||||||||||||
Total revenue | 438,990 | 397,579 | 41,411 | 10.4 | 890,447 | 793,966 | 96,481 | 12.2 | |||||||||||||||||||||||
Costs and expenses | |||||||||||||||||||||||||||||||
Cost of services | 147,114 | 120,857 | (26,257) | (21.7) | 301,820 | 237,320 | (64,500) | (27.2) | |||||||||||||||||||||||
Cost of product sales | 40,249 | 35,018 | (5,231) | (14.9) | 87,474 | 68,078 | (19,396) | (28.5) | |||||||||||||||||||||||
Selling, general and administrative | 82,967 | 72,430 | (10,537) | (14.5) | 159,919 | 144,714 | (15,205) | (10.5) | |||||||||||||||||||||||
Fees to Manager – related party | 18,433 | 16,392 | (2,041) | (12.5) | 36,656 | 31,188 | (5,468) | (17.5) | |||||||||||||||||||||||
Depreciation | 57,063 | 59,662 | 2,599 | 4.4 | 114,744 | 112,883 | (1,861) | (1.6) | |||||||||||||||||||||||
Amortization of | 15,898 | 16,713 | 815 | 4.9 | 33,591 | 34,500 | 909 | 2.6 | |||||||||||||||||||||||
Total operating expenses | 361,724 | 321,072 | (40,652) | (12.7) | 734,204 | 628,683 | (105,521) | (16.8) | |||||||||||||||||||||||
Operating income | 77,266 | 76,507 | 759 | 1.0 | 156,243 | 165,283 | (9,040) | (5.5) | |||||||||||||||||||||||
Other income (expense) | |||||||||||||||||||||||||||||||
Interest income | 41 | 25 | 16 | 64.0 | 75 | 58 | 17 | 29.3 | |||||||||||||||||||||||
Interest expense(1) | (35,356) | (39,502) | 4,146 | 10.5 | (60,838) | (96,397) | 35,559 | 36.9 | |||||||||||||||||||||||
Other income, net | 1,738 | 271 | 1,467 | NM | 2,920 | 3,700 | (780) | (21.1) | |||||||||||||||||||||||
Net income before income taxes | 43,689 | 37,301 | 6,388 | 17.1 | 98,400 | 72,644 | 25,756 | 35.5 | |||||||||||||||||||||||
Provision for income taxes | (17,664) | (16,220) | (1,444) | (8.9) | (39,737) | (31,387) | (8,350) | (26.6) | |||||||||||||||||||||||
Net income | $ | 26,025 | $ | 21,081 | 4,944 | 23.5 | $ | 58,663 | $ | 41,257 | 17,406 | 42.2 | |||||||||||||||||||
Less: net income (loss) attributable to noncontrolling interests | 5 | 1,889 | 1,884 | 99.7 | (3,372) | (290) | 3,082 | NM | |||||||||||||||||||||||
Net income attributable to MIC | $ | 26,020 | $ | 19,192 | 6,828 | 35.6 | $ | 62,035 | $ | 41,547 | 20,488 | 49.3 | |||||||||||||||||||
Basic income per share attributable to MIC | $ | 0.32 | $ | 0.24 | 0.08 | 33.3 | $ | 0.75 | $ | 0.52 | 0.23 | 44.2 | |||||||||||||||||||
Weighted average number of shares outstanding: | 82,430,324 | 80,369,575 | 2,060,749 | 2.6 | 82,285,053 | 80,241,293 | 2,043,760 | 2.5 |
NM — Not meaningful | ||
(1) | Interest expense includes losses on derivative instruments of $7.7 million and $6.8 million for the quarter and six months ended June 30, 2017, respectively. For the quarter and six months ended June 30, 2016, interest expense includes losses on derivative instruments of $14.9 million and $46.7 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 | Change | Six Months Ended | Change | ||||||||||||||||||||||||||||
2017 | 2016 | $ | % | 2017 | 2016 | $ | % | ||||||||||||||||||||||||
($ In Thousands) (Unaudited) | |||||||||||||||||||||||||||||||
Net income | $ | 26,025 | $ | 21,081 | $ | 58,663 | $ | 41,257 | |||||||||||||||||||||||
Interest expense, net(1) | 35,315 | 39,477 | 60,763 | 96,339 | |||||||||||||||||||||||||||
Provision for income taxes | 17,664 | 16,220 | 39,737 | 31,387 | |||||||||||||||||||||||||||
Depreciation | 57,063 | 59,662 | 114,744 | 112,883 | |||||||||||||||||||||||||||
Amortization of intangibles | 15,898 | 16,713 | 33,591 | 34,500 | |||||||||||||||||||||||||||
Fees to Manager-related | 18,433 | 16,392 | 36,656 | 31,188 | |||||||||||||||||||||||||||
Pension expense(2) | 1,627 | 2,197 | 4,321 | 4,395 | |||||||||||||||||||||||||||
Other non-cash (income) expense, net(3) | (1,101) | (4,958) | 2,764 | (9,190) | |||||||||||||||||||||||||||
EBITDA excluding non-cash items | $ | 170,924 | $ | 166,784 | 4,140 | 2.5 | $ | 351,239 | $ | 342,759 | 8,480 | 2.5 | |||||||||||||||||||
EBITDA excluding non-cash items | $ | 170,924 | $ | 166,784 | $ | 351,239 | $ | 342,759 | |||||||||||||||||||||||
Interest expense, net(1) | (35,315) | (39,477) | (60,763) | (96,339) | |||||||||||||||||||||||||||
Adjustments to derivative instruments recorded in interest expense(1) | 5,930 | 9,866 | 2,683 | 36,471 | |||||||||||||||||||||||||||
Amortization of debt financing costs(1) | 2,099 | 2,370 | 4,301 | 5,249 | |||||||||||||||||||||||||||
Amortization of debt | 876 | — | 1,495 | — | |||||||||||||||||||||||||||
Provision for income taxes, net of changes in deferred taxes | (2,618) | (1,662) | (6,339) | (4,168) | |||||||||||||||||||||||||||
Changes in working capital | (21,260) | (8,529) | (43,412) | (6,054) | |||||||||||||||||||||||||||
Cash provided by operating activities | 120,636 | 129,352 | 249,204 | 277,918 | |||||||||||||||||||||||||||
Changes in working capital | 21,260 | 8,529 | 43,412 | 6,054 | |||||||||||||||||||||||||||
Maintenance capital expenditures | (6,480) | (9,840) | (10,956) | (20,253) | |||||||||||||||||||||||||||
Free cash flow | $ | 135,416 | $ | 128,041 | 7,375 | 5.8 | $ | 281,660 | $ | 263,719 | 17,941 | 6.8 |
