MIC Fourth Quarter 2013 Earnings Call
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MIC Fourth Quarter 2013 Earnings Call

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MIC Fourth Quarter 2013 Earnings Call MIC Fourth Quarter 2013 Earnings Call Presentation Transcript

  • These materials are intended to be viewed in connection with the specific earnings conference call to which they refer, and are qualified in their entirety by reference to that earnings conference call and to the Company’s underlying report on Form 10-Q and Form 10-K. Macquarie Infrastructure Company Fourth Quarter Earnings Conference Call Support Slides February 2014
  • Disclaimer This presentation by Macquarie Infrastructure Company LLC (MIC) is proprietary and all rights are reserved. Any reproduction, in whole or in part, without the prior written consent of Macquarie Infrastructure Company is prohibited. This presentation is based on information generally available to the public and does not contain any material, non-public information. The presentation has been prepared solely for information purposes, it is not a solicitation of any offer to buy or sell any security or instrument. This presentation contains 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. Our actual results, performance, prospects or opportunities could differ materially from those expressed in or implied by the forward-looking statements. A description of known risks that could cause our actual results to differ appears under the caption “Risk Factors” in our Form 10-K and Form 10-Q. Additional risks of which we are not currently aware could also cause our actual results to differ. These forward-looking statements are made as of the date of this presentation. 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” consists of Macquarie Group Limited and its worldwide subsidiaries and affiliates. MIC is not an authorised 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. Macquarie Bank Limited does not guarantee or otherwise provide assurance in respect of the obligations of MIC. 2
  • MIC – Cash Generation $ Millions Fourth Quarter and Full Year 2013 Proportionately Combined Free Cash Flow1 240 220 200 180 160 140 120 100 80 60 40 20 0 210.1 167.6 44.5 4Q'12 2 $4.09 / share for full year 2013 vs. $3.59 / share for full year 20122 39.7 4Q'13 Proportionately Combined Free Cash Flow: FY'13 2 FY'12 Includes 50% equity interest in IMTT and controlling interests in Contracted Power and Energy Includes change in treatment of certain pension items at IMTT; Excludes interest rate swap breakage costs of $8.7 million incurred by Hawaii Gas in the third quarter of 2012 1 2 3
  • MIC – Cash Generation Proportionately Combined Net Income (Loss), EBITDA Excluding Non-Cash Items and Free Cash Flow $ Millions Net Income EBITDA ex Non-cash Items1 Free Cash Flow1,2 4Q 2013 17.9 4Q 2012 (8.9) FY 2013 36.6 FY 2012 16.5 83.1 74.8 339.9 306.2 44.5 39.7 210.1 167.6 Consolidated Net Income (Loss), EBITDA Excluding Non-Cash Items and Free Cash Flow $ Millions Net Income3 EBITDA ex Non-cash Items Free Cash Flow 4Q 2013 15.8 4Q 2012 (10.0) FY 2013 31.3 FY 2012 13.3 74.5 52.2 257.6 225.6 53.7 38.3 196.9 191.4 1 Includes change in treatment of certain pension items at IMTT interest rate swap breakage costs incurred by MIC’s Hawaii Gas business in the third quarter of 2012 3 Net income (loss) attributable to MIC LLC excludes net loss attributable to noncontrolling interests of $1.8 million and $3.2 million for the quarter and year ended December 31, 2013, respectively, net loss attributable to noncontrolling interests of $1.8 million for the quarter ended December 31, 2012, and net income attributable to noncontrolling interests of $930,000 for the year ended December 31, 2012 2 Excludes 4
