EX-99.1 9 y21020exv99w1.txt EX-99.1: EARNINGS RELEASE EXHIBIT 99.1 MACQUARIE INFRASTRUCTURE COMPANY LLC 125 W. 55th Street New York, NY 10019 USA Media Release [MACQUARIE LOGO] MACQUARIE INFRASTRUCTURE COMPANY REPORTS FIRST QUARTER 2006 FINANCIAL RESULTS NEW YORK, NY - MAY 10, 2006 - Macquarie Infrastructure Company (the "Company" or "MIC") (NYSE: MIC) reported the consolidated results of its operations for the quarter ended March 31, 2006. Revenue rose to $86.2 million for the period, a 31.1% increase over the first quarter of 2005. MIC generated cash from operations during the first quarter of 2006 of $11.8 million, an increase of 21.1% over the first quarter of 2005. For the quarter, the Company reported net loss of $1.3 million or $0.05 per share. The Company's results for the quarter are consistent with continued growth in revenue in its airport services and airport parking businesses combined with an expected seasonal decrease in revenue at its district energy business. "Once again, our performance in the first quarter underscores the stable, predictable cash flow generating capacity of our businesses and investments," said Peter Stokes, Macquarie's Chief Executive Officer. "In addition to their consistent generation of cash, our existing businesses have exhibited a substantial ability to grow revenue and EBITDA, both organically and via acquisitions." Cash from operations included a $2.5 million share of earnings from the Company's 50% ownership of the Yorkshire Link toll road in England. Earnings before interest, taxes, depreciation and amortization ("EBITDA") increased 30.1% over the first quarter of 2005 to $16.8 million in the first quarter of 2006. For a reconciliation of net income to EBITDA, please see the last page of this release. FINANCIAL HIGHLIGHTS MIC's controlled businesses generated increases in revenue over the prior comparable period, both from existing locations and including the impact of acquisitions made during the past year. Revenue from the Company's airport services, airport parking and district energy businesses increased by 13.5%, 7.1% and 4.3%, respectively, at existing locations, over the quarter ended March 31, 2005. Taking into account the acquisitions made by MIC's airport services and airport parking businesses, revenue increased 33.9% and 36.9%, respectively, at these businesses. No acquisitions were effected by the district energy business during the prior year. The Company's results for the quarter ended March 31, 2006 include the following highlights: - Consolidated revenue of $86.2 million - a 31.1% increase over 1Q'05; - Cash from operations of $11.8 million or $0.44 cents per share - a 21.1% increase over 1Q'05; - EBITDA (earnings before interest, taxes, depreciation and amortization) of $16.8 million or $0.62 per share - a 30.1% increase over 1Q'05; PERFORMANCE FEE The Company's total return to shareholders (distributions plus capital appreciation) exceeded that of its benchmark indices for the quarter ended March 31, 2006. As a result, Macquarie Infrastructure Management (USA) ("MIMUSA" or "Manager"), the Company's Manager, is entitled to a performance fee in the amount of $4.13 million. Based on the volume-weighted average price of MIC shares during the last 15 trading days of the quarter, total MIC shareholder value increased by $59.9 million compared to the same calculation performed at the end of the fourth quarter of 2005. The MIC Accumulation Index outperformed its utilities-based benchmark by 2.8% or approximately $23.3 million. 