(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. For the six months ended June 30, 2016, interest expense also included a non-cash write-off of deferred financing fees related to the February 2016 refinancing at Hawaii Gas. |
(2) | Pension expense primarily consists of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses. |
(3) | Other non-cash (income) expense, net, primarily includes non-cash amortization of tolling liabilities, unrealized gains (losses) on commodity hedges and non-cash gains (losses) related to disposal of assets. See "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items, Free Cash Flow and Proportionately Combined Metrics" above for further discussion. |
MACQUARIE INFRASTRUCTURE CORPORATION | ||||||||||||||||||||||||||||||||
RECONCILIATION FROM CONSOLIDATED FREE CASH FLOW TO PROPORTIONATELY COMBINED FREE CASH | ||||||||||||||||||||||||||||||||
FLOW | ||||||||||||||||||||||||||||||||
Quarter Ended | Change | Six Months Ended | Change | |||||||||||||||||||||||||||||
2017 | 2016 | $ | % | 2017 | 2016 | $ | % | |||||||||||||||||||||||||
($ In Thousands) (Unaudited) | ||||||||||||||||||||||||||||||||
Free Cash Flow – Consolidated basis | $ | 135,416 | $ | 128,041 | 7,375 | 5.8 | $ | 281,660 | $ | 263,719 | 17,941 | 6.8 | ||||||||||||||||||||
100% of CP Free Cash Flow included in consolidated Free Cash Flow | (20,704) | (17,871) | (30,543) | (29,814) | ||||||||||||||||||||||||||||
MIC's share of CP Free Cash Flow | 18,462 | 16,147 | 26,633 | 25,807 | ||||||||||||||||||||||||||||
100% of MIC Hawaii Free Cash Flow included in consolidated Free Cash Flow | (9,295) | (10,874) | (24,231) | (21,736) | ||||||||||||||||||||||||||||
MIC's share of MIC Hawaii Free Cash Flow | 9,293 | 10,874 | 24,226 | 21,736 | ||||||||||||||||||||||||||||
Free Cash Flow – Proportionately Combined basis | $ | 133,172 | $ | 126,317 | 6,855 | 5.4 | $ | 277,745 | $ | 259,712 | 18,033 | 6.9 |
MACQUARIE INFRASTRUCTURE CORPORATION | ||||||||||||||||||||||||||||||||
IMTT | ||||||||||||||||||||||||||||||||
Quarter Ended | Change | Six Months Ended | Change | |||||||||||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||||||||||||||||||
$ | $ | $ | % | $ | $ | $ | % | |||||||||||||||||||||||||
($ In Thousands) (Unaudited) | ||||||||||||||||||||||||||||||||
Revenue | 137,144 | 128,218 | 8,926 | 7.0 | 275,961 | 263,643 | 12,318 | 4.7 | ||||||||||||||||||||||||
Cost of services | 49,224 | 46,459 | (2,765) | (6.0) | 99,070 | 96,760 | (2,310) | (2.4) | ||||||||||||||||||||||||
Selling, general and administrative expenses | 7,485 | 7,790 | 305 | 3.9 | 16,523 | 15,964 | (559) | (3.5) | ||||||||||||||||||||||||
Depreciation and amortization | 30,795 | 35,282 | 4,487 | 12.7 | 62,315 | 67,903 | 5,588 | 8.2 | ||||||||||||||||||||||||
Operating income | 49,640 | 38,687 | 10,953 | 28.3 | 98,053 | 83,016 | 15,037 | 18.1 | ||||||||||||||||||||||||
Interest expense, net(1) | (11,763) | (13,764) | 2,001 | 14.5 | (20,520) | (33,635) | 13,115 | 39.0 | ||||||||||||||||||||||||
Other income, net | 452 | 464 | (12) | (2.6) | 1,160 | 3,452 | (2,292) | (66.4) | ||||||||||||||||||||||||
Provision for income taxes | (15,716) | (10,409) | (5,307) | (51.0) | (32,264) | (21,638) | (10,626) | (49.1) | ||||||||||||||||||||||||
Net income(2) | 22,613 | 14,978 | 7,635 | 51.0 | 46,429 | 31,195 | 15,234 | 48.8 | ||||||||||||||||||||||||
Less: net income attributable to noncontrolling interests | — | — | — | — | — | 59 | 59 | 100.0 | ||||||||||||||||||||||||
Net income attributable to MIC(2) | 22,613 | 14,978 | 7,635 | 51.0 | 46,429 | 31,136 | 15,293 | 49.1 | ||||||||||||||||||||||||
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) | 22,613 | 14,978 | 46,429 | 31,195 | ||||||||||||||||||||||||||||
Interest expense, net(1) | 11,763 | 13,764 | 20,520 | 33,635 | ||||||||||||||||||||||||||||
Provision for income taxes | 15,716 | 10,409 | 32,264 | 21,638 | ||||||||||||||||||||||||||||
Depreciation and amortization | 30,795 | 35,282 | 62,315 | 67,903 | ||||||||||||||||||||||||||||
Pension expense(3) | 1,350 | 1,831 | 3,766 | 3,662 | ||||||||||||||||||||||||||||
Other non-cash expense, net | 69 | 115 | 137 | 558 | ||||||||||||||||||||||||||||
EBITDA excluding non-cash items | 82,306 | 76,379 | 5,927 | 7.8 | 165,431 | 158,591 | 6,840 | 4.3 | ||||||||||||||||||||||||
EBITDA excluding non-cash items | 82,306 | 76,379 | 165,431 | 158,591 | ||||||||||||||||||||||||||||
Interest expense, net(1) | (11,763) | (13,764) | (20,520) | (33,635) | ||||||||||||||||||||||||||||
Adjustments to derivative instruments recorded in interest expense(1) | 1,587 | 3,546 | 267 | 13,156 | ||||||||||||||||||||||||||||
Amortization of debt financing costs(1) | 412 | 411 | 823 | 831 | ||||||||||||||||||||||||||||
Provision for income taxes, net of changes in deferred taxes | (1,155) | (937) | (3,413) | (2,167) | ||||||||||||||||||||||||||||
Changes in working capital | (16,881) | (7,676) | (16,145) | (10,483) | ||||||||||||||||||||||||||||