  • MIC – Cash Generation Fourth Quarter 2013 Proportionately Combined EBITDA1 by Segment Contracted Power and 2 Energy 2.4% Atlantic Aviation 42.4% 1 2 InternationalMatex Tank Terminals 2 37.3% Hawaii Gas 17.9% Excludes non-operating holding company loss of $1.0 million. See 4Q’13 earnings press release for reconciliation of net income (loss) to EBITDA Represents MIC’s controlling interests in Contracted Power and Energy and 50% interest in IMTT 5
  • MIC – Performance Overview FY’13 - Key Elements in Results • Proportionately Combined FCF up 25.4%1 • Proportionately Combined FCF per share up 11.7% to $4.091 • Lower interest expense and operational improvement at Atlantic Aviation • Increase in terminal revenue at IMTT • Contribution from Contracted Power and Energy (“CP&E”) on operations of contracted power facilities acquired in 2012 • 4.7 million share (10.2%) increase in weighted average shares outstanding • Public equity offerings in May and December • Management and performance fees re-invested in shares 1 Excludes interest rate swap breakage costs incurred by MIC’s Hawaii Gas business in the third quarter of 2012 6
  • MIC – Performance Overview 4Q’13 - Key Elements in Results • Proportionately Combined FCF up 12.2% • Operational improvement at Atlantic Aviation, partially offset by increased interest expense and higher taxes • Increase in terminal revenue at IMTT, offset by cost increases • Contribution related to full quarter of operations by contracted power facilities acquired in 2012 • Cash dividend of $0.9125 ($3.65 annualized) per share declared • Record date: March 3, 2014 • Payable date: March 6, 2014 7
  • MIC – Acquisition of Boca Raton Fixed Base Operation On February 14, 2014, Atlantic Aviation signed an agreement to acquire Fixed Base Operation (“FBO”) at Boca Raton Florida Airport • Expected to close at the end of Q1 2014 along with the proposed Galaxy Aviation acquisitions announced in December • Projected to generate annualized adjusted EBITDA of ~$3.2 million • Together, proposed acquisitions expected to: • Increase the total number of FBOs in the network to 69 • Make Atlantic Aviation the second largest FBO operator in Florida – the largest general aviation market in the U.S. • Increase the weighted average lease life to 19.6 years from 19.0 years 8
  • MIC – 2014 Full Year Guidance MIC initiates 2014 guidance for Proportionately Combined FCF between $4.35 and $4.50 per share for the full year • Increase in FCF at Atlantic Aviation driven by: • Ongoing recovery in general aviation flight activity • Growth in EBITDA pending successful closing of proposed acquisitions • Normalization of maintenance capex at IMTT • Supply stabilization at Hawaii Gas • Contribution from Contracted Power and Energy related to operations by contracted power facilities acquired in 2013 • Proportionately Combined EBITDA expected to be ~$385.0 million • Proportionately Combined Maintenance Capex expected to be ~$45.0 million 9
  • MIC 4Q and FY’13 – Atlantic Aviation Operations Increased Flight Movements and Market Share Growth Drive Cash in Q4 • Gross profit up 11.4% on increase in fuel sales, rental rates and de-icing revenue • EBITDA up 13.7% • FCF down 7.3% primarily due to expected increases in maintenance capex and higher taxes Strong FY ’13 Results • Cash interest expense (excluding swap breakage costs) declined to $18.8 million from $42.7 million following the successful refinancing in May of 2013 • Higher fuel gross profit primarily due to higher margin per gallon and an increase in gallons sold: • Total gross profit up 5.8% • Same store volume of GA fuel sold up 3.3% • Same store average fuel margin up 2.1% • FCF up 44.1% primarily due to lower interest expense 10