20% of this outperformance, net of a prior period deficit, is payable to MIC's Manager as a performance fee. The performance fee is the first to be earned by the Company's Manager since the period ended December 31, 2004. MIC's Manager has elected to receive the performance fee in additional shares of trust stock. The number and per share price of additional shares to be issued will be calculated based on the volume-weighted average price of MIC's outstanding shares during a fifteen day trading period that is expected to begin in the first week of June, 2006. DISTRIBUTIONS On May 4, 2006, the Company's Board of Directors declared a distribution to shareholders for the quarter ended March 31, 2006 of $0.50 per share. Shares of trust stock will trade ex-distribution on June 1, 2005. The distribution will be payable on June 9, 2006 to shareholders of record at the close of business on June 5, 2006. The Company intends to declare and pay regular quarterly cash distributions on all outstanding shares. The Company anticipates declaring and paying a quarterly distribution for the quarter ending June 30, 2006 of $0.50 per share. The Company's distribution policy is based on the predictable and stable cash flows of its businesses and investments. The Company's intention is to distribute to its shareholders the majority of its cash available for distribution and not to retain significant cash balances in excess of prudent reserves. BUSINESS UPDATE On May 1, 2006, MIC completed its purchase of newly issued common stock of IMTT Holdings Inc. (fka Loving Enterprises, Inc.), the holding company parent of International-Matex Tank Terminals. MIC invested $250 million for 50% of the issued and outstanding common stock of IMTT Holdings Inc. The current shareholders continue to own the balance of the common stock of IMTT Holdings Inc. The Company financed the investment and the associated transaction costs with $82 million of available cash and $175 million of borrowings under the revolving acquisition facility of Macquarie Infrastructure Company Inc. ("MIC Inc."). MIC Inc. is a wholly owned subsidiary of the Company and the holding company for its businesses and investments in the U.S. On May 3, 2006, MIC received approval from the Hawaii Public Utilities Commission for its pending acquisition of The Gas Company, a regulated producer and distributor of synthetic natural gas and distributor of propane gas on the six major islands of Hawaii. Subject to satisfaction of customary closing conditions, the Company expects to close the acquisition of The Gas Company in June 2006. ESTIMATED FIRST QUARTER CASH AVAILABLE FOR DISTRIBUTION The Company believes that EBITDA, in addition to GAAP measures, provides insight into the performance of its operating businesses and its ability to service its obligations and support its ongoing distribution policy. However, EBITDA does not reflect other cash items that management considers in estimating cash available for distribution. The table below details year-to-date cash receipts and payments that are not reflected on the Company's income statement in order to provide additional insight into management's estimate of cash available for distribution. The Company believes that cash generated by its businesses and investments, plus its cash in acquired businesses (net of reserves) will be sufficient to meet its indicated distributions in 2006. The Company's district energy businesses experiences seasonal fluctuations in revenue. In general, the district energy business revenue is positively correlated to the warmer quarters of the year in which the demand for cooling services increases. In the first quarter of 2006 the Company's businesses generated $11.8 million, or $.44 per share, in cash from operations. Adjusting for timing of certain receipts and payments, the Company estimates year to date cash available for distribution to be $11.5 million, or $0.42 per share. This represents an 7.7% increase over the $0.39 of cash available for distribution from the Company in the first quarter of 2005.
($ Millions) CASH FROM OPERATIONS 11.80 ADDITIONAL CASH ITEMS Working capital 1.32 Maintenance capex (1.21) Prior year dividend (2.36) SEW dividend 2.65 Unsuccessful acquisition bid 0.38 YLL principal payment received 0.88 ----- SUB TOTAL 13.47 ----- ADJUSTMENTS Management fees (3.91) Performance fee 4.13 Minority interest in cash from operations (0.09) Investment distribution annualization (1.72) Maintenance capex annualization (0.42) ----- SUB TOTAL (2.00) ----- NORMALIZED CASH AVAILABLE FOR DISTRIBUTION 11.47 =====
