Le Lézard
Classified in: Tourism and vacations, Oil industry, Transportation, Business, Covid-19 virus
Subjects: ERN, CCA

MIC Reports Second Quarter 2020 Financial And Operational Results


NEW YORK, Aug. 4, 2020 /PRNewswire/ -- Macquarie Infrastructure Corporation (NYSE: MIC) today announced its second quarter 2020 operational and financial results. The results reflect the ongoing impact of COVID-19 related travel restrictions, quarantines and event cancellations on the Company's Atlantic Aviation and MIC Hawaii segments, partially offset by improved performance in its IMTT segment. 

Christopher Frost, MIC's Chief Executive Officer, said: "Our bulk liquid storage and handling business, IMTT, saw sustained high levels of storage utilization and generated year-on-year improvement in financial performance while a partial recovery in general aviation flight activity in the U.S. contributed to a better than anticipated result at Atlantic Aviation.

"We remain confident in the outlook for MIC and its operating businesses over the medium term despite the impact of COVID-19 on our results for the second quarter. Cost reduction initiatives implemented early in the quarter enabled us to achieve targeted levels of expense savings while continuing to provide a high level of service and support to our customers."

Second Quarter 2020 Financial Results

MIC reported a net loss from continuing operations of $8 million for the quarter, compared with net income of $6 million in the second quarter of 2019. The decrease reflects reduced revenue from each of Atlantic Aviation and MIC Hawaii. The reduced revenue was partially offset by lower expenses including fees payable to the Company's external manager, lower unrealized losses on interest rate hedges and an income tax benefit.

Adjusted EBITDA excluding non-cash items from continuing operations totaled $87 million in the second quarter, down from $134 million in the prior comparable period. The decrease reflects the reduced contributions from each of Atlantic Aviation and MIC Hawaii, including a $7 million provision for estimated costs of remediating certain environmental matters recorded in selling, general and administrative expenses at Atlantic Aviation, partially offset by an increased contribution from IMTT.

MIC generated cash from operating activities of $73 million in the second quarter, down from $108 million in the prior comparable period. The decrease primarily reflects the reduced EBITDA excluding non-cash items generated by each of Atlantic Aviation and MIC Hawaii and declines in the amounts of products purchased and lower wholesale product prices, partially offset by declines in the amount of product sold and lower retail product prices.

The Company's Adjusted Free Cash Flow from continuing operations totaled $46 million in the second quarter, down 48% from $88 million in the prior comparable period. The decrease reflects the reduction in Adjusted EBITDA excluding non-cash items and higher maintenance capital expenditures, partially offset by a current tax benefit.

Second Quarter 2020 Segment Results

"The improved results at IMTT reflect an increase in demand for storage, particularly for petroleum products, together with a consistent level of uncontracted, ancillary services in the quarter," said Frost.

"The partial recovery in general aviation flight activity in the quarter resulted in an increased contribution from Atlantic Aviation relative to the end of the first quarter. A lifting of lockdown measures in additional markets and a recovery in business oriented travel could increase flight activity, although the absence of most event-related and international travel together with increases in COVID-19 infections in certain states, could limit further recovery in 2020," said Frost.

"Travel restrictions and rules requiring mandatory quarantining effectively eliminated tourism in Hawaii during the quarter and materially reduced demand for gas produced and/or distributed by Hawaii Gas," said Frost.

MIC's Corporate and Other segment includes costs of managing the public company, interest expense associated with holding company level debt facilities and expenses related to its pursuit of strategic alternatives.

Balance Sheet Strength and Financial Flexibility

MIC's aggregate leverage ratio increased to approximately 4.8 times net debt/Adjusted EBITDA excluding non-cash items (trailing twelve-month basis) on June 30, 2020. The Company expects its leverage ratio to increase through the remainder of the year based on the impact of COVID-19 on its financial performance and its use of a portion of its current cash balance to fund growth projects. MIC expects to deploy cash of between $200 and $225 million on projects to which it is contractually obligated. Through June 30, the Company had deployed $119 million in growth projects. The use of cash is expected to be partially offset by incremental EBITDA generated by the projects completed during the year.

