Macquarie Infrastructure Company Reports Second Quarter 2007 Financial Results

NEW YORK, Aug. 9 /PRNewswire-FirstCall/ -- Macquarie InfrastructureCompany (NYSE: MIC), a leader in the ownership and operation of U.S.infrastructure businesses, reported consolidated revenue for the secondquarter of $177.2 million. Revenue increased 67% over the second quarter in2006.

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 quarterpayable to the Company's manager, Macquarie Infrastructure Management (USA)("MIMUSA"). MIMUSA has elected to reinvest the payment in additional LLCinterests. The fee and reinvestment in additional shares will have no impacton MIC's distributable cash.

MIC reported a 67.6% year over year increase in estimated cash availablefor distribution ("CAD"). CAD is a measure used by the Company to assess itsability to sustain and increase quarterly dividends. Through six months CADincreased to $52.3 million or $1.39 per share, from $31.2 million in the firsthalf of 2006. The increase in CAD was attributable to sound ongoingoperations and successful acquisitions concluded during 2006.

The Company's board of directors has approved a dividend of $0.605 pershare 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 indistributable cash." said Peter Stokes , Chief Executive Officer of MacquarieInfrastructure Company. "Infrastructure businesses tend to be defensive inthat they generate stable, growing cash flows throughout market cycles. Weare pleased with the solid performance of our businesses this quarter."

"MIC does not raise money from investors unless we have a transaction inhand", Stokes added. "To the extent that we have cash on our balance sheet,we invest that cash only in prime short-term instruments, not illiquidinvestments".

Gross profit was $75.8 million or 60.2% more than the $47.3 millionreported in the second quarter of 2006. Evaluations based on gross profitremove the volatility in revenue associated with costs that are typicallypassed through to customers by infrastructure businesses.

For the six months ended June 30 , the Company reported consolidatedrevenue and an operating loss of $346.2 million and $3.1 million,respectively. Revenue increased 80% over the first half of 2006. The yearto date operating loss reflects the impact of the $43.0 million performancefee.


MIC reports EBITDA and contribution margin, both non-GAAP financialmeasures, as it considers them to be important indicators of overallperformance. The attached tables provide a reconciliation of EBITDA to netincome and contribution margin to revenue. The Company believes that EBITDAprovides insight into the performance of certain of its operating companiesand their ability to generate dividends. The reporting of contribution marginby the gas production and distribution business provides additional insightinto the performance of that business net of changes in fuel prices that aretypically passed through to customers.


The Company believes that its results under GAAP, after certainadjustments, provide better insight into its ability to support itsdistributions. GAAP results alone do not reflect all of the items thatmanagement considers in estimating distributable cash. The table belowsummarizes MIC's estimated cash available for distribution, beginning withcash from operations and adjusted for certain dividend income and cashexpenditures included in the calculation of CAD. Estimated cash available fordistribution totaled $52.3 million through the second quarter.

MIC's consolidated cash from operations increased to $52.5 million in thefirst half of 2007 from $23.4 million in the first half of 2006. Cash fromoperations is the starting point for calculating estimated cash available fordistribution ("CAD").

Net of all adjustments, MIC estimates cash available for distribution inthe 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.


MIC's Manager earned an performance fee of $43.0 million for the secondquarter 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'svolume-weighted average price over a fifteen day trading period that begins September 7 .

Airport services business - The Company expects that the airport servicesbusiness will conclude the acquisition of Mercury Air Centers and the San Jose Jet Center in August, 2007. Integration of the 26 FBOs into Atlantic Aviationwill commence immediately and is expected to be completed over a period of 12- 18 months. The additional sites are expected to generate a minimumincremental $47.5 million of EBITDA on an annualized basis.

MIC expects continued strong performance from the airport services segmentto be supported in part by the full-year contribution from sites acquired in2007. Activity at all sites is being driven by continued increases in thenumber of general aviation aircraft in service and the number of hours thoseaircraft are being flown.

Bulk liquid storage terminal business - The bulk liquid storage businessis expected to continue to perform well as inflation escalators generaterevenue growth from existing contracts, expiring contracts are renewed athigher rates and storage tanks currently under construction becomeoperational. New tanks generated approximately $725,000 of incremental grossprofit and EBITDA in the first half of 2007 versus 2006.

Approximately 75% of the contracts relating to the construction of theGeismar chemicals logistics center have been awarded. Construction of theGeismar facility remains on pace for completion in the second quarter of 2008.

MIC expects that the $280.3 million of capital projects underway willgenerate an incremental increase in gross profit and EBITDA of $41.4 millionper year when completed.

