MIC Reports First Quarter 2018 Financial Results and Strategic Update
MIC Reports First Quarter 2018 Financial Results and Strategic Update
- Financial results in line with expectations:
-- Net income of $46.8 million, up 43.4%
-- Adjusted Proportionately Combined EBITDA excluding non-cash items of $178.7 million, broadly in line with the prior comparable period
-- Cash generated by operating activities of $144.1 million, up 12.9%
-- Adjusted Free Cash Flow of $135.9 million, down 7.5% from $146.9 million in the prior comparable period and flat with the $135.5 million in the fourth quarter of 2017
- Announces core priorities to build long-term value:
-- Progress repurposing of a portion of capacity and repositioning of International-Matex Tank Terminals (IMTT)
-- Efficient portfolio and capital management including strategic review of Contracted Power and the potential sale of a portion or all of the Bayonne Energy Center (BEC)
-- Increased balance sheet strength and flexibility through lower leverage
- Reaffirms EBITDA guidance for 2018 of $690 million to $720 million
- 2018 growth capital deployment expectations revised to approximately $300 million
- Authorizes cash dividend of $1.00 per share for the first quarter of 2018, consistent with guidance
NEW YORK, May 2, 2018 /PRNewswire/ -- Macquarie Infrastructure Corporation (NYSE: MIC) today announced its first quarter 2018 financial results including an increase in net income of 43.4% to $46.8 million from $32.6 million in the prior comparable period on lower taxes and unrealized gains on derivative instruments.
Adjusted Proportionately Combined EBITDA excluding non-cash items of $178.7 million was broadly in line with the $180.2 million recorded in the prior comparable period.
Cash generated by operating activities of $144.1 million increased 12.9% over the $127.6 million recorded in the prior comparable period largely due to favorable movements in working capital.
Adjusted Free Cash Flow, which excludes certain one-time items including transaction related costs, was $135.9 million, down 7.5% from $146.9 million in the prior comparable period and flat on the $135.5 million reported in the fourth quarter of 2017. The decline was due primarily to increased maintenance capital expenditures and higher interest expense.
MIC also announced a quarterly cash dividend of $1.00 per share, consistent with guidance provided in February 2018.
MIC Chief Executive Officer Christopher Frost said: "MIC's financial results for the first quarter of 2018 reflect the underlying strength and diversity of our portfolio of infrastructure businesses."
"Atlantic Aviation maintained its strong performance and Contracted Power delivered a better than anticipated contribution. This performance was offset by the previously forecast and disclosed reduction in contribution from IMTT and higher expenses at MIC Hawaii. We have also taken meaningful steps to address the enhancements required at IMTT with respect to certain storage assets."
Drivers of first quarter 2018 segment results included:
-- IMTT generated EBITDA of $78.1 million, down 6% compared with the first
quarter in 2017, driven by the expected decline in average capacity
utilization to 88.1% in the quarter versus 96.3% in the prior comparable
period;
-- Atlantic Aviation generated EBITDA of $70.9 million, up 9.3% over the
prior comparable period, on increases in general aviation flight
activity and contributions from fixed base operations acquired in 2017;
-- Contracted Power generated EBITDA of $17.9 million, up 24.8% versus the
prior comparable period, on better than anticipated demand for peaking
power in New York and improved operating performance of wind facilities;
and,
-- MIC Hawaii generated EBITDA of $14.8 million, down 23.3% compared with
the first quarter in 2017, driven by higher expenses.
Core Priorities
MIC provided the following additional information concerning its core priorities.
Repurposing and Repositioning of IMTT
In February 2018, MIC announced that it was undertaking initiatives related to the repurposing and repositioning of certain IMTT assets in response to shifts in global demand and trade flows impacting on IMTT's Lower Mississippi River and New York Harbor terminal locations.
The Company anticipates repurposing approximately three million barrels of storage capacity at IMTT away from primarily heavy and residual oils to gasoline and distillates, ethanol, chemicals and vegetable and/or tropical oils. Capacity utilization at IMTT is expected to average in the mid-80s percent in 2018 and to increase to the low 90s percent range in 2020, both subject to market conditions.
In 2018, IMTT is expected to invest approximately $15 million in the repurposing of storage capacity. IMTT is also expected to deploy an additional $10 to $20 million on projects designed to reposition or increase the capacity and enhance the capability of the business.
"As repurposing initiatives continue to be evaluated and the scope of capital projects refined, the forecast level of spending at IMTT in 2018 has decreased modestly. However, we continue to expect that up to $225 million will be deployed by IMTT on repurposing and repositioning in 2018 through 2020," said Frost.
Portfolio and Capital Management
MIC noted in its fourth quarter 2017 results release that it expected to deploy approximately $350 million of capital in growth projects across all of its businesses in 2018.
Through the end of March 2018 MIC had deployed or committed to deploy approximately $50 million on projects including the acquisition (on-field consolidation) of a fixed base operation by Atlantic Aviation and the ongoing development of additional power generating capacity at BEC.
With the refinement of investment at IMTT together with revised scoping of other capital projects, MIC now believes that its growth capital deployment in 2018 will be approximately $300 million.
MIC's construction of additional power generating capacity at BEC is nearing completion and, as announced in February, the Company continues to evaluate strategic options regarding its Contracted Power businesses including the sale of a portion or all of BEC.
On April 24, 2018, IMTT closed on the sale of its OMI Environmental Solutions, Inc. subsidiary. The oil spill cleanup business had generated negative EBITDA in each of the past eight quarters. After transaction costs and other payments, IMTT is expected to receive net cash of approximately $11 million subject to adjustments for changes in working capital.
Balance Sheet Strength
Proceeds from the sale of any portion of BEC, or from smaller, non-core assets generally, would likely be used to accelerate the de-levering of MIC from its current 4.9 times net debt to EBITDA (trailing twelve months adjusted for the full year impact of acquisitions) to a level closer to its low- to mid- four times target.
"We expect to fund our 2018 capital spending with a combination of Free Cash Flow not used to support our dividend, together with proceeds from the sale of any portion of BEC or smaller assets in our portfolio. Any additional sale proceeds will strengthen our balance sheet and increase our financial flexibility," commented Frost.
