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Macquarie Infrastructure Company
Reports Second Quarter 2007 Financial Results
- Reports Operating
Loss on Payment of Non-Cash Performance Fee-
Generates 68% Increase in Cash Available for
Distribution- Increases Quarterly Dividend to
$0.605 Per Share
NEW YORK, Aug. 9 /PRNewswire-FirstCall/
-- Macquarie Infrastructure Company , a leader
in the ownership and operation of U.S.
infrastructure businesses, reported consolidated
revenue for the second quarter of $177.2
million. Revenue increased 67% over the second
quarter in 2006.
The Company reported
an operating loss for the period of $22.9
million. The operating loss reflects a
performance fee of $43.0 million for the quarter
payable to the Company's manager, Macquarie
Infrastructure Management (USA) ("MIMUSA").
MIMUSA has elected to reinvest the payment in
additional LLC interests. The fee and
reinvestment in additional shares will have no
impact on MIC's distributable cash.
MIC reported a 67.6%
year over year increase in estimated cash
available for distribution ("CAD"). CAD is a
measure used by the Company to assess its
ability to sustain and increase quarterly
dividends. Through six months CAD increased to
$52.3 million or $1.39 per share, from $31.2
million in the first half of 2006. The increase
in CAD was attributable to sound ongoing
operations and successful acquisitions concluded
during 2006.
The Company's board
of directors has approved a dividend of $0.605
per share for the second quarter of 2007. The
dividend will be payable on September 11, 2007
to shareholders of record on September 6, 2007.
"Our businesses
collectively have generated a substantial
increase in distributable cash." said Peter
Stokes, Chief Executive Officer of Macquarie
Infrastructure Company. "Infrastructure
businesses tend to be defensive in that they
generate stable, growing cash flows throughout
market cycles. We are pleased with the solid
performance of our businesses this quarter."
"MIC does not raise
money from investors unless we have a
transaction in hand", Stokes added. "To the
extent that we have cash on our balance sheet,
we invest that cash only in prime short-term
instruments, not illiquid investments".
Gross profit was
$75.8 million or 60.2% more than the $47.3
million reported in the second quarter of 2006.
Evaluations based on gross profit remove the
volatility in revenue associated with costs that
are typically passed through to customers by
infrastructure businesses.
For the six months
ended June 30, the Company reported consolidated
revenue and an operating loss of $346.2 million
and $3.1 million, respectively. Revenue
increased 80% over the first half of 2006. The
year to date operating loss reflects the impact
of the $43.0 million performance fee.
OPERATING BUSINESSES
PERFORMANCE HIGHLIGHTS
MIC reports EBITDA
and contribution margin, both non-GAAP financial
measures, as it considers them to be important
indicators of overall performance. The attached
tables provide a reconciliation of EBITDA to net
income and contribution margin to revenue. The
Company believes that EBITDA provides insight
into the performance of certain of its operating
companies and their ability to generate
dividends. The reporting of contribution margin
by the gas production and distribution business
provides additional insight into the performance
of that business net of changes in fuel prices
that are typically passed through to customers.
-- Gross profit in the Company's airport services business was $55.5
million for the quarter, an increase of 63.7% over the second quarter
in 2006. Organic gross profit (excluding sites acquired in the prior
12 months) increased 10.5%. The volume of fuel sold increased with
higher levels of activity at our locations. A larger proportion of
transient customers resulted in higher average margins on fuel sales.
-- EBITDA increased to $27.1 million or 41.4% over the second quarter in
2006. Reported EBITDA included a $0.9 million non-cash gain on
certain interest rate hedges compared to a $3.6 million non-cash gain
in the prior comparable period. EBITDA at existing locations would
have increased by 19.4% excluding the non-cash derivative gains in
both the second quarter of 2006 and the second quarter of 2007.
-- The growth in the volume of fuel sold reflects the overall increase
in activity at our sites. Margin improvement reflects the higher
percentage of transient customers versus base tenants being served by
the business. Transient customers generally pay higher fuel margins
than base tenants.
-- In April the Company announced its agreement to acquire Mercury Air
Centers, a network of 24 FBOs. In June the transaction was expanded
to include the two FBOs that comprise the San Jose Jet Center. The
Company expects to close the $615.0 million transaction (including
expenses) for the 26 sites in August, 2007.
-- The airport services business concluded the acquisition of FBOs at
the Santa Monica (CA) and Stewart (NY) airports on May 30. The
business invested a total of $87.2 million (excluding $3.0 million of
fees and expenses) in the sites and expects that they will generate
incremental EBITDA of at least $7.2 million per year.
-- The airport services business generated gross profit of $112.5
million and EBITDA $52.7 million through six months. Both metrics
are consistent with the guidance previously provided by the Company
and exclude the impact of the pending acquisition.