- Additional cash items and adjustments reflect the following: - Normalization of working capital changes; - Maintenance capital expenditures; - Prior year dividend from MCG, declared in 2005 received in 2006; - Dividend distribution from SEW; - Unsuccessful acquisition bid costs, paid from refinancing proceeds; - YLL principal payment received; - Base management fees, higher as a result of larger market cap; - Performance fee, to be paid in stock; - Minority interest in cash flows for the district energy and airport parking businesses; - Annualization of investment distributions from SEW, MCG and YLL; - Annualization of maintenance capital expenditures, primarily in airport services. BUSINESS/SEGMENT HIGHLIGHTS FOR THE QUARTER ENDED MARCH 31, 2006 The following is a segment analysis of results from operations for the quarter ended March 31, 2006, compared to results for the quarter ended March 31, 2005. The Company has included EBITDA, a non-GAAP financial measure, on both a consolidated basis as well as for each of its segments as it considers it to be an important measure of its overall performance. The Company believes EBITDA provides additional insight into the performance of its operating companies and its ability to service its obligations and support its ongoing distribution policy. AIRPORT SERVICES
QUARTER OVER MARCH QUARTER MARCH QUARTER QUARTER GROWTH 2006 2005 % ------------- ------------- -------------- REVENUE ($ MILLIONS) Fuel 41.992 30.387 38.2% Non Fuel 18.179 14.557 24.9% ------ ------ ---- TOTAL REVENUE 60.171 44.944 33.9% ------ ------ ---- EBITDA FROM CONTINUING OPERATIONS 13.836 9.395 47.3% Reconciliation of net income from continuing operations to EBITDA from continuing operations NET INCOME FROM CONTINUING OPERATIONS 2.245 1.381 62.6% Interest Expense, Net 5.589 3.405 64.1% Provision for income taxes 1.589 1.143 39.0% Depreciation and amortization 4.413 3.466 27.3% ------ ------ ---- EBITDA FROM CONTINUING OPERATIONS 13.836 9.395 47.3%
KEY FACTORS AFFECTING OPERATING RESULTS - Contribution of positive operating results from the FBO in Las Vegas acquired in August 2005 - Higher average dollar per gallon fuel margins at existing locations - Increases in volume of fuel sold of approximately 2% at comparable locations - Continued increases in fuel prices - Higher interest costs associated with debt facility expansion in December 2005 (interest cost borne by airport services, although proceeds reinvested in new, yield generating assets expected to increase cash available for distribution) - Lower first quarter de-icing revenues resulting from warmer winter in 2006 relative to 2005 AIRPORT PARKING
QUARTER OVER MARCH QUARTER MARCH QUARTER QUARTER GROWTH 2006 2005 % ------------- ------------- -------------- REVENUE ($ MILLIONS) 18.216 13.309 36.9% ------ ------ ---- EBITDA 4.059 2.814 44.2% ------ ------ ---- EBITDA Margin 22.3% 21.1% 5.7% Reconciliation of net loss to EBITDA NET LOSS (0.671) (0.412) 62.9% Interest Expense, Net 3.921 2.114 85.5% Benefit for income taxes (0.462) 0.000 0.0% Depreciation and amortization 1.271 1.112 14.3% EBITDA 4.059 2.814 44.2%
KEY FACTORS AFFECTING OPERATING RESULTS - Contribution from new locations acquired in 2005 - Implementation of yield management strategy resulting in price increases and reduced discounting in selected markets, contributed to 7.5% increase in average revenue per car at comparable locations - Marketing efforts targeting customers with longer average stay contributed to 5.8% increase in average overnight occupancy at comparable locations - No growth in cars out at comparable locations - Increased interest expense from higher debt levels and interest rates caps having been met in the quarter DISTRICT ENERGY