  • MIC 4Q and FY’13 – IMTT (100%) Operations Increased Operating Expenses Offset Growth in Terminal Revenue in Q4 • Terminal revenue up 4.4% • Terminal operating costs higher primarily due to higher labor and benefits costs • FCF up 33.1% primarily on growth in EBITDA and lower maintenance capex • Results reflect a change in treatment of certain pension items • Excluding the change, FCF would have been up 17.8% FY ’13 Results Broadly in Line with MIC’s Expectations • Terminal revenue up 7.6% • EBITDA up 15.9% reflecting improved operating results and the above mentioned change in treatment of certain pension items • Excluding the pension change, EBITDA would have been up 10.9% • FCF up 1.4% • Partially offset by increase in maintenance capex due to Hurricane Sandy • Excluding the pension change, FCF would have been down 4.5% 11
  • MIC 4Q and FY’13 – Hawaii Gas Operations Volume Uplift in Q4 • Contribution margin rose 1.3% on increase in volume of gas sold of 2.0% • EBITDA flat on Q4 2012 • FCF down 52.6% primarily due to increased provision for income taxes • Cost of $2.7 million vs. income tax benefit of $7.9 million in Q4 2012 FY ’13 Performance Affected by Supply Disruptions • Volume of gas sold up 0.5% • Non-utility volume increased by 0.6% driven by customer mix • EBITDA down 2.3% due to increases in production costs related to higher labor expenses • FCF down 7.2% on changes in provision for income taxes • The ~$5.3 million full year federal tax will be offset in consolidation 12
  • MIC 4Q and FY’13 – Contracted Power and Energy (100%) Operations Contracted Power Contributions Boost Gross Profit in Q4 • Investments in solar facilities and district energy business combined • Gross profit up 45.1% on contribution from solar facilities acquired in 2012 Strong FY ’13 Results • Five solar facilities in operation at year end • Three were commissioned late in the year, having minimal impact on revenue • SG&A expenses down primarily on reduced legal and professional fees • Gross profit up 28.2% on contribution from contracted power facilities acquired in 2012 • EBITDA up 45.7% • FCF increases to $13.7 million from $8.4 million 13
  • MIC – Debt Profile, Maturity Weighted Average Debt Maturity of 5.4 Years1 ($ 000) $600,000 $450,000 Atlantic Aviation 2 Hawaii Gas $300,000 District Energy 2 IMTT $150,000 $2014 1 2 2015 2016 2017 2018 2019 2020+ Excludes $81.3 million of contracted power term loan debt and $61.9 million of contracted power construction loan debt Assumes current balance on all facilities at December 31, 2013, does not reflect future draws or mandatory repayments with excess cash flow 14
  • MIC – Debt Profile, Balance Weighted Average All-In Debt Cost of 4.4%1 Business Maturity 2 Amount 3 ($000) Weighted Average 4 All-in Rate Atlantic Aviation 01-Jun-20 517,800 4.67% Hawaii Gas 08-Aug-17 180,000 3.63% District Energy 27-Sep-14 153,090 6.15% IMTT 15-Feb-18 969,267 4.17% Excludes $81.3 million of contracted power term loan debt and $61.9 million of contracted power construction loan debt Reflects primary facilities 3 Reflects outstanding balance on all facilities at December 31, 2013 4 Reflects annualized costs associated with interest on all facilities including, interest rate hedges (excludes non-cash deferred financing costs, letters of credit and commitment fees) 1 2 15
  • Appendix: Reconciliation of Segment Financial Data, Fourth Quarter 2013