Guidance Reaffirmed
MIC reiterated its guidance for 2018 EBITDA in a range between $690 and $720 million, broadly in line with 2017. The guidance reflects both the seasonality in certain businesses and the previously forecast decline in average storage utilization at IMTT over the balance of the year.
The Company also provided the following segment level buildup of its 2018 EBITDA guidance:
IMTT: $285 - $295 million
Atlantic Aviation: $265 - $275 million
Contracted Power: $95 - $100 million
MIC Hawaii: $60 - $65 million
Corporate/Other: $(15) - $(15) million
First Quarter 2018 Dividend
The MIC board of directors authorized a cash dividend of $1.00 per share, or $4.00 annualized, for the first quarter of 2018. The dividend will be payable May 17, 2018 to shareholders of record on May 14, 2018. The Company reaffirmed its previous guidance for a distribution of $1.00 per share in each quarter in 2018.
"Given financial and operational performance of our businesses in the quarter that were consistent with our guidance, we believe that a dividend of $1.00 per share, per quarter, is sustainable through 2018," said Frost. "As we make progress against initiatives tied to our priorities, and subject to market conditions, we believe we will be well-positioned for future dividend growth."
Summary Financial Information
Quarter Ended Change
March 31, Favorable/(Unfavorable)
--------- -----------------------
2018 2017 $ %
---- ---- --- ---
($ In Thousands, Except Share and Per Share Data)
(Unaudited)
GAAP Metrics
Net income $46,795 $32,638 14,157 43.4
Weighted average number of shares
outstanding: 84,821,453 82,138,168 2,683,285 3.3
basic
Net income per share attributable to
MIC $0.91 $0.44 0.47 106.8
Cash provided by operating
activities(1) 144,102 127,594 16,508 12.9
MIC Non-GAAP Metrics
EBITDA excluding non-cash items(2) $180,919 $180,315 604 0.3
Shared service implementation
costs(3) - 2,354 (2,354) (100.0)
Investment and acquisition costs(3) 944 - 944 NM
--- --- ---
Adjusted EBITDA excluding non-cash
items(3) $181,863 $182,669 (806) (0.4)
======== ======== ====
Cash interest(4) $(29,813) $(25,874) (3,939) (15.2)
Cash taxes (3,871) (3,721) (150) (4.0)
Maintenance capital expenditures (9,862) (4,476) (5,386) (120.3)
Noncontrolling interest(5) (2,431) (1,671) (760) (45.5)
------ ------ ----
Adjusted Free Cash Flow(3) $135,886 $146,927 (11,041) (7.5)
======== ======== =======
NM - Not meaningful
(1) Conformed to current period presentation for the adoption of ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. See Note 2, "Basis of Presentation", in our
Notes to Consolidated Condensed Financial Statements in Part I of Form 10-Q for the quarter ended March 31, 2018.
(2) EBITDA excluding non-cash items is calculated as net income before interest expense, taxes, depreciation and amortization expense, management fees, pension expense and other
non-cash (income) expense recorded in the consolidated statement of operations. See below for reconciliation of net income (loss) to EBITDA excluding non-cash items.
(3) Adjusted EBITDA excluding non-cash items and Adjusted Free Cash Flow exclude costs relating to certain investment and acquisition activities for the quarter ended March 31,
2018 and exclude costs relating to implementation of our shared services center for the quarter ended March 31, 2017.
(4) Cash interest is calculated as interest expense, net, excluding the impact of non-cash adjustments for unrealized (gains) losses from derivative instruments, amortization of
deferred financing costs and the amortization of debt discount recorded in the consolidated statement of operations.
(5) Noncontrolling interest adjustment represents the portion of Free Cash Flow not attributable to MIC's ownership interest.
Conference Call and Webcast
When: MIC has scheduled a conference call for 8:00 a.m. Eastern Time on Thursday, May 3, 2018 during which management will review and comment on the first quarter 2018 results.
How: To listen to the conference call dial +1(650) 521-5252 or +1(877) 852-2928 at least 10 minutes prior to the scheduled start time. A webcast of the call will be accessible via the Company's website at www.macquarie.com/mic. Allow extra time prior to the call to visit the site and download the software needed to listen to the webcast.
Slides: MIC will prepare materials in support of its conference call. The materials will be available for downloading from the Company's website prior to the call.
Replay: For interested individuals unable to participate in the live conference call, a replay will be available after 2:00 p.m. on May 3, 2018 through midnight on May 11, 2018, at +1(404) 537-3406 or +1(855) 859-2056, Passcode: 4495099. An online archive of the webcast will be available on the Company's website for one year following the call.
About MIC
MIC owns and operates a diversified group of businesses providing basic services to customers in the United States. Its businesses consist of a bulk liquid terminals business, International-Matex Tank Terminals; an airport services business, Atlantic Aviation; entities comprising an energy services, production and distribution segment, MIC Hawaii; and entities comprising a Contracted Power segment. For additional information, please visit the MIC website at www.macquarie.com/mic. MIC-G
Use of Non-GAAP Measures
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items, Free Cash Flow and Proportionately Combined Metrics
In addition to MIC's results under U.S. GAAP, the Company uses certain non-GAAP measures to assess the performance and prospects of its businesses. In particular, MIC uses EBITDA excluding non-cash items, Free Cash Flow and certain proportionately combined financial metrics. Proportionately combined financial metrics, including Free Cash Flow, reflect MIC's proportionate interest in its wind and solar facilities.
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.
Given MIC's varied ownership levels in its Contracted Power and MIC Hawaii segments, together with obligations to report the results of these businesses on a consolidated basis, GAAP measures such as net income (loss) do not fully reflect all of the items management considers in assessing the amount of cash generated based on its ownership interest in its businesses. The Company notes that the proportionately combined metrics used may be calculated in a different manner by other companies and may limit their usefulness as a comparative measure. Therefore, proportionately combined metrics should be used as a supplemental measure 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 paid for interest, taxes and pension contributions, less maintenance capital expenditures, which includes principal repayments on capital lease obligations used to fund maintenance capital expenditures, and excludes changes in working capital.
