a51044243.htm
Filed by Macquarie Infrastructure Company LLC
(Commission File No. 001-32384)
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
of the Securities Exchange Act of 1934
Subject Company: Macquarie Infrastructure Company LLC
(Registration Statement No. 333- 202162)
 
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
 
Date of Report (Date of earliest event reported): February 18, 2015
 
MACQUARIE INFRASTRUCTURE COMPANY LLC
(Exact name of registrant as specified in its charter)
 
Delaware
  
001-32384
  
43-2052503
(State or other jurisdiction
of incorporation)
  
Commission File Number
  
(IRS Employer Identification No.)

125 West 55th Street,
New York, New York
  
10019
(Address of Principal Executive Offices)
  
(Zip Code)
 
Registrant’s telephone number, including area code: (212) 231-1000
 
Not Applicable
(Former name or former address, if changed since last report) 
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
x Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) 
   
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) 
   
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) 
   
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) 
 
 
 
 
 
“Macquarie Group” refers to the Macquarie Group of companies, which comprises Macquarie Group Limited and its worldwide subsidiaries and affiliates.
 
Macquarie Infrastructure Company LLC is not an authorized deposit-taking institution for the purposes of the Banking Act 1959 (Commonwealth of Australia) and its obligations do not represent deposits or other liabilities of Macquarie Bank Limited ABN 46 008 583 542 (MBL). MBL does not guarantee or otherwise provide assurance in respect of the obligations of Macquarie Infrastructure Company LLC.
 
 
 
 
 
Section 2 - Financial Information
 
Item 2.02 Results of Operations and Financial Condition.
 
Attached as Exhibit 99.1 hereto is a press release issued February 18, 2015 by Macquarie Infrastructure Company LLC regarding its financial results for the quarter and year ended December 31, 2014.
 
The information furnished pursuant to this Item 2.02, including Exhibit 99.1, is deemed to be furnished and not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is not otherwise subject to the liabilities of that Section and is not incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act.
 
Section 9 - Financial Statements and Exhibits
 
Item 9.01 Financial Statements and Exhibits.
 
(d) Exhibits             
 
99.1         Press release
 
 
 
 
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
   
MACQUARIE INFRASTRUCTURE COMPANY LLC
           
           
Date:
February 18, 2015
By:
  
/s/ James Hooke
  
       
Name: James Hooke
  
       
Title: Chief Executive Officer
  
 
 
 
 
 
Exhibit 99.1
 
 
Macquarie Infrastructure Company Reports Fourth Quarter and Full-Year 2014 Financial Results, Increases Quarterly Cash Dividend
 
 
●
Proportionately combined Free Cash Flow per share increases 54.2% to $1.28 in the fourth quarter, primarily driven by IMTT Acquisition
 
●
Proportionately combined Free Cash Flow per share increases by 18.6% on an underlying basis to $4.85 per share for the full year
 
●
Dividend increased to an annualized $4.08 from $3.92; fourth quarter cash payment of $1.02 per share to be made March 5, 2015
 
●
Dividend growth of approximately 14% per year expected for two years
 
●
Company files for conversion to a corporation, as anticipated
 
NEW YORK--(BUSINESS WIRE)--February 18, 2015--Macquarie Infrastructure Company LLC (NYSE: MIC) reported its financial results for 2014 including a 54.2% and 18.6% increase in underlying proportionately combined Free Cash Flow per share for the fourth quarter and full year, respectively. The increases reflect improved operating results at each MIC-owned business, and the contribution from the acquisition in July 2014 of the 50% of International-Matex Tank Terminals (“IMTT”, “the IMTT Acquisition”) that it did not previously own. The per share increases achieved reflect an increase in the weighted average number of shares outstanding resulting primarily from an equity offering in connection with the IMTT Acquisition.
 
“Our results for the quarter and full year were considerably ahead of expectations, driven by some very good work on the integration of IMTT, particularly as it pertains to maintenance capital expenditures, and continued stronger operating performance across our portfolio,” said James Hooke, chief executive officer of MIC. “Taking into consideration both our 2014 results and our recently announced pending transaction involving Bayonne Energy Center (“BEC”), we now expect to generate growth in our quarterly cash dividend of approximately 14% year-on-year for at least the next two years.”
 
On February 3, 2015, MIC announced that it had entered into a definitive agreement to acquire BEC, a 512 megawatt gas-fired power generation facility located in Bayonne, NJ, from an affiliate of ArcLight Capital Partners LLC for $210 million in cash and the assumption of $510 million of debt. The transaction is subject to regulatory approvals and satisfaction of customary closing conditions and is expected to be completed in the first half of 2015.
 
Proportionately combined Free Cash Flow per share increased 54.2%, or $0.45, to $1.28 in the fourth quarter of 2014 compared with the fourth quarter in 2013. The increase primarily reflects the improved results at each of MIC’s operating businesses during the period and the contribution resulting from the IMTT Acquisition in July 2014.
 
Proportionately combined Free Cash Flow per share for the full-year 2014 increased 18.6%, or $0.76, to $4.85 on an underlying basis compared with $4.09 for the full-year 2013. Per share figures for the full year include the impact of a 22.6% increase in the Company’s weighted average shares outstanding at year-end and exclude approximately $43.3 million in transaction-related expenses and pension contribution in the third quarter. In the fourth quarter, MIC did not distinguish between reported and underlying free cash flow per share. MIC issued 14.8 million additional shares during 2014 including 13.2 million shares issued in July in connection with the IMTT Acquisition and those issued to its Manager upon reinvestment of management and performance fees.
 
 
 
 
 
Dividend Increase
 
On February 17, 2015, the MIC board authorized the payment of a cash dividend of $1.02 per share for the fourth quarter of 2014. The fourth quarter dividend will be paid on March 5, 2015 to shareholders of record on March 2, 2015.
 
The authorized dividend represents an increase in MIC’s cash dividend of 4.1% compared with the third quarter in 2014 and implies an annualized $4.08 per share. For the twelve months ended December 31, 2014, MIC's dividend increased by 16% versus the twelve months ended December 31, 2013. MIC distributed 80.9% of its underlying Free Cash Flow per share as a cash dividend for 2014, consistent with its previously stated intention to maintain a payout ratio of between 80% and 85% of Free Cash Flow per share.
 
“We now believe that we will grow our dividend by approximately 14% per year for at least the next two years, subject to the continued stable performance of our businesses and market conditions,” Hooke added.
 
MIC shareholders who were paid dividends in calendar year 2014 will receive a Form 1099 reflecting all such payments in Box 3, “Nondividend Distributions”. All quarterly payments to shareholders for 2014 have been characterized as a return of capital, not as a dividend. The Company has not provided guidance on the characterization of payments expected to be made in 2015.
 
Proposed Conversion to a Corporation
 
Concurrent with the release of its financial results, MIC filed a registration statement on Form S-4 with the Securities and Exchange Commission indicating its intent to seek shareholder approval to convert the Company from a limited liability company (“LLC”) to a corporation. MIC had previously converted from a listed trust to an LLC in 2007 and has elected to be treated as a corporation for tax purposes since that time.
 
“The conversion from an LLC to a corporation will open MIC up to possible inclusion in certain equity indices,” said Hooke. “While we will continue to explore other tax efficient structures for MIC and our assets, we believe the best first step is the conversion to a corporation.”
 
MIC does not believe the conversion will have any significant impact on existing holders of LLC interests and the Company will continue to report dividends on Form 1099. The conversion to a regular corporation is subject to, among other things, the approval of the holders of a majority of MIC’s shares outstanding. A meeting date and time will be set by the MIC board of directors after the registration statement is declared effective by the SEC.
 
 
 
 
 
Cash Generation
 
MIC regards Free Cash Flow as an important tool in assessing the performance of its capital intensive, cash generative businesses. Proportionately combined Free Cash Flow refers to the sum of the Free Cash Flow generated by MIC’s businesses in proportion to its equity interest in each and after holding company costs. Where the Company now owns 100% of IMTT and consolidates the substantial majority of its businesses for financial reporting purposes, it plans to rely on consolidated financial results rather than on proportionately combined metrics in the future.
 
MIC notes that Free Cash Flow does not fully reflect its ability to freely deploy generated cash, as it does not reflect required principal payments on indebtedness, potential growth capital expenditures or other cash items excluded when calculating Free Cash Flow. Free Cash Flow may be calculated differently by other companies which limits its usefulness as a comparative measure. Free Cash Flow, as defined by MIC, should be used as a supplemental measure and not in lieu of financial results reported under GAAP. See “Cash Generation, Proportionately Combined and Reconciled to GAAP” below for MIC’s definition of Free Cash Flow and further information and see the attached reconciliation of cash from operating activities to Free Cash Flow.
 
Fourth Quarter and Full-year Results
 
Consolidated Results
 
For the full year 2014, MIC has consolidated the results of its Atlantic Aviation and Hawaii Gas businesses, the various businesses in its Contracted Power and Energy (“CP&E”) segment from their dates of acquisition, as well as IMTT since the closing of the IMTT Acquisition on July 16, 2014. Prior to July 16, 2014 the Company’s 50% interest in IMTT was accounted for using the equity method. Under the equity method MIC recorded 50% of IMTT’s net income in a single line item in its consolidated statement of operations.
 
Consolidated revenue for the fourth quarter of 2014 increased 55.5% compared with the fourth quarter in 2013. The improvement reflects primarily the impact of the IMTT Acquisition, an increased level of services delivered by Atlantic Aviation, an increase in the contribution from the Company’s contracted power and energy segment (net of the sale of a district energy business in August of 2014) and improved performance by IMTT.
 
For the full-year 2014, MIC reported consolidated revenue of $1.35 billion compared with $1.04 billion in 2013. The 29.8% increase reflects primarily the contribution from the IMTT Acquisition and improved performance of MIC’s businesses generally, partially offset by lower energy prices including the cost of jet fuel delivered by Atlantic Aviation. Fluctuations in energy prices are in general passed through to customers of MIC’s businesses and recorded in revenue.
 
Reported gross profit - defined as revenue less cost of goods sold - removes the volatility in revenue associated with the fluctuations in energy prices. Consolidated gross profit for the fourth quarter and full year increased by 88.5% and 45.2%, respectively, primarily as a result of contributions arising out of the IMTT Acquisition and improved performance by Atlantic Aviation. MIC’s consolidated gross profit for the full-year 2014 totaled $611.4 million. Excluding the impact of the IMTT Acquisition, the year on year growth was primarily the result of increases in both the volume of product sold, and the margins on those sales, generally, at each of MIC’s consolidated businesses.
 
MIC reported consolidated net income, after tax and before non-controlling interests, for the fourth quarter and full year 2014 of $18.7 million and $1.04 billion, respectively, up from $14.1 million and $28.1 million in the prior comparable periods. Net income increased primarily as a result of the remeasurement to fair value of the 50% of IMTT that MIC had owned prior to the IMTT Acquisition of approximately $948.1 million and a gain on the sale of MIC’s district energy business of approximately $78.9 in the third quarter. The net income increase was partially offset by an increase in management and performance fees in 2014.
 
MIC generated a modest net loss for tax purposes for the year, primarily as a result of performance fees incurred. The net loss for tax purposes served to increase MIC’s federal Net Operating Loss (NOL) carryforward balance at year-end 2014 to approximately $250.7 million. MIC expects utilization of its NOL balance will continue to offset any current federal income tax liability, other than Alternative Minimum Tax, until after the 2017 tax year.
 
 
 
 
 
Segment Results
 
International-Matex Tank Terminals
 
IMTT is the operator of one of the largest independent bulk liquid terminals businesses in the U.S. IMTT owns and operates 10 marine terminals in the U.S. and is the part owner and operator of two terminals in Canada. The terminals handle a wide variety of petroleum grades, chemicals and vegetable and animal oils.
 
“Results at IMTT in the fourth quarter and full year 2014 demonstrate both the consistency of this business and the opportunity for performance improvement that we highlighted when we acquired the remainder of the business last July,” Hooke said. “We have made progress on expense reductions consistent with our expectations and progress on maintenance capital expenditure reductions that were achieved substantially faster than our expectations – both of these contributed to the improvement in Free Cash Flow generation in the second half of the year.”
 
