MIC Reports Fourth Quarter And Full Year 2018 Results

NEW YORK, Feb. 20, 2019 /PRNewswire/ -- Macquarie Infrastructure Corporation MIC reported financial results for 2018 that were in line with the Company's guidance.

Net income from continuing operations declined to $64.6 million in 2018 from $433.8 million in 2017 primarily as a result of the absence of a $316.4 million tax benefit related to the enactment of the Tax Cuts and Jobs Act in December 2017.

Cash generated by continuing operating activities increased $9.1 million to $473.2 million in 2018 versus 2017 as a result of favorable movements in working capital including improved collection of higher balances.

MIC's continuing operations consist of International-Matex Tank Terminals (IMTT), Atlantic Aviation, the businesses comprising its MIC Hawaii segment and several smaller businesses that individually and collectively do not constitute a reportable segment and are recorded as components of Corporate and Other. Results for the businesses previously reported as the substantial components of Contracted Power have been characterized as Discontinued Operations in the current and prior comparable periods and the Contracted Power segment has been eliminated.

Christopher Frost, MIC's chief executive officer, said of the Company's results for 2018: "Our financial results were in line with our expectations and reflect an ongoing focus on our strategic priorities. In particular, the repurposing and repositioning initiatives at IMTT are reinforcing the infrastructure characteristics of that business."

"The sales of the Bayonne Energy Center and smaller, non-core businesses in 2018 provided at least two years of funding for attractive growth opportunities across all of MIC. These proceeds have also been used to reduce MIC's overall indebtedness and, combined with the successful refinancing and amendments to debt facilities at Atlantic Aviation and IMTT, respectively, in December, significantly increased our financial flexibility. In short, we are well-positioned to continue to support our current dividend and to invest in increasing the cash generating capacity of our operating businesses with low reliance on additional debt issuance," Frost added.

Non-GAAP Metrics

EBITDA excluding non-cash items from continuing operations decreased to $569.5 million in 2018 from $618.5 million in 2017 reflecting primarily:

  • a reduction in storage capacity utilization at IMTT;
  • the previously disclosed write-down of a business in the MIC Hawaii segment and the operating losses related to that business;
  • higher costs related to the evaluation of various investment and acquisition/disposition opportunities, primarily the sale of BEC; and,
  • approximately $4.0 million of costs incurred for advisory services in connection with addressing various shareholder matters.

The above items were partially offset by an increased contribution from Atlantic Aviation and the absence of costs incurred during 2017 related to the implementation of a shared services center.

Adjusted EBITDA excluding non-cash items from continuing operations totaled $601.9 million in 2018 compared with $636.3 million in 2017. Adjustments exclude items such as transaction related costs and the write-down of an investment in a business that was sold. Adjusted EBITDA excluding non-cash items, together with MIC's proportionate interest in the businesses reported in Discontinued Operations, totaled $688.6 million.

MIC reported Adjusted Free Cash Flow from continuing operations of $439.5 million, down 13.9% from $510.3 million in 2017, on higher interest expense, higher maintenance capital expenditures and higher taxes. Adjusted Free Cash Flow, including MIC's proportionate interest in the businesses reported in Discontinued Operations, totaled $498.5 million.

See Summary Financial Information below.

Dividend

The MIC Board of Directors authorized a cash dividend of $1.00 per share, or $4.00 annualized, for the fourth quarter of 2018. The dividend will be payable on March 7, 2019 to shareholders of record on March 4, 2019. The Company initiated guidance for a quarterly cash dividend of $1.00 per share in 2019.

Full Year 2018 Results and Strategic Initiatives

International-Matex Tank Terminals

IMTT generated EBITDA excluding non-cash items of $286.6 million in 2018, down 12.1% versus 2017, primarily as a result of a previously disclosed decline in capacity utilization and slightly lower average storage rates. Free Cash Flow produced by IMTT declined 23.2% to $200.5 million as a result of the reduction in earnings together with higher interest expense, taxes and maintenance capital expenditures including those related to repurposing storage capacity.

Bulk liquid storage capacity utilization was 82.0% in the fourth quarter of 2018 and averaged 84.6% in 2018, consistent with guidance for "mid 80s percent" utilization provided early in the year.

MIC announced that its IMTT subsidiary has entered into agreements for the development of new storage capacity and capabilities that will significantly enhance the operations of two of the business' terminals on the Lower Mississippi River. The agreements will see IMTT deploy approximately $75.0 million of growth capital over the upcoming 12 to 24-month period.

At its Avondale, LA terminal, IMTT will construct storage capacity and related infrastructure including a new ship dock in support of a palm oil processing facility being developed on land leased by IMTT to Fuji Vegetable Oil ("Fuji"). The project features 87,000 barrels of new capacity being built pursuant to a 30-year use agreement with Fuji and 100,000 barrels of existing capacity that is expected to be used by a feedstock supplier. The facility is expected to be in service in late 2020.

IMTT has leased 442,000 barrels of capacity, including 80,000 barrels of capacity to be constructed, at its terminal in Gretna, LA to a customer who will market highly refined oils through the terminal. As a part of the long-term agreement IMTT will also construct a truck loading facility in support of the customer. The project is expected to be in service in early 2020.

Both the Avondale and Gretna projects are a part of ongoing efforts to invest in the infrastructure of IMTT and are subject to customary pre-construction permitting.

Atlantic Aviation

Atlantic Aviation generated EBITDA excluding non-cash items of $264.7 million in 2018, an increase of 7.0% compared with 2017, driven by full-year contributions from acquisitions of fixed base operations in 2017, increased hangar rental income and ancillary services fees.

Free Cash Flow produced by Atlantic Aviation increased slightly with the higher earnings substantially offset by higher taxes and interest expense. Excluding airports at which traffic was restricted as a result of runway closures for portions of the year, flight activity at the airports on which Atlantic Aviation operates increased by 0.6% in 2018 based on data reported by the Federal Aviation Administration.

MIC Hawaii

MIC Hawaii generated EBITDA excluding non-cash items of $37.3 million in 2018, down 38.5% versus 2017, including $17.1 million of write-downs and approximately $5.5 million of negative EBITDA, both related to a mechanical contracting business that was sold in November. These were partially offset by increased utility margins at Hawaii Gas resulting from a rate increase implemented in July 2018.

Free Cash Flow produced by MIC Hawaii declined 42.3% to $22.4 million as a result of the losses generated by the mechanical contractor, and higher maintenance capital expenditures and interest expense, partially offset by a decrease in cash taxes.

Corporate and Other

MIC's Corporate and Other segment generated EBITDA excluding non-cash items of $(19.1) million in 2018, compared with $(15.5) million in 2017, primarily as a result of higher transaction expenses and professional fees related to addressing various shareholder matters, partially offset by the absence of costs associated with the implementation of a shared services center. Free Cash Flow produced by Corporate and Other declined 80.9% to $(20.5) million as a result of higher interest expense and a reduced tax benefit.

The Corporate and Other segment includes primarily fees payable to MIC's Manager, professional fees and expenses associated with being a public company and any revenue or expense associated with smaller businesses that individually or collectively do not constitute a reportable segment. MIC also reports transaction related expenses, any profit-share income to which MIC was entitled related to the sale of renewable power generation projects by a third-party developer and shared services costs not otherwise allocated to operating companies, in its Corporate and Other segment.

In December, MIC announced that it had completed the refinancing of the primary debt facility of Atlantic Aviation and extended the maturity dates of two of three facilities at IMTT. These actions extended the weighted average maturity of MIC's debt to 5.7 years and provided the capital to fund the repayment of $349.9 million of convertible notes due in July 2019. Following the repayment of the convertible notes, MIC does not currently have any debt facilities that mature prior to 2022.

Discontinued Operations

In October 2018 MIC completed the sale of the Bayonne Energy Center (BEC) and commenced a sale process involving its solar and wind power generation facilities. These businesses, all of which had been reported as components of MIC's Contracted Power segment, were classified as Discontinued Operations and the Contracted Power segment was eliminated. The Company's financial results for 2018 and the prior years have been restated to reflect the impact of these changes.

The Discontinued Operations generated net income of $29.6 million in 2018, an increase of 32.6% compared with 2017, and EBITDA excluding non-cash items of $98.9 million, up 5.9% versus 2017. The increases were driven by contributions from the expansion of BEC and improved wind resources. Free Cash Flow produced by the Discontinued Operations increased 3.8% to $67.9 million.

2019 Guidance

MIC initiated guidance with respect to EBITDA and Free Cash Flow from continuing operations, and EBITDA by segment, for 2019. The Company expects a modest contribution from its discontinued operations (solar and wind power generation) will be additive to its guidance through the anticipated date of sale of these assets in the second quarter.

With respect to the Company's guidance for EBITDA and Free Cash Flow in 2019, a reconciliation of EBITDA to net income (loss), the most comparable GAAP measure and a reconciliation of Free Cash Flow to cash from operating activities, the most comparable GAAP measure, are not available without unreasonable effort due to the Company's limited visibility into and inability to make accurate projections and estimates of items including management fees, hedging agreements, depreciation and any (benefit) provision for income taxes. These items may vary greatly from year to year and could significantly impact MIC's results as reported in accordance with GAAP.

International-Matex Tank Terminals

Storage utilization at IMTT is expected to average in a mid-80s percent range in 2019 and to end the year in a high-80s percent range, subject to market conditions. The Company expects the improvement to be more pronounced in the second half of the year. The 2019 utilization rate estimates assume that only a portion of the storage related to a now idle refinery (owned by a third party) is leased during 2019 and that demand for bulk liquid storage increases as market participants prepare for the scheduled implementation of new rules instituted by the International Maritime Organization concerning reductions in the sulphur content of bunker fuel in January of 2020. The contribution to EBITDA associated with the recovery in utilization is expected to be partially offset by a further decline in average storage rates and higher operating costs.