Management uses Free Cash Flow as a measure of its ability to provide investors with an attractive risk-adjusted return by sustaining and potentially increasing MIC's quarterly cash dividend and funding a portion of the Company's growth. GAAP metrics such as net income (loss) do not provide MIC management with the same level of visibility to into the performance and prospects of the business as a result of: (i) the capital intensive nature of MIC's businesses and the generation of non-cash depreciation and amortization; (ii) shares issued to the Company's external manager under the Management Services Agreement, (iii) the Company's ability to defer all or a portion of current federal income taxes; (iv) non-cash unrealized gains or losses on derivative instruments; (v) 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 Quarterly Report on Form 10-Q, the Company has disclosed Free Cash Flow on a consolidated basis and for each of its operating segments and MIC Corporate. Management believes that both EBITDA excluding non-cash items and Free Cash Flow support a more complete and accurate understanding of the financial and operating performance of its businesses than would otherwise be achieved using GAAP results alone.
Free Cash Flow does not take into consideration required payments on indebtedness and other fixed obligations or other cash items that are excluded from MIC's definition of Free Cash Flow. Management notes that Free Cash Flow may be calculated differently by other companies thereby limiting its usefulness as a comparative measure. Free Cash Flow should be used as a supplemental measure to help understand MIC's financial performance and not in lieu of its financial results reported under GAAP.
See "Reconciliation of Consolidated Net Income to EBITDA excluding non-cash items and a Reconciliation from Cash Provided by Operating Activities to Free Cash Flow" below.
Classification of Maintenance Capital Expenditures and Growth Capital Expenditures
MIC categorizes capital expenditures as either maintenance capital expenditures or growth capital expenditures. As neither maintenance capital expenditure nor growth capital expenditure is a GAAP term, the Company has adopted a framework to categorize specific capital expenditures. In broad terms, maintenance capital expenditures primarily maintain MIC's businesses at current levels of operations, capability, profitability or cash flow, while growth capital expenditures primarily provide new or enhanced levels of operations, capability, profitability or cash flow. Management considers a number of factors in determining whether a specific capital expenditure will be classified as maintenance or growth.
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, manage growth, make and finance future acquisitions, and implement its strategy; risks associated with development, investment and expansion in the power industry; its regulatory environment establishing rate structures and monitoring quality of service; demographic trends, the political environment, the economy, tourism, construction and transportation costs, air travel, environmental costs and risks; fuel and gas and other commodity costs; its ability to recover increases in costs from customers, cybersecurity risks, work interruptions or other labor stoppages; risks related to its shared services initiative; reliance on sole or limited source suppliers, risks or conflicts of interests involving its relationship with the Macquarie Group and changes in U.S. federal tax law.
MIC's actual results, performance, prospects or opportunities could differ materially from those expressed in or implied by the forward-looking statements. Additional risks of which MIC is not currently aware could also cause its actual results to differ. In light of these risks, uncertainties and assumptions, you should not place undue reliance on any forward-looking statements. The forward-looking events discussed in this release may not occur. These forward-looking statements are made as of the date of this release. MIC undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
"Macquarie Group" refers to the Macquarie Group of companies, which comprises Macquarie Group Limited and its worldwide subsidiaries and affiliates. Macquarie Infrastructure Corporation is not an authorized deposit-taking institution for the purposes of the Banking Act 1959 (Commonwealth of Australia) and its obligations do not represent deposits or other liabilities of Macquarie Bank Limited ABN 46 008 583 542 (MBL). MBL does not guarantee or otherwise provide assurance in respect of the obligations of Macquarie Infrastructure Corporation.
MACQUARIE INFRASTRUCTURE CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
($ in Thousands, Except Share Data)
March 31, 2018 December 31, 2017
-------------- -----------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $76,021 $47,121
Restricted cash 26,622 24,963
Accounts receivable, less allowance for doubtful
accounts of $1,073 and $895, respectively
153,419 158,152
Inventories 38,743 36,955
Prepaid expenses 13,086 14,685
Fair value of derivative instruments 13,398 11,965
Other current assets 17,254 13,804
------ ------
Total current assets 338,543 307,645
Property, equipment, land and leasehold improvements,
net 4,644,350 4,659,614
Investment in unconsolidated business 9,408 9,526
Goodwill 2,068,799 2,068,668
Intangible assets, net 902,933 914,098
Fair value of derivative instruments 30,799 24,455
Other noncurrent assets 30,465 24,945
------ ------
Total assets $8,025,297 $8,008,951
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Due to Manager - related party $7,550 $5,577
Accounts payable 52,424 60,585
Accrued expenses 87,800 89,496
Current portion of long-term debt 51,208 50,835
Fair value of derivative instruments 974 1,710
Other current liabilities 51,266 47,762
------ ------
Total current liabilities 251,222 255,965
Long-term debt, net of current portion 3,608,812 3,530,311
Deferred income taxes 644,143 632,070
Fair value of derivative instruments 2,449 4,668
Tolling agreements - noncurrent 50,651 52,595
Other noncurrent liabilities 184,344 182,639
------- -------
Total liabilities 4,741,621 4,658,248
--------- ---------
Commitments and contingencies - -
MACQUARIE INFRASTRUCTURE CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS - (continued)
($ in Thousands, Except Share Data)
March 31, 2018 December 31, 2017
-------------- -----------------
(Unaudited)
Stockholders' equity(1):
Common stock ($0.001 par value; 500,000,000
authorized; 84,902,562 shares issued and
outstanding at March 31, 2018 and 84,733,957
shares issued and outstanding at December 31,
2017) $85 $85
Additional paid in capital 1,728,712 1,840,033
Accumulated other comprehensive loss (31,357) (29,993)
Retained earnings 1,420,401 1,343,567
--------- ---------
Total stockholders' equity 3,117,841 3,153,692
Noncontrolling interests 165,835 197,011
------- -------
Total equity 3,283,676 3,350,703
--------- ---------
Total Liabilities and equity $8,025,297 $8,008,951
========== ==========
(1) The Company is authorized to issue 100,000,000 shares of preferred stock, par value $0.001 per share. At March
31, 2018 and December 31, 2017, no preferred stock were issued or outstanding. The Company had 100 shares of
special stock issued and outstanding to its Manager at March 31, 2018 and December 31, 2017.