  • Atlantic Aviation Quarter Ended December 31, 2013 $ Revenue Fuel revenue Non-fuel revenue Total revenue Cost of revenue Cost of revenue-fuel Cost of revenue-non-fuel Total cost of revenue Fuel gross profit Non-fuel gross profit Gross profit Selling, general and administrative expenses Depreciation and amortization Loss (gain) on disposal of assets Operating income Interest expense, net(1) Loss on extinguishment of debt Other (expense) income Provision for income taxes Net income (2) _____________________ 2012 $ Year Ended December 31, Change 2013 2012 Favorable/(Unfavorable) $ % $ $ ($ In Thousands) )(Unaudited) ) ( ( Change Favorable/(Unfavorable) $ % 139,082 44,558 183,640 140,513 38,643 179,156 (1,431) 5,915 4,484 (1.0) 15.3 2.5 556,387 169,093 725,480 560,710 159,145 719,855 (4,323) 9,948 5,625 (0.8) 6.3 0.8 96,544 4,040 100,584 42,538 40,518 83,056 47,453 14,461 21,142 (1,945) (56) (7,209) 11,932 100,584 4,001 104,585 39,929 34,642 74,571 43,209 14,920 21 16,421 (4,515) 931 (5,525) 7,312 4,040 (39) 4,001 2,609 5,876 8,485 (4,244) 459 21 4,721 2,570 (987) (1,684) 4,620 4.0 (1.0) 3.8 6.5 17.0 11.4 (9.8) 3.1 100.0 28.7 56.9 NM (106.0) (30.5) 63.2 386,417 15,889 402,306 169,970 153,204 323,174 178,182 56,378 226 88,388 (22,151) (2,472) (2) (25,218) 38,545 396,384 18,037 414,421 164,326 141,108 305,434 174,039 56,681 (1,358) 76,072 (27,963) 969 (21,340) 27,738 9,967 2,148 12,115 5,644 12,096 17,740 (4,143) 303 (1,584) 12,316 5,812 (2,472) (971) (3,878) 10,807 2.5 11.9 2.9 3.4 8.6 5.8 (2.4) 0.5 (116.6) 16.2 20.8 NM (100.2) (18.2) 39.0 NM - Not meaningful (1) Interest expense, net, includes adjustments to derivative instruments, non-cash amortization of deferred financing fees and interest rate swap breakage fees. (2) Corporate allocation expense, intercompany fees and the tax effect have been excluded from the above table as they are eliminated on consolidation at the MIC Inc. level. 17
  • Atlantic Aviation Quarter Ended December 31, 2013 $ 2012 $ Year Ended December 31, Change 2013 2012 Favorable/(Unfavorable) $ % $ $ ($ In Thousands) (Unaudited) Change Favorable/(Unfavorable) $ % Reconciliation of net income to EBITDA excluding non-cash items and cash provided by operating activities to Free Cash Flow: Net income(2) Interest expense, net(1) Provision for income taxes Depreciation and amortization Loss on extinguishment of debt (Gain) loss on disposal of assets Other non-cash expense (income) EBITDA excluding non-cash items 11,932 1,945 7,209 14,461 121 35,668 7,312 4,515 5,525 14,920 (176) (720) 31,376 EBITDA excluding non-cash items Interest expense, net(1) Interest rate swap breakage fees(1) Adjustments to derivative instruments recorded in interest expense(1) Amortization of debt financing costs(1) Provision for income taxes, net of changes in deferred taxes Changes in working capital Cash provided by operating activities Changes in working capital Maintenance capital expenditures Free cash flow 35,668 (1,945) (4,781) 676 (2,254) 1,220 28,584 (1,220) (6,370) 20,994 31,376 (4,515) (1,249) 653 (674) (2,503) 23,088 2,503 (2,948) 22,643 4,292 (1,649) 13.7 38,545 22,151 25,218 56,378 2,434 106 5 144,837 27,738 27,963 21,340 56,681 (1,979) (988) 130,755 14,082 10.8 (7.3) 144,837 (22,151) 823 2,687 (7,823) 2,504 120,877 (2,504) (11,618) 106,755 130,755 (27,963) (595) (17,264) 2,675 (2,646) 46 85,008 (46) (10,897) 74,065 32,690 44.1 _____________________ (1) Interest expense, net, includes adjustments to derivative instruments, non-cash amortization of deferred financing fees and interest rate swap breakage fees. (2) Corporate allocation expense, intercompany fees and the tax effect have been excluded from the above table as they are eliminated on consolidation at the MIC Inc. level. 18