In the first quarter of 2019, IMTT is expected to receive approximately $39.0 million in proceeds related to the termination of an agreement with the owner of a refinery at IMTT's terminal in St. Rose, LA. The proceeds have been incorporated into the Company's guidance for IMTT EBITDA in 2019 of between $287.0 and $297.0 million. Excluding the termination fee, EBITDA is therefore be expected to be between $248.0 and $258.0 million. The forecast decline of approximately 12% reflects primarily the loss of revenue associated with storage related to the refinery, increased expenses and lower storage rates, primarily related to the renewal of older, out of market contracts, all partially offset by improved utilization including of repurposed capacity.

Atlantic Aviation

MIC's guidance for EBITDA from Atlantic Aviation of between $275.0 and $285.0 million in 2019 assumes historically normal growth in general aviation flight activity of approximately 2.5%. The guidance does not contemplate acquisitions of additional FBOs.

MIC Hawaii

Guidance for the Company's MIC Hawaii segment for EBITDA of between $60.0 and $65.0 million in 2019 assumes a full year benefit of the rate increase implemented in the regulated portion of Hawaii Gas in July of 2018, and the absence of write-downs and losses attributable to a business that was sold in 2018, partially offset by increases in the cost of propane hedges in the unregulated portion of that business.

Growth Investments

Growth capital expenditures across the MIC portfolio are expected to total between $275.0 and $300.0 million in 2019. Of this, the Company reports having already committed to expenditures with an aggregate value of $247.0 million. Given the attractiveness of the opportunities at IMTT and the tax benefits associated with investment in high-value, physical asset backed projects, the Company estimates that the majority of its 2019 growth capital expenditures will be made in support of IMTT.

Maintenance Capital Expenditures

MIC expects the amount of capital deployed in maintaining its businesses will be between $65.0 and $70.0 million in 2019. The expected spend is higher than the long-term average for the Company primarily as a result of planned expenditures related to the refurbishment of a pier at IMTT in Bayonne, NJ. Maintenance capital expenditures are expected to remain elevated for two to three years depending of the pace of the refurbishment.

EBITDA Guidance by Segment Summarized

IMTT:



$

287.0 – $297.0 million

Atlantic Aviation:



$

275.0 – $285.0 million

MIC Hawaii:



$

60.0 – $65.0 million

Corporate/Other:



$

(12.0) million

Total



$

610.0 – $635.0 million

Free Cash Flow

MIC expects Free Cash Flow from continuing operations in 2019 to be in a range between $400.0 and $445.0 million. The guidance contemplates higher cash interest related to an increase in the interest rate on debt at Atlantic Aviation, partially offset by the anticipated repayment of $349.9 million of holding company convertible notes in July of 2019 using a portion of the proceeds raised in the Atlantic Aviation refinancing. Free Cash Flow is also expected to be reduced by higher maintenance capital expenditures in 2019 compared with 2018 primarily in relation to increased spending at IMTT associated with the refurbishment of a pier at its facility in Bayonne, NJ.

Summary Financial Information







































Quarter Ended

December 31,



Change

Favorable/

(Unfavorable)



Year Ended

December 31,



Change

Favorable/

(Unfavorable)





2018



2017



$



%



2018



2017



$



%





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









GAAP Metrics

































































Continuing Operations

































































Net (loss) income (100%)



$

(3,848)





$

354,312







(358,160)







(101.1)





$

64,628





$

433,770







(369,142)







(85.1)



Net (loss) income per share 

     attributable to MIC





(0.01)







4.19







(4.20)







(100.2)







0.80







5.22







(4.42)







(84.7)



Cash provided by operating

     activities





107,437







112,037







(4,600)







(4.1)







473,160







464,106







9,054







2.0



Discontinued Operations

































































Net (loss) income (100%)



$

(6,354)





$

6,964







(13,318)







(191.2)





$

29,620





$

22,342







7,278







32.6



Net (loss) income per share

     attributable to MIC











(0.06)







0.06







100.0







0.80







0.20







0.60







NM



Cash (used in) provided by

     operating activities





(1,062)







18,637







(19,699)







(105.7)







46,268







64,928







(18,660)







(28.7)



Weighted average number of shares 

     outstanding: basic





85,643,587







84,572,725







1,070,862







1.3







85,233,989







83,204,404







2,029,585







2.4



MIC Non-GAAP Metrics

































































EBITDA excluding non-cash 

     items – continuing

     operations (100%)



$

144,487





$

156,579







(12,092)







(7.7)





$

569,455





$

618,528







(49,073)







(7.9)



Shared service implementation 

     costs(1)











1,655







(1,655)







(100.0)













8,502







(8,502)







(100.0)



Write-down in Investment(1)





























17,083













17,083







NM



Investment and

     acquisition/disposition costs(1)





7,891







1,381







6,510







NM







15,364







9,254







6,110







66.0



Adjusted EBITDA excluding

     non-cash items – continuing 

     operations (100%)(1)



$

152,378





$

159,615







(7,237)







(4.5)





$

601,902





$

636,284







(34,382)







(5.4)



Cash interest



$

(23,908)





$

(21,410)







(2,498)







(11.7)





$

(98,432)





$

(80,269)







(18,163)







(22.6)



Cash taxes





(3,445)







(2,532)







(913)







(36.1)







(13,950)







(11,031)







(2,919)







(26.5)



Maintenance capital expenditures





(17,695)







(11,636)







(6,059)







(52.1)







(49,979)







(34,676)







(15,303)







(44.1)



Adjusted Free Cash 

     Flow –  continuing operations 

     (100%)(1)



$

107,330





$

124,037







(16,707)







(13.5)





$

439,541





$

510,308







(70,767)







(13.9)



EBITDA excluding non-cash 

     items – discontinued operations 

     (100%)



$

14,190





$

21,401







(7,211)







(33.7)





$

98,872





$

93,375







5,497







5.9



Cash interest





(4,309)







(6,696)







2,387







35.6







(23,843)







(27,272)







3,429







12.6



Cash taxes





(6,501)







(135)







(6,366)







NM







(6,655)







(129)







(6,526)







NM



Maintenance capital

     expenditures











(504)







504







100.0







(440)







(526)







86







16.3



Free Cash Flow –  discontinued

     operations (100%)



$

3,380





$

14,066







(10,686)







(76.0)





$

67,934





$

65,448







2,486







3.8



Noncontrolling interest(2)





(2,235)







(2,583)







348







13.5







(9,008)







(7,806)







(1,202)







(15.4)



Adjusted Free Cash Flows (total 

     PC%)(1)



$

108,475





$

135,520







(27,045)







(20.0)





$

498,467





$

567,950







(69,483)







(12.2)



_____________________

NM — Not meaningful



(1) Adjusted EBITDA excluding non-cash items and Adjusted Free Cash Flow excludes costs relating to certain investment and acquisition/disposition activities during 2018 and 2017. Adjusted EBITDA excluding non-cash items and Adjusted Free Cash Flow excludes the write-down of our investment in the previously owned design-build mechanical contractor business for 2018 and excludes implementation costs relating to our shared services center for 2017.



(2) Noncontrolling interest adjustment represents the portion of Free Cash Flow not attributable to MIC's ownership interest substantially from discontinued operations.

 

Conference Call and Webcast

When: MIC has scheduled a conference call for 8:00 a.m. Eastern Time on Thursday, February 21, 2019 during which management will review and comment on the fourth quarter and full year 2018 results and 2019 guidance.

How: To listen to the conference call dial +1(650) 521-5252 or +1(877) 852-2928 at least 10 minutes prior to the scheduled start time. A webcast of the call will be accessible via the Company's website at www.macquarie.com/mic. Allow extra time prior to the call to visit the site and download the software needed to listen to the webcast.

Supplemental Materials: MIC will prepare materials in support of its conference call. The materials will be available for downloading from the Company's website prior to the call.

Replay: For interested individuals unable to participate in the live conference call, a replay will be available after 2:00 p.m. on February 21, 2019 through midnight on February 27, 2019, at +1(404) 537-3406 or +1(855) 859-2056, Passcode: 2276902. An online archive of the webcast will be available on the Company's website for one year following the call.

About MIC

MIC owns and operates a group of businesses providing basic services to customers in the United States. Its businesses consist of a bulk liquid terminals business, International-Matex Tank Terminals; an airport services business, Atlantic Aviation; and entities comprising an energy services, production and distribution segment, MIC Hawaii. For additional information, please visit the MIC website at www.macquarie.com/mic. MIC-G

Use of Non-GAAP Measures

Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items, Free Cash Flow and Proportionately Combined Metrics

In addition to MIC's results under U.S. GAAP, the Company uses certain non-GAAP measures to assess the performance and prospects of its businesses. In particular, MIC uses EBITDA excluding non-cash items, Free Cash Flow and certain proportionately combined financial metrics. Proportionately combined financial metrics, including Free Cash Flow, reflect MIC's proportionate interest in its solar and wind facilities, substantially all of which are in discontinued operations.