MACQUARIE INFRASTRUCTURE CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
($ in Thousands, Except Share and Per Share Data)
Quarter Ended March 31,
-----------------------
2018 2017
---- ----
Revenue
Service
revenue $402,609 $363,804
Product
revenue 98,947 87,653
------ ------
Total
revenue 501,556 451,457
------- -------
Costs and expenses
Cost
of
services 187,470 154,706
Cost
of
product
sales 53,385 47,225
Selling,
general
and
administrative 86,957 76,952
Fees
to
Manager
-
related
party 12,928 18,223
Depreciation 61,358 57,681
Amortization
of
intangibles 17,216 17,693
------ ------
Total
operating
expenses 419,314 372,480
------- -------
Operating
income 82,242 78,977
Other income (expense)
Interest
income 80 34
Interest
expense(1) (18,790) (25,482)
Other
income,
net 42 1,182
--- -----
Net
income
before
income
taxes 63,574 54,711
Provision
for
income
taxes (16,779) (22,073)
------- -------
Net
income $46,795 $32,638
Less:
net
loss
attributable
to
noncontrolling
interests (30,039) (3,377)
------- ------
Net
income
attributable
to
MIC $76,834 $36,015
======= =======
Basic
income
per
share
attributable
to
MIC $0.91 $0.44
----- -----
Weighted
average
number
of
shares
outstanding:
basic 84,821,453 82,138,168
========== ==========
Diluted
income
per
share
attributable
to
MIC $0.88 $0.44
----- -----
Weighted
average
number
of
shares
outstanding:
diluted 92,793,852 82,147,763
========== ==========
Cash
dividends
declared
per
share $1.00 $1.32
----- -----
1) Interest expense includes gains on derivative instruments of $15.1
million and $954,000 for the quarters ended March 31, 2018 and 2017,
respectively.
MACQUARIE INFRASTRUCTURE CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
($ In Thousands)
Quarter Ended March 31,
2018 2017(1)
---- ------
Operating activities
Net
income $46,795 $32,638
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation
and
amortization
of
property
and
equipment 61,358 57,681
Amortization
of
intangible
assets 17,216 17,693
Amortization
of debt
financing
costs 3,049 2,202
Amortization
of debt
discount 897 619
Adjustments
to
derivative
instruments (10,732) 1,972
Fees to
Manager
-
related
party 12,928 18,223
Deferred
taxes 12,908 18,352
Pension
expense 2,253 2,694
Other
non-
cash
expense
(income),
net 563 (1,354)
Changes in other assets and
liabilities, net of
acquisitions:
Accounts
receivable 4,242 1,059
Inventories (2,141) (3,718)
Prepaid
expenses
and
other
current
assets (1,798) (7,559)
Due to
Manager
-
related
party (68) 11
Accounts
payable
and
accrued
expenses (5,945) (12,382)
Income
taxes
payable 1,559 1,341
Other,
net 1,018 (1,878)
----- ------
Net cash
provided
by
operating
activities 144,102 127,594
------- -------
Investing activities
Acquisitions
of
businesses
and
investments,
net of
cash
acquired (11.433) -
Purchases
of
property
and
equipment (48,181) (59,869)
Loan to
project
developer (10,800) (8,000)
Loan
repayment
from
project
developer 5,217 -
Other,
net 86 50
--- ---
Net cash
used in
investing
activities (65,111) (67,819)
------- -------
MACQUARIE INFRASTRUCTURE CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS - (continued)
(Unaudited)
($ In Thousands)
Quarter Ended March 31,
-----------------------
2018 2017(1)
---- ------
Financing activities
Proceeds
from
long-
term
debt $141,500 $104,000
Payment
of
long-
term
debt (63,848) (72,634)
Proceeds
from the
issuance
of
shares 125 2,049
Dividends
paid to
common
stockholders (122,259) (107,714)
Contributions
received
from
noncontrolling
interests 271 -
Distributions
paid to
noncontrolling
interests (1,397) (1,351)
Offering
and
equity
raise
costs
paid - (69)
Debt
financing
costs
paid (2,595) (435)
Payment
of
capital
lease
obligations (22) (21)
--- ---
Net cash
used in
financing
activities (48,225) (76,175)
------- -------
Effect
of
exchange
rate
changes
on cash
and
cash
equivalents (207) -
Net
change
in
cash,
cash
equivalents
and
restricted
cash 30,559 (16,400)
------ -------
Cash,
cash
equivalents
and
restricted
cash,
beginning
of
period 72,084 61,257
------ ------
Cash,
cash
equivalents
and
restricted
cash,
end of
period $102,643 $44,857
======== =======
Supplemental disclosures of cash
flow information
Non-cash investing and financing
activities:
Accrued
equity
offering
costs $80 $93
=== ===
Accrued
financing
costs $233 $ -
==== =============
Accrued
purchases
of
property
and
equipment $19,038 $25,598
======= =======
Issuance
of
shares
to
Manager $10,887 $18,462
======= =======
Conversion
of
convertible
senior
notes
to
shares $6 $17
=== ===
Distributions
payable
to
noncontrolling
interests $33 $29
=== ===
Taxes
paid,
net $2,040 $2,379
====== ======
Interest
paid $25,986 $26,764
======= =======
(1) Conformed to current period presentation for the adoption of ASU
No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash.
See Note 2, "Basis of Presentation", in our Notes to Consolidated
Condensed Financial Statements in Part I of Form 10-Q for the quarter
ended March 31, 2018.
The following table provides a reconciliation of cash, cash
equivalents and restricted cash reported within the
consolidated condensed balance sheets that sum to the total
of the same amounts presented in the consolidated condensed
statements of cash flows:
As of March 31,
---------------
2018 2017
Cash and
cash
equivalents $76,021 $29,618
Restricted
cash -
current 26,622 15,169
Restricted
cash -
non-
current(2) - 70
--- ---
Total of cash, cash equivalents
and restricted cash shown in the
consolidated condensed statement
of cash flows
$102,643 $44,857
======== =======
(2) Restricted cash - non-current is included in Other
noncurrent assets in the consolidated condensed balance
sheet.