  • International-Matex Tank Terminals (100%) Quarter Ended December 31, 2013 $ 2012 $ Year Ended December 31, Change 2013 2012 Favorable/(Unfavorable) $ % $ $ ($ In Thousands) (Unaudited) Revenue 122,826 117,611 Terminal revenue 7,323 6,409 Environmental response revenue 130,149 124,020 Total revenue Costs and expenses 55,019 49,905 Terminal operating costs 7,427 6,252 Environmental response operating costs Total operating costs 62,446 56,157 Terminal gross profit 67,807 67,706 Environmental response gross profit (104) 157 Gross profit 67,703 67,863 General and administrative expenses 8,309 8,645 Depreciation and amortization 19,982 19,000 Casualty losses, net(1) Operating income 39,412 40,218 (7,473) (6,330) Interest expense, net(2) Other income 329 210 (12,255) (13,426) Provision for income taxes (31) (203) Noncontrolling interest Net income 19,982 20,469 _____________________ NM - Not meaningful (1) Casualty losses, net, includes $2.5 million and $1.5 million related to the quarters ended December 31, 2012 and March 31, periods. These amounts have been included in the year ended December 31, 2013. (2) Interest expense, net, includes adjustments to derivative instruments and non-cash amortization of deferred financing fees. Change Favorable/(Unfavorable) $ % 5,215 914 6,129 4.4 14.3 4.9 484,238 29,664 513,902 449,927 24,461 474,388 34,311 5,203 39,514 7.6 21.3 8.3 (5,114) (1,175) (6,289) 101 (261) (160) 336 (982) (806) (1,143) 119 1,171 172 (487) (10.2) (18.8) (11.2) 0.1 (166.2) (0.2) 3.9 (5.2) (2.0) (18.1) 56.7 8.7 84.7 (2.4) 200,600 26,088 226,688 283,638 3,576 287,214 32,729 76,091 6,700 171,694 (24,572) 2,133 (61,149) (251) 87,855 191,791 21,767 213,558 258,136 2,694 260,830 31,050 70,016 159,764 (35,244) 1,890 (51,293) (839) 74,278 (8,809) (4,321) (13,130) 25,502 882 26,384 (1,679) (6,075) (6,700) 11,930 10,672 243 (9,856) 588 13,577 (4.6) (19.9) (6.1) 9.9 32.7 10.1 (5.4) (8.7) NM 7.5 30.3 12.9 (19.2) 70.1 18.3 2013, respectively, which were recorded in terminal operating costs in those 19
  • International-Matex Tank Terminals (100%) Quarter Ended December 31, 2013 $ 2012 $ Reconciliation of net income to EBITDA excluding non-cash items and cash provided by operating activities to Free Cash Flow: Net income Interest expense, net(2) Provision for income taxes Depreciation and amortization Casualty losses, net(1) Other non-cash expenses(3) EBITDA excluding non-cash items 19,982 7,473 12,255 19,982 3,026 62,718 20,469 6,330 13,426 19,000 208 59,433 EBITDA excluding non-cash items Interest expense, net(2) Adjustments to derivative instruments recorded in interest expense(2) Amortization of debt financing costs(2) Provision for income taxes, net of changes in deferred taxes Pension contribution(4) Changes in working capital Cash provided by operating activities Changes in working capital Maintenance capital expenditures(5) Free cash flow 62,718 (7,473) (4,010) 843 (4,609) (3,525) 43,944 3,525 (22,715) 24,754 59,433 (6,330) (4,369) 802 (3,320) (4,044) 42,172 4,044 (27,619) 18,597 Year Ended December 31, Change 2013 2012 Favorable/(Unfavorable) $ % $ $ ($ In Thousands) (Unaudited) 3,285 5.5 87,855 24,572 61,149 76,091 6,700 12,122 268,489 74,278 35,244 51,293 70,016 855 231,686 268,489 (24,572) (19,794) 2,833 (18,456) (4,450) (3,707) 200,343 3,707 (83,228) 120,822 231,686 (35,244) (4,271) 3,221 (17,885) 13,636 191,143 (13,636) (58,375) 119,132 Change Favorable/(Unfavorable) $ % 36,803 6,157 33.1 1,690 _____________________ (1) Casualty losses, net, includes $2.5 million and $1.5 million related to the quarters ended December 31, 2012 and March 31, 2013, respectively, which were recorded in terminal operating costs in those periods. These amounts have been included in the year ended December 31, 2013. (2) Interest expense, net, includes adjustments to derivative instruments and non-cash amortization of deferred financing fees. (3) IMTT