Revenue at IMTT rose by 11.4% and 10.4% in the fourth quarter and full year periods, respectively, versus the comparable periods in 2013. The increases were driven by higher spill response activity and firm commitments together with an increase in capacity utilization in the fourth quarter of 2014 to 93.2% from 92.4% in the fourth quarter of 2013.
 
Revenue gains were partially offset by a 12.8% increase in costs for the full year versus 2013. Costs rose primarily as a result of higher labor costs associated with an increase in spill response activity and expenses incurred in connection with the IMTT Acquisition. Costs rose in the fourth quarter as well, but at a slower rate compared with the first nine months of 2014, primarily as a result of severance and transaction-related expenses.
 
IMTT reported increases in Free Cash Flow for the fourth quarter and full year 2014 of 131.1% and 21.0%, respectively, versus the comparable periods in 2013. The increase in full year Free Cash Flow in 2014 to $146.2 million reflects a substantial reduction in maintenance capital expenditures from a run rate over the past several years of between $55.0 and $60.0 million to $44.2 million. The reduction was primarily due to the implementation of improved capital expenditure planning and controls and is consistent with the guidance provided by the Company following the closing of the IMTT Acquisition. The increases in Free Cash Flow were offset in part by higher taxes in the portion of the year prior to the IMTT Acquisition and a pension contribution that was required under the terms of IMTT Acquisition.
 
“Demand for storage and related services provided by IMTT has remained strong in spite of the recent volatility in petroleum prices and in certain instances that volatility has created incremental demand,” said Hooke. “There has been a decrease in the tenor of new contracts consistent with the suddenness of the change in commodity prices, but not to an extent that causes us concern. We believe that IMTT remains a provider of vital services with good growth prospects ahead.”
 
 
 
 
 
Atlantic Aviation
 
Atlantic Aviation owns and operates a network of fixed base operations (“FBOs”) located at 69 airports in the U.S. FBOs provide primarily fuel related services to owners and operators of General Aviation (“GA”), or non-commercial, non-military aircraft. Within the GA market, the business focuses on serving the needs of the business jet segment.
 
“Atlantic Aviation posted strong results for both the fourth quarter and full-year periods in 2014 driven by continued strength in the U.S. economy generally that contributed to an increase in flight movements of 3.6% in 2014,” said Hooke. “The performance improvement versus the prior comparable periods can also be attributed to the high-quality acquisitions completed by Atlantic Aviation during the year and a continued focus on cost control.”
 
Atlantic Aviation recorded an increase in gross profit of 14.9% and 12.2% for the fourth quarter and full-year periods in 2014 compared with the same periods in 2013. Same store gross profit growth – excluding the impact of sites acquired in 2014 – was 5.9% in 2014. Performance of sites acquired in 2014 has been consistent with expectations and guidance previously provided.
 
Selling, general and administrative expenses were higher by 7.9% and 9.3% in the quarter and full year periods, primarily as a result of expenses incurred in connection with acquisitions in the second and fourth quarters. On a same store basis, SG&A expenses rose 3.1% in 2014 driven by higher salary and benefits costs, rent and utility increases and costs associated with colder weather in the Northeast (utilities and snow removal) in the first quarter.
 
Free Cash Flow at Atlantic Aviation increased by 40.4% in the fourth quarter, and by 17.5% for the full year primarily as a result of contributions from acquisitions concluded during the year, improved operating results generally, lower taxes and a reduction in the level of maintenance capital expenditures. Maintenance capital expenditures were higher in 2013 as a result of increased investment in FBO refurbishment and information technology systems. The growth in Free Cash Flow was partially offset by an increase in interest expense due to the lower cost of debt in the prior comparable period as the principal amount was unhedged until it was refinanced on May 31, 2013.
 
“Trading at Atlantic Aviation is off to a strong start in 2015,” said Hooke. “As reflected in the data collected by the FAA for 2014, general aviation flight movements have continued to move consistently higher at low to mid single digit rates. Combined with the operational leverage, acquisitions of high quality FBOs and effective cost management at Atlantic Aviation, we continue to enjoy good growth in cash generation from this business” he added.
 
 
 
 
 
Contracted Power and Energy
 
MIC’s CP&E segment comprises its controlling interests in five solar photovoltaic power generating facilities in the Southwest U.S. and two wind power generating facilities, one in each of New Mexico and Idaho. Through August 21, 2014 the segment also included a controlling interest in a district energy business headquartered in Chicago.
 
“We’re pleased with the performance of our CP&E businesses during 2014 and with our ability to insource and centralize certain of the functions associated with these as a means of improving their financial performance,” said Hooke. “As evidenced by our announcement regarding the BEC, we continue to find opportunities to deploy growth capital in additional high quality acquisitions.”
 
Revenue generated by CP&E in the quarter and full-year 2014 decreased by 63.7% and 11.6%, respectively, primarily as a result of the sale of the district energy business in August. The decline was partially offset by acquisitions of additional solar power generation facilities completed in the fourth quarter of 2013 and acquisitions of a wind power generation facility in the second half of 2014.
 
Costs were higher in 2014 primarily as a result of several CP&E transactions completed during the year.
 
Free Cash Flow generated by the CP&E segment decreased to $10.5 million in 2014 from $13.7 million in 2013 primarily as a result of the sale of the district energy business, partially offset by contributions from other contracted power and energy businesses acquired in late 2013 and 2014.
 
“What began as a small-scale exploration in contracted power in 2012 has grown into a meaningful fourth segment with the acquisitions of substantial wind power generation assets and the pending BEC transaction,” said Hooke. “We remain optimistic with respect to our ability to deploy capital prudently and effectively in this vertical in the years ahead.”
 
Hawaii Gas
 
Hawaii Gas is the owner and operator of the only regulated (“utility”) gas processing and pipeline transmission and distribution network in Hawaii. The business is also the owner and operator of the largest unregulated (“non-utility”) gas distribution operation in Hawaii.
 
Revenue generated by Hawaii Gas decreased by 4.6% in the quarter and increased by 2.7% for full year 2014 versus the prior comparable periods. A 1% increase in the volume of gas sold, together with lower inter-island transportation costs contributed to improvement in operating income during the year.
 
An increase in SG&A expenses of 71.5% and 10.8% in the quarter and full-year 2014 versus the comparable periods 2013 reflects primarily a non-cash write-off of certain transportation costs related to prior periods and increased marketing expenses, partially offset by the absence of severance costs.
 
Free Cash Flow increased by 25.5% and 12.0% in the quarter and full year periods in 2014, respectively, compared with the prior comparable periods. The increases were primarily the result of a reduction in Hawaii Gas’ current provision for income taxes, partially offset by a voluntary pension contribution.
 
“Hawaii Gas is performing in line with expectations thus far in 2015 and we believe that we will make progress on a number of strategic initiatives during the year,” said Hooke.
 
 
 
 
 
Corporate
 
Base and performance fees (expenses) payable to the Company’s Manager as well as holding company level SG&A expenses are recorded in the Corporate segment. The Corporate segment also reflects the offset in consolidation to federal income taxes incurred by MIC’s consolidated businesses (application of Net Operating Loss carryforwards).
 
“The typically benign contribution from our Corporate segment was complicated in 2014 by the IMTT Acquisition and the remeasuring of the value of our original 50% interest in IMTT to the value implied in the IMTT Acquisition and the booking of a substantial non-cash gain,” observed Hooke. “Including this item and the gain on the sale of our district energy business we reported substantial, though not particularly meaningful, net income of more than $1.0 billion.”
 
Adjusted for the impact of the gains, results for the Corporate segment reflect increased base and performance fees incurred and the offset in consolidation of a larger amount of taxes in 2014 compared with 2013. The increase in the tax benefit, reflecting the offset of federal income taxes across the portfolio by the application of holding company level NOLs, was a result of tax liabilities that were crystallized with the IMTT Acquisition and approximately $33 million of federal income tax related to the sale of the district energy business.
 
2015 Financial Performance Guidance
 
MIC expects that improved performance by its portfolio of existing businesses, together with the pending acquisition of the BEC, will support an increase its cash dividend of 14% in 2015 compared with 2014.
 
MIC’s dividend guidance contemplates issuance of additional shares upon the reinvestment of base management fees payable to Macquarie Infrastructure Management (USA) Inc but makes no assumption around any potential performance fee payable in 2015 or beyond. It also assumes the payment of minimal federal income taxes, the deployment of growth capital in amounts similar to years past and the continued stable performance of its businesses.
 
“In addition to the organic growth in cash generation expected at each of our businesses, we expect to continue to prudently deploy growth capital as a means of increasing Free Cash Flow,” Hooke said. “Our existing backlog of projects, including those that are both approved and underway, totals nearly $177 million with more than $100 million of those associated with projects at IMTT. We expect to complete approximately $150 million of the $177 million in projects in 2015 and expect that these will generate returns consistent with our experience over the past several years.”
 
“As we have demonstrated over the past few years, we also have the ability to deploy capital in what we would characterize as “bolt-on” acquisitions – relatively smaller additions to our existing operations,” Hooke noted. “Examples include individual FBOs acquired by Atlantic Aviation or some of the businesses in our CP&E segment. We expect to be able to deploy approximately $100 million in these types of opportunities in 2015, consistent with our experience in 2014.”
 
Hooke went on to point out that MIC is an enterprise that can be expected to grow through larger acquisitions over time. “Beyond growth capital deployment and bolt-on acquisitions, MIC is in a stronger position today than it has been at any point in its history and well positioned to take advantage of opportunities that may arise out of commodity price disruptions or a change in the macroeconomic backdrop, for example,” he said.
 
 
 
 
 
Cash Generation, Proportionately Combined and Reconciled to GAAP
 
MIC reports EBITDA excluding non-cash items on a consolidated and operating segment basis and reconciles each to consolidated net income (loss). EBITDA excluding non-cash items is a measure relied upon by management in evaluating the performance of its businesses and investments. EBITDA excluding non-cash items is defined as earnings before interest, taxes, depreciation and amortization and non-cash items, which include impairments, gains and losses on derivatives and adjustments for certain other non-cash items reflected in the statement of operations including base and performance fees.
 
The Company believes that EBITDA excluding non-cash items provides additional insight into the performance of its operating businesses, relative to each other and to similar businesses, without regard to capital structure, their ability to service or reduce debt, fund capital expenditures and/or support distributions to the holding company.
 
MIC also reports free cash flow, as defined below, on both a consolidated and operating segment basis as a means of assessing the amount of cash generated by its businesses and as a supplement to other information provided in accordance with GAAP, and reconciles each to cash from operating activities. MIC believes that reporting free cash flow provides additional insight into its ability to deploy cash, as GAAP measures, such as net income (loss) and cash from operating activities, do not reflect all of the items that management considers in estimating the amount of cash generated by its operating businesses. MIC defines free cash flow as cash from operating activities, less maintenance capital expenditures, which includes principal repayment on capital lease obligations used to fund maintenance capital expenditures, and excludes changes in working capital. See the attached reconciliation of EBITDA excluding non-cash items and Free Cash Flow to their most comparable GAAP measures.
 