MACQUARIE INFRASTRUCTURE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS - MD&A
Quarter Ended March 31, Change Favorable/
(Unfavorable)
-------------
2018 2017 $ %
---- ---- --- ---
(In Thousands, Except Share and Per Share Data)
(Unaudited)
Revenue
Service revenue $402,609 $363,804 38,805 10.7
Product revenue 98,947 87,653 11,294 12.9
------ ------ ------
Total revenue 501,556 451,457 50,099 11.1
------- ------- ------
Costs and expenses
Cost of services 187,470 154,706 (32,764) (21.2)
Cost of product
sales 53,385 47,225 (6,160) (13.0)
Selling, general and
administrative 86,957 76,952 (10,005) (13.0)
Fees to Manager -
related party 12,928 18,223 5,295 29.1
Depreciation 61,358 57,681 (3,677) (6.4)
Amortization of
intangibles 17,216 17,693 477 2.7
------ ------ ---
Total operating
expenses 419,314 372,480 (46,834) (12.6)
------- ------- -------
Operating income 82,242 78,977 3,265 4.1
Other income (expense)
Interest income 80 34 46 135.3
Interest expense(1) (18,790) (25,482) 6,692 26.3
Other income, net 42 1,182 (1,140) (96.4)
--- ----- ------
Net income before
income taxes 63,574 54,711 8,863 16.2
Provision for income
taxes (16,779) (22,073) 5,294 24.0
------- ------- -----
Net income $46,795 $32,638 14,157 43.4
Less: net loss
attributable to
noncontrolling
interests (30,039) NM
(3,377) 26,662
Net income
attributable to MIC $76,834 $36,015 40,819 113.3
======= ======= ======
Basic income per
share attributable
to MIC $0.91 $0.44 0.47 106.8
----- ----- ----
Weighted average number of shares outstanding:
basic 84,821,453 82,138,168 2,683,285 3.3
========== ========== =========
NM - Not meaningful
(1) Interest expense includes gains on derivative instruments of $15.1 million and $954,000 for the quarters ended March 31, 2018 and 2017, respectively.
MACQUARIE INFRASTRUCTURE CORPORATION
RECONCILIATION OF CONSOLIDATED NET INCOME TO EBITDA EXCLUDING
NON-CASH ITEMS AND A RECONCILIATION FROM CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW
Quarter Ended March 31, Change
Favorable/
(Unfavorable)
--------------
2018 2017 $ %
---- ---- --- ---
($ In Thousands) (Unaudited)
Net income $46,795 $32,638
Interest expense, net(1) 18,710 25,448
Provision for income taxes 16,779 22,073
Depreciation 61,358 57,681
Amortization of intangibles 17,216 17,693
Fees to Manager-related party 12,928 18,223
Pension expense(2) 2,253 2,694
Other non-cash expense, net(3) 4,880 3,865
----- -----
EBITDA excluding non-cash items $180,919 $180,315 604 0.3
======== ======== ===
EBITDA excluding non-cash items $180,919 $180,315
Interest expense, net(1) (18,710) (25,448)
Adjustments to derivative instruments recorded in interest expense(1)
(15,049) (3,247)
Amortization of debt financing costs(1) 3,049 2,202
Amortization of debt discount(1) 897 619
Provision for current income taxes (3,871) (3,721)
Changes in working capital(4) (3,133) (23,126)
------ -------
Cash provided by operating activities 144,102 127,594
Changes in working capital(4) 3,133 23,126
Maintenance capital expenditures (9,862) (4,476)
------ ------
Free cash flow $137,373 $146,244 (8,871) (6.1)
======== ======== ======
1) Interest expense, net, includes adjustments to derivative instruments, non-cash amortization of deferred financing fees and non- cash amortization of debt discount related to the
2.00% Convertible Senior Notes due October 2023.
(2) 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 non-cash amortization of tolling liabilities, unrealized gains (losses) on commodity hedges and non-cash gains (losses) related to
disposal of assets. See "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items, Free Cash Flow and Proportionately Combined Metrics" above for
further discussion.
(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, "Basis of Presentation", in our Notes
to Consolidated Condensed Financial Statements in Part I of Form 10-Q for the quarter ended March 31, 2018.
MACQUARIE INFRASTRUCTURE CORPORATION
RECONCILIATION FROM CONSOLIDATED FREE CASH FLOW TO
PROPORTIONATELY COMBINED FREE CASH FLOW
Quarter Ended March 31,
Change Favorable/
(Unfavorable)
-----------------
2018 2017 $ %
---- ---- --- ---
($ In Thousands) (Unaudited)
Free Cash Flow - Consolidated basis $137,373 $146,244 (8,871) (6.1)
100% of Contracted Power Free Cash Flow included in
consolidated Free Cash Flow
(14,527) (9,839)
MIC's share of Contracted Power Free Cash Flow 12,099 8,171
100% of MIC Hawaii Free Cash Flow included in
consolidated Free Cash Flow
(10,750) (14,936)
MIC's share of MIC Hawaii Free Cash Flow 10,747 14,933
------ ------
Free Cash Flow - Proportionately Combined basis $134,942 $144,573 (9,631) (6.7)
======== ======== ======
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 March 31,
-----------------------
2018 2017 Change Favorable/
(Unfavorable)
$ $ $ %
--- --- --- ---
($ In Thousands) (Unaudited)
Revenue 139,389 138,817 572 0.4
Cost of services 54,425 49,846 (4,579) (9.2)
Selling, general and administrative expenses 9,306 9,038 (268) (3.0)
Depreciation and amortization 33,249 31,520 (1,729) (5.5)
------ ------ ------
Operating income 42,409 48,413 (6,004) (12.4)
Interest expense, net(1) (7,739) (8,757) 1,018 11.6
Other income, net 296 708 (412) (58.2)
Provision for income taxes (9,686) (16,548) 6,862 41.5
------ ------- -----
Net income 25,280 23,816 1,464 6.1
====== ====== =====
Reconciliation of net income to EBITDA excluding