MIC measures EBITDA excluding non-cash items as a reflection of its businesses' ability to effectively manage the volume of products sold or services provided, the operating margin earned on those transactions and the management of operating expenses independent of the capitalization and tax attributes of those businesses. The Company believes investors use EBITDA excluding non-cash items primarily as a measure to assess the operating performance of its businesses and to make comparisons with the operating performance of other businesses whose depreciation and amortization expense may vary widely from MIC's, particularly where acquisitions and other non-operating factors are involved. MIC defines EBITDA excluding non-cash items as net income (loss) or earnings — the most comparable GAAP measure — before interest, taxes, depreciation and amortization and non-cash items including impairments, unrealized derivative gains and losses, adjustments for other non-cash items and pension expense reflected in the statements of operations. EBITDA excluding non-cash items also excludes base management fees and performance fees, if any, whether paid in cash or stock.

Because MIC has varied ownership interest in the businesses within its portfolio of solar and wind power generation facilities (in discontinued operations) but has an obligation to report their financial results on a consolidated basis, GAAP measures such as net income (loss) do not fully reflect its proportionate share of the cash generated by these businesses. The Company notes that the proportionately combined metrics used may be calculated in a different manner by other companies and may limit their usefulness as a comparative measure. Therefore, proportionately combined metrics should be used as a supplemental measure to help understand MIC's financial performance and not in lieu of financial results reported under GAAP.

The Company's businesses can be characterized as owners of high-value, long-lived assets capable of generating substantial Free Cash Flow. MIC defines Free Cash Flow as cash from operating activities — the most comparable GAAP measure — which includes cash interest, tax payments and pension contributions, less maintenance capital expenditures, which includes principal repayments on capital lease obligations used to fund maintenance capital expenditures and excludes changes in working capital.

Management uses Free Cash Flow as a measure of its ability to provide investors with an attractive risk-adjusted return by sustaining and potentially increasing MIC's quarterly cash dividend and funding a portion of the Company's growth. GAAP metrics such as net income (loss) do not provide MIC management with the same level of visibility to into the performance and prospects of the business as a result of: (i) the capital intensive nature of MIC's businesses and the generation of non-cash depreciation and amortization; (ii) shares issued to the Company's external manager under the Management Services Agreement, (iii) the Company's ability to defer all or a portion of current federal income taxes; (iv) non-cash unrealized gains or losses on derivative instruments; (v) amortization of tolling liabilities; (vi) gains (losses) on disposal of assets, and (vii) pension expense. Pension expenses primarily consist of interest expense, expected return on plan assets and amortization of actuarial and performance gains and losses. Any cash contributions to pension plans are reflected as a reduction to Free Cash Flow and are not included in pension expense. Management believes that external consumers of its financial statements, including investors and research analysts, use Free Cash Flow both to assess the Company's performance and as an indicator of its success in generating an attractive risk-adjusted return.

In its Annual Report on Form 10-K, the Company has disclosed Free Cash Flow on a consolidated basis and for each of its operating segments and MIC Corporate. Management believes that both EBITDA excluding non-cash items and Free Cash Flow support a more complete and accurate understanding of the financial and operating performance of its businesses than would otherwise be achieved using GAAP results alone.

Free Cash Flow does not take into consideration required payments on indebtedness and other fixed obligations or other cash items that are excluded from MIC's definition of Free Cash Flow. Management notes that Free Cash Flow may be calculated differently by other companies thereby limiting its usefulness as a comparative measure. Free Cash Flow should be used as a supplemental measure to help understand MIC's financial performance and not in lieu of its financial results reported under GAAP.

See tables above and below for a reconciliation of net income from continuing operations to EBITDA excluding non-cash items from continuing operations and to Adjusted EBITDA excluding non-cash items from continuing operations and a reconciliation from cash provided by operating activities from continuing operations to Free Cash Flow from continuing operations and Adjusted Free Cash Flow from continuing operations, on a consolidated basis. Reconciliations for each of MIC's operating businesses and Corporate and Other follow.

Classification of Maintenance Capital Expenditures and Growth Capital Expenditures

MIC categorizes capital expenditures as either maintenance capital expenditures or growth capital expenditures. As neither maintenance capital expenditure nor growth capital expenditure is a GAAP term, the Company has adopted a framework to categorize specific capital expenditures. In broad terms, maintenance capital expenditures primarily maintain MIC's businesses at current levels of operations, capability, profitability or cash flow, while growth capital expenditures primarily provide new or enhanced levels of operations, capability, profitability or cash flow. Management considers a number of factors in determining whether a specific capital expenditure will be classified as maintenance or growth.

In some cases, specific capital expenditures contain characteristics of both maintenance and growth capital expenditures. MIC does not bifurcate specific capital expenditures into growth and maintenance components. Each discrete capital expenditure is considered within the above framework and the entire capital expenditure is classified as either maintenance or growth.

Forward-Looking Statements

This press release contains forward-looking statements. MIC may, in some cases, use words such as "project", "believe", "anticipate", "plan", "expect", "estimate", "intend", "should", "would", "could", "potentially", or "may" or other words that convey uncertainty of future events or outcomes to identify these forward-looking statements. Forward-looking statements in this release are subject to a number of risks and uncertainties, some of which are beyond MIC's control including, among other things: changes in general economic or business conditions; its ability to service, comply with the terms of and refinance debt, successfully integrate and manage acquired businesses, retain or replace qualified employees, complete growth projects, deploy growth capital and manage growth, make and finance future acquisitions, and implement its strategy; the regulatory environment; demographic trends, the political environment, the economy, tourism, construction and transportation costs, air travel, environmental costs and risks; fuel and gas and other commodity costs; its ability to recover increases in costs from customers, cybersecurity risks, work interruptions or other labor stoppages; risks associated with acquisitions or dispositions, litigation risks; risks related to its shared services initiative and its ability to achieve cost savings; reliance on sole or limited source suppliers, risks or conflicts of interests involving its relationship with the Macquarie Group and changes in U.S. federal tax law.

MIC's actual results, performance, prospects or opportunities could differ materially from those expressed in or implied by the forward-looking statements. Additional risks of which MIC is not currently aware could also cause its actual results to differ. In light of these risks, uncertainties and assumptions, you should not place undue reliance on any forward-looking statements. The forward-looking events discussed in this release may not occur. These forward-looking statements are made as of the date of this release. MIC undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. MIC is not an authorized deposit-taking institution for the purposes of the Banking Act 1959 (Commonwealth of Australia). The obligations of MIC do not represent deposits or other liabilities of Macquarie Bank Limited ABN 46 008 583 542 (MBL). MBL does not guarantee or otherwise provide assurance in respect of the obligations of MIC.

MACQUARIE INFRASTRUCTURE CORPORATION



















CONSOLIDATED BALANCE SHEETS

 ($ in Thousands, Except Share Data)























As of December 31,







2018



2017

















ASSETS















Current assets:















Cash and cash equivalents



$

588,555



$

45,844



Restricted cash





23,316





10,295



Accounts receivable, less allowance for doubtful accounts















of $1,097 and $895, respectively





95,161





146,621



Inventories





29,256





33,060



Prepaid expenses





12,647





10,885



Fair value of derivative instruments





10,516





11,965



Other current assets





13,200





12,061



Current assets held for sale(1)





647,652





36,914



Total current assets





1,420,303





307,645



Property, equipment, land and leasehold improvements, net





3,141,407





3,197,407



Investment in unconsolidated business 





8,360





9,115



Goodwill





2,043,320





2,047,040



Intangible assets, net





788,761





851,751



Fair value of derivative instruments





14,536





22,011



Other noncurrent assets





27,094





23,034



Noncurrent assets held for sale(1)





-





1,550,948



Total assets



$

7,443,781



$

8,008,951



















LIABILITIES AND STOCKHOLDERS' EQUITY















Current liabilities:















Due to Manager - related party



$

2,966



$

5,577



Accounts payable





38,178





58,883



Accrued expenses





85,867





79,576



Current portion of long-term debt





361,166





21,496



Other current liabilities





32,621





39,768



Current liabilities held for sale(1)





317,178





50,665



Total current liabilities





837,976





255,965



Long-term debt, net of current portion





2,652,748





2,991,654



Deferred income taxes





680,938





644,914



Other noncurrent liabilities





155,792





162,678



Noncurrent liabilities held for sale(1)





-





603,037



Total liabilities





4,327,454





4,658,248



Commitments and contingencies





-





-



Stockholders' equity (2):















Common stock ($0.001 par value; 500,000,000 authorized; 85,800,303 shares issued and

  outstanding at December 31, 2018 and 84,733,957 shares
issued and outstanding at 

   December 31, 2017)



$

86



$

85



Additional paid in capital





1,510,305





1,840,033



Accumulated other comprehensive loss





(30,271)





(29,993)



Retained earnings





1,484,482





1,343,567



Total stockholders' equity





2,964,602





3,153,692



Noncontrolling interests(3)





151,725





197,011



Total equity





3,116,327





3,350,703



Total liabilities and equity



$

7,443,781



$

8,008,951



_________________















(1)  See Note 5, ''Discontinued Operations and Dispositions'', in our Notes to Consolidated Financial Statements in Part II, Item 8, of Form 10-K for the year ended December 31, 2018, for further discussion on assets and liabilities held for sale.



(2)  See Note 11, ''Stockholders' Equity'', in our Notes to Consolidated Financial Statements in Part II, Item 8, of Form 10-K for the year ended December 31, 2018, for discussions on preferred stock and special stock.



(3)  Includes $141.5 million and $184.3 million of noncontrolling interest related to discontinued operations at December 31, 2018 and 2017, respectively. See Note 5, ''Discontinued Operations and Dispositions'', in our Notes to Consolidated Financial Statements in Part II, Item 8, of Form 10-K for the year ended December 31, 2018, for further discussions.