"Our current cash balances, excluding drawings on our revolving credit facility, together with the cash we believe our businesses will generate over the remainder of the year, are expected to fund our ongoing operations and allow us to meet all of our financial obligations," noted Frost.

Strategic Alternatives

On October 31, 2019, MIC announced that it was pursuing strategic alternatives including the sale of the Company or one or more of its operating businesses as a means of unlocking value. During the second quarter, the Company continued to actively pursue these alternatives although travel and other restrictions on interactions imposed by COVID-19 slowed the process, as expected.

"While the timeline for the process has been extended due to COVID-19, we remain committed to unlocking value for shareholders through a sale or sales," said Frost. 

Summary Financial Information


Quarter Ended
June 30,


Change
Favorable/
(Unfavorable)


Six Months Ended
June 30,


Change
Favorable/
(Unfavorable)


2020


2019


$


%


2020


2019


$


%


($ In Millions, Except Share and Per Share Data) (Unaudited)

GAAP Metrics
















Continuing Operations
















Net (loss) income

$

(8)



$

6



(14)



NM


$

3



$

70



(67)



(96)


Net (loss) income per share attributable to MIC

(0.09)



0.07



(0.16)



NM


0.04



0.81



(0.77)



(95)


Cash provided by operating activities

73



108



(35)



(32)



172



259



(87)



(34)


Discontinued Operations
















Net income

$

?



$

3



(3)



(100)



$

?



$

8



(8)



(100)


Net income per share attributable to MIC

?



0.06



(0.06)



(100)



?



0.13



(0.13)



(100)


Cash provided by (used) in operating activities

?



2



(2)



(100)



?



(11)



11



100


Weighted average number of shares outstanding: basic

86,871,892



86,073,372



798,520



1



86,779,432



85,973,308



806,124



1


MIC Non-GAAP Metrics
















EBITDA excluding non-cash items - continuing operations

$

85



$

132



(47)



(36)



$

226



$

334



(108)



(32)


Investment and acquisition/disposition costs

2



2



?



?



13



3



10



NM

Adjusted EBITDA excluding non - cash items?
  continuing operations

$

87



$

134



(47)



(35)



$

239



$

337



(98)



(29)


Cash interest

$

(30)



$

(31)



1



3



$

(59)



$

(59)



?



?


Cash taxes

5



(2)



7



NM


(2)



(9)



7



78


Maintenance capital expenditures

(16)



(13)



(3)



(23)



(28)



(23)



(5)



(22)


Adjusted Free Cash Flow - continuing operations

$

46



$

88



(42)



(48)



$

150



$

246



(96)



(39)


EBITDA excluding non-cash items - discontinued
  operations

$

?



$

12



(12)



(100)



$

?



$

22



(22)



(100)


Cash interest

?



(5)



5



100



?



(8)



8



100


Free Cash Flow - discontinued operations

$

?



$

7



(7)



(100)



$

?



$

14



(14)



(100)


Adjusted Free Cash Flow - consolidated

$

46



$

95



(49)



(52)



$

150



$

260



(110)



(42)


__________ 


NM ? Not meaningful

Conference Call and Webcast

When: MIC has scheduled a conference call for 8:00 a.m. Eastern Time on Tuesday, August 4, 2020 during which management will review and comment on the second quarter and year to date 2020 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.

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 4, 2020 through midnight on August 11, 2020, at +1(404) 537-3406 or +1(855) 859-2056, Passcode: 2387446. 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. Other non-cash expenses, net, excludes the adjustment to bad debt expense related to the specific reserve component, net of recoveries, for which this adjustment is reported in working capital. 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 fund acquisitions, invest in growth projects, reduce or repay indebtedness and/or return capital to shareholders. 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 expense incurred in relation to the incentive plans for senior management of our operating business; 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 Corporate and Other. 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. Such statements include, among others, those concerning our expected financial performance and strategic and operational plans, statements regarding the anticipated specific and overall impacts of the COVID-19 pandemic, as well as all assumptions, expectations, predictions, intentions or beliefs about future events. 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; the short and long term impact of the COVID-19 pandemic; 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,
2020


December 31,
2019


(Unaudited)



ASSETS




Current assets:




Cash and cash equivalents

$

874



$

357


Restricted cash

14



1


Accounts receivable, net of allowance for doubtful accounts

62



97


Inventories

26



31


Prepaid expenses

14



13


Income tax receivable

12



11


Other current assets

16



19


Total current assets

1,018



529


Property, equipment, land and leasehold improvements, net

3,231



3,202


Operating lease assets, net

330



336


Investment in unconsolidated business

8



9


Goodwill

2,044



2,043


Intangible assets, net

705



729


Other noncurrent assets

11



13


Total assets

$

7,347



$

6,861


LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:




Due to Manager-related party

$

2



$

3


Accounts payable

37



67


Accrued expenses

76



86


Current portion of long-term debt

11



12


Operating lease liabilities - current

20



20


Fair value of derivative liabilities

8



7


Other current liabilities

26



35


Total current liabilities

180



230


Long-term debt, net of current portion

3,254



2,654


Deferred income taxes

679



679


Operating lease liabilities - noncurrent

316



320


Other noncurrent liabilities

176



167


Total liabilities

4,605



4,050


Commitments and contingencies

?



?


Stockholders' equity (1):




Additional paid in capital

1,127



1,198


Accumulated other comprehensive loss

(38)



(37)


Retained earnings

1,644



1,641


Total stockholders' equity

2,733



2,802


Noncontrolling interests

9



9


Total equity

2,742



2,811


Total liabilities and equity

$

7,347



$

6,861


__________                                                                             _



(1)

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, 2020 and December 31, 2019, the Company had 86,969,144 shares and 86,600,302 shares of common stock issued and outstanding, respectively; (ii) 100,000,000 shares of preferred stock, par value $0.001 per share authorized. At June 30, 2020 and December 31, 2019, 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, 2020 and December 31, 2019.

 

 

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,


2020


2019


2020


2019

Revenue








Service revenue

$

224



$

355



$

580



$

773


Product revenue

37



61



97



125


Total revenue

261



416



677



898


Costs and expenses








Cost of services

75



162



220



330


Cost of product sales

18



45



60



85


Selling, general and administrative

83



84



179



164


Fees to Manager-related party

4



7



11



15


Depreciation

50



48



101



96


Amortization of intangibles

13



15



27



30


Total operating expenses 

243



361



598



720


Operating income

18



55



79



178


Other income (expense)








Interest income

?



1



?



4


Interest expense(1)

(33)



(46)



(75)



(88)


Other income (expense), net

2



(2)



3



2


Net (loss) income from continuing operations before income taxes

(13)



8



7



96


Benefit (provision) for income taxes

5



(2)



(4)



(26)


Net (loss) income from continuing operations

(8)



6



3



70


Discontinued Operations(2)








Net income from discontinued operations before income taxes

?



5



?



8


Provision for income taxes

?



(2)



?



?


Net income from discontinued operations

?



3



?



8


Net (loss) income

(8)



9



3



78


Net (loss) income from continuing operations

(8)



6



3



70


Net (loss) income from continuing operations attributable to MIC

(8)



6



3



70


Net income from discontinued operations

?



3



?



8


Less: net loss attributable to noncontrolling interests

?



(2)



?



(3)


Net income from discontinued operations attributable to MIC

?



5



?



11


Net (loss) income attributable to MIC

$

(8)



$

11



$

3



$

81


Basic (loss) income per share from continuing operations attributable to
  MIC

$

(0.09)



$

0.07



$

0.04



$

0.81


Basic income per share from discontinued operations attributable to MIC

?



0.06



?



0.13


Basic (loss) income per share attributable to MIC

$

(0.09)



$

0.13



$

0.04



$

0.94


Weighted average number of shares outstanding: basic

86,871,892



86,073,372



86,779,432



85,973,308


Diluted (loss) income per share from continuing operations attributable to
  MIC

$

(0.09)



$

0.07



$

0.04



$

0.81


Diluted income per share from discontinued operations attributable to MIC

?



0.06



?



0.13


Diluted (loss) income per share attributable to MIC

$

(0.09)



$

0.13



$

0.04



$

0.94


Weighted average number of shares outstanding: diluted

86,871,892



86,099,111



86,838,519



85,998,006


Cash dividends declared per share

$

?



$

1.00



$

?