non-cash items and a reconciliation of cash provided
by operating activities to Free Cash Flow:
Net income 25,280 23,816
Interest expense, net(1) 7,739 8,757
Provision for income taxes 9,686 16,548
Depreciation and amortization 33,249 31,520
Pension expense(2) 2,080 2,416
Other non-cash expense, net 94 68
--- ---
EBITDA excluding non-cash items 78,128 83,125 (4,997) (6.0)
====== ====== ======
EBITDA excluding non-cash items 78,128 83,125
Interest expense, net(1) (7,739) (8,757)
Adjustments to derivative instruments recorded in
interest expense(1) (4,042) (1,320)
Amortization of debt financing costs(1) 411 411
Provision for current income taxes (4,276) (2,258)
Changes in working capital 5,089 736
----- ---
Cash provided by operating activities 67,571 71,937
Changes in working capital (5,089) (736)
Maintenance capital expenditures (6,989) (2,460)
------ ------
Free cash flow 55,493 68,741 (13,248) (19.3)
====== ====== =======
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 March 31,
-----------------------
2018 2017 Change Favorable/
(Unfavorable)
$ $ $ %
--- --- --- ---
($ In Thousands) (Unaudited)
Revenue 247,202 212,753 34,449 16.2
Cost of services (exclusive of depreciation and amortization 116,693 93,922 (22,771) (24.2)
shown separately below)
Gross margin 130,509 118,831 11,678 9.8
Selling, general and administrative expenses 59,939 53,890 (6,049) (11.2)
Depreciation and amortization 25,479 25,033 (446) (1.8)
------ ------ ----
Operating income 45,091 39,908 5,183 13.0
Interest expense, net(1) (69) (3,446) 3,377 98.0
Other income (expense), net 56 (86) 142 165.1
Provision for income taxes (12,111) (14,550) 2,439 16.8
------- ------- -----
Net income 32,967 21,826 11,141 51.0
====== ====== ======
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 32,967 21,826
Interest expense, net(1) 69 3,446
Provision for income taxes 12,111 14,550
Depreciation and amortization 25,479 25,033
Pension expense(2) 5 5
Other non-cash expense, net 312 62
--- ---
EBITDA excluding non-cash items 70,943 64,922 6,021 9.3
====== ====== =====
EBITDA excluding non-cash items 70,943 64,922
Interest expense, net(1) (69) (3,446)
Convertible senior notes interest(3) (2,012) (1,744)
Adjustments to derivative instruments recorded in interest (4,367) 133
expense(1)
Amortization of debt financing costs(1) 279 314
Provision for current income taxes (6,533) (2,872)
Changes in working capital 6,019 (6,116)
----- ------
Cash provided by operating activities 64,260 51,191
Changes in working capital (6,019) 6,116
Maintenance capital expenditures (1,302) (925)
------ ----
Free cash flow 56,939 56,382 557 1.0
====== ====== ===
(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.
(3) Represents the cash interest expense reclassified from MIC Corporate related to the 2.00% Convertible Senior Notes due October 2023, proceeds of which were used to pay down a portion of Atlantic Aviation's credit facility in October 2016.
Contracted Power
----------------
Quarter Ended March 31,
-----------------------
2018 2017 Change
Favorable/(Unfavorable)
$ $ $ %
--- --- --- ---
($ In Thousands) (Unaudited)
Product revenue 35,287 28,070 7,217 25.7
Cost of product sales 5,837 4,859 (978) (20.1)
Selling, general and administrative expenses 7,512 5,165 (2,347) (45.4)
Depreciation and amortization 15,527 15,340 (187) (1.2)
------ ------ ----
Operating income 6,411 2,706 3,705 136.9
Interest expense, net(1) (885) (5,383) 4,498 83.6
Other income, net 1,005 765 240 31.4
Provision for income taxes (950) (27) (923) NM
---- --- ----
Net income (loss) 5,581 (1,939) 7,520 NM
Less: net loss attributable to noncontrolling interest (30,056) (3,349) 26,707 NM
------- ------ ------
Net income attributable to MIC 35,637 1,410 34,227 NM
====== ===== ======
Reconciliation of net income (loss) to EBITDA
excluding non-cash items and a reconciliation of
cash provided by operating activities to Free Cash
Flow:
Net income (loss) 5,581 (1,939)
Interest expense, net(1) 885 5,383
Provision for income taxes 950 27
Depreciation and amortization 15,527 15,340
Other non-cash income, net(2) (1,888) (2,024)
------ ------
EBITDA excluding non-cash items 21,055 16,787 4,268 25.4
====== ====== =====
EBITDA excluding non-cash items 21,055 16,787
Interest expense, net(1) (885) (5,383)
Adjustments to derivative instruments recorded in
interest expense(1) (5,970) (1,834)
Amortization of debt financing costs(1) 379 379
Provision for current income taxes (16) (88)
Changes in working capital(3) 919 (585)
--- ----
Cash provided by operating activities 15,482 9,276
Changes in working capital(3) (919) 585
Maintenance capital expenditures (36) (22)
--- ---
Free cash flow 14,527 9,839 4,688 47.6
====== ===== =====
NM - Not meaningful
(1) Interest expense, net, includes adjustments to derivative instruments and non-cash amortization of deferred financing fees.
(2) Other non-cash income, net, primarily includes amortization of tolling liabilities. See "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items, Free Cash Flow and Proportionately Combined
Metrics" above for further discussion.
(3) Conformed to current period presentation for the adoption of ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. See Note 2, "Basis of Presentation", in our Notes to Consolidated Condensed Financial Statements in Part
I of Form 10-Q for the quarter ended March 31, 2018.