 

 

MACQUARIE INFRASTRUCTURE CORPORATION























CONSOLIDATED STATEMENTS OF OPERATIONS

 ($ in Thousands, Except Share and Per Share Data)





























Year Ended December 31,









2018





2017





2016

Revenue





















Service revenue





$

1,515,149



$

1,445,832



$

1,288,562

Product revenue







246,384





222,955





213,470

Total revenue







1,761,533





1,668,787





1,502,032

Costs and expenses





















Cost of services







712,082





624,214





524,423

Cost of product sales







178,822





143,787





119,440

Selling, general and administrative







328,464





306,664





277,628

Fees to Manager - related party







44,866





71,388





68,486

Goodwill impairment







3,215





-





-

Depreciation







193,659





178,292





175,518

Amortization of intangibles







68,314





63,825





60,997

Total operating expenses 







1,529,422





1,388,170





1,226,492

Operating income







232,111





280,617





275,540

Other income (expense)





















Interest income







788





83





86

Interest expense(1)







(112,626)





(86,999)





(95,613)

Other (expense) income, net







(6,194)





10,566





17,765

Net income from continuing operations before income taxes





114,079





204,267





197,778

(Provision) benefit for income taxes





(49,451)





229,503





(69,313)

Net income from continuing operations



$

64,628



$

433,770



$

128,465























Discontinued Operations(2)





















Net income from discontinued operations before income taxes



$

31,748



$

17,691



$

28,348

(Provision) benefit for income taxes





(2,128)





4,651





(1,944)

Net income from discontinued operations



$

29,620



$

22,342



$

26,404























Net income





$

94,248



$

456,112



$

154,869























Net income from continuing operations



$

64,628



$

433,770



$

128,465

Less: net loss attributable to noncontrolling interests





(3,452)





(409)





(3,608)

Net income from continuing operations attributable to MIC



$

68,080



$

434,179



$

132,073























Net income from discontinued operations



$

29,620



$

22,342



$

26,404

Less: net (loss) income attributable to noncontrolling interests





(38,821)





5,319





2,096

Net income from discontinued operations attributable to MIC



$

68,441



$

17,023



$

24,308























Net income attributable to MIC





$

136,521



$

451,202



$

156,381













































Basic income per share from continuing operations attributable to MIC



$

0.80



$

5.22



$

1.63

Basic income per share from discontinued operations attributable to MIC





0.80





0.20





0.30

Basic income per share attributable to MIC



$

1.60



$

5.42



$

1.93

Weighted average number of shares outstanding: basic 





85,233,989





83,204,404





80,892,654























Diluted income per share from continuing operations attributable to MIC 



$

0.80



$

4.94



$

1.55

Diluted income per share from discontinued operations attributable to MIC 





0.80





0.19





0.30

Diluted income per share attributable to MIC



$

1.60



$

5.13



$

1.85

Weighted average number of shares outstanding: diluted





85,249,865





91,073,362





82,218,627

Cash dividends declared per share





$

4.00



$

5.56



$

5.05























(1)  Interest expense includes gains on derivative instruments of $7.6 million and $2.2 million and losses on derivative instruments of $2.5 million for the years ended December 31, 2018, 2017 and 2016, respectively.

(2)  See Note 5, ''Discontinued Operations and Dispositions'', in our Notes to Consolidated Financial Statements in Part II, Item 8, of Form 10-K for the year ended December 31, 2018, for discussions on businesses classified as held for sale.

 

 

MACQUARIE INFRASTRUCTURE CORPORATION

























CONSOLIDATED STATEMENTS OF CASH FLOWS

($ in Thousands)





























Year Ended December 31,







2018







2017(1)







2016(1)

























Operating activities























Net income from continuing operations



$

64,628





$

433,770





$

128,465

Adjustments to reconcile net income to net cash provided by operating 

     activities from continuing operations:

















Non-cash goodwill impairment





3,215







-







-

Depreciation and amortization of property and equipment





193,659







178,292







175,518

Amortization of intangible assets





68,314







63,825







60,997

Amortization of debt financing costs





11,353







7,184







19,552

Amortization of debt discount





3,627







3,266







1,007

Adjustments to derivative instruments





11,490







(3,709)







(49,787)

Fees to Manager- related party





44,866







71,388







68,486

Deferred taxes





35,501







(240,534)







62,009

Pension expense





8,306







8,106







8,601

Other non-cash expense, net(2)





22,697







5,640







5,677

Changes in other assets and liabilities, net of acquisitions/ dispositions:























Accounts receivable





14,057







(31,849)







(7,488)

Inventories





(1,568)







(5,895)







(2,363)

Prepaid expenses and other current assets





(2,216)







(5,495)







8,070

Due to Manager-related party





511







(130)







135

Accounts payable and accrued expenses





421







(7,170)







4,492

Income taxes payable





584







401







8,251

Pension contribution





-







-







(3,500)

Other, net





(6,285)







(12,984)







5

Net cash provided by operating activities from continuing operations





473,160







464,106







488,127

























Investing activities























Acquisitions of businesses and investments, net of cash, cash

  equivalents and restricted cash acquired





(18,415)







(200,850)







(37,091)

Purchases of property and equipment





(177,156)







(214,224)







(257,198)

Proceeds from insurance claim





-







-







10,740

Loan to project developer





(19,400)







(23,341)







(5,000)

Loan repayment from project developer





17,131







17,079







-

Proceeds from sale of business, net of cash, cash equivalents and 

     restricted cash divested



41,212







-







-

Other, net





284







272







1,023

Net cash used in investing activities from continuing operations





(156,344)







(421,064)







(287,526)

























Financing activities























Proceeds from long-term debt



$

1,407,000





$

931,001





$

1,311,000

Payment of long-term debt





(1,384,945)







(412,646)







(1,452,480)

Proceeds from the issuance of shares





125







6,060







12,623

Dividends paid to common stockholders





(378,355)







(452,949)







(396,093)

Contributions received from noncontrolling interests





956







458







15,431

Purchase of noncontrolling interest





-







-







(9,909)

Distributions paid to noncontrolling interests





-







(7)







-

Offering and equity raise costs paid





(243)







(466)







(1,601)

Debt financing costs paid





(33,914)







(708)







(17,285)

Proceeds from the issuance of convertible senior notes





-







-







402,500

Payment of capital lease obligations





-







(281)







(2,601)

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



(389,376)







70,462







(138,415)

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

     operations



(72,560)







113,504







62,186

















































Cash flows provided by (used in) discontinued operations:























Net cash provided by operating activities





46,268







64,928







71,668

Net cash provided by (used in) investing activities





614,892







(135,757)







(85,733)

Net cash used in financing activities





(30,881)







(32,359)







(28,485)

Net cash provided by (used in) discontinued operations





630,279







(103,188)







(42,550)

















































Effect of exchange rate changes on cash and cash equivalents





(1,059)







511







211

























Net change in cash, cash equivalents and restricted cash





556,660







10,827







19,847

Cash, cash equivalents and restricted cash, beginning of period





72,084







61,257







41,410

Cash, cash equivalents and restricted cash, end of period



$

628,744





$

72,084





$

61,257

























Supplemental disclosures of cash flow information from continuing operations:





















Non-cash investing and financing activities:























Accrued financing costs



$

406





$

107





$

3

Accrued purchases of property and equipment





23,285







22,166







22,473

Issuance of shares to Manager  





47,988







72,274







135,345

Issuance of shares to independent directors





750







681







750

Issuance of shares for acquisition of business





-







125,000







-

Conversion of convertible senior notes to shares





8







20







4

Taxes paid (refund), net





12,386







10,640







(898)

Interest paid





98,215







85,128







84,112

























_________________















































(1)  See Note 2, ''Summary of Significant Accounting Policies —Recently Issued Accounting Standards'', in our Notes to Consolidated Financial Statements in Part II, Item 8, of Form 10-K for the year ended December 31, 2018, for the Company's adoption of ASU No. 2016-18.

(2) Other non-cash expense, net, includes the write-down of the Company's investment in the previously owned design-build mechanical contractor business at MIC Hawaii for the year ended December 31, 2018.



The following table provides a reconciliation of cash, cash equivalents and restricted cash from both continuing and discontinued operations reported within the consolidated balance sheets that sum to the total of the same amounts presented in the consolidated statements of cash flows:





As of December 31,







2018







2017







2016

























Cash and cash equivalents



$

588,555





$

45,844





$

42,727

Restricted cash - current





23,316







10,295







2,264

Cash, cash equivalents and restricted cash included in assets held for sale(3)





16,873







15,945







16,266

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

 consolidated statement of cash flows



$

628,744





$

72,084





$

61,257

























______________________























(3) Represents cash, cash equivalents and restricted cash related to businesses classified as held for sale. See Note 5, ''Discontinued Operations and Dispositions'', in our Notes to Consolidated Financial Statements in Part II, Item 8, of Form 10-K for the year ended December 31, 2018, for further discussion.