-- Terminal revenue at the Company's bulk liquid storage terminal business
increased to $54.8 million in the second quarter of 2007 or 19.4% over
the second quarter in 2006. The increase was primarily the result of a
$4.4 million increase in storage revenue and a $1.0 million increase in
throughput revenue. MIC does not consolidate the financial results of
the bulk liquid storage terminal business with those of its controlled
businesses.
-- EBITDA for the second quarter of 2007 was $26.0 million, an increase
of 26.0% over the second quarter in 2006. EBITDA would have
increased by 11.3% excluding non-cash gains on derivatives.
-- The bulk liquid storage terminal business paid a dividend of $7.0
million to MIC for the second quarter of 2007. The dividend payment
was accrued at quarter-end and cash was received on July 25, 2007.
MIC expects to receive a dividend of $7.0 million each quarter
through 2008. The Company expects to receive a dividend equal to 50%
of the cash from operations generated by this business, less 50% of
maintenance and environmental remediation capital expenditures,
beginning with the first quarter in 2009.
-- Cash flow from operations in the bulk liquid storage business
decreased to $31.5 million or by 18.8% for the first half of 2007
versus the first half of 2006. The decline is primarily the result
of increased interest expense associated with a $12.3 million "make
whole" payment incurred in connection with the refinancing of two
fixed rate debt facilities during the period.
-- On June 7, the bulk liquid storage terminal business entered into a
$625.0 million revolving credit facility and used $168.5 million of
proceeds to repay two fixed rate senior notes and fund letters of
credit. The interest rate on the revolving credit facility is LIBOR
(hedged to a fixed 5.5%) plus a margin based on IMTT's operating
leverage of approximately 1.0% - 1.25%. The rate is an average of
45bp lower than the margin that would have been payable on the
business' previous revolving credit facility. At June 30 the drawn \
balance was $186.6 million.
-- At June 30 the business had completed and committed to expansion
projects totaling approximately $280.3 million of growth capital
expenditures. All projects combined are expected to generate
incremental gross profit and EBITDA of approximately $41.5 million
per year. The projects include expansions of previously announced
developments in Louisiana and Canada and two new projects for the
construction and conversion of approximately one million barrels of
storage in Bayonne, NJ. The Bayonne effort is expected to cost $28.7
million and generate annual gross profit and EBITDA of $7.1 million
as the capacity comes on line in 2008 through 2010. Substantially
all of the expansion projects are backed by contracts in place. A
portion of the new tanks are for use while existing tanks are
undergoing periodic inspection.
-- The bulk liquid storage business has chosen to finance a portion of
its Louisiana growth capital expenditures through the issuance of
$215.0 million of Gulf Opportunity Zone Bonds (GO-Zone Bonds). The
bonds bear interest at a low variable rate that has historically been
about 67% of LIBOR (bond purchasers exclude bond interest from gross
income). The business has hedged its floating exposure with interest
rate swaps to a fixed 3.66%. $113.0 million of GO-Zone Bond proceeds
were released to the business after the quarter end. The funds were
used to reduce the revolver balance. The remaining funds are
expected to be released by the end of 2008.
-- The bulk liquid storage business generated gross profit and EBITDA of
$57.6 million and $53.8 million, respectively, through six months.
Excluding derivative gains, EBITDA would have been $49.4 million.
The level of gross profit is consistent with the Company's annualized
guidance. The level of EBITDA is slightly ahead of guidance on an
annualized basis.
-- The Company's gas production and distribution business generated a
total contribution margin of $15.1 million or 4.5% less than in the
second quarter of 2006. Year to date Utility therm (gas volume) sales
were slightly higher and Non-Utility sales were flat versus 2006.
-- EBITDA of $6.4 million was 3.1% lower than in the second quarter of
2006 on the lower contribution margin and slightly higher production
costs. The lower EBITDA amount reflects the non-cash gains on
derivatives booked in both periods and transaction related expenses
incurred in 2006.
-- A portion of the decrease in Utility revenue and contribution margin
for the quarter is the result of $331,000 in Fuel Adjustment Charges
that were recovered by the business from an escrow established for
that purpose at closing of the acquisition. Through six months the
Fuel Adjustment Charges recovered total $1.1 million.
-- Non-utility revenue declined versus the second quarter in 2006
primarily as a result of an exceptional volume of sales in 2006
resulting from LPG replenishments in April following state-wide
shortages in March.
-- The gas production and distribution business generated contribution
margins and EBITDA of $30.5 million and $12.9 million, respectively,
through six months. Excluding non-cash losses on derivatives and the
Fuel Adjustment Charges recovered, EBITDA would have been $13.4
million. Both gross profit and EBITDA year to date are in line with
the guidance previously provided by the Company.
-- District energy business gross profit and EBITDA increased to $4.5
million and $5.1 million, respectively, or 12.1% and 16.5% over the
second quarter in 2006. The pass-through of electricity cost
increases, inflation-based pricing increases and a warm spring in
Chicago all contributed to the improved results.
-- Capacity revenue increased with the conversion of four interruptible
customers to continuous service during June through September, 2006
and the connection of a new customer in each of the fourth quarter in
2006 and the second quarter in 2007.