$

2.00


__________                                                                             _



(1)

Interest expense includes non-cash losses on derivative instruments of $1 million and $10 million for the quarter and six months ended June 30, 2020, respectively, compared with non-cash losses of $8 million and $12 million for the quarter and six months ended June 30, 2019, respectively.

(2)

See Note 4, "Discontinued Operations and Dispositions", in our Notes to Consolidated Condensed Financial Statements in Part I of Form 10-Q for the quarter ended June 30, 2020, 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,


2020


2019

Operating activities




Net income from continuing operations

$

3



$

70


Adjustments to reconcile net income to net cash provided by operating activities fromcontinuing
  operations:




Depreciation and amortization of property and equipment

101



96


Amortization of intangible assets

27



30


Amortization of debt financing costs

5



5


Amortization of debt discount

1



2


Adjustments to derivative instruments

6



22


Fees to Manager - related party

11



15


Deferred taxes

2



17


Other non-cash expense, net

9



9


Changes in other assets and liabilities, net of acquisitions:




Accounts receivable

32



(2)


Inventories

6



(1)


Prepaid expenses and other current assets

(1)



(11)


Accounts payable and accrued expenses

(28)



1


Income taxes payable

(2)



3


Other, net

?



3


Net cash provided by operating activities from continuing operations

172



259


Investing activities




Acquisitions of businesses and investments, net of cash, cashequivalents and restricted cash acquired

(13)



?


Purchases of property and equipment

(135)



(102)


Loan to project developer

?



(1)


Net cash used in investing activities from continuing operations

(148)



(103)


Financing activities




Proceeds from long-term debt

874



?


Payment of long-term debt

(281)



(3)


Dividends paid to common stockholders

(87)



(172)


Debt financing costs paid

?



(1)


Net cash provided by (used in) financing activities from continuing operations

506



(176)


Net change in cash, cash equivalents and restricted cash from continuing operations

530



(20)


 

MACQUARIE INFRASTRUCTURE CORPORATION


CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS ? (continued)

(Unaudited)

($ in Millions)



Six Months Ended June 30,


2020


2019

Cash flows (used in) provided by discontinued operations:




Net cash used in operating activities

$

?



$

(11)


Net cash used in investing activities

?



(16)


Net cash provided by financing activities

?



27


Net cash provided by discontinued operations

?



?


Net change in cash, cash equivalents and restricted cash

530



(20)


Cash, cash equivalents and restricted cash, beginning of period

358



629


Cash, cash equivalents and restricted cash, end of period

$

888



$

609


Supplemental disclosures of cash flow information from continuing
    operations:




Non-cash investing and financing activities:




Accrued purchases of property and equipment

$

20



$

13


Leased assets obtained in exchange for new operating lease liabilities

6



2


Taxes paid, net

4



6


Interest paid, net

59



67


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,


2020


2019

Cash and cash equivalents

$

874



$

573


Restricted cash

14



17


Cash, cash equivalents and restricted cash included in assets held for sale(1)

?



19


Total of cash, cash equivalents and restricted cash shown in the

    consolidated statement of cash flows

$

888



$

609


__________                                                                             _



(1)

Represents cash, cash equivalents and restricted cash related to businesses classified as held for sale. See Note 4, "Discontinued Operations and Dispositions", in our Notes to Consolidated Condensed Financial Statements in Part I of Form 10-Q for the quarter ended June 30, 2020, 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)


2020


2019


$


%


2020


2019


$


%


($ In Millions, Except Share and Per Share Data) (Unaudited)

Revenue
















Service revenue

$

224



$

355



(131)



(37)



$

580



$

773



(193)



(25)


Product revenue

37



61



(24)



(39)



97



125



(28)



(22)


Total revenue

261



416



(155)



(37)



677



898



(221)



(25)


Costs and expenses
















Cost of services

75



162



87



54



220



330



110



33


Cost of product sales

18



45



27



60



60



85



25



29


Selling, general and administrative

83



84



1



1



179



164



(15)



(9)


Fees to Manager - related party

4



7



3



43



11



15



4



27


Depreciation and amortization

63



63



?



?