management's calculation of IMTT's EBITDA includes various non-cash items, unlike MIC’s other businesses. In order to ensure IMTT’s EBITDA excluding non-cash items does in fact excludes non-cash items, and to promote consistency across its reporting segments, MIC has excluded known non-cash items when calculating IMTT’s EBITDA excluding non-cash items including primarily the non-cash pension expense of $2.7 million and $11.2 million for the quarter and year ended December 31, 2013. The non-cash pension expense of $2.8 million and $11.4 million for the quarter and year ended December 31, 2012, respectively, were reported in changes in working capital for those periods, net of pension contribution. (4) Pension contributions of $5.0 million for the year ended December 31, 2012 were reported in changes in working capital, net of the non-cash pension expenses. (5) Maintenance capital expenditures includes a reclassification from growth capital expenditures in the quarters ended December 31, 2012 and March 31, 2013 of $1.2 million and $509,000, respectively. These amounts have been included in the year ended December 31, 2013. The classification of capital expenditures as either growth or maintenance is the subject of ongoing review and discussions between MIC and its co-investor in IMTT. 15.9 1.4 20
  • Hawaii Gas Quarter Ended December 31, 2013 $ 2012 $ Year Ended December 31, Change 2013 2012 Favorable/(Unfavorable) $ % $ $ ($ In Thousands) (Unaudited) Change Favorable/(Unfavorable) $ % Contribution margin Revenue - non-utility 31,246 27,828 3,418 12.3 120,239 116,099 4,140 Cost of revenue - non-utility 14,548 11,571 (2,977) (25.7) 54,073 52,091 (1,982) Contribution margin - non-utility 16,698 16,257 441 2.7 66,166 64,008 2,158 Revenue - utility 33,391 33,783 (392) (1.2) 137,486 144,439 (6,953) Cost of revenue - utility 23,866 24,155 289 1.2 98,780 105,723 6,943 Contribution margin - utility 9,525 9,628 (103) (1.1) 38,706 38,716 (10) Total contribution margin 26,223 25,885 338 1.3 104,872 102,724 2,148 Production 2,752 1,617 (1,135) (70.2) 10,871 8,569 (2,302) 4,904 5,280 376 7.1 20,631 21,716 1,085 Transmission and distribution(1) Gross profit 18,567 18,988 (421) (2.2) 73,370 72,439 931 4,155 4,062 (93) (2.3) 20,294 18,637 (1,657) Selling, general and administrative expenses Depreciation and amortization 2,259 2,173 (86) (4.0) 8,767 7,981 (786) Operating income 12,153 12,753 (600) (4.7) 44,309 45,821 (1,512) (2) (1,794) (1,758) (36) (2.0) (6,834) (10,860) 4,026 Interest expense, net Other income (expense) 87 (152) 239 157.2 (164) (437) 273 Provision for income taxes (4,326) (4,561) 235 5.2 (14,995) (13,904) (1,091) 6,120 6,282 (162) (2.6) 22,316 20,620 1,696 Net income (3) _____________________ (1) For the year ended December 31, 2013, transmission and distribution includes non-cash income of $286,000 for asset retirement obligation credit. This non-cash income is excluded when calculating EBITDA excluding non-cash items. (2) Interest expense, net, includes adjustments to derivative instruments, non-cash amortization of deferred financing fees and interest rate swap breakage fees. (3) Corporate allocation expense, intercompany fees and the tax effect have been excluded from the above table as they are eliminated on consolidation at the MIC Inc. level. - 3.6 (3.8) 3.4 (4.8) 6.6 (0.0) 2.1 (26.9) 5.0 1.3 (8.9) (9.8) (3.3) 37.1 62.5 (7.8) 8.2 21