-- Consumption revenue increased over the second quarter in 2006 as
warmer average temperatures in May and June resulted in increased
ton-hours of cooling sold.
-- The district energy business generated gross profit and EBITDA of
$7.2 million and $8.4 million, respectively, during the first half of
the year. The results are within the range of guidance provided by
the Company.
-- Gross profit at the Company's airport parking business declined 13.0%
to $5.4 million in the second quarter of 2007 versus 2006. Increased
average revenue per car and average overnight occupancy was offset by
higher costs and lower volumes.
-- Average revenue per car increased 4.4% however the number of cars out
declined 2.3%. Management continues to focus on reducing the volume
of daily (discount) parkers in favor of higher margin business and
leisure travelers.
-- Direct expenses increased with the implementation of initiatives
designed to improve service levels. Selling, general and
administrative expenses were higher as a result of the previously
announced re-branding of the business as FastTrack Airport Parking.
-- On June 27 the airport parking business sub-leased a parcel of land
that had been used intermittently as an overflow facility. The sub-
lease revenue will offset all of the lease expense, effectively
reducing operating costs of the business by $250,000 per quarter
through the first quarter of 2009.
-- EBITDA declined $1.9 million versus the second quarter in 2006 to
$4.2 million. Excluding a post closing settlement received in the
second quarter of 2006 (recorded in "other income"), EBITDA would
have declined by $1.5 million.
-- The airport parking business generated gross profit and EBITDA of
$10.0 million and $8.3 million, respectively, for the first six
months of the year. Excluding non-cash gains on derivatives, EBITDA
would have been $8.2 million. Both annualized gross profit and
EBITDA are below the range of guidance provided by the Company,
although re-branding expenses that were expected to be capitalized
are now being expensed as incurred.
ESTIMATED CASH
AVAILABLE FOR DISTRIBUTION
The Company believes
that its results under GAAP, after certain
adjustments, provide better insight into its
ability to support its distributions. GAAP
results alone do not reflect all of the items
that management considers in estimating
distributable cash. The table below summarizes
MIC's estimated cash available for distribution,
beginning with cash from operations and adjusted
for certain dividend income and cash
expenditures included in the calculation of CAD.
Estimated cash available for distribution
totaled $52.3 million through the second
quarter.
($ Millions) Total
Cash from operations $52.5
Cash from operations adjustments 4.3
Cash from investing and financing activities 4.2
Working capital (8.7)
Estimated Cash Available for Distribution $52.3
MIC's consolidated
cash from operations increased to $52.5 million
in the first half of 2007 from $23.4 million in
the first half of 2006. Cash from operations is
the starting point for calculating estimated
cash available for distribution ("CAD").
-- Estimated CAD is increased by a net $4.3 million of adjustments
including primarily income tax refunds received by the airport services
and gas production and distribution businesses.
-- Estimated CAD is increased by a net $4.2 million in cash from investing
and financing activities that includes the $11.7 million portion of the
dividend from the Company's bulk liquid storage business that does not
flow through earnings or cash from operations offset by $7.5 million of
capital expenditures paid in cash or accrued.
-- Estimated CAD is reduced by $8.7 million of cash generated by working
capital reductions as we do not consider working capital movements when
estimating CAD.
Net of all
adjustments, MIC estimates cash available for
distribution in the first half of 2007 increased
to $52.3 million, or $1.39 per share, compared
to $31.2 million in the first half of 2006.
BUSINESS UPDATE AND
OUTLOOK
MIC's Manager earned
an performance fee of $43.0 million for the
second quarter of 2007 and has elected to
reinvest the payment in additional shares. The
number of additional shares to be issued will be
determined based on MIC's volume-weighted
average price over a fifteen day trading period
that begins September 7.
Airport services
business - The Company expects that the airport
services business will conclude the acquisition
of Mercury Air Centers and the San Jose Jet
Center in August, 2007. Integration of the 26
FBOs into Atlantic Aviation will commence
immediately and is expected to be completed over
a period of 12 - 18 months. The additional sites
are expected to generate a minimum incremental
$47.5 million of EBITDA on an annualized basis.
MIC expects
continued strong performance from the airport
services segment to be supported in part by the
full-year contribution from sites acquired in
2007. Activity at all sites is being driven by
continued increases in the number of general
aviation aircraft in service and the number of
hours those aircraft are being flown.
Bulk liquid storage
terminal business - The bulk liquid storage
business is expected to continue to perform well
as inflation escalators generate revenue growth
from existing contracts, expiring contracts are
renewed at higher rates and storage tanks
currently under construction become operational.
New tanks generated approximately $725,000 of
incremental gross profit and EBITDA in the first
half of 2007 versus 2006.
Approximately 75% of
the contracts relating to the construction of
the Geismar chemicals logistics center have been
awarded. Construction of the Geismar facility
remains on pace for completion in the second
quarter of 2008.