QUARTER OVER MARCH QUARTER MARCH QUARTER QUARTER GROWTH 2006 2005 % ------------- ------------- -------------- REVENUE ($ MILLIONS) Capacity 4.189 4.059 3.2% Consumption 1.475 1.438 2.6% Lease and Other 2.143 1.985 8.0% ------ ------ ----- TOTAL REVENUE 7.807 7.482 4.3% ------ ------ ----- EBITDA 2.958 3.108 -4.8% ------ ------ ----- EBITDA Margin 37.9% 41.5% -8.7% Reconciliation of net loss to EBITDA NET LOSS (0.539) (0.762) -29.3% Interest Expense, Net 2.070 2.142 -3.4% Benefit for income taxes (0.333) 0.000 0.0% Depreciation 1.423 1.391 2.3% Amortization of intangibles 0.337 0.337 0.0% EBITDA 2.958 3.108 -4.8%
KEY FACTORS AFFECTING OPERATING RESULTS - Capacity revenue generally increased in-line with inflation excluding a one-time credit to a customer in the first quarter of 2005 - Consumption ton-hours sold were consistent with lower demand for cooling in winter months - Expenditure on pre-season maintenance for system reliability earlier in the year versus 2005 TOLL ROADS (YORKSHIRE LINK) - The Company recorded a net $2.5 million during the first quarter of 2006 as its share of the earnings of the Yorkshire Link - As a result of revised traffic forecasts and timing of estimated tax payments for the fiscal year ending March 31, 2007, cash distributions for the full year 2006 are expected to be approximately $7.7 million or $1.4 million less than previously indicated INVESTMENTS Macquarie Communications Infrastructure Group (MCG) - MCG declared a cash distribution of Australian Dollar 19.5 cents per stapled security on December 20, 2005 for the 6 month period ended December 31, 2005 - the Company received $2.2 million net of withholding taxes in mid-February - Cash distributions for the full year 2006 are expected to be approximately $4.3 million net of withholding taxes South East Water (SEW) - The Company received distributions of $2.7 million from its investment in SEW during the first quarter of 2006 - For the full year 2006 the Company expects to receive dividends of approximately $5.9 million relating to its investment in SEW CONFERENCE CALL AND WEB CAST The Company has scheduled a conference call for 11:00 a.m. Eastern Daylight Time on May 10, 2006, to review the Company's results. To listen to the conference call, please dial +1(800) 810-0924 (domestic) or +1(913) 981-4900 (international), at least 10 minutes prior to the scheduled start time. Interested parties can also listen to the live call, which will be webcast at the Company website, 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. For interested individuals unable to join the conference call, a replay will be available through May 30, 2006, at +1(888) 203-1112 (domestic) or +1(719) 457-0820 (international), Passcode: 1945016. An online archive of the webcast will be available on the Company's website for one year following the call. ABOUT MACQUARIE INFRASTRUCTURE COMPANY Macquarie Infrastructure Company owns, operates and invests in a diversified group of infrastructure businesses, which provide basic, everyday services to customers in the United States and other developed countries. Its businesses and investments consist of an airport services business, an airport parking business, a district energy business, a 50% interest in a bulk liquid storage terminal business, a 50% interest in the company that operates a toll road in England and investments in a regulated clean water utility in the UK and in a communications infrastructure investment vehicle listed on the Australian Stock Exchange. 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. MIC-G FOR FURTHER INFORMATION, PLEASE CONTACT: Investor enquiries Media enquiries Jay A. Davis Alex Doughty Investor Relations Corporate Communications Macquarie Infrastructure Company Macquarie Infrastructure Company (212) 231-1825 (212) 231-1710 MACQUARIE INFRASTRUCTURE COMPANY TRUST CONSOLIDATED CONDENSED BALANCE SHEETS As of March 31, 2006 and December 31, 2005 ($ in thousands, except share amounts)