 
 
 
 
     
   
For the Quarter Ended December 31, 2014
($ in Thousands) (Unaudited)
  
IMTT
100%(2)
  
Hawaii Gas
  
Atlantic
Aviation
  
Contracted
Power and
Energy(3)
  
MIC Corporate
  
Proportionately
Combined(4)
  
Contracted
Power and
Energy 100%
                               
Gross profit
  
83,919
  
18,489
  
95,458
  
2,394
    
N/A
    
200,260
    
3,364
  
EBITDA excluding non-cash items
  
74,915
  
13,796
  
44,194
  
176
    
(3,200
)
  
129,881
    
657
  
Free cash flow
  
57,210
  
10,940
  
29,482
  
(1,072
)
  
(5,732
)
  
90,828
    
(988
)
                                     

     
   
For the Quarter Ended December 31, 2013
   
IMTT
50%(1)
  
Hawaii Gas
  
Atlantic
Aviation
  
Contracted
Power and
Energy(3)
  
MIC Corporate
  
Proportionately
Combined(4)
  
IMTT
100%(5)
  
Contracted
Power and
Energy 100%
                                   
Gross profit
  
33,852
  
18,567
  
83,056
  
2,919
  
N/A
    
138,394
    
67,703
  
5,130
EBITDA excluding non-cash items
  
31,359
  
15,023
  
35,668
  
2,042
  
(970
)
  
83,122
    
62,718
  
4,720
Free cash flow
  
12,377
  
8,715
  
20,994
  
508
  
1,927
    
44,521
    
24,754
  
1,991
                                     

     
   
For the Year Ended December 31, 2014
   
IMTT
50%(1)
  
IMTT
100%(2)
  
Hawaii Gas
  
Atlantic
Aviation
  
Contracted
Power and
Energy(3)
  
MIC Corporate
  
Proportionately
Combined(4)
  
IMTT
100%(5)
  
Contracted
Power and
Energy 100%
                                       
Gross profit
  
85,727
  
147,333
  
75,609
  
362,564
  
16,639
  
N/A
    
687,872
    
318,786
  
25,922
EBITDA excluding non-cash items
  
78,712
  
127,751
  
56,956
  
167,931
  
12,914
  
(14,903
)
  
429,361
    
285,175
  
22,723
Free cash flow
  
31,324
  
83,577
  
35,902
  
125,475
  
5,103
  
(19,035
)
  
262,346
    
146,225
  
10,480
                                         

 
   
For the Year Ended December 31, 2013
   
IMTT
50%(1)
  
Hawaii Gas
  
Atlantic
Aviation
  
Contracted
Power and
Energy(3)
  
MIC Corporate
  
Proportionately
Combined(4)
  
IMTT
100%(5)
  
Contracted
Power and
Energy 100%
                                   
Gross profit
  
143,607
  
73,370
  
323,174
  
13,392
  
N/A
    
553,543
    
287,214
  
24,455
EBITDA excluding non-cash items
  
134,245
  
55,028
  
144,837
  
11,214
  
(5,433
)
  
339,891
    
268,489
  
24,087
Free cash flow
  
60,411
  
32,048
  
106,755
  
5,560
  
5,277
    
210,051
    
120,822
  
13,662
                                     

_____________________
 
N/A- Not applicable.
 
(1) Our proportionate interest in IMTT prior to the acquisition of the remaining 50% interest on July 16, 2014.
 
(2) Represents our 100% ownership interest in IMTT subsequent to July 16, 2014.
 
(3) Proportionately combined Free Cash Flow for Contracted Power and Energy is equal to MIC's controlling ownership interest in its solar and wind power generation businesses and the district energy business, up to August 21, 2014, date of sale.
 
(4) Proportionately combined Free Cash Flow is equal to the sum of Free Cash Flow attributable to MIC's ownership interest in each of its operating businesses and MIC Corporate.
 
(5) Represents 100% of IMTT as a stand-alone business.
 
 
 
 
 
 
Conference Call and WEBCAST
 
When: Management of MIC have scheduled a conference call for 8:00 a.m. Eastern Time on Thursday, February 19, 2015 during which they will review the Company’s results and comment its performance and prospects.
 
How: To listen to the conference call please 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. Please allow extra time prior to the call to visit the site and download the necessary software to listen to the webcast.
 
Slides: The Company will prepare materials in support of its conference call presentation. The materials will be available for downloading from the Company’s website the morning of February 19, 2015 prior to the conference call. A link to the materials will be located on the homepage of the MIC website.
 
Replay: For interested individuals unable to participate in the live conference call, a replay will be available after 6:00 p.m. on February 19, 2015 through February 26, 2015, at +1(404) 537-3406, Passcode: 66085622. An online archive of the webcast will be available on the Company’s website for one year following the call.
 
About Macquarie Infrastructure Company
 
Macquarie Infrastructure Company owns, operates and invests in a diversified group of infrastructure businesses providing basic services to customers in the United States. Its businesses consist of a bulk liquid terminals business, International-Matex Tank Terminals, an airport services business, Atlantic Aviation, several entities comprising a Contracted Power and Energy segment, and a gas processing and distribution business, Hawaii Gas. MIC is managed by a wholly-owned subsidiary of the Macquarie Group. For additional information, please visit the Macquarie Infrastructure Company website at www.macquarie.com/mic. MIC-G
 
Important Information for Investors and Shareholders and Where to Find It
 
This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. The plan of conversion from an LLC to a corporation and the authorization of preferred stock is expected to be submitted to MIC shareholders for their consideration. MIC has filed with the Securities and Exchange Commission (“SEC”) a registration statement on Form S-4 that includes a preliminary proxy statement/prospectus that is expected to be used by MIC to solicit the required approval of its shareholders in connection with the conversion and the authorization of preferred stock. These materials are not yet final and may be amended. The definitive proxy statement/prospectus is expected to be mailed to MIC shareholders. MIC may also file other documents with the SEC concerning the proposed conversion and the proposed authorization of preferred stock. INVESTORS AND SECURITY HOLDERS OF MIC ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS REGARDING THE PROPOSED CONVERSION AND THE PROPOSED AUTHORIZATION OF PREFERRED STOCK AND ALL OTHER RELEVANT DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED CONVERSION AND THE PROPOSED AUTHORIZATION OF PREFERRED STOCK AND RELATED MATTERS. Investors and security holders may obtain a free copy of the proxy statement/prospectus and other documents containing important information about MIC through the website maintained by the SEC at www.sec.gov. Copies of the documents filed with the SEC by MIC will be available free of charge on MIC’s website (www.macquarie.com/mic) or by contacting MIC at Macquarie Infrastructure Company LLC, Attn: Investor Relations, 125 West 55th Street, New York, New York 10019, telephone: (212) 231-1825.
 
 
 
 
 
Participants in the Solicitation for the Proposed Conversion and Proposed Authorization of Preferred Stock
 
MIC and certain of its directors and officers may be considered participants in the solicitation of proxies in connection with the proposed conversion and the proposed authorization of preferred stock. Investors and security holders may obtain more detailed information regarding the names, affiliates and interests of MIC’s directors and officers by reading MIC’s proxy statement on Schedule 14A for its 2014 annual meeting of stockholders, which was filed with the SEC on April 4, 2014, and its Annual Report on Form 10-K for the year ended December 31, 2014, which was filed with the SEC on February 18, 2015. These documents can be obtained free of charge from the sources indicated above. Additional information regarding the participants in the proxy solicitations and a description of their direct and indirect interests, by security holdings or otherwise, is or will be contained in the proxy statement/prospectus and other relevant materials filed with the SEC.
 
Forward-Looking Statements
 
This press release contains forward-looking statements. MIC may, in some cases, use words such as "project”, "believe”, "anticipate”, "plan”, "expect”, "estimate”, "intend”, "should”, "would”, "could”, "potentially”, or "may” or other words that convey uncertainty of future events or outcomes to identify these forward-looking statements. Forward-looking statements in this report are subject to a number of risks and uncertainties including, but not limited to those described in MIC’s Form 10-K, Form 10-Q and Form 8-K reports filed with the Securities and Exchange Commission. Some of these risks are beyond MIC’s control including, among other things: changes in general economic or business conditions; its ability to service, comply with the terms of and refinance debt, successfully integrate and manage acquired businesses, retain or replace qualified employees, manage growth, make and finance future acquisitions, and implement its strategy; its shared decision-making with co-investors over investments including the distribution of dividends; its regulatory environment establishing rate structures and monitoring quality of service, demographic trends, the political environment, the economy, tourism, construction and transportation costs, air travel, environmental costs and risks, fuel and gas costs; its ability to recover increases in costs from customers, reliance on sole or limited source suppliers, risks or conflicts of interests involving its relationship with the Macquarie Group and changes in U.S. federal tax law.
 
MIC’s actual results, performance, prospects or opportunities could differ materially from those expressed in or implied by the forward-looking statements. For instance, there can be no assurance that the proposed conversion to a corporation or the proposed authorization of preferred stock will be consummated. 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 COMPANY LLC
 
CONSOLIDATED BALANCE SHEETS
($ in Thousands, Except Share Data)
 
   
December 31,
2014
  
December 31,
2013
ASSETS
            
Current assets:
            
Cash and cash equivalents
  
$
48,014
    
$
233,373
  
Restricted cash
    
21,282
      
51,884
  
Accounts receivable, less allowance for doubtful accounts
            
of $771 and $953, respectively
    
96,885
      
60,823
  
Inventories
    
28,080
      
25,834
  
Prepaid expenses
    
14,276
      
10,132
  
Deferred income taxes
    
25,412
      
6,197
  
Other
    
22,941
      
18,307
  
Total current assets
    
256,890
      
406,550
  
Property, equipment, land and leasehold improvements, net
    
3,362,585
      
854,169
  
Investment in unconsolidated business
    
9,773
      
83,703
  
Goodwill
    
1,996,259
      
514,494
  
Intangible assets, net
    
959,634
      
592,850
  
Deferred financing costs, net of accumulated amortization
    
32,037
      
22,740
  
Fair value of derivative instruments
    
584
      
6,880
  
Other
    
7,426
      
19,479
  
Total assets
  
$
6,625,188
    
$
2,500,865
  
             
LIABILITIES AND MEMBERS' EQUITY
            
Current liabilities:
            
Due to manager - related party
  
$
4,858
    
$
3,032
  
Accounts payable
    
49,733
      
28,850
  
Accrued expenses
    
77,248
      
42,713
  
Current portion of capital leases
    
2,221
      
1,862
  
Current portion of long-term debt
    
27,655
      
163,083
  
Fair value of derivative instruments
    
32,111
      
13,027
  
Other
    
30,506
      
18,885
  
Total current liabilities
    
224,332
      
271,452
  
Capital leases, net of current portion
    
2,329
      
1,218
  
Long-term debt, net of current portion
    
2,364,866
      
831,027
  
Deferred income taxes
    
904,108
      
189,719
  
Fair value of derivative instruments
    
27,724
      
-
  
Other
    
131,661
      
54,181
  
Total liabilities
    
3,655,020
      
1,347,597
  
Commitments and contingencies
    
-
      
-
  
Members’ equity:
            
LLC interests, or shares, no par value; 500,000,000 authorized; 71,089,590 shares
issued and outstanding at December 31, 2014 and 56,295,595 shares issued and
outstanding at December 31, 2013
    
1,942,745
      
1,226,733
  
Additional paid in capital
    
21,447
      
21,447
  
Accumulated other comprehensive loss
    
(21,550
)
    
(8,445
)
Retained earnings (accumulated deficit)
    
844,521
      
(197,507
)
Total members’ equity
    
2,787,163
      
1,042,228
  
Noncontrolling interests
    
183,005
      
111,040
  
Total equity
    
2,970,168
      
1,153,268
  
Total liabilities and equity
  
$
6,625,188
    
$
2,500,865
  
                 
 
 
 
 
 
 
MACQUARIE INFRASTRUCTURE COMPANY LLC
 
CONSOLIDATED STATEMENTS OF OPERATIONS
($ in Thousands, Except Share and Per Share Data)
 
     
Year Ended
December 31,
2014
    
Year Ended
December 31,
2013
    
Year Ended
December 31,
2012
Revenue
                  
Service revenue
  
$
1,064,682
    
$
770,360
    
$
768,617
  
Product revenue
    
284,400
      
267,096
      
260,893
  
Financing and equipment lease income
    
1,836
      
3,563
      
4,536
  
Total revenue
    
1,350,918
      
1,041,019
      
1,034,046
  
Costs and expenses
                  
Cost of services
    
546,609
      
434,177
      
448,993
  
Cost of product sales
    
192,881
      
185,843
      
188,099
  
Selling, general and administrative
    
265,254
      
210,060
      
213,372
  
Fees to manager - related party
    
168,182
      
85,367
      
89,227
  
Depreciation
    
98,442
      
39,150
      
31,587
  
Amortization of intangibles
    
42,695
      
34,651
      
34,601
  
Loss from customer contract termination
    
1,269
      
5,906
      
-
  
Loss (gain) on disposal of assets
    
1,279
      
226
      
(1,358
)
Total operating expenses
    
1,316,611
      
995,380
      
1,004,521
  
Operating income
    
34,307
      
45,639
      
29,525
  
Other income (expense)
                  
Dividend income
    
1,344
      
-
      
-
  
Interest income
    
112
      
204
      
222
  
Interest expense(1)
    
(73,196
)
    
(37,044
)
    
(46,623
)
Loss on extinguishment of debt
    
(90
)
    
(2,472
)
    
-
  
Equity in earnings and amortization charges of investees
    
26,391
      
39,115
      
32,327
  
Gain from acquisition/divestiture of businesses(2)
    
1,027,054
      
-
      
-
  
Other (expense) income, net
    
(1,013
)
    
681
      
1,085
  
Net income before income taxes
    
1,014,909
      
46,123
      
16,536
  
Benefit (provision) for income taxes(3)
    
24,374
      
(18,043
)
    
(2,285
)
Net income
  
$
1,039,283
    
$
28,080
    
$
14,251
  
Less: net (loss) income attributable to noncontrolling interests
    
(2,745
)
    
(3,174
)
    
930
  
Net income attributable to MIC LLC
  
$
1,042,028
    
$
31,254
    
$
13,321
  
                   
Basic income per share attributable to MIC LLC
  
$
16.54
    
$
0.61
    
$
0.29
  
Weighted average number of shares outstanding: basic
    
62,990,312
      
51,381,003
      
46,635,049
  
                   
Diluted income per share attributable to MIC LLC
  
$
16.10
    
$
0.61
    
$
0.29
  
Weighted average number of shares outstanding: diluted
    
64,925,565
      
51,396,146
      
46,655,289
  
Cash dividends declared per share
  
$
3.8875
    
$
3.35
    
$
2.20
  
______________________________
                        
(1) Interest expense includes losses on derivative instruments of $21.3 million, $7.5 million and $21.6 million for the years ended December 31, 2014, 2013 and 2012, respectively, of which net losses of $856,000, $1.4 million and $15.4 million, respectively, were reclassified from accumulated other comprehensive loss.
 