128



126



(2)



(2)


Total operating expenses 

243



361



118



33



598



720



122



17


Operating income

18



55



(37)



(67)



79



178



(99)



(56)


Other income (expense)
















Interest income

?



1



(1)



(100)



?



4



(4)



(100)


Interest expense(1)

(33)



(46)



13



28



(75)



(88)



13



15


Other  income (expense), net

2



(2)



4



200



3



2



1



50


Net (loss) income from continuing
  operations before income taxes

(13)



8



(21)



NM


7



96



(89)



(93)


Benefit (provision) for income taxes

5



(2)



7



NM


(4)



(26)



22



85


Net (loss) income from continuing
  operations

(8)



6



(14)



NM


3



70



(67)



(96)


Discontinued Operations
















Net income from discontinued
  operations before income taxes

?



5



(5)



(100)



?



8



(8)



(100)


Provision for income taxes

?



(2)



2



100



?



?



?



?


Net income from discontinued operations

?



3



(3)



(100)



?



8



(8)



(100)


Net (loss) income

(8)



9



(17)



(189)



3



78



(75)



(96)


















Net (loss) income from continuing operations

(8)



6



(14)



NM


3



70



(67)



(96)


Net (loss) income from continuing
  operations attributable to MIC

(8)



6



(14)



NM


3



70



(67)



(96)


Net income from discontinued operations

?



3



(3)



(100)



?



8



(8)



(100)


Less: net loss attributable to
  noncontrolling interests

?



(2)



(2)



(100)



?



(3)



(3)



(100)


Net income from discontinued
  operations attributable to MIC

?



5



(5)



(100)



?



11



(11)



(100)


Net (loss) income attributable to MIC

$

(8)



$

11



(19)



(173)



$

3



$

81



(78)



(96)


Basic (loss) income per share from
  continuing operations attributable to MIC

$

(0.09)



$

0.07



(0.16)



NM


$

0.04



$

0.81



(0.77)



(95)


Basic income per share from discontinued
  operations attributable to MIC

?



0.06



(0.06)



(100)



?



0.13



(0.13)



(100)


Basic (loss) income per share
  attributable to MIC

$

(0.09)



$

0.13



(0.22)



(169)



$

0.04



$

0.94



(0.90)



(96)


Weighted average number of shares
  outstanding: basic

86,871,892



86,073,372



798,520



1



86,779,432



85,973,308



806,124



1


__________                                                                             _


NM ? Not meaningful


(1)

Interest expense includes non-cash losses on derivative instruments of $1 million and $10 million for the quarter and six months ended June 30, 2020, respectively, compared with non-cash losses of $8 million and $12 million for the quarter and six months ended June 30, 2019, respectively.

 

 

MACQUARIE INFRASTRUCTURE CORPORATION


RECONCILIATION OF CONSOLIDATED NET (LOSS) 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)


2020


2019


$


%


2020


2019


$


%


($ In Millions) (Unaudited)

Net (loss) income from continuing operations

$

(8)



$

6







$

3



$

70






Interest expense, net(1)

33



45







75



84






(Benefit) Provision for income taxes

(5)



2







4



26






Depreciation and amortization

63



63







128



126






Fees to Manager - related party

4



7







11



15






Other non-cash (income) expense, net (2)

(2)



9







5



13






EBITDA excluding non-cash items - continuing
  operations

$

85



$

132



(47)



(36)



$

226



$

334



(108)



(32)


















EBITDA excluding non-cash items - continuing
  operations

$

85



$

132







$

226



$

334






Interest expense, net(1)

(33)



(45)







(75)



(84)






Non-cash interest expense, net(1)

3



14







16



25






Benefit (provision) for current income taxes

5



(2)







(2)



(9)






Changes in working capital

13



9







7



(7)






Cash provided by operating activities - continuing
  operations

73



108







172



259






Changes in working capital

(13)



(9)







(7)



7






Maintenance capital expenditures

(16)



(13)







(28)



(23)






Free cash flow - continuing operations

44



86



(42)



(49)



137



243



(106)



(44)


Free cash flow - discontinued operations

?



7



(7)



(100)



?