 

 

MACQUARIE INFRASTRUCTURE CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS – MD&A























































Quarter Ended

December 31,



Change 

Favorable/

(Unfavorable)



Year Ended

 December 31,



Change 

Favorable/

(Unfavorable)









2018





2017





$



%





2018





2017





$



%







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

Revenue















































Service revenue



$

375,512



$

378,763





(3,251)



(0.9)



$

1,515,149



$

1,445,832





69,317



4.8



Product revenue





62,245





57,197





5,048



8.8





246,384





222,955





23,429



10.5



Total revenue





437,757





435,960





1,797



0.4





1,761,533





1,668,787





92,746



5.6



















































Costs and expenses















































Cost of services





178,193





169,176





(9,017)



(5.3)





712,082





624,214





(87,868)



(14.1)



Cost of product sales





50,893





36,172





(14,721)



(40.7)





178,822





143,787





(35,035)



(24.4)



Selling, general and administrative





88,142





79,610





(8,532)



(10.7)





328,464





306,664





(21,800)



(7.1)



Fees to Manager - related party





8,753





16,778





8,025



47.8





44,866





71,388





26,522



37.2



Goodwill impairment





-





-





-



-





3,215





-





(3,215)



 NM 



Depreciation





49,971





47,250





(2,721)



(5.8)





193,659





178,292





(15,367)



(8.6)



Amortization of intangibles





15,236





16,225





989



6.1





68,314





63,825





(4,489)



(7.0)



Total operating expenses 





391,188





365,211





(25,977)



(7.1)





1,529,422





1,388,170





(141,252)



(10.2)



Operating income





46,569





70,749





(24,180)



(34.2)





232,111





280,617





(48,506)



(17.3)



Other income (expense)















































Interest income





671





24





647



 NM 





788





83





705



 NM 



Interest expense(1)





(41,781)





(17,371)





(24,410)



(140.5)





(112,626)





(86,999)





(25,627)



(29.5)



Other income (expense), net





8,840





3,427





5,413



158.0





(6,194)





10,566





(16,760)



(158.6)



Net income from continuing operations before 

     income taxes





14,299





56,829





(42,530)



(74.8)





114,079





204,267





(90,188)



(44.2)



(Provision) benefit for income taxes





(18,147)





297,483





(315,630)



(106.1)





(49,451)





229,503





(278,954)



(121.5)



Net (loss) income from continuing operations



$

(3,848)



$

354,312





(358,160)



(101.1)



$

64,628



$

433,770





(369,142)



(85.1)



















































Discontinued Operations















































Net (loss) income from discontinued operations before 

     income taxes



$

(9,480)



$

5,009





(14,489)



 NM 



$

31,748



$

17,691





14,057



79.5



Benefit (provision) for income taxes





3,126





1,955





1,171



59.9





(2,128)





4,651





(6,779)



(145.8)



Net (loss) income from discontinued operations



$

(6,354)



$

6,964





(13,318)



(191.2)



$

29,620



$

22,342





7,278



32.6



















































Net (loss) income



$

(10,202)



$

361,276





(371,478)



(102.8)



$

94,248



$

456,112





(361,864)



(79.3)



















































Net (loss) income from continuing operations



$

(3,848)



$

354,312





(358,160)



(101.1)



$

64,628



$

433,770





(369,142)



(85.1)



Less: net loss attributable to noncontrolling interests





(3,135)





(338)





2,797



 NM 





(3,452)





(409)





3,043



 NM 



Net (loss) income from continuing operations 

     attributable to MIC



$

(713)



$

354,650





(355,363)



(100.2)



$

68,080



$

434,179





(366,099)



(84.3)



















































Net (loss) income from discontinued operations



$

(6,354)



$

6,964





(13,318)



(191.2)



$

29,620



$

22,342





7,278



32.6



Less: net (loss) income attributable to noncontrolling interests





(6,684)





12,542





19,226



153.3





(38,821)





5,319





44,140



 NM 



Net income (loss) from discontinued operations 

     attributable to MIC



$

330



$

(5,578)





5,908



105.9



$

68,441



$

17,023





51,418



 NM 



















































Net (loss) income attributable to MIC



$

(383)



$

349,072





(349,455)



(100.1)



$

136,521



$

451,202





(314,681)



(69.7)



















































Basic (loss) income per share from continuing 

     operations attributable to MIC

$

(0.01)



$

4.19





(4.20)



(100.2)



$

0.80



$

5.22





(4.42)



(84.7)



Basic (loss) per share from discontinued 

     operations attributable to MIC



-





(0.06)





0.06



100.0





0.80





0.20





0.60



 NM 



Basic (loss) income per share attributable to MIC

$

(0.01)



$

4.13





(4.14)



(100.2)



$

1.60



$

5.42





(3.82)



(70.5)



Weighted average number of shares outstanding: basic 





85,643,587





84,572,725





1,070,862



1.3





85,233,989





83,204,404





2,029,585



2.4



________________________















































NM - Not meaningful















































(1) Interest expense includes losses on derivative instruments of $9.0 million and gains on derivative instruments of $7.6 million for the quarter and year ended December 31, 2018, respectively. For the quarter and year ended December 31, 2017, interest expense includes gains on derivative instruments of $6.8 million and $2.2 million, respectively.





MACQUARIE INFRASTRUCTURE CORPORATION

RECONCILIATION OF CONSOLIDATED NET (LOSS) INCOME TO EBITDA EXCLUDING

NON-CASH ITEMS AND A RECONCILIATION FROM CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW







Quarter Ended

December 31,



Change 

Favorable/

(Unfavorable)



Year Ended

 December 31,





Change 

Favorable/

(Unfavorable)









2018





2017





$



%





2018





2017





$



%







($ In Thousands) (Unaudited)

















































Net (loss) income from continuing operations



$

(3,848)



$

354,312













$

64,628



$

433,770













Interest expense, net(1)





41,110





17,347















111,838





86,916













Provision (benefit) for income taxes





18,147





(297,483)















49,451





(229,503)













Goodwill impairment





-





-















3,215





-













Depreciation





49,971





47,250















193,659





178,292













Amortization of intangibles





15,236





16,225















68,314





63,825













Fees to Manager- related party





8,753





16,778















44,866





71,388













Pension expense(2)





2,022





1,625















8,306





8,106













Other non-cash expense, net(3)





13,096





525















25,178





5,734













EBITDA excluding non-cash items - continuing operations



$

144,487



$

156,579





(12,092)



(7.7)



$

569,455



$

618,528





(49,073)



(7.9)



















































EBITDA excluding non-cash items - continuing operations



$

144,487



$

156,579













$

569,455



$

618,528













Interest expense, net(1)





(41,110)





(17,347)















(111,838)





(86,916)













Adjustments to derivative instruments recorded in interest expense(1)





11,224





(6,809)















(1,574)





(3,803)













Amortization of debt financing costs(1)





5,061





1,857















11,353





7,184













Amortization of debt discount(1)





917





889















3,627





3,266













Provision for current income taxes





(3,445)





(2,532)















(13,950)





(11,031)













Changes in working capital(4)





(9,697)





(20,600)















16,087





(63,122)













Cash provided by operating activities - continuing operations





107,437





112,037















473,160





464,106













Changes in working capital(4)





9,697





20,600















(16,087)





63,122













Maintenance capital expenditures





(17,695)





(11,636)















(49,979)





(34,676)













Free cash flow - continuing operations  





99,439





121,001





(21,562)



(17.8)





407,094





492,552





(85,458)



(17.4)



Free cash flow - discontinued operations  





3,380





14,066





(10,686)



(76.0)





67,934





65,448





2,486



3.8



Total Free Cash Flow  



$

102,819



$

135,067





(32,248)



(23.9)



$

475,028



$

558,000





(82,972)



(14.9)



















































__________________















































(1)  Interest expense, net, includes adjustments to derivative instruments, non-cash amortization of deferred financing fees and non-cash amortization of debt discount related to the 2.00% Convertible Senior Notes due October 2023. Interest expense, net, also included a non-cash write-off of deferred financing fees related to the December 2018 refinancing at Atlantic Aviation.

(2)  Pension expense primarily consists of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses. 

(3)  Other non-cash expense, net, primarily includes unrealized gains (losses) on commodity hedges, adjustments to asset retirement obligations and non-cash gains (losses) related to the disposal of assets. Other non-cash expense, net, also includes the write-down of our investment in the previously owned design-build mechanical contractor business for the year ended December 31, 2018. See "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items, Free Cash Flow and Proportionately Combined Metrics"above for further discussion.

(4)  Conformed to current period presentation for the adoption of ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. See Note 2, ''Summary of Significant Accounting Policies'', in our Notes to Consolidated Financial Statements in Part II, Item 8, of Form 10-K, for the year ended December 31, 2018, for recently issued accounting standards.