(2) Gain from acquisition/divestiture of businesses represents the gain of $948.1 million from IMTT Acquisition from the remeasuring to fair value of the Company’s previous 50% ownership interest and the gain of $78.9 million from the sale of the Company's interest in the district energy business. See Note 4, "Acquisitions and Disposition" for further discussion.
 
(3) Includes $340,000, $568,000 and $6.8 million of benefit for income taxes from accumulated other comprehensive loss reclassifications for the years ended December 31, 2014, 2013 and 2012, respectively.
 
 
 
 
 
MACQUARIE INFRASTRUCTURE COMPANY LLC
 
CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in Thousands)
 
     
Year Ended
December
31,
2014
    
Year Ended
December
31,
2013
    
Year Ended
December
31,
2012
                   
                   
                   
Operating activities
                  
Net income
  
$
1,039,283
    
$
28,080
    
$
14,251
  
Adjustments to reconcile net income to net cash provided by operating activities:
                  
Depreciation and amortization of property and equipment
    
102,816
      
45,876
      
38,314
  
Amortization of intangible assets
    
42,695
      
34,651
      
34,601
  
Loss (gain) on disposal of assets
    
1,216
      
106
      
(1,979
)
Loss from customer contract termination
    
1,269
      
5,906
      
-
  
Equity in earnings and amortization charges of investee
    
(26,391
)
    
(39,115
)
    
(32,327
)
Equity distributions from investee
    
25,330
      
39,115
      
86,952
  
Gain from acquisition/divestiture of businesses
    
(1,027,181
)
    
-
      
-
  
Amortization of debt financing costs
    
5,376
      
3,874
      
4,232
  
Loss on extinguishment of debt
    
90
      
2,434
      
-
  
Adjustments to derivative instruments
    
(567
)
    
(5,138
)
    
(26,428
)
Base management fees to be settled/settled in shares
    
46,636
      
31,979
      
21,898
  
Performance fees settled in shares
    
56,546
      
53,388
      
67,329
  
Equipment lease receivable, net
    
2,805
      
3,807
      
3,548
  
Deferred rent
    
413
      
260
      
421
  
Deferred taxes
    
(27,942
)
    
13,295
      
(1,580
)
Other non-cash expenses, net
    
6,571
      
71
      
2,036
  
Changes in other assets and liabilities, net of acquisitions:
                  
Restricted cash
    
35,858
      
(28,303
)
    
-
  
Accounts receivable
    
1,645
      
(4,239
)
    
(933
)
Inventories
    
4,779
      
(4,662
)
    
3,087
  
Prepaid expenses and other current assets
    
5,448
      
1,062
      
(3,461
)
Due to manager - related party
    
(11
)
    
29
      
57
  
Accounts payable and accrued expenses
    
(12,446
)
    
(23,796
)
    
6,479
  
Income taxes payable
    
288
      
1,037
      
(414
)
Pension contribution
    
(26,960
)
    
(3,150
)
    
(3,833
)
Other, net
    
(5,951
)
    
(1,450
)
    
5,661
  
Net cash provided by operating activities
    
251,615
      
155,117
      
217,911
  
                   
Investing activities
                  
Acquisitions of businesses and investments, net of cash acquired
    
(1,222,266
)
    
(28,953
)
    
(64,817
)
Proceeds from sale of business, net of cash divested
    
265,295
      
-
      
5,625
  
Purchases of property and equipment
    
(123,946
)
    
(111,208
)
    
(39,288
)
Return of investment in unconsolidated business
    
12,319
      
371
      
101,110
  
Other, net
    
(208
)
    
154
      
(153
)
Net cash (used in) provided by investing activities
    
(1,068,806
)
    
(139,636
)
    
2,477
  
                   
Financing activities
                  
Proceeds from long-term debt
  
$
412,884
    
$
561,253
    
$
192,570
  
Payment of long-term debt
    
(548,431
)
    
(748,668
)
    
(237,240
)
Proceeds from the issuance of shares
    
764,750
      
355,867
      
-
  
Proceeds from the issuance of convertible senior notes
    
350,000
      
-
      
-
  
Dividends paid to shareholders
    
(240,535
)
    
(128,970
)
    
(112,487
)
Distributions paid to noncontrolling interests
    
(62,538
)
    
(2,366
)
    
(4,781
)
Contributions received from noncontrolling interests
    
-
      
73,612
      
55,473
  
Offering and equity raise costs paid
    
(25,600
)
    
(16,313
)
    
-
  
Debt financing costs paid
    
(15,142
)
    
(19,699
)
    
(2,942
)
Proceeds from the issuance of shares pursuant to MIC Direct
    
302
      
23
      
-
  
Change in restricted cash
    
(999
)
    
3,810
      
8,663
  
Payment of notes and capital lease obligations
    
(2,269
)
    
(2,033
)
    
(1,054
)
Net cash provided by (used in) financing activities
    
632,422
      
76,516
      
(101,798
)
Effect of exchange rate changes on cash and cash equivalents
    
(590
)
    
-
      
-
  
                   
Net change in cash and cash equivalents
    
(185,359
)
    
91,997
      
118,590
  
Cash and cash equivalents, beginning of period
    
233,373
      
141,376
      
22,786
  
Cash and cash equivalents, end of period
  
$
48,014
    
$
233,373
    
$
141,376
  
                   
Supplemental disclosures of cash flow information
                  
Non-cash investing and financing activities:
                  
Accrued equity offering costs
  
$
-
    
$
298
    
$
-
  
Accrued financing costs
  
$
112
    
$
479
    
$
-
  
Accrued purchases of property and equipment
  
$
8,122
    
$
13,950
    
$
9,623
  
Acquisition of equipment through capital leases
  
$
3,744
    
$
1,320
    
$
3,117
  
Issuance of shares for acquisition of business
  
$
115,000
    
$
-
    
$
-
  
Issuance of shares to manager for performance fees
  
$
56,546
    
$
97,208
    
$
23,509
  
Issuance of shares to manager for base management fees
  
$
44,799
    
$
35,433
    
$
19,821
  
Issuance of shares to independent directors
  
$
750
    
$
640
    
$
571
  
Conversion of construction loan to term loan
  
$
60,360
    
$
24,749
    
$
-
  
Distributions payable to noncontrolling interests
  
$
441
    
$
276
    
$
-
  
Taxes paid
  
$
19,704
    
$
3,710
    
$
4,870
  
Interest paid
  
$
70,894
    
$
38,956
    
$
58,916
  
 
 
 
 
 
MDA - CONSOLIDATED STATEMENT OF OPERATIONS
 
   
Quarter Ended
December 31,
  
Change
Favorable/(Unfavorable)
  
Year Ended
December 31,
    
Change
Favorable/(Unfavorable)
     
2014
      
2013
      
$
    
%
    
2014
      
2013
      
$
    
%
   
($ In Thousands) (Unaudited)
Revenue
                                            
Service revenue
  
$
339,059
    
$
192,902
      
146,157
    
75.8
    
$
1,064,682
    
$
770,360
      
294,322
    
38.2
  
Product revenue
    
66,083
      
66,841
      
(758
)
  
(1.1
)
    
284,400
      
267,096
      
17,304
    
6.5
  
Financing and equipment lease income
    
-
      
784
      
(784
)
  
(100.0
)
    
1,836
      
3,563
      
(1,727
)
  
(48.5
)
Total revenue
    
405,142
      
260,527
      
144,615
    
55.5
      
1,350,918
      
1,041,019
      
309,899
    
29.8
  
                                             
Costs and expenses
                                            
Cost of services
    
159,682
      
107,273
      
(52,409
)
  
(48.9
)
    
546,609
      
434,177
      
(112,432
)
  
(25.9
)
Cost of product sales
    
44,230
      
46,500
      
2,270
    
4.9
      
192,881
      
185,843
      
(7,038
)
  
(3.8
)
Gross profit
    
201,230
      
106,754
      
94,476
    
88.5
      
611,428
      
420,999
      
190,429
    
45.2
  
Selling, general and administrative
    
75,457
      
55,062
      
(20,395
)
  
(37.0
)
    
265,254
      
210,060
      
(55,194
)
  
(26.3
)
Fees to manager - related party
    
14,192
      
8,455
      
(5,737
)
  
(67.9
)
    
168,182
      
85,367
      
(82,815
)
  
(97.0
)
Depreciation
    
37,902
      
10,420
      
(27,482
)
  
NM
      
98,442
      
39,150
      
(59,292
)
  
(151.4
)
Amortization of intangibles
    
13,105
      
8,785
      
(4,320
)
  
(49.2
)
    
42,695
      
34,651
      
(8,044
)
  
(23.2
)
Loss from customer contract termination
    
-
      
4,280
      
4,280
    
100.0
      
1,269
      
5,906
      
4,637
    
78.5
  
Loss on disposal of assets
    
393
      
-
      
(393
)
  
NM
      
1,279
      
226
      
(1,053
)
  
NM
  
Total operating expenses
    
141,049
      
87,002
      
(54,047
)
  
(62.1
)
    
577,121
      
375,360
      
(201,761
)
  
(53.8
)
Operating income
    
60,181
      
19,752
      
40,429
    
NM
      
34,307
      
45,639
      
(11,332
)
  
(24.8
)
Other income (expense)
                                            
Dividend income
    
1,087
      
-
      
1,087
    
NM
      
1,344
      
-
      
1,344
    
NM
  
Interest income
    
7
      
22
      
(15
)
  
(68.2
)
    
112
      
204
      
(92
)
  
(45.1
)
Interest expense(1)
    
(24,674
)
    
(5,854
)
    
(18,820
)
  
NM
      
(73,196
)
    
(37,044
)
    
(36,152
)
  
(97.6
)
Loss on extinguishment of debt
    
-
      
-
      
-
    
-
      
(90
)
    
(2,472
)
    
2,382
    
96.4
  
Equity in earnings and amortization charges of investees
    
312
      
8,788
      
(8,476
)
  
(96.4
)
    
26,391
      
39,115
      
(12,724
)
  
(32.5
)
Gain from acquisition/divestiture of businesses
    
-
      
-
      
-
    
-
      
1,027,054
      
-
      
1,027,054
    
NM
  
Other (expense) income, net
    
(4,091
)
    
167
      
(4,258
)
  
NM
      
(1,013
)
    
681
      
(1,694
)
  
NM
  
Net income before income taxes
    
32,822
      
22,875
      
9,947
    
43.5
      
1,014,909
      
46,123
      
968,786
    
NM
  
(Provision) benefit for income taxes
    
(14,117
)
    
(8,802
)
    
(5,315
)
  
(60.4
)
    
24,374
      
(18,043
)
    
42,417
    
NM
  
Net income
  
$
18,705
    
$
14,073
      
4,632
    
32.9
    
$
1,039,283
    
$
28,080
      
1,011,203
    
NM
  
Less: net loss attributable to noncontrolling interests
    
(2,264
)
    
(1,751
)
    
513
    
29.3
      
(2,745
)
    
(3,174
)
    
(429
)
  
(13.5
)
Net income attributable to MIC LLC
  
$
20,969
    
$
15,824
      
5,145
    
32.5
    
$
1,042,028
    
$
31,254
      
1,010,774
    
NM
  
______________________________
                                                            
NM - Not meaningful
  
   
(1) Interest expense includes losses on derivative instruments of $8.2 million and $21.3 million for the quarter and year ended December 31, 2014, respectively. For the quarter and year ended December 31, 2013, interest expense includes gains on derivative instruments of $2.1 million and losses of $7.5 million, respectively.
 