Cash provided by operating activities | 54,506 | 57,959 | 126,443 | 126,293 | ||||||||||||||||||||||||||||
Changes in working capital | 16,881 | 7,676 | 16,145 | 10,483 | ||||||||||||||||||||||||||||
Maintenance capital expenditures | (2,987) | (6,942) | (5,447) | (13,239) | ||||||||||||||||||||||||||||
Free cash flow | 68,400 | 58,693 | 9,707 | 16.5 | 137,141 | 123,537 | 13,604 | 11.0 |
(1) | Interest expense, net, includes adjustments to derivative instruments and 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) | Pension expense primarily consists of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses. |
Atlantic Aviation | |||||||||||||||||||||||||||||||
Quarter Ended | Change | Six Months Ended | Change | ||||||||||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||||||||||||||||
$ | $ | $ | % | $ | $ | $ | % | ||||||||||||||||||||||||
($ In Thousands) (Unaudited) | |||||||||||||||||||||||||||||||
Revenue | 196,939 | 179,218 | 17,721 | 9.9 | 409,692 | 357,206 | 52,486 | 14.7 | |||||||||||||||||||||||
Cost of services (exclusive of depreciation and amortization of intangibles shown separately below) | 86,957 | 74,440 | (12,517) | (16.8) | 180,879 | 140,602 | (40,277) | (28.6) | |||||||||||||||||||||||
Gross margin | 109,982 | 104,778 | 5,204 | 5.0 | 228,813 | 216,604 | 12,209 | 5.6 | |||||||||||||||||||||||
Selling, general and administrative expenses | 52,596 | 51,381 | (1,215) | (2.4) | 106,486 | 103,992 | (2,494) | (2.4 | |||||||||||||||||||||||
Depreciation and amortization | 23,575 | 24,702 | 1,127 | 4.6 | 48,608 | 46,893 | (1,715) | (3.7) | |||||||||||||||||||||||
Operating income | 33,811 | 28,695 | 5,116 | 17.8 | 73,719 | 65,719 | 8,000 | 12.2 | |||||||||||||||||||||||
Interest expense, net(1) | (5,907) | (8,924) | 3,017 | 33.8 | (9,353) | (22,238) | 12,885 | 57.9 | |||||||||||||||||||||||
Other (expense) income, net | (19) | (49) | 30 | 61.2 | (105) | 341 | (446) | (130.8 | |||||||||||||||||||||||
Provision for income taxes | (11,077) | (7,973) | (3,104) | (38.9) | (25,627) | (17,715) | (7,912) | (44.7) | |||||||||||||||||||||||
Net income(2) | 16,808 | 11,749 | 5,059 | 43.1 | 38,634 | 26,107 | 12,527 | 48.0 | |||||||||||||||||||||||
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) | 16,808 | 11,749 | 38,634 | 26,107 | |||||||||||||||||||||||||||
Interest expense, net(1) | 5,907 | 8,924 | 9,353 | 22,238 | |||||||||||||||||||||||||||
Provision for income taxes | 11,077 | 7,973 | 25,627 | 17,715 | |||||||||||||||||||||||||||
Depreciation and amortization | 23,575 | 24,702 | 48,608 | 46,893 | |||||||||||||||||||||||||||
Pension expense(3) | 5 | 17 | 10 | 34 | |||||||||||||||||||||||||||
Other non-cash (income) expense, net | (22) | 339 | 40 | 248 | |||||||||||||||||||||||||||
EBITDA excluding non-cash items | 57,350 | 53,704 | 3,646 | 6.8 | 122,272 | 113,235 | 9,037 | 8.0 | |||||||||||||||||||||||
EBITDA excluding non-cash items | 57,350 | 53,704 | 122,272 | 113,235 | |||||||||||||||||||||||||||
Interest expense, net(1) | (5,907) | (8,924) | (9,353) | (22,238) | |||||||||||||||||||||||||||
Convertible senior notes interest(4) | (2,013) | — | (3,757) | — | |||||||||||||||||||||||||||
Adjustments to derivative instruments recorded in interest expense(1) | 2,553 | 1,179 | 2,686 | 6,787 | |||||||||||||||||||||||||||
Amortization of debt financing costs(1) | 221 | 905 | 535 | 1,705 | |||||||||||||||||||||||||||
Provision for income taxes, net of changes in deferred taxes | (1,730) | (910) | (4,602) | (2,362) | |||||||||||||||||||||||||||
Changes in working capital | 784 | 226 | (5,332) | 6,270 | |||||||||||||||||||||||||||
Cash provided by operating activities | 51,258 | 46,180 | 102,449 | 103,397 | |||||||||||||||||||||||||||
Changes in working capital | (784) | (226) | 5,332 | (6,270) | |||||||||||||||||||||||||||
Maintenance capital expenditures | (1,981) | (1,457) | (2,906) | (3,741) | |||||||||||||||||||||||||||
Free cash flow | 48,493 | 44,497 | 3,996 | 9.0 | 104,875 | 93,386 | 11,489 | 12.3 |
(1) | Interest expense, net, includes adjustments to derivative instruments and 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) | Pension expense primarily consists of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses. |
(4) | Represents the cash interest expense reclassified from MIC Corporate related to the 2.00% Convertible Senior Notes due October 2023, proceeds of which were used to pay down a portion of Atlantic Aviation's credit facility in October 2016. |
Contracted Power | ||||||||||||||||||||||||||||||||
Quarter Ended | Change | Six Months Ended | Change | |||||||||||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||||||||||||||||||
$ | $ | $ | % | $ | $ | $ | % | |||||||||||||||||||||||||
($ In Thousands) (Unaudited) | ||||||||||||||||||||||||||||||||
Product revenue | 40,166 | 38,300 | 1,866 | 4.9 | 68,236 | 68,479 | (243) | (0.4) | ||||||||||||||||||||||||
Cost of product sales | 5,498 | 5,794 | 296 | 5.1 | 10,357 | 10,151 | (206) | (2.0) | ||||||||||||||||||||||||
Selling, general and administrative expenses | 6,244 | 6,547 | 303 | 4.6 | 11,409 | 12,507 | 1,098 | 8.8 | ||||||||||||||||||||||||