 

 

MACQUARIE INFRASTRUCTURE CORPORATION

RECONCILIATION FROM CONSOLIDATED FREE CASH FLOW TO

PROPORTIONATELY COMBINED FREE CASH FLOW











































Change 

Favorable/

(Unfavorable)









Quarter Ended

December 31,





Change 

Favorable/

(Unfavorable)



Year Ended

December 31,













2018





2017





$



%





2018





2017





$



%









($ In Thousands) (Unaudited)



















































100% Total Free Cash Flow 

     (includes continuing and 

     discontinued operations)

$

102,819



$

135,067





(32,248)



(23.9)



$

475,028



$

558,000





(82,972)



(14.9)





100% of Discontinued Operations 

     Free Cash Flow



(3,380)





(14,066)















(67,934)





(65,448)















Proportionately Combined 

     Discontinued Operations Free 

     Cash Flow



1,145





11,483















58,926





57,642















Proportionately Combined Free 

     Cash Flow (includes continuing 

     and discontinued operations)

$

100,584



$

132,484





(31,900)



(24.1)



$

466,020



$

550,194





(84,174)



(15.3)





 

 

MACQUARIE INFRASTRUCTURE CORPORATION

RECONCILIATION OF SEGMENT NET INCOME (LOSS) TO EBITDA

EXCLUDING NON-CASH ITEMS AND A RECONCILIATION FROM CASH PROVIDED

BY/(USED IN) OPERATING ACTIVITIES TO FREE CASH FLOW

IMTT







Quarter Ended

December 31,



Change

Favorable/

(Unfavorable)





Year Ended

 December 31,



Change

Favorable/

(Unfavorable)







2018



2017







2018



2017









$



$



$



%





$



$



$



%







($ In Thousands) (Unaudited)



Revenue



123,802



139,294



(15,492)



(11.1)





510,783



549,422



(38,639)



(7.0)



Cost of services



52,961



48,317



(4,644)



(9.6)





200,966



196,369



(4,597)



(2.3)



Selling, general and administrative expenses



8,024



10,779



2,755



25.6





32,709



36,406



3,697



10.2



Depreciation and amortization



32,700



32,637



(63)



(0.2)





131,402



126,463



(4,939)



(3.9)



Operating income



30,117



47,561



(17,444)



(36.7)





145,706



190,184



(44,478)



(23.4)



Interest expense, net(1)



(15,153)



(7,650)



(7,503)



(98.1)





(45,502)



(38,357)



(7,145)



(18.6)



Other income (expense), net



101



(196)



297



151.5





965



1,758



(793)



(45.1)



(Provision) benefit for income taxes



(11,690)



256,150



(267,840)



(104.6)





(35,885)



209,464



(245,349)



(117.1)



Net income



3,375



295,865



(292,490)



(98.9)





65,284



363,049



(297,765)



(82.0)









































Reconciliation of net income to EBITDA

   excluding non-cash items and a reconciliation

   of cash provided by operating activities to Free

   Cash Flow:





































Net income



3,375



295,865













65,284



363,049











Interest expense, net(1)



15,153



7,650













45,502



38,357











Provision (benefit) for income taxes



11,690



(256,150)













35,885



(209,464)











Depreciation and amortization



32,700



32,637













131,402



126,463











Pension expense(2)



1,925



1,347













7,662



6,996











Other non-cash expense, net 



256



452













867



767











EBITDA excluding non-cash items



65,099



81,801



(16,702)



(20.4)





286,602



326,168



(39,566)



(12.1)









































EBITDA excluding non-cash items



65,099



81,801













286,602



326,168











Interest expense, net(1)



(15,153)



(7,650)













(45,502)



(38,357)











Adjustments to derivative instruments recorded

   in interest expense(1)



4,285



(3,577)













(1,978)



(3,834)











Amortization of debt financing costs(1)



487



411













1,721



1,647











Provision for current income taxes



(803)



(1,348)













(6,862)



(4,417)











Changes in working capital



(5,389)



(20,382)













4,524



(32,795)











Cash provided by operating activities



48,526



49,255













238,505



248,412











Changes in working capital



5,389



20,382













(4,524)



32,795











Maintenance capital expenditures



(12,159)



(6,580)













(33,494)



(20,143)











Free cash flow



41,756



63,057



(21,301)



(33.8)





200,487



261,064



(60,577)



(23.2)



_____________________





































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

(2)  Pension expense primarily consists of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses.

 

 

Atlantic Aviation





















































































































Quarter Ended

December 31,



Change

Favorable/ (Unfavorable)





Year Ended

 December 31,



Change

Favorable/(Unfavorable)







2018



2017







2018



2017









$



$



$



%





$



$



$



%







($ In Thousands) (Unaudited)

Revenue



247,451



225,282



22,169



9.8





962,492



846,431



116,061



13.7



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



121,184



105,509



(15,675)



(14.9)





466,948



378,494



(88,454)



(23.4)



Gross margin



126,267



119,773



6,494



5.4





495,544



467,937



27,607



5.9



Selling, general and administrative expenses



58,178



58,693



515



0.9





231,980



222,205



(9,775)



(4.4)



Depreciation and amortization



27,930



26,296



(1,634)



(6.2)





105,950



100,190



(5,760)



(5.7)



Operating income



40,159



34,784



5,375



15.5





157,614



145,542



12,072



8.3



Interest expense, net(1)



(16,232)



(864)



(15,368)



 NM 





(25,833)



(14,512)



(11,321)



(78.0)



Other income (expense), net



379



(32)



411



 NM 





(140)



(151)



11



7.3



(Provision) benefit for income taxes



(6,453)



30,257



(36,710)



(121.3)





(35,222)



(6,509)



(28,713)



 NM 



Net income



17,853



64,145



(46,292)



(72.2)





96,419



124,370



(27,951)



(22.5)









































Reconciliation of net income to EBITDA

   excluding non-cash items and a reconciliation

   of cash provided by operating activities to Free

   Cash Flow:





































Net income



17,853



64,145













96,419



124,370











Interest expense, net(1)



16,232



864













25,833



14,512











Provision (benefit) for income taxes



6,453



(30,257)













35,222



6,509











Depreciation and amortization



27,930



26,296













105,950



100,190











Pension expense(2)



5



5













21



20











Other non-cash (income) expense, net 



(11)



390













1,221



1,642











EBITDA excluding non-cash items



68,462



61,443



7,019



11.4





264,666



247,243



17,423



7.0









































EBITDA excluding non-cash items



68,462



61,443













264,666



247,243











Interest expense, net(1)



(16,232)



(864)













(25,833)



(14,512)











Convertible senior notes interest(3)



(1,449)



(2,013)













(7,487)



(7,782)











Adjustments to derivative instruments recorded

   in interest expense(1)



6,049



(2,721)













251



429











Amortization of debt financing costs(1)



3,454



351













4,296



1,170











Provision for current income taxes



(3,332)



(8,647)













(22,801)



(14,457)











Changes in working capital



(3,196)



(573)













13,708



(7,240)











Cash provided by operating activities



53,756



46,976













226,800



204,851











Changes in working capital



3,196



573













(13,708)



7,240











Maintenance capital expenditures



(3,001)



(2,894)













(8,301)



(7,965)











Free cash flow



53,951



44,655



9,296



20.8





204,791



204,126



665



0.3



_____________________





































NM - Not meaningful





































(1)  Interest expense, net, includes adjustments to derivative instruments and non-cash amortization of deferred financing fees. For the quarter and year ended December 31, 2018, interest expense also included non-cash write-off of deferred financing costs related to the December 2018 refinancing.

(2)  Pension expense primarily consists of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses.

(3)  Represents the cash interest expense reclassified to Atlantic Aviation related to the 2.00% Convertible Senior Notes due October 2023 through December 06, 2018, the date of Atlantic Aviation's refinancing. The proceeds from this note issuance in October 2016 were used principally to reduce the drawn balance on Atlantic Aviation's revolving credit facility.

 

 

MIC Hawaii















































































Quarter Ended

December 31,



Change

Favorable/ (Unfavorable)





Year Ended

 December 31,



Change

Favorable/(Unfavorable)







2018



2017







2018



2017









$



$



$



%





$



$



$



%







($ In Thousands) (Unaudited)







































Product revenue



61,393



57,197



4,196



7.3





245,532



222,955



22,577



10.1



Service revenue



4,951



15,437



(10,486)



(67.9)





46,257



54,913



(8,656)



(15.8)



Total revenue



66,344



72,634



(6,290)



(8.7)





291,789



277,868



13,921



5.0



Cost of product sales (exclusive of depreciation

   and amortization shown separately below)



50,633



36,172



(14,461)



(40.0)





178,562



143,787



(34,775)



(24.2)



Cost of services (exclusive of depreciation and

   amortization shown separately below)



4,048



15,350



11,302



73.6





44,168



49,365



5,197



10.5



Cost of revenue — total



54,681



51,522



(3,159)



(6.1)





222,730



193,152



(29,578)



(15.3)



Gross margin



11,663



21,112



(9,449)



(44.8)





69,059



84,716



(15,657)



(18.5)



Selling, general and administrative expenses



6,454



7,209



755



10.5





29,307



26,938



(2,369)



(8.8)



Goodwill impairment



-



-



-



-





3,215



-



(3,215)



 NM 



Depreciation and amortization



4,168



4,381



213



4.9





23,708



15,303



(8,405)



(54.9)



Operating income



1,041



9,522



(8,481)



(89.1)





12,829



42,475



(29,646)



(69.8)



Interest expense, net(1)



(2,738)



(1,246)



(1,492)



(119.7)





(7,984)



(7,041)



(943)



(13.4)



Other expense, net



(1,503)



(349)



(1,154)



 NM 





(24,739)



(731)



(24,008)



 NM 



Benefit (provision) for income taxes



2,419



1,485



934



62.9





6,769



(9,287)



16,056



172.9



Net (loss) income



(781)



9,412



(10,193)



(108.3)





(13,125)



25,416



(38,541)



(151.6)



Less: net loss attributable to noncontrolling

   interests



(3,067)



(77)



2,990



 NM 





(3,202)



(148)



3,054



 NM 



Net income (loss) attributable to MIC



2,286



9,489



(7,203)



(75.9)





(9,923)



25,564



(35,487)



(138.8)









































Reconciliation of net (loss) income to EBITDA

   excluding non-cash items and a reconciliation

   of cash provided by operating activities to Free

   Cash Flow:





































Net (loss) income



(781)



9,412













(13,125)



25,416











Interest expense, net(1)



2,738



1,246













7,984



7,041











(Benefit) provision for income taxes



(2,419)



(1,485)













(6,769)



9,287











Goodwill impairment



-



-













3,215



-











Depreciation and amortization



4,168



4,381













23,708



15,303











Pension expense(2)



55



273













438



1,090











Other non-cash expense (income), net(3)



12,262



(614)













21,810



2,494











EBITDA excluding non-cash items



16,023



13,213



2,810



21.3





37,261



60,631



(23,370)



(38.5)









































EBITDA excluding non-cash items



16,023



13,213













37,261



60,631











Interest expense, net(1)



(2,738)



(1,246)













(7,984)



(7,041)











Adjustments to derivative instruments recorded

   in interest expense(1)



890



(511)













153



(398)











Amortization of debt financing costs(1)



94



100













383



403











Benefit (provision) for current income taxes



3,988



(3,047)













727



(8,312)











Changes in working capital(4)



(3,265)



5,345













13,155



(7,748)











Cash provided by operating activities



14,992



13,854













43,695



37,535











Changes in working capital(4)



3,265



(5,345)













(13,155)



7,748











Maintenance capital expenditures



(2,535)



(2,162)













(8,184)



(6,568)











Free cash flow



15,722



6,347



9,375



147.7





22,356



38,715



(16,359)



(42.3)



_____________________





































NM - Not meaningful





































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

(2) Pension expense primarily consists of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses.