 
 
 
 
MACQUARIE INFRASTRUCTURE COMPANY LLC
RECONCILIATION OF CONSOLIDATED NET INCOME ATTRIBUTABLE TO MIC LLC TO EBITDA EXCLUDING
NON-CASH ITEMS AND CASH FROM OPERATING ACTIVITIES TO FREE CASH FLOW
                                             
     
Quarter Ended
December 31,
    
Change
Favorable/(Unfavorable)
 
  
Year Ended
December 31,
    
Change
Favorable/(Unfavorable)
     
2014
      
2013
      
$
   %
 
  
2014
      
2013
      
$
  
%
   
($ In Thousands) (Unaudited)
Net income attributable to MIC LLC(1)
  
$
20,969
    
$
15,824
              
$
1,042,028
    
$
31,254
            
Interest expense, net(2)
    
24,667
      
5,832
                
73,084
      
36,840
            
Provision (benefit) for income taxes
    
14,117
      
8,802
                
(24,374
)
    
18,043
            
Depreciation(3)
    
37,902
      
10,420
                
98,442
      
39,150
            
Depreciation - cost of services(3)
    
-
      
1,705
                
4,374
      
6,726
            
Amortization of intangibles(4)
    
13,105
      
8,785
                
42,695
      
34,651
            
Loss from customer contract termination
    
-
      
4,280
                
1,269
      
5,906
            
Loss on extinguishment of debt
    
-
      
-
                
90
      
2,434
            
Loss on disposal of assets
    
394
      
-
                
1,216
      
106
            
Gain from acquisition/divestiture of businesses
    
-
      
-
                
(1,027,181
)
    
-
            
Equity in earnings and amortization charges of investees
    
(312
)
    
(8,788
)
              
(26,391
)
    
(39,115
)
          
Equity distributions from investees(5)
    
244
      
20,090
                
25,330
      
39,115
            
Base management fees to be settled/settled in shares
    
14,192
      
8,455
                
46,636
      
31,979
            
Performance fees settled in cash/shares(6)
    
-
      
-
                
121,546
      
53,388
            
Other non-cash expense (income), net
    
5,084
      
(874
)
              
6,780
      
(2,843
)
          
EBITDA excluding non-cash items
  
$
130,362
    
$
74,531
      
55,831
  
74.9
  
$
385,544
    
$
257,634
      
127,910
  
49.6
                                             
EBITDA excluding non-cash items
  
$
130,362
    
$
74,531
              
$
385,544
    
$
257,634
            
Interest expense, net(2)
    
(24,667
)
    
(5,832
)
              
(73,084
)
    
(36,840
)
          
Adjustments to derivative instruments recorded in interest expense(2)
    
829
      
(6,298
)
              
(3,108
)
    
(5,138
)
          
Amortization of debt financing costs(2)
    
909
      
982
                
5,376
      
3,874
            
Equipment lease receivable, net
    
-
      
993
                
2,805
      
3,807
            
Provision/benefit for income taxes, net of changes in deferred taxes
    
(3,247
)
    
(2,074
)
              
(3,568
)
    
(4,748
)
          
Pension contribution
    
-
      
(900
)
              
(26,960
)
    
(3,150
)
          
Changes in working capital(6)
    
(46,934
)
    
(34,045
)
              
(35,390
)
    
(60,322
)
          
Cash provided by operating activities
    
57,252
      
27,357
                
251,615
      
155,117
            
Changes in working capital(6)
    
46,934
      
34,045
                
35,390
      
60,322
            
Maintenance capital expenditures
    
(13,274
)
    
(7,685
)
              
(25,520
)
    
(18,582
)
          
Free cash flow
  
$
90,912
    
$
53,717
      
37,195
  
69.2
  
$
261,485
    
$
196,857
      
64,628
  
32.8
______________________________
                                                    
(1) Net income attributable to MIC LLC excludes net loss attributable to noncontrolling interests of $2.3 million and $2.7 million for the quarter and year ended December 31, 2014, respectively, and net loss attributable to noncontrolling interests of $1.8 million and $3.2 million for the quarter and year ended December 31, 2013, respectively.
 
(2) Interest expense, net, includes adjustment to derivative instruments and non-cash amortization of deferred financing fees.
 
(3) Depreciation − cost of services includes depreciation expense for our previously owned district energy business, a component of CP&E segment, which is reported in cost of services in our consolidated statements of operations. Depreciation and Depreciation − cost of services does not include acquisition-related step-up depreciation expense of $4.2 million for the year ended December 31, 2014, and $2.0 million and $7.8 million for the quarter and year ended December 31, 2013, respectively, in connection with our previous 50% investment in IMTT, which is reported in equity in earnings and amortization charges of investees in our consolidated statements of operations.
 
(4) Amortization of intangibles does not include acquisition-related step-up amortization expense of $185,000 for the year ended December 31, 2014, and $85,000 and $342,000 for the quarter and year ended December 31, 2013, respectively, in connection with our previous 50% investment in IMTT, which is reported in equity in earnings and amortization charges of investees in our consolidated statements of operations.
 
(5) Equity distributions from investees in the above table includes distributions we received only up to our share of the earnings recorded in the calculation for EBITDA excluding non-cash items.
 
(6) In October of 2014, our Board requested, and our Manager agreed, that $65.0 million of the third quarter of 2014 performance fee be settled in cash using the proceeds from the sale of the district energy business in order to minimize dilution. The remainder of the fee of $51.6 million was reinvested in additional shares of MIC. The impact of the cash settled portion has been excluded from the calculation of Free Cash Flow.
 
 
 
 
 
MACQUARIE INFRASTRUCTURE COMPANY LLC
RECONCILIATION OF CONSOLIDATED FREE CASH FLOW TO
PROPORTIONATELY COMBINED FEE CASH FLOW
 
     
Quarter Ended December 31,
    
Change
Favorable/(Unfavorable)
  
Year Ended December 31,
  
Change
Favorable/(Unfavorable)
     
2014
      
2013
      
$
  
%
    
2014
      
2013
    
$
  
%
   
($ In Thousands) (Unaudited)
                                             
Free Cash Flow- Consolidated basis
  
$
90,912
    
$
53,717
      
37,195
  
69.2
    
$
261,485
    
$
196,857
    
64,628
  
32.8
Equity distributions from investee(1)
    
-
      
(20,090
)
                
(25,086
)
    
(39,115
)
        
100% of CP&E Free Cash Flow included in consolidated Free Cash Flow
    
988
      
(1,991
)
                
(10,480
)
    
(13,662
)
        
MIC's share of IMTT Free Cash Flow(2)
    
-
      
12,377
                  
31,324
      
60,411
          
MIC's share of CP&E Free Cash Flow
    
(1,072
)
    
508
                  
5,103
      
5,560
          
Free Cash Flow- Proportionately Combined basis
  
$
90,828
    
$
44,521
      
46,307
  
104.0
    
$
262,346
    
$
210,051
    
52,295
  
24.9
______________________________
                                                    
(1) Equity distributions from investee represent the portion of distributions received from IMTT that are recorded in cash from operating activities prior to the IMTT Acquisition on July 16, 2014. The distribution for the fourth quarter of 2013 from IMTT was received in the first quarter of 2014, as customary. Conversely, the distribution for the fourth quarter of 2012 from IMTT was received in the same period.
 
(2) Represents our proportionate share of IMTT's Free Cash Flow prior to the IMTT Acquisition on July 16, 2014.
 
 
 
 
 
 
MACQUARIE INFRASTRUCTURE COMPANY LLC
 
RECONCILIATION OF SEGMENT NET INCOME (LOSS) TO EBITDA EXCLUDING NON-CASH ITEMS AND CASH
FROM OPERATING ACTIVITIES TO FREE CASH FLOW
 
IMTT
 
    Quarter Ended
December 31,
   Change     Year Ended
December 31,
    Change
    2014   2013  
Favorable/(Unfavorable)
     2014   2013  
Favorable/(Unfavorable)
   
$
    $    $    %      $    $    $   %
   
($ In Thousands) (Unaudited)
                                   
Revenues
  
144,951
    
130,149
    
14,802
    
11.4
      
567,467
    
513,902
    
53,565
    
10.4
  
Cost of services(1)(2)
  
61,032
    
62,446
    
1,414
    
2.3
      
248,681
    
226,688
    
(21,993
)
  
(9.7
)
Gross Profit
  
83,919
    
67,703
    
16,216
    
24.0
      
318,786
    
287,214
    
31,572
    
11.0
  
General and administrative expenses(2)
  
12,036
    
8,309
    
(3,727
)
  
(44.9
)
    
44,018
    
32,729
    
(11,289
)
  
(34.5
)
Depreciation and amortization
  
28,062
    
19,982
    
(8,080
)
  
(40.4
)
    
93,488
    
76,091
    
(17,397
)
  
(22.9
)
Casualty losses, net(1)
  
-
    
-
    
-
    
-
      
-
    
6,700
    
6,700
    
100.0
  
Operating income
  
43,821
    
39,412
    
4,409
    
11.2
      
181,280
    
171,694
    
9,586
    
5.6
  
Interest expense, net(3)
  
(5,735
)
  
(7,473
)
  
1,738
    
23.3
      
(27,239
)
  
(24,572
)
  
(2,667
)
  
(10.9
)
Other income
  
982
    
329
    
653
    
198.5
      
2,665
    
2,133
    
532
    
24.9
  
Provision for income taxes
  
(17,945
)
  
(12,255
)
  
(5,690
)
  
(46.4
)
    
(64,033
)
  
(61,149
)
  
(2,884
)
  
(4.7
)
Noncontrolling interest
  
(199
)
  
(31
)
  
(168
)
  
NM
      
(527
)
  
(251
)
  
(276
)
  
(110.0
)
Net income(4)
  
20,924
    
19,982
    
942
    
4.7
      
92,146
    
87,855
    
4,291
    
4.9
  
                                   
Reconciliation of net income to EBITDA excluding non-cash
items and cash provided by operating activities to Free
Cash Flow:
                        
                                   
Net income(4)
  
20,924
    
19,982
              
92,146
    
87,855
          
Interest expense, net(3)
  
5,735
    
7,473
              
27,239
    
24,572
          
Provision for income taxes
  
17,945
    
12,255
              
64,033
    
61,149
          
Depreciation and amortization
  
28,062
    
19,982
              
93,488
    
76,091
          
Casualty losses, net(1)
  
-
    
-
              
-
    
6,700
          
Other non-cash expenses(5)
  
2,249
    
3,026
              
8,269
    
12,122
          
EBITDA excluding non-cash items
  
74,915
    
62,718
    
12,197
    
19.4
      
285,175
    
268,489
    
16,686
    
6.2
  
                                   
EBITDA excluding non-cash items
  
74,915
    
62,718
              
285,175
    
268,489
          
Interest expense, net(3)
  
(5,735
)
  
(7,473
)
            
(27,239
)
  
(24,572
)
        
Adjustments to derivative instruments recorded in interest expense(3)
  
(3,168
)
  
(4,010
)
            
(15,335
)
  
(19,794
)
        
Amortization of debt financing costs(3)
  
(593
)
  
843
              
2,050
    
2,833
          
Provision for income taxes, net of changes in deferred taxes
  
(1,428
)
  
(4,609
)
            
(34,250
)
  
(18,456
)
        
Pension contribution
  
-
    
-
              
(20,000
)
  
(4,450
)
        
Changes in working capital
  
2,309
    
(3,525
)
            
(413
)
  
(3,707
)
        
Cash provided by operating activities
  
66,300
    
43,944
              
189,988
    
200,343
          
Changes in working capital
  
(2,309
)
  
3,525
              
413
    
3,707
          
Maintenance capital expenditures
  
(6,781
)
  
(22,715
)
            
(44,176
)
  
(83,228
)
        
Free cash flow
  
57,210
    
24,754
    
32,456
    
131.1
      
146,225
    
120,822
    
25,403
    
21.0
  
______________________________
                                  
                                   
NM - Not meaningful
  
(1) Casualty losses, net, includes $2.5 million related to the quarter ended December 31, 2012, which was recorded in cost of services in that period. This amount has been included in the year ended December 31, 2013.
(2) Includes transactional costs in connection with the IMTT Acquisition.
(3) Interest expense, net, includes adjustments to derivative instruments and non-cash amortization of deferred financing fees.
(4) Corporate allocation expense, intercompany fees and the tax effect have been excluded from the above table as they are eliminated on consolidation.
(5) The calculation of IMTT's EBITDA prior to the acquisition included various non-cash items. MIC has excluded known non-cash items when calculating IMTT’s EBITDA excluding non-cash items, including primarily the non-cash pension expense of $1.8 million and $7.4 million for the quarter and year ended December 31, 2014, respectively, and the non-cash pension expense of $2.7 million and $11.2 million for the quarter and year ended December 31, 2013, respectively.
 