14



(14)



(100)


Total Free Cash Flow

$

44



$

93



(49)



(53)



$

137



$

257



(120)



(47)


__________                                                                             _



(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 (income) expense, net, includes primarily pension expense of $2 million and $4 million for the quarter and six month periods ended June 30, 2020 and 2019, respectively, unrealized gains (losses) on commodity hedge contracts, non-cash compensation expense incurred in relation to the incentive plans for senior management of our operating businesses and non-cash gains (losses) related to the disposal of assets. Pension expense consists primarily of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses. Other non-cash (income) expense, net, excludes the adjustment to bad debt expense related to the specific reserve component, net of recoveries, for which this adjustment is reported in working capital in the above table. 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)


2020


2019



2020


2019



$


$


$


%


$


$


$


%


($ In Millions) (Unaudited)

Revenue

120



119



1



1



252



280



(28)



(10)


Cost of services

46



49



3



6



96



99



3



3


Selling, general and administrative expenses

10



9



(1)



(11)



19



17



(2)



(12)


Depreciation and amortization

34



33



(1)



(3)



68



66



(2)



(3)


Operating income

30



28



2



7



69



98



(29)



(30)


Interest expense, net(1)

(10)



(15)



5



33



(25)



(28)



3



11


Other income, net

2



?



2



NM



3



?



3



NM


Provision for income taxes

(6)



(4)



(2)



(50)



(13)



(20)



7



35


Net income

16



9



7



78



34



50



(16)



(32)


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

16



9







34



50






Interest expense, net(1)

10



15







25



28






Provision for income taxes

6



4







13



20






Depreciation and amortization

34



33







68



66






Other non-cash expense, net(2)

2



3







5



4






EBITDA excluding non-cash items

68



64



4



6



145



168



(23)



(14)


EBITDA excluding non-cash items

68



64







145



168






Interest expense, net(1)

(10)



(15)







(25)



(28)






Non-cash interest expense, net(1)

?



5







5



8






Provision for current income taxes

(1)



(1)







(3)



(12)






Changes in working capital

(3)



2







(20)



10






Cash provided by operating activities

54



55







102



146






Changes in working capital

3



(2)







20



(10)






Maintenance capital expenditures

(13)



(8)







(19)



(14)






Free cash flow

44



45



(1)



(2)



103



122



(19)



(16)


________


NM ? Not meaningful


(1)

Interest expense, net, includes non-cash adjustments to derivative instruments and non-cash amortization of deferred financing fee.



(2)

Other non-cash expense, net, includes primarily pension expense of $2 million and $4 million for the quarter and six month periods ended June 30, 2020 and 2019, respectively, and non-cash compensation expense incurred in relation to incentive plans. Pension expense consists primarily of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses. Other non-cash expenses, net, excludes the adjustment to bad debt expense related to the specific reserve component, net of recoveries, for which this adjustment is reported in working capital in the above table. 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)


2020


2019



2020


2019



$


$


$


%


$


$


$


%


($ In Millions) (Unaudited)

Revenue

104



236



(132)



(56)



328



494



(166)



(34)


Cost of services (exclusive of depreciation and
   amortization shown separately below)

29



113



84



74



124



231



107



46


Gross margin

75



123



(48)



(39)



204



263



(59)



(22)


Selling, general and administrative expenses

59



62



3



5



123



123



?



?


Depreciation and amortization

25



26



1



4



52



52



?



?


Operating (loss) income

(9)



35



(44)



(126)



29



88



(59)



(67)


Interest expense, net(1)

(14)



(22)



8



36



(33)



(41)



8



20


Benefit (provision) for income taxes

6



(4)



10



NM



1



(13)



14



108


Net (loss) income

(17)



9



(26)



NM



(3)



34



(37)



(109)


Reconciliation of net (loss) income to EBITDA
   excluding non-cash items and a reconciliation
   of cash provided by operating activities to Free
   Cash Flow:
















Net (loss) income

(17)



9







(3)



34






Interest expense, net(1)

14



22







33



41






(Benefit) provision for income taxes

(6)



4







(1)



13






Depreciation and amortization

25



26







52



52






Other non-cash expense, net(2)

1



1







2



1






EBITDA excluding non-cash items

17



62



(45)



(73)



83



141



(58)



(41)


EBITDA excluding non-cash items

17



62







83



141






Interest expense, net(1)

(14)



(22)







(33)



(41)






Non-cash interest expense, net(1)

2



7







7



12






Benefit (provision) for current income taxes

9



(3)







?