(3) Other non-cash expense (income), net, primarily includes non-cash adjustments related to unrealized gains (losses) on commodity hedges and non-cash gains (losses) related to the disposal of assets. Other non-cash expense (income), net, also includes the write-down of our investment in the previously owned design-build mechanical contractor business for the year ended December 31, 2018. See "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items, Free Cash Flow and Proportionately Combined Metrics" above for further discussion.

(4) Conformed to current period presentation for the adoption of ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. See Note 2, ''Summary of Significant Accounting Policies'', in Notes to Consolidated Financial Statements in Part II, Item 8, of Form 10-K for recently issued accounting standards.

 

 

Corporate and Other















































































Quarter Ended

December 31,



Change

Favorable/(Unfavorable)





Year Ended

 December 31,



Change

Favorable/(Unfavorable)







2018



2017







2018



2017









$



$



$



%





$



$



$



%







($ In Thousands) (Unaudited)







































Product revenue



852



-



852



 NM 





852



-



852



 NM 



Service revenue



42



-



42



 NM 





42



-



42



 NM 



Total revenue



894



-



894



 NM 





894



-



894



 NM 



Cost of product sales



260



-



260



 NM 





260



-



(260)



 NM 



Selling, general and administrative expenses



16,220



4,179



(12,041)



 NM 





38,893



26,035



(12,858)



(49.4)



Fees to Manager-related party



8,753



16,778



8,025



47.8





44,866



71,388



26,522



37.2



Depreciation and amortization



409



161



(248)



(154.0)





913



161



(752)



 NM 



Operating loss



(24,748)



(21,118)



(3,630)



(17.2)





(84,038)



(97,584)



13,546



13.9



Interest expense, net(1)



(6,987)



(7,587)



600



7.9





(32,519)



(27,006)



(5,513)



(20.4)



Other income, net



9,863



4,004



5,859



146.3





17,720



9,690



8,030



82.9



(Provision) benefit for income taxes



(2,423)



9,591



(12,014)



(125.3)





14,887



35,835



(20,948)



(58.5)



Net loss



(24,295)



(15,110)



(9,185)



(60.8)





(83,950)



(79,065)



(4,885)



(6.2)



Less: net loss attributable to noncontrolling

  interests



(68)



(261)



(193)



(73.9)





(250)



(261)



(11)



(4.2)



Net loss attributable to MIC



(24,227)



(14,849)



(9,378)



(63.2)





(83,700)



(78,804)



(4,896)



(6.2)















































































Reconciliation of net loss to EBITDA excluding

   non-cash items and a reconciliation of cash

   (used in) provided by operating activities to

   Free Cash Flow:





































Net loss



(24,295)



(15,110)













(83,950)



(79,065)











Interest expense, net(1)



6,987



7,587













32,519



27,006











Provision (benefit) for income taxes



2,423



(9,591)













(14,887)



(35,835)











Depreciation and amortization



409



161













913



161











Fees to Manager-related party



8,753



16,778













44,866



71,388











Pension expense(2)



37



-













185



-











Other non-cash expense, net



589



297













1,280



831











EBITDA excluding non-cash items



(5,097)



122



(5,219)



 NM 





(19,074)



(15,514)



(3,560)



(22.9)









































EBITDA excluding non-cash items



(5,097)



122













(19,074)



(15,514)











Interest expense, net(1)



(6,987)



(7,587)













(32,519)



(27,006)











Convertible senior notes interest(3)



1,449



2,013













7,487



7,782











Amortization of debt financing costs(1)



1,026



995













4,953



3,964











Amortization of debt discount(1)



917



889













3,627



3,266











(Provision) benefit for current income taxes



(3,298)



10,510













14,986



16,155











Changes in working capital



2,153



(4,990)













(15,300)



(15,339)











Cash (used in) provided by operating activities



(9,837)



1,952













(35,840)



(26,692)











Changes in working capital



(2,153)



4,990













15,300



15,339











Free cash flow



(11,990)



6,942



(18,932)



 NM 





(20,540)



(11,353)



(9,187)



(80.9)



_____________________





































NM - Not meaningful





































(1)  Interest expense, net, included non-cash amortization of deferred financing fees and non-cash amortization of debt discount related to the 2.00% Convertible Senior  Notes due October 2023.

(2)  Pension expense primarily consists of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses.

(3)  Represents the cash interest expense reclassified to Atlantic Aviation, related to the 2.00% Convertible Senior Notes due October 2023 through December 6, 2018, the date of Atlantic Aviation's refinancing. The proceeds from this note issuance in October 2016 were used principally to reduce the drawn balance on Atlantic Aviation's revolving credit facility. Cash interest expense on this note issuance is included in Corporate and Other subsequent to December 6, 2018.

 

 

MACQUARIE INFRASTRUCTURE CORPORATION













RECONCILIATION OF NET INCOME (LOSS) TO EBITDA EXCLUDING













NON-CASH ITEMS AND A RECONCILIATION FROM CASH PROVIDED BY/(USED IN) OPERATING













ACTIVITIES TO FREE CASH FLOW ON A CONSOLIDATED,

PROPORTIONATELY COMBINED

AND TOTAL BASIS

















































For the Quarter Ended December 31, 2018





IMTT 



 Atlantic Aviation 



MIC Hawaii



MIC Corporate 



Total Continuing Operations

100%



Discontinued Operations PC%(1)



Total

 PC%(1)



Discontinued Operations  100%



Total

100%





($ in Thousands) (Unaudited)

Net income (loss)



3,375



17,853



(781)



(24,295)



(3,848)



(5,927)



(9,775)



(6,354)



(10,202)

Interest expense, net(2)



15,153



16,232



2,738



6,987



41,110



5,072



46,182



6,433



47,543

Provision (benefit) for income taxes



11,690



6,453



(2,419)



2,423



18,147



(3,126)



15,021



(3,126)



15,021

Depreciation and amortization



32,700



27,930



4,168



409



65,207



(1,600)



63,607



445



65,652

Fees to Manager-related party



-



-



-



8,753



8,753



-



8,753



-



8,753

Pension expense(3)



1,925



5



55



37



2,022



-



2,022



-



2,022

Other non-cash expense (income), net(4)



256



(11)



12,262



589



13,096



16,792



29,888



16,792



29,888

EBITDA excluding non-cash items



65,099



68,462



16,023



(5,097)



144,487



11,211



155,698



14,190



158,677







































EBITDA excluding non-cash items



65,099



68,462



16,023



(5,097)



144,487



11,211



155,698



14,190



158,677

Interest expense, net(2)



(15,153)



(16,232)



(2,738)



(6,987)



(41,110)



(5,072)



(46,182)



(6,433)



(47,543)

Convertible senior notes interest(5)



-



(1,449)



-



1,449



-



-



-



-



-

Adjustments to derivative instruments 

     recorded in interest expense, net(2)



4,285



6,049



890



-



11,224



1,419



12,643



2,021



13,245

   Amortization of debt financing costs(2)



487



3,454



94



1,026



5,061



88



5,149



103



5,164

Amortization of debt discount(2)



-



-



-



917



917



-



917



-



917

(Provision) benefit for current income taxes



(803)



(3,332)



3,988



(3,298)



(3,445)



(6,501)



(9,946)



(6,501)



(9,946)

Changes in working capital 



(5,389)



(3,196)



(3,265)



2,153



(9,697)



(4,283)



(13,980)



(4,442)



(14,139)

Cash provided by (used in) operating activities



48,526



53,756



14,992



(9,837)



107,437



(3,138)



104,299



(1,062)



106,375

Changes in working capital 



5,389



3,196



3,265



(2,153)



9,697



4,283



13,980



4,442



14,139

Maintenance capital expenditures



(12,159)



(3,001)



(2,535)



-



(17,695)



-



(17,695)



-



(17,695)

Free Cash Flow



41,756



53,951



15,722



(11,990)



99,439



1,145



100,584



3,380



102,819

 

 





For the Quarter Ended December 31, 2017





IMTT



 Atlantic Aviation 



MIC Hawaii



MIC Corporate 



Total Continuing Operations 100% 





Discontinued Operations PC%  (1)



Total

 PC%(1)



Discontinued Operations  100%



Total 100%





($ in Thousands) (Unaudited)

Net income (loss)



295,865



64,145



9,412



(15,110)



354,312





5,755



360,067



6,964



361,276

Interest expense, net(2)