Depreciation and amortization | 14,861 | 13,847 | (1,014) | (7.3) | 30,201 | 27,693 | (2,508) | (9.1) | ||||||||||||||||||||||||
Operating income | 13,563 | 12,112 | 1,451 | 12.0 | 16,269 | 18,128 | (1,859) | (10.3) | ||||||||||||||||||||||||
Interest expense, net(1) | (8,767) | (11,002) | 2,235 | 20.3 | (14,150) | (28,850) | 14,700 | 51.0 | ||||||||||||||||||||||||
Other income, net | 1,341 | 3 | 1,338 | NM | 2,106 | 308 | 1,798 | NM | ||||||||||||||||||||||||
(Provision) benefit for income taxes | (1,845) | (1,917) | 72 | 3.8 | (1,872) | 387 | (2,259) | NM | ||||||||||||||||||||||||
Net income (loss)(2) | 4,292 | (804) | 5,096 | NM | 2,353 | (10,027) | 12,380 | 123.5 | ||||||||||||||||||||||||
Less: net income (loss) attributable to noncontrolling interest | 16 | 1,889 | 1,873 | 99.2 | (3,333) | (349) | 2,984 | NM | ||||||||||||||||||||||||
Net income (loss) attributable to MIC(2) | 4,276 | (2,693) | 6,969 | NM | 5,686 | (9,678) | 15,364 | 158.8 | ||||||||||||||||||||||||
Reconciliation of net income (loss) to EBITDA excluding non-cash items and a reconciliation of cash provided by operating activities to Free Cash Flow: | ||||||||||||||||||||||||||||||||
Net income (loss)(2) | 4,292 | (804) | 2,353 | (10,027) | ||||||||||||||||||||||||||||
Interest expense, net(1) | 8,767 | 11,002 | 14,150 | 28,850 | ||||||||||||||||||||||||||||
Provision (benefit) for income taxes | 1,845 | 1,917 | 1,872 | (387) | ||||||||||||||||||||||||||||
Depreciation and amortization | 14,861 | 13,847 | 30,201 | 27,693 | ||||||||||||||||||||||||||||
Other non-cash income, net (3) | (2,232) | (1,945) | (4,256) | (3,965) | ||||||||||||||||||||||||||||
EBITDA excluding non-cash items | 27,533 | 24,017 | 3,516 | 14.6 | 44,320 | 42,164 | 2,156 | 5.1 | ||||||||||||||||||||||||
EBITDA excluding non-cash items | 27,533 | 24,017 | 44,320 | 42,164 | ||||||||||||||||||||||||||||
Interest expense, net(1) | (8,767) | (11,002) | (14,150) | (28,850) | ||||||||||||||||||||||||||||
Adjustments to derivative instruments recorded in interest expense(1) | 1,474 | 4,504 | (360) | 15,772 | ||||||||||||||||||||||||||||
Amortization of debt financing costs(1) | 379 | 354 | 758 | 737 | ||||||||||||||||||||||||||||
Provision/benefit for income taxes, net of changes in deferred taxes | 85 | (2) | (3) | (9) | ||||||||||||||||||||||||||||
Changes in working capital | (8,003) | (5,470) | (7,861) | (2,858) | ||||||||||||||||||||||||||||
Cash provided by operating activities | 12,701 | 12,401 | 22,704 | 26,956 | ||||||||||||||||||||||||||||
Changes in working capital | 8,003 | 5,470 | 7,861 | 2,858 | ||||||||||||||||||||||||||||
Maintenance capital expenditures | — | — | (22) | — | ||||||||||||||||||||||||||||
Free cash flow | 20,704 | 17,871 | 2,833 | 15.9 | 30,543 | 29,814 | 729 | 2.4 |
NM — Not meaningful | ||
(1) | Interest expense, net, includes adjustments to derivative instruments and 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) | Other non-cash income, net, primarily includes amortization of tolling liabilities. See "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items, Free Cash Flow and Proportionately Combined Metrics" above for further discussion. |
MIC Hawaii | ||||||||||||||||||||||||||||||||
Quarter Ended | Change | Six Months Ended | Change | |||||||||||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||||||||||||||||||
$ | $ | $ | % | $ | $ | $ | % | |||||||||||||||||||||||||
($ In Thousands) (Unaudited) | ||||||||||||||||||||||||||||||||
Product revenue | 53,779 | 53,058 | 721 | 1.4 | 113,362 | 107,025 | 6,337 | 5.9 | ||||||||||||||||||||||||
Service revenue | 12,193 | — | 12,193 | NM | 25,650 | — | 25,650 | NM | ||||||||||||||||||||||||
Total revenue | 65,972 | 53,058 | 12,914 | 24.3 | 139,012 | 107,025 | 31,987 | 29.9 | ||||||||||||||||||||||||
Cost of product sales (exclusive of depreciation and amortization of intangibles shown separately below) | 34,751 | 29,224 | (5,527) | (18.9) | 77,117 | 57,927 | (19,190) | (33.1) | ||||||||||||||||||||||||
Cost of services (exclusive of depreciation and amortization of intangibles shown separately below) | 10,944 | — | (10,944) | NM | 21,884 | — | (21,884) | NM | ||||||||||||||||||||||||
Cost of revenue – total | 45,695 | 29,224 | (16,471) | (56.4) | 99,001 | 57,927 | (41,074) | (70.9) | ||||||||||||||||||||||||
Gross margin | 20,277 | 23,834 | (3,557) | (14.9) | 40,011 | 49,098 | (9,087) | (18.5) | ||||||||||||||||||||||||
Selling, general and administrative expenses | 6,770 | 4,434 | (2,336) | (52.7) | 12,855 | 9,690 | (3,165) | (32.7) | ||||||||||||||||||||||||
Depreciation and amortization | 3,730 | 2,544 | (1,186) | (46.6) | 7,211 | 4,894 | (2,317) | (47.3) | ||||||||||||||||||||||||
Operating income | 9,777 | 16,856 | (7,079) | (42.0) | 19,945 | 34,514 | (14,569) | (42.2) | ||||||||||||||||||||||||
Interest expense, net(1) | (2,207) | (2,229) | 22 | 1.0 | (3,918) | (4,653) | 735 | 15.8 | ||||||||||||||||||||||||