March 31, 2006 December 31, (unaudited) 2005 Assets Current assets: Cash and cash equivalents $ 126,483 $ 115,163 Restricted cash 1,471 1,332 Accounts receivable, less allowance for doubtful accounts of $882 and $839, respectively 21,386 21,150 Dividends receivable 2,651 2,365 Inventories 1,611 1,981 Prepaid expenses 5,545 4,701 Deferred income taxes 2,115 2,101 Income tax receivable 3,420 3,489 Other 5,057 4,394 ----------- ------------ Total current assets 169,739 156,676 Property, equipment, land and leasehold improvements, net 334,094 335,119 Restricted cash 19,516 19,437 Equipment lease receivables 42,999 43,546 Investment in unconsolidated business 70,409 69,358 Investment, cost 35,716 35,295 Securities, available for sale 69,233 68,882 Related party subordinated loan 19,492 19,866 Goodwill 281,809 281,776 Intangible assets, net 296,041 299,487 Deposits and deferred costs on acquisitions 18,552 14,746 Deferred financing costs, net of accumulated amortization 12,168 12,830 Fair value of derivative instruments 14,478 4,660 Other 1,614 1,620 ----------- ------------
Total assets $ 1,385,860 1,363,298 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Due to manager $ 6,546 2,637 Accounts payable 15,634 11,535 Accrued expenses 12,382 13,994 Current portion of notes payable and capital leases 5,970 2,647 Current portion of long-term debt 146 146 Dividends payable 13,525 -- Other 3,501 3,639 ----------- ------------ Total current liabilities 57,704 34,598 Capital leases and notes payable, net of current portion 3,607 2,864 Long-term debt, net of current portion 610,811 610,848 Related party long-term debt 18,714 18,247 Deferred income taxes 114,790 113,794 Income tax liability 2,656 -- Other 7,567 6,342 ----------- ------------ Total liabilities 815,849 786,693 ----------- ------------ Minority interests 8,803 8,940 ----------- ------------ Stockholders' equity: Trust stock, no par value; 500,000,000 authorized; 27,050,745 shares issued and outstanding at March 31, 2006 and December 31, 2005 569,497 583,023 Accumulated other comprehensive loss (4,559) (12,966) Accumulated deficit (3,730) (2,392) ----------- ------------ Total stockholders' equity 561,208 567,665 ----------- ------------ Total liabilities and stockholders' equity $ 1,385,860 $ 1,363,298 =========== ============
MACQUARIE INFRASTRUCTURE COMPANY TRUST CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS For the Quarters Ended March 31, 2006 and 2005 (Unaudited) ($ in thousands, except share and per share data)
Quarter Ended -------------------------------- March 31, 2006 March 31, 2005 -------------- -------------- REVENUES Revenue from fuel sales $ 41,992 $ 30,387 Service revenue 42,904 34,006 Financing and equipment lease income 1,298 1,342 -------------- ------------- Total revenue 86,194 65,735 -------------- ------------- COSTS AND EXPENSES Cost of fuel sales 25,269 17,095 Cost of services 21,032 17,256 Selling, general and administrative expenses 23,950 19,162 Fees to manager 6,478 1,943 Depreciation expense 1,710 1,327 Amortization of intangibles 3,446 3,085 -------------- ------------- Total operating expenses 81,885 59,868 -------------- ------------- OPERATING INCOME 4,309 5,867 OTHER INCOME (EXPENSE) Dividend income 2,651 -- Interest income 1,702 1,099 Interest expense (12,339) (7,758) Equity in earnings and amortization charges of investee 2,453 1,653 Other expense, net (167) (915) -------------- -------------
Net loss before income taxes and minority interests (1,391) (54) Income tax expense 21 -- -------------- ------------- Net loss before minority interests (1,412) (54) Minority interests (74) 29 -------------- ------------- NET LOSS $ (1,338) $ (83) -------------- ------------- Basic loss per share: $ (0.049) $ (0.003) -------------- ------------- Weighted average number of shares of trust stock outstanding: basic 27,050,745 26,610,100 Diluted loss per share: $ (0.049) $ (0.003) -------------- ------------- Weighted average number of shares of trust stock outstanding: diluted 27,050,745 26,610,100 Cash dividends declared per share $ 0.50 $ -------------- -------------
MACQUARIE INFRASTRUCTURE COMPANY TRUST CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS For the Quarters Ended March 31, 2006 and 2005 (Unaudited) ($ in thousands)