  • Hawaii Gas Quarter Ended December 31, 2013 $ 2012 $ Year Ended December 31, Change 2013 2012 Favorable/(Unfavorable) $ % $ $ ($ In Thousands) (Unaudited) Change Favorable/(Unfavorable) $ % Reconciliation of net income to EBITDA excluding non-cash items and cash provided by operating activities to Free Cash Flow: Net income(3) Interest expense, net(2) Provision for income taxes Depreciation and amortization Other non-cash expenses(1) EBITDA excluding non-cash items 6,120 1,794 4,326 2,259 524 15,023 6,282 1,758 4,561 2,173 269 15,043 EBITDA excluding non-cash items Interest expense, net(2) Interest rate swap breakage fees(2) 15,023 (1,794) (4) 113 (2,744) (900) 3,808 13,502 (3,808) (979) 8,715 22,316 6,834 14,995 8,767 2,116 55,028 20,620 10,860 13,904 7,981 2,940 56,305 15,043 (1,758) (51) 55,028 (6,834) (430) 56,305 (10,860) (8,701) 3,038 112 7,862 (7,829) 13,379 7,829 (2,822) 18,386 455 (6,705) (3,150) 2,248 40,612 (2,248) (6,316) 32,048 858 1,974 (6,712) 35,902 6,712 (8,063) 34,551 (1,277) (2.3) (9,671) (52.6) (2,503) _____________________ (1) For the year ended December 31, 2013, transmission and distribution includes non-cash income of $286,000 for asset retirement obligation credit. This non-cash income is excluded when calculating EBITDA excluding non-cash items. (2) Interest expense, net, includes adjustments to derivative instruments, non-cash amortization of deferred financing fees and interest rate swap breakage fees. (3) Corporate allocation expense, intercompany fees and the tax effect have been excluded from the above table as they are eliminated on consolidation at the MIC Inc. level. (4) Pension contribution of $1.6 million and $3.8 million for the quarter and year ended December 31, 2012, respectively, were reported in changes in working capital for those periods. (7.2) expense(2) Amortization of debt financing costs(2) Provision for income taxes, net of changes in deferred taxes Pension contribution(4) Changes in working capital Cash provided by operating activities Changes in working capital Maintenance capital expenditures Free cash flow (20) (0.1) 22
  • CP&E (100%) Quarter Ended December 31, 2013 $ Product sales Service revenue Finance lease revenue Total revenue Direct expenses — electricity Direct expenses — other(1) Direct expenses — total Gross profit Selling, general and administrative expenses Depreciation Amortization of intangibles Loss from customer contract termination Operating (loss) income Interest expense, net(2) Other income Benefit (provision) for income taxes Noncontrolling interests Net (loss) income ____________ NM - Not meaningful 2,204 9,262 784 12,250 1,903 5,217 7,120 5,130 2,292 2,156 329 4,280 (3,927) (2,016) 133 2,145 471 (3,194) 2012 $ 355 9,211 1,088 10,654 1,907 5,212 7,119 3,535 7,154 154 345 (4,118) (1,269) 83 1,241 2,043 (2,020) Year Ended December 31, Change 2013 2012 Favorable/(Unfavorable) $ % $ $ ($ In Thousands) (Unaudited) 1,849 NM 9,371 355 51 0.6 44,880 48,762 (304) (27.9) 3,563 4,536 1,596 15.0 57,814 53,653 4 0.2 12,263 14,494 (5) (0.1) 21,096 20,078 (1) (0.0) 33,359 34,572 1,595 45.1 24,455 19,081 4,862 68.0 7,865 9,829 (2,002) NM 7,330 154 16 4.6 1,326 1,372 (4,280) NM 5,906 191 4.6 2,028 7,726 (747) (58.9) (7,930) (7,790) 50 60.2 3,289 651 904 72.8 (827) (930) (1,572) (76.9) 4,051 1,421 (1,174) (58.1) 611 1,078 Change Favorable/(Unfavorable) $ % 9,016 (3,882) (973) 4,161 2,231 (1,018) 1,213 5,374 1,964 (7,176) 46 (5,906) (5,698) (140) 2,638 103 2,630 (467) NM (8.0) (21.5) 7.8 15.4 (5.1) 3.5 28.2 20.0 NM 3.4 NM (73.8) (1.8) NM 11.1 185.1 (43.3) (1) Includes depreciation expense related to District Energy of $1.7 million and $6.7 million for the quarters and years ended December 31, 2013 and 2012, respectively. (2) Interest expense, net, includes adjustments to derivative instruments and non-cash amortization of deferred financing fees. 23