Other expense, net | (36) | (147) | 111 | 75.5 | (241) | (401) | 160 | 39.9 | ||||||||||||||||||||||||
Provision for income taxes | (2,563) | (5,706) | 3,143 | 55.1 | (5,942) | (11,617) | 5,675 | 48.9 | ||||||||||||||||||||||||
Net income(2) | 4,971 | 8,774 | (3,803) | (43.3) | 9,844 | 17,843 | (7,999) | (44.8) | ||||||||||||||||||||||||
Less: net loss attributable to noncontrolling interests | (11) | — | 11 | NM | (39) | — | 39 | NM | ||||||||||||||||||||||||
Net income attributable to MIC(2) | 4,982 | 8,774 | (3,792) | (43.2) | 9,883 | 17,843 | (7,960) | (44.6) | ||||||||||||||||||||||||
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) | 4,971 | 8,774 | 9,844 | 17,843 | ||||||||||||||||||||||||||||
Interest expense, net(1) | 2,207 | 2,229 | 3,918 | 4,653 | ||||||||||||||||||||||||||||
Provision for income taxes | 2,563 | 5,706 | 5,942 | 11,617 | ||||||||||||||||||||||||||||
Depreciation and amortization | 3,730 | 2,544 | 7,211 | 4,894 | ||||||||||||||||||||||||||||
Pension expense(3) | 272 | 349 | 545 | 699 | ||||||||||||||||||||||||||||
Other non-cash expense (income), | 897 | (3,654) | 6,468 | (6,406) | ||||||||||||||||||||||||||||
EBITDA excluding non-cash items | 14,640 | 15,948 | (1,308) | (8.2) | 33,928 | 33,300 | 628 | 1.9 | ||||||||||||||||||||||||
EBITDA excluding non-cash items | 14,640 | 15,948 | 33,928 | 33,300 | ||||||||||||||||||||||||||||
Interest expense, net(1) | (2,207) | (2,229) | (3,918) | (4,653) | ||||||||||||||||||||||||||||
Adjustments to derivative instruments recorded in interest expense(1) | 316 | 637 | 90 | 756 | ||||||||||||||||||||||||||||
Amortization of debt financing | 99 | 88 | 204 | 752 | ||||||||||||||||||||||||||||
Provision for income taxes, net of changes in deferred taxes | (2,041) | (2,129) | (3,492) | (5,146) | ||||||||||||||||||||||||||||
Changes in working capital | (1,837) | 4,011 | (10,317) | 6,948 | ||||||||||||||||||||||||||||
Cash provided by operating activities | 8,970 | 16,326 | 16,495 | 31,957 | ||||||||||||||||||||||||||||
Changes in working capital | 1,837 | (4,011) | 10,317 | (6,948) | ||||||||||||||||||||||||||||
Maintenance capital expenditures | (1,512) | (1,441) | (2,581) | (3,273) | ||||||||||||||||||||||||||||
Free cash flow | 9,295 | 10,874 | (1,579) | (14.5) | 24,231 | 21,736 | 2,495 | 11.5 |
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. For the six months ended June 30, 2016, interest expense also included a non-cash write-off of deferred financing fees related to the February 2016 refinancing at Hawaii Gas. |
(2) | Corporate allocation expense, intercompany fees and the tax effect have been excluded from the above table as they are eliminated on consideration. |
(3) | Pension expense primarily consists of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses. |
(4) | Other non-cash expense (income), net, primarily includes non-cash adjustments related to unrealized gains (losses) on commodity hedges. See "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items, Free Cash Flow and Proportionately Combined Metrics" above for further discussion. |
Corporate and Other | ||||||||||||||||||||||||||||||||
Quarter Ended | Change | Six Months Ended | Change | |||||||||||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||||||||||||||||||
$ | $ | $ | % | $ | $ | $ | % | |||||||||||||||||||||||||
($ In Thousands) (Unaudited) | ||||||||||||||||||||||||||||||||
Fees to Manager-related party | 18,433 | 16,392 | (2,041) | (12.5) | 36,656 | 31,188 | (5,468) | (17.5) | ||||||||||||||||||||||||
Selling, general and administrative expenses(1) | 11,092 | 3,451 | (7,641) | NM | 15,087 | 4,906 | (10,181) | NM | ||||||||||||||||||||||||
Operating loss | (29,525) | (19,843) | (9,682) | (48.8) | (51,743) | (36,094) | (15,649) | (43.4) | ||||||||||||||||||||||||
Interest expense, net(2) | (6,671) | (3,558) | (3,113) | (87.5) | (12,822) | (6,963) | (5,859) | (84.1) | ||||||||||||||||||||||||
Benefit for income taxes | 13,537 | 9,785 | 3,752 | 38.3 | 25,968 | 19,196 | 6,772 | 35.3 | ||||||||||||||||||||||||
Net loss(3) | (22,659) | (13,616) | (9,043) | (66.4) | (38,597) | (23,861) | (14,736) | (61.8) | ||||||||||||||||||||||||
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(3) | (22,659) | (13,616) | (38,597) | (23,861) | ||||||||||||||||||||||||||||
Interest expense, net(2) | 6,671 | 3,558 | 12,822 | 6,963 | ||||||||||||||||||||||||||||
Benefit for income taxes | (13,537) | (9,785) | (25,968) | (19,196) | ||||||||||||||||||||||||||||
Fees to Manager-related party | 18,433 | 16,392 | 36,656 | 31,188 | ||||||||||||||||||||||||||||
Other non-cash expense | 187 | 187 | 375 | 375 | ||||||||||||||||||||||||||||
EBITDA excluding non-cash items | (10,905) | (3,264) | (7,641) | NM | (14,712) | (4,531) | (10,181) | NM | ||||||||||||||||||||||||
EBITDA excluding non-cash items | (10,905) | (3,264) | (14,712) | (4,531) | ||||||||||||||||||||||||||||
Interest expense, net(2) | (6,671) | (3,558) | (12,822) | (6,963) | ||||||||||||||||||||||||||||
Convertible senior notes interest(4) | 2,013 | — | 3,757 | — | ||||||||||||||||||||||||||||