MIC Hawaii
----------
Quarter Ended March
31,
--------------------
2018 2017 Change
Favorable/
(Unfavorable)
$ $ $ %
--- --- --- ---
($ In Thousands) (Unaudited)
Product revenue 63,660 59,583 4,077 6.8
Service revenue 17,249 13,457 3,792 28.2
------ ------ -----
Total revenue 80,909 73,040 7,869 10.8
Cost of product sales (exclusive of depreciation and
amortization shown
separately below) 47,548 42,366 (5,182) (12.2)
Cost of services (exclusive of depreciation and
amortization shown separately below)
16,352 10,940 (5,412) (49.5)
------ ------ ------
Cost of revenue - total 63,900 53,306 (10,594) (19.9)
------ ------ -------
Gross margin 17,009 19,734 (2,725) (13.8)
Selling, general and
administrative expenses 7,229 6,085 (1,144) (18.8)
Depreciation and amortization 4,155 3,481 (674) (19.4)
----- ----- ----
Operating income 5,625 10,168 (4,543) (44.7)
Interest expense, net(1) (1,290) (1,711) 421 24.6
Other expense, net (1,319) (205) (1,114) NM
Provision for income taxes (805) (3,379) 2,574 76.2
---- ------ -----
Net income 2,211 4,873 (2,662) (54.6)
Less: net income (loss)
attributable to
noncontrolling interests 17 (28) (45) (160.7)
--- --- ---
Net income attributable to MIC 2,194 4,901 (2,707) (55.2)
===== ===== ======
Reconciliation of net income to EBITDA excluding
non-cash items
and a reconciliation of cash provided by operating
activities to Free
Cash Flow:
Net income 2,211 4,873
Interest expense, net(1) 1,290 1,711
Provision for income taxes 805 3,379
Depreciation and amortization 4,155 3,481
Pension expense(2) 127 273
Other non-cash expense, net(3) 6,199 5,571
----- -----
EBITDA excluding non-cash
items 14,787 19,288 (4,501) (23.3)
====== ====== ======
EBITDA excluding non-cash
items 14,787 19,288
Interest expense, net(1) (1,290) (1,711)
Adjustments to derivative
instruments recorded in
interest expense(1) (670) (226)
Amortization of debt financing
costs(1) 97 105
Provision for current income
taxes (639) (1,451)
Changes in working capital(4) (6,139) (8,727)
------ ------
Cash provided by operating
activities 6,146 7,278
Changes in working capital(4) 6,139 8,727
Maintenance capital
expenditures (1,535) (1,069)
------ ------
Free cash flow 10,750 14,936 (4,186) (28.0)
====== ====== ======
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, net, primarily includes non-cash adjustments related to unrealized gains (losses) on commodity hedges and non-cash
gains (losses) related to disposal of assets. See "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash
items, Free Cash Flow and Proportionately Combined Metrics" above for further discussion.
(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, "Basis of Presentation", in our Notes to Consolidated Condensed Financial Statements in Part I of Form 10-Q for the quarter ended March 31,
2018.
Corporate and Other
-------------------
Quarter Ended March
31,
--------------------
2018 2017 Change
Favorable/
(Unfavorable)
$ $ $ %
--- --- --- ---
($ In Thousands) (Unaudited)
Fees to Manager-related
party 12,928 18,223 5,295 29.1
Selling, general and
administrative expenses(1) 4,202 3,995 (207) (5.2)
Depreciation 164 - (164) NM
--- --- ----
Operating loss (17,294) (22,218) 4,924 22.2
Interest expense, net(2) (8,727) (6,151) (2,576) (41.9)
Other income, net 4 - 4 NM
Benefit for income taxes 6,773 12,431 (5,658) (45.5)
----- ------ ------
Net loss (19,244) (15,938) (3,306) (20.7)
======= ======= ======
Reconciliation of net loss to EBITDA excluding non-
cash items and a reconciliation of cash used in
operating activities to Free Cash Flow:
Net loss (19,244) (15,938)
Interest expense, net(2) 8,727 6,151
Benefit for income taxes (6,773) (12,431)
Depreciation 164 -
Fees to Manager-related
party 12,928 18,223
Pension expense(3) 41 -
Other non-cash expense 163 188
--- ---
EBITDA excluding non-cash
items (3,994) (3,807) (187) (4.9)
====== ====== ====
EBITDA excluding non-cash
items (3,994) (3,807)
Interest expense, net(2) (8,727) (6,151)
Convertible senior notes
interest(4) 2,012 1,744
Amortization of debt
financing costs(2) 1,883 993
Amortization of debt
discount(2) 897 619
Benefit for current income
taxes 7,593 2,948
Changes in working capital (9,021) (8,434)
------ ------
Cash used in operating
activities (9,357) (12,088)
Changes in working capital 9,021 8,434
----- -----
Free cash flow (336) (3,654) 3,318 90.8
==== ====== =====
NM - Not meaningful
(1) For the quarter ended March 31, 2018, selling, general and administrative expenses included $944,000 of costs incurred in connection with
the evaluation of various investment and acquisition opportunities. For the quarter ended March 31, 2017, selling, general and administrative
expenses included $2.3 million of costs related to the implementation of a shared service center.
(2) Interest expense, net, included non-cash amortization of deferred financing fees and non-cash amortization of debt discount related to
the 2.00% Convertible Senior Notes due October 2023.
(3) Pension expense primarily consists of interest cost, expected return on plan assets and amortization of actuarial and performance gains
and losses.
(4) Represents the cash interest expense reclassified to Atlantic Aviation related to the 2.00% Convertible Senior Notes due October 2023,
proceeds of which were used to pay down a portion of Atlantic Aviation's credit facility in October 2016.