  • CP&E (100%) Year Ended December 31, Change 2013 2012 Favorable/(Unfavorable) $ % $ $ ($ In Thousands) (Unaudited) Quarter Ended December 31, 2013 $ 2012 $ Change Favorable/(Unfavorable) $ % Reconciliation of net (loss) income to EBITDA excluding noncash items and cash (used in) provided by operating activities to Free Cash Flow: Net (loss) income Interest expense, net(2) (Benefit) provision for income taxes Depreciation(1) Amortization of intangibles Loss from customer contract termination Other non-cash expense EBITDA excluding non-cash items (3,194) 2,016 (2,145) 3,861 329 4,280 (427) 4,720 (2,020) 1,269 (1,241) 1,845 345 (1,939) (1,741) EBITDA excluding non-cash items Interest expense, net(2) 4,720 (2,016) (1,513) 193 993 (50) (36,158) (33,831) 36,158 (336) 1,991 Adjustments to derivative instruments recorded in interest expense(2) Amortization of debt financing costs(2) Equipment lease receivable, net Benefit/provision for income taxes, net of changes in deferred taxes Changes in working capital Cash (used in) provided by operating activities Changes in working capital Maintenance capital expenditures Free cash flow 611 7,930 827 14,056 1,326 5,906 (6,569) 24,087 1,078 7,790 930 6,881 1,372 (1,514) 16,537 (1,741) (1,269) (1,448) 24,087 (7,930) (5,531) 16,537 (7,790) (2,906) 177 953 51 13,415 10,138 (13,415) (249) (3,526) 732 3,807 (855) (54,491) (40,181) 54,491 (648) 13,662 699 3,548 (841) 11,962 21,209 (11,962) (891) 8,356 6,461 5,517 NM 156.5 7,550 45.7 5,306 63.5 ____________ NM - Not meaningful (1) Includes depreciation expense related to District Energy of $1.7 million and $6.7 million for the quarters and years ended December 31, 2013 and 2012, respectively. (2) Interest expense, net, includes adjustments to derivative instruments and non-cash amortization of deferred financing fees. 24
  • Corporate Year Ended December 31, Change 2013 2012 Favorable/(Unfavorable) $ % $ $ ($ In Thousands) (Unaudited) Quarter Ended December 31, 2013 $ Base management fees Performance fees Selling, general and administrative expenses Operating loss Interest (expense) income, net Other income (expense), net Benefit for income taxes Noncontrolling interest Net loss(1) 2012 $ 8,455 1,162 (9,617) (77) 4 588 1,280 (7,822) 6,299 43,820 1,646 (51,765) 101 (23) 21,258 (207) (30,636) Net loss(1) Interest expense (income), net Benefit for income taxes Base management to be settled/settled in LLC interests Performance fees settled in LLC interests Other non-cash (income) expense EBITDA excluding non-cash items (7,822) 77 (588) 8,455 (1,092) (970) (30,636) (101) (21,258) 6,299 43,820 357 (1,519) EBITDA excluding non-cash items Interest (expense) income, net Benefit for income taxes, net of changes in deferred taxes Changes in working capital Cash used in operating activities Changes in working capital Free cash flow (970) (77) 2,974 (2,915) (988) 2,915 1,927 (1,519) 101 (6,865) 5,974 (2,309) (5,974) (8,283) (2,156) 43,820 484 42,148 (178) 27 (20,670) 1,487 22,814 Change Favorable/(Unfavorable) $ % (34.2) 100.0 29.4 81.4 (176.2) 117.4 (97.2) NM 74.5 31,979 53,388 6,149 (91,516) 75 (12) 22,997 (877) (69,333) 21,898 67,329 10,867 (100,094) 212 (98) 33,889 (2,351) (68,442) (10,081) 13,941 4,718 8,578 (137) 86 (10,892) 1,474 (891) (46.0) 20.7 43.4 8.6 (64.6) 87.8 (32.1) 62.7 (1.3) 36.1 (69,333) (75) (22,997) 31,979 53,388 1,605 (5,433) (68,442) (212) (33,889) 21,898 67,329 2,949 (10,367) 4,934 47.6 (5,433) 75 10,635 (10,583) (5,306) 10,583 5,277 (10,367) 212 (2,352) 1,347 (11,160) (1,347) (12,507) 17,784 142.2 Reconciliation of net loss to EBITDA excluding non-cash items and cash used in operating activities to Free Cash Flow: 549 10,210 123.3 _____________________ NM - Not meaningful (1) Corporate allocation expense, intercompany fees and the tax effect have been excluded from the above table as they are eliminated on consolidation. 25