NEW YORK--Macquarie Infrastructure Corporation (NYSE: MIC) today provided the market with initial guidance regarding its expected financial performance during calendar years 2017 and 2018. MIC expects that Free Cash Flow per share, as defined by the Company, will increase by an average of between 10% and 15%, per year for 2017 and 2018, consistent with the outlook provided during its Investor Day in May 2016.
“We are pleased to reaffirm our guidance that we expect a continuation of double-digit growth in Free Cash Flow per share for the next two years,” said James Hooke, chief executive officer of MIC. “In addition to the organic growth of our portfolio of businesses, we have taken into consideration an expected reduction in expenses resulting from the implementation of our shared services strategy and the strength of our backlog of growth projects.”
The Company noted that its guidance for growth in Free Cash Flow per share also expressly contemplates the expected dilution associated with the issuance of new primary shares to its Manager under the Management Services Agreement. While the issuance of these shares has no impact on reported EBITDA excluding non-cash items or Free Cash Flow (because such issuance is not a cash expenditure), they do increase the number of shares on issue and thus decrease the Company’s Free Cash Flow per share.
MIC has delivered average annual growth in Free Cash Flow of 13.7%, per share, for the period 2007 through 2015, net of shares issued to its Manager. Through the end of the third quarter, MIC was on track to deliver year-on-year growth in Free Cash Flow of more than 13% in 2016 as well.
The Company’s 2016 financial results are expected to be released to the market after the close of trading on February 21, 2017. MIC defines Free Cash Flow as cash from operating activities – a GAAP measure that includes cash paid for interest, taxes and pension contributions – less maintenance capital expenditures and excluding changes in working capital.
Management Increases Stake
Senior MIC personnel added an aggregate 23,500 shares to their personal shareholdings this week. Five individuals including Hooke and Martin Stanley, chairman of the board of MIC, acquired shares of MIC at Monday’s volume-weighted average price of $74.15 in purchases from the Company’s Manager. Given that the MIC trading window was closed, management could only acquire shares from another insider, so the Company’s Manager facilitated these transactions.
“Like many of our long-term shareholders, we recognized the value created by the recent volatility in our share price and were pleased to be able to take advantage it,” said Hooke. “I am personally pleased to have increased my holding in MIC by more than 25%. I am also delighted that my senior management team chose to invest more in the Company.”
Additional Primer Available
MIC has created an additional investor primer and has posted it to its website at www.macquarie.com/mic.
“We’re building on the positive reaction to our initial investor primer – one covering our management fee structure – and are following it up with an additional tool designed to help investors better understand our approach to maintenance capex,” said Hooke.
The additional primer discusses MIC’s approach to maintaining current levels of operations, capability, profitability and cash flow at its operating companies and includes:
- Analysis of maintenance capital expenditures shows that in 2014 and 2015 IMTT spent approximately two times the per barrel average of operators of bulk liquid terminals in the United States;
- Bayonne Energy Center – still a relatively new facility - currently outsources Operations & Maintenance (O&M) to third parties (including Siemens, the manufacturer of the turbines) and as such, money spent on maintenance is recorded as an operating expense that reduces Net Income and EBITDA rather than as maintenance capex; and,
- Atlantic Aviation spends more on maintenance capital expenditures per FBO than any other FBO operator for which information has been made available to us.
“We’re proud of our safety record and the ongoing improvements in safety, reliability and customer experience that are being made by our businesses,” said Hooke.
Upcoming Conference Call
MIC has scheduled a conference call and webcast for analysts and investors at 8:00 a.m. Eastern Time on Wednesday, February 22, 2017 during which management will discuss the Company’s financial results for the fourth quarter and full year 2016. MIC intends to publish a press release summarizing its financial results after the close of market trading on Tuesday, February 21, 2017.
Interested individuals are invited to access the conference call by dialing +1 650-521-5252 or +1 877-852-2928 at least 10 minutes prior to the scheduled start time. MIC will webcast the conference call live on its website at www.macquarie.com/mic. The conference call is being hosted free of charge.
MIC owns, operates and invests in a diversified group of infrastructure businesses providing basic services to customers in the United States. Its businesses consist of a bulk liquid terminals business, International-Matex Tank Terminals, an airport services business, Atlantic Aviation, entities comprising an energy services, production and distribution segment, MIC Hawaii, and entities comprising a Contracted Power and Energy segment. For additional information, please visit the MIC website at www.macquarie.com/mic. MIC-G
This press release contains forward-looking statements. MIC may, in some cases, use words such as "project”, "believe”, "anticipate”, "plan”, "expect”, "estimate”, "intend”, "should”, "would”, "could”, "potentially”, or "may” or other words that convey uncertainty of future events or outcomes to identify these forward-looking statements. Forward-looking statements in this release are subject to a number of risks and uncertainties, some of which are beyond MIC’s control including, among other things: changes in general economic or business conditions; its ability to service, comply with the terms of and refinance debt, successfully integrate and manage acquired businesses, retain or replace qualified employees, manage growth, make and finance future acquisitions, and implement its strategy; risks associated with development, investment and expansion in the power industry; its regulatory environment establishing rate structures and monitoring quality of service; demographic trends, the political environment, the economy, tourism, construction and transportation costs, air travel, environmental costs and risks; fuel and gas and other commodity costs; its ability to recover increases in costs from customers, cybersecurity risks, work interruptions or other labor stoppages, reliance on sole or limited source suppliers, risks or conflicts of interests involving its relationship with the Macquarie Group and changes in U.S. federal tax law.
MIC’s actual results, performance, prospects or opportunities could differ materially from those expressed in or implied by the forward-looking statements. Additional risks of which MIC is not currently aware could also cause its actual results to differ. In light of these risks, uncertainties and assumptions, you should not place undue reliance on any forward-looking statements. The forward-looking events discussed in this release may not occur. These forward-looking statements are made as of the date of this release. MIC undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
MIC is not an authorized deposit-taking institution for the purposes of the Banking Act 1959 (Commonwealth of Australia). The obligations of MIC do not represent deposits or other liabilities of Macquarie Bank Limited ABN 46 008 583 542 (MBL). MBL does not guarantee or otherwise provide assurance in respect of the obligations of MIC.