 
 
 
 
ATLANTIC AVIATION
 
    Quarter Ended
December 31,
   Change     Year Ended
December 31,
   Change
    2014   2013  
Favorable/(Unfavorable)
     2014   2013  
Favorable/(Unfavorable)
   
$
   $   $   %     $   $   $   %
   
($ In Thousands) (Unaudited)
 
Revenues
  
194,108
    
183,640
    
10,468
    
5.7
      
779,261
    
725,480
    
53,781
    
7.4
  
Cost of services
  
98,650
    
100,584
    
1,934
    
1.9
      
416,697
    
402,306
    
(14,391
)
  
(3.6
)
Gross Profit
  
95,458
    
83,056
    
12,402
    
14.9
      
362,564
    
323,174
    
39,390
    
12.2
  
Selling, general and administrative expenses
  
51,206
    
47,453
    
(3,753
)
  
(7.9
)
    
194,804
    
178,182
    
(16,622
)
  
(9.3
)
Depreciation and amortization
  
16,745
    
14,461
    
(2,284
)
  
(15.8
)
    
63,778
    
56,378
    
(7,400
)
  
(13.1
)
Loss on disposal of assets
  
393
    
-
    
(393
)
  
NM
      
1,279
    
226
    
(1,053
)
  
NM
  
Operating income
  
27,114
    
21,142
    
5,972
    
28.2
      
102,703
    
88,388
    
14,315
    
16.2
  
Interest expense, net(1)
  
(13,012
)
  
(1,945
)
  
(11,067
)
  
NM
      
(40,618
)
  
(22,151
)
  
(18,467
)
  
(83.4
)
Loss on extinguishment of debt
  
-
    
-
    
-
    
-
      
-
    
(2,472
)
  
2,472
    
100.0
  
Other expense
  
(47
)
  
(56
)
  
9
    
16.1
      
(25
)
  
(2
)
  
(23
)
  
NM
  
Provision for income taxes
  
(7,095
)
  
(7,209
)
  
114
    
1.6
      
(25,096
)
  
(25,218
)
  
122
    
0.5
  
Net income(2)
  
6,960
    
11,932
    
(4,972
)
  
(41.7
)
    
36,964
    
38,545
    
(1,581
)
  
(4.1
)
Reconciliation of net income to EBITDA excluding non-cash
items and cash provided by operating activities to Free Cash
Flow:
                          
Net income(2)
  
6,960
    
11,932
              
36,964
    
38,545
          
Interest expense, net(1)
  
13,012
    
1,945
              
40,618
    
22,151
          
Provision for income taxes
  
7,095
    
7,209
              
25,096
    
25,218
          
Depreciation and amortization
  
16,745
    
14,461
              
63,778
    
56,378
          
Loss on extinguishment of debt
  
-
    
-
              
-
    
2,434
          
Loss on disposal of assets
  
394
    
-
              
1,216
    
106
          
Other non-cash (income) expense
  
(12
)
  
121
              
259
    
5
          
EBITDA excluding non-cash items
  
44,194
    
35,668
    
8,526
    
23.9
      
167,931
    
144,837
    
23,094
    
15.9
  
EBITDA excluding non-cash items
  
44,194
    
35,668
              
167,931
    
144,837
          
Interest expense, net(1)
  
(13,012
)
  
(1,945
)
            
(40,618
)
  
(22,151
)
        
Adjustments to derivative instruments recorded in interest expense(1)
  
4,747
    
(4,781
)
            
9,459
    
823
          
Amortization of debt financing costs(1)
  
810
    
676
              
3,138
    
2,687
          
Provision for income taxes, net of changes in deferred taxes
  
(1,981
)
  
(2,254
)
            
(4,549
)
  
(7,823
)
        
Changes in working capital
  
3,850
    
1,220
              
6,775
    
2,504
          
Cash provided by operating activities
  
38,608
    
28,584
              
142,136
    
120,877
          
Changes in working capital
  
(3,850
)
  
(1,220
)
            
(6,775
)
  
(2,504
)
        
Maintenance capital expenditures
  
(5,276
)
  
(6,370
)
            
(9,886
)
  
(11,618
)
        
Free cash flow
  
29,482
    
20,994
    
8,488
    
40.4
      
125,475
    
106,755
    
18,720
    
17.5
  
_____________________
                                    
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.
 
 
 
 
 
CONTRACTED POWER & ENERGY
 
    Quarter Ended
December 31,
   Change     Year Ended
December 31,
   Change
    2014   2013  
Favorable/(Unfavorable)
     2014   2013  
Favorable/(Unfavorable)
   
$
   $   $   %     $   $   $   %
   
($ In Thousands) (Unaudited)
     
Service revenues
  
-
    
9,262
    
(9,262
)
  
(100.0
)
    
29,487
    
44,880
    
(15,393
)
  
(34.3
)
Product revenues
  
4,441
    
2,204
    
2,237
    
101.5
      
19,779
    
9,371
    
10,408
    
111.1
  
Finance lease revenues
  
-
    
784
    
(784
)
  
(100.0
)
    
1,836
    
3,563
    
(1,727
)
  
(48.5
)
Total revenues
  
4,441
    
12,250
    
(7,809
)
  
(63.7
)
    
51,102
    
57,814
    
(6,712
)
  
(11.6
)
                                   
Cost of revenue — service(1)
  
-
    
6,690
    
6,690
    
100.0
      
21,311
    
31,871
    
10,560
    
33.1
  
Cost of revenue — product
  
1,077
    
430
    
(647
)
  
(150.5
)
    
3,869
    
1,488
    
(2,381
)
  
(160.0
)
Cost of revenue — total
  
1,077
    
7,120
    
6,043
    
84.9
      
25,180
    
33,359
    
8,179
    
24.5
  
Gross profit
  
3,364
    
5,130
    
(1,766
)
  
(34.4
)
    
25,922
    
24,455
    
1,467
    
6.0
  
Selling, general and administrative expenses
  
1,461
    
2,292
    
831
    
36.3
      
8,319
    
7,865
    
(454
)
  
(5.8
)
Depreciation
  
3,864
    
2,156
    
(1,708
)
  
(79.2
)
    
14,758
    
7,330
    
(7,428
)
  
(101.3
)
Amortization of intangibles
  
5
    
329
    
324
    
98.5
      
843
    
1,326
    
483
    
36.4
  
Loss from customer contract termination
  
-
    
4,280
    
4,280
    
100.0
      
1,269
    
5,906
    
4,637
    
78.5
  
Operating (loss) income
  
(1,966
)
  
(3,927
)
  
1,961
    
49.9
      
733
    
2,028
    
(1,295
)
  
(63.9
)
Interest expense, net(2)
  
(849
)
  
(2,016
)
  
1,167
    
57.9
      
(8,606
)
  
(7,930
)
  
(676
)
  
(8.5
)
Loss on extinguishment of debt
  
-
    
-
    
-
    
-
      
(90
)
  
-
    
(90
)
  
NM
  
Equity in earnings of investee
  
312
    
-
    
312
    
NM
      
244
    
-
    
244
    
NM
  
Other (expense) income
  
(1,489
)
  
133
    
(1,622
)
  
NM
      
2,300
    
3,289
    
(989
)
  
(30.1
)
Benefit (provision) for income taxes
  
591
    
2,145
    
(1,554
)
  
(72.4
)
    
(823
)
  
(827
)
  
4
    
0.5
  
Noncontrolling interest
  
2,463
    
471
    
1,992
    
NM
      
4,471
    
4,051
    
420
    
10.4
  
Net (loss) income
  
(938
)
  
(3,194
)
  
2,256
    
70.6
      
(1,771
)
  
611
    
(2,382
)
  
NM
  
                                   
Reconciliation of net (loss) income to EBITDA excluding non-
cash items and cash provided by (used in) operating activities
to Free Cash Flow:
                    
Net (loss) income
  
(938
)
  
(3,194
)
            
(1,771
)
  
611
          
Interest expense, net(2)
  
849
    
2,016
              
8,606
    
7,930
          
(Benefit) provision for income taxes
  
(591
)
  
(2,145
)
            
823
    
827
          
Depreciation(1)
  
3,864
    
3,861
              
19,132
    
14,056
          
Amortization of intangibles
  
5
    
329
              
843
    
1,326
          
Loss on extinguishment of debt
  
-
    
-
              
90
    
-
          
Loss from customer contract termination
  
-
    
4,280
              
1,269
    
5,906
          
Equity in earnings of investee
  
(312
)
  
-
              
(244
)
  
-
          
Equity distributions from investee (3)
  
244
    
-
              
244
    
-
          
Other non-cash income
  
(2,464
)
  
(427
)
            
(6,269
)
  
(6,569
)
        
EBITDA excluding non-cash items
  
657
    
4,720
    
(4,063
)
  
(86.1
)
    
22,723
    
24,087
    
(1,364
)
  
(5.7
)
                                   
EBITDA excluding non-cash items
  
657
    
4,720
              
22,723
    
24,087
          
Interest expense, net(2)
  
(849
)
  
(2,016
)
            
(8,606
)
  
(7,930
)
        
Adjustments to derivative instruments recorded in interest expense(2)
  
(812
)
  
(1,513
)
            
(5,321
)
  
(5,531
)
        
Amortization of debt financing costs(2)
  
16
    
193
              
518
    
732
          
Equipment lease receivable, net
  
-
    
993
              
2,805
    
3,807
          
Benefit/provision for income taxes, net of changes in deferred taxes
  
-
    
(50
)
            
(903
)
  
(855
)
        
Changes in working capital
  
9,454
    
(36,158
)
            
33,440
    
(54,491
)
        
Cash provided by (used in) operating activities
  
8,466
    
(33,831
)
            
44,656
    
(40,181
)
        
Changes in working capital
  
(9,454
)
  
36,158
              
(33,440
)
  
54,491
          
Maintenance capital expenditures
  
-
    
(336
)
            
(736
)
  
(648
)
        
Free cash flow
  
(988
)
  
1,991
    
(2,979
)
  
(149.6
)
    
10,480
    
13,662
    
(3,182
)
  
(23.3
)
_____________________
                                  
NM - Not meaningful
 
(1) Includes depreciation expense of $4.4 million for the year ended December 31, 2014 and depreciation expense of $1.7 million and $6.7 million for the quarter and year ended December 31, 2013, respectively.
(2) Interest expense, net, includes adjustments to derivative instruments and non-cash amortization of deferred financing fees.
(3) Equity distributions from investee in the above table includes distributions we received only up to our share of the earnings recorded in the calculation for EBITDA excluding non-cash items.
 