(10)






Changes in working capital

9



6







25



2






Cash provided by operating activities

23



50







82



104






Changes in working capital

(9)



(6)







(25)



(2)






Maintenance capital expenditures

(2)



(3)







(5)



(5)






Free cash flow

12



41



(29)



(71)



52



97



(45)



(46)


__________ 


NM ? Not meaningful


(1)

Interest expense, net, includes  non-cash adjustments to derivative instruments and non-cash amortization of deferred financing fees.



(2)

Other non-cash expense, net, includes primarily non-cash compensation expense incurred in relation to incentive plans and non-cash gains (losses) related to the disposal of assets. Other non-cash expenses, net, excludes the adjustment to bad debt expense related to the specific reserve component, net of recoveries, for which this adjustment is reported in working capital in the above table. See "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items and Free Cash Flow" above for further discussion.

 

MIC Hawaii



Quarter Ended
June 30,


Change
Favorable/(Unfavorable)


Six Months Ended
June 30,


Change
Favorable/(Unfavorable)


2020


2019



2020


2019



$


$


$


%


$


$


$


%


($ In Millions) (Unaudited)

Revenue

37



61



(24)



(39)



97



125



(28)



(22)


Cost of product sales (exclusive of
   depreciation and amortization shown
   separately below)

18



45



27



60



60



85



25



29


Gross margin

19



16



3



19



37



40



(3)



(8)


Selling, general and administrative expenses

6



5



(1)



(20)



12



11



(1)



(9)


Depreciation and amortization

4



4



?



?



8



8



?



?


Operating income

9



7



2



29



17



21



(4)



(19)


Interest expense, net(1)

(2)



(2)



?



?



(5)



(5)



?



?


Other expense, net

?



(2)



2



100



?



(2)



2



100


Provision for income taxes

(2)



(1)



(1)



(100)



(4)



(4)



?



?


Net income

5



2



3



150



8



10



(2)



(20)


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

5



2







8



10






Interest expense, net(1)

2



2







5



5






Provision for income taxes

2



1







4



4






Depreciation and amortization

4



4







8



8






Other non-cash (income) expense, net(2)

(6)



5







(3)



7






EBITDA excluding non-cash items

7



14



(7)



(50)



22



34



(12)



(35)


EBITDA excluding non-cash items

7



14







22



34






Interest expense, net(1)

(2)



(2)







(5)



(5)






Non-cash interest expense, net(1)

?



?







1



1






Provision for current income taxes

(1)



?







(3)



(3)






Changes in working capital

9



3







4



1






Cash provided by operating activities

13



15







19



28






Changes in working capital

(9)



(3)







(4)



(1)






Maintenance capital expenditures

(1)



(2)







(4)



(4)






Free cash flow

3



10



(7)



(70)



11



23



(12)



(52)


________



(1)

Interest expense, net, includes non-cash adjustments to derivative instruments related to interest rate swaps and non-cash amortization of deferred financing fees.



(2)

Other non-cash (income) expense, net, includes primarily non-cash adjustments related to unrealized gains (losses) on commodity hedge contracts, pension expense and non-cash compensation expense incurred in relation to incentive plans. Pension expense consists primarily of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses. Other non-cash (income) expense, net, excludes the adjustment to bad debt expense related to the specific reserve component, net of recoveries, for which this adjustment is reported in working capital in the above table. 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)


2020


2019



2020


2019



$


$


$


%


$


$


$


%


($ In Millions) (Unaudited)

Selling, general and administrative expenses

8



8



?



?



25



14



(11)



(79)


Fees to Manager - related party

4



7



3



43



11



15



4



27


Operating loss

(12)



(15)



3



20



(36)



(29)



(7)



(24)


Interest expense, net(1)

(7)



(6)



(1)



(17)



(12)



(10)



(2)



(20)


Other income, net

?



?



?



?



?



4



(4)



(100)


Benefit for income taxes

7



7



?



?