MIC expects that the
$280.3 million of capital projects underway will
generate an incremental increase in gross profit
and EBITDA of $41.4 million per year when
completed.
MIC believes that
the bulk liquid storage terminal business will
continue to generate a quarterly dividend of
$14.0 million, 50% of which is payable to the
Company, through the end of 2008. Beginning with
the first quarter in 2009 MIC will receive a
dividend equal to 50% of the business' cash from
operations, less 50% of maintenance and
environmental capital expenditures. Continued
organic growth in terminal revenue combined with
the incremental increase in gross profit
expected from growth capital expenditures is
expected to support a growing dividend in excess
of the current level.
Gas production and
distribution business - The fundamental driver
of continued growth in the gas production and
distribution business is population growth in
Hawaii. Beyond this, MIC believes that it can
effectively market its synthetic natural gas and
liquid petroleum gas products as an efficient,
environmentally friendly fuel source, thereby
increasing its market share relative to other
fuel/power sources.
MIC believes that
its gas production and distribution business
will continue to be a stable source of
distributable cash consistent with the
approximately 11.0% yield assumed when the
business was acquired.
District energy
business - The Company expects continued stable
performance from its district energy business
assuming a historically normal level of demand
for cooling during the summer. Expansion of the
current system, in conjunction with operational
strategies and efficiencies, will increase
saleable capacity.
Airport parking
business - Yield management strategies continue
to generate improvement in average revenue per
car. In addition, management has significantly
upgraded the operations team of the business and
believes that expected service improvements and
growth in volume and revenue will offset the
higher expenses over the medium term.
CONFERENCE CALL AND
WEBCAST
When: Management has
scheduled a conference call for 11:00 a.m.
Eastern Daylight Time on August 9, 2007 to
review MIC's results.
How: To listen to
the conference call, please dial +1(800)
289-0726 (domestic) or +1(913) 981-5545
(international), at least 10 minutes prior to
the scheduled start time. Interested parties can
also listen to the live call via webcast at
www.macquarie.com/mic/. Please allow extra time
prior to the call to visit the site and download
the necessary software to listen to the Internet
broadcast.
Slides: The Company
has prepared slides in support of its conference
call presentation. The slides will be available
for downloading from the MIC website the morning
of August 9, 2007. A link to the slides will be
located in the "Latest News" section of the MIC
homepage.
Replay: For
interested individuals unable to listen to the
live conference call, a replay will be available
through August 24, 2007, at +1(888) 203-1112
(domestic) or +1(719) 457-0820 (international),
Passcode: 7500743. An online archive of the
webcast will be available on the MIC website for
one year.
ABOUT MACQUARIE
INFRASTRUCTURE COMPANY
Macquarie
Infrastructure Company owns, operates and
invests in a diversified group of infrastructure
businesses, which provide basic, everyday
services, to customers in the United States. Its
businesses consist of an airport services
business, a 50% indirect interest in a bulk
liquid storage terminal business, a gas
production and distribution business, a district
energy business, and an airport parking
business. The Company is managed by a
wholly-owned subsidiary of Macquarie Bank
Limited. For additional information, please
visit the Macquarie Infrastructure Company
website at www.macquarie.com/mic.
FORWARD LOOKING
STATEMENTS
This earnings
release contains forward-looking statements. We
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
presentation are subject to a number of risks
and uncertainties, some of which are beyond our
control including, among other things: our
ability to successfully integrate and manage
acquired businesses, manage growth, make and
finance future acquisitions, service, comply
with the terms of and refinance our debt, and
implement our strategy, decisions made by
persons who control our investments including
the distribution of dividends, our regulatory
environment, changes in air travel, automobile
usage, fuel and gas prices, foreign exchange
fluctuations, environmental risks and changes in
U.S. federal tax law.
Our actual results,
performance, prospects or opportunities could
differ materially from those expressed in or
implied by the forward-looking statements.
Additional risks of which we are not currently
aware could also cause our 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. We
undertake 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 Bank Limited and its
worldwide subsidiaries and affiliates.