 
 
 
 
HAWAII GAS
 
    Quarter Ended
December 31,
   Change     Year Ended
December 31,
   Change
    2014   2013  
Favorable/(Unfavorable)
     2014   2013  
Favorable/(Unfavorable)
   
$
   $   $   %     $   $   $   %
   
($ In Thousands) (Unaudited)
                                                   
Revenues
   61,642     64,637     (2,995 )   (4.6 )     264,621     257,725     6,896     2.7  
Cost of product sales(1)
   43,153     46,070     2,917     6.3       189,012     184,355     (4,657 )   (2.5 )
Gross profit
   18,489     18,567     (78 )   (0.4 )     75,609     73,370     2,239     3.1  
Selling, general and administrative expenses
   7,127     4,155     (2,972 )   (71.5 )     22,491     20,294     (2,197 )   (10.8 )
Depreciation and amortization
   2,331     2,259     (72 )   (3.2 )     9,192     8,767     (425 )   (4.8 )
Operating income
   9,031     12,153     (3,122 )   (25.7 )     43,926     44,309     (383 )   (0.9 )
Interest expense, net(2)
   (1,824 )   (1,794 )   (30 )   (1.7 )     (7,091 )   (6,834 )   (257 )   (3.8 )
Other (expense) income
   (2,690 )   87     (2,777 )  
NM
       (2,871 )   (164 )   (2,707 )  
NM
  
Provision for income taxes
   (926 )   (4,326 )   3,400     78.6       (12,635 )   (14,995 )   2,360     15.7  
Net income(3)
   3,591     6,120     (2,529 )   (41.3 )     21,329     22,316     (987 )   (4.4 )
                                                   
Reconciliation of net income to EBITDA excluding non-cash
items and cash provided by operating activities to Free Cash
Flow:
                                    
Net income(3)
   3,591     6,120                   21,329     22,316              
Interest expense, net(2)
   1,824     1,794                   7,091     6,834              
Provision for income taxes
   926     4,326                   12,635     14,995              
Depreciation and amortization
   2,331     2,259                   9,192     8,767              
Other non-cash expenses(1)
   5,124     524                   6,709     2,116              
EBITDA excluding non-cash items
   13,796     15,023     (1,227 )   (8.2 )     56,956     55,028     1,928     3.5  
                                                   
EBITDA excluding non-cash items
   13,796     15,023                   56,956     55,028              
Interest expense, net(2)
   (1,824 )   (1,794 )                 (7,091 )   (6,834 )            
Adjustments to derivative instruments recorded in interest expense(2)
   62     (4 )                 5     (430 )            
Amortization of debt financing costs(2)
   120     113                   480     455              
Provision for income taxes, net of changes in deferred taxes
   3     (2,744 )                 (659 )   (6,705 )            
Pension contribution
   -     (900 )                 (6,960 )   (3,150 )            
Changes in working capital
   974     3,808                   (1,100 )   2,248              
Cash provided by operating activities
   13,131     13,502                   41,631     40,612              
Changes in working capital
   (974 )   (3,808 )                 1,100     (2,248 )            
Maintenance capital expenditures
   (1,217 )   (979 )                 (6,829 )   (6,316 )            
Free cash flow
   10,940     8,715     2,225     25.5       35,902     32,048     3,854     12.0  
_____________________
                                                  
NM - Not meaningful
                                                  
(1) For the year ended December 31, 2013, cost of product sales includes non-cash income of $286,000 for asset retirement obligation credit that is not expected to recur. This non-cash income is excluded when calculating EBITDA excluding non-cash items.
  
(2) Interest expense, net, includes adjustments to interest rate swaps and non-cash amortization of deferred financing fees.
  
(3) Corporate allocation expense, intercompany fees and the tax effect have been excluded from the above table as they are eliminated on consolidation.
  
 
 
 
 
 
CORPORATE AND OTHER
 
    Quarter Ended
December 31,
   Change     Year Ended
December 31,
   Change
    2014   2013  
Favorable/(Unfavorable)
     2014   2013  
Favorable/(Unfavorable)
   
$
   $   $   %     $   $   $   %
   
($ In Thousands) (Unaudited)
                                     
Base management fees
  
14,192
    
8,455
    
(5,737
)
  
(67.9
)
    
46,636
    
31,979
    
(14,657
)
  
(45.8
)
Performance fees
  
-
    
-
    
-
    
-
      
121,546
    
53,388
    
(68,158
)
  
(127.7
)
Selling, general and administrative expenses
  
3,387
    
1,162
    
(2,225
)
  
(191.5
)
    
15,526
    
6,149
    
(9,377
)
  
(152.5
)
Operating loss
  
(17,579
)
  
(9,617
)
  
(7,962
)
  
(82.8
)
    
(183,708
)
  
(91,516
)
  
(92,192
)
  
(100.7
)
Interest (expense) income, net(1)
  
(3,247
)
  
(77
)
  
(3,170
)
  
NM
      
(5,905
)
  
75
    
(5,980
)
  
NM
  
Gain from acquisition/divestiture of businesses(2)
  
-
    
-
    
-
    
-
      
1,027,054
    
-
    
1,027,054
    
NM
  
Other income (expense)
  
-
    
4
    
(4
)
  
(100.0
)
    
-
    
(12
)
  
12
    
100.0
  
Benefit for income taxes
  
11,258
    
588
    
10,670
    
NM
      
88,696
    
22,997
    
65,699
    
NM
  
Noncontrolling interest
  
-
    
1,280
    
(1,280
)
  
(100.0
)
    
(1,428
)
  
(877
)
  
(551
)
  
(62.8
)
Net (loss) income(3)
  
(9,568
)
  
(7,822
)
  
(1,746
)
  
(22.3
)
    
924,709
    
(69,333
)
  
994,042
    
NM
  
                                     
Reconciliation of net (loss) income to EBITDA excluding non-cash
items and cash used in operating activities to Free Cash
Flow:
                          
Net (loss) income(3)
  
(9,568
)
  
(7,822
)
            
924,709
    
(69,333
)
        
Interest expense (income), net(1)
  
3,247
    
77
              
5,905
    
(75
)
        
Benefit for income taxes
  
(11,258
)
  
(588
)
            
(88,696
)
  
(22,997
)
        
Base management fees to be settled/settled in shares
  
14,192
    
8,455
              
46,636
    
31,979
          
Performance fees settled in cash/shares
  
-
    
-
              
121,546
    
53,388
          
Gain from acquisition/divestiture of businesses(2)
  
-
    
-
              
(1,027,181
)
  
-
          
Other non-cash expense (income)
  
187
    
(1,092
)
            
2,178
    
1,605
          
EBITDA excluding non-cash items
  
(3,200
)
  
(970
)
  
(2,230
)
  
NM
      
(14,903
)
  
(5,433
)
  
(9,470
)
  
(174.3
)
                                     
EBITDA excluding non-cash items
  
(3,200
)
  
(970
)
            
(14,903
)
  
(5,433
)
        
Interest (expense) income, net (1)
  
(3,247
)
  
(77
)
            
(5,905
)
  
75
          
Amortization of debt financing costs(1)
  
556
    
-
              
1,013
    
-
          
Benefit for income taxes, net of changes in deferred taxes
  
159
    
2,974
              
760
    
10,635
          
Changes in working capital
  
(63,521
)
  
(2,915
)
            
(60,531
)
  
(10,583
)
        
Cash used in operating activities
  
(69,253
)
  
(988
)
            
(79,566
)
  
(5,306
)
        
Changes in working capital
  
63,521
    
2,915
              
60,531
    
10,583
          
Free cash flow
  
(5,732
)
  
1,927
    
(7,659
)
  
NM
      
(19,035
)
  
5,277
    
(24,312
)
  
NM
  
_____________________
                                    
NM- Not meaningful
                                    
(1) Interest (expense) income, net, includes non-cash amortization of deferred financing fees.
(2) Represents the gain from the remeasuring to fair value of our previous 50% ownership of IMTT and the gain recognized on the sale of the district energy business.
(3) Corporate allocation expense, intercompany fees and the tax effect have been excluded from the above table as they are eliminated on consolidation.
 
 
 
 
 
MACQUARIE INFRASTRUCTURE COMPANY LLC
 
RECONCILIATION OF PROPORTIONATELY COMBINED NET INCOME (LOSS) ATTRIBUTABLE TO MIC LLC TO EBITDA EXCLUDING NON-
CASH ITEMS AND CASH FROM OPERATING ACTIVITIES TO FREE CASH FLOW
             
   
For the Quarter Ended December 31, 2014
        
($ in Thousands) (Unaudited)
  
IMTT
100%(2)
  
Hawaii
Gas
100%
  
Atlantic
Aviation
100%
  
Contracted
Power and
Energy(3)
  
MIC
Corporate
100%
  
Proportionately
Combined(4)
  
Contracted
Power and
Energy
100%
      
                                                 
Net income (loss) attributable to MIC LLC
     20,924       3,591       6,960       (117 )     (9,568 )     21,790       (938 )      
Interest expense, net(6)
     5,735       1,824       13,012       449       3,247       24,267       849        
Provision (benefit) for income taxes
     17,945       926       7,095       (591 )     (11,258 )     14,117       (591 )      
Depreciation
     24,549       2,019       7,470       2,817       -       36,855       3,864        
Amortization of intangibles
     3,513       312       9,275       3       -       13,103       5        
Loss on disposal of assets
     -       -       394       -       -       394       -        
Equity income of investee
     -       -       -       (67 )     -       (67 )     (68 )      
Base management fee settled/to be settled in shares
     -       -       -       -       14,192       14,192       -        
Other non-cash expense (income)(7)
     2,249       5,124       (12 )     (2,318 )     187       5,230       (2,464 )      
EBITDA excluding non-cash items
     74,915       13,796       44,194       176       (3,200 )     129,881       657        
                                                               
EBITDA excluding non-cash items
     74,915       13,796       44,194       176       (3,200 )     129,881       657        
Interest expense, net(6)
     (5,735 )     (1,824 )     (13,012 )     (449 )     (3,247 )     (24,267 )     (849 )      
Adjustments to derivative instruments recorded in interest expense, net(6)
     (3,168 )     62       4,747       (812 )     -       829       (812 )      
Amortization of deferred finance charges(6)
     (593 )     120       810       13       556       906       16        
Provision/benefit for income taxes, net of changes in deferred taxes
     (1,428 )     3       (1,981 )     -       159       (3,247 )     -        
Changes in working capital
     2,309       974       3,850       7,208       (63,521 )     (49,180 )     9,454        
Cash provided by (used in) operating activities
     66,300       13,131       38,608       6,136       (69,253 )     54,922       8,466        
Changes in working capital
     (2,309 )     (974 )     (3,850 )     (7,208 )     63,521       49,180       (9,454 )      
Maintenance capital expenditures
     (6,781 )     (1,217 )     (5,276 )     -       -       (13,274 )     -        
Free cash flow
     57,210       10,940       29,482       (1,072 )     (5,732 )     90,828       (988 )      
                                                               
   
For the Quarter Ended December 31, 2013
  
($ in Thousands) (Unaudited)
  
IMTT
50%(1)
  
Hawaii
Gas
100%
  
Atlantic
Aviation
100%
  
Contracted
Power and
Energy(3)
  
MIC
Corporate
100%
  
Proportionately
Combined(4)
  
IMTT
100% (5)
  
Contracted
Power and
Energy
100%
                                                               
Net income (loss) attributable to MIC LLC
     9,991       6,120       11,932       (2,323 )     (7,822 )     17,898       19,982       (3,194 )
Interest expense, net(6)
     3,737       1,794       1,945       1,185       77       8,737       7,473       2,016  
Provision (benefit) for income taxes
     6,128       4,326       7,209       (1,472 )     (588 )     15,603       12,255       (2,145 )
Depreciation
     9,749       1,946       6,318       2,283       -       20,296       19,498       3,861  
Amortization of intangibles
     242       313       8,143       165       -       8,863       484       329  
Loss from customer contract termination
     -       -       -       2,140       -       2,140       -       4,280  
Base management fee settled in shares
     -       -       -       -       8,455       8,455       -       -  
Other non-cash expense (income)(7)
     1,513       524       121       65       (1,092 )     1,131       3,026       (427 )
EBITDA excluding non-cash items
     31,359       15,023       35,668       2,042       (970 )     83,122       62,718       4,720  
                                                                 