Amortization of debt financing | 988 | 612 | 1,981 | 1,224 | ||||||||||||||||||||||||||||
Amortization of debt discount(2) | 876 | — | 1,495 | — | ||||||||||||||||||||||||||||
Benefit for income taxes, net of changes in deferred taxes | 2,223 | 2,316 | 5,171 | 5,516 | ||||||||||||||||||||||||||||
Changes in working capital | 4,677 | 380 | (3,757) | (5,931) | ||||||||||||||||||||||||||||
Cash used in operating activities | (6,799) | (3,514) | (18,887) | (10,685) | ||||||||||||||||||||||||||||
Changes in working capital | (4,677) | (380) | 3,757 | 5,931 | ||||||||||||||||||||||||||||
Free cash flow | (11,476) | (3,894) | (7,582) | (194.7) | (15,130) | (4,754) | (10,376) | NM |
NM — Not meaningful | ||
(1) | For the quarter and six months ended June 30, 2017, selling, general and administrative expenses included $3.1 million and $5.4 million, respectively, of costs related to the implementation of a shared service initiative. Selling, general and administrative expenses for the quarter and six months ended June 30, 2017 also includes $4.9 million of costs incurred in connection with the evaluation of various investment and acquisition opportunities. |
(2) | Interest expense, net, included non-cash amortization of deferred financing fees and amortization of debt discount related to the 2.00% Convertible Senior Notes due October 2023. |
(3) | Corporate allocation expense, intercompany fees and the tax effect have been excluded from the above table as they are eliminated on consolidation. |
(4) | Represents the cash interest expense reclassified to Atlantic Aviation related to the 2.00% Convertible Senior Notes due October 2023, proceeds of which were used to pay down a portion of Atlantic Aviation's credit facility in October 2016. |
MACQUARIE INFRASTRUCTURE CORPORATION | |||||||||||||||||||||||||||||||||||
RECONCILIATION OF NET INCOME (LOSS) TO EBITDA | |||||||||||||||||||||||||||||||||||
EXCLUDING NON-CASH ITEMS AND A RECONCILIATION FROM CASH PROVIDED BY/(USED | |||||||||||||||||||||||||||||||||||
IN) OPERATING ACTIVITIES TO PROPORTIONATELY COMBINED FREE CASH FLOW | |||||||||||||||||||||||||||||||||||
For the Quarter Ended June 30, 2017 | |||||||||||||||||||||||||||||||||||
IMTT | Atlantic | Contracted | MIC | MIC | Proportionately | Contracted Power | MIC | ||||||||||||||||||||||||||||
($ in Thousands) (Unaudited) | |||||||||||||||||||||||||||||||||||
Net income (loss) | 22,613 | 16,808 | 4,107 | 4,973 | (22,659) | 25,842 | 4,292 | 4,971 | |||||||||||||||||||||||||||
Interest expense, net(3) | 11,763 | 5,907 | 7,789 | 2,204 | 6,671 | 34,334 | 8,767 | 2,207 | |||||||||||||||||||||||||||
Provision (benefit) for income | 15,716 | 11,077 | 1,845 | 2,563 | (13,537) | 17,664 | 1,845 | 2,563 | |||||||||||||||||||||||||||
Depreciation and amortization of intangibles | 30,795 | 23,575 | 12,980 | 3,726 | — | 71,076 | 14,861 | 3,730 | |||||||||||||||||||||||||||
Fees to Manager-related party | — | — | — | — | 18,433 | 18,433 | — | — | |||||||||||||||||||||||||||
Pension expense(4) | 1,350 | 5 | — | 272 | — | 1,627 | — | 272 | |||||||||||||||||||||||||||
Other non-cash expense (income), net(5) | 69 | (22) | (2,232) | 898 | 187 | (1,100) | (2,232) | 897 | |||||||||||||||||||||||||||
EBITDA excluding non-cash | 82,306 | 57,350 | 24,489 | 14,636 | (10,905) | 167,876 | 27,533 | 14,640 | |||||||||||||||||||||||||||
EBITDA excluding non-cash | 82,306 | 57,350 | 24,489 | 14,636 | (10,905) | 167,876 | 27,533 | 14,640 | |||||||||||||||||||||||||||
Interest expense, net(3) | (11,763) | (5,907) | (7,789) | (2,204) | (6,671) | (34,334) | (8,767) | (2,207) | |||||||||||||||||||||||||||
Convertible senior notes | — | (2,013) | — | — | 2,013 | — | — | — | |||||||||||||||||||||||||||
Adjustments to derivative instruments recorded in interest expense, net(3) | 1,587 | 2,553 | 1,312 | 315 | — | 5,767 | 1,474 | 316 | |||||||||||||||||||||||||||
Amortization of debt financing charges(3) | 412 | 221 | 365 | 99 | 988 | 2,085 | 379 | 99 | |||||||||||||||||||||||||||
Amortization of debt | — | — | — | — | 876 | 876 | — | — | |||||||||||||||||||||||||||
Provision/benefit for income taxes, net of changes in deferred taxes | (1,155) | (1,730) | 85 | (2,041) | 2,223 | (2,618) | 85 | (2,041) | |||||||||||||||||||||||||||
Changes in working capital | (16,881) | 784 | (7,392) | (1,817) | 4,677 | (20,629) | (8,003) | (1,837) | |||||||||||||||||||||||||||
Cash provided by (used in) operating activities | 54,506 | 51,258 | 11,070 | 8,988 | (6,799) | 119,023 | 12,701 | 8,970 | |||||||||||||||||||||||||||
Changes in working capital | 16,881 | (784) | 7,392 | 1,817 | (4,677) | 20,629 | 8,003 | 1,837 | |||||||||||||||||||||||||||
Maintenance capital expenditures | (2,987) | (1,981) | — | (1,512) | — | (6,480) | — | (1,512) | |||||||||||||||||||||||||||
Proportionately Combined Free Cash Flow | 68,400 | 48,493 | 18,462 | 9,293 | (11,476) | 133,172 | 20,704 | 9,295 |
For the Quarter Ended June 30, 2016 | |||||||||||||||||||||||||||||||