Australian banking
regulations that govern the operations of
Macquarie Bank Limited and all of its
subsidiaries, including the Company's manager,
require the following statements. Investments in
Macquarie Infrastructure Company LLC are not
deposits with or other liabilities of Macquarie
Bank Limited or of any Macquarie Group company
and are subject to investment risk, including
possible delays in repayment and loss of income
and principal invested. Neither Macquarie Bank
Limited nor any other member company of the
Macquarie Group guarantees the performance of
Macquarie Infrastructure Company LLC or the
repayment of capital from Macquarie
Infrastructure Company LLC. MIC-G
MACQUARIE INFRASTRUCTURE COMPANY LLC
CONSOLIDATED CONDENSED BALANCE SHEETS
As of June 30, 2007 and December 31, 2006
($ in thousands, except share amounts)
June 30, 2007
(unaudited) December 31, 2006
Assets
Current assets:
Cash and cash equivalents $73,000 $37,388
Restricted cash 1,290 1,216
Accounts receivable, less allowance
for doubtful accounts of $1,829
and $1,435, respectively 66 ,291 56,785
Dividends receivable 7,000 7,000
Other receivables 126 87,973
Inventories 12,539 12,793
Prepaid expenses 4,564 6,887
Deferred income taxes 2,411 2,411
Income tax receivable - 2,913
Other 12,747 15,600
Total current assets 179,968 230,966
Property, equipment, land and
leasehold improvements, net 550,165 522,759
Restricted cash 25,551 23,666
Equipment lease receivables 40,101 41,305
Investment in unconsolidated business 227,958 239,632
Goodwill 513,867 485,986
Intangible assets, net 553,441 526,759
Deposits and deferred costs on acquisitions 2,717 579
Deferred financing costs, net of
accumulated amortization 18,908 20,875
Fair value of derivative instruments 11,681 2,252
Other 2,933 2,754
Total assets $2,127,290 $2,097,533
Liabilities and stockholders' equity
Current liabilities:
Due to manager $49,871 $4,284
Accounts payable 34,235 29,819
Accrued expenses 27,030 19,780
Current portion of notes payable and
capital leases 11,954 4,683
Current portion of long-term debt 6,757 3,754
Fair value of derivative instruments 1,278 3,286
Other 8,484 6,533
Total current liabilities 139,609 72,139
Capital leases and notes payable, net
of current portion 2,320 3,135
Long-term debt, net of current portion 991,326 959,906
Deferred income taxes 149,226 163,923
Fair value of derivative instruments - 453
Other 27,959 25,371
Total liabilities 1,310,440 1,224,927
Minority interests 7,677 8,181
Stockholders' equity:
LLC interests, no par value; 500,000,000
authorized; 37,562,165 interests issued
and outstanding at June 30, 2007 and
Trust Stock, no par value; 500,000,000
authorized; 37,562,165 shares issued and
outstanding at December 31, 2006 820,700 864,233
Accumulated other comprehensive income 6,044 192
Accumulated loss (17,571) -
Total stockholders' equity 809,173 864,425
Total liabilities and stockholders' equity $2,127,290 $2,097,533
MACQUARIE INFRASTRUCTURE COMPANY LLC
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
For the Quarters and Six Months Ended June 30, 2007 and 2006
(Unaudited)
($ in thousands, except share and per share data)
Quarter Ended Six Months Ended
June 30, June 30, June 30, June 30,
2007 2006 2007 2006
Revenues
Revenue from product sales $114,809 $56,922 $225,457 $98,914
Service revenue 61,161 47,726 118,247 90,630
Financing and equipment
lease income 1,235 1,285 2,483 2,583
Total revenue 177,205 105,933 346,187 192,127
Costs and expenses
Cost of product sales 75,121 36,010 145,605 61,279
Cost of services 26,323 22,632 49,665 43,664
Selling, general and
administrative 38,564 24,294 77,542 48,244
Fees to manager 48,964 3,718 54,525 10,196
Depreciation 4,162 2,121 8,053 3,831
Amortization of intangibles 7,004 3,580 13,932 7,026
Total operating expenses 200,138 92,355 349,322 174,240
Operating (loss) income (22,933) 13,578 (3,135) 17,887
Other income (expense)
Dividend income - 2,351 - 5,002
Interest income 1,465 1,180 2,924 2,882
Interest expense (17,705) (15,604) (35,271) (31,267)
Equity in (losses) earnings
and amortization charges
of investees (1,145) 3,115 2,320 5,568
Gain on derivative
instruments 1,138 6,487 661 20,162
Other income (expense), net 272 94 (644) (73)
Net (loss) income before
income taxes and
minority interests (38,908) 11,201 (33,145) 20,161
Benefit (provision) for
income taxes 13,833 (1,618) 15,878 (3,011)
Net (loss) income before
minority interests (25,075) 9,583 (17,267) 17,150
Minority interests (28) 146 (97) 152
Net (loss) income $(25,047) $9,437 $(17,170) $16,998
Basic (loss) earnings per
share: $(0.67) $0.35 $(0.46) $0.63
Weighted average number
of shares outstanding:
basic 37,562,165 27,062,201 37,562,165 27,056,505
Diluted (loss) earnings
per share: $(0.67) $0.35 $(0.46) $0.63
Weighted average number
of shares outstanding:
diluted 37,562,165 27,073,016 37,562,165 27,069,835
Cash dividends declared
per share $0.59 $0.50 $1.16 $1.00
MACQUARIE INFRASTRUCTURE COMPANY LLC