12



11



1



9


Net loss

(12)



(14)



2



14



(36)



(24)



(12)



(50)


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

(12)



(14)







(36)



(24)






Interest expense, net(1)

7



6







12



10






Benefit for income taxes

(7)



(7)







(12)



(11)






Fees to Manager - related party

4



7







11



15






Other non-cash expense, net

1



?







1



1






EBITDA excluding non-cash items

(7)



(8)



1



13



(24)



(9)



(15)



(167)


EBITDA excluding non-cash items

(7)



(8)







(24)



(9)






Interest expense, net(1)

(7)



(6)







(12)



(10)






Non-cash interest expense, net(1)

1



2







3



4






(Provision) benefit for current income taxes

(2)



2







4



16






Changes in working capital

(2)



(2)







(2)



(20)






Cash used in operating activities

(17)



(12)







(31)



(19)






Changes in working capital

2



2







2



20






Free cash flow

(15)



(10)



(5)



(50)



(29)



1



(30)



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.

 

 

 

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, 2020



IMTT


Atlantic
Aviation


MIC
Hawaii


Corporate
and Other


Total Continuing
Operations



($ in Millions) (Unaudited)


Net income (loss)

16



(17)



5



(12)



(8)


Interest expense, net(1)

10



14



2



7



33


Provision (benefit) for income taxes

6



(6)



2



(7)



(5)


Depreciation and amortization

34



25



4



?



63


Fees to Manager-related party

?



?



?



4



4


Other non-cash expense (income), net(2)

2



1



(6)



1



(2)


EBITDA excluding non-cash items

68



17



7



(7)



85


EBITDA excluding non-cash items

68



17



7



(7)



85


Interest expense, net(1)

(10)



(14)



(2)



(7)



(33)


Non-cash interest expense, net(1)

?



2



?



1



3


(Provision) benefit for current income taxes

(1)



9



(1)



(2)



5


Changes in working capital

(3)



9



9



(2)



13


Cash provided by (used in) operating activities

54



23



13



(17)



73


Changes in working capital

3



(9)



(9)



2



(13)


Maintenance capital expenditures

(13)



(2)



(1)



?



(16)


Free Cash Flow

44



12



3



(15)



44





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)

Non-cash interest expense, net(1)

5



7



?



2



14



2



16

(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 Six Months Ended June 30, 2020


IMTT


Atlantic
Aviation


MIC
Hawaii


Corporate
and Other


Total Continuing
Operations


($ in Millions) (Unaudited)

Net income (loss)

34



(3)



8



(36)



3


Interest expense, net(1)

25



33



5



12



75


Provision (benefit) for income taxes

13



(1)



4



(12)



4


Depreciation and amortization

68



52



8



?



128


Fees to Manager-related party

?



?



?



11



11


Other non-cash expense (income), net(2)

5



2



(3)



1



5


EBITDA excluding non-cash items

145



83



22



(24)



226


EBITDA excluding non-cash items

145



83



22



(24)



226


Interest expense, net(1)

(25)



(33)



(5)



(12)



(75)


Non-cash interest expense, net(1)

5



7



1



3



16


(Provision) benefit for current income taxes

(3)



?



(3)



4



(2)


Changes in working capital

(20)



25



4



(2)



7


Cash provided by (used in) operating activities

102



82



19



(31)



172


Changes in working capital

20



(25)



(4)



2



(7)


Maintenance capital expenditures

(19)



(5)



(4)



?



(28)


Free Cash Flow

103



52



11



(29)



137













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)


Non-cash interest expense, net(1)

8



12



1



4



25



4



29


(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






































__________                                                                             _



(1)

Interest expense, net, includes non-cash 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, includes primarily pension expense of $2 million and $4 million for the quarter and six month periods ended June 30, 2020 and 2019, respectively, unrealized gains (losses) on commodity hedge contracts, non-cash compensation expense incurred in relation to the incentive plans for senior management of our operating businesses and non-cash gains (losses) related to the disposal of assets. Pension expense consists primarily of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses. Other non-cash expense (income), net, excludes the adjustment to bad debt expense related to the specific reserve component, net of recoveries, for which this adjustment is reported in working capital in the above table. See "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items and Free Cash Flow" above for further discussion.

 

 

 

SOURCE Macquarie Infrastructure Corporation


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