IMTT | Atlantic | Contracted | MIC | MIC | Proportionately | Contracted | |||||||||||||||||||||||||
($ in Thousands) (Unaudited) | |||||||||||||||||||||||||||||||
Net income (loss) | 14,978 | 11,749 | (153) | 8,774 | (13,616) | 21,732 | (804) | ||||||||||||||||||||||||
Interest expense, net(3) | 13,764 | 8,924 | 9,661 | 2,229 | 3,558 | 38,136 | 11,002 | ||||||||||||||||||||||||
Provision (benefit) for income taxes | 10,409 | 7,973 | 1,915 | 5,706 | (9,785) | 16,218 | 1,917 | ||||||||||||||||||||||||
Depreciation and amortization of intangibles | 35,282 | 24,702 | 11,973 | 2,544 | — | 74,501 | 13,847 | ||||||||||||||||||||||||
Fees to Manager-related party | — | — | — | — | 16,392 | 16,392 | — | ||||||||||||||||||||||||
Pension expense(4) | 1,831 | 17 | — | 349 | — | 2,197 | — | ||||||||||||||||||||||||
Other non-cash expense (income), net(5) | 115 | 339 | (1,945) | (3,654) | 187 | (4,958) | (1,945) | ||||||||||||||||||||||||
EBITDA excluding non-cash items | 76,379 | 53,704 | 21,451 | 15,948 | (3,264) | 164,218 | 24,017 | ||||||||||||||||||||||||
EBITDA excluding non-cash items | 76,379 | 53,704 | 21,451 | 15,948 | (3,264) | 164,218 | 24,017 | ||||||||||||||||||||||||
Interest expense, net(3) | (13,764) | (8,924) | (9,661) | (2,229) | (3,558) | (38,136) | (11,002) | ||||||||||||||||||||||||
Adjustments to derivative instruments recorded in interest expense, net(3) | 3,546 | 1,179 | 4,019 | 637 | — | 9,381 | 4,504 | ||||||||||||||||||||||||
Amortization of debt financing charges(3) | 411 | 905 | 340 | 88 | 612 | 2,356 | 354 | ||||||||||||||||||||||||
Provision/benefit for income taxes, net of changes in deferred taxes | (937) | (910) | (2) | (2,129) | 2,316 | (1,662) | (2) | ||||||||||||||||||||||||
Changes in working capital | (7,676) | 226 | (5,446) | 4,011 | 380 | (8,505) | (5,470) | ||||||||||||||||||||||||
Cash provided by (used in) operating activities | 57,959 | 46,180 | 10,701 | 16,326 | (3,514) | 127,652 | 12,401 | ||||||||||||||||||||||||
Changes in working capital | 7,676 | (226) | 5,446 | (4,011) | (380) | 8,505 | 5,470 | ||||||||||||||||||||||||
Maintenance capital | (6,942) | (1,457) | — | (1,441) | — | (9,840) | — | ||||||||||||||||||||||||
Proportionately Combined Free | 58,693 | 44,497 | 16,147 | 10,874 | (3,894) | 126,317 | 17,871 |
For the Six Months Ended June 30, 2017 | |||||||||||||||||||||||||||||||||||
IMTT | Atlantic | Contracted | MIC | MIC | Proportionately | Contracted | MIC | ||||||||||||||||||||||||||||
($ in Thousands) (Unaudited) | |||||||||||||||||||||||||||||||||||
Net income (loss) | 46,429 | 38,634 | 2,153 | 9,848 | (38,597) | 58,467 | 2,353 | 9,844 | |||||||||||||||||||||||||||
Interest expense, net(3) | 20,520 | 9,353 | 12,579 | 3,914 | 12,822 | 59,188 | 14,150 | 3,918 | |||||||||||||||||||||||||||
Provision (benefit) for income | 32,264 | 25,627 | 1,872 | 5,942 | (25,968) | 39,737 | 1,872 | 5,942 | |||||||||||||||||||||||||||
Depreciation and amortization of intangibles | 62,315 | 48,608 | 26,441 | 7,202 | — | 144,566 | 30,201 | 7,211 | |||||||||||||||||||||||||||
Fees to Manager-related party | — | — | — | — | 36,656 | 36,656 | — | — | |||||||||||||||||||||||||||
Pension expense(4) | 3,766 | 10 | — | 545 | — | 4,321 | — | 545 | |||||||||||||||||||||||||||
Other non-cash expense (income), net(5) | 137 | 40 | (4,235) | 6,469 | 375 | 2,786 | (4,256) | 6,468 | |||||||||||||||||||||||||||
EBITDA excluding non-cash | 165,431 | 122,272 | 38,810 | 33,920 | (14,712) | 345,721 | 44,320 | 33,928 | |||||||||||||||||||||||||||
EBITDA excluding non-cash | 165,431 | 122,272 | 38,810 | 33,920 | (14,712) | 345,721 | 44,320 | 33,928 | |||||||||||||||||||||||||||
Interest expense, net(3) | (20,520) | (9,353) | (12,579) | (3,914) | (12,822) | (59,188) | (14,150) | (3,918) | |||||||||||||||||||||||||||
Convertible senior notes | — | (3,757) | — | — | 3,757 | — | — | — | |||||||||||||||||||||||||||
Adjustments to derivative instruments recorded in interest expense, net(3) | 267 | 2,686 | (302) | 89 | — | 2,740 | (360) | 90 | |||||||||||||||||||||||||||
Amortization of debt financing charges(3) | 823 | 535 | 729 | 204 | 1,981 | 4,272 | 758 | 204 | |||||||||||||||||||||||||||
Amortization of debt discount(3) | — | — | — | — | 1,495 | 1,495 | — | — | |||||||||||||||||||||||||||
Provision/benefit for income taxes, net of changes in deferred taxes | (3,413) | (4,602) | (3) | (3,492) | 5,171 | (6,339) | (3) | (3,492) | |||||||||||||||||||||||||||
Changes in working capital | (16,145) | (5,332) | (7,540) | (10,299) | (3,757) | (43,073) | (7,861) | (10,317) | |||||||||||||||||||||||||||
Cash provided by (used in) operating activities | 126,443 | 102,449 | 19,115 | 16,508 | (18,887) | 245,628 | 22,704 | 16,495 | |||||||||||||||||||||||||||
Changes in working capital | 16,145 | 5,332 | 7,540 | 10,299 | 3,757 | 43,073 | 7,861 | 10,317 | |||||||||||||||||||||||||||
Maintenance capital expenditures | (5,447) | (2,906) | (22) | (2,581) | — | (10,956) | (22) | (2,581) | |||||||||||||||||||||||||||
Proportionately Combined Free Cash Flow | 137,141 | 104,875 | 26,633 | 24,226 | (15,130) | 277,745 | 30,543 | 24,231 |