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 2007 and 2006
(Unaudited)
($ in thousands)
Six Months Ended
June 30, 2007 June 30, 2006
Operating activities
Net (loss) income $(17,170) $16,998
Adjustments to reconcile net (loss)
income to net cash provided by
operating activities:
Depreciation and amortization of
property and equipment 13,029 8,290
Amortization of intangible assets 13,932 7,026
Equity in earnings and amortization
charges of investee (2,320) (5,568)
Equity distribution from investee 2,320 2,366
Amortization of finance charges 2,883 1,806
Noncash derivative gain, net of
noncash interest expense (2,500) (15,734)
Performance fees to be settled
in stock 43,962 4,134
Equipment lease receivable, net 1,381 994
Deferred rent 1,264 1,205
Deferred taxes (16,858) (2,444)
Other noncash expenses, net 1,118 1,418
Non-operating transactions relating
to foreign investments 2,799 -
Changes in other assets and liabilities:
Restricted cash (74) (177)
Accounts receivable (7,013) (2,222)
Dividend receivable - 145
Inventories 409 1,353
Prepaid expenses and other current
assets 3,963 1,930
Accounts payable and accrued expenses 6,486 (4,650)
Income taxes payable 1,977 4,729
Due to manager 1,624 1,192
Other 1,326 610
Net cash provided by operating
activities 52,538 23,401
Investing activities
Acquisitions of businesses and
investments, net of cash acquired (85,934) (501,110)
Costs of dispositions (322) -
Deposits and deferred costs on future
acquisitions (966) (1,134)
Proceeds from sale of investment in
unconsolidated business 84,977 -
Settlements of non-hedging derivative
instruments (1,965) -
Purchases of property and equipment (18,246) (4,912)
Return on investment in unconsolidated
business 11,680 -
Proceeds received on subordinated loan - 611
Net cash used in investing activities (10,776) (506,545)
Financing activities
Proceeds from long-term debt 34,500 160,000
Proceeds from line-credit facility 7,130 277,901
Distributions paid to shareholders (43,572) (27,059)
Debt financing costs (687) (4,756)
Distributions paid to minority shareholders (408) (282)
Payment of long-term debt (77) (72)
Restricted cash (1,886) 715
Payment of notes and capital lease
obligations (1,149) (990)
Net cash (used in) provided by financing
activities (6,149) 405,457
Effect of exchange rate changes on cash (1) 367
Net change in cash and cash equivalents 35,612 (77,320)
Cash and cash equivalents, beginning of
period 37,388 115,163
Cash and cash equivalents, end of period $73,000 $37,843
Supplemental disclosures of cash flow information:
Noncash investing and financing activities:
Accrued deposits and deferred costs on
acquisition, and equity offering costs $2,757 $2,639
Accrued purchases of property and
equipment $2,620 $1,263
Acquisition of property through capital
leases $30 $1,667
Issuance of stock to manager for payment
of March 2006 performance fees $- $4,134
Issuance of stock to independent directors $- $450
Taxes paid $1,886 $492
Interest paid $33,016 $24,225
A reconciliation of net (loss) income to EBITDA, on a consolidated basis
is provided below:
Quarter Ended June 30,
2007 2006 Change
$ $ $ %
Net (loss) income (1) (25,047) 9,437 (34,484) NM
Interest expense, net 16,240 14,424 1,816 12.6
Income taxes (13,833) 1,618 (15,451) NM
Depreciation (2) 6,672 4,292 2,380 55.5
Amortization (3) 7,004 3,580 3,424 95.6
EBITDA (8,964) 33,351 (42,315) (126.9)
Six Months Ended June 30,
2007 2006 Change
$ $ $ %
Net (loss) income (1) (17,170) 16,998 (34,168) NM
Interest expense, net 32,347 28,385 3,962 14.0
Income taxes (15,878) 3,011 (18,889) NM
Depreciation (2) 13,029 8,290 4,739 57.2
Amortization (3) 13,932 7,026 6,906 98.3
EBITDA 26,260 63,710 (37,450) (58.8)
-------------------
NM - Not meaningful
(1) Net loss for the six months ended June 30, 2007 includes performance
fees earned by our manager, MIMUSA, of $43.0 million in the second
quarter and $957,000 in the first quarter. MIMUSA has elected to
reinvest these performance fees in additional shares.
(2) Includes depreciation expense of $1.4 million, $1.4 million, $2.9
million and $2.8 million for the district energy business for the
quarters ended June 30, 2007 and 2006 and the six month periods ended on
the same dates, respectively, which are reported in cost of services in
our consolidated condensed statements of operations. Also includes
depreciation expense of $1.1 million, $744,000, $2.1 million and $1.6
million for the airport parking business for the quarters ended June 30,
2007 and 2006 and the six month periods ended on the same dates,
respectively, which are also reported in cost of services in our
consolidated condensed statements of operations. Does not include
depreciation expense of $1.7 million and $3.4 million in connection with
our investment in IMTT for the quarter and six months ended June 30,
2007, respectively, which is reported in equity in earnings and
amortization charges of investees in our statements of operations.