Quarter Ended -------------------------------- March 31, 2006 March 31, 2005 -------------- -------------- OPERATING ACTIVITIES Net loss $ (1,338) $ (83) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization of property and equipment 3,998 3,221 Amortization of intangible assets 3,446 3,085 Loss on disposal of equipment 44 13 Equity in earnings and amortization charges of investee (56) 238 Amortization of finance charges 720 265 Noncash derivative gain, net of noncash interest expense 897 -- Accretion of asset retirement obligation 55 65 Deferred rent 583 605 Deferred revenue 92 110 Deferred taxes (3,072) -- Minority interests (74) 29 Noncash compensation 543 -- Post retirement obligations 29 (20) Other noncash income (8) -- Accrued interest expense on subordinated debt - related party 249 259 Changes in operating assets and liabilities: Restricted cash (139) (13) Accounts receivable (236) (1,130) Equipment lease receivable, net 436 306 Dividend receivable (295) 1,743 Inventories 371 451 Prepaid expenses and other current assets 330 407 Accounts payable and accrued expenses (1,163) (1,726) Income taxes payable 2,720 --
Due to manager 3,909 1,924 Other (220) 11 Net cash provided by operating activities 11,821 9,760 INVESTING ACTIVITIES -------------- -------------- Acquisition of businesses and investments, net of cash acquired -- (49,594) Additional costs of acquisitions (33) (68) Deposits and deferred costs on future acquisitions (111) -- Collection on notes receivable -- 24 Purchases of property and equipment (1,490) (879) Proceeds received on subordinated loan 611 686 Net cash used in investing activities (1,023) (49,831) -------------- -------------- FINANCING ACTIVITIES Proceeds from long-term debt -- 32,000 Proceeds from line-credit facility 1,275 -- Debt financing costs (58) (1,674) Distributions to minority shareholders (63) -- Payment of long-term debt (37) (26) Offering costs -- (1,833) Restricted cash (79) (1,079) Payment of notes and capital lease obligations (486) (349) -------------- -------------- Net cash provided by financing activities 552 27,039 Effect of exchange rate changes on cash (30) 11 -------------- -------------- Net change in cash and cash equivalents 11,320 (13,021) Cash and cash equivalents at beginning of year 115,163 140,050 -------------- -------------- Cash and cash equivalents at end of year $ 126,483 $ 127,029 ============== ============== SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Noncash investing and financing activity:
Accrued purchases of property and equipment $ 241 $ -- ============== ============== Accrued deposits and deferred costs on acquisitions $ 3,695 $ -- ============== ============== Acquisition of property through capital leases $ 1,669 $ 438 ============== ============== Income taxes paid $ 290 $ 311 ============== ============== Interest paid $ 10,263 $ 7,134 ============== ==============
MACQUARIE INFRASTRUCTURE COMPANY TRUST RECONCILIATION OF NET LOSS TO EBITDA For the Quarter Ended March 31, 2006, and the Quarter ended March 31, 2005 (Unaudited) ($ in thousands)
QUARTER ENDED -------------------------------- MARCH 31, 2006 MARCH 31, 2005 CHANGE -------------- -------------- ------------------- $ % ------------------- Net loss $ (1,338) $ (83) (1,255) 1,512.0 Interest expense, net 10,637 6,659 3,978 59.7 Income taxes 21 -- 21 -- Depreciation (1) 3,998 3,221 777 24.1 Amortization (2) 3,446 3,085 361 11.7 -------------- -------------- ------ ------- EBITDA $ 16,764 $ 12,882 3,882 30.1 ============== ============== ====== =======
---------- (1) Includes depreciation expense of $865,000 and $503,000 for the airport parking business for the quarters ended March 31, 2006 and 2005, respectively, and $1.4 million and $1.4 million for the district energy business for the quarters ended March 31, 2006 and 2005, respectively, which is included in cost of services on our consolidated condensed statement of operations. (2) Does not include $933,000 and $1.2 million of amortization expense related to intangible assets in connection with our investment in the toll road business for the three month periods ended March 31, 2006 and 2005, respectively.