MACQUARIE INFRASTRUCTURE CORPORATION
RECONCILIATION OF NET INCOME (LOSS) TO EBITDA
EXCLUDING NON-CASH ITEMS AND A RECONCILIATION FROM CASH PROVIDED BY/(USED IN) OPERATING
ACTIVITIES TO PROPORTIONATELY COMBINED FREE CASH FLOW
For the Quarter Ended March 31, 2018
------------------------------------
IMTT Atlantic Contracted MIC MIC Proportionately Contracted MIC
Aviation Power(1) Hawaii (1) Corporate Combined(2) Power Hawaii
100% 100%
----
($ In Thousands) (Unaudited)
Net income (loss) 25,280 32,967 4,268 2,210 (19,244) 45,481 5,581 2,211
Interest expense, net(3) 7,739 69 896 1,292 8,727 18,723 885 1,290
Provision (benefit) for income taxes
9,686 12,111 950 805 (6,773) 16,779 950 805
Depreciation and amortization
of intangibles 33,249 25,479 13,644 4,150 164 76,686 15,527 4,155
Fees to Manager-related party - - - - 12,928 12,928 - -
Pension expense(4) 2,080 5 - 127 41 2,253 - 127
Other non-cash expense (income), net(5)
94 312 (1,884) 6,199 163 4,884 (1,888) 6,199
--- --- ------ ----- --- ----- ------ -----
EBITDA excluding non-cash items 78,128 70,943 17,874 14,783 (3,994) 177,734 21,055 14,787
------ ------ ------ ------ ------ ------- ------ ------
items 78,128 70,943 17,874 14,783 (3,994) 177,734 21,055 14,787
Interest expense, net(3) (7,739) (69) (896) (1,292) (8,727) (18,723) (885) (1,290)
Convertible senior notes
interest(6) - (2,012) - - 2,012 - - -
Adjustments to derivative
instruments recorded in
interest expense, net(3) (4,042) (4,367) (5,201) (667) - (14,277) (5,970) (670)
Amortization of debt
financing costs(3) 411 279 365 97 1,883 3,035 379 97
Amortization of debt
discount(3) - - - - 897 897 - -
(Provision) benefit for current
income taxes (4,276) (6,533) (16) (639) 7,593 (3,871) (16) (639)
Changes in working capital 5,089 6,019 1,189 (6,139) (9,021) (2,863) 919 (6,139)
----- ----- ----- ------ ------ ------ --- ------
Cash provided by (used in)
operating activities 67,571 64,260 13,315 6,143 (9,357) 141,932 15,482 6,146
Changes in working capital (5,089) (6,019) (1,189) 6,139 9,021 2,863 (919) 6,139
Maintenance capital
expenditures (6,989) (1,302) (27) (1,535) - (9,853) (36) (1,535)
------ ------ --- ------ --- ------ --- ------
Proportionately Combined Free Cash Flow 55,493 56,939 12,099 10,747 (336) 134,942 14,527 10,750
====== ====== ====== ====== ==== ======= ====== ======
For the Quarter Ended March 31, 2017
------------------------------------
IMTT Atlantic Contracted Power(1) MIC MIC Proportionately Contracted MIC
Aviation Hawaii(1) Corporate Combined(2) Power Hawaii
100% 100%
----
($ in Thousands) (Unaudited)
Net income (loss) 23,816 21,826 (1,954) 4,875 (15,938) 32,625 (1,939) 4,873
Interest expense, net(3) 8,757 3,446 4,790 1,710 6,151 24,854 5,383 1,711
Provision (benefit) for income taxes
16,548 14,550 27 3,379 (12,431) 22,073 27 3,379
Depreciation and amortization
of intangibles 31,520 25,033 13,461 3,476 - 73,490 15,340 3,481
Fees to Manager-related party - - - - 18,223 18,223 - -
Pension expense(4) 2,416 5 - 273 - 2,694 - 273
Other non-cash expense(income), net(5)
68 62 (2,003) 5,571 188 3,886 (2,024) 5,571
--- --- ------ ----- --- ----- ------ -----
EBITDA excluding non-cash items 83,125 64,922 14,321 19,284 (3,807) 177,845 16,787 19,288
------ ------ ------ ------ ------ ------- ------ ------
EBITDA excluding non-cash
items 83,125 64,922 14,321 19,284 (3,807) 177,845 16,787 19,288
Interest expense, net(3) (8,757) (3,446) (4,790) (1,710) (6,151) (24,854) (5,383) (1,711)
Convertible senior notes
interest(6) - (1,744) - - 1,744 - - -
Adjustments to derivative
instruments recorded in
interest expense, net(3) (1,320) 133 (1,614) (226) - (3,027) (1,834) (226)
Amortization of debt
financing costs(3) 411 314 364 105 993 2,187 379 105
Amortization of debt
discount(3) - - - - 619 619 - -
(Provision) benefit for current income taxes (2,258) (2,872) (88) (1,451) 2,948 (3,721) (88) (1,451)
Changes in working capital(7) 736 (6,116) (879) (8,726) (8,434) (23,419) (585) (8,727)
--- ------ ---- ------ ------ ------- ---- ------
Cash provided by (used in) operating activities
71,937 51,191 7,314 7,276 (12,088) 125,630 9,276 7,278
Changes in working capital(7) (736) 6,116 879 8,726 8,434 23,419 585 8,727
Maintenance capital expenditures
(2,460) (925) (22) (1,069) - (4,476) (22) (1,069)
------ ---- --- ------ --- ------ --- ------
Proportionately Combined Free Cash Flow 68,741 56,382 8,171 14,933 (3,654) 144,573 9,839 14,936
====== ====== ===== ====== ====== ======= ===== ======
(1) Represents MIC's proportionately combined interests in the businesses comprising these reportable segments.
(2) The sum of the amounts attributable to MIC in proportion to its ownership.
(3) Interest expense, net, includes adjustments to derivative instruments, non-cash amortization of deferred financing fees and non- cash amortization of debt discount related to the 2.00% Convertible Senior Notes due October 2023.
(4) Pension expense primarily consists of interest cost, expected return on plan assets and amortization of actuarial and performance gains and losses.
(5) Other non-cash expense (income), net, primarily includes non-cash amortization of tolling liabilities, unrealized gains (losses) on commodity hedges and non-cash gains (losses) related to disposal of assets. See "Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items, Free Cash Flow and
Proportionately Combined Metrics" above for further discussion.
(6) Represents the cash interest expense reclassified from MIC Corporate to Atlantic Aviation related to the 2.00% Convertible Senior Notes due October 2023, proceeds of which were used to pay down a portion of Atlantic Aviation's credit facility in October 2016.
(7) Conformed to current period presentation for the adoption of ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. See Note 2, "Basis of Presentation", in our Notes to Consolidated Condensed Financial Statements in Part I of Form 10-Q for the quarter ended March 31, 2018.
CONTACT: Investors: Jay Davis, Investor Relations, MIC, 212-231-1825; Media: Melissa McNamara, Corporate Communications, MIC, 212-231-1667
View original content:http://www.prnewswire.com/news-releases/mic-reports-first-quarter-2018-financial-results-and-strategic-update-300641503.html
SOURCE Macquarie Infrastructure Corporation