(3) Does not include amortization expense related to intangible assets
in connection with our investment in the toll road business of $974,000
and $1.9 million for the quarter and six months ended June 30, 2006,
respectively, which are reported in equity in earnings and amortization
charges of investees in our consolidated condensed statements of
operations. Also does not include amortization expense related to
intangible assets in connection with our investment in IMTT of $283,000,
$189,000, $567,000 and $189,000 for the quarters ended June 30, 2007 and
2006 and the six month periods ended on the same dates, respectively,
which are reported in equity in earnings and amortization charges of
investees in our statements of operations.
A reconciliation of
net (loss) income to EBITDA, on a segment basis,
and contribution margin to revenue for the gas
production and distribution business is provided
below.
Note: All $ are in millions. Totals may not foot due to rounding.
AIRPORT SERVICES BUSINESS Quarter Ended June 30,
Existing Locations
2007 2006 Change Acquisitions
$ $ % $
Revenue
Fuel 44.87 46.30 (3.1) 28.82
Non-Fuel 20.39 17.65 15.5 8.40
Total Revenue 65.25 63.95 2.0 37.22
Gross Profit
Fuel 18.58 17.78 4.5 10.77
Non-Fuel 18.86 16.10 17.2 7.26
Total Gross Profit 37.44 33.88 10.5 18.02
SG&A 18.80 18.26 3.0 10.40
Unrealized Gain on Derivatives 0.87 3.58 (75.6) 0.00
Reconciliation of net income (loss)
to EBITDA
Net Income (loss) 6.31 6.40 (1.4) (0.04)
Interest Expense, Net 4.64 4.86 (4.6) 3.63
Provision (benefit) for income
taxes 4.14 3.46 19.8 (0.03)
Depreciation and amortization 4.40 4.46 (1.4) 4.06
EBITDA 19.48 19.17 1.6 7.63
Total
2007 2006 Change
$ $ %
Revenue
Fuel 73.69 46.30 59.2
Non-Fuel 28.79 17.65 63.1
Total Revenue 102.48 63.95 60.2
Gross Profit
Fuel 29.35 17.78 65.1
Non-Fuel 26.12 16.10 62.2
Total Gross Profit 55.47 33.88 63.7
SG&A 29.20 18.26 59.9
Unrealized Gain on Derivatives 0.87 3.58 (75.6)
Reconciliation of net income (loss)
to EBITDA
Net Income (loss) 6.27 6.40 (2.0)
Interest Expense, Net 8.27 4.86 70.2
Provision (benefit) for income
taxes 4.12 3.46 19.0
Depreciation and amortization 8.45 4.46 89.6
EBITDA 27.11 19.17 41.4
Six Months Ended June 30,
Existing Locations
2007 2006 Change Acquisitions
$ $ % $
Revenue
Fuel 86.47 88.29 (2.1) 57.07
Non-Fuel 43.31 35.83 20.9 16.69
Total Revenue 129.78 124.12 4.6 73.76
Gross Profit
Fuel 36.70 34.50 6.4 21.92
Non-Fuel 39.32 31.94 23.1 14.59
Total Gross Profit 76.01 66.45 14.4 36.52
SG&A 38.53 36.96 4.3 21.20
Unrealized (Loss) Gain on
Derivatives (0.08) 10.90 (100.7) 0.00
Reconciliation of net income to
EBITDA
Net Income 11.29 10.95 3.1 0.61
Interest Expense, Net 9.83 13.77 (28.6) 6.70
Provision for income taxes 7.41 6.73 10.1 0.40
Depreciation and amortization 8.81 8.87 (0.7) 7.61
EBITDA 37.34 40.32 (7.4) 15.33
Total
2007 2006 Change
$ $ %
Revenue
Fuel 143.54 88.29 62.6
Non-Fuel 60.00 35.83 67.4
Total Revenue 203.54 124.12 64.0
Gross Profit
Fuel 58.62 34.50 69.9
Non-Fuel 53.91 31.94 68.8
Total Gross Profit 112.53 66.45 69.3
SG&A 59.73 36.96 61.6
Unrealized (Loss) Gain on
Derivatives (0.08) 10.90 (100.7)
Reconciliation of net income to
EBITDA
Net Income 11.90 10.95 8.7
Interest Expense, Net 16.53 13.77 20.0
Provision for income taxes 7.82 6.73 16.1
Depreciation and amortization 16.42 8.87 85.1
EBITDA 52.66 40.32 30.6
BULK LIQUID STORAGE BUSINESS
Quarter Ended June 30, Six Months Ended June 30,
2007 2006 Change 2007 2006 Change