EBITDA excluding non-cash items
     31,359       15,023       35,668       2,042       (970 )     83,122       62,718       4,720  
Interest expense, net(6)
     (3,737 )     (1,794 )     (1,945 )     (1,185 )     (77 )     (8,737 )     (7,473 )     (2,016 )
Adjustments to derivative instruments recorded in interest expense, net(6)
     (2,005 )     (4 )     (4,781 )     (757 )     -       (7,547 )     (4,010 )     (1,513 )
Amortization of deferred finance charges(6)
     422       113       676       104       -       1,314       843       193  
Equipment lease receivables, net
     -       -       -       497       -       497       -       993  
Provision/benefit for income taxes, net of changes in deferred taxes
     (2,305 )     (2,744 )     (2,254 )     (25 )     2,974       (4,354 )     (4,609 )     (50 )
Pension contribution
     -       (900 )     -       -       -       (900 )     -       -  
Changes in working capital
     (1,763 )     3,808       1,220       (38,033 )     (2,915 )     (37,683 )     (3,525 )     (36,158 )
Cash provided by (used in) operating activities
     21,972       13,502       28,584       (37,357 )     (988 )     25,713       43,944       (33,831 )
Changes in working capital
     1,763       (3,808 )     (1,220 )     38,033       2,915       37,683       3,525       36,158  
Maintenance capital expenditures
     (11,358 )     (979 )     (6,370 )     (168 )     -       (18,875 )     (22,715 )     (336 )
Free cash flow
     12,377       8,715       20,994       508       1,927       44,521       24,754       1,991  
 
 
 
 
 
   
For the Year Ended December 31, 2014
($ in Thousands) (Unaudited)
  
IMTT
50% (1)
  
IMTT
100% (2)
  
Hawaii
Gas
100%
  
Atlantic
Aviation
100%
  
Contracted
Power and
Energy(3)
  
MIC
Corporate
100%
  
Proportionately
Combined(4)
  
IMTT
100% (5)
  
Contracted
Power and
Energy
100%
                                     
Net income attributable to MIC LLC
  
28,748
    
34,650
    
21,329
    
36,964
    
645
    
924,709
    
1,047,045
    
92,146
    
(1,771
)
Interest expense, net(6)
  
8,188
    
10,864
    
7,091
    
40,618
    
5,606
    
5,905
    
78,271
    
27,239
    
8,606
  
Provision (benefit) for income taxes
  
19,133
    
25,768
    
12,635
    
25,096
    
143
    
(88,696
)
  
(5,922
)
  
64,033
    
823
  
Depreciation
  
19,582
    
47,475
    
7,945
    
28,264
    
13,004
    
-
    
116,270
    
88,397
    
19,132
  
Amortization of intangibles
  
879
    
5,091
    
1,247
    
35,514
    
423
    
-
    
43,154
    
5,091
    
843
  
Loss from customer contract termination
  
-
    
-
    
-
    
-
    
635
    
-
    
635
    
-
    
1,269
  
Loss on extinguishment of debt
  
-
    
-
    
-
    
-
    
45
    
-
    
45
    
-
    
90
  
Base management fee settled/to be settled in shares
  
-
    
-
    
-
    
-
    
-
    
46,636
    
46,636
    
-
    
-
  
Performance fees settled in cash/shares
  
-
    
-
    
-
    
-
    
-
    
121,546
    
121,546
    
-
    
-
  
Gain from acquisition/divestiture of businesses
  
-
    
-
    
-
    
-
    
-
    
(1,027,181
)
  
(1,027,181
)
  
-
    
-
  
Loss on disposal of assets
  
-
    
-
    
-
    
1,216
    
-
    
-
    
1,216
    
-
    
-
  
Other non-cash expense (income)(7)
  
2,183
    
3,903
    
6,709
    
259
    
(7,586
)
  
2,178
    
7,646
    
8,269
    
(6,269
)
EBITDA excluding non-cash items
  
78,712
    
127,751
    
56,956
    
167,931
    
12,914
    
(14,903
)
  
429,361
    
285,175
    
22,723
  
                                     
EBITDA excluding non-cash items
  
78,712
    
127,751
    
56,956
    
167,931
    
12,914
    
(14,903
)
  
429,361
    
285,175
    
22,723
  
Interest expense, net(6)
  
(8,188
)
  
(10,864
)
  
(7,091
)
  
(40,618
)
  
(5,606
)
  
(5,905
)
  
(78,271
)
  
(27,239
)
  
(8,606
)
Adjustments to derivative instruments recorded in interest expense, net(6)
  
(4,042
)
  
(7,251
)
  
5
    
9,459
    
(3,067
)
  
-
    
(4,896
)
  
(15,335
)
  
(5,321
)
Amortization of deferred finance charges(6)
  
912
    
227
    
480
    
3,138
    
280
    
1,013
    
6,049
    
2,050
    
518
  
Equipment lease receivable, net
  
-
    
-
    
-
    
-
    
1,403
    
-
    
1,403
    
-
    
2,805
  
Provision/benefit for income taxes, net of changes in deferred taxes
  
(18,017
)
  
1,783
    
(659
)
  
(4,549
)
  
(453
)
  
760
    
(21,134
)
  
(34,250
)
  
(903
)
Pension contribution
  
-
    
(20,000
)
  
(6,960
)
  
-
    
-
    
-
    
(26,960
)
  
(20,000
)
  
-
  
Changes in working capital
  
6,781
    
(13,974
)
  
(1,100
)
  
6,775
    
28,875
    
(60,531
)
  
(33,174
)
  
(413
)
  
33,440
  
Cash provided by (used in) operating activities
  
56,158
    
77,672
    
41,631
    
142,136
    
34,346
    
(79,566
)
  
272,377
    
189,988
    
44,656
  
Changes in working capital
  
(6,781
)
  
13,974
    
1,100
    
(6,775
)
  
(28,875
)
  
60,531
    
33,174
    
413
    
(33,440
)
Maintenance capital expenditures
  
(18,054
)
  
(8,069
)
  
(6,829
)
  
(9,886
)
  
(368
)
  
-
    
(43,206
)
  
(44,176
)
  
(736
)
Free cash flow
  
31,324
    
83,577
    
35,902
    
125,475
    
5,103
    
(19,035
)
  
262,346
    
146,225
    
10,480
  
                                     
 
 
 
 
 
 
   
For the Year Ended December 31, 2013
($ in Thousands) (Unaudited)
  
IMTT
50% (1)
  
Hawaii
Gas
100%
  
Atlantic
Aviation
100%
  
Contracted
Power and
Energy(3)
  
MIC
Corporate
100%
  
Proportionately
Combined(4)
  
IMTT
100% (5)
  
Contracted
Power and
Energy
100%
                                 
Net income (loss) attributable to MIC LLC
  
43,928
    
22,316
    
38,545
    
1,095
    
(69,333
)
  
36,551
    
87,855
    
611
  
Interest expense (income), net(6)
  
12,286
    
6,834
    
22,151
    
4,417
    
(75
)
  
45,613
    
24,572
    
7,930
  
Provision (benefit) for income taxes
  
30,575
    
14,995
    
25,218
    
602
    
(22,997
)
  
48,393
    
61,149
    
827
  
Depreciation
  
37,077
    
7,519
    
24,301
    
7,987
    
-
    
76,884
    
74,154
    
14,056
  
Amortization of intangibles
  
969
    
1,248
    
32,077
    
663
    
-
    
34,957
    
1,937
    
1,326
  
Loss from customer contract termination
  
-
    
-
    
-
    
2,954
    
-
    
2,954
    
-
    
5,906
  
Casualty losses, net(8)
  
3,350
    
-
    
-
    
-
    
-
    
3,350
    
6,700
    
-
  
Loss on disposal of assets
  
-
    
-
    
106
    
-
    
-
    
106
    
-
    
-
  
Loss on extinguishment of debt
  
-
    
-
    
2,434
    
-
    
-
    
2,434
    
-
    
-
  
Base management fee settled in shares
  
-
    
-
    
-
    
-
    
31,979
    
31,979
    
-
    
-
  
Performance fee settled in shares
  
-
    
-
    
-
    
-
    
53,388
    
53,388
    
-
    
-
  
Other non-cash expense (income)(7)
  
6,061
    
2,116
    
5
    
(6,504
)
  
1,605
    
3,283
    
12,122
    
(6,569
)
EBITDA excluding non-cash items
  
134,245
    
55,028
    
144,837
    
11,214
    
(5,433
)
  
339,891
    
268,489
    
24,087
  
                                 
EBITDA excluding non-cash items
  
134,245
    
55,028
    
144,837
    
11,214
    
(5,433
)
  
339,891
    
268,489
    
24,087
  
Interest (expense) income, net(6)
  
(12,286
)
  
(6,834
)
  
(22,151
)
  
(4,417
)
  
75
    
(45,613
)
  
(24,572
)
  
(7,930
)
Adjustments to derivative instruments recorded in interest expense, net (6)
  
(9,897
)
  
(430
)
  
823
    
(2,766
)
  
-
    
(12,270
)
  
(19,794
)
  
(5,531
)
Amortization of deferred finance charges(6)
  
1,417
    
455
    
2,687
    
377
    
-
    
4,936
    
2,833
    
732
  
Equipment lease receivables, net
  
-
    
-
    
-
    
1,904
    
-
    
1,904
    
-
    
3,807
  
Provision/benefit for income taxes, net of changes in deferred taxes
  
(9,228
)
  
(6,705
)
  
(7,823
)
  
(428
)
  
10,635
    
(13,549
)
  
(18,456
)
  
(855
)
Pension contribution
  
(2,225
)
  
(3,150
)
  
-
    
-
    
-
    
(5,375
)
  
(4,450
)
  
-
  
Changes in working capital
  
(1,854
)
  
2,248
    
2,504
    
(53,436
)
  
(10,583
)
  
(61,121
)
  
(3,707
)
  
(54,491
)
Cash provided by (used in) operating activities
  
100,172
    
40,612
    
120,877
    
(47,552
)
  
(5,306
)
  
208,802
    
200,343
    
(40,181
)
Changes in working capital
  
1,854
    
(2,248
)
  
(2,504
)
  
53,436
    
10,583
    
61,121
    
3,707
    
54,491
  
Maintenance capital expenditures
  
(41,614
)
  
(6,316
)
  
(11,618
)
  
(324
)
  
-
    
(59,872
)
  
(83,228
)
  
(648
)
Free cash flow
  
60,411
    
32,048
    
106,755
    
5,560
    
5,277
    
210,051
    
120,822
    
13,662
  
___________________________
                                
(1) Our proportionate interest in IMTT prior to the acquisition of the remaining 50% interest on July 16, 2014.
(2) Represents our 100% ownership interest in IMTT subsequent to July 16, 2014.
(3) Proportionately combined Free Cash Flow for Contracted Power and Energy is equal to MIC's controlling ownership interest in its solar and wind power generation businesses and the district energy business, up to August 21, 2014, date of sale.
(4) Proportionately combined Free Cash Flow is equal to the sum of Free Cash Flow attributable to MIC's ownership interest in each of its operating businesses and MIC Corporate.
(5) Represents 100% of IMTT as a stand-alone business.
(6) Interest (expense) income, net, includes adjustments to derivative instruments and non-cash amortization of deferred financing fees.
(7) The calculation of IMTT's EBITDA prior to the acquisition included various non-cash items. MIC has excluded known non-cash items when calculating IMTT’s EBITDA excluding non-cash items, including primarily the non-cash pension expense of $1.8 million and $7.4 million for the quarter and year ended December 31, 2014, respectively, and the non-cash pension expense of $2.7 million and $11.2 million for the quarter and year ended December 31, 2013, respectively.
(8) Casualty losses, net, includes $2.5 million related to the quarter ended December 31, 2012, which was recorded in cost of services in that period. This amount has been included in the year ended December 31, 2013.
 
 
CONTACT:
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Macquarie Infrastructure Company
Jay A. Davis, (212) 231-1825
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or
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Macquarie Infrastructure Company
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