MIC believes that the bulk liquid storage terminal business will continueto generate a quarterly dividend of $14.0 million, 50% of which is payable tothe Company, through the end of 2008. Beginning with the first quarter in 2009MIC will receive a dividend equal to 50% of the business' cash fromoperations, less 50% of maintenance and environmental capital expenditures.Continued organic growth in terminal revenue combined with the incrementalincrease in gross profit expected from growth capital expenditures is expectedto support a growing dividend in excess of the current level.

Gas production and distribution business - The fundamental driver ofcontinued growth in the gas production and distribution business is populationgrowth in Hawaii. Beyond this, MIC believes that it can effectively marketits synthetic natural gas and liquid petroleum gas products as an efficient,environmentally friendly fuel source, thereby increasing its market sharerelative to other fuel/power sources.

MIC believes that its gas production and distribution business willcontinue to be a stable source of distributable cash consistent with theapproximately 11.0% yield assumed when the business was acquired.

District energy business - The Company expects continued stableperformance from its district energy business assuming a historically normallevel of demand for cooling during the summer. Expansion of the currentsystem, in conjunction with operational strategies and efficiencies, willincrease saleable capacity.

Airport parking business - Yield management strategies continue togenerate improvement in average revenue per car. In addition, management hassignificantly upgraded the operations team of the business and believes thatexpected service improvements and growth in volume and revenue will offset thehigher expenses over the medium term.


When: Management has scheduled a conference call for 11:00 a.m. EasternDaylight 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 tothe scheduled start time. Interested parties can also listen to the live callvia webcast at Please allow extra time prior to thecall to visit the site and download the necessary software to listen to theInternet broadcast.

Slides: The Company has prepared slides in support of its conference callpresentation. The slides will be available for downloading from the MICwebsite the morning of August 9, 2007 . A link to the slides will be locatedin the "Latest News" section of the MIC homepage.

Replay: For interested individuals unable to listen to the live conferencecall, a replay will be available through August 24, 2007 , at +1(888) 203-1112(domestic) or +1(719) 457-0820 (international), Passcode: 7500743. An onlinearchive of the webcast will be available on the MIC website for one year.


Macquarie Infrastructure Company owns, operates and invests in adiversified group of infrastructure businesses, which provide basic, everydayservices, to customers in the United States . Its businesses consist of anairport services business, a 50% indirect interest in a bulk liquid storageterminal business, a gas production and distribution business, a districtenergy business, and an airport parking business. The Company is managed by awholly-owned subsidiary of Macquarie Bank Limited. For additionalinformation, please visit the Macquarie Infrastructure Company website


This earnings release contains forward-looking statements. We may, insome 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 toidentify these forward-looking statements. Forward-looking statements in thispresentation are subject to a number of risks and uncertainties, some of whichare beyond our control including, among other things: our ability tosuccessfully integrate and manage acquired businesses, manage growth, make andfinance future acquisitions, service, comply with the terms of and refinanceour debt, and implement our strategy, decisions made by persons who controlour investments including the distribution of dividends, our regulatoryenvironment, changes in air travel, automobile usage, fuel and gas prices,foreign exchange fluctuations, environmental risks and changes in U.S. federaltax law.

Our actual results, performance, prospects or opportunities could differmaterially from those expressed in or implied by the forward-lookingstatements. Additional risks of which we are not currently aware could alsocause our actual results to differ. In light of these risks, uncertaintiesand assumptions, you should not place undue reliance on any forward-lookingstatements. The forward-looking events discussed in this release may notoccur. These forward-looking statements are made as of the date of thisrelease. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events orotherwise, except as required by law.

"Macquarie Group" refers to the Macquarie Group of companies, whichcomprises Macquarie Bank Limited and its worldwide subsidiaries andaffiliates.

Australian banking regulations that govern the operations of MacquarieBank Limited and all of its subsidiaries, including the Company's manager,require the following statements. Investments in Macquarie InfrastructureCompany LLC are not deposits with or other liabilities of Macquarie BankLimited or of any Macquarie Group company and are subject to investment risk,including possible delays in repayment and loss of income and principalinvested. Neither Macquarie Bank Limited nor any other member company of theMacquarie Group guarantees the performance of Macquarie Infrastructure CompanyLLC or the repayment of capital from Macquarie Infrastructure Company LLC.MIC-G

A reconciliation of net (loss) income to EBITDA, on a segment basis, andcontribution margin to revenue for the gas production and distributionbusiness is provided below.

SOURCE Macquarie Infrastructure Company