$ $ % $ $ %
Revenue
Terminal 54.77 45.89 19.4 109.55 92.27 18.7
Heating 4.26 3.03 40.3 11.35 10.54 7.7
Other 7.22 8.35 (13.5) 19.20 16.06 19.5
Total Revenue 66.25 57.27 15.7 140.10 118.87 17.9
Gross Profit
Terminal 25.60 21.71 17.9 54.49 44.64 22.1
Environmental Response 0.97 2.39 (59.2) 2.63 4.05 (35.2)
Nursery 0.08 (0.34) (124.8) 0.45 (0.22) (307.0)
Total Gross Profit 26.66 23.75 12.2 57.56 48.48 18.7
SG&A 6.10 5.31 14.9 11.67 10.87 7.4
Unrealized Gain on
Derivatives 4.67 1.46 218.9 4.43 3.51 26.3
Reconciliation of net
income to EBITDA
Net Income 0.08 5.47 (98.6) 9.60 11.15 (13.9)
Interest Expense, Net 16.53 3.91 323.2 19.94 9.32 113.8
Provision for income
taxes 0.31 3.73 (91.8) 6.73 7.54 (10.8)
Depreciation and
Amortization 9.04 7.48 20.8 17.56 15.16 15.8
EBITDA 25.95 20.59 26.0 53.83 43.18 24.6
GAS PRODUCTION AND DISTRIBUTION BUSINESS
Quarter Ended June 30, Six Months Ended June 30,
2007 2006 Change 2007 2006 Change
$ $ % $ $ %
Revenue
Utility 22.82 23.96 (4.8) 45.11 48.95 (7.8)
Non-utility 18.30 18.38 (0.4) 36.81 35.03 5.1
Total Revenue 41.12 42.34 (2.9) 81.92 83.98 (2.4)
Cost of Revenue
Utility 15.01 15.81 (5.0) 29.60 30.98 (4.5)
Non-utility 10.99 10.71 2.7 21.81 21.17 3.0
Total Cost of Revenue 26.00 26.51 (1.9) 51.40 52.15 (1.4)
Contribution Margin
Utility 7.81 8.16 (4.2) 15.51 17.97 (13.7)
Non-utility 7.31 7.67 (4.7) 15.01 13.86 8.3
Total Contribution
Margin 15.12 15.83 (4.5) 30.52 31.83 (4.1)
Transmission and
Distribution 3.57 3.73 (4.3) 6.95 7.05 (1.4)
SG&A 4.03 4.38 (8.1) 8.11 8.41 (3.6)
Unrealized Gain (Loss)
on Derivatives 0.07 1.91 (96.5) (0.20) 1.91 (110.4)
Reconciliation of
income before taxes
to EBITDA
Income before taxes 2.44 2.43 0.4 4.96 7.47 (33.6)
Interest Expense, Net 2.29 2.75 (16.8) 4.53 3.96 14.4
Depreciation and
amortization 1.67 1.42 17.6 3.40 2.79 22.0
EBITDA 6.39 6.60 (3.1) 12.89 14.22 (9.4)
DISTRICT ENERGY
Quarter Ended June 30, Six Months Ended June 30,
2007 2006 Change 2007 2006 Change
$ $ % $ $ %
Revenue
Capacity 4.74 4.24 11.7 9.29 8.43 10.2
Consumption 6.80 5.26 29.3 8.66 6.73 28.6
Lease and Other 2.00 2.08 (3.5) 3.90 4.22 (7.6)
Total Revenue 13.54 11.58 17.0 21.85 19.38 12.7
Direct Expenses
Electricity 4.30 3.34 28.7 5.78 4.29 35.0
Other 4.73 4.21 12.3 8.88 8.53 4.1
Total Direct Expenses 9.03 7.55 19.6 14.66 12.81 14.4
Gross Profit 4.51 4.03 12.1 7.19 6.57 9.5
SG&A 0.82 0.98 (16.0) 1.59 1.78 (10.4)
Reconciliation of
net income (loss)
to EBITDA
Net Income (loss) 0.73 0.42 72.7 0.37 (0.12) (411.9)
Interest Expense, Net 2.17 2.11 3.1 4.26 4.18 2.0
Provision (benefit) for
income taxes 0.43 0.09 358.5 0.22 (0.24) (191.2)
Depreciation and
amortization 1.78 1.77 0.7 3.55 3.53 0.6
EBITDA 5.11 4.39 16.5 8.39 7.35 14.3
AIRPORT PARKING
Quarter Ended June 30, Six Months Ended June 30,
2007 2006 Change 2007 2006 Change
$ $ % $ $ %
Total Revenue 20.07 19.78 1.4 38.88 38.00 2.3
Direct Expenses 14.62 13.52 8.1 28.91 26.96 7.2
Gross Profit 5.45 6.26 (13.0) 9.97 11.04 (9.7)
SG&A 2.78 1.57 76.8 4.39 3.27 34.2
Unrealized Gain on
Derivatives 0.18 0.34 (46.7) 0.11 1.00 (89.1)
Reconciliation of
net (loss) income
to EBITDA
Net (loss) Income (0.87) 0.43 (303.0) (1.83) 0.14 (1454.1)
Interest Expense, Net 4.02 4.33 (7.2) 7.99 8.23 (2.9)
Provision for income
taxes (0.69) 0.18 (476.0) (1.45) (0.04) 3,276.7
Depreciation and
amortization 1.78 1.22 46.0 3.60 2.49 44.7
EBITDA 4.24 6.16 (31.2) 8.31 10.81 (23.1)
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