7,650



864



1,246



7,587



17,347





2,660



20,007



3,056



20,403

Benefit for income taxes



(256,150)



(30,257)



(1,485)



(9,591)



(297,483)





(1,955)



(299,438)



(1,955)



(299,438)

Depreciation and amortization



32,637



26,296



4,381



161



63,475





13,382



76,857



15,269



78,744

Fees to Manager-related party



-



-



-



16,778



16,778





-



16,778



-



16,778

Pension expense(3)



1,347



5



273



-



1,625





-



1,625



-



1,625

Other non-cash expense (income), net(4)



452



390



(614)



297



525





(1,934)



(1,409)



(1,933)



(1,408)

EBITDA excluding non-cash items



81,801



61,443



13,213



122



156,579





17,908



174,487



21,401



177,980









































EBITDA excluding non-cash items



81,801



61,443



13,213



122



156,579





17,908



174,487



21,401



177,980

Interest expense, net(2)



(7,650)



(864)



(1,246)



(7,587)



(17,347)





(2,660)



(20,007)



(3,056)



(20,403)

Convertible senior notes interest(5)



-



(2,013)



-



2,013



-





-



-



-



-

Adjustments to derivative instruments recorded in interest expense, net(2)



(3,577)



(2,721)



(511)



-



(6,809)





(3,615)



(10,424)



(4,019)



(10,828)

   Amortization of debt financing costs(2)



411



351



100



995



1,857





363



2,220



379



2,236

Amortization of debt discount(2)



-



-



-



889



889





-



889



-



889

(Provision) benefit for current income taxes



(1,348)



(8,647)



(3,047)



10,510



(2,532)





(136)



(2,668)



(135)



(2,667)

Changes in working capital



(20,382)



(573)



5,345



(4,990)



(20,600)





4,648



(15,952)



4,067



(16,533)

Cash provided by operating activities



49,255



46,976



13,854



1,952



112,037





16,508



128,545



18,637



130,674

Changes in working capital



20,382



573



(5,345)



4,990



20,600





(4,648)



15,952



(4,067)



16,533

Maintenance capital expenditures



(6,580)



(2,894)



(2,162)



-



(11,636)





(377)



(12,013)



(504)



(12,140)

Free Cash Flow



63,057



44,655



6,347



6,942



121,001





11,483



132,484



14,066



135,067

 

 





























For the Year Ended December 31, 2018





IMTT



 Atlantic Aviation 



MIC Hawaii



MIC

 Corporate 



Total Continuing Operations

100%





Discontinued Operations PC%(1)



Total

 PC%(1)



Discontinued Operations  100%



Total

100%





($ in Thousands) (Unaudited)

Net income (loss) 



65,284



96,419



(13,125)



(83,950)



64,628





27,056



91,684



29,620



94,248

Interest expense, net(2)



45,502



25,833



7,984



32,519



111,838





14,691



126,529



17,094



128,932

Provision (benefit) for income taxes



35,885



35,222



(6,769)



(14,887)



49,451





2,128



51,579



2,128



51,579

Goodwill impairment



-



-



3,215



-



3,215





-



3,215



-



3,215

Depreciation and amortization



131,402



105,950



23,708



913



261,973





31,281



293,254



38,517



300,490

Fees to Manager-related party



-



-



-



44,866



44,866





-



44,866



-



44,866

Pension expense(3)



7,662



21



438



185



8,306





-



8,306



-



8,306

Other non-cash expense, net(4)



867



1,221



21,810



1,280



25,178





11,508



36,686



11,513



36,691

EBITDA excluding non-cash items



286,602



264,666



37,261



(19,074)



569,455





86,664



656,119



98,872



668,327









































EBITDA excluding non-cash items



286,602



264,666



37,261



(19,074)



569,455





86,664



656,119



98,872



668,327

Interest expense, net(2)



(45,502)



(25,833)



(7,984)



(32,519)



(111,838)





(14,691)



(126,529)



(17,094)



(128,932)

Convertible senior notes interest(5)



-



(7,487)



-



7,487



-





-



-



-



-

Adjustments to derivative instruments 

     recorded in interest expense, net(2)



(1,978)



251



153



-



(1,574)





(7,241)



(8,815)



(7,990)



(9,564)

   Amortization of debt financing costs(2)



1,721



4,296



383



4,953



11,353





1,179



12,532



1,241



12,594

Amortization of debt discount(2)



-



-



-



3,627



3,627





-



3,627



-



3,627

(Provision) benefit for current income taxes



(6,862)



(22,801)



727



14,986



(13,950)





(6,655)



(20,605)



(6,655)



(20,605)

Changes in working capital



4,524



13,708



13,155



(15,300)



16,087





(21,377)



(5,290)



(22,106)



(6,019)

Cash provided by (used in) operating activities



238,505



226,800



43,695



(35,840)



473,160





37,879



511,039



46,268



519,428

Changes in working capital



(4,524)



(13,708)



(13,155)



15,300



(16,087)





21,377



5,290



22,106



6,019

Maintenance capital expenditures



(33,494)



(8,301)



(8,184)



-



(49,979)





(330)



(50,309)



(440)



(50,419)

Free Cash Flow



200,487



204,791



22,356



(20,540)



407,094





58,926



466,020



67,934



475,028

 

 















































For the Year Ended December 31, 2017





IMTT



 Atlantic Aviation 



MIC

Hawaii(5)



MIC

 Corporate 



Total Continuing Operations 100%





Discontinued Operations PC%(1)



Total

 PC%(1)



Discontinued Operations  100%



Total 100%





($ in Thousands) (Unaudited)

Net income (loss)



363,049



124,370



25,416



(79,065)



433,770





21,392



455,162



22,342



456,112

Interest expense, net(2)



38,357



14,512



7,041



27,006



86,916





20,831



107,747



23,487



110,403

(Benefit) provision for income taxes



(209,464)



6,509



9,287



(35,835)



(229,503)





(4,651)



(234,154)



(4,651)



(234,154)

Depreciation and amortization



126,463



100,190



15,303



161



242,117





52,758



294,875



60,300



302,417

Fees to Manager-related party



-



-



-



71,388



71,388





-



71,388



-



71,388

Pension expense(3)



6,996



20



1,090



-



8,106





-



8,106



-



8,106

Other non-cash expense (income), net(4)



767



1,642



2,494



831



5,734





(8,082)



(2,348)



(8,103)



(2,369)

EBITDA excluding non-cash items



326,168



247,243



60,631



(15,514)



618,528





82,248



700,776



93,375



711,903









































EBITDA excluding non-cash items



326,168



247,243



60,631



(15,514)



618,528





82,248



700,776



93,375



711,903

Interest expense, net(2)



(38,357)



(14,512)



(7,041)



(27,006)



(86,916)





(20,831)



(107,747)



(23,487)



(110,403)

Convertible senior notes interest(5)



-



(7,782)



-



7,782



-





-



-



-



-

Adjustments to derivative instruments 

     recorded in interest expense, net(2)



(3,834)



429



(398)



-



(3,803)





(4,704)



(8,507)



(5,301)



(9,104)

   Amortization of debt financing costs(2)



1,647



1,170



403



3,964



7,184





1,457



8,641



1,516



8,700

   Amortization of debt discount(2)



-



-



-



3,266



3,266





-



3,266



-



3,266

(Provision) benefit for current income

     taxes



(4,417)



(14,457)



(8,312)



16,155



(11,031)





(129)



(11,160)



(129)



(11,160)

Changes in working capital



(32,795)



(7,240)



(7,748)



(15,339)



(63,122)





(762)



(63,884)



(1,046)



(64,168)

Cash provided by (used in) operating 

     activities



248,412



204,851



37,535



(26,692)



464,106





57,279



521,385



64,928



529,034

Changes in working capital



32,795



7,240



7,748



15,339



63,122





762



63,884



1,046



64,168

Maintenance capital expenditures



(20,143)



(7,965)



(6,568)



-



(34,676)





(399)



(35,075)



(526)



(35,202)

Free Cash Flow



261,064



204,126



38,715



(11,353)



492,552





57,642



550,194



65,448



558,000

















































































__________________







































(1) Represents MIC's proportionately combined interests in its portfolio of solar and wind power generation businesses classified as part of discontinued operations.













(2) Interest expense, net, includes adjustments to derivative instruments, non-cash amortization of deferred financing fees and non-cash amortization of debt discount related to the 2.00% Convertible Senior Notes due October 2023. Interest expense, net, also included a non-cash write-off of deferred financing fees related to the December 2018 refinancing at Atlantic Aviation.













(3) Pension expense primarily consists of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses.













(4) Other non-cash expense (income), net, primarily includes non-cash amortization of tolling liabilities, unrealized gains (losses) on commodity hedges and non-cash gains (losses) related to the disposal of assets. Other non-cash expense (income), net, also includes the write-down of our investment in the previously owned design-build mechanical contractor business for the year ended December 31, 2018. See "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items, Free Cash Flow and Proportionately Combined Metrics"above for further discussion.













(5) Represents the cash interest expense reclassified to Atlantic Aviation, related to the 2.00% Convertible Senior Notes due October 2023 through December 6, 2018, the date of Atlantic Aviation's refinancing. The proceeds from this note issuance in October 2016 were used principally to reduce the drawn balance on Atlantic Aviation's revolving credit facility. Cash interest expense on this note issuance is included in Corporate and Other subsequent to December 6, 2018.













 

Cision View original content:http://www.prnewswire.com/news-releases/mic-reports-fourth-quarter-and-full-year-2018-results-300799219.html

SOURCE Macquarie Infrastructure Corporation

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