For the Six Months Ended June 30, 2016 | ||||||||||||||||||||||||||||||||
IMTT(7) | Atlantic | Contracted | MIC | MIC | Proportionately Combined(2) | Contracted | ||||||||||||||||||||||||||
($ in Thousands) (Unaudited) | ||||||||||||||||||||||||||||||||
Net income (loss) | 31,195 | 26,107 | (8,593) | 17,843 | (23,861) | 42,691 | (10,027) | |||||||||||||||||||||||||
Interest expense, net(3) | 33,635 | 22,238 | 25,449 | 4,653 | 6,963 | 92,938 | 28,850 | |||||||||||||||||||||||||
Provision (benefit) for income taxes | 21,638 | 17,715 | (389) | 11,617 | (19,196) | 31,385 | (387) | |||||||||||||||||||||||||
Depreciation and amortization of intangibles | 67,903 | 46,893 | 23,945 | 4,894 | — | 143,635 | 27,693 | |||||||||||||||||||||||||
Fees to Manager-related party | — | — |
— | — | 31,188 | 31,188 | — | |||||||||||||||||||||||||
Pension expense(4) | 3,662 | 34 | — | 699 | — | 4,395 | — | |||||||||||||||||||||||||
Other non-cash expense (income), net(5) | 558 | 248 | (3,946) | (6,406) | 375 | (9,171) | (3,965) | |||||||||||||||||||||||||
EBITDA excluding non-cash items | 158,591 | 113,235 | 36,466 | 33,300 | (4,531) | 337,061 | 42,164 | |||||||||||||||||||||||||
EBITDA excluding non-cash items | 158,591 | 113,235 | 36,466 | 33,300 | (4,531) | 337,061 | 42,164 | |||||||||||||||||||||||||
Interest expense, net(3) | (33,635) | (22,238) | (25,449) | (4,653) | (6,963) | (92,938) | (28,850) | |||||||||||||||||||||||||
Adjustments to derivative instruments recorded in interest expense, net(3) | 13,156 | 6,787 | 14,090 | 756 | — | 34,789 | 15,772 | |||||||||||||||||||||||||
Amortization of debt financing charges(3) | 831 | 1,705 | 709 | 752 | 1,224 | 5,221 | 737 | |||||||||||||||||||||||||
Provision/benefit for income taxes, net of changes in deferred taxes | (2,167) | (2,362) | (9) | (5,146) | 5,516 | (4,168) | (9) | |||||||||||||||||||||||||
Changes in working capital | (10,483) | 6,270 | (3,062) | 6,948 | (5,931) | (6,258) | (2,858) | |||||||||||||||||||||||||
Cash provided by (used in) operating activities | 126,293 | 103,397 | 22,745 | 31,957 | (10,685) | 273,707 | 26,956 | |||||||||||||||||||||||||
Changes in working capital | 10,483 | (6,270) | 3,062 | (6,948) | 5,931 | 6,258 | 2,858 | |||||||||||||||||||||||||
Maintenance capital | (13,239) | (3,741) | — | (3,273) | — | (20,253) | — | |||||||||||||||||||||||||
Proportionately Combined Free Cash Flow | 123,537 | 93,386 | 25,807 | 21,736 | (4,754) | 259,712 | 29,814 |
(1) | Represents MIC's proportionately combined interests in the businesses comprising this reportable segment. |
(2) | The sum of the amounts attributable to MIC in proportion to its ownership. |
(3) | Interest expense, net, includes adjustments to derivative instruments, non-cash amortization of deferred financing charges and non-cash amortization of debt discount related to the 2.00% Convertible Senior Notes due October 2023. For the six months ended June 30, 2016, interest expense, net, also included a non-cash write-off of deferred financing fees related to the February 2016 refinancing at Hawaii Gas. |
(4) | Pension expense primarily consists of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses. |
(5) | Other non-cash expense (income), net, primarily includes non-cash amortization of tolling liabilities, unrealized gains (losses) on commodity hedges and non-cash gains (losses) related to disposal of assets. See "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items, Free Cash Flow and Proportionately Combined Metrics" above for further discussion. |
(6) | Represents the cash interest expense reclassified from MIC Corporate to Atlantic Aviation related to the 2.00% Convertible Senior Notes due October 2023, proceeds of which were used to pay down a portion of Atlantic Aviation's credit facility in October 2016. |
(7) | On March 31, 2016, IMTT acquired the remaining 33.3% interest in its Quebec terminal that it did not previously own. IMTT was previously providing management services to this terminal and no operational changes are expected. Prior to the acquisition, IMTT consolidated the results of the Quebec terminal in its financial statements and adjusted for the portion that it did not own through noncontrolling interests. Since the IMTT Acquisition in July 2014 and prior to the acquisition of the noncontrolling interest, MIC reported IMTT's EBITDA excluding non-cash items and Free Cash Flow including the 33.3% portion of the Quebec terminal. The contribution from the minority interest was not significant. Therefore, there were no changes to our historical EBITDA excluding non-cash items, Free Cash Flow or results generally as a function of acquiring this noncontrolling interest. |
View original content:http://www.prnewswire.com/news-releases/mic-reports-second-quarter-2017-financial-results-announces-acquisition-and-investment-increases-quarterly-cash-dividend-300498692.html
SOURCE Macquarie Infrastructure Corporation
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